Regarding Directors, in light of the broad and diverse nature of its businesses, the Company appoints, in a well-balanced manner, those who have broad knowledge, experience and qualification. Regarding Outside Directors, the Company appoints, from among such as management or experts of external entities, those who have knowledge and extensive expertise, that is difficult to be brought if it is relying only on Inside Directors. The Company, also, considering importance of independency of an appointee, appoints Outside Directors, from the perspective that there is no conflict of interest between the Company and the appointee, and that the appointee can increase and enhance the effectiveness of the oversight of the Board based on objective and neutral standpoint.

Regarding Audit & Supervisory Board (A&SB) Members, the Company appoints those who have knowledge, experience and qualification for exercising their responsibilities and duties. Also the Company appoints A&SB Member who has substantial finance, accounting and legal knowledge.

Regarding Outside A&SB Members, the Company appoints, from among such as management of external entities, lawyer and certified public accountant, those who have knowledge and extensive expertise, that is difficult to be brought if it is relying only on Inside A&SB Members. The Company, also, considering importance of independency of an appointee, appoints Outside A&SB Members, from the perspective that there is no conflict of interest between the Company and the appointee, and that the appointee may increase and enhance the effectiveness of the auditing by A&SB Members on the execution of business by Directors based on objective and neutral standpoint.

In order for our Board of Directors to fulfill its roles, we have identified 8 (eight) areas of knowledge that the Board of Directors must possess, based on the premise that the directors are serious about social issues and have the enthusiasm and commitment to make changes that will enhance our corporate value.

(1) Business experience as a member of management (Business management)
(2) Long-term changes in global industrial structures and mega trends (Industry structures, mega trends)
(3) Technical trends related to IT and digital transformation (IT, digital)
(4) Global perspective (Global, international situation)
(5) Financial insight and large-scale investment decisions (Finance, investment decisions)
(6) Promotion of innovation, strengthening of competitiveness (Technologies, manufacturing, supply chain)
(7) Risk control and governance related to execution of duties (Governance, risk management)
(8) Environment and society

Of the knowledge areas, the table below lists the top four areas where each director and Audit & Supervisory Board member is expected to demonstrate particular knowledge.

Eligible Executive Officers include those responsible for the Group governance, important management agendas across the Group, and external affairs. Personnel with the knowledge, experience, and capabilities appropriate for these positions are appointed after deliberations by the Nomination and Compensation Advisory Committee.

Director and Executive Officer candidates are deliberated upon by the Chairman, the Group CEO, and the Group CHRO before being decided by the Board of Directors. A&SB Member candidates are deliberated upon by the Chairman, the Group CEO, and the Group CHRO and consented to by the A&SB before being decided by the Board. The Company has established a voluntary Nomination and Compensation Advisory Committee, chaired by an independent Outside Director. In response to inquiries from the Board, this Committee deliberates and reports to the Board on the results of internal considerations of Director, Executive Officer and A&SB Member candidates.

With respect to the dismissal of Directors, if a Director remarkably lacks in qualification as a Director because of violation of laws and regulations, involvement in unfair, dishonest or suspicious acts undermining confidence as a Director, or a decline in business or for other reasons, as set forth in the Rules for Directors, the proposal of dismissal to the General Meeting of shareholders, exclusion of such director from the candidates for the next director, and other necessary actions are resolved in accordance with the procedures set forth in the Rules for Directors. Regarding dismissal of Executive Officers, if an Executive Officer remarkably lacks in qualification as an Executive Officer because of violation of laws and regulations, involvement in unfair, dishonest or suspicious acts undermining confidence as an Executive Officer, or a decline in business of for other reasons, as set forth in the Rules for Executive Officers, the Board of Directors shall resolve the necessary actions. As for replacement of the Group CEO, please refer to the Voluntary Nomination and Compensation Advisory Committee in the Corporate Governance Structure.

Director and Executive Officer candidates are deliberated upon by the Chairman, the Group CEO, and the Group CHRO before being decided by the Board of Directors. A&SB Member candidates are deliberated upon by the Chairman, the Group CEO, and the Group CHRO and consented to by the A&SB before being decided by the Board. The Company has established a voluntary Nomination and Compensation Advisory Committee, chaired by an independent Outside Director. In response to inquiries from the Board, this Committee deliberates and reports to the Board on the results of internal considerations of Director, Executive Officer and A&SB Member candidates.

The following persons are not considered independent.

(1) A person executing the operations of a parent company or a subsidiary of the parent company of the Company (Including a person who corresponds to such a person recently or previously, hereinafter, “executing person”)

(2) A person whose major business partner is the Panasonic Group or an executing person of the same, or a major business partner of the Panasonic Group or an executing person of the same.

(3) A consultant, accounting expert, or legal expert who receives a significant amount of money or other property from the Panasonic Group other than compensation as a Director / Audit & Supervisory Board Member. If the person who receives such property is an organization such as a legal entity or association, a person who belongs or belonged to the organization corresponds to the relevant person.

(4) A principal shareholder of the Company (If the principal shareholder is a legal entity, an executing person of such legal entity)

(5) A close relative listed in items (1) to (4) (A second-degree or closer relative applies. The same applies hereinafter.) or a close relative of an executing person of the Company or a subsidiary of the Company (If an Outside Audit & Supervisory Board Member is appointed to as an Independent Director / Audit & Supervisory Board Member, a person who is or who was a non-executing director / accounting advisor is included in the executing person.)

• An executive director, an executive officer (shikkouyaku) or a director / audit & supervisory board member who executes business of a legal entity, etc.
• An employee who executes business, a person responsible of serving duties of an employee who executes business of a legal entity in the case that the legal entity is an employee who executes business, or other such equivalent person
• A worker Also, the wording “recently” shall be assumed to be the point of time when the content of the bill of the general meeting of shareholders electing the person as a director or an audit & supervisory board member is decided, and the wording “previously” shall be assumed to be within the last three years.

• A person oneself who provides a service: Receives compensation of more than or equal to 12 million yen per year from the Panasonic Group.
• An organization to which a service provider belongs: The amount of the transaction between the Panasonic Group and the organization exceeds 2% of either of their annual consolidated net sales. “A person who belonged to an organization” shall be assumed to be identified based on whether the person belonged to the organization within the last three years.