Composition, etc., of the Board of Directors

Last update: August 31, 2023

1. Composition of the Board of Directors (balance among knowledge, experience, and skills, and diversity and size, of the Board of Directors) and reasons for selection as Director [CGC Principle 3.1 (v)][CGC Supplementary Principle 4.11.1, 2]

The Company emphasizes the composition of Directors and Audit & Supervisory Board Members for the Board of Directors having a good overall balance of knowledge, experience, and skills to effectively perform the role and responsibilities of the Board and ensuring both diversity and an appropriate size.
In particular, as a holding company, the Company needs to conduct comprehensive and multifaceted management for diverse business domains. Therefore, the Company examines the Board composition, considering diversity (including career and age) in terms of female and non-Japanese Directors and Audit & Supervisory Board Members as well as the balance among their knowledge, experience, and skills. For the Company's Audit & Supervisory Board Members, the Company takes care to appoint such persons with appropriate knowledge of finance and accounting.
The Company stipulates the aforementioned policies in the "Guidelines for Directors and Audit & Supervisory Board Members" (See " Guidelines for Directors and Audit & Supervisory Board Members ").

Additional appointment of the representative director and change in the management structure

The Company adopted a resolution at a meeting of the Board of Directors held on March 9, 2023 regarding the transfer of the representative director (additional appointment) and change in the management structure of the Company.

(1) Additional appointment of the representative director
While proactively promoting the expansion of the Group business scale through the global growth strategy and business structural reforms, the Company added one officer with the right of representation in order to strengthen and stabilize the Group governance system from a medium- to long-term perspective.
(2) Change in the management structure
A Chief x Officer (CxO) was appointed for each corporate function in order to improve the corporate value of the Group over the medium- to long-term, support the top management of the entire Group, strengthen the structure of the strategic corporate departments, and improve the ability to promote strategies.
In addition, a Head of each business segment and business domain was appointed in order to strengthen the growth strategy of the domestic and overseas convenience store operations and the ability to execute and promote the structural reform of the superstore operations.

Composition, etc., of the Board of Directors for FY2023

The Company executed a bold reform to a Board of Directors composed with Independent Outside Directors in the majority at its FY2022 Shareholder’s Meeting to establish a governance structure suitable for a world-class retail group as it is aiming for in its Medium-term Management Plan 2021-2025 announced in July 2021.
　The composition of the Board of Directors in FY2023 emphasizes experience in top management at listed companies, knowledge and experience relating to food, digital transformation and global management which are viewed as the strategic axes of the Group, and skill sets such as specialization in business transformation to establish a management structure which will contribute to further growth and maximization of long-term corporate value and shareholder value.
　The Board of Directors of the Company will make important decisions which support the swift and decisive risk-taking of the management team with its diverse members as described above. At the same time, it will provide highly-effective oversight and appropriately fulfill its roles and responsibilities as the Board of Directors.

Establishment of Lead Independent Outside Director

Because a majority of the members of the Board of Directors are Outside Directors with diverse experience and skills, the Company has established the position of Lead Independent Outside Director on May 26, 2022. To fulfill the following roles, the Company ensures a more effective oversight function of the Board of Directors.

Roles of the Lead Independent Outside Director

(1) Ensure mutual coordination and follow-up among Outside Directors.
(2) Further enhance and maintain dialogue and communication between Outside Directors and senior management.
(3) Strengthen coordination between Outside Directors and the Audit & Supervisory Board.
(4) Promote “constructive dialogue with shareholders and investors” in which Outside Directors participate.

Appointment of Audit & Supervisory Board Members with expertise with regard to finance and accounting

The Company has appointed the following three Audit & Supervisory Board Members who have expertise with regard to finance and accounting.

Standing Audit & Supervisory Board Member Nobutomo Teshima was engaged in operations relating to accounting in the accounting management division in the Company and SEVEN-ELEVEN JAPAN CO., LTD. for a total period of 20 years or more.
Audit & Supervisory Board Member Kazuhiro Hara is a certified public accountant and certified tax accountant.
Audit & Supervisory Board Member Kaori Matsuhashi is a certified public accountant.

Major management and industry experience, management skills, knowledge, etc. of Directors and Audit & Supervisory Board Members

Name	Title	Management and Industry Experience				Management Skills, Knowledge, etc.
Name	Title	CEO Experience	Retail Experience	International Business Experience	Financial Business Experience	Organizational Management	Marketing/Branding	DX/IT/Security	Finance and Accounting	Risk Management/Crisis Response/Legal	Sustainability
Ryuichi Isaka	Representative Director and President	◯	◯	◯		◯	◯				◯
Katsuhiro Goto	Representative Director and Vice President		◯		◯	◯	◯	◯
Junro Ito	Representative Director		◯			◯				◯	◯
Fumihiko Nagamatsu	Director	◯	◯			◯	◯
Joseph M. DePinto	Director	◯	◯	◯		◯	◯	◯
Yoshimichi Maruyama	Director				◯				◯	◯
Toshiro Yonemura	Independent Outside Director					◯		◯		◯
Yoshiyuki Izawa	Independent Outside Director	◯		◯	◯	◯			◯		◯
Meyumi Yamada	Independent Outside Director	◯	◯			◯	◯	◯			◯
Jenifer Simms Rogers	Independent Outside Director			◯	◯				◯	◯	◯
Shinji Wada	Independent Outside Director	◯	◯			◯		◯			◯
Fuminao Hachiuma	Independent Outside Director	◯		◯		◯	◯				◯
Paul Yonamine	Independent Outside Director	◯		◯	◯	◯		◯	◯
Stephen Hayes Dacus	Lead Independent Outside Director	◯	◯	◯		◯	◯		◯
Elizabeth Miin Meyerdirk	Independent Outside Director	◯	◯	◯			◯	◯	◯
Noriyuki Habano	Standing Audit & Supervisory Board Member		◯				◯			◯
Nobutomo Teshima	Standing Audit & Supervisory Board Member		◯					◯	◯	◯
Kazuhiro Hara	Independent Outside Audit & Supervisory Board Member								◯	◯
Mitsuko Inamasu	Independent Outside Audit & Supervisory Board Member							◯		◯
Kaori Matsuhashi	Independent Outside Audit & Supervisory Board Member					◯			◯	◯

*The above table is not an exhaustive list of the knowledge and experience each person can offer.

Director (Internal)

Name (date of birth)	Area of Responsibility in the Company and Important Concurrent Positions (as of May 30, 2023)	Attendance at Meetings	Reasons for Selection (experience and knowledge)
Ryuichi Isaka (October 4, 1957) Member of the Nomination Committee	President, Representative Director and CEO Director of 7-Eleven, Inc.	Board of Directors^1 17/17 Nomination Committee^2 7/7	He has overseas business experience and broad knowledge of the retailing industry cultivated as a president of a Group company and a director of the Company as well as broad knowledge and experience in company management including the franchise business, marketing, and management administration, as well as sustainability (addressing environmental and social issues and so forth). The Company would like him to utilize this knowledge and experience to realize the management plans aimed for by the Company, and to maximize the Group's corporate value through the generation of new business and through activation of our existing business by means of using the collective capabilities of the retail group, which has various business categories.
Katsuhiro Goto (December 20, 1953) Member of the Nomination Committee	Vice President, Representative Director and CAO Information Management Supervisor Director of SEVEN-ELEVEN JAPAN CO., LTD. Director of Seven Bank, Ltd.	Board of Directors^1 17/17 Nomination Committee^2 7/7	He has broad knowledge of the retailing and financial industries cultivated as a director of the Company and its Group companies including a finance related subsidiary as well as broad knowledge and experience in areas including advertising and branding, management administration, risk management, and so forth. The Company would like him to utilize this knowledge and experience to realize the management plans aimed for by the Company, and to advance Group function (strengthening the provision of high value added services and the function of administrative divisions).
Junro Ito (June 14, 1958) Member of the Compensation Committee	Senior Managing Executive Officer, Representative Director and CSuO General Manager of ESG Development Division Supervising Officer of Superstore operations Outside Director of AIN HOLDINGS INC. Representative Director of Ito-Kogyo Co., Ltd.	Board of Directors^1 17/17 Compensation Committee^3 3/3	He has overseas business experience and broad knowledge of the retailing industry cultivated as a director of the Company and its Group companies as well as broad knowledge and experience in ESG (Environment, Social, Governance), risk management, accounting and finance, social marketing, and so forth. The Company would like him to utilize this knowledge and experience to realize the management plans aimed for by the Company, to enhance its corporate value including non-financial aspects, and to smoothly execute group management.
Fumihiko Nagamatsu (January 3, 1957)	Director and Senior Managing Executive Officer Head of Domestic CVS operations (Japan) Representative Director and President of SEVEN-ELEVEN JAPAN CO., LTD. Director of 7-Eleven, Inc.	Board of Directors^*1 17/17	He has broad knowledge of the retailing industry cultivated as a president of a Group company and a director of the Company as well as broad knowledge and experience relating to company management including the franchise business, management administration, personnel management, etc. The Company would like him to utilize this knowledge and experience to realize the management plans aimed for by the Company, to advance Group functions, and to pursue Group synergies.
Joseph M. DePinto (November 3, 1962)	Director and Senior Managing Executive Officer Head of Overseas CVS operations (North America) Director and Chief Executive Officer (CEO) of 7-Eleven, Inc Chairman of the Board of Brinker International, Inc. (Non-Executive) Director of DHC Acquisition Corp. (Non-Executive)	Board of Directors^*1 16/17	He has broad knowledge of the international retailing business cultivated as a president of our American Group company and as a director of the Company as well as broad knowledge and experience relating to company management, the franchise business, management administration, marketing and so forth. The Company would like him to utilize this knowledge and experience to realize the management plans aimed for by the Company, to provide advice to the Company's Board of Directors from an international perspective, and to promote global management of the Company.
Yoshimichi Maruyama (November 2, 1959) Member of the Compensation Committee	Director, Managing Executive Officer and CFO General Manager of Corporate Finance & Accounting Division Representative Director and President of Seven & i Financial Center Co., Ltd. Director of 7-Eleven, Inc.	Board of Directors^1 17/17 Compensation Committee^2 1/1	He has business experience in a financial institution and broad knowledge relating to the Group's overall operations cultivated as a senior officer in the risk management division of the Company and the finance division of the Company as well as broad knowledge and experience relating to risk management, finance and accounting, and so forth. The Company would like him to utilize this knowledge and experience to realize the management plans aimed for by the Company, to stabilize the Group's financial base, and to strengthen financial discipline.

Director (Outside)Updated

Name (date of birth)	Area of Responsibility in the Company and Important Concurrent Positions (as of August 31, 2023)	Attendance at Meetings	Reasons for Selection (experience and knowledge)
Toshiro Yonemura (April 26, 1951) Chair of the Compensation Committee Member of the Nomination Committee Member of the Strategy Committee	Independent Outside Director Outside Director of Kansaidengyosha Co., Ltd.	Board of Directors^1 17/17 Nomination Committee^2 7/7 Compensation Committee^*3 1/1	He has held such important positions as Superintendent General of the Tokyo Metropolitan Police Department and Deputy Chief Cabinet Secretary for Crisis Management, has held positions such as Chief Security Officer (CSO) of the Tokyo Organising Committee of the Olympic and Paralympic Games, and has broad high level knowledge and experience regarding organizational management, risk management, etc. The Company would like him to utilize this knowledge and experience to realize the management plans aimed for by the Company, and to further improve risk management and the effectiveness of the Company's management and the Board of Directors.
Yoshiyuki Izawa (February 10, 1948) Member of the Nomination Committee Member of the Strategy Committee	Independent Outside Director Outside Director, Member of the Audit and Supervisory Committee of Nitori Holdings Co., Ltd. Outside Director of Sanoh Industrial Co., Ltd.	Board of Directors^1 11/12 Nomination Committee^2 2/2	He has abundant overseas experience and a broad range of high level knowledge and experience in international corporate management, business administration, finance and capital markets, as well as his experience as an investor, having served as a Representative Director of a trading company and a financial institution, and has served such important positions as Chairman & CEO, Representative Director of BlackRock Japan Co., Ltd. The Company would like him to utilize this knowledge and experience to realize our sustainable growth and to further improve the effectiveness of our management and the Board of Directors.
Meyumi Yamada (August 30, 1972) Chair of the Nomination Committee Member of the Strategy Committee	Independent Outside Director Director of istyle Inc. Outside Director of SEINO HOLDINGS CO., LTD. Outside Director of Sompo Holdings, Inc.	Board of Directors^1 12/12 Nomination Committee^2 3/3	She has a broad range of high level knowledge and experience in EC (e-commerce), DX (digital transformation), organizational management, marketing, sustainability, among others, which she has cultivated through the operation of “@cosme,” one of Japan’s largest cosmetics and beauty portal sites, and through starting up a women’s skill development and job hunting support business. The Company would like her to utilize this knowledge and experience to realize our management plans and to further improve the effectiveness of our management and the Board of Directors.
Jenifer Simms Rogers (June 22, 1963) Member of the Compensation Committee Member of the Strategy Committee	Independent Outside Director General Counsel Asia of Asurion Japan Holdings G.K. Outside Director of Kawasaki Heavy Industries, Ltd. Outside Director of Sumitomo Mitsui Financial Group, Inc.	Board of Directors^1 12/12 Compensation Committee^2 1/1	She has experience working for international financial institutions as an In-House Counsel, as well as extensive experience as President of the American Chamber of Commerce in Japan and as an Outside Director at other companies, and through said experience she has cultivated a high level of insight into global legal and risk management, finance and accounting, and sustainability, etc. The Company would like her to utilize this knowledge and experience to realize our management plans and to further improve the effectiveness of our management and the Board of Directors.
Shinji Wada (April 3, 1952) Member of the Strategy Committee	Independent Outside Director Chairman, Director, Executive Officer of Nippon Gas Co., Ltd.	―	He has held important positions such as the representative director of a comprehensive energy company. He has a wide range of advanced knowledge and experience relating to retail business management, digital transformation (DX), organizational management and corporate governance. The Company would like him to utilize this knowledge and experience to realize its management plans and to further improve the effectiveness of its management and the Board of Directors.
Fuminao Hachiuma (December 8, 1959) Member of the Nomination Committee Member of the Strategy Committee	Independent Outside Director Outside Audit & Supervisory Board Member of YKK AP Inc. Outside Director of Subaru Corporation	―	He has a wide range of knowledge relating to international food cultivated through important positions such as the representative director of food companies in Japan and overseas. At the same time, he has a wide range of advanced knowledge and experience relating to corporate management, organizational management, marketing and sustainability. The Company would like him to utilize this knowledge and experience to realize its management plans and to further improve the effectiveness of its management and the Board of Directors.
Paul Yonamine (August 20, 1957) Member of the Strategy Committee Member of the Compensation Committee	Independent Outside Director Chairman & CEO of Central Pacific Financial Corp. Executive Chairman of Central Pacific Bank Outside Director of Sumitomo Mitsui Banking Corporation Outside Director (Outside Audit & Supervisory Committee Member) of PayPay Corporation	Board of Directors^*1 12/12	He has a broad range of high level knowledge and experience in DX (digital transformation), organizational management, and finance and accounting, etc. cultivated through his extensive management experience at consulting firms, as President of IBM Japan, Ltd. and as CEO of overseas financial institutions, among others. The Company would like him to utilize this knowledge and experience to realize our management plans and to further improve the effectiveness of our management and the Board of Directors.
Stephen Hayes Dacus (November 7, 1960) Chair of the Strategy Committee Member of the Nomination Committee	Lead Independent Outside Director Chairman of the Supervisory Board of Hana Group SAS Chairman of Daiso California L.L.C.	Board of Directors^1 12/12 Nomination Committee^2 2/2	He has served as a corporate executive officer in the retail industry and other industries both in the U.S. and Japan, and has a broad range of high level knowledge and experience in corporate management, marketing, finance and accounting, etc. cultivated through abundant global business experience. The Company would like him to utilize this knowledge and experience to realize our management plans and to further improve the effectiveness of our management and the Board of Directors.
Elizabeth Miin Meyerdirk (December 1, 1981) Member of the Strategy Committee	Independent Outside Director Chairwoman & CEO of Hey Favor, Inc.	Board of Directors^*1 12/12	She has a broad range of high level knowledge and experience in DX (digital transformation), marketing, finance and accounting, and other fields, cultivated through her experience as a co-founder of Uber Eats, a division of Uber Technologies, Inc. in the United States and her management of e-commerce companies and other positions, grobally. The Company would like her to utilize this knowledge and experience to realize our management plans and to further improve the effectiveness of our management and the Board of Directors.

Audit & Supervisory Board Member (Internal/Outside)

Name (date of birth)	Area of Responsibility in the Company and Important Concurrent Positions (as of August 31, 2023)	Attendance at Board of Directors Meetings^*1	Attendance at Audit & Supervisory Board Meetings^*4	Reasons for Selection (experience and knowledge)
Noriyuki Habano (February 10, 1958)	Standing Audit & Supervisory Board Member Audit & Supervisory Board Member of Sogo & Seibu Co., Ltd. Audit & Supervisory Board Member of Ito-Yokado Co., Ltd.	17/17	26/26	He has broad knowledge related to the overall operations of the Group cultivated as a Senior Officer of the Auditing Office of the Company, as well as broad knowledge and experience in marketing, branding, risk management, etc. The Company would like him to contribute to the establishment of a good corporate governance structure that can realize the robust and sustainable growth of the Company, create medium- to long-term corporate value, and respond to social trust by utilizing his knowledge and experience.
Nobutomo Teshima (June 15, 1962)	Standing Audit & Supervisory Board Member Audit & Supervisory Board Member of SEVEN-ELEVEN JAPAN CO., LTD. Audit & Supervisory Board Member of York-Benimaru Co., Ltd.	12/12	18/19	He has extensive knowledge and experience in finance and accounting, risk management, and information technology, etc., as well as a broad range of knowledge of the Group’s overall operations, which he cultivated as a senior officer in the Accounting Management Department and Auditing Office. The Company would like him to contribute this knowledge and experience to the establishment of a good corporate governance structure that can realize robust and sustainable growth of the Company, create medium- to long- term corporate value, and respond to social trust.
Kazuhiro Hara (February 25, 1954)	Independent Outside Audit & Supervisory Board Member Certified Public Accountant Certified Tax Accountant	17/17	26/26	He has abundant experience and technical knowledge related to finance, accounting, tax, and risk management cultivated as a certified public accountant and tax accountant. The Company would like him to contribute to the establishment of a good corporate governance structure that can realize the robust and sustainable growth of the Company, create medium- to long-term corporate value, and respond to social trust by utilizing his knowledge and experience.
Mitsuko Inamasu (March 15, 1976)	Independent Outside Audit & Supervisory Board Member Attorney at Law Outside Director, Member of the Audit and Supervisory Committee of NTT DATA Corporation	17/17	26/26	She has abundant experience and technical knowledge related to overall corporate legal affairs, including legal affairs pertaining to the digital field, and risk management cultivated as an attorney at law. The Company would like her to contribute to the establishment of a good corporate governance structure that can realize the robust and sustainable growth of the Company, create medium- to long-term corporate value, and respond to social trust by utilizing her knowledge and experience.
Kaori Matsuhashi (June 7, 1969)	Independent Outside Audit & Supervisory Board Member Certified Public Accountant Representative Director of Luminous Consulting Co., Ltd. Outside Director, Member of the Audit and Supervisory Committee of YASKAWA Electric Corporation	17/17	26/26	She has abundant experience and technical knowledge related to finance, accounting, business management, and risk management cultivated through her experience in a business company and as a consultant and certified public accountant. The Company would like her to contribute to the establishment of a good corporate governance structure that can realize the robust and sustainable growth of the Company, create medium- to long-term corporate value, and respond to social trust by utilizing her knowledge and experience.

*1 Attendance at meetings of the Board of Directors held in the 18th fiscal year (from March 1, 2022 to February 28, 2023) (The same applies to the following.)

*2 Attendance at meetings of the Nomination Committee held in the 18th fiscal year (from March 1, 2022 to February 28, 2023) (The same applies to the following.)

*3 Attendance at meetings of the Compensation Committee held in the 18th fiscal year (from March 1, 2022 to February 28, 2023) (The same applies to the following.)

*4 Attendance at meetings of the Audit & Supervisory Board held in the 18th fiscal year (from March 1, 2022 to February 28, 2023)

2. Numbers and composition ratios of Outside Directors and Outside Audit & Supervisory Board Members

As a holding company, the Company needs to conduct comprehensive and multifaceted management for diverse business domains. Accordingly, the composition of its Outside Directors and Outside Audit & Supervisory Board Members is to be examined considering not only ensuring diversity but also bearing in mind the overall balance of knowledge, experience, and skills. The Company therefore values having a diverse team of Outside Directors and Outside Audit & Supervisory Board Members to provide multifaceted management advice, including raising issues, and thereby ensures active discussion within the Board of Directors.
While being extremely conscious of the diversity of its Outside Directors and Outside Audit & Supervisory Board Members, we believe that the most important aspect is "personnel selection." We have not yet reached the conclusion that setting formal numbers of Outside Directors and Outside Audit & Supervisory Board Members based on constant composition ratios would be optimal for the Company's Board of Directors. Therefore, we have not set a specific policy on the composition ratio of Outside Directors and Outside Audit & Supervisory Board Members, including Independent Outside Directors.
We will continue to discuss this point, not only through dialogue with our stakeholders, but also based on social trends.

3. View on independence of Outside Directors and Outside Audit & Supervisory Board Members and independence standards [CGC Principle 4.9]

(1) Designation of Independent Directors and Independent Audit & Supervisory Board Members

The Company designates all Outside Directors and Outside Audit & Supervisory Board Members who satisfy the qualifications for independent officers as the Independent Outside Directors and Independent Outside Audit & Supervisory Board Members.

(2) Independence standards for Outside Directors and Outside Audit & Supervisory Board Members

As mentioned above, the Company emphasizes diversity in its Directors and Audit & Supervisory Board Members, including in Outside Directors and Outside Audit & Supervisory Board Members, and strives to secure high-quality external human resources who will support enhanced corporate governance. Accordingly, the Company has adopted the following standards for independence of Outside Directors and Outside Audit & Supervisory Board Members, considering that it is better to judge each candidate from the essential perspective of whether they have any potential conflict of interest with general shareholders.
The opinions of the Outside Directors and Outside Audit & Supervisory Board Members were also considered in the adoption of the following standards; the Company will continue to discuss the standards going forward, noting that other companies and so forth have examined their independence standards from various perspectives.

1. Independence standards for Outside Directors and Outside Audit & Supervisory Board Members

i) Fundamental approach
Independent Directors and Independent Audit & Supervisory Board Members are defined as Outside Directors and Outside Audit & Supervisory Board Members who have no potential conflicts of interest with general shareholders of the Company.
In the event that an Outside Director or an Outside Audit & Supervisory Board Member is likely to be significantly controlled by the management of the Company or is likely to significantly control the management of the Company, that Outside Director or Outside Audit & Supervisory Board Member is considered to have a potential conflict of interest with general shareholders of the Company and is considered to lack independence.
ii) Independence standards
In accordance with this fundamental approach, the Company uses the independence standards established by the financial instruments exchange as the independence standards for the Company's Outside Directors and Outside Audit & Supervisory Board Members.

2. De minimis thresholds for information disclosure regarding the attributes of Independent Directors and Independent Audit & Supervisory Board Members as negligible

(In the most-recent business year of the Company)

With regard to "transactions," "less than 1% of the non-consolidated revenues from operations of the Company in the most recent accounting period"
With regard to "donations," "less than ¥10 million"

4. Support system for Outside Directors and Outside Audit & Supervisory Board Members

The Company has assigned dedicated employees to assist the Outside Directors and Outside Audit & Supervisory Board Members in their duties, enabling close coordination and smooth exchange of information with the internal Directors and internal Audit & Supervisory Board Members. The Company has also concluded liability limitation agreements with Outside Directors and Outside Audit & Supervisory Board Members to ensure they can perform their roles as expected. These agreements limit the amount of their liability for compensation for damage to the minimum legally stipulated amounts.

5. Main activities of Outside Directors and Outside Audit & Supervisory Board Members

(1) Remarks at meetings of the Board of Directors and the Audit & Supervisory Board during the 17th fiscal year (from March 1, 2022 to February 28, 2023)

Outside Director	Kunio Ito	Toshiro Yonemura	Yuki Izawa	Meyumi Yamada	Jenifer Simms Rogers
Advice and proposals made by Outside Directors to ensure the validity and appropriateness of the Board's decision making	Opinions based on his broad high level knowledge and experience regarding finance, accounting, economics, ESG (Environment, Society, Governance), risk management, etc.	Opinions based on his broad high level knowledge and experience regarding organizational management, risk management, etc.	Opinions based on his broad high level knowledge and experience regarding international corporate management, business management, finance and capital markets, etc.	Opinions based on her broad high level knowledge and experience regarding digital transformation (DX), organizational management, marketing and sustainability, etc.	Opinions based on her broad high level knowledge and experience regarding global legal affairs and risk management, finance and accounting, and sustainability, etc.

Outside Director	Paul Yonamine	Stephen Hayes Dacus	Elizabeth Miin Meyerdirk	Tetsuro Higashi
Advice and proposals made by Outside Directors to ensure the validity and appropriateness of the Board's decision making	Opinions based on his broad high level knowledge and experience regarding digital transformation (DX), organizational management, and finance and accounting, etc.	Opinions based on his broad high level knowledge and experience regarding organizational management, marketing, and finance and accounting, etc.	Opinions based on her broad high level knowledge and experience regarding digital transformation (DX), marketing, and finance and accounting, etc.	Opinions based on his broad high level knowledge and experience regarding the international corporate management, management administration, finance, accounting, etc.

Outside Audit & Supervisory Board Member	Kazuhiro Hara	Mitsuko Inamasu	Kaori Matsuhashi
Opinions expressed by Outside Audit & Supervisory Board Members	Questions and opinions based on his abundant experience and technical knowledge related to finance, accounting, tax and risk management	Questions and opinions based on her abundant experience and technical knowledge related to overall corporate legal affairs and risk management	Questions and opinions based on her abundant experience and technical knowledge related to finance, accounting, management administration and risk management

* Outside Director Tetsuro Higashi retired from his position on December 31, 2022.

(2) Functions and roles of Outside Directors and Outside Audit & Supervisory Board Members

The Outside Directors and Outside Audit & Supervisory Board Members provide supervision or audits and advice and proposals from an external perspective based on their respective expertise and wide-ranging, high-level experience and insight into management from an objective and neutral standpoint with no risk of conflict of interest with general shareholders, and fulfill the function and role of ensuring valid and appropriate decision- making and business execution by the Board of Directors.

6. Exchange of opinions with Outside Directors and Outside Audit & Supervisory Board MembersUpdated

In addition to participating in meetings of the Board of Directors, Outside Directors and Outside Audit & Supervisory Board Members meet with the Representative Directors, Directors, Standing Audit & Supervisory Board Members, and others. These meetings, including Management Opinion Exchange Meetings, are held on a regular and as-needed basis. The themes are set for each of the meetings, centered on various management issues and matters of high social concern. Reports are provided by Directors, the internal control divisions, and so forth regarding the status of business execution and internal control, and explanations are given in response to questions from the Outside Directors and Outside Audit & Supervisory Board Members, who also express their opinions regarding the Company's management, corporate governance, and other topics based on their respective expert knowledge, experience, and insights. In these and other ways, the Outside Directors and Outside Audit & Supervisory Board Members exchange frank and lively opinions. The Outside Directors and Outside Audit & Supervisory Board Members also exchange opinions with the Directors and Audit & Supervisory Board Members, etc. of operating companies.
Through these activities, Outside Directors supervise operational execution, and Outside Audit & Supervisory Board Members perform audits of operational execution and accounting practices.

Establishment of the Strategy Committee

At the meeting of the Board of Directors held on March 9, 2023, we established the Strategy Committee, composed solely of independent outside directors.
The Strategy Committee will monitor the progress of the Group’s strategic priorities and continue to analyze and review the optimal group business structure and strategic alternatives (IPO, spin-off, etc.) comprehensively and objectively to achieve the Group’s strategic goals. Based on the results of this review, the Strategy Committee will provide advice to the Board of Directors on strategies to increase the Group’s medium- to long-term corporate value.

Executive Session

Since October 2022, the Company has held meetings attended only by Outside Directors and Outside Audit & Supervisory Board Members. The purpose of these meetings, which are led by the Lead Independent Outside Director, is for Outside Directors and Outside Audit & Supervisory Board Members to actively exchange their candid opinions with each other, deepen the relationships of trust between them, and achieve a shared recognition of the issues facing the Group, in order to help improve the quality of discussions by the Board of Directors.

What is the Management Opinion Exchange Meeting?

Comprising all the Company's Directors and Audit & Supervisory Board Members, the Management Opinion Exchange Meeting is a meeting body aimed at explaining in advance the proposals at the Board of Directors meetings to the Directors and the Audit & Supervisory Board Members, as well as sharing information on the management and business strategies of the Company and operating companies.

7. Activities of the Board of Directors

(1) Setting the dates of the meetings of the Board of Directors and securing deliberation time

The meetings of the Board of Directors of the Company are basically held once per month, and are chaired by a Director selected by the Board of Directors.

Item	Details
Setting the dates of the meetings of the Board of Directors	Considering the increase in the number of Outside Directors and Outside Audit & Supervisory Board Members, as well as the fact that some Directors reside overseas, the Company begins preparations early and sets the dates of meetings six months prior to the commencement of the fiscal year.
Deliberation time	In light of the fact that meeting materials are shared in advance, the key points of the agenda are explained clearly and briefly, while sufficient time is allocated for question and answer sessions and discussion. The Company is making efforts to secure sufficient time for deliberation, through means such as prolonging the meetings themselves, in order to accommodate the recent increase in active discussions from diverse standpoints.
Matter for resolution and reporting	If further deliberation is required, the agenda, etc. after being redrafted and improved to reflect the observations of the Board of Directors, is again presented as follow-up deliberations at the next and subsequent meetings of the Board of Directors, and is accordingly confirmed and resolved, etc.

Deliberation time of the meeting of the Board of Directors*

Deliberation time of the Management Opinion Exchange Meetings*

(2) Matters for deliberation

Although the Board of Directors deliberates a wide range of topics, the major items and the points of each item are as follows. (The following presents examples. Accordingly, deliberations include, but are not limited to these items.)

Main matters for deliberation	Examples of main themes discussed from May 2022 to April 2023
1. Matters determined by laws and regulations, including the Companies Act	Approval of quarterly financial statements Approval of the agenda of the Shareholders' Meetings, etc.
2. Matters determined by the Corporate Governance Code	Assessment of cross-shareholdings Evaluation of the Board of Directors’ effectiveness Establishment of a Lead Independent Outside Director Report on the status of dialogue with shareholders and institutional investors, etc.
3. Items for deliberations, in cooperation with the Nomination Committee and the Compensation Committee	Addition of Nomination Committee members Deliberation of candidates for directors proposed by shareholders, etc.
4. Progress of the Medium-Term Management Plan, and the strategies and policies of the Group and its operating companies	Transfer of share of Sogo & Seibu Co. Reevaluation of Group strategy, etc.
5. Internal controls, the status of risk management, and the implementation status of compliance	Report on Internal Audit & Supervisory Board Members Fundamental review of risk management Review of deliberation and decision-making process, etc.

8. Evaluation of the Board of Directors' effectiveness [CGC Supplementary Principle 4.11.3]

(1) Fundamental approach to evaluation of the Board of Directors' effectiveness

The Company conducts the Board of Directors' effectiveness evaluation (referred to as "Board of Directors' evaluation") through objective analysis and thorough discussions by members of the Board of Directors regarding "whether the Board of Directors is effectively functioning to realize corporate value and improve corporate governance as the Company aims." The evaluation is positioned as an important factor in the PDCA cycle leading to specific actions for further improvements.
In addition, the Company has established the Board of Directors' evaluation implementation policy, as follows.

Board of Directors' evaluation implementation policy

1. The evaluation shall basically be a "self-evaluation," to be performed each year by all Directors and all Audit & Supervisory Board Members.
2. Progress of the important topics set in the previous year's Board of Directors' evaluation shall be confirmed and evaluated.
3. With regard to the Board of Directors' evaluation process (conducting surveys and interviews, utilizing third-party organizations, etc.), the Board of Directors' secretariat shall prepare a draft each time, and this draft shall be discussed by the Board of Directors.

(2) FY2022 Board of Directors' evaluation process

Overview

With regard to the FY2022 Board of Director' evaluation process, the evaluation was carried out by utilizing third-party organizations to conduct surveys and individual interviews with all Directors and Audit & Supervisory Board Members, followed by discussions with all members.

	Pre-evaluation survey	Individual interviews	Discussion
FY2017	Conducted for all Directors and all Audit & Supervisory Board Members	Conducted for all Directors and all Audit & Supervisory Board Members	Conducted for all Directors and all Audit & Supervisory Board Members
FY2018		Conducted only for newly appointed Directors and newly appointed Audit & Supervisory Board Members
FY2019		Conducted for all Directors and all Audit & Supervisory Board Members
FY2020
FY2021
FY2022

Scope of evaluation

In addition to the Board of Directors itself, the scope of evaluation also covered relevant meeting bodies such as the Nomination Committee and the Compensation Committee, advisory bodies, as well as the Management Opinion Exchange Meeting and the Audit & Supervisory Board.

(3) Evaluation schedule and evaluation process

Overviews of the Board of Directors' evaluation schedule and process are as below.

Overviews of evaluation schedule and process

Evaluation schedule and evaluation process

Overviews of evaluation schedule and process

(4) Results of Board of Directors' evaluation

The overview of the aforementioned Board of Directors' evaluation (resolved on May 11, 2023) is as below.

Overview of process of the FY2022 Board of Directors' evaluation

1. Survey and interview results were reported by the third party at a meeting of the Board of Directors to ensure objectivity
2. Major issues that emerged from the results of the survey and interviews were categorized into (a) matters which do not require deep discussions and (b) matters which require separate discussions and reporting, and a response to them was then organized
3. Based on the above, we will hold discussions on the FY2023 important topics and the process of preparing the agenda for meetings of the Board of Directors and then confirm the course of action for the operation of the Board of Directors in FY2023

Overview of results of the FY2022 Board of Directors' evaluation

1. From the viewpoint of realizing a world-class retail group, the Board of Directors implemented a bold change to a board structure with a majority of outside directors at the AGM in 2022 and has been ensuring the effectiveness of the Board of Directors by increasing the effectiveness of governance.
2. Each director and audit & supervisory board member deliberates from a much more diverse perspective based on their respective knowledge, experience, and abilities, through free and vigorous discussions, etc. and the Board of Directors appropriately fulfills monitoring functions and other roles and responsibilities.
3. Recently, based on the voice of the capital market, we conducted the Group Strategy Reevaluation, announced the results and the update of Mid-term Management Plan and established the Strategy Committee consisting solely of outside directors.
4. In FY2023, with a focus on the priority themes of the Board of Directors in FY2023, we aim to further improve the effectiveness of the Board of Directors and to achieve steadily the Mid-term Management Plan.

FY2023 important topics [Evolution (deepening) of meetings of the Board of Directors following changes in the composition of the Board of Directors]

Important topics		Measures
Evaluation of the progress and verification of the Group’s growth strategies		North America, Japan and other global CVS business strategies, and food, digital transformation and last one mile, and financial strategies, etc.
Monitoring of Superstore Operations business turnaround		Quarterly confirmation of the state of progress on the drastic transformation of the Superstore Operations business
Ongoing review of business portfolio		Ongoing review of strategic options
Strengthening the Group’s governance structure		Monitoring of the Group’s governance and risk management structures, monitoring relating to sustainable management initiatives, and discussions relating to the way the governance structure should be such as the roles of the Board of Directors
Confirmation of initiatives relating to human capital management etc.		Strengthening of human resource development and engagement, and strengthening of cooperation on the status of reviews by the Nomination Committee, etc.

We will confirm and evaluate the progress on these important topics at upcoming and future evaluations of the Board of Directors.
Based on the results of this evaluation of the Board of Directors' effectiveness, we will work to further improve the effectiveness of the Board of Directors in order to achieve sustainable growth and increase corporate value over the medium to long term.