Corporate Governance System

Basic views

At the Company, we believe that sound corporate activities based upon high ethical standards and fairness make a crucial part of our business philosophy, and thus we shall endeavor to strengthen corporate governance according to the principles stated below, ensuring the transparency and compliance across our management and operations as our fundamental objective:

1. Strive to protect shareholders’ rights and ensure the equitable treatment of all shareholders
2. Strive to appropriately collaborate with stakeholders other than shareholders
3. Strive to ensure proper disclosure and transparency of information
4. Strive to have the Board of Directors appropriately fulfill its roles and responsibilities, reflecting upon fiduciary duty and accountability to the shareholders
5. Strive to have constructive dialogue with shareholders

The Company shall establish the Corporate Governance Guidelines, resolved by the Board of Directors, for the purpose of achieving sustainable growth and improving the Company’s long-term corporate value so that the Company’s shares are held on a long-term basis by its shareholders. The Corporate Governance Guidelines can be viewed on the Company’s website.

Chart of Corporate Governance Structure

Corporate Governance System

The Board of Directors makes decisions on matters stipulated by laws and regulations and other important matters related to general management, and is positioned as an entity that supervises business execution. Also, the Board currently comprises seven directors, including four external directors. Board meetings are held as required in order to make prompt and flexible management decisions.
Furthermore, the Company adopts a Company with an Audit & Supervisory Committee structure, and two of the three Audit & Supervisory Committee members are external directors.The Company’s Audit & Supervisory Committee members monitor corporate governance with the mission of responding to the trust of shareholders and the demands of society. This is done by attending meetings of the Board of Directors and other important meetings, hearing reports on business from directors and other relevant personnel, examining the status of operations and assets, and inspecting important documents.
The Company will continue to further enhance its organizational structure and mechanisms, focusing on statutory functions such as the General Meeting of Shareholders, Board of Directors, Audit & Supervisory Committee, and accounting auditors. We will strive to ensure accountability through prompt disclosure of management and financial information and proactive efforts in investor relations (IR) activities.

Corporate Governance Guidelines

The Company shall set forth the Corporate Governance Guidelines for the purpose of clarifying the basic views and the initiatives to be taken by it concerning corporate governance.

Corporate Governance Report

For details of the Company’s corporate governance, please refer to the “Corporate Governance Report” that we have submitted to the Tokyo Stock Exchange.

Independence Standards for External Directors

The Company has established “Independence Standards for External Directors” with the aim of clarifying standards for the independence of External Directors.

Structure and institutional design

Board of Directors

The Board is chaired by the Chairman and Representative Director and comprises seven directors in total: four directors other than Audit & Supervisory Committee members and three directors who are Audit & Supervisory Committee members. Four of the seven directors - a majority - are independent external directors. The Board makes decisions on matters prescribed by laws and regulations and other important management matters, supervises business execution, and meets as necessary to enable prompt and flexible decision-making.

Audit & Supervisory Committee

The Article of Incorporation provide for up to five directors who are Audit & Supervisory Committee members. The Committee is chaired by an independent external director and consists of one full-time Audit & Supervisory Committee member and two independent external directors. It audits the execution of directors’ duties and monitors and verifies the establishment and operation of internal control systems.

Nomination & Compensation Committee

The Nomination & Compensation Committee is chaired by an independent external director and comprises the Chairman and Representative Director and two independent external directors who possess corporate management experience. The Committee is a voluntary advisory body established with the purpose of utilizing the knowledge and advice of external directors, as well as further enhancing the independence, objectivity, and accountability of the Board of Directors. The Committee mainly deliberates on the appointment and dismissal of directors and other officers, as well as the policies and specifics of remuneration and other compensation received by directors and other officers, and provides advice and recommendations to the Board of Directors.

Management Meetings

Management meetings are chaired by the Chairman and Representative Director and comprise executive directors and corporate officers of the Company and its principal subsidiaries, or persons in equivalent positions. It is convened as appropriate to enhance the Board's effectiveness and management efficiency, deliberate important matters concerning business execution, and devote sufficient time to focused strategic topics.

Evaluating the Effectiveness of the Board of Directors

Based on the Corporate Governance Guidelines, the Company conducts an annual evaluation of the effectiveness of the Board of Directors as a whole.

Evaluation Method

In the current fiscal year, we conducted a questionnaire-based survey of all Directors and Audit & Supervisory Board Members regarding the activities of the Board of Directors and its advisory committees, the Nomination Committee and the Compensation Committee. To ensure objectivity in the evaluation of the Board of Directors and further improve the effectiveness of corporate governance, we engaged an external organization. In designing the questionnaire, we utilized the expertise of the external organization and we also received a report analyzing the survey results prepared by that organization.

[Composition of the Questionnaire]
(1) Composition and operation of the Board of Directors
(2) Management strategy and business strategy
(3) Corporate ethics and risk management
(4) Management evaluation and compensation
(5) Dialogue with shareholders and other stakeholders

Based on the report of the external organization, deliberations were held at the Council composed of External Directors and External Audit & Supervisory Board Members on June 20, 2025 and the Board of Directors meeting on August 7, 2025.

Outline of evaluation results (Fiscal 2024)

(1) Overall assessment:

The results of the questionnaire showed that the Company’s Board of Directors is highly evaluated for respecting free and open discussion, providing information in advance to External Directors so that they can participate constructively in discussions, setting up opportunities for informal discussions with management, and making efforts to improve effectiveness, and that effectiveness is generally ensured.

(2) Issues for further improvement of evaluation:

On the other hand, with regard to the issues identified from the results of the questionnaire, we recognized the need to address the following items in order to further improve the effectiveness of the Board of Directors:

1. Provide opportunities to regularly review progress and deliberate on initiatives related to important invested projects and management issues
2. Clarify current issues and policies so that the Board of Directors can more effectively oversee human capital development
3. Improve the sophistication of risk management systems, including governance of group companies

(3) Efforts to improve effectiveness: The Company’s Board of Directors will continue to further examine and deliberate on the issues identified, and will endeavor to implement improvements to enhance the effectiveness of the Board.

Cross-shareholdings

The number of shares of other companies that AMADA holds as cross-shareholdings shall be kept to the minimum necessary, and the Board of Directors shall annually assess whether or not to hold individual cross-shareholdings, closely examining whether the benefits and risks from each holding cover the Company’s cost of capital. Our policy is to proceed with the sale of any shares not deemed sufficiently significant to hold as a result of these examinations.
Furthermore, in the event that a holder of cross-shareholdings in the Company expresses an intention to sell the Company’s shares, the Company shall not prevent sale.

Number of issues held (listed stocks)

Dialogue with shareholders and investors

AMADA actively enters into constructive dialogues with shareholders and investors with the aim of sustaining growth and boosting medium- to long-term corporate value.

Major AMADA Group attendees

Chairman, President, External Directors, Executive General Manager of Finance Div., Finance Dept. General manager, Section manager, and members engaged in IR

Overview of shareholders and investors engaging in dialogues

In fiscal 2025, approximately 700 companies in total, including institutional investors and analysts inside and outside Japan, participated in earnings briefings, individual meetings and other IR activities. We also exchanged opinions on ESG in general with a cumulative total of 10 companies.

Major dialogue themes

Growth strategy direction and shareholder return policy in Medium-term Business Plan 2025, growing revenue and profitability, progress in regional strategies, streamlining the balance sheet, efforts to cultivate new markets, and sustainability activities including ESG.

Feedback of information gained in dialogue to upper management and the Board of Directors

When dialogues are held at results briefings, individual interviews, or other activities, reports are drafted summarizing dialogue content and the opinions of shareholders and investors, which are shared with AMADA officers and other parties. We also exchanged opinions on ESG in general with a cumulative total of 10 companies. These reports are also presented to the Board of Directors as part of the IR activity summary each year.

Anti-takeover measures

The Company does not utilize any anti-takeover measures.