The Role and Composition of the Board of Directors

Skills Matrix

Name Position Management Experience ESG / Sustainability Marketing and Business Strategy IT and infrastructure technology Industry knowledge Internationalism and diversity Legal and Risk Management Financial Accounting / M&A
Tsunenori Sato President and Representative Director ○ ○ ○ ○ ○
Koji Sakata Representative Senior Managing Director and Executive Officer, General Manager of Technology Development Department ○ ○ ○ ○ ○
Hirotaka Oeda Managing Director and Executive Officer, General Manager of Corporate Strategy Department and Retail EC Systems Division ○ ○ ○ ○ ○
Katsuo Nakayama Director and Executive Officer, General Manager of Administration Department ○ ○ ○ ○ ○
Kazunori Kono Director and Executive Officer, General Manager of Cashless Payment Business Division ○ ○ ○ ○ ○
Waka Abe Outside Director ○ ○ ○ ○
Masahito Motoyama Director and Full-Time Audit & Supervisory Board Member ○ ○ ○ ○
Makoto Sato Outside Director and Audit & Supervisory Board Member ○ ○ ○ ○
Daisuke Koizumi Outside Director and Audit & Supervisory Board Member ○ ○ ○ ○

Up to five areas of focus or expertise are listed as those particularly expected of Directors.
The list does not represent all of the knowledge and experience possessed by each director.

Summary of evaluation results of the Board of Directors’ effectiveness

ITFOR Inc. (the “Company”) has set a long-term goal to achieve sustainable growth. In order to accelerate its efforts toward this goal, the Company has been working to strengthen its corporate governance.
Furthermore, in order to enhance the functions of the Board of Directors and ultimately enhance corporate value, the Company conducts an analysis and evaluation of the effectiveness of its Board Directors. The Company hereby announces the results of the evaluation of the effectiveness of its Board of Directors for FY2023, as described below.

1. Method of analysis and evaluation

With the support of an external organization, the Company conducted a survey of all members of the Board of Directors, and based on the aggregated results reported by the external organization, the Board analyzed and evaluated the results, and discussed future initiatives and measures.

Target participants:

Five directors(excluding Audit & Supervisory Board members), including one Outside Director, and three directors who are Audit & Supervisory Board members, including two outside directors, for a total of eight directors.

Evaluation method:

Anonymous questionnaire (five-point scale and free-form responses)

Summary of Questions:

  1. 1) Composition of the Board of Directors
  2. 2) Operation of the Board of Directors
  3. 3) Discussions of the Board of Directors
  4. 4) Monitoring functions of the Board of Directors
  5. 5) Performance of outside directors (including Audit & Supervisory Board members)
  6. 6) Support system for directors (including Audit & Supervisory Board members)
  7. 7) Training
  8. 8) Dialogue with shareholders (investors)
  9. 9) Your initiatives
  10. 10) Operation of the Nomination Committee and Compensation Committee
  11. 11) General summary

2. Evaluation results of the Board of Directors‘ effectiveness (Summary)

As a result of deliberations at the Company’s Board of Directors based on an analysis of the survey results, the Board of Directors is functioning appropriately in general in terms of its operations, decision-making, and supervision. Accordingly, the Company’s Board of Directors has determined that “the Board of Directors’ effectiveness is generally ensured.” The individual topics related to the evaluation results are as follows:

(1) Highly Evaluated Areas
  • Sufficient discussion regarding profitability, capital efficiency, and other factors in the decision-making process for management strategies and business plans
  • The remuneration system for directors
  • A system in place to appropriately provide necessary information for the execution of directors’ duties
(2) Areas with Room for Improvement
  • Involvement in the formulation and operation of a succession plan
  • The timing and content of pre-meeting explanations of items to be discussed at Board of Directors

3. Future initiatives

As a result of discussions at the Board of Directors, the following matters were recognized as issues requiring ongoing efforts going forward.:

(1) Formulating improvement policies and enhancing discussions on these issues through analyzing and evaluating our capital costs, capital profitability, and market evaluations for management that is conscious of cost of capital and stock price
(2) Improving the overall quality of management by providing all directors with opportunities to acquire the necessary knowledge and by ensuring diversity among executive candidates and systematically strengthening and developing their skills
(3) Strengthening the system to ensure that necessary and sufficient information, as well as prior explanations, are promptly reported and shared with the management and the Board of Directors to enable timely and appropriate discussions, given the increasing importance of the content of discussions at the Board of Directors

The Company’s Board of Directors, based on the results of this evaluation and issues that need to be addressed, will improve the effectiveness of its operations by further enhancing discussions at the Board of Directors. In addition, the Company will continue to engage in transparent, fair, and prompt decision-making and make efforts to further reinforce corporate governance going forward.

Independence Standards and Qualifications for Independent Outside Directors

The Board of Directors of the Company has set forth the following criteria (1) through (3) when electing Independent Outside Directors, to enhance the supervision function over management and strengthen the corporate governance structure.

(1) An Independent Outside Director must currently not be an executive of the Company, its subsidiaries, or affiliates of the Company. In addition, an Independent Outside Director must not have been an executive of the Company, its subsidiaries, or affiliates of the Company during the last 10 years.
(2) An Independent Outside Director must currently not be a party whose major client or supplier is the Company or an executive thereof, or a major client or supplier of the Company or an executive thereof.
(3) An Independent Outside Director must not be a consultant, an accounting or legal specialist, an accounting auditor, or a counterparty to an advisory contract, currently receiving a large amount of cash or other property from the Company aside from the compensation as a Director (if the entity receiving the stated assets is a corporation, union or other organization, then any person belonging to said organization).

In selecting the candidates, the Board of Directors of the Company also fully examines whether the candidate holds the qualifications that will allow the candidate to fulfill his/her roles and responsibilities as an Independent Outside Director, such as whether the candidate is expected to contribute to the frank, active, and constructive discussions of the Board, in addition to whether a candidate complies with these criteria of independence.

Reason for nomination of the director

Position Name Reason for the appointment of the Director
President and Representative Director Tsunenori Sato Mr. Tsunenori Sato has made significant contributions to the development and sales of systems for financial institutions such as regional banks in the systems business for financial institutions, which is a core business of the Company. Based on such abundant achievements and experience, he assumed the office of President and Representative Director of the Company in April 2019. In the expectation that he will make important management decisions and appropriately fulfill supervisory functions in business execution, the Company has judged that he will contribute to achieve sustainable growth of the Company and enhance corporate value over the medium to long term, and is an appropriate person to be renominated as Director.
Representative Senior Managing Director and Executive Officer Koji Sakata Mr. Koji Sakata has leveraged his abundant experience as a system engineer and has contributed to the improvement of the quality of the Company’s packaged software and increased customer satisfaction in the customer support business. He assumed the office of Representative Senior Managing Director and Executive Officer in October 2020, and has made contributions to accelerating execution of business in the technical division and strengthening the management system and functions accompanying business expansion. The Company has judged that he will make use of his experience and knowledge in management, and is an appropriate person to be renominated as Director.
Managing Director and Executive Officer Hirotaka Oeda Mr. Hirotaka Oeda has made significant contributions to the development of systems for servicers and non-banks in the systems business for financial institutions, which is a core business of the Company, as well as business expansion. He has fulfilled his duties appropriately based on such achievements and his experience and insight cultivated through striving for the supervision of the entire business as Director and Executive Officer, General Manager of Corporate Strategy Department. The Company has continued to judge that he is an appropriate person to be renominated as Director with expectation that he will drive further business expansion of the Group.
Director and Executive Officer Katsuo Nakayama Mr. Katsuo Nakayama has leveraged his experience of serving as Outside Corporate Auditor of the Company as a certified public accountant, and has supported the timely disclosure system and supervised Internal Auditing Division as General Manager of Administration Department of the Company since June 2010. In addition to such achievements, taking into consideration his experience and insight in promoting the expansion of the BPO business for local government and risk management as a responsible person of the subsidiaries, the Company has judged that he is an appropriate person to be renominated as Director.
Director and Executive Officer Kazunori Kono Since joining the Company, Mr. Kazunori Kono has accumulated a wealth of knowledge mainly in the Network Solution Division and has served as Deputy General Manager of the Corporate Strategy Department and General Manager of the Cashless Payment Business Division. He has a wide range of experience in business, technology, and sales. Based on his achievements and experience, the Company has judged that he is an appropriate person as a Director.
Outside Director Waka Abe Ms. Waka Abe has experience and insight in launching new businesses overseas and serving as Director of a business corporation. Accordingly, the Company expects that she will contribute to strengthening a function of supervising the Company’s management by, for example, making strict and fair judgement about appropriateness of decision-making by the Board of Directors. The Company has therefore judged that she is an appropriate person to be renominated as Outside Director.

Attendance at the Board of Directors

The attendance record for the Board of Directors in fiscal year 2023 is as follows.

Position Name Attendance status
President and Representative Director Tsunenori Sato 100% (21/21 meetings)
Representative Director Koji Sakata 95% (20/21 meetings)
Director Hirotaka Oeda 100% (21/21 meetings)
Director Katsuo Nakayama 100% (21/21 meetings)
Director Masahito Motoyama 100% (21/21 meetings)
Outside Director Waka Abe 100% (21/21 meetings)
Outside Director Makoto Sato 100% (21/21 meetings)
Outside Director Daisuke Koizumi 100% (21/21 meetings)