The Statutory Committee Performance

About the Nomination Committee

The Nomination Committee is responsible for proactively enhancing the transparency and fairness of the Group’s governance to ensure the Board of Directors can fulfill their mission effectively. In particular, the committee plays a key role in effectively advancing well-ordered succession plans for executives, including the Group CEO, ensuring the best appointments of key executives across the Sompo Group, and building an optimal member portfolio for the Board. The committee has also established an oversight framework characterized by a high degree of effectiveness and independence by formulating policies and criteria for the appointment of directors, executive officers, and senior vice presidents; determining candidate proposals; participating in appointments to key positions at Group companies; and deliberating on the appointment or dismissal of the Group CEO based on their individual performance evaluation.
As described below, in FY2025, we implemented measures and made decisions to establish a management and oversight framework that will drive the transformation needed to realize SOMPO’s Purpose.
First, with a view to establishing a new management structure, we selected Mr. Katsuyuki Tajiri as Representative Executive Officer and Mr. Tajiri and Mr. Jeffrey Hayman as candidates for the Board of Directors. Mr. Tajiri possesses extensive experience in planning and management both in Japan and overseas, as well as exceptional strategic insight; we have determined that he is the ideal candidate for serving as the Group CFO, who oversees the financial and capital strategies of the entire Group.
We also selected Mr. Hayman as the ideal candidate to strengthen the oversight and monitoring functions of the Board of Directors from a global perspective, given his high level of expertise in insurance risk governance gained from his experience in key positions at one of the world’s leading global insurance groups and as Chairman of the Board of Directors at a listed insurance company in Europe.
In addition, we focused on formulating and implementing succession plans to ensure the steady and effective development of senior executives and the next generation of management personnel who will provide the foundation for enhancing corporate value over the longer term. In FY2025, we established guidelines for 87 key positions other than the Group CEO, and pursued diversity in our talent pool by setting a clear selection criterion requiring that at least 50% of candidates be women. Furthermore, with regard to the training and recruitment of the next generation of management personnel who will lead the Group in the future, we discussed multifaceted training processes and recruitment policies, including accelerating the hiring of external candidates and digital natives and enhancing high-level decision-making capabilities, as well as the need for personnel training programs that would include overseas assignments designed to prepare candidates for success in global markets. Additionally, we have continued to discuss the succession plan for the Group CEO in an objective manner to guarantee a transparent and systematic approach, and are making strides in cultivating a more sophisticated successor development pipeline.
We also reviewed the structure of the Board of Directors and reduced the number of directors from 13 to 11. This move is intended to foster more in-depth engagement by each director in discussions, establish a more agile oversight framework, and promote swift and effective decision-making in a rapidly changing business environment.
To support these initiatives, the Nomination Committee maintains close communication and actively exchanges views on an ongoing basis with the Group CEO and the entire executive team. Going forward, the committee will continue to pursue an optimal executive portfolio that embodies diversity and expertise, strengthening mechanisms to consistently and effectively develop high-caliber management talent.

Activities and Achievements

The committee held a total of ten meetings in FY2025. The principal agenda items discussed at these meetings are outlined below.

About the Audit Committee

The Audit Committee provides oversight to management from an independent and objective standpoint and works to contribute to the enhancement of corporate value over the medium to long term. The committee is guided by a mission to audit and oversee the execution of duties by officers by verifying the reliability of financial reporting, the effectiveness of internal controls and risk management systems, and compliance with laws, regulations, and other relevant rules, thereby supporting a sound framework for governance across the Group.
To ensure that management can fully exercise its executive capabilities, avoid placing an excessive burden on frontline operations, and establish a highly effective and efficient Group audit system, the committee has adopted a basic approach of maximizing audit resources and being sensitive to the dual structure of the Group made up of a holding company and its businesses. While focusing in particular on the parent company's management capabilities-that is, whether our executive team can manage and oversee Group companies appropriately-we are striving to eliminate any blind spots in governance. To this end, we have continued work to enhance functions and strengthen coordination between the second and third lines of defense-in other words, risk management and compliance departments, and the Internal Audit Department. At the same time, we are collaborating closely with auditors at subsidiaries to arrive at a shared understanding of risks. In accordance with this basic approach, we carried out the activities listed in the table on the right in FY2025 and are continuing with audit activities initiated during that year in FY2026, focusing on two key audit categories.
First, we will focus on making progress on the business improvement plans. In addition to verifying efforts to fully implement the plans, which were developed in response to past incidents, our focus is not merely on the fulfillment of each element in the plans, but also on whether a genuinely customer-oriented corporate culture has taken root on the front lines and whether a framework is in place that enables the benefits of that culture to continue to play out in a sustainable way. We will confirm this through dialogue with management.
Second, we will focus on making progress on initiatives at SOMPO P&C and SOMPO Wellbeing. This fiscal year, these two major growth engines that will drive the future of the Group are transitioning to a phase of seeking to deliver concrete results. We will closely monitor whether the frameworks designed to address the new risks associated with this major transformation are functioning effectively, and whether the personnel needed to support this transformation are being appropriately placed and trained. At the same time, we will continue to monitor key issues such as AI governance, cybersecurity, and the establishment of a corporate culture that enables the rapid identification and reporting of unfavorable information.
I believe the Audit Committee must gain the trust of those within the Group to serve as the Group's brakes that will always work even at critical points, and at the same time it must serve as an accelerator that encourages management to take sound risks. To live up to the trust placed in the Group by our stakeholders, we will continue to vigorously drive forward reforms in governance.

Activities and Achievements

The committee held a total of 13 meetings in FY2025. The principal agenda items discussed at these meetings are outlined below.

About the Compensation Committee

The Compensation Committee plays a key role in the oversight function of the Board of Directors, taking the lead in establishing and administering a fair and competitive executive compensation system. The committee's proactive mandate is to strongly encourage the executive divisions to pursue sound and robust management and to take risks appropriately yet decisively. Also, by determining the Group-wide executive compensation framework, conducting performance evaluations, taking part in decisions by major subsidiaries concerning compensation, and conducting individual performance evaluations of the Group CEO, the committee acts to eliminate arbitrariness in the decision-making process around compensation and ensure a high degree of objectivity, transparency, and fairness.
In FY2025, guided by this mission, the committee deliberated and resolved on the following matters regarding the method of evaluating the management structure, the design of systems based on our Basic Philosophy of Executive Compensation, and specific revisions aimed at further enhancing the effectiveness of incentives.
First, regarding the current management structure and performance evaluations for individual executives, in addition to assessing the degree to which financial targets reflecting the year's performance were achieved, we have conducted a comprehensive strategic goal evaluation to assess the exercise of leadership aimed at achieving management plans from a long-term incentive program and efforts toward the qualitative transformation of the corporate culture. To enhance the objectivity of our evaluation, we have established a rigorous process in which the Compensation Committee, which is composed of a majority of outside directors, engages in thorough-going communication with the Group CEO and other executive officers at the beginning, midpoint, and end of each fiscal term. After clarifying the rationale behind our decisions, we make sure these decisions are reflected in the evaluation of individual executives and in the determination of their compensation amounts.
Second, based on the Basic Concept of Compensation for Directors and Executive Officers, which was revised in FY2025, we moved forward with establishing an appropriate executive compensation structure. SOMPO's Purpose and SOMPO's Values are positioned as the overarching concepts informing the Basic Concept. We established a system that links the compensation of executives both to how well they take the lead in practicing the Group Common Competencies, which are Group-wide behavioral expectations, and to the process by which they exhibit a commitment to fostering a healthy corporate culture while engaging the entire organization. Additionally, we added the sustainable creation of value for stakeholders as a core element of the Basic Concept, creating a compensation framework linked to addressing social issues.
The Compensation Committee has also held repeated discussions regarding appropriate standards for future executive compensation in the company as it strives to become a global enterprise. In particular, we conducted a multifaceted review to determine whether the company is sufficiently competitive in the market by referencing benchmark data on peer groups provided by an independent third-party organization, as well as actual compensation amounts for executives disclosed by other companies. By continuing to discuss the renumeration amounts linked to the scope, importance, and level of responsibility of each executive's mission, as well as the balance between fixed and performance-linked compensation, we strive to maintain objective compensation levels that enable us to attract and retain fair, impartial, and highly capable management personnel.
Third, to maximize the incentive to drive the sustainable enhancement of corporate value, we conducted a detailed review of the compensation structure. For performance-linked compensation, which represents a near-term incentive, we restructured the financial performance coefficient to make it more dynamic and introduced a new equation in which compensation varies based on performance relative to actual results as well as targets.
For our phantom stock system, which is a long-term incentive compensation program linked to stock prices, we decided to revise the evaluation metrics and change the grant schedule in preparation for extending the program's application to other Group companies in FY2026. In addition, we introduced relative Total Shareholder Return (TSR) as a new performance metric for executives of the company and its core subsidiaries. By reflecting the company's stock price growth relative to the market and its competitors in the compensation structure, we will align executive compensation and shareholder returns more closely than ever before, further encouraging executives to share value with shareholders.
In promoting these initiatives, the Compensation Committee stays in close communication with the Group CEO and executive management, actively exchanging views on an ongoing basis. Going forward, the committee will continue to pursue a compensation governance framework that supports the sustainable enhancement of corporate value while fulfilling its accountability to shareholders and other stakeholders.

Activities and Achievements

The committee held a total of ten meetings in FY2025. The principal agenda items discussed at these meetings are outlined below.