Operational Status of the Board of Directors

Overview of the Board of Directors

As a company with a nomination committee, etc., we have established a governance framework in which the Board of Directors, primarily made up of outside directors, oversees the executive divisions. Independent directors also chair the Board of Directors and the three statutory committees—the Nomination, Audit, and Compensation committees. Each committee engages in balanced, lively discussions aimed at strengthening Group governance. Furthermore, we enhance the soundness and transparency of governance by proactively sharing information on the status of execution at Board meetings.

The Board of Directors fulfills its responsibilities as stipulated by laws and regulations and the Articles of Incorporation. It also makes decisions on important business matters as set forth in the Rules of Board of Directors, while exercising its supervisory function regarding business execution.

In accordance with policies for appointment of directors and executive officers, outside directors are company managers, academics, legal professionals, or individuals with specialized knowledge in finance, accounting, or other areas, who bring an outside perspective to issues such as corporate governance, consumer relations, and overseas business development.

Virtuous cycle created by leveraging the supervisory function of the Board of Directors

Figure:Virtuous cycle created by leveraging the supervisory function of the Board of Directors

A briefing for outside directors is held every time the Board convenes to brief them on agenda items. Board meetings and briefings are managed in an integrated manner: Opinions and questions raised by outside directors during the briefing are shared with all Board members prior to the meeting. We also aim to ensure constructive and substantial discussions at Board meetings and effectiveness in the way meetings are run by inviting directors to participate as observers in Group ExCo meetings and other committeemeetings, and by providing information via the Board secretariat.

Achievements in FY2024

Main topics discussed at Board of Directors meetings

A total of 14 Board meetings were held in FY2024. The principal agenda items that were discussed at these meetings are outlined below.

Topic	Description
Implementation and effectiveness of the business improvement plans of Sompo Holdings and Sompo Japan Insurance	In addition to confirming progress of the business improvement plan, made recommendations to enhance the effectiveness of initiatives such as reforming corporate culture and addressing structural issues in the P&C insurance industry.
Group strategies to further enhance corporate value	Discussed issues such as the management framework, the business portfolio, and the human resource strategy to ensure the achievement of the Mid-Term Management Plan that began in FY2024 and sustainably increase corporate value.
Promotion of capital circulation management	In light of progress in drawing down cross-shareholdings, discussed the balance between growth investments to improve ROE and shareholder returns.
Progress of Mid-Term Management Plan	Confirmed progress of the Mid-Term Management Plan through regular status reports by the Group CEO and quarterly reports on the Group’s numerical management targets.
Sustainability initiatives	Summarized Group sustainability initiatives to date and discussed future direction for addressing priority issues.

Specific initiatives

Appropriate reporting on business execution by Group CEO, business CEOs, and Group Chief Officers at Board meetings
Ensuring opportunities to deepen understanding and discuss key management issues and strategies, such as by holding intensive discussion retreats
Director participation as observers in Group ExCo meetings and access to other meetings
Ensuring opportunities to report timely information on business execution to outside directors, not limited to matters to be brought up at Board meetings
Free discussion on information relating to execution
Exchanging opinions between outside directors and representative executive officers

Initiatives to improve the effectiveness of the Board of Directors

PDCA cycle for the effective functioning of the Board of Directors

Figure:PDCA cycle for the effective functioning of the Board of Directors

The Company works to improve the functionality of the Board of Directors and strengthen corporate governance by carrying out PDCA cycles for the execution of concrete initiatives that enhance the functionality of the Board of Directors.

As part of its efforts to improve the effectiveness of the Board of Directors in FY2024, we utilized an external expert to analyze and evaluate the effectiveness of the Board of Directors as a whole, in addition to an existing questionnaire, which includes a self-evaluation section to each Director.

Summary of results of third-party evaluation and future policy

A summary of the results of the evaluation of the effectiveness of the operation of the Board of Directors in FY2024 conducted using outside experts and the action plan going forward are as follows. We will continue to take steps to improve the issues identified by the evaluation and pursue initiatives needed to further enhance the functioning of the organization.

Figure:Summary of results of third-party evaluation and future policy