We have been enhancing corporate governance through such initiatives as formulating the Basic Policy on Corporate Governance, establishing the Nomination Committee and Remuneration Committee, introducing a stock remuneration system for Directors, and evaluating the effectiveness of the Board of Directors. In FY2022, we introduced indicators for employee safety in order to use non-financial metrics related to the environment, society, and other aspects for performance-linked remuneration for Directors. In FY2023, we introduced indicators related to climate change as an incentive to accelerate our ability to tackle issues related to that concern. We will continue to improve our remuneration system for Directors to provide stronger incentives with a higher level of integrity and drive sustainable growth.

Thorough compliance is the foundation of our relationship of trust with stakeholders and the basis of our business activities. While we strive to ensure adherence to corporate ethics and compliance as a material issue of management, the JFE Group Sustainability Council, chaired by the president of JFE Holdings, supervises and provides guidance on compliance efforts, and important measures are reported to and deliberated by the Board of Directors for direction and supervision.

With regard to risk management, JFE Holdings as the holding company is responsible for the comprehensive risk management of the Group and has established a system under which its Board of Directors supervises risk management and confirms its effectiveness. JFE Holdings is continuously improving risk management for the entire Group based on discussions by its Board of Directors.