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Global / English

The Board of Directors

How the Board of Directors Should Function

Kao’s Board of Directors will conduct a substantial delegation of authority to the executive organizations, and further strengthen its monitoring function to encourage appropriate risk-taking by management and prompt and bold decision-making. In particular, the Board of Directors will effectively supervise the appropriate allocation of management resources, including human capital, and the adequate implementation of strategies by management. It also recognizes that it is the responsibility of the Board of Directors to develop internal controls and risk and crisis management systems, and will build and operate these systems appropriately.

Stance on Balance among Knowledge, Experience and Skills, and on Diversity and Size of the Board of Directors/Skill Matrix

At Board of Directors meetings (attended by Directors and Audit & Supervisory Board Members), Directors provide broad direction regarding business strategies and Directors and Audit & Supervisory Board Members deliberate on their appropriateness and the risks related to their realization and other matters in an objective and multidimensional fashion.
The Kao Group Mid-term Plan “K27” includes the vision of “Protecting future lives.” To accomplish this, the Company’s management is executing business in line with the Company’s strategies of (1) becoming an essential company in a sustainable world, (2) transforming to build robust business through investment, and (3) maximizing the power and potential of employees.
The Board of Directors considers it important for Inside and Outside Directors and Audit & Supervisory Board Members to complement each other with each of their knowledge, experience, and abilities, and to be able to demonstrate high effectiveness as a whole, in order to supervise that management is implementing business execution in a framework for transparent, fair, prompt and decisive decision-making accordance with the above strategies.

In addition to knowledge, experience and ability, the Company recognizes that diverse perspectives that come from diversity of the Board of Directors in terms of gender, nationality, race and age contribute to the promotion of business, global expansion and proper supervision and auditing, and promotes the appointment of such diverse personnel as Directors and Audit & Supervisory Board Members. The Company’s target for the ratio of women on the Board of Directors is 30% by 2025. The items of experience, knowledge, and expertise are reviewed annually by the Committee for the Examination of the Nominees for Directors and Audit & Supervisory Board Members in terms of their importance to the Company’s sustainable growth. Based on the skills matrix, the committee deliberates on the composition of the Board of Directors and candidates for the upcoming fiscal year.
The Company aims for a small Board of Directors to accelerate decision-making while also considering the balance between having diverse personnel required to conduct the proper deliberations and supervision of execution. It has also set the number of Outside Directors to comprise at least half of the Board of Directors and is considering increasing it to the majority to ensure its diversity and influence and emphasizes their independence. In addition, the Company aims to have a majority of Outside Audit & Supervisory Board Members who meet the Standards for Independence.

As of March 21, 2025

		Attributes			Experience / Knowledge / Expertise											Main reasons for marking “✓”
		Term of office	Gender	Nationa -lity	Manage -ment	Global	Consu -mer goods industry	Chemi -cal industry	Branding	Human capital strategy	R&D	Environ -ment/ society	IT/DX	Legal/ risk manage -ment	Finance/ account -ing	Main reasons for marking “✓”
Inside Directors	Yoshihiro Hasebe	9 years	Male	Japan	✓	✓	✓	✓		✓	✓	✓	✓			- Experience in the Company’s Research and Development (including experience in global operations, and knowledge of fundamental and applied technologies and matter cycle research) (Doctor of Engineering) - Experience at the Company’s overseas business promotion projects - Experience as the Company’s Senior Vice President of Strategic Innovation Technology - Experience as the Company’s officer responsible for Human Capital Development
	Masakazu Negoro	2 years	Male	Japan		✓		✓				✓			✓	- Experience in the Company’s Chemical Business and management experience at overseas subsidiaries (Chemical Business) - Experience at the Company’s Procurement, Global (including promotion of sustainability activities in procurement) - Experience as the Company’s officer responsible for Accounting and Finance
	Toru Nishiguchi	2 years	Male	Japan		✓	✓		✓							- Experience in the Company’s Consumer Products Business - Experience in management and global marketing at the Company’s overseas subsidiaries - MBA
	Lisa MacCallum	-	Female	Australia		✓	✓		✓	✓		✓	✓		✓	- Experience leading business transformations and brand repositioning for a leading global sporting goods company - Experience advising on brand purpose, strategy, employee experience, ESG communications, and the impact of digitization - Chartered Accountant with big firm experience
Outside Directors	Osamu Shinobe	7 years	Male	Japan	✓	✓						✓		✓		- Experience as the top executive of a major global airline (including experience as Chairman of CSR and the Environmental Management Committee)
	Eriko Sakurai	3 years	Female	Japan	✓	✓		✓		✓		✓				- Experience as the head of a global division and the regional head of a major U.S. chemical company - Experience in overall human resources strategy, including compensation, development, and assignment in global businesses - Knowledge of sustainability
	Takaaki Nishii	2 years	Male	Japan	✓	✓	✓			✓					✓	- Experience as the top executive of a major global food company (Mid-term ROIC management results) - Experience in restructuring overseas subsidiaries - Experience in the human resources department
	Makoto Takashima	1 year	Male	Japan	✓	✓								✓	✓	- Experience as the top executive of a major global financial institution - Experience in international and corporate planning departments - Experience in risk management and legal affairs in bank management
	Sarah L. Casanova	-	Female	Canada	✓	✓	✓		✓	✓		✓				- Experience managing the Japanese Company of a major global restaurant chain - Experience as a head of various countries/regions, including Japan - Marketing experience in various countries and regions - MBA (Marketing/HR focus)
Full-time Audit & Supervisory Board Members	Yasushi Wada	2 years	Male	Japan		✓						✓		✓		- Experience in the Company’s Product Quality Management - Experience at the Company’s global production sites - Experience in the Company’s process engineering development and plant management
Full-time Audit & Supervisory Board Members	Mami Murata	-	Female	Japan			✓		✓			✓				- Experience in the Consumer Products Business - Experience in overseeing Strategic Public Relations (including social contributions) and serving as Deputy Head of the Marketing Innovation Division - Experience as Executive Director of the Kao Foundation for Arts and Science
Outside Audit & Supervisory Board Members	Nobuhiro Oka	7 years	Male	Japan								✓		✓		- Attorney-at Law - Ph.D. in Law (Chuo University) - Professor at Keio University Law School
	Saeko Arai	1 year	Female	Japan		✓							✓		✓	- Certified Public Accountant - Experience as a representative of a U.S. corporation - Experience as a partner of an IT venture company
	Junya Naito	-	Male	Japan		✓								✓		- Attorney-at Law, Japan and New York, U.S.A.

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* The areas of experience, knowledge, and expertise of each Director and Audit & Supervisory Board Member that are particularly expected of them are marked with a “✓.”

Experience/ knowledge/expertise	Reasons for selection as experience/knowledge/expertise
Management	Experience as a top executive is necessary for effectively supervising management, their execution of the strategy, and for providing useful counsel to management. This experience is essential to ensure appropriate risktaking and prompt, decisive decision-making by the management to contribute to proactive governance.
Global	As part of our K27 strategy, we aim to expand globally and offer unique value to our customers that sets us apart, to avoid intense competition and price wars with competitors. Furthermore, we plan to accelerate global growth as part of K27, by transitioning to a localized production and consumption model focusing on local value, cost performance, and manufacturing. Importantly, understanding Japanese companies is critical and desirable for promoting global strategies, as our company is a Japanese firm with a majority of Kao’s revenues and assets being generated in the region. Experience with non-Japanese companies is also additive to help provide guidance and oversee global expansion efforts. Management positions and insights into overseas operations are also necessary to provide guidance and oversee these efforts.
Consumer goods industry Chemical industry	Experience in and understanding of the consumer goods and chemical industries is imperative given Kao’s exposure to these sectors. To effectively oversee management's execution, it is important to take a comprehensive view of our business domains, including the consumer goods and chemical industries, from a higher-level perspective. For this reason, we believe that the Board should have a deep understanding of the business environment, market characteristics, and future outlook of these industries.
Branding	Actively investing in marketing of our core brands globally that are deemed capable of enhancing loyalty is an important strategy of Kao. It is also necessary for the Board to understand the elements of brand strategy so they can properly oversee the formulation and execution of brand and marketing initiatives as part of management strategies.
Human capital strategy	Developing human capital strategies aligned with management strategies is necessary for future growth, including strategically developing and acquiring talent. The Board needs to monitor the validity and progress of these strategies using specialized knowledge and experience.
R&D	Our company's research serves as the driving force behind the continuous creation of innovative and high-value products. We are committed to Essential Research and leverage the technological assets accumulated through such efforts to foster innovation. The Board must oversee whether our research framework sustains and develops innovation, effectively leverages the technology assets created, and contributes to expanding business and corporate value.
Environment/society	Since April 2019, the Company has adopted ESG strategies under the Kirei Lifestyle Plan. Integrating sustainability and management strategies is pivotal for achieving our purpose of “realizing a world in which all life lives in harmony.” and to achieve global growth. The Board is required to monitor the implementation of these strategies considering social trends and demands.
IT/digital transformation (DX)	Achieving the K27 target necessitates innovative initiatives leveraging IT and DX, such as creating new businesses beyond our existing frameworks, as well as digital marketing and digital communication. Experience, knowledge, and expertise in IT/DX amongst the Board are critical, while complementing the oversight by the Board of Directors by utilizing executives and external experts.
Legal/risk management	In the course of daily corporate activities, as well as in the creation of new businesses and business innovation, various risks are likely to arise. It is crucial to recognize and appropriately manage these risks, as well as to strategically, preemptively, and reactively address them while thoroughly understanding applicable laws, their background, and trends. The Board must possess experience, knowledge, and expertise in legal and risk management to ensure strategic and preventive responses to potential risks.
Finance/accounting	Ensuring the reliability of financial reporting, which influences investment decisions and strategic planning, and optimizing capital allocation from a company- wide perspective is crucial for sustainable value creation. The Board must possess experience, knowledge, and expertise in finance and accounting to drive growth, profitability and capital efficiency.

Attending Members for Meetings of the Board of Directors, the Audit & Supervisory Board and Other Committees

◎ Indicates Chairman of the Board or specified committee. ○ Indicates attending member.

Name		Age （as of March 21, 2025）	Board of Directors	Audit & Supervisory Board	Committee for the Examination of Nominees for Directors and Audit & Supervisory Board Members	Compensation Advisory Committee for Directors and Executive Officers	Compensation Advisory Committee for Audit & Supervisory Board Members	Attendance
Name		Age （as of March 21, 2025）	Board of Directors	Audit & Supervisory Board				Board of Directors	Audit & Supervisory Board
Directors	Yoshihiro Hasebe	64	〇			〇	〇	14/14	ー
	Masakazu Negoro	65	〇					14/14	ー
	Toru Nishiguchi	63	〇					14/14	ー
	Lisa MacCallum	52	〇					ー^*1	ー
	Osamu Shinobe Outside/ Independent	72	◎		〇	◎	〇	14/14	ー
	Eriko Sakurai Outside/ Independent	64	〇		◎	〇		14/14	ー
	Takaaki Nishii Outside/ Independent	65	〇		〇	〇		14/14	ー
	Makoto Takashima Outside/ Independent	66	〇		〇	〇		11/11^*2	ー
	Sarah L. Casanova Outside/ Independent	59	〇		〇	〇		ー^*1	ー
Board Members Audit & Supervisory	Yasushi Wada	65	〇	◎				14/14	10/10
	Mami Murata	59	〇	〇				ー^*1	ー
	Nobuhiro Oka Outside/ Independent	61	〇	〇	〇		〇	14/14	10/10
	Saeko Arai Outside/ Independent	61	〇	〇			◎	11/11^*2	10/10
	Junya Naito Outside/ Independent	60	〇	〇			〇	ー^*1	ー

* 1 Assumed at the Shareholders Meeting in March 2025.
* 2 The Board of Directors met 11 times since Mr. Takashima and Ms. Arai.

Major topics discussed by the Board of Directors

In FY2025, the Board of Directors, in accordance with the Board of Directors’ approach, focused its deliberations on the following points.

How the Board of Directors should function

Kao’s Board of Directors will conduct a substantial delegation of authority to the executive organizations, and further strengthen its monitoring function to encourage appropriate risk-taking by management and prompt and bold decision-making. In particular, the Board will effectively supervise the appropriate allocation of management resources, including human capital and the adequate implementation of strategies by management. It also recognizes that it is the responsibility of the Board to develop internal controls and risk and crisis management systems, and will build and operate these systems appropriately.

Monitoring of the progress of the Mid-term plan and issues

Through regular reporting on business-specific ROIC, the Board of Directors engages in discussions on business profitability from a medium- to long-term perspective. Ongoing discussions are held regarding challenged businesses and priority themes, with results being achieved particularly in the cosmetics business. In the overseas Global Consumer Care Business, efforts will continue to strengthen brands and develop markets in major overseas markets, focusing on cosmetics business and skin protection business, while also advancing reforms in challenge areas. In addition, the progress of “K27” is regularly monitored to increase the certainty of achieving its targets.

Human capital strategy

Reports were provided on the results of the employee engagement survey, and discussions were held on future responses based on those results. The Board of Directors has also continued to deliberate on the progress and outcomes following the introduction of the OKR (Objectives and Key Results) human capital activation system, which encourages employee challenges, as well as the internal job posting system. It was confirmed that diverse challenges across the Group are increasing and expanding, and that further collaboration through dialogue is being promoted. In addition, reports were provided by the executive side on the framework for the selection and development of next-generation senior management, and the Board of Directors confirmed its progress.

Establishment and Operation of Internal Control System

It was confirmed that the internal control system has been properly developed and is being operated. Discussions were also held on initiatives to further strengthen the system in support of global growth.

Holding of off-site meetings

Off-site meetings were held to further deepen discussions at Board of Directors meetings. Participants freely exchanged views on the current status and future direction of the overseas Global Consumer Care business, including businesses facing challenges, as well as on human capital development strategies and corporate branding strategies.

In addition to the above, directors who concurrently serve as executive officer report on execution and executive officers in charge report on matters deliberated by the Management Board.

Evaluation of the Effectiveness of the Board of Directors

With an eye to enhancing its corporate value in a sustainable manner, we aims to improve the functions of the Board of Directors by evaluating and analyzing the effectiveness of the Board as a whole, including through a self-assessment by each Director, and a disclosure with a summary of the results.
Since FY2015, evaluations have been conducted once a year based on a survey of all Directors and Audit & Supervisory Board Members and discussions by the Board of Directors. In FY2024 the Company introduced interviews with some Directors and an effectiveness evaluation of the Board by an external third party (scheduled once every three years) to continually enhance the depth and objectivity of the evaluation. In FY2025, the Company conducted peer reviews (mutual evaluations) of Directors to confirm that each Director is fulfilling their expected role. The Committee for Examination of Nominees for Directors and Audit & Supervisory Board Members (the “Committee for Examination of Nominees”) and the Compensation Advisory Committee for Directors and Executive Officers (the “Compensation Advisory Committee”) were evaluated at the same time.

Method of the effectiveness evaluation

Survey

Respondents: All Directors and Audit & Supervisory Board Members (nine Directors and five Audit & Supervisory Board Members)
Response period: November 7, 2025 to November 28, 2025
Type of questions: single-choice and open-ended
Number of questions: 45
Survey items: The approach and composition of the Board of Directors, operation of the Board of Directors, discussions held by the Board of Directors, monitoring function of the Board of Directors, performance of Directors, and mutual evaluations, support systems and training for Directors and Audit & Supervisory Board Members, dialogue with shareholders (investors), personal initiatives, operation and deliberation of the committees, and overview

Final evaluation

Based on the survey responses, the Board of Directors verified, discussed, and evaluated the results, and confirmed the direction of future initiatives to address the issues that were identified.

Results of the effectiveness evaluation

General summary

The Board of Directors’ effectiveness score (single-choice) was 4.5 points (out of 5 points; 4: Mostly adequate, 5: Adequate), which was in line with last year’s assessment. Responses to the open-ended questions also indicated that the Board’s effectiveness is functioning adequately. Efforts were made to address the issues identified in the previous effectiveness evaluation (board diversity, ESG discussions, dialogue with shareholders, etc.), and progress was observed, with the scores for those areas improving. Opinions were also expressed regarding areas where there is room for further improvement, and recognition of issues and the direction of future initiatives were discussed and shared at Board of Directors meetings.

Peer review (mutual evaluations)

Both Outside Directors and Inside Directors demonstrated the expertise expected of them (as listed in the skills matrix) and were found to be fulfilling their expected roles. In particular, Outside Directors were mutually evaluated on whether they exercised oversight, provided advice, and reflected stakeholders’ views, and it was confirmed that they were fulfilling those roles.

Positive feedback

Free and open constructive discussion
As in the previous year, free, open, and constructive discussions are taking place, and an honest and open environment has been created.
Board composition and diversity
The proportions of women and foreign nationals have steadily increased, and the skills matrix has been further clarified and strengthened, ensuring an appropriate balance.
Dialogue with shareholders
In SR activities with domestic and foreign institutional investors, both management and outside directors attended, enriching both the content and the opportunities.
Other
At the Board’s offsite meeting, the Company took ample time for in‑depth discussion on important medium‑ to long‑term themes. Mutual understanding among the Directors also progressed, improving the quality of discussions.

Issues that should be focused on going forward

Discussions at the Board of Directors
Concrete actions have been taken to address the issues pointed out last year, and improvements have been observed. Priority issues going forward include further discussion to achieve the mid-term management plan “K27” and to secure sustainable growth beyond “K27.” Ongoing discussions will continue, and efforts will be further deepened regarding overseas structural reforms and growth strategies, global human resources strategies, and the plan for CEO succession.
The Board’s monitoring function; the structure of the Board
As the Company expands its overseas operations, it will further strengthen continuous reviews and improvements of management oversight and the effectiveness of internal controls at overseas subsidiaries. Regarding institutional design, continuous discussion is necessary, taking into account its priority relative to discussions on medium- to long-term strategy.

Specific opinions raised in the effectiveness evaluation

From the numerous opinions raised, the main ones are summarized below.

It is important to further deepen discussions on the positioning of strategic investments and how to verify their effectiveness in order to achieve K27 and sustain growth beyond it. Also, regarding selection and concentration in global operations, it is necessary to have clearer discussions that define regional challenges and the future direction of the portfolio.
Regarding HR strategy, proactive efforts are being made such as current-state analysis and building a talent pool. It is important to continue discussions on human capital investments, such as the development, recruitment, and placement of core leaders from a medium- to long-term perspective. Further discussion and deepening of processes are needed with respect to global talent and succession planning.
For the appointment of the president and key officers, it is necessary to consider further enhancement through discussion and documentation of role expectations, increased engagement with candidates, refinement of the process, and use of tools.
The importance of dialogue with investors has been increasing, and efforts to strengthen it will continue. An Outside Director reported that participation in SR interviews was very meaningful, as it enabled an Outside Director’s perspective to be reflected in Board discussions.
With the new Board structure, benefits from the diversity of career backgrounds are beginning to emerge. A culture that allows differing opinions is considered a characteristic of the Company’s Board of Directors.

Status of ongoing improvements

In order to disclose the status of ongoing improvements based on effectiveness evaluations, the issues raised in the previous evaluation, the results of improvement initiatives, and the most recent evaluation have been summarized as follows. The Board of Directors, the Committee for Examination of Nominees, and the Compensation Advisory Committee for the current fiscal year will continue to address the issues raised in the most recent evaluation.

Board of Directors

	FY2024 Evaluation and issues	FY2025 Initiatives	Most Recent Evaluation and Future Initiatives
Composition	Steady progress was made regarding the diversity of the Board of Directors. Continuous discussions are needed based on the future vision of the Board of Directors.	Appointment of female and foreign directors. (Target achieved: 30% female representation) After discussing the ideal composition via a skills matrix, appoint directors who match the required skills.	Steady progress was made in terms of diversity, including gender, internationality, and skills. Continuously review board composition in line with future medium- to long-term strategies.
Discussions and monitoring function	Continued to discuss business segments that are experiencing issues, which produced results. Introduction of ROIC by business enabled discussions on the profitability of businesses to be held from more medium- to long-term perspectives. Follow up on K27 and discussions on growth strategies and business segments that are experiencing issues (especially Cosmetics) are needed. Deeper discussions will be held on the succession plan for appointing future Presidents and other human capital strategies. There is room for further enhancement of governance and monitoring of businesses outside of Japan and subsidiaries.	Conducted discussions on business reforms for underperforming businesses, global strategy, and overseas management structure. Strengthened supervisory functions by improving monitoring indicators to support achievement of K27. As part of the CEO succession planning, shared and reviewed candidates’ track records, strengths, and development status; opportunities for interaction with Outside Directors were also established.	Enhanced and continue to evolve the process for selecting candidates for the CEO succession plan and suitable personnel. Discussions on overseas structural reforms and growth strategies have been repeated; the Company will further strengthen execution and verification of those strategies. Governance and monitoring of overseas subsidiaries will be further strengthened.
Operation	Clarification of discussion points is helping secure more time for discussion. Ensure materials are distributed in advance, as scheduled.	Materials were distributed in advance by the deadline.	Materials were provided in a timely manner, allowing more focus on discussion. Continue implementing operational improvements to secure deliberation time.
Dialogue with shareholders	Conducted engagement integrating IR, SR and PR. Disclosure of growth strategies should be enhanced further. Opportunities for dialogue by Outside Directors will also be considered.	Held a business strategy briefing for the Cosmetics business, which was one of the challenged businesses. Conducted SR meetings involving Outside Directors.	Attendance by outside directors at SR meetings with investors was extremely meaningful and will continue.

Committee for Examination of Nominees and Compensation Advisory Committee

	FY2024 Evaluation and issues	FY2025 Initiatives	Most Recent Evaluation and Future Initiatives
Discussions and operation	Discussions on the succession plan should continue to be deepened further. A way to report and share information with the Board of Directors needs to be devised.	Check progress and discuss the CEO succession plan. Further clarify inquiries from the board of directors to committees.	Further discussion is needed on the succession plan for the company president and on deepening discussions regarding the selection of key executive candidates who will support that successor.