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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 Director

In FY2024, the Board of Directors, in accordance with the Board of Directors’ approach confirmed in FY2022, 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

The introduction of ROIC by business segment has enabled the Board of Directors to discuss the profitability of the Company’s businesses from a medium- to long-term perspective. They have continuously discussed challenging businesses and key themes in each meeting, and they have seen results, particularly in the sanitary business, hair care business, as well as the divestiture of the pet care business and beverage business. In FY2025, in order to sustainably enhance the Company’s earning power and establish a solid foundation for accelerated growth, they plan to regularly monitor the progress of “K27” and discuss global strategies and growth strategies, including the cosmetics business and salon business.

Human capital strategy

The progress of human capital strategy activities (including the human capital structural reforms implemented in FY2023) to realize the Company’s growth strategy and the evaluation of management activities by the Company’s employees (results of the engagement survey) were reported, and future actions based on these reports were discussed. The Board also continuously deliberates on the new human capital revitalization system OKR (Objectives and Key Results), which encourages employees to take on new challenges, as well as the progress and results after the introduction of internal open recruitment. The Board of Directors will continue to confirm that diverse challenges are increasing and expanding across the group, and that further collaboration through dialogue is being promoted.

Sustainability (Climate Change Risks/Human Rights, etc.)

The Board of Directors received reports on the Kao Group’s initiatives, including global ESG trends and the incorporation of “decarbonization” and “biodiversity” strategies into business plans, and confirmed their promotion status. The Board will continue to review issues related to sustainability.

Establishment and Operation of Internal Control System

The Board of Directors was confirmed that the internal control system has been established and is operating without any major problems.
In addition to the above, director who concurrently serve as executive officer reports 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 aim to improve the functions of the Board of Directors by evaluating and analyzing the effectiveness of the Board of Directors as a whole, including through a self-assessment of each Director, and disclose 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 FY2023, the Company sought to improve objectivity by receiving advice from a third-party organization regarding the preparation of the survey and the analysis of the results. In FY2024, with the aim of further enhancing these evaluations and improving objectivity, some Directors were interviewed, and a third-party organization conducted an evaluation of the effectiveness of the Board of Directors. 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. Going forward, we plan to have a third-party organization conduct evaluations once every three years.

Method of effectiveness evaluation

Survey (prepared by a third-party organization)

Respondents: All Directors and Audit & Supervisory Board Members (eight Directors and five Audit & Supervisory Board Members)
Response period: October 17, 2024 to October 31, 2024
Type of questions: Multiple choice and open-ended (attributed survey)
Number of questions: 46
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, 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

Interview (conducted by a third-party organization)

Interviewees: President and Chief Executive Officer, Chairperson of the Board of Directors, Chairperson of the Committee for Examination of Nominees, Chairperson of the Compensation Advisory Committee
Implementation period: November 22, 2024 to November 26, 2024
Main topics: The approach of the Board of Directors, the composition of the Board of Directors, discussions held by the Board of Directors, operation of the Board of Directors, monitoring function of the Board of Directors, support systems for Directors and Audit & Supervisory Board Members, dialogue with shareholders (investors), and the committees

Final evaluation

Based on the third-party analysis, 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 overall average score for the survey (multiple choice) was 4.2 points (out of 5 points), with scores for all items rated equal to or better than the average scores of other companies,^* indicating that the Board of Directors and committees are generally functioning effectively. Efforts were made to improve the issues raised in the previous effectiveness evaluation, and progress in improvement was seen.
Moreover, Inside and Outside Directors’ evaluations and recognition of issues were generally consistent, and it was confirmed that there was sufficient communication between Inside and Outside Directors through active discussions at Board of Directors meetings.
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.

* The average score of other companies that have outsourced evaluations to the same third-party organization

Positive feedback

Composition of the Board of Directors
As a result of ongoing discussions by the Board of Directors and the Committee for Examination of Nominees, steady progress has been made in terms of diversity, including gender, internationality, and skills.
Discussions held by the Board of Directors
The introduction of ROIC by business as an indicator has enabled discussions on the profitability of businesses to be held from more medium- to long-term perspectives. At each meeting, the Board of Directors was able to continue discussions on focus topics and business segments that are facing issues, which has led to improvement. Results have already been seen in some areas, particularly in the Sanitary, Hair Care, and transferred businesses.
Monitoring function of the Board of Directors
At the monthly Board of Directors meeting, the status of execution is monitored using the Management Strategy Dashboard.^* Growth and ROIC management KPIs have been introduced throughout the company and are reflected in the Management Strategy Dashboard.
Dialogue with shareholders
Conducting engagement that integrates investor relations (IR), shareholder relations (SR), and public relations (PR) has increasingly enabled the issuance of clearer messages. The Board of Directors has also begun proactively reporting and holding discussions on IR and SR.

* Management Strategy Dashboard: In order to accurately monitor execution status, indicators such as net sales, profit, market share, price increase status, and ROIC by business are set and reported on a regular basis using the same format.

Issues that should be focused on going forward

Composition of the Board of Directors
It is necessary to continue discussing the skills required of Board members from the perspective of the future approach of the Board of Directors and value creation.
Discussions held by the Board of Directors [Key issues]
To achieve the Mid-term Plan K27, ongoing follow-up on its progress is needed alongside further discussion regarding global growth strategies, global brand strategies (including corporate branding), and business segments that are experiencing issues, such as Cosmetics. Discussions are to be carried out with a view to the next long-term strategy to follow after K27. Deeper discussions will also be held on human capital strategies, including the succession plan for appointing future Presidents and the development of the next generation of leaders.
Monitoring function of the Board of Directors
There is room for further enhancement of governance and monitoring businesses outside of Japan and subsidiaries in implementing global strategies.
Dialogue with shareholders
Concrete and realistic growth strategies need to be actively disclosed in a more easy-to-understand manner. There is also room to consider opportunities for Outside Directors to further engage in dialogue.

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

	FY2023 Evaluation and Issues	FY2024 Initiatives	Most Recent Evaluation and Future Initiatives
Composition	The disclosure of the Corporate Governance Policy was given a positive evaluation. The composition of the Board of Directors was in line with the policy.	There were ongoing discussions regarding the composition of the Board of Directors, including diversity (gender, internationality, skills, etc.).	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.
Discussions and monitoring function	K27 was formulated and progress was made in both discussing and implementing structural reforms. Further discussion was needed regarding growth strategies and business segments that are experiencing issues. Further improvements should be made to the monitoring of management indicators under ROIC management. Discussions and decisions on the structural reforms in relation to human capital were given a positive evaluation. It was necessary to discuss what is required of the human capital responsible for growth strategies, and how to develop and acquire said human capital.	There were ongoing discussions regarding business segments that are experiencing issues. Monitoring indicators were refined, then reflected and reported in the Management Strategy Dashboard. Discussions were held on the succession plan for appointing future Presidents and appointment plans for next-generation leaders.	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 the monitoring businesses outside of Japan and subsidiaries.
Operation	The Board of Directors was appropriately fulfilling its supervisory functions. Presenters should make discussion points clear.	Used the presentation format at all meetings of the Board of Directors, and clearly indicated discussion points.	Clarification of discussion points is helping secure more time for discussion. Ensure materials are distributed in advance, as scheduled.
Dialogue with shareholders	Deliberations were being conducted with greater attention paid to stakeholders, including investors. Growth strategies need to be demonstrated more clearly.	Conducted efforts to integrate IR and SR, which was also reported on and discussed at Board of Directors meetings. Held strategy briefings on digital transformation (DX) and the Hair Care Business following discussions by the Board of Directors.	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.

Committee for Examination of Nominees and Compensation Advisory Committee

	FY2023 Evaluation and Issues	FY2024 Initiatives	Most Recent Evaluation and Future Initiatives
Discussions and operation	Discussions were sufficient. More concrete discussions were needed regarding the succession plan for future Presidents and other human capital requirements and training plans.	There were ongoing deliberations regarding the composition and diversity of the Board of Directors. There were ongoing discussions regarding the succession plan for future Presidents.	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.

Results of the Evaluation of the Effectiveness of the Board of Directors