Corporate Governance

Basic Policy View

• Japan Display Inc. (hereafter "JDI") strives to achieve the goals of sustainable growth and increasing corporate value over the medium to long term by practicing important corporate principles. In order to achieve these goals, JDI has instituted a Corporate Governance Basic Policy that contains its basic view of corporate governance as well as a framework and set of policies based on its view of corporate governance.
• In order to have a transparent, fair, rapid, and decisive decision-making process that serves the interest of shareholders, customers, employees, and local communities, JDI is committed to further strengthening its corporate governance in accordance with the fundamental concepts below.

• ①JDI ensures shareholders' rights and equality.
• ②JDI cooperates by all appropriate means with stakeholders.
• ③JDI ensures transparency through the disclosure of information in compliance with laws and regulations and the provision of additional corporate information.
• ④As a company with a Three Committees (nomination, compensation, audit) governance structure, JDI separates supervision and the operation of business execution, establishes an execution system that enables swift business execution based on its fiduciary responsibility and accountability to shareholders, and ensures the effectiveness of the supervision function by the Board of Directors, which is comprised of a majority of outside directors.
• ⑤JDI holds constructive dialogue with shareholders conducive to the sustainable growth of JDI and the enhancement of corporate value over the medium to long term.

Corporate Governance System

JDI is a company with a Three Committees governance structure as set forth in the Companies Act of Japan. Under this structure, the functions of management supervision and business execution and separated in order to establish an operating system that enables the swift conduct of business and ensures the effectiveness of management supervision. The Board of Directors, which is comprised of a majority of outside directors, performs highly effective supervision of JDI's management through the utilization of a Nomination Committee, a Compensation Committee, and an Audit Committee, and is also responsible for creating and maintaining a highly effective system of management supervision that is robust and transparent. The Board of Directors shall make decisions on basic management policies and other important matters, clarify the scope of responsibilities of Executive Officers, and delegate to them the authority to make decisions regarding business execution, except for matters stipulated by law, the Articles of Incorporation, and JDI's Board of Directors Regulations.

Board of Directors

The Board of Directors is entrusted by shareholders and is responsible for maximizing the company's sustainable growth and medium- to long-term corporate value through efficient and effective corporate governance. At present, the Board of Directors consists of six (6) directors, each serving a term of office of one (1) year.
The majority (4) of the directors are outside directors (all independent outside directors), and JDI has established a system to appropriately reflect the opinions of the directors, who have a wealth of experience and insight in global corporate management, in the management of JDI.
The Board of Directors meets once a month in principle to fully consider proposals on important matters from various perspectives and to engage in constructive discussions that contribute to the sustainable growth of JDI and the enhancement of its corporate value over the medium- to long-term.

Audit Committee

The Audit Committee, of which the majority is composed of outside directors, assumes the roles and responsibilities of auditing the execution of duties by directors and executive officers from an independent and objective standpoint, and exercising authority over the selection and dismissal of accounting auditors and audit fees.
Audit Committee members selected by the Audit Committee attend important meetings related to the execution of the Company's business operations and gather necessary information through interviews with Executive Officers, business divisions, head office functional divisions, and others to ascertain the status of corporate governance implementation. The Internal Audit Department, as the secretariat of the Audit Committee, assists the Committee in its duties and conducts audits in close cooperation with the Internal Audit Department, while maintaining a highly effective Audit Committee by sharing information at the monthly Audit Committee meetings.

Nomination Committee

The Nomination Committee, in which outside directors constitute the majority, determines the content of proposals for the election and dismissal of directors to be submitted to the General Meeting of Shareholders. The committee also deliberates on criteria for the appointment and dismissal of Representative Executive Officers, Executive Officers, and Corporate Officers, proposals for the appointment and dismissal of Representative Executive Officers and Executive Officers and succession plans for Representative Executive Officers and Executive Officers.

Compensation Committee

The Compensation Committee, in which outside directors constitute the majority, deliberates and decides on policies concerning the determination of compensation, etc. for Directors and Executive Officers, as well as the details of compensation, etc. for each individual.

Executive Officers and Corporate Officers

As a company with a Three Committees governance structure, JDI has appointed one Executive Officer (as of June 2023) by resolution of the Board of Directors. The Representative Executive Officer, Chairman, and CEO, to whom the authority to make business decisions is delegated by the Board of Directors, heads the Executive Division and makes decisions on business-related matters and executes business, except for matters stipulated by law, the Articles of Incorporation, and JDI's Board of Directors Rules.
In addition, JDI has adopted a Corporate Officer System in order to facilitate prompt decision-making in the realm of business execution. Under the delegation of the Board of Directors or the Representative Executive Officers and Executive Officers, each Executive Officer executes JDI's business in the area for which he or she is responsible under the supervision of the Representative Executive Officers and Executive Officers.

Voluntary Committees

Compliance Committee

In order to achieve comprehensive compliance within JDI, including subsidiaries we have established compliance-related rules and established the Compliance Committee to prevent or detect compliance violations and refine the compliance self-improvement process.
The Compliance Committee is chaired by an executive officer in charge of compliance or an executive officer appointed by the Board of Directors, and is responsible for the maintenance of the compliance system.
The Compliance Officer or Executive Officer has established an internal reporting system consisting of an internal reporting contact, an external reporting contact, and the Audit Committee, as well as a global internal reporting system that allows employees of overseas subsidiaries to report illegal or improper matters directly to JDI's internal or Audit Committee whistleblowing reporting contacts.

Internal Audit Department

The Internal Audit Department reports directly to the Audit Committee, thereby separating execution and supervision and establishing a system to ensure that the Internal Audit Department's periodic audits of the Group's compliance status are conducted effectively. In addition, from a practical standpoint, the Internal Audit Department ensures the effectiveness of audits through regular information sharing with the full-time Audit Committee members and meetings including Audit Committee members who are also outside directors. In addition, the Internal Audit Department continuously reports to the Audit Committee on the status of the execution of duties and findings, periodically reports the results of internal audits, and reports the results of internal audits to the Representative Executive Officer when instructed by the Audit Committee.

Internal Control System

JDI has an Internal Control System for the purpose of ensuring appropriate business operations. The creation of this System was begun immediately following the commencement of business to achieve sound and efficient organization management. The development of the basic policy concerning the maintenance and operation of the Internal Control System (Basic Policy on the Internal Control System) was completed in June 2012. Since then, the Basic Policy and Internal Control Systems have been used with only partial modifications made based on legal revisions or organizational changes.