Nippon Paint : Update of the Corporate Governance Policies and Corporate Governance Report

Corporate Governance Policies／Corporate Governance Report

Nippon Paint Holdings is implementing the principles of Japan's Corporate Governance Code.

• Corporate Governance Policies (Revised on January 14, 2022)

• Corporate Governance Report (Submitted on January 14, 2022)

Our approach to corporate governance

We have shifted to a Company with Nominating Committee, etc. with the aim of enhancing the transparency, objectivity and fairness of management as well as separating and strengthening business execution and supervision. We, based on our Purpose, the common raison d'être of the Group, and our Business Philosophy, our policy, promote our business and engage in ongoing efforts to enhance and strengthen our corporate governance.

Relationship with the major shareholder and protection of the interests of minority shareholders

We share a philosophy of MSV with the Wuthelam Group, which has a history of cultivating business partnerships with the Company for over 60 years, and properly protect the interests of minority shareholders. The acquisitions of 100% ownership of the Asian JVs and the Indonesia business in January 2021 simplified our ownership structure, causing the interests of the major shareholder and minority shareholders to be perfectly aligned. This created a management structure for pursuing MSV while ensuring the protection of the interests of minority shareholders.
At the same time, in line with the bringing in a major shareholder in the form of the Wuthelam Group, protection of minority shareholders has become more important. At present, the majority of the Board of Directors is comprised of Independent Directors, and in addition, we are working to ensure appropriate involvement and supervision by Independent Directors such as having the lead Independent Director serving as Board Chair, in line with the system changes as of April 2021.

Status of Company shares, execution of share rights

See "Stock Information".

Corporate governance system

• With the shift to being a Company with Nominating Committee, etc., we aim to separate and strengthen business execution and supervision, improve the transparency, objectivity and fairness of management, strengthen the global auditing system, protect minority shareholder rights and strengthen relations with domestic and international stakeholders.

• Directors are elected by a resolution of the General Meeting of Shareholders for a term of one year.

• The Company selects and appoints the Lead Independent Director, and the Board Chair has been filled by the Lead Independent Director as of April 28, 2020.

• The Board of Directors has three statutory committees: Nominating, Audit and Compensation. The majority of their members are Independent Directors.

• See "Committees", for members of each committee and their roles.

• In order to ensure the effectiveness of each committee and the Board of Directors, the Company provides a secretarial office for each meeting body, with an appropriate budget and personnel.

• We have established the meeting of the Independent Directors, which is composed entirely of Independent Directors.
  See "meeting of the Independent Directors " for details of this Meeting.

• Business execution is done by the Representative Executive Officer and the Executive Officers elected by the Board of Directors, and the Board of Directors supervises the business execution.

• We have established an Internal Audit Department in the Company, which evaluates the effectiveness of the Group's governance, processes, risk management and other internal control systems on a risk basis. In addition, the Internal Audit Department ensures the independence and appropriateness of audits by establishing a double reporting line to both the Audit Committee and the Representative Executive Officer and Co-Presidents.
  See "Promotion of Global Audits" for information related to the Internal Audit Department.

• The Company has appointed KPMG AZSA LLC as an Accounting Auditor.