Governance

Materiarity Strengthening of corporate governance

Corporate governance

The Qol Group recognizes that the Group must continually enhance its corporate value through its corporate activities based on its Corporate Philosophy, Slogan, Qol Group Vision, and Qol Group Charter of Corporate Behavior to respond to the expectations of all stakeholders including its shareholders, patients, and employees. To this end, ongoing corporate governance enhancements are an important management issue as the basis for ensuring management soundness, transparency and efficiency. The Group is strengthening its management oversight function by appointing outside directors who meet the requirements for independent officers. Furthermore, the Group’s policy about dialogues with shareholders and investors is to proactively have dialogues with them. This policy represents its commitment to meeting the expectations of stakeholders including shareholders and investors. In line with such commitment, the Group makes efforts such as establishing appropriate conditions for the exercise of the shareholders' rights in addition to appropriately disclosing the following information in a timely manner: information on the business conditions such as the progress of management plans; quantitative financial information; and non-financial information on corporate governance and activities aimed toward sustainability.

Corporate governance structure

Board of Directors

The Board of Directors consists of nine directors (seven men and two women) excluding those who are Audit & Supervisory Committee members and three directors (three men) who are Audit & Supervisory Committee members. The Board holds meetings in principle once per month to make decisions on important management matters as well as to manage and supervise the status of business execution. The term of office for directors (excluding those who are Audit & Supervisory Committee members) is one year to clarify management responsibilities each fiscal year.

The Chairman of the Board of Directors is Takashi Nakamura, President and Representative Director and includes Takayoshi Ishii, Representative and Senior Executive Director; Kiyonobu Fukumitsu, Representative and Executive Director; Shinobu Karasawa, Executive Director; Yutaka Togashi, Director; Kei Imai, Director; Jun Kawaguchi, Director; Toshiko Kuboki, Outside Director; Yukiharu Yamamoto, Outside Director; Yasutoshi Mori, Outside Audit & Supervisory Committee Member; Motoyuki Miyazaki, Outside Audit & Supervisory Committee Member; and Kazuo Ishii, Full-time Audit & Supervisory Committee Member.

Audit & Supervisory Committee

The Audit & Supervisory Committee consists of three members, two of whom are outside directors (Audit &Supervisory Committee members) and one of whom is a director (Audit & Supervisory Committee member),The Committee audits the legality and validity of the execution of duties by directors (excluding those who are Audit & Supervisory Committee members) in accordance with the Audit & Supervisory Committee Rules and Audit & Supervisory Committee Directors Auditing Standards. Moreover, to avoid a situation where the number of outside directors who are Audit & Supervisory Committee members and directors who are Audit & Supervisory Committee members falls short of legal requirements, the Company appointed one substitute outside director (Audit & Supervisory Committee member) and one substitute director (Audit & Supervisory Committee member).

The Audit & Supervisory Committee is chaired by Kazuo Ishii, Full-time Audit & Supervisory Committee Member, and includes Yasutoshi Mori, Outside Audit & Supervisory Committee Member; and Motoyuki Miyazaki, Outside Audit & Supervisory Committee Member.

Nomination and Compensation Committee

• The Company has established the Nomination and Compensation Committee as a committee to deliberate on the nomination and compensation of Directors.
• The Nomination and Compensation Committee is composed of 3 or more Directors, with a majority of Independent Outside Directors. Its members and chair are selected by resolution of the Board of Directors.
• The Nomination and Compensation Committee deliberates on the following matters and makes recommendations to the Board of Directors from a fair, transparent and objective perspective as an advisory body to the Board of Directors.
  1. Matters concerning the appointment and dismissal of Directors (matters to be determined by resolution of the General Meeting of Shareholders)
  2. Matters concerning the appointment and dismissal of Representative Directors and Directors with titles
  3. Matters concerning Directors’ Compensation, etc.
  4. Succession plans for the President and Representative Director
  5. Other important management matters deemed necessary by the Board of Directors

Internal Audit Department

Internal audits of the Company are conducted by the Internal Audit Department under the direct control of the president. The Internal Audit Department head conducts an audit to secure legitimate, appropriate and efficient operations and makes suggestions for improvement to relevant departments as necessary. In principle, the results of the audit are reported once a month at the internal audit meeting attended by directors and business execution departments. The results of the audits are reported to the Audit & Supervisory Committee Member twice a year at the Audit & Supervisory Board. In addition, the Internal Audit Department cooperates with Audit & Supervisory Committee Member and accounting auditors as necessary to improve the efficiency of auditing work.

Risk Management Committee

The Risk Management Committee examines, consults and approves the policies and directions of overall management initiatives for risks (classified into external risks, business process risks, and internal risks) stipulated in the Risk Management Regulations and the scope of management crises stipulated in the Risk Management Detailed Regulations. The department in charge of Business Management holds regular meetings as the secretariat of the Compliance Subcommittee of the Risk Management Committee to report on the status of each risk management, devise and discuss company-wide plans and deal with individual issues. Departments related to various risks prepare preventive measures and manuals, and the secretariat of the Risk Management Committee manages the progress. Based on the viewpoint that dispensing errors, which are apparent in the insurance and pharmacy business, the Group’s mainstay business, are the most important risks on the business, the Committee for the Eradication of Dispensing Errors was established in April 2008 to report on the occurrence errors reported and analysis of the reports to the Group’s directors and the heads of major divisions, as well as to examine measures to prevent them.

The Management Committee

The Management Committee consists of directors designated as Representative Directors of the Company and, in principle, meets once every week to consider measures for addressing management issues, deliberate important matters, and determine policies in an attempt to hasten decision making.
The Management Committee is chaired by Takashi Nakamura, President and Representative Director, and includes Takayoshi Ishii, Representative and Senior Executive Director; Kiyonobu Fukumitsu, Representative and Executive Director; Shinobu Karasawa, Senior Managing Director and Head of Pharmacy Business Division; Yutaka Togashi, Director, Head of Human Resources and Education Division and General Manager of Human Resources Planning Department; Kei Imai, Director and Head of Corporate Planning Division; and Jun Kawaguchi, Director, Head of General Affairs and Disaster Countermeasures Division, General Manager of General Affairs and Legal Department, and General Manager of Disaster Countermeasures Department.

Sustainability Committee

In order to respond to issues related to sustainability, including social and environmental issues toward the realization of a sustainable society, the Company has established the Sustainability Committee chaired by the President and Representative Director under the Board of Directors of the Company, as an advisory body to the Board of Directors. Under the corporate philosophy of "We support quality of life for everyone. There for you. Anywhere,anytime." the Committee takes the mission to deliver safe medical care to all over the country and aims to realize a healthy, prosperous and sustainable society. The Sustainability Committee, chaired by the President and Representative Director, is composed mainly of directors and the persons responsible for each department, and works on formulating the Qol Group’s sustainability policies, determining activity targets, and managing progress. The Committee regularly reports on the activities and progress of the Committee to the Board of Directors.

Expertise and experience expected of Directors (Skill Matrix)

• *The above list does not represent all the knowledge and experience of each person.

Officer remuneration

① Matters related to policies concerning the determination of the amount of remuneration, etc. for officers or the calculation method thereof

The Company has established the Nomination and Compensation Committee to enhance the fairness, transparency and objectivity of the procedures regarding remuneration for directors, etc. and to improve corporate governance. A majority of the members of the Nomination and Compensation Committee are independent outside directors, and the President and Representative Director was elected by the Board of Directors to chair the Committee. The Company resolved at a meeting of the Board of Directors held on February 26, 2021 to adopt a policy for determining the content of individual remuneration for directors.
In addition, the Board of Directors determined that this policy had been duly observed because the Board confirmed that the method used to determine the content of the individual remuneration for directors, and the content of the remuneration determined for the fiscal year under review were in line with the policy and that the recommendations from the Nomination and Compensation Committee were respected. The amounts of remuneration, etc. for directors are determined within the range of remuneration limit resolved at the General Meetings of Shareholders.

(1) Remuneration System

The Company resolved at a meeting of the Board of Directors held on June 26, 2025 to revise the policy for determining the individual remuneration, etc. for directors. Starting in July 2025, the remuneration of directors (excluding Directors who are Audit & Supervisory Committee members) has consisted of monthly fixed remuneration and performance-based remuneration based on evaluations of business performance in the previous fiscal year. The Nomination and Compensation Committee formulates a draft version of the fixed remuneration plan in comprehensive consideration of each director's title, duties, tenure, degree to which they contribute to the Company, data on industry averages and employee salaries and submits recommendations to the Board of Directors.
Performance metrics are used when determining performance-based remuneration to increase directors' awareness of the improvement of business results in individual fiscal years.
Performance-based remuneration is paid every month together with fixed remuneration. The performance metrics used are consolidated net sales and profit attributable to owners of parent in the previous fiscal year. Performance metrics are linked to evaluations as defined by the Nomination and Compensation Committee. The Committee formulates a draft version of the ratios of performance-based remuneration to fixed remuneration based on the title and duties of the directors and submits recommendations to the Board of Directors.
The remuneration of outside directors shall consist solely of fixed remuneration.
Remuneration of directors who are Audit & Supervisory Committee members shall consist solely of fixed remuneration, and the individual remuneration of directors who are Audit & Supervisory Committee members shall be determined after consulting with the Audit & Supervisory Committee.
In FY2025, the composition of the remuneration of directors (excluding directors who are Audit & Supervisory Committee members) was as follows.

Composition of monthly basic remuneration (FY2025) of directors (excluding directors who are Audit & Supervisory Committee members)

Representative director

Fixed remuneration: 77.1% Performance-linked remuneration: 22.9%

Director

Fixed remuneration: 85.6% Performance-linked remuneration: 14.4%

Outside director

Fixed remuneration: 100.0% Performance-linked remuneration: ―

(2) Matters regarding the determination of the content of individual remuneration, etc. for directors.

The President and Representative Director and the Director in charge of administrative activities consult to determine the content of individual remuneration for directors based on a resolution of the Board of Directors.
The President and Representative Director consults with the Nomination and Compensation Committee in examining the draft remuneration plan, and the Board of Directors confirms the recommendations of the Nomination and Compensation Committee. The President and Director in charge of administrative activities determines the content of remuneration in line with these recommendations.

Executive compensation paid in the fiscal year ended March 31, 2026, was as follows:
Director excluding directors who are Audit & Supervisory Committee Member (9 people) compensation amounted to 253 million yen (of which, 10 million yen was paid to outside directors)
Director who are Audit & Supervisory Committee Member (3 people) compensation amounted to 17 million yen (of which, 8 million yen was paid to outside directors)

② Total amount of consolidated remuneration, etc. for each executive

It is not listed as there is no person whose total amount of consolidated remuneration, etc. exceeds 100 million yen.

Internal control system

The Company aims to steadily carry out its Corporate Philosophy, and it is promoting corporate activities based on high ethical standards that comply with the "Qol Group Charter of Corporate Behavior," "Executive Officer and Employee Code of Ethics," and "Compliance Management Regulations" in accordance with laws, regulations, the Articles of Incorporation and internal regulations. In addition, the Company established and operates an internal control system in order to ensure the effectiveness and efficiency of operations, the reliability of financial reporting, compliance with related laws and regulations, and the protection of assets. The Internal Control Subcommittee is established within the Internal Control Committee as a supervisory body for internal control. This subcommittee conducts the prescribed procedures to monitor and evaluate internal control, and after review by the Internal Control Committee, reports to the president, with final decisions being made by the Board of Directors. For more information on the Company’s internal control system, please refer to the Corporate Governance Report.

Risk management

Basic policy on Group risk management

1. Through practicing risk management, the Qol Group will ensure continuity and stable development of the business.
2. We will strive to eliminate and reduce the factors that hinder the interests of customers, business partners, shareholders and investors, local communities, and other stakeholders, as well as executives and employees, with the highest priority to ensuring the quality and safety of our operations and services in each business.
3. We are aware of our responsibilities as an entity engaged in medical-related business and act based on our social mission to safely and securely supply operations and various services in each business.
4. All executives and employees of the Qol Group comply with various laws and regulations, and rules, etc. in accordance with the spirit of compliance, decide for themselves what is an ethically correct action, and act according to this value judgment.

Compliance

Qol Group Charter of Corporate Behavior

In order to realize our corporate philosophy as a medical professional, we have established the Qol Group Charter of Corporate Behavior as a code of conduct that all Group employees should comply with.

More information on the Qol Group Charter of Corporate Behavior is available on the site below.

Basic concepts of compliance

For Qol Group, compliance means to comply with laws, regulations based on its corporate philosophy, "We support quality of life for everyone. There for you. Anywhere,anytime." and Qol Group Charter of Corporate Behavior, and to conduct corporate activities while maintaining a high sense of ethics as medical professionals and as business persons.

Information security

Reporting system

The purpose of the reporting system is to establish a mechanism for the proper handling of consultations and reporting from employees, etc. regarding organizational or personal violations of laws, to early detect misconducts and correct them, and thereby to contribute to the strengthening of compliance management. The General Affairs and Legal Affairs Department  serves as the point of contact, and the same department also provides consultation on whether or not it falls under a violation of laws and regulations.

Strengthening of compliance

The Qol Group strives to ensure complete compliance as a corporate mission to provide medical care and health maintenance and as a foundation for practicing management for society. We distribute Qol Group Essential Information and Compliance Book to all Qol executives and employees to raise their awareness in ethics and compliance. In addition, compliance training is conducted with external instructors at the Management Policy Meeting (held once a year), manager training (held once a year), and group training for new employees.

Protection of personal information

Qol Holdings Co., Ltd. (Qol HD) has established and practiced corporate ethics that can contribute to society as a corporation that engages in healthcare-related businesses in our group in addition to complying with laws and regulations, and so have the Charter of Corporate Conduct, which states that it is trusted by society.

To put this Charter into practice, we deeply recognize that personal information must be handled with care based on the philosophy of respect for personal character. At the same time, we comply with the Personal Information Protection Management System, handle personal information accurately and properly, and carry out highly transparent corporate activities.

Privacy Policy of Qol Holdings is available on the site below.

Corporate Governance Report

Corporate Governance Report of Qol Holdings is available on the site below.