Kawasaki Kisen Kaisha: Regarding the evaluation of our board

April 28, 2022

Kawasaki Kisen Kaisha, Ltd.

Regarding the evaluation of our board of directors

Based on the conviction that effective corporate governance is essential to sustainable growth and to improving the value of the company in the medium and long term, we analyze and evaluate the effectiveness of the board of directors on an annual basis. administration and communicate results in a timely and appropriate manner.

We have completed the board assessment for FY2021 and would like to present an overview of the results as follows.

1. Method for assessing board effectiveness

This year’s assessment was conducted by an independent assessment firm who interviewed all directors and members of the Audit and Supervisory Board.

  • Composition of the Board

  • Board operations

  • Board discussion

  • Board oversight function

  • Performance of outside directors

  • Support system for Directors and members of the Audit and Supervisory Board

  • Training

  • Dialogue with shareholders and investors

2. Overview of results of third-party assessment of board effectiveness

Our board was rated as generally operating effectively.

We judged that the following strengths noted in last year’s assessment have been continuously maintained and strengthened this year.

  • Strives to continuously reform and improve governance

  • An atmosphere of cooperation due to the leadership of the President

  • Monitoring for prompt and appropriate decision-making process when performing tasks

  • Appropriate oversight by various outside administrators

  • Proactive capital efficiency discussions including asset portfolio review

  • Constructive dialogue with shareholders

KAWASAKI KISEN KAISHA, LTD.

For this exercise, we added a new topic to assess how the Board addressed the items added in the June 2021 review of the Corporate Governance Code, and sustainability was found to be sufficiently addressed. On the other hand, it was recognized that there was room for further discussion on issues such as monitoring the progress of the management plan. These points have been identified as issues to be addressed to further improve governance.

With respect to items listed as issues in the previous assessment, the following items were all assessed as having been discussed and resolved.

  • Promoting corporate sustainability

    It was confirmed that the framework and internal discussions of the company are well developed and that the oversight function related to sustainability is working. In particular, with regard to climate change issues, it was recognized that sufficient measures are being taken to address issues directly related to the business. Sustainability is an area where the demands of the world are increasing year by year, and we will continue to pursue accordingly.

  • Strengthen Group Governance

    The improvement compared to last year was confirmed given the sufficient discussions within the Board of Directors and a reporting system in place from management to the Board. Container business integration company Ocean Network Express Pte. Ltd has a significant impact on the Group’s performance, and the importance of monitoring and strengthening governance as a reference shareholder has been reaffirmed.

  • Improved discussions on medium and long-term capital policy

    Rapid changes in the business environment, including a significant improvement in profits for the container business integration company, are recognized as increasing the importance of medium and long-term capital policywhich is the subject of in-depth discussions as part of the process of drawing up the new medium-term management plan.

  • To strenghten and strengthen risk management in the face of the threat of cyberattacks

    It was confirmed that an adequate response was in place given the measures taken over the past year, including targeted improvement measures such as the formulation of a basic cybersecurity policy and the development of a framework using the expertise of external consultants. Cybersecurity issues are advancing at a rapid pace and we will continue to strengthen our response.

KAWASAKI KISEN KAISHA, LTD.

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3. Moving forward

Our board concludes that its effectiveness is well maintained at this time, however, to achieve a more effective board, we will be working on further improvements, including the following.

  • Monitoring the progress of the management plan

  • Discussions on medium and long-term capital policy

  • Strengthen group governance

  • Constructive dialogue with shareholders

  • Clarify the process for developing a succession plan

KAWASAKI KISEN KAISHA, LTD.

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