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Corporate Governance System

The following details our corporate governance system.

Corporate Governance System

Yamaha Motor's Corporate Governance System and Internal Control System

1) Reasons for Adoption of Current Corporate Governance System

Yamaha Motor supplies various kinds of products and services to markets around the world, including sensibility-focused personal mobility for individual customers’ recreational purposes, user friendly and practicality-focused personal mobility for travelling and transportation purposes, marine products to be used for a wide range of applications from recreational to business purposes, industrial robots, automotive engines, and industrial unmanned helicopters for corporate customers’ business use.

Overseas sales account for approximately 90% of the Company’s consolidated net sales. With the principal concept of developing and producing locally where the products are consumed, our development, procurement, production and sales and other activities have expanded worldwide.

To sustainably develop operational activities that are capable of flexibly responding to customer diversity, product diversity and the globally expanding market, we acknowledge that adequate risk-taking and decisive decision-making are necessary. We also place importance on multilaterally understanding and appropriately overseeing issues and risks associated with the implementation of management strategies. We believe it is effective to structure a corporate governance system consisting of the Board of Directors, made up of Directors of the Company who are familiar with the Company’s customer characteristics, products, business operations and functions and Outside Directors who have a wealth of knowledge in global corporate management, and the Audit & Supervisory Board whose members include Outside Audit & Supervisory Board Members with professional knowledge in areas including accounting, legal affairs, and management administration. Under this corporate governance system, Executive Officers are appointed to execute operational duties in a timely manner, and the Board of Directors delegates matters related to the execution of business operations to the Executive Officers.

2) Summary of Current System

Composition of the Board of Directors and Audit & Supervisory Board

The Board of Directors and the Audit & Supervisory Board, which implement corporate governance, consist of six (6) Directors, four (4) Independent Outside Directors (one [1] of whom is female), two (2) Standing Audit & Supervisory Board Members, and two (2) Independent Outside Audit & Supervisory Board Members (one [1] of whom is female).

Of the fourteen (14) Directors and Audit & Supervisory Board Members in total, six (6) are Independent Outside Directors / Audit & Supervisory Board Members.

Roles of the Board of Directors

To ensure the execution of growth strategies for the future, the Board of Directors establishes an environment that supports management’s appropriate risk-taking and decisive decision-making activities. In addition, the Board of Directors multilaterally understands and appropriately oversees issues and risks associated with the execution of management strategies from the viewpoint of fulfilling its responsibilities to various stakeholders including shareholders and investors. We acknowledge that these tasks are their roles in supporting the Company’s sustainable growth and enhancement of its corporate and brand value.

To ensure prompt execution of business operations, The Board of Directors appoints Executive Officers and delegates matters related to execution of business operations to them.

Executive Personnel Committee

Yamaha Motor has established an Executive Personnel Committee, which is involved in nominations and remuneration, as a voluntary advisory body of the Board of Directors, to improve transparency and validity in appointments and dismissals of executives and determining their remuneration, among other objectives. Matters deliberated upon at the Executive Personnel Committee are reported to the Board of Directors.

In the role related to “nominations,” the Executive Personnel Committee deliberates upon the appointments and dismissals of the Chief Executive Officer (CEO), Directors, Audit & Supervisory Board Members and Executive Officers, as well as the selection of candidates for such senior management positions and their development plans, while confirming future management strategies and personnel requirements for putting them into practice, among other things. In particular, as for the appointing and dismissing of the CEO, a system has been introduced for making judgements based on reviewing and assessing the operations of the CEO. More specifically, there is a round-table conference with CEO that is made up of six Outside Directors and Outside Audit & Supervisory Board Members and chaired by an Outside Director, and through strategic dialogues with the CEO, the conference carries out non-financial evaluations regarding matters including the status of operations of the individual in question as a top-level manager, based on looking at whether the individual in question has the qualities needed to serve as the CEO of the Company and is appropriately demonstrating such. The results are reported from the Executive Personnel Committee to the Board of Directors, and then a decision is made regarding the appointment of the CEO and other Executive Officers. Thus, governance is established in which the most suitable and best top-level managers execute business operations, based on a process in which objectivity and fairness are ensured.

In the role related to “remuneration,” the Executive Personnel Committee deliberates upon and determine the evaluation standards and remuneration system for the CEO, Directors and Executive Officers. The Executive Personnel Committee also evaluates the performance of the Company and individuals based on contributions to medium- to long-term corporate growth and business performance for the said fiscal year, in order to deliberate upon the compensation linked to performance for such senior management within the limits of total remuneration resolved at the General Meeting of Shareholders.

To ensure the transparency and effectiveness of the deliberation process, which is the purpose for establishing the Executive Personnel Committee, as well as to ensure the validity of matters reported to the Board of Directors’ meetings, the majority of the members of the Executive Personnel Committee consists of Outside Directors, and the meeting of the Executive Personnel Committee is held more than six times a year, in principle.

Audit & Supervisory Board Members and the Audit & Supervisory Board

Our Audit & Supervisory Board Members are two (2) Standing Audit & Supervisory Board Members and two (2) Independent Outside Audit & Supervisory Board Members.

On the basis of fiduciary responsibilities to shareholders, Audit & Supervisory Board Members and the Audit & Supervisory Board, as a body independent from the Board of Directors, request the Company and its subsidiaries to submit reports on their business activities in accordance with laws and regulations, survey the status of business operations and property, exercise rights in respect of appointing or dismissing an External Accounting Auditor and audit compensation, attend meetings of the Board of Directors and other important meetings, and provide opinions as needed. Through these tasks, Audit & Supervisory Board Members and the Audit & Supervisory Board audit the legality and appropriateness of Directors’ execution of duties, internal control systems, and the performance and financial position of the Company and its subsidiaries. An Audit & Supervisory Board Members’ Office, with a dedicated staff of two (2) persons, has been established to assist the Audit & Supervisory Board Members with their audit and supervisory operations.

The Audit & Supervisory Board meets monthly in principle, with additional meetings held as needed.

Executive Officers and Management Committee, etc.

The Company has thirty-two (32) Executive Officers (including Deputy Executive Officers), of whom five (5) serve concurrently as Directors. A Management Committee, comprising ten(10) Executive Officers with specific posts, has been established to deliberate on matters of business execution, speeding up the Company’s decision-making process. In principle, the Management Committee meets at least monthly, and additionally from time to time as necessary.

In addition, a Global Executive Committee has been established to deliberate on important management policies and issues related to the Group’s management. The Global Executive Committee includes the Representative Directors, all Executive Officers with specific posts, Audit & Supervisory Board Member, and senior local managers of major Group companies, and has forty-six (46) members, of whom twenty-eight (28) are Japanese and eighteen(18) are non-Japanese. In principle, the Global Executive Committee meets at least once annually, and additionally from time to time as necessary.

Sustainability Committee

Sustainability Committee, comprising ten(10) Executive Officers with specific posts, has been established to address issues related to sustainability and deliberate measures related to risk management and compliance. In principle, the Sustainability Committee meets at least twice annually, and additionally from time to time as necessary.

Internal Auditing

The Integrated Auditing Division, with twenty-seven (27) members and reporting directly to the President and Chief Executive Officer, has been established as an internal auditing sector to audit the appropriateness of operational activities at the Company and its subsidiaries. In addition, internal audit functions have been installed at major subsidiaries, working together with the Company’s internal auditing sector to audit divisions and subsidiaries.

Internal auditing
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