Governance

Basic Policy on Governance

CellSource positions corporate governance as the core of the business essential for the Company to continue making profits and improving sustainability and developing an organizational structure and corporate ethics for providing true profits to stakeholders while simultaneously achieving social and corporate sustainability.

As a solution-oriented company, we recognize that the fulfillment of corporate governance is one of the most important management issues in our corporate mission, which is to provide solutions for the aging society, declining birthrate, and financial issues (reduction of social insurance medical expenses). Simultaneously, for corporate governance to function effectively, we consider it important to speedily disclose active and accurate information to the stakeholders

Skills Matrix

Name	Position/Role	Skills (specialist knowledge and experience required by CellSource)
Name	Position/Role	Corporate management	Global management	Finance and accounting	Legal affairs and risk management	Governance and internal control	Organization and human resources	ICT/DX	Healthcare	Management strategy and business implementation
Takashi Sawada	Director	〇								〇
Masato Tsumamoto	Director	〇							〇	〇
Masayuki Yamakawa	Director								〇	〇
Norio Murakami	External Director	〇	〇			〇	〇	〇		〇
Takeshi Amemiya	Director (Audit and Supervisory Committee member)			〇	〇	〇	〇			〇
Tsuneyasu Ozaki	External Director (Audit and Supervisory Committee member)				〇	〇	〇
Kumi Fujisawa	External Director (Audit and Supervisory Committee member)				〇		〇			〇

Note: Includes directors who are also Audit and Supervisory Committee members.

Directors’ Compensation

Policy regarding the determination of the amount of compensation, etc.

The amount of directors’ compensation is determined based on the following basic policy, which is approved by a resolution of the Board of Directors. The Board of Directors has concluded that, with regard to compensation, etc., of individual directors for the current fiscal year, the policy for determination of the content of compensation, etc., and the content of compensation, etc., that has been determined is consistent with the policy approved by a resolution of the Board of Directors, and in accordance with the policy for determination of the content of compensation.

Ⅰ　Basic policy

Compensation of the Company’s directors is based on a compensation structure that is linked to shareholder return to ensure that it fully functions as an incentive to achieve sustained improvement of the value of the firm, and compensation of individual directors is set at an appropriate level according to each director’s responsibilities. Specifically, the compensation of directors responsible for business execution will consist of fixed basic compensation and earnings-linked compensation, while the compensation of outside directors responsible for supervisory functions and Audit and Supervisory Committee members with audit and supervisory functions will consist solely of a fixed basic compensation in light of their responsibilities.

Ⅱ　Policy for determination of basic compensation (cash) for individual directors (including policy regarding the decision of payment timing and/or conditions)

The basic compensation of the Company’s directors will be fixed monthly compensation, determined based on a comprehensive review of the director’s knowledge, position, responsibilities, and length of service, taking into consideration compensation levels of other companies, the Company’s earnings performance, and employees’ salary levels.

Compliance and risk management

In January 2023, the Company transitioned to a company with Audit and Supervisory Committee structure to strengthen further the management and oversight functions of the Board of Directors, which makes key management decisions and oversees business execution, as well as improve the agility and efficiency of business execution. The Audit and Supervisory Committee (with external directors accounting for the majority of its members) works closely with the Internal Control Department, etc., to oversee from a neutral and independent standpoint whether the Board of Directors is making decisions appropriately and efficiently.

The Company also introduced an Executive Officer System to make a clear division between management supervision and execution. The Board of Directors oversees business execution, having transferred some of its business execution authority to the Management Council, whose members are directors responsible for business execution and executive officers.

The Company has also established a Nominating and Compensation Advisory Committee to discuss the fairness and appropriateness of appointments, dismissals, and compensation, etc., of directors and executive officers (including succession planning) and strengthen the Company’s corporate governance structure by ensuring transparency and improve accountability of management, and a Compliance and Risk Council, which discusses compliance and risks.