We regard corporate governance as management and governance functions to become a good company of the twenty-first century, which makes all our shareholders, customers, and local society happy and allows our employees to work with pride. We pursue innovation in our current director and auditor system and transparency in management to further reinforce its compliance to laws and regulations.

Seiren's board of directors consists of ten directors including two outside directors. They make decisions after thorough discussions in board meetings held according to the Commercial Law.

In addition, for business promotion decisions that require prompt responses, management meetings consisting mostly of executives, who are also the chiefs of the respective divisions, are held twice a month delegated by the board so that we can promptly deal with management problems that occur every day and promote mutual understanding among divisions.

In order to handle expansion of business and operation ranges along with changes in the corporate structure, we introduced the operating officer system in June 2004, which allows acceleration of decision making and clarifies the executive's operational responsibilities. For a while, instead of completely separating management and administration from business operations, we will adapt a unique corporate governance system in which directors also work as operating officers of the respective divisions.

We will adapt the auditor system according to the Commercial Law. The four auditors, including two outside ones, actively participate in important meetings, such as management meetings, as well as board meetings to realize strictly fair audits.

To increase the permeability of management, we will disclose financial and management information in a timely manner through aggressive IR activities, issuance of investors' guidebooks, and posting information on our Web site. By continuously fulfilling our responsibility to be accountable to our shareholders and investors, we will promote management reforms.

In order to prevent insider trading, we have an Insider Trading Committee and conduct a preliminary check on the stock trades of Seiren and the companies of the Seiren Group by our directors and employees.

In addition, we will distribute the Employees Action Agenda based on Corporate Ethics to all employees to ensure thorough execution of compliance and risk management about legislation, social norms, ethics, etc. Through the achievement of these tasks, we will continuously reform our management system to build a company valued and supported by our shareholders and the other three parties.