The Board of Directors supervises management by directors and assumes the decision-making functions regarding matters prescribed under laws and regulations, the Articles of Incorporation of the Company, as well as the important matters concerning the Nikon Group.

For the purpose of clarifying the scope of delegation to executive directors and officers while ensuring prompt decision-making and management by executive directors and officers, the Company specifically sets out the matters subject to deliberation at Board of Directors' meetings in the criteria for matters subject to deliberation and reporting at Board of Directors' meetings. For example, the Board of Directors makes decisions on matters concerning important management issues, including the basic management policies, the Medium-Term Management Plan, the annual plan, the Basic Policy on Internal Control System, and investments and loans exceeding a certain amount.

To accomplish its management strategy, the Company selects the specific skills expected from its directors, and authorizes them following the deliberation by the Nominating Committee. The skills include knowledge on and experience in corporate management, management strategy, internal control, and governance as well as the Company’s business characteristics and issues. The composition of the Board of Directors is designed to ensure that each director possesses these skills in a well-balanced manner and the Board as a whole can demonstrate its effectiveness, taking into account the need to maintain diversity and an appropriate number of directors.
In addition, at least one-third of the Board of Directors shall be comprised of independent external directors in order to further strengthen the supervisory function of the Board of Directors.

The Company strives to provide appropriate and necessary information to directors for effectively fulfilling their roles and responsibilities. Meanwhile, at the meetings of the Board of Directors, the Company carries out prior distribution of relevant materials to the attendees of the meetings of the Board of Directors, and advance briefing to external directors as necessary, to ensure constructive discussion and exchange of opinions.

The Board of Directors will analyze and evaluate its effectiveness each year and disclose a summary of the results thereof. Based on the results, the Board of Directors will work on measures for further improving its functions.

The Audit and Supervisory Committee audits and supervises the status of management by directors other than those who are Audit and Supervisory Committee members, and officers (including executive fellows and other positions equivalent to officer; hereinafter collectively referred to as “officers, etc.”) as an independent body. For such a purpose, Audit and Supervisory Committee members regularly attend the important meetings of the Board of Directors as well as important meetings such as the Executive Committee, and conducts audits and supervision over management and directors.

The Audit and Supervisory Committee shall maintain an adequate number of members, within five members as prescribed in the Articles of Incorporation, to ensure highly effective audits and supervision. Furthermore, members with the appropriate experience and capabilities as well as knowledge in the areas of finance, accounting and legal affairs shall be appointed. In particular, at least one member with ample knowledge in the areas of finance and accounting shall be appointed. In addition, for the purpose of further enhancing independence and neutrality of the audit system, the majority of the Audit and Supervisory Committee shall be comprised of independent external directors.

As a voluntary advisory body to the Board of Directors, the Nominating Committee primarily formulates criteria for the election and removal of the chief executive officer, president and directors, nominates candidates, considers the composition of the Board of Directors, and oversees evaluation and assignment of officers, etc. so as to ensure that decisions on the election and removal of directors and officers, etc. are transparent and objective.

From the perspective of conducting appropriate supervision, the majority of members of the Nominating Committee shall be external directors, and the Committee chairperson shall also be an external director.

As a voluntary advisory body to the Board of Directors, the Compensation Committee deliberates and makes proposals for policy regarding executive compensation as well as various related systems so as to ensure objectivity, transparency and linkage with performance in the process of determining executive compensation.

From the perspective of conducting appropriate supervision, the majority of members of the Compensation Committee shall be external directors, and the Committee chairperson shall also be an external director.

The Company nominates director candidates from among those who understand the management environment of the Company and who can contribute to the sustainable growth of the Nikon Group and the enhancement of corporate value over the medium to long term from a sophisticated and global viewpoint, while also being qualified to earn the trust of society as members of the Board of Directors. The specific race, gender, nationality, or country of origin of candidates shall not be determining factors in the nomination of candidates. Furthermore, the Company nominates external director candidates from among those with a wealth of knowledge and experience, etc., as executives of other companies, or expertise and experience, etc., as specialists such as attorneys and certified public accountants, and who are qualified to take part in management supervision function from a fair and objective standpoint independent of management.

The Company appoints officer candidates from among those with a broad perspective, a wealth of experience, leadership skills, and capabilities to promote reforms in their respective areas of responsibility, while possessing the ability to strategically fulfill their capabilities to contribute to the improvement of business performance. Meanwhile, the Company appoints executive fellow candidates from among those who possess the outstanding expertise, abundant experience and distinguished achievements in specific field, and who contribute to the management of the Company with accomplishments.

In addition to the criteria for external directors under the Companies Act, the Company judges an external director candidate to be independent if he/she does not fall under any of the following criteria.

The Nominating Committee deliberates on the nomination of candidates for director, and the nomination of candidates is determined by resolution of the Board of Directors based on the results of these deliberations.
The appointment of officers, etc. is determined by resolution of the Board of Directors after prior examination by the Nominating Committee of the appropriateness of the candidates.
The nomination of candidates for director who is an Audit and Supervisory Committee member is subject to the prior consent of the Audit and Supervisory Committee.

If a director or an officer, etc. of the Company falls under the dismissal criteria formulated by the Nominating Committee, the Nominating Committee and the Board of Directors shall consider whether he or she should be dismissed.

The Company recognizes the appointment, dismissal, and systematic training for the successors of its chief executive officer, as a task with utmost importance in achieving its sustainable growth, and the Nominating Committee formulates appointment and dismissal criteria, narrows down successor candidates, monitors their training, and nominates successors.

Executive compensation for the Company's Directors and Officers (including Executive Fellows and other positions equivalent to Officers; Officers, Executive Fellows, and other positions equivalent to Officers hereinafter called "Officers, etc.") is determined to satisfy the following basic criteria.

Compensation for Directors other than those who are Audit and Supervisory Committee Members and Officers, etc. is deliberated on by the Compensation Committee by comprehensively taking into account the titles, duties, responsibilities, and other situations, and based on the results of such deliberations, determined by the Board of Directors. Compensation for Directors who are Audit and Supervisory Committee Members is determined by consultation among Directors who are Audit and Supervisory Committee Members.

The majority and chair of the Compensation Committee are Independent External Directors, and the Compensation Committee takes into account the compensation levels of major Japanese companies that globally develop their businesses, so as to determine the compensation amount consistent with the Company's performance and business scale.

If a Director (other than a Director who is an Audit and Supervisory Committee Member and a Director who is a foreign national) or Officers, etc. of the Company is found to have committed serious violation of laws and regulations and other illegal acts or if other cases occur, the Company shall be able to claim revocation or return of all or part of bonuses, PSU, and RS paid or delivered or take other measures.