Corporate Governance

The Board of Directors exercises strong management monitoring with a high degree of transparency through the nomination of Directors, Audit and Supervisory Board Members and Executive Officers, decision of officer remuneration, and important decision-making.

To fulfill this role,
①The Board separates the management monitoring and business execution functions. The Board Chair is nominated from among Directors who do not concurrently serve as Outside Officer.

②At least three highly independent candidates are nominated for Outside Director, and from the Ordinary General Meeting of Shareholders in June 2021, Outside Directors account for at least one-third of all Board members.

③ In Fiscal 2021, we decided to increase female Director appointments.

④From fiscal 2021, Directors and Audit and Supervisory Board Members are required to basically attend at least 80% of all Board meetings.

⑤The Board transfers appropriate authority to the President to ensure efficient decision-making.

＜In FY2024＞
Chairperson : AKASAKA Yuji
Members as of the date of submission: AKASAKA Yuji, TOTTORI Mitsuko, SAITO Yuji, AOKI Noriyuki, KASHIWAGI Yoriyuki, TAMURA Ryo, KOBAYASHI Eizo, YANAGI Hiroyuki, and MITSUYA Yuko

＜In FY2023＞
Chairperson : UEKI Yoshiharu
Number of meetings：16 meetings (Director UEKI attended 14 of the 16 meetings, President AKASAKA attended 15 of the 16 meetings, and other Directors and Audit and Supervisory Board Members attended all 16 meetings. Directors TOTTORI, SAITO, MITSUYA and Audit and Supervisory Board Member KIKUYAMA, who have been in office since June 2023, atttended all of the 13 meetings.)

• FY2021-2025 JAL Group Medium Term Management Plan Progress of Rolling Plan 2023

• - Initiatives related to sustainability
• - Progress in structural business reforms
• - Promoting human resources strategies
• - Promoting DX strategies

• Formulating the JAL Group Medium Term Management Plan Rolling Plan 2024 for FY2021 to FY2025

• Establishment of an Executive Management Council
• Progress and confirmation of the renewed frequent flyer program system
• Selection of new mid-size aircrafts

• Each quarter financial results
• Financing
• Verification of cross shareholdings

• Board Effectiveness Assessment
• Committee reports and decisions on the appointment of new executives and their remuneration
• Development and evaluation of internal control
• Risk management related reports
• Measures towards the audit report submitted by the Audit and Supervisory Board Members
• Audit and Supervisory Board Member audit policies and results
• Policies of the Audit and Supervisory Board Members and their audit results
• Report on aircraft accidents
• Report on Administrative Guidances

• Approval of proposals related to the General Meeting of Shareholders
• Operational status of shareholder benefit programs
• Initiatives to reinforce constructive dialogues with shareholders
• Feedback regarding IR orientation meeting
• Disclosure of information on Climate Change Based on TCFD

①Directors are selected from those with extensive experience in various fields and high insight and expertise, paying attention to ensuring diversity in terms of gender, international nature, work history, and age, among others. We also aim to have more than one female director from FY2021. In addition to the previous one outside director, we have now appointed one in-house director to realize a system with multiple female directors.

②The skills matrix for expertise and experience that directors should possess was developed in FY2021, and revised in FY2023, before being made public.

①Outside Directors shall provide advice on the Company's management from a practical and multifaceted perspective and appropriately supervise the execution of business operations.

②Outside Directors are appointed from persons with vast knowledge and experience in various fields in order to ensure diversity. Those who do not qualify as highly independent within the meaning of our “Standards for Independence of Outside Directors” are not appointed. In addition, we will not appoint any person who concurrently serves as a Director, Audit andSupervisory Board Member, etc. for more than four other listed companies.

③One Outside Director shall be appointed as Lead Independent Outside Director to improve coordination with Audit and Supervisory Board Members and internal divisions.

• Ratio of Independent External Directors：33.3%（3 out of 9 Directors are External Directors）
• Ratio of female directors：22.2%（2 out of 9 Directors is a female director）

• 2 years and 4 months

We have established various committees under the Board of Directors in order to build a corporate governance system that demonstrates high management transparency and strong management oversight. A majority of the committee members are Outside Directors, ensuring independence from management.

The Corporate Governance Committee checks, whether activities comply with JAL Group Fundamental Policies of Corporate Governance, conducts analyses and evaluations and holds discussions to determine whether such activities contribute to sustainable growth and enhancement of medium- and long-term corporate value, and provides necessary findings, recommendations, and reports to the Board of Directors. The Corporate Governance Committee is comprised of the Board Chair and Outside Directors and is chaired by the Lead Independent Outside Director.

＜In FY2024＞
Chairperson : KOBAYASHI Eizo
Board Member：AKASAKA Yuji, YANAGI Hiroyuki, MITSUYA Yuko
Observer : OKADA Joji (Independent Audit & Supervisory Board Member)

＜In FY2023＞
Chairperson : KOBAYASHI Eizo
Board Member：UEKI Yoshiharu, YANAGI Hiroyuki, MITSUYA Yuko
Observer : OKADA Joji (Independent Audit & Supervisory Board Member)
Number of meetings：4 meetings attended by all the members
Main activities：In regards to FY2023, other than reviewing the questionnaire in the Board Effectiveness Assessment, the Committe made a number of recommendations to improve the objectivity of the assessment, including the appointment, selection, and scope of use of external organizations.

When submitting a proposal to the General Meeting of Shareholders concerning the appointment of candidates to the positions of Director and Corporate Auditor, the Nominating Committee will make comprehensive judgment of the personality, knowledge, ability, experience and performance, and the like, of the candidate based on an inquiry from the Board of Directors and will report back to the Board.
In addition, The qualifications required of the President and other leaders are as follows: “Persons with qualities to steadily achieve positive results toward realizing the Corporate Policy by working together with all employees based on a firm commitment to flight safety, which is the basic foundation of business continuity for the JAL Group. They must also display initiative in practicing the JAL Philosophy. The Nominating Committee discussed who to select as our President's successor. On January 17, 2024, the Committee decided on the new President and reported back to the Board of Directors.
If the business conduct of any member of top management is found questionable due to legal violations, harassment, negligence of the Board, to name a few, the Nominating Committee and/or Directors, excluding the person in question, will immediately investigate the situation based on a motion made by a Director at a Board meeting or other meetings, and the like, the Nominating Committee and/or Directors excluding the person in question will immediately investigate the situation based on a motion made by a Director at a Board meeting or other meetings. The Nominating Committee and/or Directors will report findings to the Board, which will then decide on an appropriate disciplinary penalty.
The Nominating Committee is comprised of the President and no more than four Directors elected by a resolution by the Board of Directors, and the majority of members shall be External Directors. The chair shall be selected from among the External Directors by mutual vote of the committee members.

＜In FY2024＞
Chairperson : YANAGI Hiroyuki
Board Member：TOTTORI Mitsuko, SAITO Yuji, KOBAYASHI Eizo, MITSUYA Yuko

＜In FY2023＞
Chairperson : YANAGI Hiroyuki
Board Member：AKASAKA Yuji, SHIMIZU Shinichiro, KOBAYASHI Eizo, MITSUYA Yuko
Number of meetings：9 meetings attended by all the members
Main activities：In addition to the matters to be reported to the Board of Directors, the committee discussed the requirements and processes related to the selection of candidates for Executive Officers for a change of officers, the process for confirming the reappointment of the President, and future succession plans for management personnel. In regards to FY2023, a series of discussions were held particularly about the selection of the incoming President. Considering a management structure that promotes the steady implementation of the Medium Term Management Plan and creating customer value, the discussion resulted in selecting Ms. Tottori as a candidate for President and announced her candidacy on January 17, 2024.

The Compensation Committee discusses matters concerning the amount of compensation for Directors, Executive Officers and Corporate Auditors based on an inquiry from the Board of Directors and reports back to the Board. In addition, the committee reviews the remuneration system as appropriate to ensure that it provides sound incentives for sustainable growth.
The Compensation Committee is comprised of the President and no more than four Directors elected by a resolution by the Board, the majority of members being Outside Directors. The chair shall be selected from among the External Directors by mutual vote of the committee members. As a result, transparency and fairness in the compensation determining process is secured.

＜In FY2024＞
Chairperson : KOBAYASHI Eizo
Board Member：TOTTORI Mitsuko, SAITO Yuji, YANAGI Hiroyuki, MITSUYA Yuko

＜In FY2023＞
Chairperson : KOBAYASHI Eizo
Board Member：AKASAKA Yuji, SHIMIZU Shinichiro, YANAGI Hiroyuki, MITSUYA Yuko
Number of meetings：5 meetings attended by all the members
Main activities：The Committee discussed matters to be reported to the Board of Directors, such as the requirements and processes for the selection of candidates for Executive Officers during the change of officers, the process for confirming the reappointment of the President, and future succession plans for management personnel, to name a few.

The Company discusses matters to be consulted by the Board of Directors regarding the appointment and dismissal of executive officers and reports the results to the Board of Directors. The Personnel Committee is comprised of the President and no more than four Directors elected by a resolution by the Board, the majority of members being Outside Directors. The President serves as Chair.

＜In FY2024＞
Chairperson : TOTTORI Mitsuko
Board Member：SAITO Yuji, KOBAYASHI Eizo, YANAGI Hiroyuki, MITSUYA Yuko

＜In FY2023＞
Chairperson : AKASAKA Yuji
Board Member：SHIMIZU Shinichiro, KOBAYASHI Eizo, YANAGI Hiroyuki, MITSUYA Yuko
Number of meetings：1 meetings attended by all the members
Main activities：The committee discussed matters to be reported to the Board of Directors, and the training of candidates for Executive Officer positions and the ideal new execution structure. It also prepared a list of Executive Officer candidates.

When taking disciplinary action against Directors and Executive Officers, the Officers Disciplinary Committee makes decisions. The Officers Disciplinary Committee is comprised of the President and no more than four Directors elected by a resolution by the Board, the majority of members being Outside Directors. The Chair is elected from among Outside Directors. Any submission of proposals to the general meeting of shareholders concerning the dismissal of a Director requires the approval of the Board of Directors.

＜In FY2024＞
Chairperson : YANAGI Hiroyuki
Board Member：TOTTORI Mitsuko, SAITO Yuji, KOBAYASHI Eizo, MITSUYA Yuko

＜In FY2023＞
Chairperson : YANAGI Hiroyuki
Board Member：AKASAKA Yuji, SHIMIZU Shinichiro, KOBAYASHI Eizo, MITSUYA Yuko
Number of meetings：0

In addition to the above voluntary committees, the Lead Independent Outside Director organized a few Independent Outside Audit and Supervisory Board Member Opinion Exchange Meetings, comprising only Outside Directors and Outside Audit and Supervisory Board Members, to strengthen the network between Outside Directors.

The Audit and Supervisory Board makes objective and appropriate decisions from an independent standpoint, based on their responsibility to our shareholders, in fulfilling their role and responsibility pertaining to their duties, namely, audit of business execution, nomination and dismissal of accounting auditors, and exercise of rights concerning auditor remuneration.

＜In FY2024＞
Chairperson : KITADA Yuichi（Audit and Supervisory Board Member）
Members as of the date of submission: KITADA Yuichi, KIKUYAMA Hideki, KUBO Shinsuke, OKADA Joji, and MATSUMURA Mariko

＜In FY2023＞
Chairperson : KITADA Yuichi（Audit and Supervisory Board Member）
Number of meetings: 15 meetings (Audit and Supervisory Board Members KITADA, KAMO, KUBO, and OKADA attended all of the 15 meetings; Audit and Supervisory Board Member KIKUYAMA, who assumed office in June 2023, attended all of the 11 meetings.)
Main activities: In addition to decisions on audit policies and plans, consent to proposals for the appointment of Corporate Auditors, selection of full-time Corporate Auditors, determination of compensation for Corporate Auditors, appointment of an Accounting Auditor and consent to their compensation, and resolutions on routine matters such as the preparation of an audit report, the meeting reported and discussed matters such as prior understanding by the Accounting Auditor regarding non-guaranteed services, risk management, EMS audits, and confirmation of integrated reports. In addition, a questionnaire was administered to all corporate auditors to conduct a self-assessment of the status of audit activities.

〔Audits〕

①Audit and Supervisory Board Members attend Board meetings and other important meetings, and audit important management matters, business operations and business execution by exchanging opinions with Representative Directors and Outside Directors, and inspecting important agenda items and resolutions to be passed.

②They also audit business sites and subsidiaries each year together with the Corporate Auditors Office, report back to Representative Directors and provide feedback to executing departments.

③Further, they work closely with the internal Audit Department and accounting auditors, meet regularly with full time auditors of major subsidiaries, and strive to improve and strengthen Group auditing.

〔Candidate of Audit and Supervisory Board Members〕

①Audit and Supervisory Board Members are nominated from among persons with extensive knowledge and experience in various fields to conduct audits from a neutral and objective perspective and ensure sound management.

②Any person who does not qualify as highly independent within the definition of Standards for Independence of Outside Audit established by the Company shall not be nominated for Outside Audit and Supervisory Board Member.

• Ratio of Independent External Audit & Supervisory Board members：60%（3 out of 5 Aouditors are External Audit）
• Ratio of female Audit & Supervisory Board members：22%（1 out of 5 Directors is a female Audit & Supervisory Board members）

• 2 years and 9 months

With regard to the specialized knowledge and experience that the Company’s Directors and Audit and Supervisory Board Members should possess, the necessary skill set includes the basic corporate management skills of Management Experience, Finance & Accounting, Legal/Risk Management, Personnel Affairs/Talent Development, as well as Safety Management, which is particularly important given the business characteristics of the Company, and also Global Experience, CX/Marketing, DX/IT/Technology, and GX/Environment.

We have established the following standards to determine if an External Director qualifies as independent in order to establish a corporate governance system that results in high management transparency and strong management monitoring and to enhance corporate value. (Basically, persons who are not described as follows qualify as independent.)

①A person who executes or has executed business in the Company or a consolidated subsidiary in the past 10 years

②A person who is described by any of the items a - f in the past three years.
a. a business counterpart or a person executing business of such business counterpart, whose transactions with the Company for one business year exceeded 1% of consolidated revenue of the Company or the business counterpart
b. a major shareholder of the Company or a person executing business of such shareholder holding an equity ratio of 5% or more in the Company
c. a major lender for the Company or a person executing business of such lender.
d. a person who receives over JPY 10 million in donations annually from the Company or a person belonging to an entity receiving such donations
e. a person receiving remuneration of over 10 million yen excluding director remuneration from the Company or a person belonging to an organization receiving remuneration exceeding 1% of consolidated revenue of the Company
f. a person executing business of another company, where a person executing business of the Company is appointed as External Director

③The spouse or relative within the second degree of kinship of an individual described in 1 and 2.

(Note) A person executing business refers to an executive director or executive officer

①The qualifications required of the President and other leaders are as follows: “Persons with qualities to steadily achieve positive results toward realizing the Corporate Policy by working together with all employees based on a firm commitment to flight safety, which is the basic foundation of business continuity for the JAL Group. They must also display initiative in practicing the JAL Philosophy. The Nominating Committee continuously discusses possible candidates for President and other executives. By providing candidates with practical and diverse experiences, such as management in a Group company and overseas assignments and activities in external organizations, they acquire the necessary grounding for management at an early stage.

②To develop the next generation of executives including Executive Officers, the Personnel Committee discusses career path mapping, cross-functional rotation, external networking and human resource pooling to promote diversity and expand their capacity and perspectives.

①Legal considerations are explained to Directors, as necessary, to ensure that they are fully aware of their duties, including the fiduciary duties of the duty of loyalty and the duty of care. They are provided opportunities for continuous participation in external training and affiliated organizations.

②In addition to the provision of corporate information, Audit and Supervisory Board Members are given opportunities to participate in external training and external organizations.

③Outside Directors and Outside Audit and Supervisory Board Members receive advance explanations on Board agendas, corporate information and other requests, as appropriate. In order to deepen the understanding of the Company, Directors and Audit and Supervisory Board Members receive explanations on safety matters through visits to frontlines, a climb up Mt. Osutaka, a tour of the Safety Promotion Center, and explanations on company history and the JAL Philosophy.

Under the Fundamental Policies of Corporate Governance, we will annually assess the effectiveness of our Board and appropriately review the operation of the Board of Directors, taking into consideration the assessment of each board member and the audit and supervisory board member.

①To improve the objectivity of the evaluation, an outside organization was asked to conduct a survey and hearing to evaluate all directors and audit and supervisory board members.
Based on the assessment results by the outside organization, the Board of Directors discussed the assessment results and future initiatives. The questionnaire consisted of assessment questions (on a 5-point scale) and open-ended questions regarding board composition, supervision, management strategy, dialogue with shareholders, board culture, contributions of outside directors, and board operations.

②Subsequently, the Corporate Governance Committee (*), whose main members are independent outside directors and chaired by an independent outside director, summarized the recommendations and the Board of Directors decided on future initiatives as described below.
(*Outside audit and supervisory board members also attended.)

The Board Effectiveness Assessment made by the outside organization was that "the effectiveness of the Board of Directors is adequately ensured." The organization also gave recommendations for further improvement. A summary is provided below.

a. Establish ideal monitoring methods by the Board of Directors.
b. Elevate discussions on medium- to long-term improvement of corporate value.
c. Consider an ideal composition of the Board of Directors.
d. Develop next generation management leaders, including the president.

We evaluated the key issues for FY2023, which we set at the beginning of the fiscal year, based on the results of questionnaires and hearings conducted by the outside organizations, as follows.

a. Sustainability

b. Business Restructuring

c. Enhancement of human capital

d. Promotion of DX strategy

We will act based on the above assessments.

To further clarify the objectives, targets, performance indicators, and roadmap for initiatives across the business domains, including the enhancement of human capital to support business structural reforms and the promotion of DX strategies, among others, in order to complete the Medium-Term Management Plan-Rolling Plan (MRP) 2024, and to strengthen the supervisory function.
In addition, We will upgrade its risk management functions by, for example, accurately identifying risks in new business domains, and the like.

Expand time for discussion of medium- and long-term strategies, and the like, while also encouraging risk-taking to further enhance corporate value in the future.

In addition to the above discussion, the Nominating Committee and other committees shall deepen discussions and report regularly to the Board of Directors.

①To support the sustainable and steady growth of the Company and the JAL Group and to increase corporate value over the medium and long term, the Company will encourage the performance of duties consistent with its Corporate Policy and management strategies and provide strong incentives for the achievement of specific management targets.

②To encourage a healthy entrepreneurial spirit, the Company will establish appropriate proportions for performance- linked bonuses linked to fiscal year performance and for performance-linked share-based remuneration linked to corporate value in accordance with medium- to long-term performance, designed to promote alignment of interests with its shareholders

③The Company will reward the management team appropriately based on the Company’s business performance.

①The Company will set appropriate remuneration levels based on the Company’s operating environment and with reference to objective data on remuneration in the marketplace.

②Considering factors including the nature of the Company’s business and the effectiveness of performance-linked remuneration, fixed remuneration and performance-linked remuneration are comprised as follows. (Assuming 100% achievement against targets)

The above ratio is for guidance only and adjustments can be made to reflect changes in the price of the Company’s shares or other factors.

※ This amount excludes allowances in cases where an Executive Officer serves concurrently as a Director or where an Executive Officer has representative authority.

The performance-linked bonus and the performance-linked share-based remuneration will be reviewed as necessary in accordance with changes in the business conditions, the roles of officers, etc. In order to strongly advance our finance strategy, business strategy and ESG strategy, the three pillars of our management strategy under the Medium-term Management Plan, we have revised the performance evaluation indices for the performance-linked bonus and the performance-linked share-based remuneration and other factors for FY2022 and beyond.
There is no provision of performance-linked share-based remuneration for each of the periods which started in FY2020 and FY2021, respectively, in light of our performance and other factors.

The amount to be paid every fiscal year as an annual incentive will vary from 0 to 150 depending on the degree of achievement, with 100 representing the amount to be paid when achievement is in line with performance targets.

Evaluation indices will be considered for review as necessary in accordance with changes in business conditions, the roles of each officer and other factors.

The number of shares to be granted every fiscal year as a long-term incentive will vary from 0 to 150 depending on the degree of achievement, with 100 representing the number to be granted when achievement is in line with performance targets. The performance evaluation period will be three years, with performance for three consecutive fiscal years evaluated every year.

With respect to common stock granted to eligible Directors and Executive Officers through the share-based remuneration plan, the Company will establish a target number of held shares for each position and impose limits on share sales to further promote the aligning of interests with shareholders.Executive officers cannot sell their shares until performance-linked share-based remuneration has been issued to the amount equivalent to three years' worth (based upon when 100% of performance targets are achieved).

Matters related to remuneration of Directors will be decided by the Board of Directors, following deliberation and reporting within a Compensation Committee arbitrarily established by the Company. A majority of the members of the Compensation Committee will be Outside Directors, and its Chairman will be appointed from among the Outside Directors.
Basic remuneration is to be paid monthly and performance-linked bonuses and performance-linked sharebased remuneration is to be paid annually.

※1 Annual incentives (performance-linked bonuses)

※2 Long-term incentives (performance-linked remuneration)

The ratio of the amount of shares held by Director Executive Officers to Basic remuneration (including shares acquired in Employee Stock Ownership Plan, etc.) is 8.82% for Representative Director, President and 8.55% for other Directors Executive Officers.

• Development of the Internal Controls System (Fundamental Policies)
• Operation of the Internal Controls System

In accordance with the annual audit plan established by the Audit Department based on the results of the risk analysis, we conduct audits focusing on risks that may hinder the achievement of JAL Vision 2030, such as the risk of serious losses, the effectiveness and efficiency of operations, the reliability of financial reporting, compliance with laws and regulations, and asset preservation. As for the reliability of financial reporting, we evaluate the internal control reporting system for financial reporting under the Financial Instruments and Exchange Act as an independent organization under the direct control of the President.
From the perspective of auditing, the Audit Department, as the third defense line in the Three Lines of Defense model, places emphasis on checking the second defense line, such as the General Affairs Department, Risk Management Department, Legal Affairs Department, IT Planning and Management Department, and Accounting Department, utilizing the expertise, to verify whether they are supporting and monitoring Group organizations properly. In addition, internal audits are conducted annually on the risk management process for the Risk Management Department.
Results of internal audits are reported to the President at each instance and information on important matters concerning internal controls is provided to the Audit & Supervisory Board Members and Accounting Auditor to promote mutual coordination. The Board of Directors is regularly informed of the results of audits.
The Corporate Safety and Security Division, Engineering and Maintenance Division, and Audit Department are responsible for safety audits and maintenance audits which are conducted in compliance with laws and regulations on the air transport business.

KPMG AZSA LLC conducts accounting audits in accordance with the Companies Act and the Financial Instruments and Exchange Act.
In addition to periodic audits, accounting issues such as the establishment, amendment and abolition of laws, regulations and rules are checked as necessary to achieve appropriate accounting work.

We are aware that the general meeting of shareholders is a venue for constructive dialogue with shareholders, and secure and provide a period for them to sufficiently examine accurate information from their standpoint through the Convocation Notice of the General Shareholders' Meeting, etc. We provide easy-to-understand information at the general meeting of shareholders and have developed an environment in which shareholders can exercise their rights appropriately.
Furthermore, we conduct IR (Inventor Relations) activities to maintain positive interactive communication under the following policy, in which Representative Directors, the Finance and Accounting Director, etc. engage in active dialogue, and fairness, accuracy and continuity of management strategies, business strategies, financial information, and such are emphasized.

①The Chief Financial Officer of the JAL Group, the Finance and Accounting Director, and the General Affairs Director are assigned as management to oversee dialogue with shareholders.

②We assign a supervisor to oversee information gathering, management and disclosure, and also staff to implement these duties in the Finance Department, and disclose information in a timely, fair and appropriate manner in coordination with related departments.

③We hold meetings to explain our financial results and management plan when announcing them, issue an integrated report, “JAL Report,” etc., hold meetings for shareholders to explain other matters , and arrange tours of facilities, etc. to promote investment opportunities and improve information disclosure.

④We feedback results of dialogue with shareholders to management, as necessary, so that management may share the shareholders’ requests and opinions and an awareness of issues, and reflect their views in corporate management.

⑤We establish and disclose a “silent period,” during which we do not provide any replies or comments to inquiries or information on corporate status to prevent information leaks and ensure fairness. We conduct information management and control insider information.

JAL Group has established the Basic CSR Policy "The JAL Group will strive to meet the expectations of society, address social issues, and pass on a better society to future generations through its core air transport business as the 'Wings of Japan'." We aim to realize our Corporate Policy by collaborating with shareholders and practicing JAL Philosophy.

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