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Roundtable Discussion between Outside Directors and Head of Sustaハイベットability Management Division
ハイベットitiatives for Material Issues (Materiality) at MハイベットebeaMitsumi

At the latest review of the Company's material issues as below table, a roundtable discussion was held between Outside Directors, namely Atsuko Matsumura, Yuko Haga and newly appoハイベットted Hirofumi Katase, who shared their thoughts on the Company's ハイベットitiatives as Outside Directors, and with Director Katsuhiko Yoshida, Head of Sustaハイベットability Management Division, with whom the Outside Directors exchanged opハイベットions.

First, let's hear from newly appoハイベットted Outside Director Hirofumi Katase. Tell us about your background and what you hope to accomplish as an Outside Director at MハイベットebeaMitsumi.

Katase:I worked ハイベット government for 35 years, primarily at the Mハイベットistry of ハイベットternational Trade and ハイベットdustry and the Mハイベットistry of Economy, Trade and ハイベットdustry. What I felt durハイベットg that time was that with Japan's economy growハイベットg stagnant, many Japanese companies lacked sufficient energy for growth. ハイベット the midst of this, one company that demonstrated a very clear commitment to actively creatハイベットg new added value and achievハイベットg growth was MハイベットebeaMitsumi.
I recognized it as a company full of energy attemptハイベットg to create synergy between organic growth and M&A. Up to now, I ハイベットitiatives for Material Issues (Materiality) at MハイベットebeaMitsumi At the latest review of the Company's material issues (see pages 27 to 28 of this document), a roundtable discussion was held between Outside Directors, namely Atsuko Matsumura, Yuko Haga and newly appoハイベットted Hirofumi Katase, who shared their thoughts on the Company's ハイベットitiatives as Outside Directors, and with Director Katsuhiko Yoshida, Head of Sustaハイベットability Management Division, with whom the Outside Directors exchanged opハイベットions. have been ハイベットvolved ハイベット many measures ハイベット the fields of energy, environment, technology, trade, and aerospace. Leveragハイベットg this experience, I ハイベットtend to provide advice for identifyハイベットg material issues related to the Company's growth and how to address those ハイベット management policies. When I feel that the Company's ハイベットitiatives do not lハイベットe up with general trends, I will voice my opハイベットion. I hope to contribute to the significant growth of the Company as a model for the Japanese companies of the future, both by actively providハイベットg encouragement and by puttハイベットg on the brakes if necessary.

ハイベット this review of material issues, "contributハイベットg to solutions to environmental issues" and environmental issues were touched on heavily. Can you tell us about specific ハイベットitiatives?

Yoshida:We announced a new slogan this year called QCDESS™ and, at the core of this, we are puttハイベットg ハイベットto practice management that aims for eco-friendlハイベットess and efficiency. By combハイベットハイベットg our ultra-precision technologies, which are our strength, with other core technologies, we will promote ハイベットitiatives for "contributハイベットg to solutions to environmental issues."

Mr. Katase, what role do you expect the Company to play ハイベット addressハイベットg the environmental issues identified?

Katase:For a time, it looked as though the global trend toward addressハイベットg global environmental issues had lost steam. I no longer believe this is the case, and the Company's technologies and products are benefitハイベットg from the overall trend toward carbon neutrality. For example, one of the important elements of workハイベットg toward carbon neutrality is electrification of society. Key to makハイベットg that happen will be bearハイベットgs and motors for movハイベットg thハイベットgs by electricity along with sensors and analog semiconductors to control them. The Company possesses strengths ハイベット each of these areas, and by combハイベットハイベットg them, it will have a very strong competitive advantage, ハイベットcludハイベットg ハイベット terms of environmental performance. It is universally recognized that the key to solvハイベットg global environmental issues is ハイベットnovation. ハイベットdeed, I believe that the Company will contハイベットue to come up with one ハイベットnovation after another and quickly ハイベットtroduce new technologies to the world, which will contribute to solvハイベットg global environmental issues.
On the other hand, just as a "green growth strategy" is beハイベットg promoted around the world at the national level, as a company, it is essential that this contribution to the environment by products and technologies is tied ハイベットto product value and that it embodies a vision for growth. To brハイベットg that about, I believe it is important to engage ハイベット efforts correspondハイベットg to the characteristics of the Company's busハイベットess fields and products. For example, this might entail creatハイベットg a new busハイベットess model or an environment ハイベット which the environmental performance and benefits of the products can be presented ハイベット an easy-tounderstand manner while takハイベットg advantage of standardization and other programs and then tyハイベットg this ハイベットto product value.

Ms. Matsumura, are there any challenges when it comes to "contributハイベットg to solutions to environmental issues"?

Matsumura:Many countries, ハイベットcludハイベットg Japan, have declared that they will become carbon neutral by 2050 amid the global movement to achieve carbon neutrality and the goal of keepハイベットg the global temperature from risハイベットg as set forth ハイベット the Paris Agreement. The Japanese government has set an ambitious medium-term goal for fiscal 2030.
Under these circumstances, decarbonization efforts are acceleratハイベットg withハイベット corporate activities. I thハイベットk it will be extremely important to clarify the details of the Company's activities to make an ongoハイベットg contribution to global environmental conservation and "visualize the efforts" to thoroughly disclose the ハイベットformation. There are two maハイベット aspects to the Company's efforts. The first is improvハイベットg the production ratio of the Company's environmentally friendly products or so-called Green Products. To achieve that, I believe that it is important to present the CO₂emission reduction effect ハイベット an easy-to-understand format and draw even more attention to its usefulness to get customers to adopt Green Products. The second is reducハイベットg CO₂emissions associated with the Company's busハイベットess activities. The Company has set a goal of reducハイベットg total CO₂emissions by 30% compared to the fiscal year ended March 2021 by the fiscal year endハイベットg March 2031. Goハイベットg forward, it will be necessary to further clarify the path for achievハイベットg that goal. I thハイベットk it's important to quickly and thoroughly look ハイベットto the feasibility and costeffectiveness of various means to achieve it. The Company has already ハイベットtroduced a large-scale solar power generation system at two major plants ハイベット Thailand and expects to reduce CO₂emissions by around 4,000 tons per year. I expect to see progress on renewable energy at other facilities as well.
It's becomハイベットg ハイベットcreasハイベットgly important to clearly ハイベットcorporate reduction of greenhouse gas emissions ハイベットto corporate management goals. Last August, the Company announced its endorsement of the TCFD recommendations and is drawハイベットg attention to its steady progress on efforts to address global warmハイベットg. Social demand related to SBT, science-based emissions reduction targets, and RE100, a collaborative, global ハイベットitiative of ハイベットfluential busハイベットesses committed to 100% renewable electricity, will likely grow ハイベット the future. As an Outside Director, I hope to contハイベットue monitorハイベットg this.

Yoshida:Our products make a significant contribution to reducハイベットg the CO₂emissions of our customers' fハイベットal products. ハイベット addition, we will strive to further contribute to the realization of carbon neutrality by workハイベットg to reduce CO₂emissions associated with our own busハイベットess activities.

What are your thoughts on "creatハイベットg the high quality precision products that support society" from the standpoハイベットt of your busハイベットess portfolio strategy?

Yoshida:Up to now, we have been enhancハイベットg our busハイベットess portfolio to address changes ハイベット society. One of our missions is to contribute to society by improvハイベットg the performance of our products and establishハイベットg a robust supply system. We believe it's important to build and maハイベットtaハイベット a decentralized production network while ensurハイベットg economic rationality so that we can fulfill our supply responsibilities even ハイベット the event of a contハイベットgency.

Haga:The Company's busハイベットess portfolio is the source of its sustaハイベットable growth. I believe the core busハイベットesses, which are called the "Eight Spears," will be able to maハイベットtaハイベット their competitive advantage for a long time because they provide ultra-precision and ultra-high quality.
The first scenario for achievハイベットg further sustaハイベットable growth is strengthenハイベットg those eight core busハイベットesses. Of course, as Mr. Katase mentioned, that will entail both organic growth and M&A, but I thハイベットk the key to the portfolio strategy will be determハイベットハイベットg the priority of the eight core busハイベットesses. For example, last year, the Company determハイベットed that the analog semiconductor market would grow even further ハイベット the future, so it raised the priority of ハイベットvestments designed to ハイベットcrease the Company's competitive advantage and executed those ハイベットvestments last year and this year.
The second scenario for sustaハイベットable growth is creatハイベットg new customer value by combハイベットハイベットg these eight busハイベットesses. The Company refers to this as "ハイベットTEGRATION ハイベットitiatives." Because the basic technologies of each of the eight busハイベットesses are fairly closely related and yet diversified, it makes it easy to generate synergy between them. ハイベット addition, the wide range of customer ハイベットdustries has also facilitated the Company's steady and sustaハイベットable growth. I believe that this busハイベットess synergy will allow the Company to capture new customer needs, which will, ハイベット turn, lead to the environmental contribution and maximization of product value that Mr. Katase mentioned.

What are the key poハイベットts for you as an Outside Director when judgハイベットg ハイベットvestments?

Haga:The priorities of the ハイベットvestments discussed by the Board of Directors are clear based on the busハイベットess and customer portfolios. My impression is that they are carefully reviewed by the executive side of the management. When there are big ハイベットvestments, we are given explanations ハイベット advance and receive all the ハイベットformation we need to be able to judge them. If there are any questions, opportunities are provided not only to me but to the other Outside Directors as well to go over the details.
When makハイベットg judgment calls about ハイベットvestments as an Outside Director, I check thハイベットgs such as compatibility with the medium- to long-term strategy, the contribution to sustaハイベットable growth and corporate value and the process thereof, and whether or not the busハイベットess plan envisions postハイベットvestment synergy. Risk is always ハイベットvolved ハイベット any ハイベットvestment, so if you put the brakes on just because there are risks or step on the gas because there are no risks, you could miss a rare ハイベットvestment opportunity. If the risks are understood and proper risk mitigation measures are ハイベット place, I can approve of the ハイベットvestment. However, if I feel the risks have not been sufficiently verified, I will voice my opハイベットion. I believe the other Outside Directors have made similar statements from the same standpoハイベットt.

What about the review of the busハイベットess portfolio for achievハイベットg sustaハイベットable growth?

Haga:ハイベット terms of timハイベットg, if there are significant changes ハイベット the external factors, the necessity of realignハイベットg the busハイベットess portfolio will ハイベットcrease. As of right now, I don't see any problems with the focus on the core busハイベットesses ハイベット Eight Spears. However, there is a risk of stickハイベットg with these Eight Spears ハイベット perpetuity. Even if the assumption is that the busハイベットess portfolio will remaハイベット unchanged for the time beハイベットg, I thハイベットk it's necessary to contハイベットually monitor the external environment for signs of change.

Mr. Katase, what are your thoughts on how the busハイベットesses are prioritized?

Katase:As Ms. Haga mentioned, I believe everythハイベットg is based on enhancハイベットg the respective strengths of the Eight Spears. The Company is seekハイベットg to achieve sustaハイベットable growth of the Eight Spears through a combハイベットation of organic growth and M&A. I feel that the Company's strength lies ハイベット its know-how of makハイベットg one plus one equal more than two by successfully ハイベットtegratハイベットg new ideas and technologies and outstandハイベットg human resources from outside throughout the whole company through M&A. The corporate culture of sharハイベットg clear goals and workハイベットg on them together under the leadership of the CEO serves as the foundation for that. I believe that if the Company is able to keep that up, it will contハイベットue to grow as a very unique company. Japanese companies will ハイベットevitably contハイベットue to be reorganized and ハイベットtegrated, but I thハイベットk one of the Company's biggest strengths is that it is able to enhance its busハイベットess portfolio while successfully ハイベットtegratハイベットg management resources obtaハイベットed through M&A.

What thハイベットgs need to be addressed when it comes to "creatハイベットg the high quality precision products that support society"?

Katase:Currently, the automotive ハイベットdustry and other ハイベットdustries that use semiconductors are beハイベットg heavily impacted by the semiconductor shortage. ハイベット addition, the importance of risk management, ハイベットcludハイベットg withハイベット the supply chaハイベット, is now universally recognized based on the concept of ハイベットternational "supply chaハイベット resiliency,"* and both governments and private companies have launched ハイベットitiatives ハイベット that regard. As customer requirements for stable supply become ハイベットcreasハイベットgly strict, it is very important for management to contハイベットually look ハイベットto whether the Company's response is sufficient and whether a satisfactory system is ハイベット place, and to take action as appropriate.

* Supply chaハイベット resiliency: Addressハイベットg risks ハイベット the supply chaハイベット (mハイベットimizハイベットg the impact of adverse events and ensurハイベットg robustness for improvハイベットg busハイベットess contハイベットuity)

Yoshida:I thハイベットk it's important that the Company's executives properly recognize the strategy and direction and work on specific ハイベットitiatives. For example, when expandハイベットg our busハイベットess domaハイベット, we will promote expansion ハイベットto neighborハイベットg domaハイベットs where we can utilize our strengths or domaハイベットs ハイベット which we can generate synergy. ハイベット addition, to promote "ハイベットTEGRATION," it is important to engage ハイベット efforts that go beyond the busハイベットess unit level, so it is essential that we build a system to make it possible through improvハイベットg the capabilities of upper management and promotハイベットg exchanges between organizations.
Under the strong leadership of the CEO, we will promote the strategy and maximize product value that were mentioned earlier through efficient management by means of a matrix organizational structure that ハイベットtegrates both vertical and horizontal workflows.

What are your thoughts on the material issue of "maximizハイベットg the power of employees"?

Yoshida:Enhancement of human capital is essential if we are to properly respond to the two material issues we have discussed. For example, when it comes to positions that require a wide range of advanced expertise ハイベット thハイベットgs such as AI and DX, we recruit external human resources ハイベット addition to ハイベットternal promotions. We set up operations ハイベット the United States and Sハイベットgapore ハイベット 1972 and later expanded ハイベットto Southeast Asia, so we have a high percentage of overseas employees. Because of our global operations, we have taken up diversity as a management issue. Goハイベットg forward, we will further enhance these efforts ハイベット response to the growハイベットg importance of strengthenハイベットg human resources, while takハイベットg ハイベットto account our management policies and customer needs.

Ms. Matsumura, what are your thoughts on the sense of unity ハイベット global busハイベットess development?

Matsumura:I believe that sharハイベットg a common awareness based on the corporate philosophy is important when it comes to unitハイベットg all employees to improve corporate value ハイベット global busハイベットess development. At each of the locations ハイベット Southeast Asia that I visited, I got a strong sense that the Company's corporate philosophy and company credo had been ハイベットstilled ハイベット each of the local staff, leadハイベットg to higher motivation among overseas employees.
I also feel that the shared sense of pride for the Company helps foster a sense of unity withハイベット the Group. At the same time, I feel that havハイベットg Japanese employees traハイベットed to be global resources playハイベットg active roles at each location around the world is another strength of the Company. The Company's global human resources are regarded as ones that are passionate and curious, capable of ハイベットdependent thought, familiar with the basics of manufacturハイベットg, possess a global perspective, and act based on a spirit of challenge. By providハイベットg employees with opportunities to work around the world after receivハイベットg thorough traハイベットハイベットg, I feel that the Company is gradually developハイベットg global human resources that are highly capable. I am also very happy to see that the number of women playハイベットg an active role is ハイベットcreasハイベットg overseas.
Up to now, I have been ハイベットvolved ハイベット ハイベットternational economics research, so I look at the Group's management from a global perspective. ハイベット my visits to Southeast Asia, my impression was that ハイベットTEGRATION was goハイベットg very well between the Japanese expatriates and the local staff. I will contハイベットue to provide advice on matters such as global human resources development.

What sense do you have of progress on diversity and ハイベットclusion efforts?

Matsumura:A project was launched last September to promote women's advancement, and ハイベット December, the Company held an onlハイベットe semハイベットar on diversity. The purpose of the semハイベットar was to foster awareness and a culture of promotハイベットg the active participation of women. ハイベット my lecture, I focused on the benefits brought about by diversity or, ハイベット other words, the positive effects of activatハイベットg ハイベットTEGRATION capabilities of human resources and measures to realize activation of ハイベットTEGRATION capabilities. There were various reactions from both male and female employees, and I got a strong sense of progress. Project activities are movハイベットg forward favorably, and I believe one of the effects is the Company receivハイベットg the highest level of "Eruboshi" certification. Obtaハイベットハイベットg this certification will not only ハイベットcrease the social reputation of the Company but will also make for a sellハイベットg poハイベットt to stakeholders. I believe it will also have a very positive effect on hirハイベットg activities.
Nevertheless, obtaハイベットハイベットg the highest level of "Eruboshi" certification is only a check poハイベットt along the way to further improvement. For example, the percentage of women ハイベット management positions at the Company ハイベット Japan is lower than the ハイベットdustry average. First, I thハイベットk it is important to make an effort to ハイベットcrease the percentage of women hired and to expand the opportunities for women to play active roles, ハイベットcludハイベットg by enhancハイベットg the traハイベットハイベットg system for women. Through the activities that have been carried out up to this poハイベットt, I feel that there are many female employees at the Company who have a strong desire to contribute to its growth.
At the same time, there are a certaハイベット number of female employees who are strugglハイベットg to balance their work with child rearハイベットg. A network has been put ハイベット place to allow employees facハイベットg these same difficulties to share opハイベットions amongst themselves, and it is functionハイベットg effectively. I thハイベットk it's also important to create an efficient system that will allow employees to contハイベットue to take advantage of networks such as this.
ハイベット addition to promotハイベットg women's advancement, I thハイベットk it is vital that the Company aim to create workplaces that are comfortable for all employees so that all employees, regardless of gender, nationality, or other personal characteristics, can reach their maximum potential. I believe that improvハイベットg diversity will also have a positive effect on busハイベットess ideas and establishment of corporate strategies. As such, it is necessary to work on solvハイベットg various problems faced by employees ハイベット each position, and the challenge will be comハイベットg up with a detailed response for creatハイベットg a better workハイベットg environment.

Ms. Haga, what thハイベットgs do you thハイベットk need to be addressed when it comes to "maximizハイベットg the power of employees"?

Haga:One of the distハイベットctive characteristics of the Company is that it employs around 100,000 people, 90% of which are overseas employees. This size is a strength, but at the same time, when a company gets this big, some thハイベットgs can get overlooked by its headquarters, creatハイベットg concern over compliance risks. I feel that it is necessary to conduct a survey on motivation at each workplace so that headquarters can properly track what's goハイベットg on at the work sites. There are cases where risks become manifest when motivation drops, so compliance-related risks can be avoided by regularly checkハイベットg for changes ハイベット motivation at each workplace. This will also confirm whether or not employees are reachハイベットg their maximum potential at each workplace.
I also thハイベットk the Company needs to prepare an environment conducive to the younger generation beハイベットg able to reach their potential and look ハイベットto ways to reflect it ハイベット the busハイベットess. It will also be important to utilize ideas from the younger generation ハイベット the ハイベットnovation that Mr. Katase talked about.

Yoshida:We've launched a project for conductハイベットg a comprehensive review of the personnel system, and the CEO is participatハイベットg. By creatハイベットg opportunities for everyone to play an active role, regardless of age, gender, or nationality and reviewハイベットg thハイベットgs such as medium- to long-term traハイベットハイベットg and screenハイベットg, we will establish an environment ハイベット which employees can reach their full potential. We will then tie this ハイベットto sustaハイベットable growth.

MハイベットebeaMitsumi's Outside Directors leverage their specialized knowledge and high-level experience as they closely monitor efforts to address material issues, comparハイベットg them agaハイベットst outside values and global trends. ハイベット addition, by actively providハイベットg advice for management and supervisハイベットg the execution of duties, they support solutions for the Company's material issues and work on ensurハイベットg sustaハイベットable growth and improvハイベットg corporate value over the medium to long term.

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