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Corporate Governance
Board of Directors Evaluation

Board of Directors Evaluation

Basic Effectiveness Evaluation Process
Initiatives That Underwent Effectiveness Evaluation and Their Results
Support System for Directors and Audit & Supervisory Board Members

IHI has been evaluating the performance of the Board of Directors annually since fiscal 2015 to further its effectiveness.
To enhance the independence and objectivity, an evaluation is conducted by an external third-party organization once every three years, most recently in FY2024.
IHI will continue to work toward enhancing the effectiveness of its Board of Directors in order to achieve sustainable growth for IHI, as well as to increase its corporate value over the medium to long term.

Basic Effectiveness Evaluation Process

Initiatives That Underwent Effectiveness Evaluation and Their Results

	Items	Evaluation Results	Initiatives in Response to Evaluation Results
FY2024 Evaluation	Third-party evaluation Questionnaire analysis by a third-party evaluation agency and interviews with all Officers, and an overall evaluation based on these efforts	<Overall evaluation> Key managerial decision-making and monitoring processes are operating efficiently <Identified issues> Further enhancement of discussions on medium- and long-term strategies such as business portfolios and business model construction, as well as matters important to management (human resources strategies, group governance, risk management, etc.) Making full use of the limited time available at Board of Directors meetings	<Policy for FY2025 Initiatives> Maintain sufficient opportunities for discussion by setting agenda items on matters important to management throughout the year, with a focus on discussions on creating a new medium-term management policy Implement operational innovations and improvements to make full use of the limited time available at Board of Directors meetings and ensure fruitful dialogue
FY2025 Evaluation	Self-evaluation Conducted with the support of an external third-party organization: Anonymous questionnaire for all Directors and Audit & Supervisory Board Members Individual interviews with all relevant Directors and Audit & Supervisory Board Members based on the analysis of the questionnaire results Aggregate and analyze the results of the questionnaire and individual interviews, and report them to the Board of Directors, and identify self-evaluation and areas for improvement at the Board level Questionnaire topics include the composition and operation of the Board of Directors, discussions held at Board meetings, the roles and functions of the Board, the operation and discussions of the Nomination Advisory Committee and the Remuneration Advisory Committee, support systems for Independent Directors, and relationships with investors and shareholders, among others.	<Overall evaluation> IHI concluded through self-evaluation that the effectiveness of its Board of Directors remains assured and that progress has been made in discussions regarding its business portfolio. <Identified issues> IHI recognized the need to further enhance the quality of discussions regarding the governance systems that underpin its business operations and its long-term business strategies, with a view to improving the Board of Directors’ effectiveness in the future.	<Policy for FY2026 Initiatives> Ensure ample opportunities for discussion by scheduling agenda items throughout the year—based on discussions among Independent Directors and Independent Audit & Supervisory Board Members—regarding key management issues such as governance systems, growth investments to realize IHI’s future business portfolio, digital transformation (DX), and human resource development. Implement operational improvements to make the most of the Board’s limited time and ensure substantive discussions, including enhancement of board meeting materials and review of meeting operations In light of a series of misconduct incidents at IHI’s consolidated subsidiaries, continuously monitor the progress of measures to prevent recurrence; transform its organizational climate so that every employee takes compliance seriously and adheres to it rigorously; and establish a system designed to prevent such incidents from occurring.

Items

Evaluation Results

Initiatives in Response to Evaluation Results

FY2024 Evaluation

Third-party evaluation

Questionnaire analysis by a third-party evaluation agency and interviews with all Officers, and an overall evaluation based on these efforts

<Overall evaluation>

Key managerial decision-making and monitoring processes are operating efficiently

<Identified issues>

Further enhancement of discussions on medium- and long-term strategies such as business portfolios and business model construction, as well as matters important to management (human resources strategies, group governance, risk management, etc.)
Making full use of the limited time available at Board of Directors meetings

<Policy for FY2025 Initiatives>

Maintain sufficient opportunities for discussion by setting agenda items on matters important to management throughout the year, with a focus on discussions on creating a new medium-term management policy
Implement operational innovations and improvements to make full use of the limited time available at Board of Directors meetings and ensure fruitful dialogue

FY2025 Evaluation

Self-evaluation

Conducted with the support of an external third-party organization:
- Anonymous questionnaire for all Directors and Audit & Supervisory Board Members
- Individual interviews with all relevant Directors and Audit & Supervisory Board Members based on the analysis of the questionnaire results
Aggregate and analyze the results of the questionnaire and individual interviews, and report them to the Board of Directors, and identify self-evaluation and areas for improvement at the Board level

Questionnaire topics include the composition and operation of the Board of Directors, discussions held at Board meetings, the roles and functions of the Board, the operation and discussions of the Nomination Advisory Committee and the Remuneration Advisory Committee, support systems for Independent Directors, and relationships with investors and shareholders, among others.

<Overall evaluation>

IHI concluded through self-evaluation that the effectiveness of its Board of Directors remains assured and that progress has been made in discussions regarding its business portfolio.

<Identified issues>

IHI recognized the need to further enhance the quality of discussions regarding the governance systems that underpin its business operations and its long-term business strategies, with a view to improving the Board of Directors’ effectiveness in the future.

<Policy for FY2026 Initiatives>

Ensure ample opportunities for discussion by scheduling agenda items throughout the year—based on discussions among Independent Directors and Independent Audit & Supervisory Board Members—regarding key management issues such as governance systems, growth investments to realize IHI’s future business portfolio, digital transformation (DX), and human resource development.
Implement operational improvements to make the most of the Board’s limited time and ensure substantive discussions, including enhancement of board meeting materials and review of meeting operations
In light of a series of misconduct incidents at IHI’s consolidated subsidiaries, continuously monitor the progress of measures to prevent recurrence; transform its organizational climate so that every employee takes compliance seriously and adheres to it rigorously; and establish a system designed to prevent such incidents from occurring.

Support System for Directors and Audit & Supervisory Board Members

With the aim of vitalizing Board deliberations, IHI is primarily implementing the following measures:

Distribute board meeting materials in advance (approximately one week prior to the board meeting)
Provide advance explanations to all Independent Directors and Independent Audit & Supervisory Board Members (with explanations by the responsible departments, followed by Q&A sessions)
Conduct off-site meetings attended by all Independent Directors and Independent Audit & Supervisory Board Members for the purpose of discussing medium- to long-term management themes
Formulate an annual list of Board of Directors agenda items that reflects discussions by Independent Directors and Independent Audit & Supervisory Board Members

In addition, to support Directors and Audit & Supervisory Board Members in acquiring the knowledge necessary to fulfill their roles and responsibilities, IHI bears the costs of training requested by individual officers, including holding seminars by experts or specialists, or participation in external seminars. IHI also arranges regular site visits to its business locations and construction sites to deepen their understanding of its business and products. In fiscal 2025, IHI set up tours of domestic works and business sites.

In addition, an Audit & Supervisory Board secretariat assists Audit & Supervisory Board Members in executing their duties. The secretariat assists Independent Audit & Supervisory Board Members, and Standing Audit & Supervisory Board Members report to them on the status of daily audits to share information.

In fiscal 2026, IHI established a Corporate Secretary Division responsible for the Board of Directors Secretariat and related functions, thereby enhancing support for Directors and Audit & Supervisory Board Members. For the Independent Director who serves as Chair of the Board of Directors, IHI arranges individual briefings prior to Board meetings to provide information on the background of each agenda item, the deliberation process, and anticipated points of discussion, thereby offering support to assist them in managing the proceedings as Chair.

IHI will continue to provide support to ensure that all Directors and Audit & Supervisory Board Members can effectively fulfill their roles and responsibilities.

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