Corporate Governance Initiatives

Rapid Responses in the Management Environment, and Enhanced Corporate Governance Structure to Improve Management Transparency

At Kubota, we have adopted the following corporate governance structure, in order to improve the speed of responses in the management environment and increase management transparency.

• Board of Directors: Strategic decision-making and audits of execution of duties by Executive Officers
• Audit & Supervisory Board: Auditing and supervision of execution of duties by directors
• Executive Officers’ Meeting: Confirmation of execution of duties by Executive Officers, and prompt, appropriate management decisions
• ESG Management Strategy Meeting: formulation of policies and evaluation of major measures for the creation of medium- to long‐term corporate value.
• Management Committee and Investment Council: Decision-making for specific important issues, and deliberations
• Nomination Advisory Committee and Compensation Advisory Committee: Deliberation on nominations of candidates for Directors, the compensation system, and compensation level of the Directors, with appropriate involvement and advice from the Outside Directors.

• Concept and Structure of Corporate Governance

Operation of an Internal Control System for Risk Reduction

At Kubota, we are working to manage risks through an internal control system positioned as one pillar of our business activities. Based on an awareness that risk management efforts are at the core of our business, we identify items common to the entire Kubota Group such as risks related to reliability of financial reporting. We exert efforts to manage risks appropriately through continuous steady improvement to “correct any inadequacies immediately.”

Key Categories of Major Risks in Kubota’s Management

1. Internal control over reliability of financial reporting
2. Internal control over the basic corporate functions such as fair trade, environmental conservation, and health and safety
3. Internal control over compliance with rules and regulations related to equipment, import/export controls, and other compliance issues

Major Risk Reduction Initiatives

• Operation of the internal control system (risk management activities)
• Operation of the “Kubota Hotline” internal reporting system
• Securing reliability of financial reports
• Compliance with anti-monopoly act/competition law
• Compliance with the act against delay in payment to subcontractors
• Prevention of illegal payments

• Internal Control System

Incorporating Diverse Opinions and Expertise from within and outside the Company to Drive Enhancement of Corporate Value

Kubota creates venues to stimulate communication with external experts and stakeholders both within and outside the company, in order to improve corporate value and practice more effective sustainability management. For example, the company holds dialogues with external experts and works to deepen Outside Directors’ understanding of business, in order to reach appropriate business decisions. Furthermore, through observation of sites, subsidiaries, and affiliates within Japan and abroad, the company also actively works to absorb a diverse range of knowledge, opinions, and appraisals to improve corporate value.

Continuous Efforts for Information Security

Kubota is aware that the appropriate protection and management of personal information of its customers and other stakeholders is an important social responsibility. In order to secure its competitiveness, Kubota is also devoted to preventing the leakage of confidential information such as technological information. Depending on the type of information, Kubota appoints main divisions, including overseas, to conduct ongoing activities such as revising rules, auditing and awareness-raising at their respective locations.

• IT Security