Chugai has appointed outside directors to reflect a broader range of stakeholder views in management decision-making. Outside directors point out issues and give advice concerning Chugai’s management from their abundant experience and knowledge as corporate executives, physicians or university professors. The average rate of attendance by outside directors at the 10 board meetings in 2022 was 100 percent.

Chugai has appointed outside Audit & Supervisory Board Members with the knowledge and experience to appropriately audit managerial decision-making and the execution of business.
The outside Audit & Supervisory Board Members are selected from among experts with rich knowledge and experience in accounting, law and similar fields.

Chugai will judge outside officers (outside directors and outside Audit & Supervisory Board Members) that do not fall under any of the following to be independent officers (independent outside directors and independent outside Audit & Supervisory Board Members) with no risk of a conflict of interests with Chugai’s general shareholders:

1. a person who is currently or has been in the past ten years an executive ^{(see note 1)} of Chugai or any of its subsidiaries (collectively, the “Chugai Group”);
2. a person who is currently or has been in the past five years an executive of the parent company or any sister company of Chugai;
3. a person for whom the Chugai Group is a major business partner ^{(see note 2)} or an executive of that person;
4. a major business partner ^{(see note 2)} of the Chugai Group or an executive of that business partner;
5. a major lender ^{(see note 3)} of the Chugai Group or an executive of that lender;
6. a consultant, accounting professional, or legal professional who receives a large amount of money or other such assets ^{(see note 4)} other than officer remuneration from the Chugai Group (including any person belonging to a corporation, partnership, or other such organization that receives such assets);
7. a major shareholder ^{(see note 5)} of Chugai or an executive of that shareholder;
8. an executive of a company for which the Chugai Group is a major shareholder
9. an executive of a company that engages a director or Audit & Supervisory Board Member (regardless of whether full or part time) from the Chugai Group or an executive of the parent company or any subsidiary of such company;
10. a director or other executive of a corporation, partnership, or other such organization that receives contributions or aid exceeding a certain amount ^{(see note 6)} from the Chugai Group;
11. an accounting auditor of the Chugai Group or any person belonging to an auditing corporation that is an accounting auditor of the Chugai Group; and
12. a close relative ^{(see note 7)} of any person (limited to those in material positions ^{(see note 8)}) who falls under any of 1. through 11. above.

• Note 1 “Executive” means an executive director, executive officer, corporate officer, or other such employee or the like.
• Note 2 “Major business partner” means a business partner whose transactions with the Chugai Group in any business year within the past five years total 2% or more of the consolidated sales of that business partner or the Chugai Group.
• Note 3 “Major lender” means a lender from whom the Chugai Group’s borrowings at the end of the business year exceed 2% of the Chugai Group’s consolidated total assets at the end of that business year.
• Note 4 “Large amount of money or other such assets” means, in any business year within the past five years, money or other such assets in excess of the greater of (a) ten million yen annually or (b) 2% of the total annual income of the person receiving the money or other such assets.
• Note 5 “Major shareholder” means a shareholder directly or indirectly holding 10% or more of total voting rights in any business year within the past five years.
• Note 6 “Contributions or aid exceeding a certain amount” means, in any business year within the past five years, contributions or aid exceeding the greater of (a) ten 13 million yen annually or (b) 2% of the total annual income of the person receiving the contributions or aid.
• Note 7 “Close relative” means a spouse or a relative within the second degree of kinship.
• Note 8 “Those in material positions” means directors (excluding outside directors), corporate officers, and executive officers, or any person with authority equivalent to any of these.