CORPORATE INFORMATION

Basic Philosophy and Basic Policy

1-1 Basic Philosophy

The Company is working to expand business and enhance corporate value, with a basic stance on corporate management of aiming to continue developing as a company that is trusted and respected by society by conducting fair and appropriate corporate management while recognizing our social responsibility to contribute to the happiness of people and the creation of rich culture, as stated in our corporate philosophy and code of conduct, in order to honor our public mission as a broadcaster. To that end, enhancing corporate governance not only serves to achieve fair and appropriate corporate management but is also indispensable for building relationships of trust between the Company and shareholders, viewers, employees, business partners and other stakeholders supporting the Company and thereby making it a company that is trusted and respected by society.
The Company views the comprehensive implementation of corporate governance as a key management issue. It believes that pursuing rigorous corporate governance through ensuring the appropriate functioning of various administrative bodies, including the Board of Directors and Audit & Supervisory Committee, improving the transparency of management, and further strengthening the management oversight system will help secure and enhance its corporate value and its shared values with shareholders. Furthermore, the Company will strive to strengthen corporate governance in due respect of Japan's Corporate Governance Code as prescribed by the financial instruments exchange.
Based on the above approach, within a fast-changing management environment, the Audit & Supervisory Committee, the majority of whose members consist of outside directors, realizes more transparent management by auditing and supervising the legality and validity of execution of operations and establishing systems for more accurately meeting the expectations of domestic and international stakeholders. In addition, by delegating some of the Board of Directors' powers to make decisions about the execution of operations to directors, the Company seeks to speed up management decision-making and execution with appropriate supervision by the Board of Directors to comprehensively implement and enhance corporate governance. Therefore, at the 38th Ordinary General Meeting of Shareholders held on June 22, 2022, it was resolved to switch from the previous structure of a company with a Board of Auditors to a company with an Audit & Supervisory Committee.

1-2 Basic Policy

The Company's basic policy on corporate governance is as follows:

1.Securing the Rights and Equal Treatment of Shareholders
The Company takes appropriate measures and provides prompt information disclosure as appropriate in accordance with laws and regulations to serve to fully secure the rights and equal treatment of shareholders and appropriate exercise of shareholder rights.
2.Appropriate Cooperation with Stakeholders Other Than Shareholders
The Company recognizes that efforts should be made to appropriately cooperate with the various stakeholders for sustainable corporate growth and creation of mid-to long-term corporate value. In addition, led by the management team, efforts are being made to foster a corporate culture that respects the rights and positions of stakeholders as well as corporate ethics so that cooperation with stakeholders is put into practice. Such efforts include setting the corporate philosophy and code of conduct, and holding a management policy briefing once every six months as an opportunity for these to be explained to all employees directly by the president and other management in their own words.
3.Ensuring Appropriate Information Disclosure and Transparency
The Company recognizes information disclosure as one of the key management tasks and that appropriate information disclosure is also essential for gaining the understanding of shareholders and other stakeholders. To put such recognition into practice, the Company strives for proactive disclosure of information (including non-financial information) that is deemed to be important to shareholders and other stakeholders, beyond the requirement of laws and regulations, through the Company's website and voluntary timely disclosure.
4.Duties of Board of Directors, etc.
In addition to separating the structure for corporate management-related decision-making/oversight and the structure for executing business operations with the aim of establishing a framework for efficient management and execution, the Company appoints seven outside directors (including five independent outside directors) in an effort to achieve highly transparent corporate management.
In addition to establishing a highly effective system for overseeing directors by appointing outside directors, three of the four directors who are appointed as Audit & Supervisory Committee members are independent outside directors, thereby establishing an independent system for overseeing directors' execution of their duties. In addition, the voluntarily formed Nomination & Compensation Advisory Committee, the majority of whose members are independent outside directors, is involved in the decision-making process relating to directors' nomination (including succession planning), compensation, etc., and by ensuring objectivity and transparency, it strengthens oversight functions relating to directors and further enhances the corporate governance system.
5.Dialogue with Shareholders
The Company recognizes that continuing to grow together with shareholders by proactively engaging in constructive dialogue with shareholders in day-to-day operations and reflecting the opinions and requests of shareholders in corporate management is important for sustainable growth and mid-to long-term corporate value enhancement. From such point of view, the Company develops the IR structure around an executive officer in charge of IR and strives to hold a constructive dialogue with the shareholders and investors by proactively responding to interview requests in order to gain understanding against the Company's corporate strategy and business plan.

1-3 Cross-Shareholdings

When shares in other listed companies are to be held for purposes other than pure investment, the rationality behind the cross-shareholdings is determined based on a careful examination of not only dividends and share price trends but also the risks and benefits such as whether or not the cross-shareholdings maintain/foster collaborative business ties, etc. with the invested companies, whether or not synergistic effects with the Company's business are anticipated and whether or not the cross-shareholdings serve to enhance the Company's mid- to long-term corporate value.
Selling will be considered for shares that have lost their holding rationality. The rationality of continued holding is considered based on capital costs by the Board of Directors every year, and regarding the currently-held shares in nine listed companies (2,127 million yen at the end of March 2023), the Board has decided to continue holding them as their purpose has been deemed appropriate and rational as even in light of the risks, the benefits are sufficient. In addition, concerning exercise of the voting rights to the cross-shareholdings, the general rule shall be to exercise the voting rights to all cross-shareholdings, and whether to vote in favor or against the proposals shall be determined in light of such factors as whether it contributes to the sustainable growth of the invested company by enhancing its mid- to long-term corporate value, or the realization of the purposes for holding as well as whether it enhances the Company's mid- to long-term corporate value and contributes to its sustainable growth, while dialoguing with the invested companies as necessary and respecting their management policies.

Overview of Corporate Governance Structure

2-1 Chart of Corporate Governance Structure

2-2 Corporate Governance Structure

The Company is a company with an Audit & Supervisory Committee. Outside directors who possess knowledge and experience of management in general as well as expertise in the Group's business are invited to serve on both the Board of Directors and Audit & Supervisory Committee. Based on their knowledge and experience of management in general, they provide opinions and advice that contribute to the Company's management from an objective, neutral perspective, thereby enhancing the management oversight structure, including overseeing whether directors are executing their duties adequately.
In addition, clarifying roles by separating management decision-making/oversight functions and execution functions strengthens the Board of Directors' decision-making and oversight functions and makes execution more flexible and speedier, so the Company is building a corporate governance structure by introducing an optional executive officer system and corporate officer system.

1.Board of Directors
The Company's Board of Directors consists of 8 directors (of whom four are outside directors) who are not Audit & Supervisory Committee members, with a term of office of one year, and four directors (of whom three are outside directors) who are Audit & Supervisory Committee members, with a term of office of two years. It meets once a month as a general rule and also holds impromptu meetings as required. At these meetings, it decides important matters regarding the basic policy and execution of Company management and oversees directors' execution of duties. The Board of Directors also appoints executive officers (ten) to decide and execute the Company's operations and corporate officers (five) to oversee management and decide and execute operations at the Company's important subsidiaries and affiliate companies, both with a term of office of one year. The members of the Company's Board of Directors are as follows:

Chair: Akira Tanaka (representative director)
Members:
Directors who are not Audit & Supervisory Committee members: Hitoshi Yamamoto, Tami Ihara, Junichi Onoue, Masanori Gunji, Jun Otomo (outside director), Kenji Shimizu (outside director), Hiroyuki Fukuda (outside director), Kiyoshi Nagai (outside director) Directors who are Audit & Supervisory Committee members: Fumihiro Yamanouchi、Takashi Kusama (outside director), Hideyuki Takahashi (outside director), Mitsuru Murai (outside director)
2.Management Council
In order to ensure appropriate operation execution and speedy, efficient decision-making, the Company has established a Management Council composed of ten executive officers (of which, four are also directors), chaired by the president & CEO. The Management Council meets once a week as a rule to support the execution of the president & CEO's duties by discussing important matters, including matters relating to important decisions about the execution of operations delegated to the representative director by the Board of Directors, as well as to consider specific management issues and important matters discussed by the Board of Directors, etc., and receives reports on the status of the execution of operations in various departments, including subsidiaries. Full-time Audit & Supervisory Committee members also attend Management Council meetings, where they receive reports, express opinions, and acquire information required for auditing purposes. The members of the Company's Management Council are as follows:

Chair: Akira Tanaka (president & CEO)
Members: Hitoshi Yamamoto(executive vice president), Tami Ihara(senior managing executive officer), Hideki Tashiro(senior managing executive officer), Junichi Onoue (managing executive officer), Michihiro Ishizu(managing executive officer), Atsushi Hirota(executive officer), Seiichi Yokoyama(executive officer), Toshihiko Okuno(executive officer), Hiroki Tooyama(executive officer),

Ichiro Yamazaki(corporate officer), Masanori Gunjicorporate officer), Masahiko Mizuguchicorporate officer), Masato Konishicorporate officer), Kazuhiko Okumacorporate officer), Akira Fujimoricorporate officer),Haruo Otsukacorporate officer

※seven corporate officers joined the council as members on July 1, 2023

3.Audit & Supervisory Committee
The Company's Audit & Supervisory Committee consists of four members (of whom one is a full-time member and three are outside directors who are Audit & Supervisory Committee members). The Committee meets once a month as a rule and also holds extraordinary meetings as needed. It proposes auditing plans and reports on and discusses matters that are necessary for auditing purposes. Each member of the Audit & Supervisory Committee audits the execution of directors' duties in accordance with the auditing plans proposed by the Audit & Supervisory Committee.
The members comprising the Company's Audit & Supervisory Committee are as follows.

Chairman: Fumihiro Yamanouchi (full-time Audit & Supervisory Committee member)
Members: Takashi Kusama (outside director who is an Audit & Supervisory Committee member), Hideyuki Takahashi (outside director who is an Audit & Supervisory Committee member), Mitsuru Murai (outside director who is an Audit & Supervisory Committee member)
4.Accounting Auditor
The Company has appointed EY Japan as its Accounting Auditor. Furthermore, an independent auditing department (three members) directly under the president & CEO does internal audits of the Company and subsidiaries at the command of the president & CEO
5.Nomination & Compensation Advisory Committee
The Company has set up a voluntarily formed Nomination & Compensation Advisory Committee (four members), the majority of whose members are independent outside directors, with the aim of enhancing supervisory functions of the Board of Directors by making the evaluation and decision-making process related to nomination of directors, director compensation, etc., more transparent and objective.
The members of the Nomination & Compensation Advisory Committee are as follows:

Chair: Takashi Kusama (independent outside director)
Members: Akira Tanaka (representative director), Kiyoshi Nagai(independent outside director), Mitsuru Murai(independent outside director)
6.Risk Management & Compliance Committee,Information Security Committee
For the purpose of establishing a thorough risk management system for the Group, the Company has set up a Risk Management Committee (13 members), whose members include executive officers and presidents of subsidiaries, with the Company's president & CEO as the committee chairperson. Meeting once a year as a rule, the Risk Management Committee monitors the status of initiatives related to key risks, including disaster countermeasures, infectious disease countermeasures, compliance, information security, and personal information protection, and considers any necessary measures. Full-time Audit & Supervisory Committee members also attend Risk Management Committee meetings, where they receive reports, express opinions, and acquire information required for auditing purposes. The members who comprise the Group's Risk Management Committee are as follows.

Chair: Akira Tanaka (president & CEO)
Members: Hitoshi Yamamoto(executive vice president), Tami Ihara(senior managing executive officer), Hideki Tashiro(senior managing executive officer), Junichi Onoue (managing executive officer), Michihiro Ishizu(managing executive officer), Atsushi Hirota(executive officer), Seiichi Yokoyama(executive officer), Toshihiko Okuno(executive officer), Hiroki Tooyama(executive officer), Ichiro Yamazaki (WOWOW COMMUNICATIONS INC. representative director, president & CEO), Masato Konishi (WOWOW Entertainment, Inc. representative director president), Kazuhiko Okuma (WOWOW PLUS INC. representative director president).

2-3 Collaboration among the Audit & Supervisory Committee, Accounting Auditor, and Internal Audit Department

The Company has appointed Ernst & Young ShinNihon LLC as its accounting auditor. The Audit & Supervisory Committee and the accounting auditor strive to improve the viability and efficiency of auditing by sharing information such as auditing plans, the implementation status of audits, and so forth as required and exchanging their opinions. In terms of internal auditing, an Internal Audit Department (3 employees) has been established. The Audit & Supervisory Committee receives reports on the status of internal audits and audit results from the Internal Audit Department as needed, and ongoing collaboration is ensured. Furthermore, reports on audit results are received from the accounting auditor on a regular and as-needed basis, and ongoing collaboration is ensured.

2-4 Support Structure for Outside Directors

To ensure they can contribute fully to Board of Directors discussions, outside directors (including former non-full-time outside auditors) are briefed in advance on the purpose and details of proposed Board of Directors discussion topics by full-time directors (including former full-time auditors).

2-5 Reasons for Selecting Current Corporate Governance Structure

Based on a resolution at the 38th Ordinary General Meeting of Shareholders on June 22, 2022, the Company changed from a company with a Board of Auditors to a company with an Audit & Supervisory Committee.
The purpose of changing to a company with an Audit & Supervisory Committee is to achieve more transparent management through this committee, the majority of whose members are outside directors, to audit and supervise the legality and validity of the execution of operations, and to establish a system for accurately meeting the expectations of domestic and international stakeholders, as well as working to thoroughly implement and enhance corporate governance with the aim of faster management decision-making and execution of operations, based on appropriate oversight by the Board of Directors, by means of delegating some of the Board of Directors' decision-making powers relating to execution of operations to the directors.
Based on the above, in line with clarifying roles by separating management decision-making/oversight functions and execution functions, the Company has introduced an optional executive officer system and corporate officer system as an operation execution structure and established a Management Council, but at the same time, in line with strengthening the management oversight structure, including oversight of the validity of directors' execution of duties, it has included in the twelve directors seven (including directors who are Audit & Supervisory Committee members) outside directors well-versed in the broadcasting industry or management strategy.
Furthermore, with a view to ensuring the viability of auditing, three outside directors who are Audit & Supervisory Committee members are appointed, and the Audit & Supervisory Committee maintains ongoing mutual cooperation with the accounting auditor and the Internal Audit Department.
In addition, the Company has set up a voluntarily formed Nomination & Compensation Advisory Committee, the majority of whose members are independent outside directors, with the aim of enhancing supervisory functions and contributing to a more robust corporate governance structure by making the evaluation and decision-making process related to nomination of directors, director compensation, etc., more transparent and objective.
Moreover, for the purpose of implementing a thorough risk management system for the Group, a Risk Management Committee has been set up.

Directors

3-1 List of Directors

The Company appoints seven outside directors among its 12 directors (including directors who are Audit & Supervisory Committee members).
Directors

3-2 Reason for Appointment as Outside Directors

Name Independent director Reason for appointment
Takashi Kusama Takashi Kusama was judged to be qualified to serve as an outside director and Audit & Supervisory Committee member given that he may be expected to apply the management experience and finance and accounting-related expertise he has acquired from corporate finance duties at financial institutions to the comprehensive implementation of the Company's auditing functions.

Employed until 2000 by the Industrial Bank of Japan, a predecessor to Mizuho Bank, one of the Company's major business partners, but as a significant amount of time has passed since his departure, judged to not be in a position to be influenced by the will of his former company; therefore, judged to be qualified for the position of independent director free of any conflict of interest with ordinary shareholders.
Jun Otomo Judged to be qualified for the position of outside director in view of expected ability to leverage expertise and management experience from another company in the same industry in the Company's management.
Kenji Shimizu Judged to be qualified for the position of outside director in view of expected ability to leverage expertise and management experience from another company in the same industry in the Company's management.
Hideyuki Takahashi Hideyuki Takahashi was judged to be qualified to serve as an outside director and Audit & Supervisory Committee member given that he may be expected to apply the management experience and finance and accounting-related expertise he has acquired through corporate finance duties at financial institutions, particularly his experience as chair of the Audit Committee at Mizuho Financial Group, Inc., to the comprehensive implementation of the Company's auditing functions.

Employed until 2012 by Mizuho Corporate Bank, a predecessor to Mizuho Bank, one of the Company's major business partners, but as a significant amount of time has passed since his departure, judged to not be in a position to be influenced by the will of his former company; therefore, judged to be qualified for the position of independent director free of any conflict of interest with ordinary shareholders.
Hiroyuki Fukuda Judged to be qualified for the position of outside director in view of expected ability to leverage expertise and management experience from another company in the same industry in the Company's management.

No significant transactions between the Company and him or his former company; therefore, judged to be qualified for the position of independent director free of any conflict of interest with ordinary shareholders.
Kiyoshi Nagai Judged to be qualified for the position of outside director in view of expected ability to leverage expertise and executive experience in the marketing/advertising industry in the Company's management

No significant transactions between the Company and him or his former company; therefore, judged to be qualified for the position of independent director free of any conflict of interest with ordinary shareholders.
Mitsuru Murai Mitsuru Murai concurrently serves as the Representative Director (Chairperson) of Nippon Badminton Association. After working in human resources and management for companies such as Japan Recruit Center Co., Ltd. (now known as Recruit Holdings Co., Ltd.) for many years, Mitsuru Murai has accumulated considerable experience as an executive officer both domestically and internationally, including being appointed as chairman of the Japan Professional Football League. He was judged to be qualified to serve as an outside director and Audit & Supervisory Committee member given that he may be expected to apply the extensive knowledge he has acquired in the business field and his experience as an executive officer to the comprehensive implementation of the Company's auditing functions.

No significant transactions between the Company and him or his former company; therefore, judged to be qualified for the position of independent director free of any conflict of interest with ordinary shareholders.

3-3 Director's Compensation

1.Policy Details and Decision Method for Officer Compensation Amounts and Calculation Method Determination

Based on the advice and recommendations of the Nomination & Compensation Advisory Committee, the Company's Board of Directors has stipulated a decision-making policy relating to the details of compensation for individual directors (excluding directors who are Audit & Supervisory Committee members). Furthermore, in conjunction with this, the Board of Directors has stipulated a decision-making policy relating to the details of compensation for individual directors who are Audit & Supervisory Committee members (along with the decision-making policy relating to the details of compensation for individual directors who are not Audit & Supervisory Committee members, this is referred to below as the "basic policy"). These policies are as follows.
As a basic policy, the amount of compensation to be paid to directors and directors who are Audit & Supervisory Committee members is set at a level which will maintain their motivation to improve business performance and enable the recruitment of exceptional human resources both internally and externally, taking into account the balance between the level at other companies in the same industry, the nature of the Company's management, and its employees' salaries.
With regard to the compensation for directors (excluding directors who are Audit & Supervisory Committee members), after the maximum total amount of compensation is determined by means of a resolution at the general meeting of shareholders, the Representative Director President & CEO delegated by the Board of Directors determines the amount of compensation individually within the above maximum amount based on the above basic policy. The amount of individual compensation is determined by comprehensively taking into account such factors as the position, responsibility, short-term and medium to long-term performances and degree of contribution to such performances of each director (excluding directors who are Audit & Supervisory Committee members). In addition, upon the determination of the amount of individual compensation, deliberation is conducted in advance at a voluntary Nomination & Compensation Advisory Committee, over half of whose members are independent outside directors, which gives recommendations and proposals. With regard to the compensation for directors who are Audit & Supervisory Committee members, the maximum total amount is determined by means of a resolution at a general meeting of shareholders, and the amount of compensation is determined based on the above basic policy through discussion among directors who are Audit & Supervisory Committee members after deliberating it in advance at the Nomination & Compensation Advisory Committee and receiving advice and recommendations.

It is also reviewed by the Nomination & Compensation Advisory Committee, over half of whose members are independent outside directors, which gives recommendations and proposals. The maximum total amount of compensation for directors who are Audit & Supervisory Committee members is determined by means of a resolution at a general meeting of shareholders, discussed in advance by the Nomination & Compensation Advisory Committee, which provides advice and recommendations, then determined through discussion between the directors who are Audit & Supervisory Committee members, based on the above basic policy.
Aiming to give an incentive to sustainably increase the Company's corporate value and deepen shared values with shareholders, it was decided to introduce a restricted stock compensation program for directors (excluding outside directors) from the fiscal year ended March 31, 2021, and the 36th Ordinary General Meeting of Shareholders on June 23, 2020, approved by resolution the total amount of monetary compensation credit to offer the restricted stock and total number of regular stock for the Company to issue or dispose.
In addition, with the transition to a company with an Audit & Supervisory Committee, the restricted stock compensation program for directors (excluding outside directors and directors who are Audit & Supervisory Committee members) will be continued in the fiscal year ending March 2023, and at the 38th Ordinary General Meeting of Shareholders on June 22, 2022, a resolution was adopted regarding the total amount of monetary compensation credit to be issued for the purpose of granting restricted stock and the total amount of common stock that the Company will issue or dispose of.
Specific distribution of the monetary compensation credit will be decided by resolution of the Board of Directors based on standard compensation amounts corresponding to title and with the advice and recommendations of the Nomination & Compensation Advisory Committee. Furthermore, the amount paid per restricted stock share is decided by the Board of Directors by using the closing price of the Company's common shares on the Tokyo Stock Exchange on the business day preceding the date of the Board of Directors resolution relating to issuance or disposal.

2. Policy on Deciding Amount of Officer Compensation and Calculation Method for Each Position
(1) Compensation for directors (excluding outside directors and directors who are Audit & Supervisory Committee members)
 Compensation for directors (excluding outside directors and directors who are Audit & Supervisory Committee members) consists of fixed title-based compensation, performance-based compensation (monetary compensation) that varies according to performance in each fiscal year, and restricted stock compensation. The proportion of payment represented by each form of compensation is set so that the higher the director's position is, the greater the proportion of restricted share compensation will be.

 a. Title-based compensation (fixed)
  A fixed amount is paid in line with the size of responsibility per title, divided in 12 for monthly payment. The payment ratio is 70% of total annual compensation.

 b. Performance-based compensation (variable)
 Performance-based compensation for directors (excluding outside directors and directors who are Audit & Supervisory Committee members) is issued as monetary compensation following the ordinary general meeting of shareholders, based on a performance evaluation coefficient calculated from performance indicators for the applicable fiscal year. Taking the base amount as 100%, the amount may vary from 80% to 120%. The base amount payment proportion is from 5% to 15% of the annual compensation amount.

 Note: The base amount is the amount of performance-based compensation paid if the performance evaluation coefficient calculated from performance indicators for that business year is 100%.

 c. Restricted stock compensation (variable)
 Monetary compensation credit issued for the purpose of granting restricted stock is issued following an ordinary general meeting of shareholders. The payment proportion is from 15% to 25% of the annual compensation amount.

(2) Compensation for outside directors and directors who are Audit & Supervisory Committee members
Compensation for outside directors and directors who are Audit & Supervisory Committee members is issued on a monthly basis by dividing the fixed compensation amount by 12, which is not impacted by the Company's performance.

3. Performance-Based Compensation Indicators, Reasons for Choosing These Indicators, Decision Method for Amount of Performance-Based Compensation
(1) Overview of performance-based compensation, fundamental indicators, reasons for choosing these indicators
Performance-based compensation (monetary compensation) is issued to directors (excluding outside directors and directors who are Audit & Supervisory Committee members), using one fiscal year as the assessment period. The purpose of performance-based compensation is to provide directors (excluding outside directors and directors who are Audit & Supervisory Committee members) with increased incentive to achieve the objectives of various management plans and to improve the correlation between compensation and accountability for executing operations.
In order to link compensation more closely to performance results, the indicators used for performance-based compensation are consolidated net sales and consolidated operating income, especially important performance indicators in the Company's business model.
For performance-based compensation, a performance evaluation coefficient is calculated based on the Company's consolidated net sales and consolidated operating income achievement rate for the applicable fiscal year and the year-on-year change in consolidated net sales, and once the payment rate (which varies within a range of 80% to 120% of the base amount) has been decided, the amount is decided by the Board of Directors following discussion of its validity and appropriateness by the Nomination & Compensation Advisory Committee and issued as cash in a single payment.

(2) Decision method for amount of performance-based compensation
Performance-based compensation is calculated based on the Company's consolidated net sales and consolidated operating income achievement rate for the applicable fiscal year relative to the targets set at the start of the year and the year-on-year change in consolidated net sales. The performance evaluation coefficient calculated based on the formula below is multiplied by an adjustment coefficient, and the result is multiplied by the performance-based compensation base amount.

・Performance evaluation coefficient formula Performance evaluation coefficient = Consolidated net sales achievement rate × 30% + Consolidated operating income achievement rate × 20% + year-on-year change in consolidated net sales × 50%

However, the upper limit for the performance evaluation coefficient is 120% and the lower limit is 80%.

・Adjustment coefficient
1.00

However, if the Nomination & Compensation Advisory Committee judges that there is a significant discrepancy between the calculated performance evaluation coefficient and the performance results and current state of the business environment, the representative director may change the adjustment coefficient to an optimal figure other than 1.00, following discussion by the Nomination & Compensation Advisory Committee.

・Performance-based compensation formula Performance-based compensation = Performance-based compensation base amount × Performance evaluation coefficient × Adjustment coefficient

⑶ Targets and results for performance-based compensation indicators
Targets for consolidated net sales and consolidated operating income, the indicators for performance-based compensation, are set by Board of Directors resolution based on performance forecasts. In the current fiscal year, the targets for both consolidated net sales and consolidated operating income were achieved, but consolidated net sales fell below the figure in the previous year.

4. Matters Relating to the Resolution on Compensation for Directors and Auditors by the General Meeting of Shareholders
(Before the transition to a company with an Audit & Supervisory Committee)
The maximum amount of compensation for directors was set at a yearly amount of not more than 600 million yen (not more than 60 million yen per year in the case of outside directors; however, this does not include employee salary) by a resolution at the 36th Ordinary General Meeting of Shareholders on June 23, 2020. At the time the above resolution was enacted, there were 13 directors (of whom five were outside directors). Furthermore, at the same Ordinary General Meeting of Shareholders, the following resolutions were adopted: for the purpose of introducing the restricted stock compensation program targeting directors excluding outside directors, the total amount of monetary compensation credit to be issued for the purpose of granting restricted stock shall be not more than 120 million yen per year (not including employee salary) within the maximum compensation amount range for directors after the above revision, and the total number of shares of the Company's common stock that the Company shall issue or dispose of shall be not more than 100,000 shares per year (provided, however, that in the event of a stock split of the Company's common stock [including gratis allotment of the Company's common stock] or a reverse stock split of the Company's common stock, or in the event of any other event requiring adjustment of the total number of shares of the Company's common stock to be issued or disposed of as shares with transfer restrictions, this total number shall be adjusted to a reasonable extent); the transfer restriction period shall be determined by the Board of Directors, within a range of 3 years to 30 years; if a director resigns from the position stipulated in advance by the Board of Directors before the end of the transfer restriction period, the shares with transfer restrictions shall be acquired at no cost upon his or her resignation, except in cases such as his or her term ending, death, or other reasonable grounds; the transfer restriction shall be completely removed, conditional upon the director remaining in the applicable position throughout that period; and in cases where a director resigns from the applicable position before the transfer restriction period ends due to his or her term ending, death, or other reasonable grounds, the number of shares for which the transfer restriction will be removed and the timing of the transfer restriction's removal shall be adjusted to a reasonable extent as needed. The number of directors at the time of the above resolutions being adopted was 13 (of whom five were outside directors). The maximum amount of compensation for auditors was set at a yearly amount of not more than 79 million yen by a resolution at the 35th Ordinary General Meeting of Shareholders on June 20, 2019. The number of auditors at the time of the above resolutions being adopted was four.

(After the transition to a company with an Audit & Supervisory Committee)
The maximum compensation amount for directors (excluding directors who are Audit & Supervisory Committee members) was set at a yearly amount of not more than 600 million yen (not more than 60 million yen per year in the case of outside directors; however, this does not include employee salary) by a resolution at the 38th Ordinary General Meeting of Shareholders on June 22, 2022. At the time the above resolution was enacted, there were 11 directors (of whom four were outside directors), excluding directors who are Audit & Supervisory Committee members.
Furthermore, at the same Ordinary General Meeting of Shareholders, the following resolutions were adopted: for the purpose of continuing the restricted stock compensation program for directors (excluding outside directors and directors who are Audit & Supervisory Committee members; referred to as the "Eligible Directors" throughout the rest of this section), the total amount of monetary compensation credit to be issued for the purpose of granting restricted stock shall be not more than 120 million yen per year (not including employee salary) within the maximum compensation amount range for directors (excluding directors who are Audit & Supervisory Committee members) determined above, and the total number of shares of the Company's common stock that the Company shall issue or dispose of shall be not more than 100,000 shares per year (provided, however, that in the event of a stock split of the Company's common stock [including gratis allotment of the Company's common stock] or a reverse stock split of the Company's common stock, or in the event of any other event requiring adjustment of the total number of shares of the Company's common stock to be issued or disposed of as shares with transfer restrictions, this total number shall be adjusted to a reasonable extent); the transfer restriction period shall be determined by the Board of Directors, within a range of 3 years to 30 years; if an Eligible Director resigns from the position stipulated in advance by the Board of Directors before the end of the transfer restriction period, the shares with transfer restrictions shall be acquired at no cost upon his or her resignation, except in cases such as his or her term ending, death, or other reasonable grounds; the transfer restriction shall be completely removed, conditional upon the Eligible Director remaining in the applicable position throughout that period; and in cases where an Eligible Director resigns from the applicable position before the transfer restriction period ends due to his or her term ending, death, or other reasonable grounds, the number of shares for which the transfer restriction will be removed and the timing of the transfer restriction's removal shall be adjusted to a reasonable extent as needed. The number of Eligible Directors at the time of the above resolutions being adopted was seven.
The maximum compensation amount for directors who are Audit & Supervisory Committee members was set at a yearly amount of not more than 79 million yen by a resolution at the 38th Ordinary General Meeting of Shareholders on June 22, 2022. At the time the above resolution was enacted, there were four directors who are Audit & Supervisory Committee members.

2.Total Amount of Compensation, Total Amount by Type of Compensation and Number of Applicable Directors by Director Classification (fiscal year 2022)

Director
classification
Number of applicable directors
(persons)
Total amount of pay
(million yen)
Total compensation
by type(million yen)
Fixed compensation
(Title-Based Compensation)
Performance-based compensation Non-Monetary Compensation
(Restricted Stock Compensation)
Members of the Board of Directors(excluding Audit & Supervisory Committee members)
[of which Outside Directors]
14(7) 312(44) 230(44) 29(-) 52(-)
Directors who are Audit & Supervisory Committee members
[of which Outside Directors]
4(3) 48(27) 48(27) -(-) -(-)
Members of the Audit & Supervisory Board
[of which Outside Auditors]
4(2) 19(4) 19(4) -(-) -(-)
Total
[of which Outside Directors]
22(12) 379(76) 298(76) 29(-) 52(-)

(Notes)
1.The amounts listed are rounded down to the nearest million yen.
2.The above includes the two outside directors and two auditors (of whom one was an outside auditor) who resigned upon the conclusion of the 38th Ordinary General Meeting of Shareholders held on June 22, 2022. Furthermore, based on the resolution at the 38th Ordinary General Meeting of Shareholders held on June 22, 2022, the Company underwent a transition to a company with an Audit & Supervisory Committee upon the conclusion of said ordinary general meeting of shareholders.
3.Director (Audit & Supervisory Committee Member) Fumihiro Yamanouchi resigned from the position of auditor due to the expiration of term of office upon the conclusion of the 38th Ordinary General Meeting of Shareholders held on June 22, 2022, and was appointed as a director who is an Audit & Supervisory Committee member. Therefore, he is included in auditors during his term of office as an auditor and included in directors who are Audit & Supervisory Committee members during his term of office as a director who is an Audit & Supervisory Committee member.
4.Director (Audit & Supervisory Committee Member) Takashi Kusama resigned from the position of director due to the expiration of term of office upon the conclusion of the 38th Ordinary General Meeting of Shareholders held on June 22, 2022, and was appointed as a director who is an Audit & Supervisory Committee member. Therefore, he is included in directors (excluding Audit & Supervisory Committee members) (outside directors) during his term of office as a director and included in directors who are Audit & Supervisory Committee members (outside directors) during his term of office as a director who is an Audit & Supervisory Committee member.
5.Director (Audit & Supervisory Committee Member) Hideyuki Takahashi resigned from the position of auditor due to the expiration of term of office upon the conclusion of the 38th Ordinary General Meeting of Shareholders held on June 22, 2022, and was appointed as a director who is an Audit & Supervisory Committee member. Therefore, he is included in auditors (outside auditors) during his term of office as an auditor and included in directors who are Audit & Supervisory Committee members (outside directors) during his term of office as a director who is an Audit & Supervisory Committee member.
6.The performance-based compensation above indicates the amount recorded as cost in the current fiscal year.
7. Company stock is provided as non-monetary compensation, and details such as the allocation conditions are as described in Section B, "Matters to Be Resolved by the General Meeting of Shareholders Relating to Compensation of Directors and Auditors" in the Business Report provided for the 38th Ordinary General Meeting of Shareholders. Furthermore, the issue status for the current fiscal year is included in Section 2(2), "Status of Stock Issued to Company Officers as Compensation for the Execution of Duties During the Current Fiscal Year," in the Business Report provided for the 38th Ordinary General Meeting of Shareholders.
8.No officer exceeds 100 million yen in total consolidated compensation.

3-4 Incentives

From the year ended March 31, 2020, in order to increase directors' (excluding outside directors) incentive to achieve management plans and link compensation to execution of duties, a performance-based (monetary) compensation program was introduced for directors (excluding outside directors).
Moreover, for the purpose of further sharing the values with shareholders, as well as providing incentives aimed at continuous improvement of the Company's corporate value, a restricted stock compensation program was introduced for directors (excluding outside directors) in the fiscal year ended March 2021, and at the 36th Ordinary General Meeting of Shareholders on June 23, 2020, a resolution was adopted regarding the total amount of monetary compensation credit to be issued for the purpose of granting restricted stock and the total amount of common stock that the Company will issue or dispose of. In addition, with the transition to a company with an Audit & Supervisory Committee, the restricted stock compensation program for directors (excluding outside directors and directors who are Audit & Supervisory Committee members) will be continued in the fiscal year ending March 2023, and at the 38th Ordinary General Meeting of Shareholders on June 22, 2022, a resolution was adopted regarding the total amount of monetary compensation credit to be issued for the purpose of granting restricted stock and the total amount of common stock that the Company will issue or dispose of.
The details of director compensation programs can be found under "Disclosure of Policy to Determine Compensation Amounts or Calculation Method" in "Directors' Compensation-Related Information" below.

Basic Philosophy on and Status of Development of Structure for Exclusion of Anti-Social Forces

4-1 Basic Philosophy on Exclusion of Anti-Social Forces

The Company, which has set an Anti-Social Forces Exclusion Policy based on the WOWOW Code of Conduct, shall exclude anti-social forces in any case under the following policy:

  • (1) Take action against anti-social forces as an entire organization; (2) closely cooperate with external experts and expert organizations against anti-social forces; (3) secure the safety of directors, employees and other relevant persons from anti-social forces; (4) ban any business or other ties with anti-social forces, and reject unjust demands; (5) eliminate backroom deals for covering up anti-social forces incidents; (6) be aware that accepting demands from anti-social forces is a violation of laws and regulations, and strictly prohibit provision of funds to anti-social forces; (7) do not engage anti-social forces and; (8) do not act in a way that facilitates or assists the activities of anti-social forces

4-2 Implementation of Measures to Exclude Anti-Social Forces

The Company has set an "Anti-Social Forces Exclusion Policy", "Rules on Dealing with Anti-Social Forces" and a "Manual on Dealing with Anti-Social Forces" based on the WOWOW Code of Conduct to exclude anti-social forces. The unit dealing with anti-social forces is General Affairs Department and the person responsible is the director of the General Affairs Department. Directors and employees shall report immediately to the head of their department or their superior in addition to the director of the General Affairs Department when an anti-social forces incident is suspected to take place or found to have taken place.
Dealing with incidents involving anti-social forces is a risk that will be addressed by the Risk Management Committee, and if the director of the General Affairs Department receives a report about an incident involving anti-social forces, he or she shall report it immediately to the executive officer responsible for risk management and the president & CEO and propose convening the Risk Management Committee to said organizer if necessary. The Risk Management Committee shall consider and decide on the method of dealing with the incident in question.

Skill Matrix

Views on the Balance, Diversity, and Size of the Board of Directors With a view to promote comprehensive discussion and timely decision-making, the Company's Board of Directors is comprised of twelve directors (including seven outside directors). In light of the management strategy of the Company, the Company believes that its board directors should possess expertise and experience in the fields of management (experience as a top management official), management (management strategy/business strategy), industry (entertainment), marketing, DX/ICT/technology, personnel and labor/human resources development/organizational personnel, financial affairs/accounting/tax affairs, risk management compliance and sustainability (ESG/SDGs). The Board of Directors is composed of board directors who are well-versed in the aforementioned fields and concurrently serve as executive officers, and outside directors who are well-versed in the broadcasting industry or management strategy, etc., in order to ensure overall good balance of knowledge, experience and skills to fulfill duties and responsibilities of the Board of Directors and to secure diversity. Outside directors of the Company include independent outside directors who possess managerial experience at other companies.