Corporate Governance
CORPORATE GOVERNANCE

March28, 2024
Socionext Inc.
Masahiro Koezuka
Representative Director, Chairman, President and CEO
Contact:

Public Relations & Investor Relations Office
Representative Phone : +81-45-568-1000
Securities Code: 6526

The corporate governance of Socionext Inc. (the “Company”) is described below.
I.

Basic views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information

1.

Basic Views(1)

Basic Management Policy

1)

Management philosophy

Socionext Group (the “Group”) defines the following common group philosophy for its mission and value.
Based upon this philosophy, we will help to bring about a prosperous society by delivering new value to ourcustomers and to people around the world beyond them. We will do this as a valued partner of customers seeking
to develop unique and cutting-edge SoCs (System on Chip, which is the implementation of multiple functions
needed to run a device or system on a single semiconductor chip) to differentiate their services and products. We
will also do this as a partner of our suppliers providing the latest technologies in the evolving semiconductor
ecosystem, including foundries, outsourced semiconductor assembly & tests (OSATs) and providers ofintellectual property (IP), electronic design automation (EDA) and software.
The Group’s Mission as a corporation
Together with our global partners, we bring innovation to everyone everywhere.
The Group’s Value
Change:We adapt ourselves to the disruptive discontinuous changes in business, technology, mind,
operations, and other environments.

Technology:

By pursuing cutting-edge technology, we aim to become a company that supports global
innovation through the development of competitive technology.

Growth:Our growth helps to deliver benefits to all stakeholders, including shareholders, customers,
partners, and employees.

2)

Speed:We respond quickly to dynamic and rapidly-changing markets and customers.

Sustainability:

We ensure a sustainable future by creating a cohesive society with customers and partners.

Management Policy

To pursue the above management philosophy, at the Group we are putting our guiding principles into practicethrough our own distinctive Solution SoC business model for customers wanting to develop leading-edge custom
SoCs, whereby we combine an optimal mix of technologies to implement the functions they require. Along withthe automotive, networking & data center, and smart device fields that represent our leading growth sectors, weare also seeking to combine regional balance with the winning of more business from global customers in theindustrial field and in IoT & radar sensing.

1

Corporate Governance
CORPORATE GOVERNANCE

Along with winning the trust of customers and supporting their growth by becoming the SoC supplier of choice
to major global and growth companies, our business activities also serve as a means for us to leverage ourtechnologies to help overcome the challenges facing society, in areas like low power consumption, for example.
Moreover, through the development work we undertake in partnership with customers, we seek to create avirtuous circle of growth for both engineers and the company, enhancing corporate value through this growth andthereby generating returns for our shareholders.
(2)

Basic views on corporate governance

Recognizing the importance of management as a company having social responsibilities, the Company has
positioned the development of organizational structures and mechanisms to ensure transparency and fairness indecision-making and the building of a trust relationship with all stakeholders, including shareholders, as one ofits most important management issues. Accordingly, we aim to increase our corporate value and achievesustainable growth through the implementation and continuous improvement of the Corporate Governance Codebelow.

[Reasons for Non-compliance with the Principles of the Corporate Governance Code][Supplementary Principle 4-1-3 Succession Plan for the Chief Executive Officer (CEO) and other top executives]
The succession plan for the CEO and other top executives is implemented through deliberations in the
Nomination and Compensation Committee, the majority of whose members are Independent Outside Directors(two out of three members), which is chaired by an Independent Outside Director.

[Disclosure Based on the Principles of the Corporate Governance Code] Updated[Principle 1-4 Cross-shareholdings]
As a general rule, the Company does not hold any cross-shareholdings and does not currently hold any listed
shares as cross-shareholdings.
If it becomes necessary to acquire cross-shareholdings in the future from the perspective of management strategy,
etc., the acquisition will be limited to cases that contribute to the sustainable growth of the Company and theenhancement of corporate value over the medium to long term. In addition, the Board of Directors will confirm
the significance of acquiring each stock in advance, and after the acquisition, the appropriateness of the holding
will be confirmed and reviewed annually. The exercise of voting rights in connection with cross-shareholdings isjudged on the basis of whether it contributes to the corporate value of the Company.
[Principle 1-7 Related-Party Transactions]
In accordance with the Related-Parties Transactions Management Regulations, when conducting transactions
with officers or major shareholders (related-party transactions), the Company verifies the reasonableness andappropriateness of the transactions and conducts appropriate approval procedures by the Board of Directors, etc.
In accordance with the above regulations, the Company is required to report the results of all related-party
transactions to the Board of Directors on a quarterly basis.
In addition, every year, a written survey is conducted with directors to confirm the presence of related-party
transactions.

2Corporate Governance
CORPORATE GOVERNANCE[Supplementary Principle 2-4-1 Ensuring Diversity in Promotion to Core Human Resources]
The Company strives to foster a corporate climate and culture that enables each and every employee with a wide
range of personalities, ideas and values to work comfortably and demonstrate their abilities.
For this reason, the Company will continue to recruit and promote people of all nationalities, genders and ages,
promote the development of an internal environment in which diverse human resources can work vigorously, andaim for higher ratios of female, foreign and mid-career employees to total employees and to total managers thanthe current ratio.
Female employees
In the fiscal year ended March 2023, female employees accounted for 9.8% of the Company’s total employees
and 2.3% of its management positions. We are also developing systems for shorter working hours, leave ofabsence and holidays to create more a comfortable environment with a good work-life balance for female
employees.
Foreign nationality employees
In the fiscal year ended March 2023, employees with foreign nationality accounted for 2.2% of the Company’s
total employees and 1.2% of its management positions. We will continue to hire and promote foreign nationals.
Mid-career employees
The Company has been actively recruiting mid-career employees of all nationalities, genders and ages. In thefiscal year ended March 2023, we hired 31 mid-career employees, 10 of whom were for management positions.
In the fiscal year ended March 2023, mid-career employees accounted for 10.7% of the Company’s total
employees and 8.5% of its management positions.
We will continue to hire and promote mid-career employees.
[Principle 2-6 Roles of Corporate Pension Funds as Asset Owners]
The Company employs a defined contribution pension plan. We provide education on defined contribution
pension plans and asset management for employees when they join the company and on a regular basis.
[Principle 3-1 Full Disclosure]
To enhance management transparency, the Company strives to disclose information in a timely, fair and balancedmanner. We will actively disclose our management philosophy, management strategies, and corporate governanceinitiatives on the Company’s website at appropriate times.
(i)

For the management philosophy and policy, see “I-1. Basic Views” in this report.

(ii)

For basic views on corporate governance, see “I-1. Basic Views” in this report.

(iii) For policies and procedures of determining directors compensation, please see “1. Matters Concerning
Institutional Structure and Organizational Management, etc. [Director Remuneration]” and “2. Matters
Concerning Functions of Business Execution, Auditing and Supervision, Nomination, and Remuneration
Decisions (Overview of Current Corporate Governance System)” in “II. Business Management
Organization and Other Corporate Governance Systems regarding Decision-making, Execution ofBusiness, and Oversight in Management” in this report.
(iv) For policies and procedures of election, dismissal and nomination of directors, please see “2. Matters
Concerning Functions of Business Execution, Auditing and Supervision, Nomination, and Remuneration
Decisions (Overview of Current Corporate Governance System)” in “II. Business Management

3Corporate Governance
CORPORATE GOVERNANCE

Organization and Other Corporate Governance Systems regarding Decision-making, Execution ofBusiness, and Oversight in Management.”(v)

The reasons for the election of new director candidates will be disclosed in the notice of convocation of thegeneral meeting of shareholders.

[Supplementary Principle 3-1-3 Initiatives on Sustainability]
The Company’s Mission is “Together with our global partners, we bring innovation to everyone everywhere.”
And one of its Values is “Sustainability: We ensure a sustainable future by creating a cohesive society withcustomers and partners.”
Based on this philosophy, the Company will work with customers to achieve innovation and resolve various
social issues through the power of System on a chip (SoC).
On April 1, 2022, we established the ESG Promotion Office under the leadership of the Corporate Vice President
to centrally manage and promote internal sustainability activities.
Specific initiatives are disclosed on the Company website. https://www.socionext.com/en/sustainability/[Supplementary Principle 4-1-1 Scope and content of delegation to the management]
The Board of Directors of the Company makes resolutions on important matters related to the execution ofbusiness as stipulated in the Board Regulations and matters stipulated in laws and regulations, and supervises thestatus of the execution of business on a sequential basis. In addition, the Company employs independent outside
directors who are experts in multiple diverse fields to strengthen the supervisory function of business execution
and develop an effective system through appropriate advice.
In accordance with the Group Approval Authority and Affiliate Management Regulations, the Board of Directors
delegates part of its executive authority to the Management Committee, which is chaired by the CEO and iscomposed of executive officers who oversee each Group.
[Principle 4-9 Independence Standards and Qualifications for Independent Outside Directors]
In the Company, the appointment of independent outside directors, including Audit & Supervisory Committee
Members, is subject to deliberation by the Nomination and Compensation Committee on the conformity withindependence standards and policies, and the results are reported to the Board of Directors, which deliberates andresolves the matter.
The independence standards adopted and established by the Company are based on the requirements for outside
directors stipulated in the Companies Act and the requirements for independent officers stipulated by the Tokyo
Stock Exchange.
[Supplementary Principle 4-10-1 Authorities and Roles of the Nomination Committees and Compensation
Committees]
The Company has established a voluntary Nomination and Compensation Committee as an advisory body to theBoard of Directors in order to enhance independence, objectivity and transparency regarding the nomination andcompensation of officers.
The majority of the Nomination and Compensation Committee members are Independent Outside Directors, andthe committee is chaired by an Independent Outside Director.
For details on Nomination and Compensation Committee, see “II 2. Matters Concerning Functions of Business
Execution, Auditing and Supervision, Nomination, and Remuneration Decisions (Overview of Current Corporate
Governance System)” in this report.

4Corporate Governance
CORPORATE GOVERNANCE[Supplementary Principle 4-11-1 Views on Diversity of the Board of Directors]
The Company discloses a skill matrix that lists each director’s knowledge, experience, and abilities, as well as a
combination of the director’s skills etc. in a manner appropriate to the business environment and businesscharacteristics, along with policies and procedures for the election of directors.
Candidates for Directors who are not Audit & Supervisory Committee Members are determined by the Board of
Directors based on a report by the Nomination and Compensation Committee, the majority of whose members
are Independent Outside Directors.
Candidates for Directors who are Audit & Supervisory Committee Members are determined by the Board of
Directors, with the consent of the Audit & Supervisory Committee, based on a report by the Nomination andCompensation Committee, the majority of whose members are Independent Outside Directors.
The skill matrix of directors is provided at the end of this report.
[Supplementary Principle 4-11-2 Concurrent Positions of Directors as Officers of Other Listed Companies]
To ensure that the overall roles and responsibilities of directors are fulfilled appropriately and soundly, theCompany elects candidates for directors by considering whether their concurrent directors positions at othercompanies are reasonable.
The status of concurrent positions held by directors of the Company as directors of other companies is describedin the Annual Securities Report for the Ninth Fiscal Period on the Company website.
https://www.socionext.com/jp/ir/library/[Supplementary Principle 4-11-3 Analysis and Evaluation of the Effectiveness of the Board of Directors as a
Whole]The Company’s approach to the evaluation of effectiveness
The Board of Directors of the Company analyzes and evaluates the effectiveness of the Board of Directors every
year with the support of a third-party organization to further ensure its effectiveness and improve its functions.
A summary of the methodology and results of the evaluation of the effectiveness of the Company’s Board of
Directors for the fiscal year ended March 2024 is provided below.
Method of evaluation
In December 2023, an anonymous external third-party questionnaire survey with approximately 40 questions(both multiple-choice and descriptive) was conducted with all ten directors, and the results were discussed at a
meeting of the Board of Directors to evaluate the effectiveness of the Board of Directors.
Summary of evaluation results
Overall, we judged that the effectiveness of the Board of Directors of the Company was adequately ensured.
In this evaluation of the effectiveness of the Board of Directors, it was confirmed that improvements were madein a number of issues identified in the previous evaluation, such as the diversification of the Board members, theavailability of deliberation time, discussions on sustainability, the timing and method of providing materials, andexplanations of the business environment and business model to the outside directors.
The main issues identified as evaluation results of the effectiveness of the Board of Directors are as follows:1)

Strengthening the support system for directors

5Corporate Governance
CORPORATE GOVERNANCE



Ensuring advance distribution of materials and improvement of comprehensibilitySecuring opportunities for explanations to the outside directors to understand the semiconductor businessand the Company's business modelEnhancing the support system for the Audit and Supervisory Committee, including strengthening theinternal audit department

2)

Securing time for deliberation on important strategic topics (Sustainability, human capital development,
etc.)

3)

Ensuring opportunities for business explanations and communication between the outside directors and theexecutive officers

4)

Continuous consideration of the ideal structure of the Board of Directors (diversity, ratio of outside
directors, succession planning, etc.)

Initiatives based on evaluation results
Based on the results of this evaluation, the company will work to further improve the effectiveness of the Boardof Directors by promoting continuous improvement activities on issues identified.
[Supplementary Principle 4-14-2 Training Policies for Directors]
For newly appointed internal directors and executive officers, the Company has a policy to improve their skills
by utilizing outside seminars for them to acquire the necessary knowledge regarding legal compliance, corporate
governance, finance and other matters.
For newly appointed outside directors, the Company explains industry trends and the business situation of theCompany, and also has a system in place whereby the new outside directors, after their appointment, can directly
request directors and executive officers in charge of business to provide an explanation to deepen theirunderstanding of the Company’s business.
In order to revitalize the deliberations of the Board of Directors, the costs of training sessions and socializing
opportunities, etc. in which each director voluntarily participates as necessary are to be borne by the Company.
[Principle 5-1 Policy for Constructive Dialogue with Shareholders]
The following is the Company’s policy regarding the development of systems and initiatives to promote
constructive dialogue with shareholders and investors.
Policy for initiatives to promote dialogueDisclose information in a timely and appropriate manner in accordance with laws and regulations, such as
the Financial Instruments and Exchange Act, and the Timely Disclosure Rules of the Tokyo Stock
Exchange.

Efforts will be made to engage in two-way communication with shareholders to explain the the Group's
management situation and operating policies in an easy-to-understand and accurate manner, and report the
feedback of shareholders’ opinions and requests to the Board of Directors as part of IR status reports, which
will be reflected in formulating management strategies, improving business operations and determining
information disclosure.

This will lead to sustainable growth of the Company and medium- to long-term enhancement of its
corporate value.

6

Corporate Governance
CORPORATE GOVERNANCE

Internal StructureThe person in charge of Investor Relations shall be the executive officer in charge of corporate planning,
and the department in charge of Investor Relations shall be the Public Relations & Investor Relations
Office.



Departments committed to Investor Relations (Public Relations & Investor Relations Office, Corporate
Planning Office, Corporate Affairs & Human Resources Division, Finance and Corporate Finance Division,etc.) will fully cooperate in preparing disclosure materials to promote dialogue with shareholders.

Report to the Board of Directors


The person in charge of Investor Relations regularly reports information and opinions from shareholders
and investors to the Board of Directors.

Initiatives to promote dialogue

Information that falls under the Timely Disclosure Rules shall be disclosed via TDnet (a system to realize
fair, prompt and extensive disclosure).

Disclose necessary information on the Investor Relations section of the Company’s website.



Set up opportunities for dialogue, such as individual meetings, group meetings and company briefings, andactively disclose information.



The Company will hold financial results briefings and disclose materials on the Investor Relations sectionof its website.

Management of insider information
Manage insider information appropriately in accordance with laws and regulations and internal company
regulations.



In order to prevent leaks of financial information and ensure fairness, the period from the day following thelast day of the fiscal period (quarterly financial results) to the day of the announcement of financial results
is designated as a “silent period,” during which, in principle, the Company refrains from responding tocomments or questions related to financial results. However, even during this period, timely disclosure may
be made in accordance with the Timely Disclosure Rules.

[Measures to realize management with capital cost and stock price in mind]
In promoting the solution SoC business, the Group is implementing management with capital profitability inmind.
Specifically, we set up multiple checkpoints for each business project, focusing on profitability and cash flow,
during the period from the beginning of the project to the acquisition of the project, and during the period fromthe acquisition to the start of mass production.
Once a year, we calculate the cost of capital for the fiscal year ended and reports the results compared to thereturn on capital (ROE, ROIC) to the Board of Directors.
In the fiscal year ended March 2023, we confirmed that the Group’s profitability exceeded the cost of capital
because the Group's ROE and ROIC exceeded the cost of capital according to our calculation.
Specific measures to further improve ROE and ROIC are as follows.


Through Securing of Proper Profits on a per project basis.

Pursuing development efficiency by strengthening development systems in line with the solution SoC

7

Corporate Governance
CORPORATE GOVERNANCE

buisiness.
By promoting these measures, we aim to increase our corporate value and improve our market valuation.
[Implementation of Dialogue with Shareholders]

We provide shareholders and investors with an interactive environment by disclosing the Group's latest
business results and business strategies on the shareholders and investors pages of our website, and by
posting a contact point for IR inquiries.



We hold quarterly financial results briefings and individual interviews with institutional investors andanalysts.



Dialogues with shareholders, investors, and analysts are reported to the Board of Directors and othermeetings to provide feedback to management.

2.

Capital Structure
Foreign Shareholding Ratio

30% or more

[Status of Major Shareholders]Name or Company Name

Number of Shares Owned

Percentage (%)

The Master Trust Bank of Japan, Ltd. (trust account)

4,552,200

12.79

SSBTC CLIENT OMNIBUS ACCOUNT

1,940,643

5.45

Custody Bank of Japan, Ltd. (trust account)

1,369,000

3.84

NORTHERN TRUST CO. (AVFC) RE NON TREATY

1,196,754

3.36

UEDA YAGI TANSHI Co., Ltd.

761,700

2.14

Nomura Securities Co., Ltd.

688,000

1.93

JAPAN SECURITIES FINANCE Co., Ltd.

594,200

1.67

STATE STREET BANK AND TRUST COMPANY

550,400

1.54

CENTRAL TANSHI Co., Ltd.

512,800

1.44

STATE STREET BANK WEST CLIENT-TREATY

436,600

1.22

CLIENTS ACCOUNT

505225505234

Name of Controlling Shareholder, if applicable(excluding Parent Company)-

Name of Parent Company, if applicable

None

Supplementary Explanation
1．The ratio of foreign shareholdings and the status of major shareholders are as of September 30, 2023.
2．Although the Statement of Large-Volume Holdings (the Statement of Changes) made available for public8

Corporate Governance
CORPORATE GOVERNANCE

inspection on December 22, 2023, indicated that Capital Research and Management Company held 1,716,018
shares (4.82% of the issued shares) as of December 15, 2023, the Company could not confirm its actual
shareholding as of September 30, 2023, and therefore did not include it in the above list of major shareholders.

3.

Corporate Attributes
Listed Stock Exchange and Market Segment

Tokyo Stock Exchange, Prime Market

Fiscal Year-End

MarchBusiness Sector

Electrical Appliances

Number of Employees (Consolidated) as of the End

1,000 or moreof the Previous Fiscal YearNet Sales (Consolidated) as of the End of the

100 billion yen or more but less than 1 trillion yen

Previous Fiscal Year
Number of Consolidated Subsidiaries as of the End

Fewer than 10of the Previous Fiscal Year

4.

Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder-

5.

Other Special Circumstances That May Have Material Impact on Corporate Governance-

II.

Business Management Organization and Other Corporate Governance Systems Regarding Decision-Making,Execution of Business, and Oversight in Management

1.

Matters Concerning Institutional Structure and Organizational Management, etc.
Organizational System

Company with Audit & Supervisory Committee

Directors
Number of Directors Stipulated in Articles ofIncorporation

10

Directors’ Term of Office Stipulated in Articles ofIncorporation

1 yearChairperson of the Board

President

Number of Directors

10Election of Outside Directors

ElectedNumber of Outside Directors

5

Number of Independent Directors among Outside
Directors

4

9

Corporate Governance
CORPORATE GOVERNANCE

Outside Directors’ Relationship with the Company (1)Name

Relationship with the Company (*1)

Attributes

Masatoshi Suzuki

From another company

Sachiko Kasano

LawyerYasuyoshi Ichikawa

CPA

Morimasa Ikemoto

From another company

Noriko Yoneda

Lawyer

a

b

c

d

e

f

g

h

i

j

k

*1 Categories for “Relationship with the Company”
a.

Person who executes business of the Company or a subsidiaryb.

Person who executes business at or a non-executive director of a parent companyc.

Person who executes business at a fellow subsidiaryd.

Person/entity for which the Company is a major client or a person who executes business for such person/entitye.

Major client of the Company or a person who executes business for such clientf.

Consultant, accounting expert, or legal expert who receives large amounts of cash or other assets in addition to
director/Audit and Supervisory Board Member compensation from the Companyg.

Major shareholder of the Company (in cases where the shareholder is a corporation, a person who executes business of thecorporation)h.

Person who executes business for a client of the Company (excluding persons categorized as any of d, e, or f above)(applies to self only)i.

Person who executes business for another company holding cross-directorships/cross-auditorships with the Company(applies to self only)j.

Person who executes business for an entity receiving contributions from the Company (applies to self only)

k.

Other

Outside Directors’ Relationship with the Company (2)NameMasatoshi Suzuki

Audit &
Designation as
Supervisory
Independent
Committee
Director
Member✓

Supplementary
Explanation of
the Applicable
Relationship-

10

Reasons for Appointment

Leveraging a wealth ofmanagement experience gained
from serving as a representative
director and in other positions atlisted companies, he supervises andadvises management from an
objective and neutral standpoint.
Therefore, we believe that he will
be able to appropriately perform
his duties as Outside Director froman independent position.
In addition, as Mr. Suzuki meetsthe requirements for Independent
Officer stipulated by Tokyo Stock
Exchange and the “IndependenceStandards for Outside Directors”
set forth by the Company, theCompany has designated him as
Independent Officer.

Corporate Governance
CORPORATE GOVERNANCE

Sachiko Kasano

Yasuyoshi Ichikawa✓

Morimasa Ikemoto

✓

✓

-

Based on her extensive experience
as an attorney and her deep insight
into corporate legal affairs andcompliance, she supervises andadvises management from an
objective and neutral standpoint.
While Ms. Kasano has noexperience of being involved incorporate management other thanserving in the past as Outside
Officer, the Company concluded
that she will be able to perform her
duties appropriately from an
independent standpoint.
In addition, as Ms. Kasano meetsthe requirements for Independent
Officer stipulated by Tokyo Stock
Exchange and the “IndependenceStandards for Outside Directors”
set forth by the Company, theCompany has designated her as
Independent Officer.

✓-

Based on his extensive experience
as a certified public accountant andhis deep insight into financial
accounting, he supervises andadvises management from an
objective and neutral standpoint.
While Mr. Ichikawa has noexperience of being involved incorporate management other thanserving in the past as Outside
Officer, the Company concluded
that he will be able to perform his
duties appropriately from an
independent standpoint.
In addition, as Mr. Ichikawa meetsthe requirements for Independent
Officer stipulated by Tokyo Stock
Exchange and the “IndependenceStandards for Outside Directors”
set forth by the Company, theCompany has designated him as
Independent Officer.

-

He has served as a director who is
an audit and supervisory committee
member and a full-time auditor of alisted company, and has
considerable knowledge of financeand accounting, internal control
and auditing. In addition, from
June 2018 to July 2022, he advised
the management of the Company
as Outside Director of theCompany. Therefore, the Company
concluded that he will be able to11

Corporate Governance
CORPORATE GOVERNANCE

perform his duties appropriately.
Although Mr. Ikemoto meets therequirements for Independent
Officer stipulated by Tokyo Stock
Exchange and the “IndependenceStandards for Outside Directors”
set forth by the Company, theCompany has not designated him
as Independent Officer✓

Noriko Yoneda✓-

She has extensive experience as an
attorney and deep insight into
corporate legal affairs andcompliance. While Ms. Yoneda has
no experience of being involved incorporate management other thanserving in the past as Outside
Officer, the Company concluded
that she will be able to perform her
duties appropriately from an
independent standpoint.
In addition, as Ms. Yoneda meetsthe requirements for Independent
Officer stipulated by Tokyo Stock
Exchange and the “IndependenceStandards for Outside Directors”
set forth by the Company, theCompany has designated her as
Independent Officer.

[Audit & Supervisory Committee]
Composition of Supervisory Committee and Attributes of the Chairperson
All Committee
Members(persons)
Audit & Supervisory
Committee

Full-timeMembers(persons)

InsideDirectors(persons)3

Appointment of Directors and/or Staff to Support theSupervisory Committee

1

OutsideDirectors(persons)0

Committee
Chair(Chairperson)
3

OutsideDirector

Appointed

Matters Concerning Independence of Said Directors and/or Employees from Executive Officers
To support the duties of the Audit & Supervisory Committee, the Company established a dedicated Audit &Supervisory Committee Secretariat (3 persons). In order to ensure the independence of the Audit & Supervisory
Committee Secretariat, persons belonging to the Audit & Supervisory Committee Secretariat shall provide
support to the Audit & Supervisory Committee under the direct directions and chain of command from the Audit& Supervisory Committee, and shall obtain prior consent from the Audit & Supervisory Committee forappointments, transfers and other personnel matters.
Status of Coordination between Audit & Supervisory Committee, Accounting Auditor and Internal Audit
Department
In order to ensure the effectiveness and efficiency of audits, the Audit & Supervisory Committee receives
explanations of accounting audit plans and results, and exchanges information and opinions as necessary, in

12Corporate Governance
CORPORATE GOVERNANCE

cooperation with the Accounting Auditor. In cooperation with the Internal Audit Department, which is theinternal audit division, the Audit & Supervisory Committee approves the annual audit plan of the Internal Audit
Department and receives its reports on the results of internal audit, while the Audit & Supervisory Committee
directs the Internal Audit Department when necessary.

[Voluntary Established Committees]
Voluntary Establishment of Committees Equivalent
to Nomination Committee or Compensation
Committee

Appointed

Status of Voluntarily Established Committees, Attributes of Members Constituting the Committee and theCommittee Chair (Chairperson)
Committee’s
Name

All
Full-time Inside
Outside In-house
Committee
Other
Members Members Directors Director Experts
Chair(persons)(persons) (persons) (persons) (persons) (persons)(Chairperson)

Voluntarily
Established
Committee
Equivalent toNomination
Committee

Nomination
andCompensation
Committee

3

0

1

2

0

0

OutsideDirector

Voluntarily
Established
Committee
Equivalent toCompensation Committee

Nomination
andCompensation
Committee

3

0

1

2

0

0

OutsideDirector

Supplementary Explanation
The current members of the Nomination and Compensation Committee are as follows:
Chairperson: Masatoshi Suzuki (Independent Outside Director)
Committee members: Sachiko Kasano (Independent Outside Director), Masahiro Koezuka (Representative
Director, Chairman and President)
For details on Nomination and Compensation Committee, see “II 2. Matters Concerning Functions of Business
Execution, Auditing and Supervision, Nomination, and Remuneration Decisions (Overview of Current Corporate
Governance System)” in this report.

[Matters Concerning Independent Directors]
Number of Independent Directors

4

Other Matters Concerning Independent Directors
Four out of five Outside Officers, who qualify as independent officers, are appointed as independent officers.
The Company has established the following independence standards for outside directors.
Independence Standards for Outside Directors
The Company considers Outside Directors or candidates for such directors to be independent if it determines thatnone of the following 1 to 9 apply:13

Corporate Governance
CORPORATE GOVERNANCE

However, even if a person falls under any of the following 1 to 9, he or she may be appointed as Independent
Outside Director of the Company if the Company believes that he or she has sufficient independence, provided
that the reasons for such independence are publicly disclosed.
1.

A person whose major client or supplier is a Socionext Group Company (Note 1) (Note 2) or a businessexecutive person thereof (Note 3)

2.

Major client of (Note 4) or major lender (Note 5) to Socionext Group Companies or a business executive
person thereof3.

An outside expert who receives a substantial amount of compensation from Socionext Group Companies in
addition to officer’s compensation (Note 6), or a person who belongs to the organization if the outside
expert is an organization such as a corporation

4.

A member or employee of the Accounting Auditor of the Company

5.

A person who receives a large donation from a Socionext Group Company (Note 7), or a person who
belongs to the organization if the recipient of such a donation is an organization such as a corporation

6.

A business executive person of a corporation or other organization that accepts directors or other officers
from a Socionext Group Company

7.

A person who has fallen under any of the above items 1 through 6 in the past three years

8.

A major shareholder of the Company (Note 8) or a business executive person thereof

9.

A close relative of one of the following (Note 9):(1)

Persons listed in the above 1 through 8(2)

A business executive person of a Socionext Group Company(3)

A business executive person who has been an executive person of a Socionext Group Company in the past
three years(Note 1) “Socionext Group Companies” means Socionext Inc. and its subsidiaries.
(Note 2) “A person whose major client or supplier is a Socionext Group Company” means a party whose sales toSocionext Group Companies account for 2% or more of its annual consolidated total sales in the most recent
fiscal year.
(Note 3) A business executive person is defined in Article 2, Paragraph 3, Item 6 of the Regulations for
Enforcement of the Companies Act.
(Note 4) “Major client of or supplier to a Socionext Group Company” means a party to which 2% or more ofSocionext Group Companies’ annual consolidated total sales in the most recent fiscal year are recorded.
(Note 5) Major lender is a major lender stated in the Company’s most recent Business Report.
(Note 6) A substantial amount of compensation means that an individual is paid at least 10 million yen per year in
the most recent business year of a Socionext Group Company, and an organization such as a corporation is paid
at least 2% of the total annual consolidated sales in the most recent business year of the organization.
(Note 7) A large donation means a donation of at least 10 million yen per year in the most recent fiscal year of a
Socionext Group Company.
(Note 8) A major shareholder is a person who holds 10% or more of the voting rights.
(Note 9) A close relative is a spouse, a relative within the second degree of kinship or a relative living together.

[Incentives]
Implementation Status of Measures related toIncentives Granted to Directors

Introduction of Performance-Linked Remuneration
Scheme14

Corporate Governance
CORPORATE GOVERNANCE

Supplementary Explanation for Applicable Items
For details, see “II 1. [Director Remuneration] Disclosure of Policy on Determining Remuneration Amounts andthe Calculation Methods Thereof” in this report.

Persons Eligible for Stock Options

Inside Directors, Employees, Other

Supplementary Explanation for Applicable Items
As an incentive program aimed at accelerating preparations for listing, the Company has granted stock options oneight occasions to employees who joined the Company before the end of December 2020 (non-executive
directors are not eligible for the granting thereof).
[Director Remuneration]
Status of Disclosure of Individual Directors’
Remuneration

No disclosure of remuneration for any Directors

Supplementary Explanation for Applicable Items
In accordance with laws and regulations, the total amount is disclosed separately for Directors who are not Audit& Supervisory Committee Members and Directors who are Audit & Supervisory Committee Members. If there isa person for whom the total amount of consolidated compensation, etc. is 100 million yen or more, the Company
plans to disclose such person separately in the Annual Securities Report in accordance with laws and regulations.
Policy on Determining Remuneration Amounts andthe Calculation Methods Thereof

Established

Disclosure of Policy on Determining Remuneration Amounts and the Calculation Methods Thereof
Policy on determining compensation, etc. for Directors (excluding Directors who are Audit & Supervisory
Committee Members) (overview)
A.

Details of the Directors’ Compensation Systema.

Basic Views
Highly linked to the company’s performance and highly transparent and objectiveEnhancement of corporate value and compensation should be linked in order to share a sense of interest
with shareholders

Contribute to securing and retaining a global management team that meets competent capability
requirements in realizing the corporate visionb.

Compensation level

In light of the business environment surrounding the Company, we will objectively compare compensation levels
with those of other companies in the same industry or other companies of the same size, based on the data fromresearch firms, and establish appropriate levels relevant for the positions.
c.

Process for determining compensation
The Company has established a voluntary Nomination and Compensation Committee to ensure theappropriateness of compensation levels and amounts and the transparency of the decision-making process.
The chairperson and the majority of committee members are Independent Outside Directors. The Board of
Directors consults with the Nomination and Compensation Committee on basic policies and decision
procedures. The recommendations of the Nomination and Compensation Committee are deliberated by the
Board of Directors, and the Board of Directors decides the basic policy and decision procedures and makesa resolution on the agenda for the General Meeting of Shareholders in the event that the upper limit of totalcompensation is reviewed.

The specific amount of basic compensation and incentive compensation (cash and stock) for eachindividual is determined within the total amount of compensation approved by the General Meeting of
Shareholders, based on the report made by the Nomination and Compensation Committee to the Board of15

Corporate Governance
CORPORATE GOVERNANCE

Directors, and subject to approval by the Nomination and Compensation Committee, and is determined at
the discretion of the Representative Director, Chairman and President, based on a resolution of the Board of
Directors.
B.

Compensation structurea.

Executive Director

1)

Basic compensation: Based on the scope of responsibility and role (position) in the Company, a fixedamount is paid as basic compensation

2)

Cash incentive compensation: Payment by cash (bonus) as performance-based compensation based on theevaluation of performance results in the target year

3)

Stock incentive compensation: Payment by stock as performance-based restricted-stock compensation
based on the evaluation of performance results in the target year



If the performance target is 100% achieved, the percentage of the above proportion is 1) 60%, 2) 20% and3) 20%.

As evaluation items and indicators for the performance-based portion (cash and stock), we consider four
items of “net sales,” “operating profit,” and “design win amount,” and “business transformation, growthstrategy, ESG measures, etc.” with a weighting of 25% for each. In addition, we evaluate all of these items
based on comprehensive judgment by the Nomination and Compensation Committee. The results of theevaluation are reported to and deliberated on by the Board of Directors.

b.

Independent Outside Directors (non-executive directors)

In view of the role of supervising the execution of business, only fixed basic compensation is paid.

[Support System for Outside Directors]
The Representative Director, Chairman and President or the Board of Directors Secretariat provides the necessary
support to outside directors, including providing supplementary explanations on the business overview andproposals to be submitted to the Board of Directors. Furthermore, for Outside Directors who are Audit &Supervisory Committee Members, the Audit & Supervisory Committee Secretariat provides support for theiractivities.
[Statuses of Persons Who Have Retired as Representative Director and President, etc.]
Information on Persons Holding Advisory Positions (Sodanyaku, Komon, etc.) after Retiring as Representative
Director and President, etc.

Name

Yoshifumi
OkamotoJob title/
position
SpecialTechnology
Adviser

Responsibilities

Terms and Conditionsof Employment(Full/part time,
with/without
remuneration, etc.)

Date whenformer role aspresident/
CEO
ended

Promote technologicalcollaboration withcustomers and academic
institutions, etc.

Terms andConditions: Full-time
Remuneration: With
remuneration

March 30,
2022

Number of Persons Holding Advisory Positions (Sodanyaku, Komon, etc.)
After Retiring as Representative Director and President, etc.

16

1

Term

From March
30, 2022,
to March 31,2024

Corporate Governance
CORPORATE GOVERNANCE

Other Related Matters
The Board of Directors has resolved to appoint the above advisor, and in accordance with the Advisory
Regulations, the term of office is one year in principle, and an appropriate level of compensation is set inconsideration of the nature of the work, experience, knowledge, and social position.
Following the establishment of the Nomination and Compensation Committee on March 30, 2022, theappointment of advisor (including continuation) is subject to a resolution of the Board of Directors after receivinga report from the Nomination and Compensation Committee on the necessity and appropriateness of thetreatment.

2.

Matters Concerning Functions of Business Execution, Auditing and Supervision, Nomination, andRemuneration Decisions (Overview of Current Corporate Governance System)
The Company’s business execution and monitoring systems are as follows:
Board of Directors
The Board of Directors makes decisions on important management matters and matters stipulated by laws andregulations and the Articles of Incorporation, and continuously supervises the status of business execution. In
addition, the Company employs multiple independent outside directors who are experts in diverse fields tostrengthen the supervisory function of business execution and develop an effective system through appropriate
advice. In principle, the Board of Directors meets once a month on a regular basis, and extraordinary meetings
are held as necessary.
The Board of Directors consists of ten members in total, with five internal directors and five outside directors.
Audit & Supervisory Committee
The Audit & Supervisory Committee conducts audits on the legality and appropriateness of the execution ofduties by directors, ensures the soundness of the Company, and acts in the common interest of shareholders witha view to sustainable enhancement of corporate value. One full-time Audit & Supervisory Committee Member iselected to enhance the effectiveness of the audit and supervisory functions by attending important meetings andstrengthening cooperation with the Accounting Auditor and Internal Audit Department. In principle, the Audit &Supervisory Committee meets once a month, and extraordinary meetings are held as necessary.
The Audit & Supervisory Committee consists of three Directors, of which three are outside directors.
Nomination and Compensation Committee
The Nomination and Compensation Committee, which is composed of members elected from among thedirectors by resolution of the Board of Directors, is established as a voluntary advisory body to the Board of
Directors with the aim of improving transparency regarding election and compensation of directors who are not
Audit and Supervisory Committee Members and executive officers, and election of directors who are Audit andSupervisory Committee Members. The Nomination and Compensation Committee is consulted by the Board of
Directors and makes recommendations on the election and compensation of directors who are not Audit andSupervisory Committee Members and executive officers, and the election of Directors who are Audit andSupervisory Committee Members. The Committee formulates election criteria and policies for the personnel of
directors and executive officers, and policies for the compensation of directors who are not Audit andSupervisory Committee Members and executive officers, and deliberates compensation levels. To adopt
independent perspectives, an Outside Director chairs the Committee and two-thirds of the Committee members
are Outside Directors.

17

Corporate Governance
CORPORATE GOVERNANCE

Outside Directors’ Meeting
The Outside Board of Directors’ group meeting is held every month to gather and share information necessary for
Outside Directors’ management decision-making and to exchange opinions including their ideas and necessity of
discussion for the Board of Directors. The meeting is chaired by a Lead Independent Outside officer. The Outside
Directors’ Meeting is composed of all outside directors, and the representative director participates as necessary.
Lead Independent Outside Director
Our company selects the Lead Independent Outside Director from among the Independent Outside Directors.
The role of the Lead Independent Outside Director is to act as a liaison between the management and theIndependent Outside Directors and to facilitate dialogue between them.
In addition, the Outside Directors’ Meeting is convened to determine the agenda of the meeting when necessary,and serves as the chairman of the meeting, and the results of the deliberations are communicated to the
management or the Board of Directors to encourage discussion.
Management Committee
The Management Committee deliberates and makes decisions on important matters relating to the execution of
the Group’s business and on important matters to be submitted to the Board of Directors, as determined by the
Board of Directors regarding the transfer of authority. In principle, the Management Committee meets once a
week. The Committee consists of the Representative Director, Chairman, President and CEO, executive officers,
and organizational heads appointed by the CEO.
Risk and Compliance Committee
The Risk and Compliance Committee discusses to identify, analyze and take measures for risks including
information security, compliance and disasters. Business risks, such as those relating to the business environment,
strategy, finance, labor management and supply chain, are deliberated by the Management Committee. The Risk
and Compliance Committee meets quarterly.
The Committee consists of the chairperson (Representative Director, Chairman, President and CEO), committee
members (executive officers) and organizational heads appointed by the CEO.
Internal Audit Department
The Internal Audit Department, which is established directly under the CEO, conducts internal audits on theoverall development of internal controls over management activities and the status of execution of business in theGroup. The Internal Audit Department’s audit plan is approved by the CEO and the Audit & Supervisory
Committee, and the results of the Internal Audit Department’s audit are reported to the CEO and the Audit &Supervisory Committee. In addition, the Audit & Supervisory Committee can direct the Internal Audit
Department as necessary.
Policy on election and dismissal of Directors
The Company sets forth the following policies, standards and procedures for the election and dismissal of
directors of the Company.
1.

Policies for election(1)

In electing director candidates, consideration shall be given to the composition of the Board of Directors sothat the Board of Directors can fully exercise its functions and contribute to the sustainable development of
the Group, while ensuring diversity by balancing the experience, knowledge and abilities of each director.

18

Corporate Governance
CORPORATE GOVERNANCE(2)The Board of Directors shall consist of not more than ten members, and at least one-third of them shallmeet the independence standards for outside directors set by the Company.

(3)

The Audit & Supervisory Committee shall, in principle, have at least one legal specialist and one financial
accounting specialist.

2.

Election criteria for director candidates(1)

Requirements common to all directors

1)

A person must have the personality, knowledge, insight and experience required of a director, as well as ahigh level of awareness in legal compliance and ethics.

2)

A person must understand the Group’s management philosophy and have the integrity to earn the trust ofvarious stakeholders.

(2)

Requirements for Internal Directors

1)

Have a high level of knowledge of the Group’s business areas and a wealth of experience and track recordin specialized areas.

2)

Can promote appropriate organizational management and business execution by making quick and accurate
management decisions while overviewing management from a company-wide and medium- to long-term
perspective.

(3)

Requirements for Outside Directors

1)

Can perform supervisory functions from a fair and broad perspective based on extensive experience andknowledge in management and areas of expertise.

2)

Can discuss and offer opinions in a frank and constructive manner toward sustainable development of theGroup.

3.

Procedures to elect director candidates

The Board of Directors decides the candidates for directors to be proposed to the General Meeting of
Shareholders, based on the recommendations of the Nomination and Compensation, in which the majority ofmembers and the chairperson are Independent Outside Directors. Election of candidates for Directors who are
Audit & Supervisory Committee Members shall be subject to the prior consent of the Audit & Supervisory
Committee.
4.

Standards and procedures for dismissing directors

When a director no longer meets the requirements set forth in “2. Election criteria for director candidates” or isdeemed to lack eligibility as a director, the Board of Directors shall take appropriate measures, such asprocedures for dismissal under laws and regulations, based on the report of the Nomination and Compensation
Committee.

3.

Reasons for Adoption of Current Corporate Governance System

To increase corporate value over the medium to long term, the Company has established a corporate governancesystem based on a company with an audit and supervisory committee.
(1)

Strengthening supervisory functions

The Board of Directors, which includes Independent Outside Directors, and the Audit & Supervisory Committee,
the majority of whose members are independent outside directors, will strengthen the supervisory function overbusiness execution.
(2)

Ensuring management transparency

19

Corporate Governance
CORPORATE GOVERNANCE

The Company ensures management transparency by appointing more than one-third of its directors as
independent outside directors and by having the Nomination and Compensation Committee, a majority of whose
members are independent outside directors, report to the Board of Directors on the nomination and compensationof officers.
(3)

Acceleration of decision-making

The Board of Directors focuses on guiding the course of action for management, making important decisions andoverseeing the execution of business operations. By delegating its executive authority to the CEO and executive
officers, we aim to promote business operations and increase corporate value through accelerated
decision-making.

III.

Implementation of Measures for Shareholders and Other Stakeholders

1.

Measures to Vitalize the General Shareholder Meetings and Facilitate Exercise of Voting Rights
Supplementary Explanation2.

Early Posting of Noticeof the General
Shareholders Meeting

As a general rule, we send out a convocation notice three weeks prior to the General
Shareholders Meeting to give shareholders enough time to consider the matter.
Convocation notices will also be disclosed on the Company website before they aresent out.

Scheduling of theGeneral Shareholders
Meeting During
Non-Peak Days

In order to encourage more shareholders to participate, we make efforts to avoid
holding shareholder meetings on peak days (days when many other companies holdtheir shareholders meetings).

Electronic Exercise of
Voting Rights

Shareholders can exercise their voting rights via a voting website or a platform forthe electronic exercise of voting rights.

Participation in a
Platform for theElectronic Exercise of
Voting Rights and Other
Initiatives to Enhance
Environment for
Institutional Investors to
Exercise Voting Rights

The Company participates in the electronic voting platform for institutional
investors operated by ICJ, Inc.

Provision of Notice (orSummary of Notice) of
the General Shareholders
Meeting in English

An English version of the notice is available on the websites of the Company and
the Tokyo Stock Exchange and on the electronic voting platform for institutional
investors.

Other

We make efforts to create convocation notices that are easy to read and understandfor shareholders.
At the General Shareholders Meeting, we also strive to explain the contents of our
proposals and reports to shareholders so that they can understand them.

Status of IR-related Activities

Supplementary Explanation

Formulation andPublication ofDisclosure Policies

The disclosure policy is available on the Company website.
https://www.socionext.com/en/ir/management/disclosure.html

Regular Investor
Briefings Held forIndividual Investors

We will consider holding briefing sessions for individual
investors, taking into account the percentage of shares held byindividual shareholders.

20

Explanation by arepresentative
director or arepresentative
executive officer

NoneCorporate Governance
CORPORATE GOVERNANCE

Regular Investor
Briefings Held for
Analysts andInstitutional Investors

We hold quarterly financial results briefings.

Held

Regular Investor
Briefings Held forOverseas Investors

We provide opportunities for dialogue with key institutional
investors.

Held

Online Disclosure of
IR Information

We have set up a page for shareholders and investors to disclose
legal disclosure materials and financial results briefing materials.
https://www.socionext.com/en/ir/

Establishment of
Department and/or
Placement of aManager in Charge ofInvestor Relations

The Public Relations & Investor Relations Office is in charge ofinvestor relations.

3.

Status of Measures to Ensure Due Respect for Stakeholders
Supplementary Explanation
Establishment ofInternal Rules
Stipulating Respect
for the Position of
Stakeholders

In the Mission, Value and Action Policy and the CSR Policy, the Company has
established a policy of respecting the positions of all stakeholders through honest,balanced and fair relationships with shareholders, customers, business partners,
employees and society.

Implementation ofEnvironmental
Preservation
Activities and CSR
Activities, Etc.

Our sustainability initiatives are disclosed on the Company website.
https://www.socionext.com/en/sustainability/

Formulation of
Policies, etc. on
Provision ofInformation to
Stakeholders

The disclosure policy is available on the Company website.
https://www.socionext.com/en/ir/management/disclosure.html

IV.

Matters Concerning the Internal Control System

1.

Basic Views on Internal Control System and Status of Development Updated
In accordance with the Companies Act, the Company’s Board of Directors approved the Basic Policy on theDevelopment of Internal Control Systems, and the Company has developed and been operating an internal
control system in the Group based on the policy.
1.

Systems to ensure that the execution of the duties by Socionext Personnel complies with laws andregulations and the Articles of Incorporation(1)

The company is committed to promoting compliance, including compliance with laws and regulations, by
establishing internal rules, such as the “CSR Basic Policy” and the "Compliance Standards", and making
the Group's officers and employees aware of and abide by them.

(2)

The company shall clarify laws and regulations concerning the Group's busineess activities, establish
internal rules necessary for compliance with them, conduct education, and develop a monitoring system.

(3)

When the Group's officers and employees become aware of potentially material noncompliance related to
the Group's business activities, they immediately notify the Board of Directors and the Audit andSupervisory Committee of such information through their business lines.

(4)

To enable early detection of compliance issues, the company shall set up internal and external contact

21

Corporate Governance
CORPORATE GOVERNANCE

points for whistleblowing from the Group officers and employees, while ensuring that whistleblowers areprotected.
(5)

The company regularly receives reports on the status of the execution of its duties from the Group's
executors at meetings of the Board of Directors and confirms that there are no non-compliance in theexecution of its duties.

(6)

The company shall conduct internal audits to confirm the status of the Group's business execution and toensure compliance with laws and regulations, the Articles of Incorporation, and to improve operational
efficiency.

(7)

The Group shall stand firm against anti-social forces, have no relationship with them, and respondsystematically in cooperation with external specialized agencies.

2.

Systems under which information regarding execution of duties by Directors shall be retained and managed(1)

The company shall appropriately store and manage documents related to the execution of duties byDirectors and other important information based on the “Important Document Management Regulations”
and by designating a custodian.

(2)

The company shall establish a system for the directors to view documents to check the status of theexecution of duties at all times.

3.

Regulations and other systems for the risk management of loss

(1)

The company shall establish a risk management system for the Group based on the "Risk Management
Standards". Risk management for overall management is carried out by the Management Committee, andrisk management for disasters/accidents, compliance, information security, etc. is carried out by the Risk
and Compliance Committee.

(2)

The company shall systematically and continuously identify and assess risks that could cause losses to theGroup, appoint an officer to take charge of each identified risk, clarify the system of responsibility, anddevelop and implement countermeasures. In addition, when risks materialize, the company shall undertake
activities to minimize the losses incurred.

(3)

Based on the "BCP (Business Continuity Plan) / BCM (Business Continuity Management) Standards," thecompany shall clarify its responsibility system, prepare for unforeseen events such as disasters in the Groupand business partners, and conduct activities to ensure business continuity in the Group.

(4)

Based on the “Information Security Standards,” the company shall clarify its responsibilities andimplement specific measures for the Group's information security.

(5)

The company regularly reports to the Board on the status of the Group's risk management activities.

4.

Systems to ensure efficient execution of duties by Directors(1)

The company separates the supervisory function of management from the executive function, and theBoard of Directors determines basic management policies and important business execution, and supervises
the executive function. the company has introduced an executive officer system in which the CEO andexecutive officers are responsible for the executive functions of the company. In addition, a management
committee is established to efficiently conduct multifaceted reviews in the executive function, anddeliberates and decides on important matters related to management strategy and business execution.

(2)

The company shall clarify the duties of the Group's officers and employees and the reporting obligations of
its subsidiary officers and employees to the company through the "Socionext Group Approval Authority
and Affiliate Management Regulations" and "Regulations on Organization and Separation of Duties."

22Corporate Governance
CORPORATE GOVERNANCE(3)

The company shall establish a system for the efficient and lawful conduct of the Group's business by
establishing the business process fundamentals for the business.

(4)

The company shall continuously promote the development of internal control systems and the reform ofbusiness processes in the Group.

(5)

The company disseminates its management policy throughout the Group and formulates a business plan in
March of each year that includes the next fiscal year and beyond. At monthly meetings of the Board of
Directors, the Company monitors and supervises the achievement of management objectives by reportingon financial results and the status of business execution.

5.

Matters relating to Socionext Personnel assisting with the duties of Audit & Supervisory Committee andmatters relating to the independence, etc. of such Socionext Personnel from Directors (excluding Audit &Supervisory Committee Members)(1)

The Company shall have Socionext Personnel to assist with the duties of the Audit & Supervisory
Committee of the Company and shall assign appropriate personnel with the abilities and knowledge
required by the Audit & Supervisory Committee of the Company.

(2)

In order to ensure the independence of the Socionext Personnel referred to in the preceding item and theeffectiveness of directions given to such Socionext Personnel by Audit & Supervisory Committee of theCompany, the Company shall obtain the consent of the Audit & Supervisory Committee with respect tomatters relating to personnel, such as appointment, transfer and compensation of such Socionext Personnel.

(3)

In principle, the Company shall not allow the Socionext Personnel described in the item (1) above to serve
concurrently with any other organizations. However, when it becomes necessary to have the Socionext
Personnel with special expertise concurrently serve at the request of the Audit & Supervisory Committee of
the Company, consideration shall be given to ensuring the independence set forth in the preceding
paragraph.

6.

Systems for Reporting to the Audit and Supervisory Committee(1)

Officers and employees of the Group shall regularly report to the Audit and Supervisory Committee of thecompany on their performance of duties and provide Audit and Supervisory Committee members with
opportunities to attend important meetings.

(2)

Officers and employees of the Group shall immediately report to the Audit & Supervisory Committee of
the Company when a risk affecting their management or performance occurs or when they become awareof a fact that constitutes a material breach of compliance with respect to the conduct of their businessactivities.

(3)

The Group shall not treat any officers or employees unfavorably for the reason of making a report under thepreceding two items.

7.

Other systems for ensuring the effectiveness of audits by the Audit and Supervisory Committee(1)

Officers and employees of the Group shall exchange information with the Audit and Supervisory
Committee upon request from the Audit and Supervisory Committee.

(2)

The Audit Department regularly shall report the status and results of audits to the Audit and Supervisory
Committee. The Audit and Supervisory Committee may give instructions to the Audit Department as
necessary.

(3)

The Audit and Supervisory Committee receives reports from accounting auditors on plans and results ofaccounting audits from time to time, and periodically exchanges information with accounting auditors.

23

Corporate Governance
CORPORATE GOVERNANCE(4)

Expenses incurred in the performance of the duties of the Audit & Supervisory Committee of the Company
shall be in accordance with Article 399-2, Paragraph 4 of the Companies Act, and the Company shallestablish procedures for the requests in the same paragraph.

2.

Basic Views on Measures for Eliminating Antisocial Forces and Status of Development
The Company takes a firm stand against antisocial forces and clearly declares in its internal regulations that it
will not have any relationship with any party, making sure that all Socionext Personnel are fully aware of this andpromoting initiatives to eliminate antisocial forces.
(1)

In contracts with business partners and other parties, the Company strives to ensure thorough enforcementof such provisions by establishing clauses on the elimination of antisocial forces or concluding memoranda
on antisocial forces.

(2)

By appointing a person responsible for preventing unjust demands and joining the Kanagawa Corporate
Defense Countermeasures Council, we have been working to establish a system to collaborate with thepolice and gather information on antisocial forces.

(3)

With respect to our business partners, we use newspapers, web article search services, etc., and conduct
inspections of all our business partners regularly and upon new business transactions to determine whether
they are or are suspected of being associated with antisocial forces.

Employees hired and new candidates for directors are investigated in the same way as business partners. In
addition, when hiring employees, the Company obtains a written pledge from the new employees stating thatthey are not associated with antisocial forces.
We also conduct a similar survey on a certain range of major shareholders.

V.

Other

1.

Adoption of Anti-Takeover Measures
Adoption of Anti-Takeover Measures

None

Supplementary Explanation for Applicable Items
2.

Other Matters Concerning the Corporate Governance System“Overview of Timely Disclosure System”
1.

Collection of disclosure information

In accordance with the Board Regulations and the Management Committee Regulations, the Company has asystem in which information required to be disclosed in a timely way will be gathered in these committees. The
Corporate Vice President in charge of corporate planning, who is responsible for external disclosure, attends
these committees and Secretariats of the Board of Directors and the Management Committee to judge whether
timely disclosure is necessary.
2.

Publication of disclosure information

If it is judged that the matter is subject to timely disclosure, the Public Relations & Investor Relations Officeshall publish such information after obtaining the approval of the CEO of the disclosure materials.

24Corporate Governance
CORPORATE GOVERNANCE[Chart (Reference material)]

General Meeting of Shareholders
Appoint and dismiss

Appoint and dismiss[Supervision]

Appoint and dismiss

ReportInquireNomination andCompensation Committee
Outside Board Directors’Meeting

Board of Directors
Audit

Board Directors
Respond

Coordinate

Audit & Supervisory
Committee

Accounting
AuditorBoard Directors (Audit & Supervisory Committee members)
Audit

Coordinate

Audit
Report &discuss

Appoint,
dismiss,
supervise

Select, dismiss,supervise

ReportInstruct
Instruct

Representative Director, Chairman, President and CEO

Internal Audit
Department

ReportExecutive Officers
in charge

ReportRisk and Compliance
Committee

InstructManagement Committee

Executive Officers
ReportReportImplement

Business & operational groups and subsidiaries

25

Internal
auditing

Corporate Governance
CORPORATE GOVERNANCE[Overview of Timely Disclosure System (Chart)]

東京証券取引所（TDnet）
Tokyo Stock Exchange (TDnet)
Implementationof information disclosure
情報開示の実施

Public Relations 広報IR室& Investor Relations Office(Department
inchargeof information disclosure)（情報開示担当部署）
Directions for information
情報開示の指示disclosure

The Boardof Directors
取締役会

Resolution
or report
決議または報告CEO

経営企画担当執行役員
Corporate Vice President
in charge of Corporate Planning(Head ofinformation
management)（情報管理責任者）
Submissionof disclosure materials
開示資料の提出

開示資料作成Preparationof disclosure materials

開示資料作成Preparationof disclosure materials(Disclosureof facts occurred/decisions made)（発生事実／決定事実に関する開示）(Disclosureof financial information)（決算情報に関する開示）

取締役会・経営委員会事務局
Secretariat of the Boardof Directors and the Management Committee(Corporate Affairs & Human
Resources Division, Corporate Planning Office)(総務人事統括部･経営企画室)
Reportof facts occurred/
発生事実/決定事実に
decisions made
関する報告

Report of financial
information
決算情報に関する報告

Each Group in the Company and the
当社及びグループ会社
Group Company 各部門

Corporate
財務経理部
Finance
Division[Facts occurred/decisions made][Financial Information]【発生事実／決定事実】【決算情報】

26

Corporate Governance
CORPORATE GOVERNANCE[Skill matrix of Directors (Reference material)]

Name
GenderOutsideDirector

Independent
Officer

Audit &
Supervisory
Committee
M ember

1)

2)

3)

4)

5)

M anagement
experience

Semiconductorbusiness

International(Overseas
experience)

Finance andAccounting

Legal andCompliance

✓

✓

✓

✓

✓

Masahiro Koezuka

Male

Koichi Otsuki

Male

✓

Noriaki Kubo

Male

✓

Yutaka Yoneyama

Male

✓

Hisato Yoshida

Male

✓

Masatoshi Suzuki

Male

✓

✓

Sachiko Kasano

Female

✓

✓
✓

Male

✓

Morimasa Ikemoto

Male

✓

Noriko Yoneda

Female✓Yasuyoshi Ichikawa

✓

✓

✓

✓

✓
✓

✓

✓

✓

✓

✓

✓

27