English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

values for each attribute in order to provide all employees with equal opportunities for assessment and promotion.
[Supplementary Principle 3.1.3 Disclosure, Etc. Based on TCFD Recommendations]
The Company is engaged in the planning, development, and sales of cloud-based business card management services, etc., andas of today, it does not foresee any impact of climate change-related issues on the Company’s business. Therefore, it does notmake any disclosure, etc. based on TCFD recommendations. However, the Company regards addressing climate change-related
issues as an important initiative to ensure stable development of the economy and secure a foundation for the livelihoods of people.
To this end, the Company is taking actions such as strict energy-saving and digitizing of documents, etc., as well as allocating apart of its revenue to tree-planting activities.
[Supplementary Principle 4.1.3 Succession Plan]
The Company regards a succession plan for the CEO and other top executives as an important issue in the long term and believes
that it is a matter that should be considered going forward.
[Supplementary Principle 4.10.1 Use of Optional Approach]
The Company is a company with Audit & Supervisory Committee and seeks to enhance overall governance functions of the Boardof Directors by multilaterally utilizing the monitoring function of the Audit & Supervisory Committee that consists only of Outside
Directors. In addition to the fact that half of the Audit & Supervisory Committee consists of women, each of the Outside Directors
has a wide range of abundant knowledge and experience, and we believe that we have established an adequate system in termsof diversity and skills, including gender.
Based on these situations, in order to avoid issues arising from setting up organizations whose purposes overlap, such as an issueof making a decision-making process complicated or conflicted, the Company considers that it has no need to separately set up
any optional advisory committees that mainly consist of Independent Outside Directors.
The Audit & Supervisory Committee deliberates on the appointment and dismissal of Directors, and the Company has a policy of
deciding the details of individual remuneration for Directors after confirming the intentions of all Outside Directors, in order toestablish a system for appropriate involvement and advice.

[Disclosure Based on Principles of the Corporate Governance Code] Updated[Principle 1.4 Cross-Shareholdings]
From the viewpoint of corporate governance, the Company will not conduct cross-shareholdings for the purpose of merely securing
stable shareholders. If the Company conducts cross-shareholdings, the Company will do so only after the Board of Directors
examines whether the cross-shareholdings are reasonable and appropriate.
[Principle 1.7 Related Party Transactions]
The Company has established the Rules on Management of Related Party Transactions and strictly operates and properly
monitors transactions through a system where an authorized person specified in the Company’s internal rules approves thosetransactions in advance with respect to appropriateness of the details and decision methods of those transactions, and theCompany subsequently, after the approval, receives reports on the status, etc. of those transactions.
Even for transactions other than those specified above, the Company checks where there were any transactions with its directors
and their close relatives by conducting an individual examination on directors once a year. Moreover, the Company properly2English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

discloses related party transactions in accordance with the provisions of the Companies Act, the Financial Instruments andExchange Law and other applicable laws and regulations as well as the rules of the Tokyo Stock Exchange.
[Supplementary Principle 2.4.1 Ensuring Diversity in the Promotion of Core Human Resources]<Views on Ensuring Diversity and the Status Thereof>
In order to realize the Group’s stated mission and vision and to accelerate business growth, the Company believes that it is vital tomaximize the growth of each and every employee and continue sustainable growth. Thus, the Company is working on initiatives
aimed at developing the environment and formulating human resource strategies also from the perspective of ensuring diversity, tomaximize the productivity of the Company and its employees. Under the policy to aggressively recruit and promote outstanding
talents regardless of attributes such as gender, nationality, and disabilities, the Company intentionally does not establish target
values for each attribute, and provides all employees equal opportunities for assessment and promotion.
With respect to the status of ensuring diversity as of the last day of the month preceding the filing of this Report, females accounted
for 34.9% of all employees, and the share of females at managerial positions was 15.9%. The percentage of foreign employees
was 2.8%.
<Voluntary and Measurable Goals for Ensuring Diversity>
As the Company provides all employees equal opportunities for assessment and promotion, it intentionally does not establish
target values for each attribute.
<Policies on Training Human Resources and Developing Work Environments to Ensure Diversity and Status of Implementation>
For the Group to achieve sustainable growth, it is crucial that we hire many talented professionals with diverse career backgrounds,
and then improve our sales, development, and managerial structures. In order to establish work environments and arrangementsthat substantially fuel employee motivation for talented professionals who share an understanding of the Group’s corporate
philosophy and business activities, we allow our staff to work remotely under certain conditions regardless of the COVID-19
pandemic to support flexible workstyles, and introduced the “Strength Matching” system to objectively analyze, recognize, andshare the strengths of each and every employee, and the Peer Bonus system. The Company is developing frameworks that will
enable our people to respect each other’s diversity and advantages, and the Company to synergize their ability to contribute to theorganization and business by utilizing the capabilities of employees in a timely and appropriate manner. Also, as initiatives torespect and foster unrestricted ideas and the willingness to take on challenges in employees, we introduced such systems as“Many Projects” employee-originated project system and “Geek Seek” engineering skills promotion system, through which weestablish a framework to encourage employees to develop their capacity on their own initiative. Moreover, regarding the point of
supporting the active participation of women who bear a greater burden on account of pregnancy, childbirth, and childcare, theCompany is aiming to create an environment in which it is easy to work regardless of gender. To support the early return to work of
women taking maternity leave and childcare leave, the Company has a support system for their children to enter and attend
nursery schools by providing allowance to pay the full tuition for nursery schools and aid for taxi fares, and a system to provide aid
for babysitter fees with the aim of supporting employees to balance parenting and work.
Also, to respond to the increase in employees of foreign nationality, we are developing an environment in which our people,
regardless of nationality, can understand and cultivate the Company’s mission and status, for example, by making it a general rule
to include an English translation for any group-wide notices.
[Principle 2.6 Roles of Corporate Pension Funds as Asset Owners]

3

English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

The Company has no corporate pension fund plan.
[Principle 3.1 Full Disclosure](i) Corporate philosophy, etc.
The Company’s corporate philosophy, code of conduct, “The Katachi of Sansan,” and management strategies, etc. are describedon the Company’s website (https://corp-sansan.com/) and its Annual Securities Reports (available in Japanese only) posted on thewebsite.

(ii) Basic views and basic policies on corporate governanceFor the Company’s basic views and basic policies on corporate governance, please refer to “I. 1. Basic Approach” in this Corporate
Governance Report.

(iii) Policies and procedures in determining remuneration for directors
The Company’s Board of Directors adopted a resolution at its meeting held on February 16, 2021 regarding the policy for deciding
the details of remuneration, etc. for Directors. The amount of remuneration for Directors who are Audit & Supervisory Committee
Members is decided following discussion by all Audit & Supervisory Committee Members within the limit of the total remuneration
amount resolved at the General Meeting of Shareholders. In addition, at the meeting of the Board of Directors held on May 18,
2021, a resolution was passed to change the method of determining the details of individual remuneration, etc. for Directors(excluding those who are Audit & Supervisory Committee Members) from delegation to Representative Directors to determination
by resolution of the Board of Directors. At the time of the resolution by the Board of Directors, the Company will consult with theindependent officers regarding the details of the resolution in advance and receive their report. As a result, from the 15th fiscal year
onward, decisions on the details of individual remuneration, etc. for Directors (excluding those who are Audit & Supervisory
Committee Members) will be made by resolution of the Board of Directors.
In addition, the determination of the details of individual remuneration, etc. for Directors (excluding those who are Audit &Supervisory Committee Members) for the current fiscal year has been delegated to Representative Director (Executive
Officer/CEO) Chikahiro Terada, based on a resolution of the extraordinary meeting of the Board of Directors held on August 26,
2020, as it was before the resolution of the above determination policy. The reason for the delegation was that the Representative
Director was judged to be the most suitable person to determine the details of individual remuneration, etc., based on the
responsibilities and business execution status of each Director, as well as the Company’s performance and economic conditions.
The Board of Directors has determined that the details of the individual remuneration, etc. are in line with the above
decision-making policy because the Board of Directors has held prior consultations on the determination of the individual
remuneration and the Representative Director has made decisions based on the results of such prior consultations.
The details of the decision policy regarding the details of individual remuneration, etc. for Directors are as follows.
a. Policy for determining the amount or calculation method of individual remuneration, etc. of Directors regarding basic
remuneration (fixed monetary remuneration)
The amount of individual basic remuneration for Directors (excluding those who are Audit & Supervisory Committee Members)
shall be updated and determined each fiscal year within the limits of the total amount of remuneration resolved at the General
Meeting of Shareholders, taking into consideration the responsibilities and business execution status of each Director and theCompany’s performance and economic conditions.

4English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

The amount of individual basic remuneration for Directors who are Audit & Supervisory Committee Members is decided following
discussion by all Audit & Supervisory Committee Members within the limit of the total remuneration amount resolved at the General
Meeting of Shareholders.
b. Introduction and decision policy for performance-linked remuneration and non-monetary remuneration
The introduction of a performance-linked remuneration plan or a non-monetary remuneration plan for individual Directors shallrequire a resolution of the Board of Directors.
When introducing such a remuneration plan, the Board of Directors shall also pass a resolution on the details of the plan, the policy
for determining the amount (calculation method), and the ratio of each form of remuneration that constitutes the individual
remuneration, etc.
c. Policy for determining the timing and conditions of payment and grant of remuneration, etc. to Directors
The remuneration, etc. of Directors shall, in principle, be fixed remuneration on a monthly basis. This shall not apply in cases where
expenses to be paid as remuneration are separately incurred.
d. Matters concerning the delegation of decisions on remuneration, etc.
Individual remuneration, etc. of Directors (excluding those who are Audit & Supervisory Committee Members) for the 14th fiscal
year shall be determined through prior consultation by the Board of Directors, and the determination of the details thereof shall beleft to the discretion of the Representative Director. Individual remuneration, etc. of Directors (excluding those who are Audit &Supervisory Committee Members) for the 15th and subsequent fiscal years shall be determined by resolution of the Board of
Directors, and shall be subject to approval by a majority of the Directors and all Outside Directors. As a means to incentivize
Directors apart from the remuneration system, the Company has introduced the Stock Acquisition Rights Trust and the
Performance Target-linked Stock Acquisition Rights (Stock Options with Charge), which aims to provide an incentive to current andfuture Directors of the Group to improve corporate value over the medium to long term. The number of shares distributed to eacheligible recipient is decided based on their position, expected role (mission grade), etc.

(iv) Policies and procedures in nomination of candidates for directors and dismissal of directors
The Company stipulates in the Articles of Incorporation that the number of directors (excluding Audit & Supervisory Committee
Members) shall not exceed 8 and that the number of directors who are Audit & Supervisory Committee Members shall not exceed 5.
The Company appoints members who constitutes the Board of Directors, taking into account the balance between experience,
knowledge and skills and diversity. Currently, the Company has 9 Directors (male: 7, female: 2), 3 of whom are Independent
Outside Directors.
In nominating candidates for directors (excluding Audit & Supervisory Committee Members), the Company nominates, based on its
policy, persons who have extensive knowledge and experience in the relevant business, are expended to greatly contribute to theCompany through the relevant business, fulfill their duties as directors and contribute to improving corporate value.
In nominating candidates for directors who are Audit & Supervisory Committee Members, the Company nominates, based on its
policy, persons who are expected to offer opinions on overall management leveraging their knowledge on corporate management
based on their extensive business experience, such as persons who have experience of serving as officers of other companies andlegal experts who are familiar with corporate legal affairs and compliance matters.
In appointment procedure for directors (excluding Audit & Supervisory Committee Members), Representative Director & CEO
proposes persons who meet the requirements of the Company’s policy as candidates for directors and obtains an opinion of the5English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

Audit & Supervisory Committee. Then, the Board of Directors discusses and submits such proposal to the General Meeting of
Shareholders for resolution.
In appointment procedure for directors who are Audit & Supervisory Committee Members, Representative Director & CEO
proposes persons who meet the requirements of the Company’s policy as candidates for directors and obtains consent of the Audit& Supervisory Committee. Then, the Board of Directors discusses and submits such proposal to the General Meeting of
Shareholders for resolution.
The Board of Directors and the Audit & Supervisory Committee monitor and supervise the status of business execution by eachdirector. If they determine that any director is disqualified, they will discuss whether or not to dismiss such director.

(v) Reasons for individual nominations of candidates for directors
Reasons for appointment of Directors are described on the Notice of Annual General Meeting of Shareholders and Annual
Securities Reports, etc. posted on the Company’s website (https://corp-sansan.com/).

[Supplementary Principle 3.1.3 Initiatives, Etc. on Sustainability]
The Group offers its businesses under the mission of “turning encounters into innovation” and the vision of “becoming business
infrastructure.” It believes that contributing to resolving social issues through its business activities will help create a sustainable
society, which will eventually lead the Group to sustainable growth and to improvement of corporate value. We take into
consideration various factors including the business climate surrounding the Group, financial conditions, and business stage, andunder sound governance and corporate management, give full attention to what we can do now for the future through our corebusiness, and pursue sustainable activities that contribute to business growth and investments in human resources and intellectual
properties. Also, under the management strategies set forth in the Company’s Securities Report, we disclose our earnings forecast.
At the same time, through posting information on the Company’s website, we provide comprehensible explanation on our initiatives,
etc. on sustainability in line with our business portfolio and future growth strategy.
<Initiatives on Sustainability>
As an initiative on sustainability, the Company acknowledge protection of information assets to be a material issue, and engages inenvironmental and social initiatives to fulfill its responsibility as a listed company. Customer information and other information
assets that are handled in the course of the Group’s business is extremely important as the Group’s management foundation. We
undertake information security measures to protect such information assets from risks such as leakage, damage, and loss. In orderto ensure that all executives and employees handling information assets abide by the information security policy, and that
information security such as confidentiality, integrity, and availability of information assets are maintained, we have established a
Computer Security Incident Response Team (CSIRT), which is responsible for the gathering of information on security vulnerability,
monitoring of cyber-attacks and troubles, and formulation of countermeasure policies and procedures based on such information
gathering and monitoring. The Team also engages in the implementation of information security training and sharing of expertiseon information security.
Also, environmental and social initiatives that were launched in 2011 are appropriately reviewed through deliberation by the Boardof Directors, as the wings of activities are expanded in line with the forms and size of responsibilities that the Company should bearas a listed company. Currently, the Company actively pursues NEXT, its CSV activities under the concept “What we can do now, forthe future,” and engages mainly in the following initiatives to contribute to society and to the growth of its business.

6English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

● Scan for Trees
This is an effort to support environmental issues and regional reconstruction by planting trees, the raw material of business cards.
We plant trees in regions in need according to the number of business cards scanned into Sansan. So far, we have planted 9,255
trees. (As of August 2021)● Sansan for NPOs
This is our project to support NPOs working on solving social issues. We provide Sansan services customized to NPOs, offered at
special prices that make it easy to implement, even for NPOs that have difficulty investing in IT.
● Evidence-based Policy Making (EBPM)
We provide knowledge and results obtained through the research and development of DSOC and support the efforts ofgovernment agencies as they work to apply EBPM, such as estimation of business-related population through analysis of data on
business card exchange.
● Kodomo Meishi (Kids’ Business Cards) Project (Education Support)
We produce and give away kids’ business cards, and hold workshops and other events for children. Through these activities, theproject provides educational support for children who are the businesspersons of the future in an aim to help them treasure thediversity and importance of encounters and foster their interests in working.
● Supporting establishment of Kamiyama Marugoto College of Design, Technology and Entrepreneurship (Education Support)
By supporting the establishment of Kamiyama Marugoto School of Technology which encourages the development ofentrepreneurs taking advantage of IT technologies, we aim to foster human resources who can contribute to the digitaltransformation of Japanese companies through startups and job placements.
● Yoiko for CSR
We introduced a system in which the Company supports employee-planned and employee-implemented CSR activities throughfunding of activity costs, granting of leave, and so on. It aims to achieve social contribution and productivity improvement throughinteraction among employees.
NEXT website: https://www.corp-sansan.com/csv/<Initiatives on Investments in Human Resources and Intellectual Properties>
The Company’s initiatives on investments in human resources are as described in the statement for Supplementary Principle 2.4.1.
Also, for investments in intellectual properties, we conduct, through patent offices, investigations, etc. on infringement of patents on
software and programs developed and designed by the Company to reduce the risks of infringement of third party rights. We also
invest a certain amount to fund the promotion of patent applications, etc. through hosting of regular intellectual property discovery
meetings in collaboration with patent offices in an aim to uncover potential intellectual properties. In addition, by providing
employee incentives through the establishment of the Employee Invention Rules, we boost the motivation of employees andencourage more patent applications, which leads to enhancing the Company’s technological strengths and trust.
<Disclosure Based on TCFD Recommendations>
The Company is engaged in the planning, development, and sales of cloud-based business card management services, etc., andas of today, it does not foresee any impact of climate change-related issues on the Company’s business. Therefore, it does notmake any disclosure, etc. based on TCFD recommendations. However, the Company regards addressing climate change-related
issues as an important initiative to ensure stable development of the economy and secure a foundation for the livelihoods of people.
To this end, the Company is taking actions such as strict energy-saving and digitizing of documents, etc., as well as allocating a7

English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

part of its revenue to tree-planting activities.

[Supplementary Principle 4.1.1 Scope of Authority Delegated to the Management]
The Company has a policy to determine the following matters through resolution of the Board of Directors in accordance with theprovisions of the Rules on the Board of Directors: (1) Matters prescribed by the Companies Act and other laws and regulations; (2)Matters prescribed by the Articles of Incorporation; (3) Matters delegated by resolution of the General Meeting of Shareholders;and (4) Other important matters on management.
As for other important matters on management, the Company decides on the materiality of such matters based on factors such as
the scale of such matters. In addition, in order to expedite a decision-making process for business execution, the Company
stipulates in the Articles of Incorporation that the execution of certain important duties may be delegated to directors, andestablishes the Rules on Organization, Segregation of Duties and Administrative Authority pursuant to which the Company
delegates its authority to executive directors and executive officers, etc. as appropriate.

[Principle 4.9 Independence Standards and Qualification for Independent Outside Directors]
The Company nominates persons, as candidates for independent Outside directors, who have diverse and specialist knowledge,
experience and deep insight required to provide the Company with advice on management and to fulfill their supervisory function
among from persons who meet standards set by financial instruments exchanges, taking into consideration other specificconditions.

[Supplementary Principle 4.11.1 Board Composition]
The Company stipulates in the Articles of Incorporation that the number of Directors (excluding Audit & Supervisory Committee
Members) shall not exceed 8 and that the number of Directors who are Audit & Supervisory Committee Members shall not exceed
5. Currently, the Company has appointed 9 Directors (male: 7, female: 2).
The Company appoints members who constitutes the Board of Directors, taking into account the balance between experience,
knowledge and skills and diversity. In addition, starting from the 14th Annual General Meeting of Shareholders, the skill matrix ofcandidates for Directors and the reasons for nomination of each candidate are included in the Convocation Notice, in order todisclose the skill composition of the management team that the Company should have. In addition, Independent Outside Directors
include those who themselves have corporate experience and those who concurrently serve as directors of other companies. Thus,
the Company has established a system in which it can expect to receive opinions that are not based on those of the Company
itself.
Skill matrix of the management team is described on the Notice of the 14th Annual General Meeting of Shareholders posted on the
Company’s website (https://corp-sansan.com/).

[Supplementary Principle 4.11.2 Status of Concurrent Positions of Directors]
The status of major concurrent positions of directors are described on the Notice of Annual General Meeting of Shareholders andAnnual Securities Reports, etc. posted on the Company’s website (https://corp-sansan.com/). The Company has confirmed that all
directors who have concurrent positions can properly perform their roles and responsibilities at the Company.

8

English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

[Supplementary Principle 4.11.3 Summary of Analysis and Evaluation Results of Effectiveness of Board of Directors]
The Board of Directors of the Company conducts Effectiveness Evaluation of the Board of Directors as an initiative to evaluate theextent to which the roles expected of them have been fulfilled with respect to the management, etc. delegated to the Board byshareholders, and based on the evaluation results, the Board carries out a PDCA cycle on its own to enhance corporate
governance. For the 14th fiscal year Effectiveness Evaluation of the Board of Directors, we conducted a questionnaire survey on
the effectiveness of the Board or Directors, etc. targeting all directors. The survey results were brought to the Audit & Supervisory
Committee for discussion, and based on the opinions obtained, the Board discussed the survey results, shared common
perceptions, and decided on the policy for improvements. The survey results for the current fiscal year indicated that, for the major
items of the questionnaire—namely, “Responsibilities of the Board,” “Board size and composition,” “Frequency of Board meetings,”“Decision-making process of the Board,” and “Quality of information provided to the Board”—there were many opinions that
evaluated these items as Appropriate or Generally Appropriate. Therefore, we determined that the effectiveness of the Board was
ensured in the current fiscal year.
Going forward, as the Company’s business scale and social responsibilities as a listed company continue to expand, the necessity
to further enhance the training system for directors and to deepen deliberations of the Board of Directors by revising the agenda
items, etc. was identified. The Company will make continuous efforts through the formulation of improvement plans, etc. to improvethe effectiveness of the Board.

[Supplementary Principle 4.14.2 Training Policy for Directors]
In order to ensure that directors fully perform their management supervisory and audit functions, the Company facilitates
improvement of discussion at meetings of the Board of Directors by distributing and explaining materials for the meetings of theBoard of Directors in advance and providing relevant information. In addition, for the Audit & Supervisory Committee that consistsof Outside Directors, the Company has deployed dedicated employees to assist the Audit & Supervisory Committee’s smooth
execution of its duties. Such employees are engaged in timely reporting and provision of information upon request of the Audit &Supervisory Committee by participating in major meetings, accessing important documents, etc. The Company also provides
directors with opportunities to participate in training sessions provided by third-party institutions at the Company’s expense.

[Principle 5-1 Policy for Constructive Dialogue with Shareholders]
The Company believes that, for sustainable growth and the medium- to long-term enhancement of corporate value, it is importantto actively conduct dialogues with investors, including shareholders, and to properly reflect insight gained in management.
Accordingly, the Company willingly accepts interviews from shareholders and investors based on the following policies:(i) The Company has set up a dedicated IR department in the CFO office and appointed Director, Executive Officer, CFO Muneyuki
Hashimoto as executive officer in charge of the department.
(ii) The Company has established a system to work with related departments in connection with opinions and requests ofshareholders identified at the dialogues;(iii) CEO, CFO and the department in charge of IR under the immediate control of CFO take the initiative in holding financial results
briefings for analysts and institutional investors, and the Company discloses information on its website and arranges actual
dialogues with shareholders, investors, etc. in and outside Japan.

9English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

management and investing in companies.
Yoshiki Ishikawa

◯

◯

-

Mr. Ishikawa possesses specialist and abundant
knowledge with regard to areas such as data
science,humanresource

strategy,

andsustainability, as a researcher of preventive
medicine and behavioral science, as well as work
experience at a business company where he wasinvolved in the establishment and management.
Therefore, the Company has appointed him as
an Outside Director in the anticipation that he will
present opinions from a multifaceted perspective
cultivated through the experiences describedabove.
In addition, there is no special relationshipbetween Mr. Ishikawa and the Company and heis unlikely to have conflicts of interest withgeneral shareholders. Therefore, the Company
has nominated him as an Independent Director.
Toko Shiotsuki◯◯

CyberAgent, Inc.

Ms. Shiotsuki has degrees as a junior accountant

Director

and a doctor of jurisprudence (professional), andandFull-time Audit andhasextensive

experienceinbusiness

Supervisory

companies, including serving as a full-time Audit

Committee member& Supervisory Committee member of a listedcompany by leveraging her broad insight inaccounting, auditing and legal affairs. The
Company has appointed her as an Outside
Director in the anticipation that she will present
meaningful opinions from the perspective ofauditing and supervision as well as diversity.
In addition, there is no special relationshipbetween Ms. Shiotsuki and the Company andshe is unlikely to have conflicts of interest withgeneral shareholders. Therefore, the Company
has nominated her as an Independent Director.

14

English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

in advance and providing relevant information. In addition, for the Audit & Supervisory Committee that consists of Outside Directors,
the Company has deployed dedicated employees to assist the Audit & Supervisory Committee’s smooth execution of its duties. Suchemployees are engaged in timely reporting and provision of information upon request of the Audit & Supervisory Committee byparticipating in major meetings, accessing important documents, etc. The Company also provides directors with opportunities toparticipate in training sessions provided by third-party institutions at the Company’s expense.

2. Matters on Functions such as Business Execution, Auditing, Oversight, Nomination and Remuneration Decisions(Overview of Current Corporate Governance System) Updated
An overview of the Company’s corporate governance structure is described below.

Board of Directors
The Board of Directors consists of 9 Directors, including 4 Directors who are members of the Audit & Supervisory Committee. All
directors who are members of the Audit & Supervisory Committee are Outside Directors. The Company has invited as Outside
Directors persons such as those with experience as a director at other companies and legal experts with a detailed knowledge ofcorporate legal affairs and compliance, as well as persons with expertise in the field of accounting, in order to promote theestablishment of a system that enables the Company to conduct management decision-making from a broader perspective and tosupervise management from outside the Company, while utilizing their insights on corporate management based on their wealth ofbusiness experience. In addition, in accordance with Article 427, paragraph (1) of the Companies Act, the Company has enteredagreements with its Outside Directors to limit their liability for damages under Article 423, paragraph (1) of said Act. The maximum
amount of liability for damages under these agreements is the minimum liability amount provided for under laws and regulations.
In order to conduct effective and prompt decision-making, the Board of Directors holds a regular Board of Directors meeting once amonth in principle, as well as holding extraordinary meetings as needed. 17 meetings were held in the 14th fiscal year.
The Board of Directors functions both as a body for supervising the operations of directors and a body for making decisions onimportant management matters, in compliance with the Articles of Incorporation and laws and regulations.

Audit & Supervisory Committee
The Company’s Audit & Supervisory Committee comprises 4 directors who are members of the Audit & Supervisory Committee. All
Committee Members are Outside Directors. Directors who are members of the Audit & Supervisory Committee include attorneys or
persons who possess an independent perspective on corporate management. Thus, the Company has established a structure inwhich management supervision is conducted from the standpoint of each Committee member’s professional ethics.
Directors who are members of the Audit & Supervisory Committee express opinions on directors’ execution of business atmeetings of the Board of Directors and other meetings.
The Audit & Supervisory Committee monitors the vision of governance and its operational status. In order to audit and supervise
the everyday activities of the directors, including the directors’ performance of duties, the Audit & Supervisory Committee
implements audits based on the audit plan and holds meetings of the Audit & Supervisory Committee once a month whileconvening meetings with the Internal Auditing Department and Accounting Auditors, and sharing information necessary for auditing.
During the 14th fiscal year, the Company held 13 meetings of the Audit & Supervisory Committee.

17English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

Functions of nomination and remuneration decisions
The methods for determining nomination and remuneration are described on Principles 3.1 (iii) and (iv) of “Disclosure Based on
Principles of the Corporate Governance Code” of this Corporate Governance Report.

Status of Internal Audits, Audit & Supervisory Committee’s Audits, and Financial Audits
Internal Audits.
1 person belonging to the Internal Auditing Department and 2 internal auditors appointed by the head of the Internal Auditing
Department are in charge of the Company’s internal auditing. The objective of internal auditing is to examine and evaluate theeffectiveness of internal controls established and operated at the Company, and to point out matters that require improvement andoffer advice toward making improvement in order to contribute to achievement of the Company’s management targets and stablebusiness operations. The Internal Auditing Department makes an internal audit plan each fiscal year, implements internal auditing
after receiving the approval of the CEO, and reports results of auditing to Representative Directors and the division that was
subject to auditing while pointing out matters to the said department in order to realize improvements, and checking the status of
improvements. Internal auditing is carried out by 1 member of the Internal Auditing Department and other persons nominated by
the Internal Auditing Department. The Internal Auditing Department cooperates with the Audit & Supervisory Committee andshares information necessary for auditing.

Audit & Supervisory Committee’s Audits
The Company’s Audit & Supervisory Committee consists of 4 members, all of whom are Outside Directors.
Based on the Audit & Supervisory Committee’s guidelines, the Audit & Supervisory Committee carries out audit operations in linewith auditing standards, auditing policies, the Audit Plan, auditing methods, etc. decided by the Audit & Supervisory Committee.
The Audit & Supervisory Committee checks whether the Company’s internal control systems are being established and operated
appropriately, receives regular reports on the comprehensive implementation status of audits from the Internal Auditing Department,
and shares information at the meeting of the Audit & Supervisory Committee. Furthermore, in order to foster sufficient
communication and deepen mutual awareness between Audit & Supervisory Committee Members and the Representative Director,
they exchange opinions under the theme of significant auditing issues, etc. By attending meetings of the Board of Directors, etc.,
each Audit & Supervisory Committee member receives information regarding the status of business execution, and by giving theiropinions regarding this, audits and monitors the legality and suitability, and ensures appropriate business execution.
In addition, the Audit & Supervisory Committee monitors and verifies whether the Accounting Auditors maintain their independence
and implement appropriate audits, and receives reports from the Accounting Auditors regarding the performance of their duties andrequests explanations when necessary. Moreover, the Audit & Supervisory Committee receives notification from the Accounting
Auditors regarding steps to improve the “systems for ensuring that the performance of the duties is being carried out properly” (asenumerated in each item of Article 131 of the Regulation on Corporate Accounting) in compliance with the “Quality Control
Standard for Audit” (adopted by the Business Accounting Council on October 28, 2005), etc., and requests explanations whennecessary.
Furthermore, Ms. Yasuko Yokosawa, an Outside Director who is a member of the Audit & Supervisory Committee, is a qualified
attorney and she offers recommendations and advice on the Company’s legal affairs from her standpoint as an expert. Outside
Director Toko Shiotsuki, who is also an Audit & Supervisory Committee member, has degrees as a junior accountant and a doctor

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English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

of jurisprudence (professional), and has extensive knowledge of finance and accounting.

Financial Audits
The Company has concluded an auditing contract with KPMG AZSA LLC. There is no relationship of special interest between the
Company and this auditor or its employees who conduct audits. The names of the certified public accountants who executed theaudit and the composition of the assistants involved in the audit work are stated below.

1.

Names of the certified public accountants who execute the audit:
Hiroyuki Nakamura, Designated Limited Liability Partner and Executive Partner
Genta Tsuru, Designated Limited Liability Partner and Executive Partner

2.

Composition of assistants involved in the audit work:
9 certified public accountants
10 other individuals

3. Reasons for adopting the current corporate governance structure
From the perspective of further strengthening the auditing and oversight functions of the Board of Directors through the further
enhancement of corporate governance, the Company transitioned from being a company with a Board of Auditors to a company
with Audit & Supervisory Committee on August 18, 2015. The Company made this transition in order to leverage the functions of
Outside Directors, who do not personally execute business operations. Members of the Audit & Supervisory Committee, whopossess auditing authority and voting rights at meetings of the Board of Directors appropriately oversee the directors’ execution ofbusiness in terms of both legality and validity. With this transition to a company with Audit & Supervisory Committee, the Company
believes it will enhance the fairness, transparency, and effectiveness of management.

19English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

IV Matters Related to the Internal Control System
1. Basic Views on the Internal Control System and the Progress of System Development
The Company strives to maintain and enhance corporate governance by the establishment and strict operation of an internal
control system based on the Basic Policy on Internal Control System, which was determined by the Board of Directors.

a) System to ensure that the execution of duties by directors and employees complies with laws and regulations as well as the
Articles of Incorporation (System for Strict Compliance with Laws and Regulations and the Articles of Incorporation).
1. Directors and employees carry out appropriate corporate activities based on high ethical standards and comply with laws andregulations and internal rules such as the Articles of Incorporation in accordance with the Company’s corporate philosophy andcode of conduct, “The Katachi of Sansan.”
2. Implement internal audits by the Internal Auditing Department, an independent entity under the direct supervision of the CEO,to verify if execution of business operations is being conducted based on laws and regulations, the Articles of Incorporation, andinternal and other rules while at all times strive to make improvements when issues are discovered.

b) System for storage and management of information related to execution of duties by directors (Information Storage andManagement System)
1. Store and manage documents, business forms, and records made in an electronic format based on the Rules on Document
Management, after classifying according to level of confidentiality.
2. Directors may access these documents and records at any time.

c) Rules and other systems for managing risk of loss (Risk Management System)
1. Appropriately manage a host of potential risks in the Company’s business activities through the establishment of internal rules
and a response system.
2. Give utmost priority to the appropriate handling of personal information, appoint a person in charge of personal information
protection, and make efforts to minimize the risks associated with the management of personal information by establishinginternal rules centered on a set of basic regulations for the protection of personal information.
3. Reduce information security risks by appointing a chief information officer with responsibility and authority for information
security risks and risk management and establishing rules on management of information systems.
4. Directors immediately report to the Audit & Supervisory Committee in the event of any kind of risk arising that may cause amajor loss to the Company.

d) System to ensure that the duties of the directors are being carried out efficiently (System for Securing Efficiency)
1. Hold regular meetings comprising directors once a month and convene extraordinary meetings as needed in accordance withlaws and regulations, the Articles of Incorporation, and the Rules on the Board of Directors in order to audit the status ofbusiness execution by discussing and making decisions on important matters, and receiving reports from executive directors.
2. Establish a suitable and efficient decision-making system through developing internal rules such as the Rules on the Board of
Directors, and clarifying areas of responsibility and authority.

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English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

e) System to ensure the properness of business operations of the corporate group composed of the Company and its subsidiaries(Internal Control of Corporate Group)
1. The Company and its subsidiaries, etc., which comprise the Sansan Group, have held up a policy to carry out appropriate
corporate activities based on high ethical standards and to comply with their respective corporate philosophy and code of
conduct as well as applicable laws and regulations and internal rules, such as the Articles of Incorporation, and endeavor todevelop fair and responsible business to contribute to sustainable growth of the Sansan Group.
2. As the basic policy for involvement in management of its subsidiaries, the Company has established the Rules on
Management of Subsidiaries and maintains a system in which group governance can function, such as concluding business
management agreements with the subsidiaries pursuant to said regulations.
3. The Internal Auditing Department implements regular audits in order to verify if the business operations of the Company andits subsidiaries are in compliance with laws and regulations, the Articles of Incorporation, internal rules, and other regulations.

f) Internal control system for financial reporting (System to ensure properness of financial reporting)
1. In order to secure the properness of financial reporting of the Company and its subsidiaries, the Company develops andappropriately operates internal rules, including the Basic Policy on Internal Controls Related to Financial Reporting, based on
the Financial Instruments and Exchange Law and other laws and regulations in Japan and overseas that apply to the Company
and its subsidiaries.
2. Develop and operate a monitoring system for financial reporting and establish a system for timely and appropriate reportingwhen internal control system problems or defects are identified through the monitoring system.
3. In terms of information infrastructure, make effective and efficient use of the internal control system for financial reporting andrespond appropriately with respect to General Control and Application Control.

g) Matters related to the Office that assists the duties of the Audit & Supervisory Committee.
Matters related to the independence of members of that Office and matters on ensuring the practicability of instructions to thosemembers (Establishing an Office and Office member for the Audit & Supervisory Committee), (Independence of the Office for the
Audit & Supervisory Committee), (Ensuring practicability of instructions to the Office of the Audit & Supervisory Committee).
1. Establish an Office under the direct control of the Audit & Supervisory Committee and designate an Office member to assist
the duties of the Committee’s members on a full-time basis.
2. The supervisory authority over that Office member is to belong exclusively to the Audit & Supervisory Committee and theappointment, transfer, performance evaluation, disciplinarian action, and other matters regarding the member require theapproval of, and prior notification to, the Audit & Supervisory Committee.

h) System for submitting reports to the Audit & Supervisory Committee, which includes the system for directors and employees toreport to the Audit & Supervisory Committee
1. Directors and employees shall promptly inform the Audit & Supervisory Committee of any matter that may have a significant
impact on the Company and the implementation status of internal audits as well as legal matters, and provide necessary reports
and information in response to requests from the Audit & Supervisory Committee.
2. Formulate rules for a Whistle-Blower System and ensure the operation of an appropriate reporting system based on the24English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

stipulations of the Whistle-Blower System. The Company shall not treat any director or employee unfavorably on the basis of
said director or employee using the System to give a report to the Audit & Supervisory Committee.

i) Other: Systems for ensuring the effectiveness of audits by the Audit & Supervisory Committee (Systems for ensuring theeffectiveness of audits by the Audit & Supervisory Committee)
1. The CEO shall meet regularly with the Audit & Supervisory Committee and Accounting Auditor to exchange of opinions andcommunicate effectively.
2. The Audit & Supervisory Committee shall meet regularly with the Accounting Auditor, cooperate with the Internal Auditing
Department, and exchange information at all times.
3. Payments of costs incurred in the process of executing the duties of the Audit & Supervisory Committee Member shall be
addressed upon a request for payment.

2. Basic Views on Eliminating Anti-Social Forces
a. Basic Views on Eliminating Anti-Social Forces
The Company shall conduct fair and responsible corporate activities by the formulation of its Basic Policy on Eliminating Anti-Social
Forces and its dissemination inside and outside the Company as well as the securing and maintaining of a compliance systemthrough the development and operation of all internal rules.

b. Status of the Company’s preparedness for the elimination of antisocial forces(a) Status of the preparedness of internal rules
All executives and employees of the Company shall comply with the Basic Policy on Eliminating Anti-Social Forces and otherinternal rules and establish a system to promote the elimination of such forces.
Additionally, by establishing Detailed Rules on Investigations into Anti-social Forces for Sales Management and Detailed Rules onExternal Procurement Transactions as operational rules, the Company has built a system for preventing transactions with
anti-social forces.

(b) Special department with responsibility for countermeasures in relation to anti-social forces and person responsible for theprevention unreasonable demands
The Company has established the following system for responding to antisocial forces.
1. Person with overall responsibility: Executive in charge of General Affairs & Legal
2. Division with overall responsibility: Legal Team
3. Responding division: The department dealing with that business partner(c) Method for addressing the elimination of anti-social forces
i. New business partners, shareholders, and executives
As a general principle, the Company uses a private sector tool to ascertain whether or not new business partners, shareholders,and executives have relationships with anti-social forces.
At the commencement of business, the Company inserts a wording in all contracts in which the partner guarantees that they25

English Translation
This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

have no relationship with anti-social forces, and a contract cancellation clause to be invoked in the event that the partner does
have such relationship.
ii. Existing business partners
Using a price sector investigative tool, the Company carries out checks on all existing business partners to ascertain whether or
not they have relationships with anti-social forces. In addition to taking the usual precautions, the Company also implements
investigations and checks to a certain extent.
iii. The Company has a system for dissolving relationships with existing business partners if it comes to light that they are
anti-social forces or are suspected of being such forces.

(d) Status of cooperation with external specialist organizations
The Company continuously studies the importance of eliminating anti-social forces through external lectures and seminars.
Additionally, the Company has established cooperative ties with the police, the Center for Removal of Criminal Organizations, andlegal counsel.

(e) Status of efforts to gather and manage information related to anti-social forces
The Company consolidates information on anti-social forces with the responsible division, thereby centralizing the gathering andmanagement of information.

(f) Implementation status of training activities
On joining the Company, new employees submit a written pledge confirming that they have no relationships with anti-social forces
and the Company explains the importance of eliminating anti-social forces.

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