Daiwa Securities Group Inc. Corporate Governance Guidelines
The Company will respect the rights and interests of the shareholders, consider the position of all
stakeholders and strive for sustainable growth and improvement of medium- to long-term corporate value
through realization of its Corporate Principles “Building trust”, “Placing importance on personnel”,“Contributing to society” and “Maintaining healthy earnings results”.
Article 1: Basic approach to corporate governance and the positioning of these Guidelines
1.

The Company practices group management based on a holding company structure, establishes a highlytransparent and objective governance environment that conforms to international standards, realizes
highly efficient oversight of group companies and builds a unified group management system that elicits
synergies among group companies.

2.

To achieve the matters stated in the preceding paragraph, the Company has established these Guidelines,
which define the basic framework and policies of Daiwa Securities Groupʼs corporate governance.

Article 2: Organizational design (adoption of a Three Committees system)
The Company has adopted a Three Committees system (a company with Nominating, Compensation andAudit committees) as an institutional design in order to exhibit its management oversight function throughthe following (1) and (2).
(1) Making swift and decisive decisions by having the Board of Directors assign wide-ranging authority toCorporate Executive Officers (Shikkoyaku) and clarifying the division of duties among Corporate
Executive Officers (Shikkoyaku)(2) Improving transparency and fairness of the management by establishing three Committees in whichhighly independent Outside Directors account for a majority of the members: the Nominating
Committee, Audit Committee, and Compensation Committee
Article 3: Role of the Board of Directors
1.

The Board of Directors assumes responsibility for seeking sustainable growth and maximization ofcorporate value over the medium to long term based on the Companyʼs Corporate Principles.

2.

The Board of Directors decides on core management matters, such as basic management policies, theelection and dismissal of Corporate Executive Officers (Shikkoyaku), the development of internal control
systems and risk management environments, and matters related to the division of duties and command
system among Corporate Executive Officers (Shikkoyaku).

3.

To ensure the flexibility of decision-making, the Board of Directors, in principle, delegates decisionmaking authority regarding business execution to the Corporate Executive Officers (Shikkoyaku) exceptfor the matters that are to be decided by the Board of Directors under laws and regulations.

4.

By overseeing the execution of duties by Directors and Corporate Executive Officers (Shikkoyaku), theBoard of Directors fulfills the responsibility described in Paragraph 1 while ensuring the fairness andtransparency of the Groupʼs management.
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<Major matters decided by the Board of Directors>
Basic management policies such as Medium-Term Management Plans and budgets for each fiscal yearMatters related to internal control systems (refer to Article 18)Matters related to important business execution organizations, etc., such as the election and dismissal of
the CEO and other Corporate Executive Officers (Shikkoyaku), the division of duties and command
systems among Corporate Executive Officers (Shikkoyaku).

Dividends (including interim dividends) and acquisition of treasury sharesMatters related to the risk appetite framework and the Rules for Risk Management

Matters related to General Shareholders Meetings, such as convocation of and proposals submitted atGeneral Shareholders Meetings

Other matters stipulated in laws and regulations or the Articles of Incorporation and matters delegatedby General Shareholders Meetings

Matters determined by the Board of Directors to be important, etc.

Article 4: Composition of the Board of Directors
1.

The Board of Directors consists of all Directors within 20 members. In order for the Board of Directors
to exercise its supervisory function over management more appropriately, one-third or more of themembers of the Board of Directors shall be independent Outside Directors with a high degree of expertiseand a sense of ethics.

2.

As a general rule, the majority of the Directors shall not concurrently serve as Corporate ExecutiveOfficers (Shikkoyaku).

3.

Regarding the personnel composition of the Board of Directors, the Company endeavors to ensure abalance of knowledge, experience and abilities, and diversity including gender, internationality as a whole.
In principle, the Company shall keep the ratio of female Directors at 30% or more .

Article 5: Chair of the Board of Directors
1.

In principle, the Chairperson of the Board of Directors serves as Chair of the Board of Directors inaccordance with the Regulations of the Board of Directors. The Chairperson of the Board of Directors is
selected from among the Directors through a resolution by the Board of Directors.

2.

In order for the Board of Directors to make highly transparent and objective decisions and fulfill theirrole of management oversight, the Chair of the Board of Directors endeavors to develop an environment
for invigorating discussions at the Board of Directors and enhancing the quality of their discussions andto operate the Board of Directors efficiently and effectively.

Article 6: Composition of the Committees
1. The Committees (which refers to the Nominating, Compensation, and Audit Committees) are composedof three or more members selected by the Board of Directors from among the Directors, and the majorityof the members are Outside Directors.
2. The Chairpersons of the Committees are determined by the Committees from among the Outside
Directors who are members of the Committees.

2Article 7: Agenda setting and management of Board of Directors meetings
1.

The agenda (matters to be resolved and matters to be reported) for Board of Directors meetings isdecided in accordance with the Regulations of the Board of Directors in light of opinions and proposals
from Directors and Corporate Executive Officers (Shikkoyaku).

2.

The agenda and reference materials for Board of Directors meetings are delivered to each Director inadvance for fruitful discussions at Board of Directors meetings. For Outside Directors, a prior briefing isheld.

Article 8: The role and requirements of Directors
1.

As members of the Board of Directors, Directors participate in the proceedings regarding decisions oncore management matters while overseeing the execution of duties by Corporate Executive Officers(Shikkoyaku) and Directors.

2.

Directors must satisfy the following requirements.
(1) Able to exert maximum effort to actualize the Daiwa Securities Groupʼs Corporate Principles(2) Have a high sense of ethics and morals and take the initiative to set a good example(3) Have business experience or expert knowledge in law, accounting, management, etc.

Article 9: The role and requirements of Outside Directors
1. As Directors, Outside Directors oversee the execution of duties by Corporate Executive Officers(Shikkoyaku) from an independent and neutral standpoint, while providing appropriate opinions, ormaking appropriate determinations, as members of the Nominating, Compensation, and Audit
Committees. In undertaking such roles, Outside Directors are expected to provide advice on management,
based on their knowledge and experience.
2. Outside Directors must satisfy all of the following requirements for independence, in addition to therequirements stipulated in Article 8 Paragraph 2.
(1) Have no work experience as an Executive Director, Corporate Executive Officer (Shikkoyaku),Executive Officer (Shikkoyakuin), or any other persons equivalent to these, of Daiwa Securities Group,or as an employee of Daiwa Securities Group(2) Not be a Director, Corporate Executive Officer (Shikkoyaku), manager or employee of a company forwhich Daiwa Securities Group is a major shareholder or a main business partner(3) Have no other matters that may impair their independence in fulfilling their duties as an OutsideDirector
3. In principle, the total tenure of Outside Directors shall not exceed 8 years. Regardless of the reason,
individuals who have served for more than 10 years in total shall not be an Outside Director candidate.
Article 10: The Outside Directorsʼ Committee
1.

The Company holds meetings of the Outside Directorsʼ Committee composed of Outside Directors, inwhich Outside Directors share information and exchange opinions.

2.

The chairperson of the Outside Directorsʼ Committee is determined by the Outside Directorsʼ
Committee from among the members.

3.

The Outside Directorsʼ Committee is managed in accordance with the Rules for the Outside Directorsʼ
3Committee.
Article 11: Support systems for Directors (including the provision of information and training)
The Company develops a sufficient system including (1) to (4) below that is needed for Directors toeffectively fulfill their roles and responsibilities.
(1) The Company provides training and explanations to newly appointed Directors when they take office,and continues to help such Directors to acquire information and knowledge so that they can fulfill theirroles after taking office.
(2) The Company shares sufficient internal information with Outside Directors.
(3) The Company bears the expenses necessary for Outside Directors to fulfill their roles (such as expensesfor using outside experts).
(4) The Company has established the Corporate Secretariat, which serves as the secretariat of the Board ofDirectors and supports Outside Directors
Article 12: Evaluating the effectiveness of the Board of Directors
1.

The Board of Directors conducts a survey of the effectiveness of the Board of Directors once every yearwith each of the Directors.

2.

The Board of Directors examines and discusses the results of the survey described in the previous
paragraph and evaluates the effectiveness of the Board of Directors. They urge improvement for issues
recognized as a result of such discussions and endeavor to maintain and improve the effectiveness of theBoard of Directors.

Article 13: The role of Corporate Executive Officers（Shikkoyaku）
Corporate Executive Officers (Shikkoyaku) execute business and make decisions on the execution of businessdelegated by the Board of Directors.
Article 14: The role of the Nominating Committee
1.

The Nominating Committee examines matters such as the composition of the Board of Directors andbasic approaches to the nomination of candidates for Directors in consideration of corporate governance,and selection of candidates for Directors. Specifically, the Committee resolves the following matters.

(1) The details of proposals related to the election and dismissal of Directors to be submitted to General
Shareholders Meetings(2) The establishment, revision, or abolition of basic policies, etc. necessary for resolution described in thepreceding item
(3) Other matters stipulated in laws and regulations and matters that the Nominating Committee
determines to be necessary in fulfilling duties
2.

The Nominating Committee elects Director candidates as described in Item (1) of the preceding
paragraph in accordance with the policy set forth in Article 8, Paragraph 2.

3.

When nominating Outside Director candidates, the Nominating Committee elects those who satisfy all
the requirements for independence set forth in Article 9, Paragraph 2, in addition to the policy set forthin Article 8, Paragraph 2.
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4.

The Nominating Committee and Nominating Committee members conduct necessary investigations andevaluations, such as meetings with relevant parties, to resolve each item of Paragraph 1.

Article 15: Succession plans for the position of CEO
1.

The CEO establishes a succession plan for the CEO based on management strategy, business strategy,and other matters, and reports it to the Nominating Committee. The Nominating Committee
appropriately oversees the details of the plan.

2.

The Board of Directors resolves the election and dismissal of the CEO based on the deliberations of theNominating Committee.

3.

The Board of Directors dismisses the CEO if they determine that the CEO cannot fully fulfill the roles ofthe CEO and conclude that it is appropriate to dismiss the CEO.

4.

When the unexpected happens to the CEO, the COO substitutes for the CEO. Succession plans are also
formulated in preparation for the unexpected that may happen to the CEO.

Article 16: The role of the Compensation Committee
1.

The Compensation Committee considers matters related to Director remuneration policy and decisions
upon individual remuneration, as well as incentive plans for the Group as a whole and other matters that
contribute to improving consolidated earnings. Specifically, the Committee resolves on the followingmatters.

(1) Policies on determination of the details of individual remuneration, etc. received by the CompanyʼsDirectors and Corporate Executive Officers (Shikkoyaku)(2) The details of individual remuneration, etc. received by the Companyʼs Directors and Corporate
Executive Officers (Shikkoyaku)(3) Other matters stipulated in laws and regulations and matters that the Compensation Committee
determines to be necessary in fulfilling duties
2.

In determining Paragraph 1, Item (2), the Compensation Committee determines the matters stipulated
in each item below according to the classification of each item.

(1) Fixed amount: amount for each individual(2) Non-fixed amount: specific calculation method for each individual(3) Other than money: specifics of remuneration for each individual
3.

Remuneration for Directors and Corporate Executive Officers (Shikkoyaku) is based on the following
fundamental policies.

(1) To create effective incentives that contribute to the increase of shareholder value through soundbusiness development and also lead to the improvement of business performance in the short term andthe medium to long term
(2) To keep remuneration at both domestically and internationally competitive levels as a global securities
group(3) To ensure execution and oversight functions work effectively as a company with a Three Committees
systemArticle 17: The authority and role of the Audit Committee
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1.

The Audit Committee audits the legality and appropriateness of duties executed by Directors andCorporate Executive Officers (Shikkoyaku), as well as business reports, financial statements, and otherdocuments. The Committee also prepares audit reports and determines the details of proposals to besubmitted to General Shareholders Meetings regarding the election or dismissal and non-reappointmentof the Accounting Auditor. In addition, the Committee has the right to consent regarding thedetermination of remuneration, etc. of the Accounting Auditor.

2.

Audit Committee members appointed by the Audit Committee (appointed Audit Committee members),
in principle, work full-time to ensure the effectiveness of audits.

3.

In conducting audits, the Audit Committee appropriately exercises the authority to investigate the statusof business and property of the Company and its subsidiaries.

4.

The Audit Committee audits the status of installation and operation of internal control systems of theCompany and its subsidiaries.

5.

The Audit Committee conducts audits in collaboration with internal auditing divisions and theAccounting Auditor. The consent of the Audit Committee or appointed Audit Committee members isrequired for important matters related to internal audits, such as the development of internal audit plans
and the delegation of internal audit work. The Audit Committee can delegate investigations to theInternal Audit Department, etc. as necessary.

6.

The Company has established the Audit Committeeʼs Office as an office that specializes in supporting
the Audit Committeeʼs work. The personnel affairs, organizational changes, and other matters for theAudit Committeeʼs Office require consent of the Audit Committee or appointed Audit Committee
members.

Article 18: Internal control systems
The Board of Directors resolves “a system to ensure the appropriateness of business” (internal controlsystems) based on laws and regulations, and develops systems for ensuring effective audits by the Audit
Committee and systems for ensuring that the execution of duties by Corporate Executive Officers(Shikkoyaku) conforms to laws and regulations and the Articles of Incorporation.
<Major systems for ensuring that the execution of duties by Corporate Executive Officers (Shikkoyaku)
complies with laws and regulations and the Articles of Incorporation>
Compliance system, risk management environment, and internal audit environment of the Company andthe Group

Whistleblowing system aimed at early detection and correction of conduct in violation of rules, etc.

Internal control for financial reporting

System for ensuring the appropriateness of business in the Group

Article 19: Information disclosure
1.

The Company makes fair and timely disclosure of material information regarding the Group (including
financial, social, and environmental information), while complying with relevant laws, regulations, andrules, in order to help shareholders, investors, and all other stakeholders to enhance their understandingof the Company and in order to receive appropriate evaluations. The Company has formulated and6

announced this basic policy on information disclosure as the “Daiwa Securities Group Inc. Disclosure
Policy.”https://www.daiwa-grp.jp/english/ir/disclosurepolicy.html
2.

The Company has established the Disclosure Committee to make decisions on details, methods, and othermatters concerning information disclosure.

Article 20: Securing equality of shareholders
The Company treats all shareholders equally according to their respective stakes and strives to carry out
early delivery of notice of convocation, set schedules for General Shareholders Meetings appropriately, anddevelop the use of an electronic voting platform and other environments in order to ensure that all
stakeholders can appropriately exercise their voting rights. The Company also makes timely and appropriate
information disclosure so that information disparity does not occur between shareholders.
Article 21: Related party transactions
In order to avoid harm to the common interests of the Company and its shareholders, the Company
undertakes appropriate procedures in accordance with the Companies Act and other applicable laws andregulations when conducting transactions with Directors, Corporate Executive Officers (Shikkoyaku), major
shareholders, and other related parties.
Article 22: Dialogue with shareholders and investors
1.

The Company places importance on constructive dialogue with shareholders and others. To achievesustainable growth and maximize corporate value over the medium to long term based on the Companyʼs
Corporate Principles, the Company engages in dialogue through various opportunities, such as financial
results briefings, briefings for individual investors, and meetings with institutional investors and analysts.

2.

The Company provides feedback regarding issues and opinions obtained through dialogue as describedin the preceding paragraph to Directors and Corporate Executive Officers (Shikkoyaku). The Company
also endeavors to expand opportunities for its Directors and Corporate Executive Officers (Shikkoyaku)
to hold dialogue with shareholders, individual investors, institutional investors, and analysts, etc.

Article 23: Dialogue with stakeholders
1.

Towards the realization of the Corporate Principles, the Company identifies social issues through activedialogue not only with shareholders and investors but also a broader range of stakeholders, helps to resolve
such issues through its business, and aims to achieve a balance between social and economic value.

2.

For implementing the policy stated in the preceding paragraph, the Company has established the Basic
Policy on Stakeholder Engagement.
https://www.daiwa-grp.jp/english/sustainability/group_sustainability/stakeholder.html

Article 24: Basic policy on strategic shareholding
The Company will establish a basic policy on strategic shareholding and a basic policy on the exercising ofvoting rights related to strategic shareholding, and will disclose the outline of such policies.

7Article 25: Amendments to and revocation of the Guidelines
Amendments to and revocation of the Guidelines will be made following a resolution by the Board ofDirectors.
Date of establishment: April 1, 2021
Date of amendment: June 1, 2023

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