Lawson, Inc.

CORPORATE GOVERNANCE
Last update: May 22, 2024
Sadanobu Takemasu,
President and CEO, Representative
Director, Chairman of the Board
Contact: +81-(0)3-6635-3963
Securities Code Number: 2651
https://www.lawson.jp/en/
The current status of Lawson’s corporate governance is as follows:

I

Basic Approach to Corporate Governance, Capital Structure, Corporate
Attributes, and Other Basic Information

We place great importance on stakeholder under group philosophy “Creating Happiness and Harmony in Our
Communities,” and strive to maximize enterprise value by making Lawson stores a place where 1.

the customer is always made to feel welcome

2.

franchised store owners can feel that they are realizing their full potential

3.

part-time staff and workers on short-term contracts can develop their skills and grow as a result of their own efforts

4.

suppliers and service providers see their dreams take shape5.

employees can take pride in their work and really feel a sense of being useful to the society

6.

shareholders can contribute indirectly to society and invest in their dreams for the future, and7.

members of customer communities can feel welcome and safe.
These are our goals, and the realization of these objectives will contribute to the maximization of enterprise value. To

this end, we will continue to ensure that laws and regulations are strictly observed, and social codes of conduct arehonored. In accordance with Lawson’s group philosophy and the Lawson’s Code of Ethics, we will give attention topeople requiring support. Moreover, we believe it is important to increase management soundness and transparency aswell as to raise corporate governance standards through compliance and rigorous disclosure.
Based on the above basic approach, regarding basic views on composition of Board of Directors and policies in theappointment of officer, please refer to section I.1 (4) “Basic views on composition of Board of Directors and policies in theappointment of officers” in “1. Basic Approach <Principle 3-1: Voluntary Information Distribution>” in this report.

[Reasons for not implementing all the principles of the Corporate Governance Code]The following Supplementary Principle is described in accordance with the Corporate Governance Code as revised inJune 2021.

The Company is implementing all the principles of the Corporate Governance Code.

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Lawson, Inc.

CORPORATE GOVERNANCE[Disclosures based on each principle of the Corporate Governance Code]
The Company’s initiatives in the area of corporate governance are described not only this report, but also in convocation
notices for shareholders’ meetings, annual securities reports, integrated reports, and so on.
Details of the disclosure components of each principle of the Corporate Governance Code are as follows:<Principle 1-4: Policy on Strategic Holdings and Standards Concerning the Exercise of Voting Rights in the Case ofStrategically-Held Shares>
The Company sometimes holds listed shares strategically for the purposes of raising its value over the medium to longterm, but we endeavor to keep such holdings to the minimum required. When acquiring such holdings, we perform a detailed
investigation for each individual issue to ascertain whether the purpose of holding is appropriate, whether the benefits andrisks associated with holding are commensurate with the cost of capital, etc. Furthermore, each year the Board of Directors
reviews the appropriateness of holdings, and as of the end of February 2024, we held 3 different listed stocks. From time totime, we review the reasons for these strategic shareholdings, taking into account, for example, their impact on increasing
our corporate value. Furthermore, when acquiring or disposing of listed shares, we ensure compliance with insider trading
rules.
Regarding voting rights in the case of strategically-held shares, given that our primary goal is to raise the Company’svalue, we examine each proposal from the standpoint of whether it will increase the shareholder value of the investee
company over the medium to long term, after which we exercise our voting rights accordingly. Regarding the exercise of
voting rights, based on internal rules, the department in charge examines each proposal, such as the use of surplus funds, theappointment of officers, and changes to officer compensation, taking into account both quantitative and qualitative aspectsof the condition and performance of the company concerned (operating results, capital efficiency, etc.), after which we
exercise our voting rights in an appropriate manner. Furthermore, if we need to confirm, for example, the purpose of a
proposal, we engage in dialog with the investee company before deciding how to exercise our voting rights.

<Principle 1-7: Framework for Confirmation of Related Party Transactions>
In its rules for the Board of Directors, the Company has designated competitive transactions, personal transactions, andconflict-of-interest transactions by directors as requiring Board approval, and ensures that directors are aware of this.
Furthermore, the same rules also stipulate that transactions executed with the approval of the Board be reported to the Board
once every 3 months. Moreover, a system is in place to ensure that transactions with major shareholders do not compromise
the interests of the Company or its shareholders.

<Supplementary Principle 2-4(1): Ensuring Diversity in Appointment of Core Human Resources>(1) Views on ensuring diversity
We believe that maximizing the capabilities and potential of all employees, including female and non-Japanese employees,
and creating new innovations will lead to an increase in corporate value, and we position diversity, equity and inclusion(DE&I) as one of our management strategies.

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CORPORATE GOVERNANCE
In order to promote DE&I management, a DE&I Promotion Officer has been appointed. Under the direction of the President,
the Diversity Promotion Officer is promoting necessary system design, operations, and appointments in cooperation with the
Human Resources Division. In addition, we endeavor to actively promote human resources diversity in the appointment ofcore human resources, such as managers.

[Diversity, Equity & Inclusion (DE&I) Policy]
Lawson’s group philosophy is “Creating Happiness and Harmony in Our Communities.”
This corporate philosophy means contributing to towns and growing in happiness with them by acknowledging the diverse
nature of society, and creating new products and services that correspond to environmental changes. Society is made up of
many different types of groups with different attitudes and values, and individuals have all kinds of different ways of thinking
informed by a variety of background factors such as ethnicity, religion, and employment status.
Against this backdrop, we aim to grow as a member of the global community by engaging with an array of people not justin Japan but all over the world with a view to improving our corporate value.
We strive to create an environment where each individual member of our diverse workforce can fulfill their potential,
regardless of gender, gender identity and expression, sexual orientation, disability, nationality, age, or other factors. Thismeans capitalizing on individual capabilities in order to increase our organizational capabilities so that we can develop
products and services that deliver new value, thus contributing to happiness and harmony in our communities and society atlarge.
DE&I is a strength that is irreplaceable for Lawson’s growth, and a concept that we will wholeheartedly promote.

(2) Status of ensuring diversity and voluntary and measurable targets[Female employees]
In our desire to retain our female employees over the long term, we have introduced such programs as career developmenttraining, childcare leave training, and elective leadership training to support young women in their career and life planning.
We are also taking steps to develop female management candidates in our Next-Generation Development Committee, whichaims to develop the next generation of leaders for senior management roles from among our general managers. We have beenworking to boost our hiring efforts with the aim of achieving a 30% ratio of female employees in 2030, and in the recruitmentof new graduates since 2005, we have targeted a 50:50 ratio of male and female new hires. The ratio of female managers infiscal 2023 was 13.5%. With the qualitative goal of “A society where women can bring up children while continuing to work,”
we have set the numerical target of increasing the ratio of female managers to 30% in 2030.
And in 2014 we established the “Happy Lawson Nursery” within one of our business sites, thus supporting employees tocontinue working while simultaneously bringing up children. We have also declared a goal of normalizing the practice ofmale employees taking childcare leave. After surpassing 80% of eligible employees in fiscal 2016, the figure reached 90% infiscal 2018 and 98% in fiscal 2023.
The average number increased to 26.1 in fiscal 2023 as a result of the introduction of the parental leave (paternity leave)
system in September 2022 and the promotion of the system through e-learning and online information sharing sessions. In

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CORPORATE GOVERNANCE
March 2023, we were introduced as one of the companies encouraging their employees to take childcare leave on the Tokyo
Metropolitan Government’s Child Smile Movement website. By encouraging men to play a greater role in raising theirchildren, we aim to become a company at which both men and women feel comfortable to work.

[Non-Japanese employees]
We have been actively hiring non-Japanese employees since 2008. In the recruitment of new graduates, we have continued
efforts with the target of increasing the ratio of non-Japanese employees to 10 to 20%, and more than 138 non-Japaneseemployees are currently employed and taking active roles in fiscal 2023 (ratio of international employees at the end of 2023:
3.2%).
The ratio of non-Japanese managers in fiscal 2023 was 1.8%. While continuing recruitment efforts with the aim ofincreasing the ratio of international employees among new graduate hires to 15%, we will make ongoing efforts in developing
and promoting non-Japanese employees.

[Lateral hires]
In lateral recruitment, we mainly hire individuals with various career backgrounds who have experience in other industries,
special skills and know-how, and who are not bound by fixed concepts within the industry or the Company. The ratio of
lateral-hire managers in fiscal 2023 was 40.7%, and we will endeavor to maintain a similar ratio in the future.

(3) Human resources development policy aimed at ensuring diversity, internal environment development policy, and current
statusThe Company has focused on the development of core human resources who are tasked with realizing its Group philosophy
and Lawson’s Way (Action Guideline). The kind of talent that we look for at Lawson is people who can create value throughcollaboration based on team, who can transform themselves in order to constantly generate value, and who can accomplish
goals—and the ability to “think and act on their own initiative” is key. We operate a developmental personnel system aimed
at encouraging every employee to think and act on their own initiative toward realizing the Group philosophy, including how
to act as an employee and how to fulfill their own duties in order to achieve annual missions.
With the aim of creating a corporate culture in which employees act on their own initiative, the personnel system clarifies
the scope of responsibility and the roles to be played in accordance with their duties, and a system to evaluate the behavior ofindividual employees has been introduced. As part of this, we use 2 evaluation systems to decide compensation and promotepersonnel development: the Employee Behavior and Skill Level Evaluation, which evaluates the employee behaviors(processes) that produce positive results; and the Performance Evaluation, which assesses the results of the behavior. In
addition, we use Career Development Sheets to help each employee draw a clear picture of his or her future career path. We
ask each employee to look back on his or her past career and current position and clearly state where he or she should be in
the future. We also support individual growth through interviews.
Lawson promotes DE&I with the aim of assembling employees with widely varied values who join together and perform
to their full potential to strengthen its franchise chain further. We have constructed systems for promoting DE&I and inclusion4Lawson, Inc.

CORPORATE GOVERNANCE
under the direction of the President, established a special subsidiary to promote employment of people with disabilities,
developed childcare facilities in our workplaces, and opened offices for conducting labor management consultations with afocus on improving operating efficiency and work environments. In recruiting activities, we disregard gender, nationality, age,school, and origin, focusing instead on individual suitability, motivation, and ability. To promote active roles for diverse
human resources, we introduced a flexible full-time (limited work location and hour) employee system designed forcompatibility with obligations such as childcare, long-term care and cancer treatment; established a remote work system forall employees; and introduced an active full-time senior employee system, raising our employee retirement age to 65 effective
March 2021. These measures will help transform Lawson into a company whose employees can continue working withsatisfaction.
For details of our human resources development policy, internal education policy, etc., including our efforts to ensure
diversity, please refer to our website.
https://www.lawson.jp/en/about/hrs/diversity/<Principle 2-6: Demonstration of Function as a Corporate Pension Asset Owner>
The Company has introduced a defined-contribution pension plan that is administered and managed by a trust bank. In
addition to endeavoring to mitigate future risk from a business account perspective, we are committed to enabling each andevery one of our employees to invest their assets in a way that matches their respective life plans. To that end, we consult
with the trust bank before selecting products and offering them to our employees. Furthermore, to prevent employees being
disadvantaged if they forget to select investment products when enrolling in the scheme, we have prescribed specified
investment methods.

<Principle 3-1: Voluntary Information Distribution>(1) Company business principles, business strategies and business plans
The Company has formulated its group philosophy as a basis for all its corporate activities.
[Group Philosophy]“Creating Happiness and Harmony in Our Communities”
Furthermore, under this group philosophy, the Group has set a new vision in order to clarify its goal and orient all
business activities toward these goals.
[Vision]“Our goal is to become the hub of refreshment in every community.”At the same time, in order to succeed this vision, we also have revised Lawson's Way (action guideline) to clarify theactions required for the individual and to move forward with everyone united.
[Lawson's Way (Action Guideline)]
1.

Create stores filled with the best smile in town.

2.

Speak out your ideas to take action.

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CORPORATE GOVERNANCE
3.

Enjoy your challenge.

4.

Value your friends to become one.

5.

Act in good faith.

For details of our business strategy, please refer to our integrated report.
https://www.lawson.jp/en/ir/library/annual_report.html(2) Basic views and guidelines on corporate governanceFor our basic views and guidelines on corporate governance, please refer to I.1 “Basic Approach” in this report.

(3) Board policies and procedures in determining the remuneration of directors
For the Company’s policies concerning remuneration for directors and Audit & Supervisory Board Members, pleaserefer to section II.1 “Disclosure of the Policy on Deciding the Amount of Remuneration or its Calculation Method” in“Matters Related to Compensation for Directors” in this report.

(4) Basic views on composition of Board of Directors and policies in the appointment of officers
The Company has established Officer Selection Standards to serve as criteria when appointing director and Audit &Supervisory Board Member candidates, and we have appointed persons who have different expertise and experience as
director candidates so as to ensure the diversity of the Board of Directors as a whole as well as appropriate decision
making and supervision. Furthermore, in addition to “Independence Standards” determined by the Tokyo Stock Exchange,
Inc., we have established “Criteria for Determining Independence” and appointed several independent officers who areunlikely to develop conflicts of interests with ordinary shareholders in order to strive to make clear about the transparency
and fairness of management. More than one-third of the member of Board of Directors shall be independent officers. In
addition, a lead independent outside director (Miki Iwamura as of May 22, 2024) is elected from among outside directors
with the aim of enhancing the system related to the liaison and coordination between outside directors and the senior
management as well as the cooperation with Audit & Supervisory Board Members and the Board of Audit & Supervisory
Board Members.
Regarding the number of directors, the number of directors is limited to eleven persons in our company, and we will
establish a framework that allows both the adequate consideration at the Board of Directors and the maintenance of themobility of the inquiries while by introducing the executive officer system, we can categorize management decisionmaking and supervision and business execution and establish a system that enables quick decision making and businessexecution.
Regarding Audit & Supervisory Board Members, we appoint persons with knowledge and expertise such as finance,accounting, risk management, law necessary for audit duties.

<Officer Selection Standards and Procedures>
Based on the above policy, we select candidates for officers in accordance with the following Officer Selection Standards.

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CORPORATE GOVERNANCE
In addition, candidates for outside directors are those who do not violate the following Criteria for Determining Independence.
Furthermore, we established the Nomination and Compensation Advisory Committee to declare candidates for directors andrepresentative directors to the Board of Directors. If, after taking up their post, a director or representative director has
seriously damaged the value of the Company or no longer meets the Officer Selection Standards, the committee is consulted
on whether to dismiss the officer concerned.

<Officer Selection Standards>
・Have a strong affinity with the group philosophy of “Creating Happiness and Harmony in Our Communities”
・Have the ability to contribute to delivering sustainable growth to the Group and increasing its corporate value
・An absence of mental or physical health problems that would hinder their ability to perform their duties
・Popularity, dignity, impeccable ethics, and very respectful for the law.
・Have objective decision-making abilities and gifted with both foresight and insight・Have extensive experience and insight in such as corporate management and specialized fields
・Be able to secure enough time to do the job line
・Not disqualified under the Companies Act
・Regarding independent officers, not conflict with “Criteria for Determining Independence”<Criteria for Determining Independence>
・A person or person who works for a party for whom the Group is an important business partner
Refers to the case of a business-partner group that supplies products or services to the Group where the amount ofbusiness conducted between the Group and the business-partner group in the preceding business year was 2% or moreof the business-partner group’s consolidated sales
・A person who is an important business partner of the Group or person who works for a party that is an important business
partner of the Group
Refers to the case of a business-partner group to which the Group supplies products or services where the amount ofbusiness conducted between the Group and the business-partner group in the preceding business year was 2% or moreof the Group’s consolidated sales (gross operating revenue)
・A consultant, accounting specialist, or legal specialist who receives large amounts of money or other assets other thanofficer compensation from the Group
Refers to a consultant, accounting specialist such as a certified public accountant, or legal specialist such as an attorney
who receives money or other assets other than officer compensation from the Group and has received 5 million yen or
more per year in each of the past 2 years from the Group・A major shareholder of the Company (if the shareholder is a corporation, a person who works for that corporation)
・A close relative of the person works for the Group・A close relative of the person is a non-executive director or an accounting advisor of the Group (if the independent
officer is an outside Audit & Supervisory Board Member)7

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CORPORATE GOVERNANCE
・A person who, at the time of reappointment, has served for a total of more than 8 years as an outside director or 12
years as an outside Audit & Supervisory Board Member. Even if any of the above apply, if the person concerned isdeemed by the Board of Directors to be effectively independent, that person may be selected as an independent
outside-officer candidate. In such a case, the reasons shall be explained and disclosed at the time of their appointment
as an outside officer.

(5) Explanations of each appointment/nomination when the Board of Directors appoints nominates director and Audit &Supervisory Board Member candidates based on (4) above
The Company includes the reasons for selecting director and Audit & Supervisory Board Member candidates inconvocation notices for shareholders’ meetings.

<Supplementary Principle 3-1(3): Sustainability Initiatives, etc.>(Sustainability initiatives)
The Company has been promoting its business activities from the customer’s point of view in order to become the hub of
refreshment in every community based on its Group philosophy, “Creating Happiness and Harmony in Our Communities.”
In creating happiness in our communities, it is essential to realize a sustainable society for the future and to coexist
synergistically with our stakeholders. In order to create a prosperous future for our children, the Lawson Group has
established the Lawson Group Sustainability Policy based on the Lawson Group Corporate Conduct Charter and has beenpromoting sustainable business activities in collaboration with its stakeholders.
The Lawson Group pursues ESG-focused management with the objective of addressing social challenges posed by climatechange and other environmental issues as well as issues regarding human rights. For this purpose, we have established theposition of Chief Sustainability Officer (CSO), which is assumed by the President and CEO and representative director. We
have also established the SDGs Promotion Office as a dedicated department that reports directly to the president of theCompany and has responsibility for the Group’s overall sustainability activities. As one of its roles in promoting the Group’s
sustainability initiatives, the SDGs Promotion Office serves as secretariat for the SDGs Committee, which meets four times
a year and counts as its members the heads of each organization related to sustainability.
Under the SDGs Committee, working groups or similar bodies are formed to discuss concrete measures and strategies todeal with priority issues (reducing CO2 emissions, reducing food waste, reducing plastic use, supply chain expansion, andinformation disclosure) to be responded to urgently by the Group. Discussion results are reviewed by the SDGs Committee
to confirm the directions, and brought up to the management meeting and Board of Directors or other meetings, as needed,
to obtain approval.

We believe that our approach to help achieve the SDGs and create a sustainable society should be to take on challenges inorder to fulfill the Three Promises while at the same time promoting business activities and building appropriate value
creation cycles. Based on this belief, we are carrying out a battery of plans to solve social issues. We identify the Group’s
priority social issues based on the Three Promises and in terms of the level of impact that our business activities, including8

Lawson, Inc.

CORPORATE GOVERNANCE
those related to value chains, have on the environment, society, and economy. Deeming these to be material issues related tosustainability (materiality), we have organized them into “Six Material Issues”. In a bid to address the Material Issues, eachdivision of the Company and each company of the Group are making all-out efforts to keep the Three Promises while
implementing a variety of collaborative programs. The relevant implementation status is reported to the SDGs Committee
on a regular basis in order to facilitate the overall progress of the Group.

Lawson’s “Six Material Issues”
1. Providing safety/security-oriented overwhelmingly high value-added products and services friendly tosociety and the environment
2. Supporting health promotion for all people through products and stores
3. Providing comfortable work environment leading to job satisfaction
4. Supporting women, senior people as well as children’s growth
5. Coexisting synergistically with communities by serving as part of social infrastructure
6. Sustainable environment preservation activities toward carbon-free society

For details of sustainability initiatives, please refer to “Environmental Protection and CSR Activities” in section Ⅲ.3“Approach for Respecting the Position of Stakeholders” in this report.
For details of the Lawson Group Sustainability Policy, please refer to our website.
https://www.lawson.jp/en/csr/policy/sustainability_policy/(Investment in human capital and intellectual property)
The Group defines its employees as human capital and views them as essential to ESG-focused management. We endeavor
to enhance our human capital with the objective of realizing the Group’s philosophy and visions. In order to maximize thevalue of our employees, who are our most important capital in terms of realizing happiness in our communities and advanced
store productivity, we are promoting our human resources strategy along with DE&I (diversity, equity, and inclusion)
management as part of our key management strategy themes. Seeking to bring happiness to our communities, we arecommitted to “human kindness,” one of our Three Promises, and implement various initiatives related to our Material Issuesof “providing comfortable work environments leading to job satisfaction,” “supporting empowerment of women and seniors,
as well as children’s growth,” and “supporting health promotion for all people through products and stores.” Also, under the
Lawson Group Sweeping Transformation Executive Committee, a central function for promoting the Lawson Group
Challenge 2025, we have launched human resources program reform and job satisfaction reform projects to consider a number
of issues related to personnel systems, such as the adoption of systems for job-based employment with clearly defined roles
and allowing diverse working arrangements, and are also conducting measures to assist employees in taking on challenges.
By moving forward with the above-described human capital management strategies, we aim to achieve the sustainable growthof the Company and improve its corporate value.

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CORPORATE GOVERNANCE
In addition, intellectual property and intangible assets—including technology, brands, design, content, data, know-how,customer networks, trust, and reputation, value chains, and supply chains are important factors for the Company to secure acompetitive advantage, and we believe that investment in these assets is essential to further enhancing our corporate value.
Under the Lawson Group Sweeping Transformation Executive Committee, we consider and promote an AI-based nextgeneration ordering system, a discount sale recommendation experiment, a store delivery optimization program, utilization of
the Group’s data for our marketing measures, and implementation of Group-wide initiatives to enhance our brand image, thus
working on structural reforms from a medium- to long-time perspective while making active growth investment. At the sametime, we are working on discontinuous research and development at the Open Innovation Center in order to utilize cuttingedge technology for the business models of next-generation convenience stores.
Furthermore, we recognize that the maintenance and enhancement of the value of our intellectual property, such as
trademarks and brands, is indispensable for the business continuity and the sustainable growth of the Company. Accordingly,
we will acquire and maintain intellectual property rights in Japan and overseas, and promote the protection of intellectual
property by taking prompt and strict measures against counterfeits and other products and services that damage such value.

For our management strategy based on the utilization of intellectual property and intangible assets, please refer to thefollowing operating results presentation.
https://www.lawson.jp/en/ir/library/pdf/presentation/ps_2024.pdf<Supplementary Principle 4-1 (1): Overview of Scope of Matters Delegated to Management by the Board of Directors>
The Company specifies matters that require a resolution of the Board of Directors in its rules for the Board of Directors,
guidelines for matters that require discussion by the Board of Directors, and so on, and has also deemed that mattersprescribed by law or in its articles of incorporation, as well as important matters concerning the Company and Group
companies, be decided by resolution of the Board. Furthermore, in 2002, we introduced an executive officer system withthe aim of clarifying management responsibilities and speeding up decision-making through the delegation of authority.
Under this system, matters concerning business execution other than those stipulated in the rules for the Board of
Directors are delegated to the Executive Committee, which comprises personnel who are generally of executive
managing officer level or above and members designated by Representative Director and President.

<Supplementary Principle 4-1 (3): Chief Executive Officer Succession Planning>
The Company regards succession planning for the president, who also is the chief executive officer of the Company,as an important management task, and with the aim of making the procedures more objective, timely, and transparent,
the matter is considered by the Nomination and Compensation Advisory Committee, an advisory organ to the Board of
Directors that comprises only part-time officers (and has 6 members, 5 of whom are independent officers). The committee
has prescribed the following qualities and attributes required of the Company’s chief executive officer, and therepresentative director and president has made suggestions to the committee concerning the development of successors,
the method of nomination, etc., and the committee has accepted these suggestions.

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CORPORATE GOVERNANCE[Qualities, attributes, etc. required of the President](ⅰ) Ability to respond to and engineer change
To ensure the continuation of the convenience-store business, which is part of the societal infrastructure, it is essential
to respond with a sense of urgency to the constantly changing external environment and needs of society and customers.
Furthermore, the ability to unearth new needs among customers and society and to deploy innovation to engineer change
is vital.
(ⅱ) Strong leadership
To maintain and elevate the chain’s brand, the exercise of strong leadership toward not only employees but also tostores throughout the country is critical.
(ⅲ) High-level communication skills
The person at the top of the Company needs to provide explanations to shareholders, investors, the media, etc. and tocommunicate information to the outside world. They also require high-level communication skills in order to ensure that
store owners nationwide fully understand our management policy and Group philosophy.
(ⅳ) Broad perspectives for viewing the Group as a whole and strong commitment to governanceTo contribute to management at the consolidated level, it is essential to maintain a broad perspective for pursuing total
optimization for the Group as well as a strong commitment to promoting disciplined Group governance.
(ⅴ) Impeccable ethics
As the president of a listed company, which could almost be described as a public institution, and as the top leader ofa convenience-store chain, they need to act in good faith and with impeccable ethics in any event that arises.
Note that no hard and fast attributes for successors are specified. For example, they could be people from inside theCompany or outside the Company.

<Principle 4-9: Independence of Independent Outside Directors and Criteria for Determining Independence in Practice>
Described in “(4) Basic views on composition of Board of Directors and policies in the appointment of officers” above.

<Supplementary Principle 4-10(1): Views on Independence of Nomination and Compensation Advisory Committee andthe Committee’s Authority, Roles, etc.>
The voluntarily established Nomination and Compensation Advisory Committee serves as an advisory body that
expresses its opinion to the Board of Directors regarding nominations of candidates for the positions of member of theBoard and representative director. All 6 of the Committee members are non-executive members of the Board or part-timeoutside Audit & Supervisory Board Members, and 5 of them are independent officers. This ensures that the Committee
can express its opinion to the Board of Directors regarding nominations of candidates for the positions of member of theBoard and representative director based on a high degree of independence.

<Supplementary Principle 4-11(1): Views on the Balance of Knowledge, Experience, and Skills of the Board of
Directors as a Whole and the Diversity and Size of the Board of Directors>

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Please refer to “(4) Basic views on composition of Board of Directors and policies in the appointment of officers,”"Officer Selection Standards."
As of May 22, 2024 there are 5 directors (of which 2 are independent directors) and 5 Audit & Supervisory Board
Members (of which 3 are independent Audit & Supervisory Board Members). Furthermore, we are aggressively
promoting women to officer positions, and as of May 22, 2024, there are 5 female officers (2 directors, 3 Audit &Supervisory Board Members). In addition, in order to ensure the optimal composition of the Board of Directors for theCompany, we have been disclosing the main areas of experience and expertise of directors and Audit & Supervisory
Board Members (skills matrix) in the convocation notices for general meetings of shareholders starting in 2021. In August
2021, we reviewed the categories and disclosed the skills matrix in the integrated report.
https://www.lawson.jp/en/ir/stock/stockholder.html
https://www.lawson.jp/en/ir/library/annual_report.html<Supplementary Principle 4-11(2): Concurrent Service by Directors and Audit & Supervisory Board Members>
We disclose information on directors and Audit & Supervisory Board Members of the Company who hold concurrent
posts as officers of other listed companies in convocation notices for shareholders’ meetings.
Information on directors and Audit & Supervisory Board Members of the Company who held important concurrent
posts as of the date this report was updated is presented in “Matters Related to Directors” and “Matters Related to Audit& Supervisory Board Members” in section II.1 of this report.

<Supplementary Principle 4-11(3): Overview of Analysis/Evaluation of the Effectiveness of the Board of Directors asa Whole>Every year, with the aim of ensuring the effectiveness and enhancing the functions of the Board of Directors, theCompany conducts surveys (mostly in writing) in which all of the Directors and Audit & Supervisory Board Members
perform a self-evaluation of the effectiveness of the Board of Directors. Responses are compiled and analyzed after they
have been collected from all respondents. While responses to surveys conducted in fiscal 2023 identified issues inconnection with medium- to long-term management strategies, strategic investments in human capital, and discussions
on sustainability, no serious problems were indicated, testifying to the effectiveness of the Company’s Board of Directors
in deciding on important management matters and overseeing business execution. The results were shared at a Board of
Directors’ meeting where related discussions took place. Details of discussions held at the opinion exchange meeting by
independent officers were also shared at a Board of Directors’ meeting where related discussions took place.
Going forward, based on the results of the aforementioned evaluation of the effectiveness of the Board of Directors,
we will refer to discussions at the opinion exchange meeting of independent officers and the Board of Directors’ meetings
to enhance discussions on medium- and long-term management issues and improve the operation of the Board of
Directors’ functions in order to further enhance the effectiveness of the Board. Every three years, we employ external
evaluation services to conduct the above-described self-evaluation survey to ensure the objectivity of the resulting
analysis.

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CORPORATE GOVERNANCE<Supplementary Principle 4-14(2): Policy on Training for Directors and Audit & Supervisory Board Members>
The Company provides directors and Audit & Supervisory Board Members with opportunities to undertake the training
they need to perform their roles and duties. We also provide directors and Audit & Supervisory Board Members withinternal and external training opportunities relating to the roles, responsibilities, etc. required for the Company to makedecisions as necessary. Non-executive directors and outside audit & supervisory board member (part-time), meanwhile,
are provided with opportunities to acquire essential knowledge concerning the operations, finances, organization, etc. of
the Company. Furthermore, to enable them to deepen their understanding of the Group’s business, they are given theopportunity to participate in key events such as conferences to announce Company policy and to tour Group-related
facilities. The Company pays the cost of all these activities.

<Principle 5-1: Policy for Systems and Initiatives for Promoting Constructive Dialog with Shareholders>
The Company’s Policy for Systems and Initiatives for Promoting Constructive Dialog with Shareholders is as follows.
(1) Basic approach
The Company acknowledges that to deliver sustainable growth and medium- to long-term increases in corporate value
through value creation, it is essential to obtain the understanding and support of shareholders and investors.
To that end, we endeavor to disclose information in an appropriate, timely, and fair manner, and intend to engage inconstructive dialog with shareholders and investors in order to build trust with them. In addition, indicators such as
medium to long-term capital profitability, which are necessary for a constructive dialogue, are disclosed in materials
related to operating results and the integrated report.
(2) IR structure
The President is responsible for dialog with shareholders and investors, which is handled by a dedicated IR department
under the purview of the CFO, which works with related departments to proactively disclose information in a highly
transparent fashion.

(3) Dialogue Policy and Activity Results
The Company regards shareholders’ meetings as providing important and valuable opportunities for dialog withshareholders, and ensures that there is adequate time at these meetings for questions and answers. We also hold earnings
briefings. At these meetings we provide analysts and institutional investors with information on matters such as ouroperating results and business strategy. Furthermore, our website contains a dedicated IR section where we provide
individual investors and overseas investors with easy-to-understand information on our operating performance,businesses, management policies, monthly performance, and so on. Moreover, the President, CFO, and IR department
proactively visit institutional investors both in Japan and overseas and respond to individual requests from journalists for
information.
<Activities conducted in fiscal 2023>
Earnings briefings: two (with the President, CFO, etc. present)
Earnings teleconferences: three (with CFO, etc. present)13

Lawson, Inc.

CORPORATE GOVERNANCE
Interviews with institutional investors and analysts from inside and outside of Japan: around 260 (including roughly
50 attended by the President, CFO, or other executives)(4) Feedback to Company executives
When necessary, details of dialogs with shareholders and investors are provided to the President and other executives.

(5) Inside information and quiet periods
In our dialogs with shareholders and investors, we do not reveal inside information (important matters that have yet tohave been announced publicly). With the aim of ensuring fairness and preventing the leakage of operating results, wehave a quiet period each quarter.

(6) Action to Implement Management That is Conscious of Cost of Capital and Stock Price (with disclosure in English)
The Company sets ROE and other numerical targets as key performance indicators according to the Lawson Group
Challenge 2025, our medium-term management vision. We also formulate implementation plans for each business andcarry them out effectively, aiming to increase corporate value over the medium and long term.

Medium-Term Management Vision and Action Plan
https://www.lawson.jp/en/ir/library/pdf/presentation/ps_2021.pdf
https://www.lawson.jp/en/ir/library/pdf/presentation/ps_2023.pdf

Integrated Report (CEO/CFO Message)
https://www.lawson.jp/en/ir/library/annual_report.html<Principle 5-2: Formulate and publish management strategies and plans >For details of our initiatives in FY2023 and policies and targets for our business in FY2024 and beyond, please referto the following operating results presentation.
https://www.lawson.jp/en/ir/library/pdf/presentation/ps_2024.pdf

14

Lawson, Inc.

CORPORATE GOVERNANCE

Proportion of Lawson’s shares held by non-residents

20% or more and less than 30%[Status of Major Shareholders]Name

Number of Shares Held

Mitsubishi Corporation
The Master Trust Bank of Japan, Ltd. (Trust account)
BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC)
Custody Bank of Japan, Ltd. (Trust account)
KDDI CORPORATION
NTT DOCOMO, INC.
MSIP CLIENT SECURITIES

Ratio (%)

50,150,100

50.11

6,515,400

6.51

2,155,595

2.15

2,134,800

2.13

2,110,000

2.11

2,092,000

2.09

1,821,344

1.82

1,513,035

1.51

1,007,638

1.01

926,292

0.93

BNYM SA/NV FOR BNYM FOR BNY GCM CLIENT
ACCOUNTS M LSCB RD
JPLLC-CL JPY
Employee stockholding association

Controlling Shareholder (Exclude Parent Company)

None
Mitsubishi Corporation

Parent Company(Stock Listings: Tokyo) (Securities Code) 8058

Supplementary Explanation
Nothing to report

Stock Exchange Listings

Tokyo Stock Exchange (Prime Market)

Accounting Settlement

February

Business Type

Retail business(Consolidated) Number of Employees at End of Last
Fiscal Year

Over 1,000(Consolidated) Sales for Last Fiscal Year

Over 1 trillion yen

Number of Consolidated Subsidiaries at End of Last
Fiscal Year

Over 10 companies and less than 50 companies

15

Lawson, Inc.

CORPORATE GOVERNANCE

As a listed company, we ensure certain independence. Even in transactions with parent company, Mitsubishi
Corporation, and its group companies, we have determined their terms and conditions like other general transactions
after considering prices of other companies and actual prices of the market to not give disadvantages to minority
shareholders. In accordance with Supplementary Principle 4-8 (3), the Company appoints at least one-third of themembers of the Board of Directors are outside directors elected independently of the Company’s controlling shareholders
and has voluntarily established a permanent special committee to deliberate and consider significant transactions and any
conduct involving a conflict of interest between Mitsubishi Corporation, the parent company, and minority shareholders.
In fiscal year 2023, the committee was held three times. The committee comprises 5 members including the committee
chairperson, all of whom are outside directors and outside Audit & Supervisory Board Members independent of theparent company, ensuring a highly independent structure to ascertain the necessity, rationality, appropriateness, andfairness of the significant transactions and conduct in question and report the results to the Board of Directors.

Mitsubishi Corporation is its parent company that currently holds 50.2% of its total voting rights (50,150 thousand
shares). Mitsubishi Corporation, as the owner of a host of consolidated subsidiaries, respects the independence of thesecompanies and works to optimize consolidated management, aiming to increase corporate value and business value.
Lawson Inc. is positioned in the S.L.C. Group, Mitsubishi Corporation’s business segment engaged in retailing, such as
convenience store and food supermarket chain operations, data marketing, and loyalty program business, and as suchshares the parent company’s management philosophy and business strategies. The Company has entered into a formal
business alliance with Mitsubishi Corporation, under which its independence and autonomy for the purpose of conducting
alliance projects is appropriately ensured, its capacity to make its own decisions on management and overall businessactivities is secured, and its independence as a listed company in operating its business is respected.
The Company will be delisted, as announced on April 26, 2024. After delisting, the Company will continue to beaffiliated with Mitsubishi Corporation as it engages in alliances with its group companies as well as businesses fromother industries, looking to deliver new consumer experiences and customer value with a view to further improvementin the corporate value of both the Company and the Mitsubishi Corporation Group.

16

Lawson, Inc.

CORPORATE GOVERNANCEII Business Management Organizations Associated with Management Decisionmaking, Execution and Supervision, and Status of Other Corporate
Governance Systems
1.
Company with Audit & Supervisory Board
Members

Type of Organization[Matters Related to Directors]
Number of Directors under the Articles of Incorporation

11

Term of Directors under the Articles of Incorporation

1 yearChairperson of the Board of Directors

President

Number of Directors

5Election of Outside Directors

Yes

Number of Outside Directors

2

Number of Outside Directors that are Appointed as
Independent Directors

2

Relationship with Lawson (1)NameAttribute

Relationship with Lawson (*)

a
b
c
d
e
f
g
h
i
j
k
Miki Iwamura
Originally from another company
Satoko Suzuki
Scholar* Conditions met regarding the relationship with Lawson* ○ denotes that an item currently applies to the person, and △ denotes that it applied in the past
* ● denotes that an item currently applies to a close relative of the person, and ▲ denotes that it applied in thepasta.
Executive officer of the listed company or subsidiary thereofb.
Executive officer or non-executive director of parent company of the listed companyc.
Executive officer of a fellow subsidiary of the listed companyd.
A person for whom the listed company is a key business partner, or an executive officer thereofe.
A key business partner of the listed company, or an executive officer thereoff.
A consultant, accounting expert or legal expert who receives substantial money or other property from thelisted company other than officer compensationg.
A major shareholder of the listed company (if the major shareholder is a corporation, an executive officer ofthe corporation)h.
An executive officer (only the actual person) of a business partner of the listed company (which does not fallunder d,e or f)i.
An executive officer of a company with a relationship of mutual appointment of external directors (only the17

Lawson, Inc.

CORPORATE GOVERNANCE
j.
k.

actual person)
An executive officer of a party to which the listed company makes donations (only the actual person)
OthersRelationship with Lawson (2)Name

Independent
Director

Miki
Iwamura○SatokoSuzuki○

Supplementary
Explanation to
Corresponding Item
Vice President, Asia-Pacific,
Japan (Marketing),
Google Japan LLC

Professor, Hitotsubashi ICS

Reason for Selection as Outside Director
Possesses extensive experience and knowledge as avice president at a global IT company, and is currently
conducting appropriate supervision of Lawson’s
management.
Furthermore, she is highly independent, as shedoesn’t violate any of the independence standards
prescribed in the Guidelines for Managing Listings
etc. or any of the Company’s Criteria for Determining
Independence. She has therefore been designated by
the Company’s Board of Directors as an independent
officer who is unlikely to have a conflict of interest
with ordinary shareholders and who will supervise
the Company’s management from an independent
standpoint.
Possesses extensive knowledge as an academic in
consumer behavior, marketing, brand management,
etc., has served on joint government and privatesector committees that address topics such as“business management based on omotenashi(Japanese-style hospitality)” and “globalization ofservice industry.” She has also published numerous
papers, presented at academic conferences on
multiple occasions, and received many awards, and iscurrently conducting appropriate supervision of
Lawson’s management.
Furthermore, she is highly independent, as shedoesn’t violate any of the independence standards
prescribed in the Guidelines for Managing Listings
etc. or any of the Company’s Criteria for Determining
Independence. She has therefore been designated by
the Company’s Board of Directors as an independent
officer who is unlikely to have a conflict of interest
with ordinary shareholders and who will supervise
the Company’s management from an independent
standpoint.

The presence or absence of any committee, which corresponds to theNomination Committee or the Compensation Committee

18

Yes

Lawson, Inc.

CORPORATE GOVERNANCE

Establishment Conditions of Committee, Committee Structure and Attribute of Committee Chairperson

Name ofCommittee

Committee
Corresponds to
Nomination
Committee
Committee
Corresponds toCompensation
Committee

Nomination andCompensation
Committee
Nomination andCompensation
Committee

All
Members

Full-timeMembers

Internal
Directors

OutsideDirectors

OutsideEmployed
PersonOther

Committee
Chairperson

6

0

1

2

0

3

Other

6

0

1

2

0

3

Other

Supplementary Explanation
The nomination and compensation committee were held 4 times in FY2023. In which, it made a proposal to Board of
Directors regarding to compensation for Board of Directors and nomination of executive officers.

19

Lawson, Inc.

CORPORATE GOVERNANCE[Matters Related to Audit & Supervisory Board Members]
Establishment of the Board of Audit &Supervisory Board Members

Yes

Number of Audit & Supervisory Board
Members under the Articles of Incorporation

5

Number of Audit & Supervisory Board
Members

5

Cooperation between Audit & Supervisory Board Members, the Certified Public Accountant and Internal
Auditing Division
Lawson’s Audit & Supervisory Board Members cooperate closely with the certified public accountant, Deloitte
Touche Tohmatsu through the following communication and information exchange:
1. Briefing of the audit plan by the certified public accountant

Once per year

2. Receipt of audit reports (including reviews) and explanation materials for the interim period
and the end of the term by the certified public accountant
16 times per year
3. Monitoring of the independence of the certified public accountant
As required
4. Observation of audit by the certified public accountant

As required during each audit

5. Other meetings to exchange information and opinions

As required

Lawson’s Audit & Supervisory Board Members cooperate closely with the Internal Audit Office through thefollowing communication and information exchange:
1. Briefing on the internal auditing division’s plan for the fiscal year

Once per year

2. Exchange of opinions regarding the content of the internal audit report

For each internal audit report

3. Exchange of information regarding the status of internal controls

As required(nearly once per month)Election of Outside Audit & Supervisory Board
Members

Yes

Number of Outside Audit & Supervisory Board
Members3

Number of Outside Audit & Supervisory Board
Members that are Appointed as Independent
Audit & Supervisory Board Members

3Partnership with Lawson (1)Attribute

Name

Relationship with Lawson (*)
a

Yuko Gomi

Lawyer

20

b

c

d

e

f

g

h

i

j

k

l

m

Lawson, Inc.

CORPORATE GOVERNANCE
Keiko Yoshida
Yuko Miyata

Certified Public Accountant
Other* Conditions met regarding the relationship with Lawson* ○ denotes that an item currently applies to the person, and △ denotes that it applied in the past
* ● denotes that an item currently applies to a close relative of the person, and ▲ denotes that it applied in thepasta.
Executive officer of the listed company or subsidiary thereofb.
Non-executive director or accounting advisor of the list company or subsidiary thereofc.
Executive officer or non-executive director of parent company of the listed companyd.
Auditor of the parent company of the listed company
e.
Executive officer of a fellow subsidiary of the listed companyf.
A person for whom the listed company is a key business partner, or an executive officer thereofg.
A key business partner of the listed company, or an executive officer thereofh.
A consultant, accounting expert or legal expert who receives substantial money or other property from thelisted company other than officer compensationi.
A major shareholder of the listed company (if the major shareholder is a corporation, an executive officer ofthe corporation)j.
An executive officer (only the actual person) of a business partner of the listed company (which does not fallunder f,g or h)k.
An executive officer of a company with a relationship of mutual appointment of external directors (only theactual person)l.
An executive officer of a party to which the listed company makes donations (only the actual person)m. Others

21

Lawson, Inc.

CORPORATE GOVERNANCE
Partnership with Lawson (2)Name

Independent
Director

Yuko Gomi○

Keiko Yoshida○

Yuko Miyata○

Supplementary Explanation
to Corresponding Item

Reason for Selection as Outside
Audit & Supervisory Board Member

Possesses a qualification as a lawyer, is involved inlegal and risk management duties, mainly in the fieldof corporate law, and she is currently conducting
appropriate audits of the roles and responsibilities of
directors.
Furthermore, she is highly independent, as she doesn’t
violate any of the independence standards prescribedin the Guidelines for Managing Listings etc. or any oftheCompany’s
Criteria
for
Determining
Independence. She has therefore been designated by
the Company’s Board of Directors as an independent
officer who is unlikely to have a conflict of interest
with ordinary shareholders and who will supervise theCompany’s management from an independent
standpoint.
Certified Public Accountant, Possesses a Certified Public Accountant qualificationand serves as representative of an accounting firm; has
Certified Public Tax
Accountant with no business a considerable degree of knowledge of tax,
accounting, and business administration; and isrelationship with Lawson
currently conducting appropriate audits of the roles
and responsibilities of directors.
Furthermore, she is highly independent, as she doesn’t
violate any of the independence standards prescribedin the Guidelines for Managing Listings etc. or any oftheCompany’s
Criteria
for
Determining
Independence. She has therefore been designated by
the Company’s Board of Directors as an independent
officer who is unlikely to have a conflict of interest
with ordinary shareholders and who will supervise theCompany’s management from an independent
standpoint.
Human Resources
Has global experience, including overseas
Consultant with no business assignments in the U.S. and the U.K. She has
relationship with Lawson
extensive experience in human resources and laboraffairs at global companies, having served as Memberof the Board, Head of HR and General Affairs of
Unilever Japan K.K. and as Executive Officer andGeneral Manager of the Human Resources Division ofBayer Holding Ltd. And also has considerable
knowledge of overall business decision-making,governance, and compliance and is currently
conducting appropriate audits of the roles andresponsibilities of directors.
Furthermore, she ishighly independent, as she doesn’t violate any of the
independence standards prescribed in the Guidelines
for Managing Listings etc. or any of the Company’s
Criteria for Determining Independence. She has
therefore been designated by the Company’s Board of
Directors as an independent officer who is unlikely tohave a conflict of interest with ordinary shareholders
and who will supervise the Company’s managementfrom an independent standpoint.
Lawyer with no business
relationship with Lawson

22Lawson, Inc.

CORPORATE GOVERNANCE[Matters Related to Independent Directors and Audit & Supervisory Board Members]
Number of Independent Directors and Audit &Supervisory Board Members

5

Other Matters Related to Independent Directors and Audit & Supervisory Board Members
Nothing to report[Matters Related to Incentives]
Status of Implementation of Measures for the
Granting of Incentives to Directors

Introduction of Stock Options Program
Introduction of Performance Pay System

Supplementary Explanation Associated with the Relevant Item
Please refer to section II.1 [Matters Related to Compensation for Directors] “Disclosure of the Policy on Deciding theAmount of Remuneration or its Calculation Method” in this report.

Recipient of Stock Options

In-house directors, outside directors, others

Supplementary Explanation Associated with the Relevant Items
Stock options are granted to in-house directors, outside directors and senior vice presidents to share not only the meritof the rise in stock price but also the risk of decline in stock price with shareholders in order to raise the motivationand morale to raise stock prices and improve performance.
[Matters Related to Compensation for Directors]
Scope of Disclosure (of Individual Compensation
for Directors)

Only partial individual disclosure

Supplementary Explanation Associated with the Relevant Item
In total 5 directors received paid compensation in FY2023 of 248 million yen, including 2 outside directors who
received 30 million yen.
The above compensation amount consists of the following remuneration in relation to FY2023:(1) Basic compensation paid in FY2023
134 million yen (91 million yen of fixed compensation and 43 million yen of variable compensation) to 3
directors
26 million yen (26 million yen of fixed compensation) to 2 outside directors(2) Stock option remuneration
83 million yen to 3 directors
4 million yen to 2 outside directors

23

Lawson, Inc.

CORPORATE GOVERNANCE
Furthermore, the total compensation of which consolidated compensation is over 100 million yen is individually
disclosed in the Annual Securities Report.

Policy on Deciding the Amount of Remuneration
or its Calculation Method

Yes

Disclosure of the Policy on Deciding the Amount of Remuneration or its Calculation Method
Decision-making process and policy for the amount of remuneration paid to directors.
(1) Basic policy on decisions concerning the amount of remuneration paid to directors
Regarding the amount of remuneration paid to directors, it is the Company’s basic policy to design the remuneration
system in close correlation with shareholder returns while ensuring that it will function sufficiently as an incentive forthe enhancement of corporate value, sustainable growth and improvement of operating performance, and reward eachdirector with a sufficient and adequate amount of compensation for the execution of their duties.

(2) Decision-making process for the amount of remuneration paid to directors
In order to enhance management transparency, the amount of remuneration paid to directors is determined at theboard of directors meeting based on recommendations by the Company’s Compensation Committee, which consists
exclusively of non-executive directors and outside audit & supervisory board members (part-time).
Based on “interviews on performance evaluation”, “interviews on goal setting for next fiscal year” and “discussions
on basic compensation and performance evaluation of the Company’s directors” which the Company’s Compensation
Committee conducts, the board of directors meeting determines the amount of individual remuneration paid to
directors.
Members of the Nomination and Compensation Committee:
Committee Chairperson:

Yuko Gomi (Outside Audit & Supervisory
Board Member)

Vice Committee Chairperson:

Miki Iwamura (Outside Director)

Committee member:

Satoko Suzuki (Outside Director)
Shota Kondo (Director)
Keiko Yoshida (Outside Audit & Supervisory
Board Member)
Yuko Miyata (Outside Audit & Supervisory
Board Member)(3) Details of remuneration paid to directors
Remuneration paid to the Company’s directors is composed of basic compensation through monthly cash payments

24

Lawson, Inc.

CORPORATE GOVERNANCE
and stock price-linked compensation through the granting of stock options.

[Basic compensation]
Basic compensation of directors is composed of fixed compensation with fixed monthly payments and variable
compensation, which fluctuates in response to the Company’s financial performance for each period.
1) Fixed compensation (60% of the total)
The amount of standard compensation commensurate with the position is determined based on standards stipulated
by internal rules.
2) Variable compensation (40% of the total)
In order to link the remuneration of directors with shareholder returns, the Company has adopted a compensation
system that is linked to the Company’s financial performance.
The amount of variable compensation is determined based on the percentage of budget achievement for EPS (Basicearnings per share) and SDGs targets (CO2 reduction rate per store, etc.) The final amount of variable compensation
is determined after adding a qualitative component (10%) based on an evaluation performed at a meeting with theNomination and Compensation Committee.
The EPS targets are aimed at better sharing value with shareholders and linking this to the Company’s operating results,
while the SDGs targets are aimed at achieving the Company’s environmental vision of “Lawson Blue Challenge 2050!
-Save our blue planet!-” ((1) reducing CO2 emissions; (2) reducing food waste; and (3) reducing plastic use). In
addition, we reviewed some of the targets in March 2023 and added the ratio of achievement of the core operating
profit (indicator for operating income under Japanese GAAP that is calculated by subtracting the cost of sales andselling, general and administrative expenses from gross operating revenues) target. By setting the same target as for
employees, we will aim to increase our corporate competitiveness.
Regarding 3 non-executive directors, Miki Iwamura, Satoko Suzuki, and Shota Kondo, variable compensation is notapplicable as they are focused on their supervisory and advisory roles as the Company’s representative directors andin the board of directors’ meetings.

[Stock price-linked compensation]
Stock options as stock-based compensation
By incorporating stock options as stock-based compensation linked with stock prices as part of compensation paid to
directors, the Company has a system in which management shares with stockholders the benefits from a rise in stock
price as well as the risks associated with a price decline. The Company positions stock options as compensation thatis linked to medium to long-term improvement of its corporate value.
Exercise price on stock options as stock-based compensation is ¥1 per share and the number of units granted, which
is determined in accordance with the position of directors, is adjusted up or down by multiplying it by the percentageof the EPS target achieved. In addition, stock options as stock-based compensation can be exercised only during
designated periods after retirement from office; directors are not allowed to exercise their stock option rights during25

Lawson, Inc.

CORPORATE GOVERNANCE
their term in office.

(4) Limit on the amount of remuneration paid to directors
The limit on the amount of remuneration paid to the Company’s directors is determined at the general meeting ofshareholders in accordance with laws and regulations.
1) Amount of remuneration paid to directors
Resolutions at the general meeting of shareholders as of May 24, 2001: 400 million yen or less per year
2) Amount of stock options granted to directors
Resolutions at the general meeting of shareholders as of May 27, 2014: 300 million yen or less per year

Policy on Decisions Concerning the Amount of Remuneration Paid to Audit & Supervisory Board Members
1)

Basic policy on decisions concerning the amount of remuneration paid to Audit & Supervisory Board Members

Regarding the amount of remuneration paid to Audit & Supervisory Board Members, it is the Company’s basic policy
to reward each Audit & Supervisory Board Member with a sufficient and adequate amount of compensation for the
execution of their duties.
2)

Decision-making process for the amount of remuneration paid to Audit & Supervisory Board Members

The amount of remuneration paid to Audit & Supervisory Board Members is determined based on discussions among
Audit & Supervisory Board Members and is within the remuneration amount limit resolved at the general meeting ofshareholders.
3)

Details of remuneration paid to Audit & Supervisory Board Members

The Company’s Audit & Supervisory Board Members receive basic compensation (fixed compensation) in cash.
The amount of basic compensation is decided based on discussions among Audit & Supervisory Board Members,
taking into consideration whether or not they are working on a full-time basis, and segregation of auditing duties.
Regarding retirement benefits, the system itself was abolished.
4)

Limit of the amount of remuneration paid to Audit & Supervisory Board Members

The limit of the amount of remuneration paid to the Company’s Audit & Supervisory Board Members is determinedat the general meeting of shareholders in accordance with laws and regulations.
Amount of remuneration paid to Audit & Supervisory Board Members
Resolutions at the general meeting of shareholders as of May 27, 2020: 100 million yen or less per year

[Support System for Outside Directors (Outside Audit & Supervisory Board Members)]
The staff of the Board of Directors is in charge of administrative tasks and communicating with the outside directors.
Further, in the event of any incident or accident, the staff submits a report to the directors in each case. The Audit &Supervisory Board Members’ Office supports the Audit & Supervisory Board Members and 2 full-time staffs are
assigned. The staff members are in charge of assisting audit operations, administrative tasks and communicating withoutside Audit & Supervisory Board Members.

26

Lawson, Inc.

CORPORATE GOVERNANCE
In order for independent outside directors to actively contribute to discussions at the Board of Directors’ meetings, theCompany holds Independent Director Opinion Exchange Meeting to exchange opinions with only independent outside
directors at least once a year as an opportunity to exchange information and share awareness based on an independentand objective standpoint.

2.
The Company’s Board of Directors is made up of 5 directors, including 3 males and 2 females, 2 of whom are
independent directors. The Board of Directors not only decides important management matters such as issues stipulated
by laws and regulations and the Articles of Incorporation, but also monitors the conduct of business operations by its
directors. The Board met 15 times in FY2023. Furthermore, the Company has adopted an executive officer system andentrusts authority to executive officers to expedite business execution. Moreover, the Company holds management
meetings as a supplementary decision-making body to the Board of Directors. The management meeting comprises
personnel who are generally of executive managing officer level or above and members designated by the President andCEO (and met 14 times in FY2023).
To ensure the effectiveness of the compliance system and risk management system, the Company has a Complianceand Risk Management Committee. Meanwhile, the Financial Reporting Internal Control Committee oversees
enhancement of internal controls around financial reporting.
Furthermore, in FY2023, the Compensation Advisory Committee headed by committee chairperson Yuko Gomi, an
outside Audit & Supervisory Board Member, and vice committee chairperson Miki Iwamura, an outside director,
consisting 5 independent directors out of 6 members was convened 4 times. The committee reported to the Board of
Directors on methods for deciding the compensation of directors and company executive officers.
The Internal Audit Office, which has 18 members, serves as the Company’s internal audit division and reports directly
to the president of the Company. This office conducts business audits, including audits of affiliated companies, to identify
problems and also provides guidance for improvements.
The Company has 5 Audit & Supervisory Board Members, including 2 males and 3 females, 3 of whom are
independent Audit & Supervisory Board Members. Audit & Supervisory Board Members attend meetings of the Boardof Directors and other important meetings where they also express their opinions. They also inspect important documents
and conduct other activities in auditing the conduct of duties by directors (The Board of Audit & Supervisory Board
Members’ meeting was held 17 times in FY2023).
The Company has signed an audit contract with Deloitte Touche Tohmatsu to conduct financial audits. The Company
is subject to audits in accordance with the Japanese Company Law and the Financial Instruments and Exchange Act.
There are no special relationships involving mutual interests between the certified public accountant (independent
auditor) and the Company. In close liaison with Lawson’s Audit & Supervisory Board Members and Lawson, the certified
public accountant issues a report on its planned auditing work for each business period, and subsequently issues regular
reports on the progress of the auditing. During each business period, Lawson’s Audit & Supervisory Board Members

27Lawson, Inc.

CORPORATE GOVERNANCE
and the certified public accountant exchange information and opinions wherever deemed necessary to ensure theefficiency and accuracy of the auditing process.

3.
Lawson adopts a Audit & Supervisory Board Member system, with 5 Audit & Supervisory Board Members, including
3 outside Audit & Supervisory Board Members (3 of whom are Independent Audit & Supervisory Board Members),
auditing the roles and responsibilities of directors. The Company has 5 directors, including 3 in-house directors and 2
outside directors, 2 of whom are independent directors. The number of Board members has been kept to a minimum tospeed up the decision-making process. We also ensure that at least one-third of outside directors appointed are
independent officers in order to enable the Company to incorporate insights and knowledge from a broader perspective
where the Company is unlikely to have a conflict of interest with general shareholders, as well as to make appropriate
judgments on important matters related to Company management, including formulation of business strategies.

28

Lawson, Inc.

CORPORATE GOVERNANCE
III

Implementation of Measures Associated with Shareholders and Other
Stakeholders

Supplementary Explanation
Early Dispatch of Noticeof Ordinary General
Meeting of Shareholders

For the 49th Ordinary General Meeting of Shareholders, in addition to distributing
the Notice of the Ordinary General Meeting of Shareholders 20 days prior to themeeting, a Notice of Ordinary General Meeting of Shareholders is posted on
Lawson’ s website (an English version is also posted) prior to the date of shipment.

Exercising Voting Rights
by Electronic Means

Company shareholders are able to exercise voting rights by electronic means,
beginning from the 34th Ordinary General Meeting of Shareholders held in 2009 andthereafter.

Participation in Electronic
Voting Platform for
Institutional and Foreign
Investors and Other
Measures to Enhance

Lawson is using the electronic platform for exercising voting rights offered by ICJ,
beginning from the 34th Ordinary General Meeting of Shareholders held in 2009 andthereafter.

Availability of Notice ofGeneral Meeting of
Shareholders (orSummary) in English

An English version of the Notice of Ordinary General Meeting of Shareholders has
been prepared and published on the website, beginning from the 26th Ordinary
General Meeting of Shareholders held in 2001 and thereafter.

OthersLawson endeavors to create a friendly atmosphere at ordinary general meetings ofshareholders, such as by having reception personnel wear the easily recognizable
Lawson store uniform. Furthermore, following the completion of meetings, Lawson
provides details of business reports on its corporate website, as well as releases theresults of voting.
Beginning from the 47th Ordinary General Meeting of Shareholders held in 2022,
Lawson has adopted a virtual shareholder meeting in which shareholders canparticipate online, with video of the meeting distributed live to shareholders. Lawson
also discloses details of business reports on its corporate website following thecompletion of the meetings.

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CORPORATE GOVERNANCE

Supplementary Explanation

Explanation
Provided
Directly by the
Representative

Formulation andposting of disclosure
policyWe publish the “Basic Principles for Information Disclosure,” which
are formulated with reference to our “Basic Rules for Information
Disclosure,” an internal regulation, on our website in order to share
our basic approach regarding the disclosure of information.
For details of the “Basic Principles for Information Disclosure,”
please refer to our website.
https://www.lawson.jp/en/ir/disclose.html

Regular explanatory
meeting foranalysts/institutional
investors

Earnings briefings are hosted by the president and the CFO twice ayear for half-year and full-year results. The president describes
strategies and the CFO explains results. The meeting is attended by a Yes
total of around 100 analysts and investors from inside and outside ofJapan.

Regular explanatory
meeting for overseas
investors

We hold regular dialogues with institutional investors in the U.S. andYes
Europe.

Posting of IR
materials on
Lawson’s website

We have created a dedicated IR page on our website on which we
publish materials related to operating results, etc.
For details of the IR page, please refer to our website.
https://www.lawson.jp/en/ir/

Establishment ofdivision(representatives) tohandle IR

As a department specialized in IR, the Finance and Investor Relations
Department has been established under the Financial Administration ―Division. The CFO serves as an officer in charge of IR.

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CORPORATE GOVERNANCE

Supplementary Explanation
Lawson’s group philosophy is “Creating Happiness and Harmony in Our
Communities.” In order to make this the corporate philosophy of the entire Groupand bring this philosophy to reality, Lawson has set out its basic stance on all
stakeholders in the Lawson Corporate Conduct Charter and this is made available on
the Company’s website.

Internal Charter That
Respects Stakeholders[Establishment of and compliance with the Lawson Group Human Rights Policy]
We have established the Lawson Group Human Rights Policy. The policy supports
and respects international norms on human rights such as the International Bill of
Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work,the United Nations Guiding Principles on Business and Human Rights, the OECD
Guidelines for Multinational Enterprises, and the Children's Rights and Business
Principles. Based on this policy, we respect human rights in our business activities
and build relationships of trust with all people involved in our business activities
through sincere responses. Anticipating that our customers, business partners, local
communities, and other stakeholders who support our business activities will also
support this policy, we will continue our efforts to respect human rights throughdialogue and consultation with these stakeholders. In addition to implementing
human rights due diligence, we promote the development and implementation of
educational and awareness programs on human rights as well as the establishment
and operation of contact points for consultation.
For details of the Lawson Group Human Rights Policy, please refer to our website.
https://www.lawson.jp/en/csr/policy/respect/31

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The Lawson Group has established the Lawson Group Environmental Policy toexpress its commitment to conducting business activities in full consideration of theenvironment and local areas and working proactively to achieve sustainable
development and coexistence with local communities. In keeping with its philosophy,
the Lawson Group established the policy with the objective of ensuing that future
generations will be able to enjoy the natural blessings of the Earth in the same way
as people alive today.
Specifically, we are implementing measures to address the following three priority
issues: (1) reducing CO2 emissions; (2) reducing food waste; and (3) reducing plasticuse (for containers, packaging, and shopping bags). We are setting related targets(KPIs) in accordance with our environmental vision “Lawson Blue Challenge 2050!
Save our blue planet!” formulated in 2019.
For details of Lawson Group Environmental Policy, please refer to our website.
https://www.lawson.jp/en/csr/policy/environmental_policy/
For details of Environmental Vision, please refer to our website.
https://www.lawson.jp/en/csr/bluechallenge/

Environmental Protection
and CSR Activities

With climate change issues becoming increasingly serious, we are attempting totackle them by analyzing climate-related risks and opportunities with reference to the
Task Force on Climate-related Financial Disclosures (TCFD) recommendations.
Based on analysis results, we carry out measures to mitigate or adapt to climatechange, chiefly by introducing energy-saving functions and renewably sourcedenergy to our stores and offices, while also disclosing information on their impact on
the Company’s business activities and financial position. Also, in order to obtain the
Science Based Targets (SBT) certification, an acknowledgement of GHG emissions
reduction targets that are scientifically consistent with the goals set forth in the Paris
Agreement, we are performing a range of necessary tasks, such as identifying target
business activities, collecting data, promoting reduction activities, and setting
reduction targets.
For details of how to respond to TCFD, please refer to our website.
https://www.lawson.jp/en/csr/tcfd/●Goals (KPIs)
・Reducing CO2 emissions (per store)
2025 Reduce by 15% over 2013
2030 Reduce by 50% over 2013
2050 Reduce by 100% over 2013
・Reducing food waste (per store)
2025 Reduce by 25% over 2018
2030 Reduce by 50% over 2018
2050 Reduce by 100% over 2018
・Reducing plastic use (for containers and packaging)2025 Reduce by 15% over 2017
2030 Reduce by 30% over 2017 (50% of materials used for Lawson’s original
product containers and packaging are eco-friendly)
2050 (100% of materials used for Lawson’s original product containers andpackaging are eco-friendly)
・Reducing plastic use (Plastic shopping bags)
2030 Plastic shopping bags Reduce by 100%32

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As a member of local communities, the Lawson Group conducts various social
contribution activities aiming to create a better future for children. As one example,
we place donation boxes in our stores to collect money to support youth education.
Donations made by our customers are used, through two charity organizations, tosupport school greening projects conducted at elementary, junior high, and specialneeds schools throughout the country as well as scholarship programs for children
from single-parent households.
In addition, to help create an environment that promotes the sound development ofchildren, we provide cooperation for elementary school out-of-school programs bygiving children opportunities to experience store operations as well as host fun
programs of our own for junior and senior high school students in which they learn
about our SDGs activities.
For details of the Social Contributions, please refer to our website.
https://www.lawson.jp/en/csr/fund/As a member of society, we will continue to contribute to the promotion of SDGs
through our measures to address social and environmental issues together withfranchise stores, customers and business partners.

Development of Policies,
etc. for Providing
Information to
Stakeholders

The company published “Basic Principles for Information Disclosure” and the basic
ideas of the disclosure of information to stakeholders in company’s website based on“Basic rules for Information Disclosure” established by Board of Directors andrelevant rules.
Furthermore, to comply with relevant regulations, the company promotes initiatives
to stakeholders at Corporate Strategy and Planning Division, Corporate
Communications Division, Franchisee Business Support Division and Financial
Administration Division.

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Lawson, Inc.

CORPORATE GOVERNANCEIV Matters Relating to the Internal Control System

Based on the status of development and operation of “2023 Basic Policy for Improvement of Internal Control Systems”,
which was resolved at the Board of Directors meeting held on February 15, 2024, the Company passed the resolution
called the “2024 Basic Policy for Improvement of Internal Control Systems” as indicated below.

2024 Basic Policy for Improvement of Internal Control Systems
Lawson is involved in a broad range of business domains, high-end supermarket business, entertainment-related
business, financial services business, e-commerce business, consulting business and advertising business along with its
core convenience store business. Lawson provides multifarious products and services through its immense chain of
stores in every prefecture in Japan and overseas in these wide-ranging business domains. In conjunction with these
activities, Lawson is subject to a host of laws and regulations and is also exposed to risks of loss (hereinafter “risks”).
Because Lawson’s convenience store business uses a franchise system, there is a need to provide proper support to alarge number of franchised stores. In light of the nature of Lawson’s business, an important theme for management is
the maintenance and operation of internal control systems that can support sound and continuous business growth.
Accordingly, Lawson has established “2024 Basic Policy for Improvement of Internal Control Systems” (hereinafter“Basic Policy”), as outlined below, in accordance with the Japanese Company Law and its enforcement regulations, aswell as the Financial Instruments and Exchange Act. The Basic Policy will ensure that Lawson’s businesses are
conducted effectively, efficiently and in a proper manner, ultimately helping to preserve and increase enterprise value.
The Company will constantly review this policy in accordance with the status of the internal control system based on
this policy and changes in the business environment, will strive to develop an effective and rational internal control
system.
This policy is applicable to all company officers (directors, Audit & Supervisory Board Members, executive committee
members and other individuals of similar rank; hereinafter the same) and employees (permanent, temporary, contract
workers and other staff members; hereinafter the same).

1.

Systems to Ensure Compliance of the Execution of Duties by Directors, Senior Vice Presidents and Employeeswith Laws and Regulations and the Articles of Incorporation(1) The board of directors shall determine the improvement policies and plans for internal control systems,
including those for compliance, and receive status reports thereof periodically.
(2) The Board of Directors shall maintain and improve the supervising function regarding the execution of duties
by the Directors by electing outside Directors on an ongoing basis.
(3) The Audit & Supervisory Board Members shall independently audit the execution of duties by the Directors,
including the status concerning the improvement of the internal control systems.
(4) The Board of Directors shall raise and maintain the awareness of directors, senior vice presidents and34

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CORPORATE GOVERNANCE
employees regarding compliance by thoroughly disseminating the Lawson Group’s Code of Conduct andthe Lawson Ethical Mission Statement as well as measures that shall include, but not be limited to:establishing a specialist committee (“Compliance & Risk Management Committee”), appointing a Chief
Compliance and Risk Management Officer and establishing a department that oversees compliance,
assigning personnel in charge of compliance to each department and company, streamlining the rules in relation
tocompliance, and providing training on ethics and conducting compliance awareness surveys on a periodic
basis.
(5) The Legal Department establish foundations for complying with legal requirements by identifying the laws andregulations applicable to the Company’s businesses and communicating the content thereof to the relevant
departments and sections. Especially for compliance with the Act on Prohibition of Private Monopolization and
Maintenance of Fair Trade, the Subcontract Act, the Act Against Unjustifiable Premiums and Misleading
Representations, the Food Labeling Act, the Food Sanitation Act and other consumer-related laws, theIntellectual Property Act, the Labor Standards Act, etc., the Company shall strive to disseminate information
regarding applicable laws and regulations to its employees and support the efforts of each department.
(6) The Internal Audit Department, which is independent from the business executing bodies, shall conduct efficientand effective audits of the status concerning the improvement of the internal control systems, and recommend
improvements thereof, as required.
(7) The Company shall establish and upgrade reporting routes for reporting any violations of laws, regulations, orinternal rules as well as any negative impacts on human rights in carrying out the Company’s business operations(hereinafter, “Violations of Laws and Regulations, etc.”). Moreover, by establishing consulting and reporting
points (internal contact points, a Group-wide consulting contact point, and a consulting contact point for
employees and business counterparties for Lawson’s franchised stores) that can be used by informants withanonymity and peace of mind and making prospective users aware of such facilities, the Company shall strive
for early detection of Violations of Laws and Regulations, etc. across the entire Lawson Group and Lawson
chain. If a Violation of Laws and Regulations, etc. is discovered, the Company shall act promptly to rectify thesituation and prevent any recurrence.

(8) The Company shall never become involved with antisocial forces or bodies that threaten the order and securityof society, and shall take a firm stance on and deal with improper demands by consulting with lawyers, thepolice and the like.

(9) The Company shall rotate personnel periodically to prevent wrongdoings resulting from specific employees
monopolizing certain business processes.

2.

Systems to Preserve and Manage Information Pertaining to the Execution of Duties by Directors(1) The Company shall record, preserve and manage information relating to decision making at important meetings
such as those of the Board of Directors and the Management Council, and authorizing documents, including35

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CORPORATE GOVERNANCE
those approved by the President as well as financial, clerical and risk- and compliance-related information(including information contained in electromagnetic media). Moreover, the Company shall put in place a systemallowing relevant parties to inspect the above information.
(2) The Company shall manage and monitor its information systems in a secure manner, in addition to maintaining
the system by sufficiently taking into account contingencies.
(3) The Company shall establish and maintain rules regarding the storage and management of documents (including
electromagnetic recording media), keep everyone informed about the responsibility and authority for document
management, document storage periods and management methods, and periodically monitor the status of
document storage and management.
(4) The Company shall establish regulations regarding the safeguarding of personal information and managementof confidential business information, and shall properly and safely store and manage personal information andimportant confidential business information.
(5) The Company shall establish a special committee (Information Security Management Committee), appoint a
Chief Information Security Officer and establish departments to generally control information security andallocate appropriate personnel thereto. The Company shall also strive to establish an information security system
for the Lawson Group in order to promote information security risk management and System Technology
Security in an interactive and comprehensive manner.
(6) The Company shall establish and maintain rules regarding the disclosure of important Company information,and upgrade the system for disclosing information that must be disclosed according to the requirements of laws,
regulations and stock exchanges, in an appropriate, timely and fair manner.

3.

Rules and Other Systems Regarding Risk Management(1) The Company shall appoint a Chief Risk Management Officer, and improve rules related to risk management
and group-wide risk-prevention systems during normal operations. Furthermore, each department shall identify
risks that might have adverse effects on the Company’s management in connection with its business purposes,
analyze the probability of such risk factors materializing and their impact, and evaluate whether intensive
countermeasures should be taken as part of measures tailored to the nature of risks.
(2) To ensure the effectiveness of risk management, the Company shall establish a specialist committee (Compliance& Risk Management Committee), and clarify the authority and responsibility of the committee and its
chairperson. Furthermore, the Company shall endeavor to increase awareness about risk management by
assigning risk management staff to departments and companies, subsidiaries and affiliated companies(hereinafter “Associated Companies”) and conducting risk management training.
(3) The Company shall develop contingency systems and formulate policy for contingency-response bodies inadvance to prepare for the occurrence or possible occurrence of unanticipated situations or events, which might
have adverse effects on management of the Company, in order to provide a quick response to any actual
occurrence thereof and to take effective measures to prevent a reoccurrence.

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Lawson, Inc.

CORPORATE GOVERNANCE(4) As a designated public institution, the Company shall work to formulate a business continuity plan (BCP) andestablish a business continuity management (BCM) system in order to maintain the essential infrastructure
functions of convenience stores and minimize any disruption to operations caused by events that could have a
detrimental impact on the Company, including a major disaster or infectious disease outbreak, such as that of a
new strain of influenza. In order to be prepared for major disaster, the Company shall conduct disaster prevention
drills 3 times a year while working to improve effectiveness of the “Disaster Countermeasure Manuals” and the“BCP Manuals”.
(5) As for the risk of human rights violations in terms of business-related risks, the Company implements humanrights due diligence based on the Lawson Group Human Rights Policy and promotes initiatives to prevent andmitigate any negative impacts on human rights.

4.

Systems to Ensure the Efficient Execution of Duties by Directors(1) The Company shall clarify the functional authority and responsibility of corporate officers and employees for
decision making and execution of business affairs. The Company shall also improve rules for the division ofduties to ensure and encourage more appropriate division of duties and collaboration among organizational
bodies.
(2) The Company shall work to raise operational efficiency by simplifying business processes, streamlining theorganization and making appropriate use of IT.
(3) The Company shall promote digital transformation through the renewal of IT infrastructure.
(4) In order to promote the proper communication of information and communications between officers andemployees, the Company shall improve systems by which management guidelines and policies are disseminatedto employees by corporate officers, and important field information is properly communicated by employees tocorporate officers in a timely manner.
(5) The company shall endeavor to improve work productivity by promoting work motivation reform and increasing
employee’s willingness to work and work motivation.

5.

Systems to Ensure the Propriety of Business Operations Conducted by the Corporate Group Consisting of theCompany and Its Subsidiaries(1) Systems for reporting to the Company on matters pertaining to the execution of duties by the AssociatedCompanies’ directors, etc., and systems for ensuring that the performance of duties by directors etc. of isefficient.
(ⅰ)The Company shall establish rules concerning the management of Associated Companies and endeavor tomaintain and enhance the Lawson brand through close collaboration with them. However, with regards toaffiliated companies, the Company will work to establish and maintain systems through phased implementation,
taking into account such factors as relations with other leading shareholders, difference in laws, regulations
and business customs and the like of foreign countries.

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Lawson, Inc.

CORPORATE GOVERNANCE(ⅱ)While respecting the independence of Associated Companies, we shall step up action to optimize a system forsupervising Associated Companies by taking into account the reasons that the Company has taken a stake in
the Associated Company, engaging in negotiations or providing advice to Associated Companies as necessary,
operating a system for receiving reports from them, etc.
(2) Rules and other systems for risk management by Associated Companies and systems for ensuring that the
Associated Companies’ directors, senior vice presidents and employees execute their duties in conformity withlaws, ordinances, and the articles of incorporation(ⅰ)While respecting the independence of Associated Companies, in view of the purpose of the Company’s equity
participation in Associated Companies, the Company shall establish Group regulations such as basic policies
for the management of Associated Companies and management policies thereof, and keep the AssociatedCompanies fully informed of the Lawson Group Code of Conduct.

(ⅱ)The Company shall establish an organization with jurisdiction over Associated Companies, and a dedicateddepartment that can provide support to Associated Companies from technical standpoints, and endeavor toensure the soundness of operations at Associated Companies.
(ⅲ)The Company shall appoint designated people at major Associated Companies to be responsible for promoting
compliance and risk management (hereinafter, “People in Charge of Compliance and Risk Management at
Associated Companies”). Moreover, the departments that oversee risk management and compliance for theCompany also meet with the People in Charge of Compliance and Risk Management at Associated Companies
on a regular basis to confirm the status of development of internal rules at Associated Companies and give
advice if necessary, and thus strive to ensure appropriate business operations across the entire Lawson Group.
(ⅳ) The Company will establish a system that the People in Charge of Compliance and Risk Management at
Associated Companies will report immediately to the Company if they are aware of the situation could harm
Associated Companies.
(ⅴ) The Internal Audit Department shall cooperate in auditing the status of establishment of internal control
systems at Associated Companies, and promote improvements based on the results of audits.
(3) The Company will report immediately to the parent company if they are aware of the situation could harm thecompany and Associated Companies.

6.

Necessary Systems to Ensure Proper Financial Reporting by the Company and its Group of Companies(1) The Company shall enhance systems for preparing financial statements according to laws and regulations andaccounting standards and disclosing same after they have been discussed, examined and confirmed inaccordance with regulations governing information disclosure, in order to report financial information in aproper and timely manner.
(2) The Company shall establish a dedicated internal organization in order to properly implement the internal
control reporting system required by the Financial Instruments and Exchange Act, as an internal control for
financial reporting. Furthermore, the Company shall establish a system for self- and third-party evaluation and38

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CORPORATE GOVERNANCE
improvement through the identification and recording of business processes at important business bases and thestatus of Companywide internal controls. The Company shall report regularly to the Board of Directors theresults of evaluations and improvements made at the Company and important subsidiaries.

7.

Matters Concerning Employees Where a Audit & Supervisory Board Member Requests Employees to Assist
With Duties(1) The Company shall assign appropriate personnel to the Auditors’ Office as employees exclusively to assist Audit& Supervisory Board Members in the execution of their duties (hereinafter “Audit & Supervisory Board
Members’ Staff”).
(2) Audit & Supervisory Board Members’ Staff may serve concurrently as Audit & Supervisory Board Members of
Associated Companies.
(3) Audit & Supervisory Board Members’ Staff shall have the authority to conduct investigations necessary foraudits by Audit & Supervisory Board Members following the instructions of Audit & Supervisory Board
Members.

8.

Independence of Employees from Directors in the Preceding Item

(1) Performance reviews of Audit & Supervisory Board Members’ Staff shall be conducted by the Standing Audit& Supervisory Board Members to ensure that Audit & Supervisory Board Members’ Staff carry out their duties
appropriately. Personnel changes and disciplinary action require the prior consent of the Audit & Supervisory
Board Members. Systems for ensuring that directors, senior vice presidents and employees of the Company

and directors, Audit & Supervisory Board Members, senior vice presidents and employees of AssociatedCompanies make reports to Audit & Supervisory Board Members and other systems concerning reports to
Audit & Supervisory Board Members.
(2) Directors, senior vice presidents and employees of the Company shall report important corporate management
and business administration matters, as well as the status and results of the execution of their duties, to Audit &Supervisory Board Members so that the Audit & Supervisory Board Members can carry out their duties
effectively. Such important matters include compliance and risk-related issues and other matters relating tointernal control.
(3) Should directors, senior vice presidents and employees of the Company and directors, Audit & Supervisory
Board Members, senior vice presidents and employees of Associated Companies become aware of any fact orevent that will likely cause the Company or Associated Companies to suffer significant damage or loss, theyshall immediately so inform Audit & Supervisory Board Members of the Company.
(4) Reports to Audit & Supervisory Board Members shall basically be made in good faith without fail, and shall bemade promptly if required in addition to periodic reports.
(5) The Company will establish a system for cross-external consultation and reporting content will be reported tothe auditors in a timely manner.

39

Lawson, Inc.

CORPORATE GOVERNANCE(6) No person shall be subject to disadvantageous treatment by reason of having made a report to
Audit & Supervisory Board Members.

9.

Other Systems to Ensure Effective Audits by Audit & Supervisory Board Members(1) The Representative Directors and Audit & Supervisory Board Members shall have regular meetings to enhancesmooth communications with each other.
(2) Directors shall cooperate with the Audit & Supervisory Board Members with regards to communications, thecollection and exchange of information and so on between the Audit & Supervisory Board Members and thecorporate directors and the like of Associated Companies so that the Audit & Supervisory Board Members canperform their duties appropriately.
(3) Directors shall also cooperate in conducting surveys of significant business partners, which the Audit &Supervisory Board Members deem necessary.
(4) Directors shall enable the Audit & Supervisory Board Members to collaborate with outside experts such as
lawyers and certified public accountants, if any Audit & Supervisory Board Member deems it necessary in
executing his/her duties.
(5) Legal Department, Risk Management Department, Internal Audit Department, Finance and Accounting
Department and others will assist in the necessary audit investigation by the request of the auditor.
(6) Expenses etc. incurred by Audit & Supervisory Board Members in the performance of their duties shall bepromptly reimbursed, except in cases where the Company has proven that they were unnecessary for said
performance of duties.

□Present Status of Internal Control Systems
1. Present Status of Compliance System and Risk Management System
Lawson has appointed a Chief Compliance and Risk Officer (CRO) in charge of the promotion and establishmentof compliance; has established a Legal Department to supervise compliance, and a Risk and Information Security
Management Department to supervise risk management under the CRO’s direction; and has assigned a position ofCompliance & Risk Management Officer (CR manager) in each division and company. As leaders for promoting
initiatives, CR Managers formulate, disseminate, and implement their own organization's compliance and risk
response measures, and promote the creation of a culture that emphasizes compliance with social norms.
The Legal Department and the Risk and Information Security Management Department cooperatively serve as
cross-departmental secretariats for the Compliance & Risk Management Committee Meeting and manage theprogress of measures implemented in these areas by individual departments throughout the Group to promote aneffective compliance risk management system. In addition, by working closely with the IT Department, the Risk
and Information Security Management Department acts as the secretariat of the Information Security Committee
Meeting and further enhances measures to manage information security risks. Meanwhile, 4 subcommittees (RiskManagement Subcommittee, Safety Measures Subcommittee, Intellectual Property and Premiums and40

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CORPORATE GOVERNANCE
Representations Subcommittee, and Overseas Business-Related Compliance Subcommittee) have been separately
established under the Compliance & Risk Management Committee Meeting in an effort to manage the progress of
key measures and prevent risks.
(1) Present Status of Compliance Systems
To continually comply with the law, and always maintain corporate conduct in line with generally accepted morals
and societal expectations, Lawson maintains and refines its rules related to compliance. Along with that, The
Company has established The Group Code of Conduct as its code of conduct, published them in the “Lawson
Group C&R Handbook,” Lawson Group Human Rights Policy, Lawson Group Purchasing Policy, and distributed
the handbook to all employees in an effort to thoroughly disseminate its content with the aim of ensuring the
propriety of business operations across the Group.
On the educational/training front, the Company aims to further improve ethical awareness and the ability towithstand crises by conducting compliance and risk management training for all employees every year. In addition,
the Company has established an educational system to enable systematic learning by providing training uponjoining the Group and upon promotion to a managerial position, training by job types, training conducted byexternal lecturers for company management, and optional study group activities. The Company is seeking
measures to ensure that employees of various job positions and job types will be able to share problems to improvetheir operations by maintaining these educational/training programs while revising their content in line withchanging in social environment, etc.
In addition to the employee awareness survey targeting all our employees, Lawson has sent out questionnaires tobusiness partners (product delivery and store construction). Through such questionnaires, we have gained anunderstanding of the problems and issues related to compliance promotion activities and transaction styles, andbased on this knowledge, we are reviewing and improving our compliance system from a wide perspective. In
addition, the Company provides thorough guidance and improvement proposals based on the results of audits
conducted by the Internal Audit Department.
With respect to whistleblowing reports, the Company has established a consultation contact point exclusively forsexual harassment and power harassment, which is offered by the Human Resources Department, as well as aninternal consultation and reporting contact point(internal consultation services, group-wide external consultation
services, and consultation services available to FC store owners, staff, and business partners) for compliance andrisk management matters including those related to human rights violations, misconduct/corruption, and labor
issues to maintain a system for detecting and coping with internal problems at an early stage. The Company shallseek to strengthen self-rectification within the organization by treating instances of whistleblowing appropriately,
reviewing the system to prevent recurrence, and introducing specific cases at meetings and through training
programs and internal notifications.
(2) Present Status of Risk Management System
We at Lawson maintain and refine the rules concerning risk management, and places particular emphasis on “foodsafety and hygiene management,” “information security,” “disaster relief,” and “security measures” and it has

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CORPORATE GOVERNANCE
prepared a structure for responding to emergencies and resolving problems rapidly. Meetings of the Compliance& Risk Management Committee and the Information Security Committee as well as of the 4 subcommittees areconvened regularly under ordinary circumstances to assess risks and to formulate and promote measures to avoid
them and prevent their occurrence.
In the event of significant risk events, the countermeasures headquarters is convened in an effort to swiftly solve
issues and minimize damage. Once the problems have been resolved, the Company analyzes the factors
contributing to their occurrence and reviews and improves the relevant countermeasures to prevent any recurrence.
Furthermore, we are reinforcing our emergency response capabilities through efforts such as formulating theBusiness Continuity Plan (BCP) and implementing disaster mitigation measures. Our aim is to institute a business
continuity (BC) framework that prevents interruption of important business activities, even in the case ofsignificant damage due to a large-scale disaster, etc.
With regard to the food safety and hygiene management system, we strictly enforce food safety and hygiene
management in the process of developing, manufacturing and selling original products. We use raw materials thathave passed examination based on our voluntary standards, and after the examination of product specifications,
we take samples from the production line to confirm their safety. At our original product manufacturing plants, wehave adopted a factory management method based on the HACCP concept, and we have established a system torecord each priority management item, such as cooking time, product temperature, and the presence of metallic
foreign objects, etc., and to immediately investigate the cause of any problems and take measures when they occur.
Product information (thermal label) is displayed in compliance with laws and regulations, and the Quality Control
Department and a third-party organization check the content of the labeling. In order to ensure thorough hygiene
management at our stores, voluntary inspections at our stores and hygiene inspections by the headquarters are
conducted every month, and surprise inspections are conducted by external organizations.
With regard to the information security system, the “Lawson Group Privacy Policy” has been formulated and amanagement system has been established under the supervision of the CRO to establish management system forpersonal information protection. To help employees put the Privacy Policy into practice, the Company produces
and publishes various manuals illustrating potential mistakes and complaints that may arise at the stores,
accompanied by practical responses to them, for stores in an effort to raise awareness. For headquarters employees,
the Company has compiled matters to be observed in the form of the Information Security Guidebook andperiodically conducts tests to confirm that the rules are being followed. In light of the increased risk of cyber-attacks
in recent years, we are working to strengthen our cyber security by taking measures from multiple perspectives,
including technical, process/personnel, and physical aspects. In addition, in preparation for the unlikely event of aproblem, we conduct security drills during normal times in an effort to reduce such risks.
With regard to Disaster Response System, we are formulating The Disaster Relief Manual that defines the approachto disaster preparedness and the standards of conduct for employees and the organization in the event of a disaster.
The Disaster Relief Manual is composed of a “Common Section,” “Initial Response Section,” and “Emergency
Response Section” describing the disaster response rules and procedures to be followed by all employees across all42

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CORPORATE GOVERNANCE
organizations in accordance with the disaster level. When large-scale disasters occur, our first priority is to confirm
the safety of the Company’s employees and our FC owners and crews. The Company conducts Companywide
disaster prevention drills 3 times a year in which participants acquire experience in implementing a variety ofmeasures, including responding by telephone, email and disaster message dialing and applying the safety checksystem. This prepares every individual to respond smoothly should emergencies arise. Manuals elucidating therequisite disaster preparedness and responses are distributed to the stores. In the event a disaster occurs, disaster
relief headquarters are set up immediately in 3 locations: headquarters, area offices, and branches that oversee
operations in the disaster-struck areas. The Company takes advantage of a Disaster Information Map Systemdesigned to enable personnel to confirm the disaster situation in real-time and implement support measures forshops, factories and delivery centers, so that stores in the disaster area can be reopened for business at an earlytiming. The disaster relief headquarters and franchised stores work together to ascertain potential hazards as well
as evacuation site locations, widely sharing the information with employees in preparation for an evacuation.
For crime prevention, we conduct education to ensure that store personnel act with the highest priority placed on
personal safety and with crime prevention in mind, in ways such as greeting customers in a cheerful and spirited
manner. Our headquarters is cooperating with the police and the Japan Franchise Association in efforts to prevent
crimes against the convenience store industry as a whole.

2. Present Status of System Concerning the Storage and Management of Information Relating to the Execution of
Duties by Directors(1) Present Status of System for Recording, Storing and Managing Information Relating to Decisions Made by the
Board of Directors, Executive Committee and other Decision-making Bodies, Information Relating to Decisions
Made by Representative Director and Other Important Decisions, and Information Relating to Compliance andRisk Matters
1) Storage and Management of Information Relating to Decisions Made by the Board of Directors, Executive
Committee and Other Decision-making Bodies
To ensure the accountability of the representative director, written proposals and minutes of meetings are recorded
and stored. The original minutes of Board of Directors’ meetings for the most recent ten years are properly
maintained in a book vault at the executive office of the headquarters, and after ten years the original proposals
and minutes of the Board of Directors’ meetings are stored permanently in outside storage under strict security.
The minutes relating to decisions made by the Executive Committee and other decision-making bodies for themost recent year are properly maintained in the book vault in the executive office of the headquarters, and after
one year these minutes are stored permanently in an outside storehouse under strict security.
2) Storage and Management of Approval Documents and Written Contracts
In November 2012, we introduced an electronic approval system, totally eliminating the need to use paper for
approval documents including attachments. Information relating to decisions made by the President and otherimportant decisions prior to the introduction of the system is recorded and stored as follows to ensure the43Lawson, Inc.

CORPORATE GOVERNANCE
accountability of the representative director and other decision-makers:
A. Approval documents by representative director with attachments for 2 years are maintained in the executive
office of the headquarters. After 2 years, such documents are stored in an external storehouse under strict
security.
B. Approval documents other than those by representative director, including approval documents for branches
are collected by the head office, and these documents are transferred after one year to be stored in an external
storehouse under strict security.
Written contracts are stored as follows: Meanwhile, electronic contracts are also being gradually introduced, andservices with high security reliability are selected and appropriately managed.
A. Franchise agreements and store lease agreements including any attached memorandums, which constitute thefoundation of Lawson’s business, are stored in an external storehouse under strict security immediately uponconclusion of the agreement.
B. Other written contracts are stored in secure locked locations at each responsible division or in an external
storehouse under strict security control for 7 years after expiration of the contract period.
3) Storage and Management of Information Relating to Compliance and Risk
To ensure the accountability of the CRO, the written background and minutes of meetings are recorded and stored
under strict security. With the approval of the CRO, the Risk and Information Security Management Department’s
general manager deals with requests for access to such documents.
4) Storage and Management of Minutes of Meeting Bodies Other Than the Above and Other Important
Documents
The staff of responsible divisions store and manage these documents at their own discretion.
(2) Present Status of System Concerning Management and Monitoring of Information System as Well as Proper
Maintenance of Such Systems for Contingencies
Under Lawson’s Information Security Policy, the Information System Management Rules prescribe matters thatshould be observed by related divisions for the purpose of maintaining and improving information security andenhancing the reliability, effectiveness and efficiency of our information system. In this way, we maintain the
secure management and operation of systems and implement proper preventive measures and procedures in theevent of a contingency.
These rules apply to matters relating to the planning, development, maintenance and operation of the information
system, information system equipment, and related facilities. They prescribe not only matters to be observed byusers, but also management in the event of a failure in the information system, the management of changes in thesystem, the management of outsourcing, the management of system security, access management, project risk
management, business continuity management, compliance and other relevant matters.

3. Internal Control by the Certified Public Accountant
Lawson has an audit contract with Deloitte Touche Tohmatsu (“Tohmatsu”). There are no special relationships

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CORPORATE GOVERNANCE
involving mutual interests between Lawson and Tohmatsu or any of the staff of Tohmatsu engaged in auditing workfor Lawson. In close liaison with Lawson’s Audit & Supervisory Board Members and Lawson, the certified public
accountant issues a report on its planned auditing work for each business period, and subsequently issues regular
reports on the progress of the auditing. During each business period, Lawson’s Audit & Supervisory Board Members
and the certified public accountant exchange information and opinions wherever deemed necessary to the efficiency
and accuracy of the auditing process. The Audit & Supervisory Board Members received a notification from theaccounting (independent) auditors that they are taking steps to improve the “system for ensuring appropriate
execution of duties” (matters specified in the items under Article 131 of Corporate Accounting Rules) in accordancewith the “Quality Control Standards Relating to Auditing” (Business Accounting Deliberation Council, October 28,2005) and other standards, and requested explanations when necessary.
If an accounting (independent) auditor violates or infringes the Corporate Law of Japan, or the Certified Public
Accountants Law, and if the Board of Directors deems it necessary, the Board of Directors shall submit a proposal to
the General Meeting of Shareholders to dismiss or not reappoint the aforesaid accounting (independent) auditor after
receiving the agreement of the Board of Auditors. If it is deemed that the aforesaid accounting (independent) auditor
fits any of the circumstances prescribed in any item of Clause 1 of Article 340 of the Corporate Law, the Board ofAuditors can dismiss the aforesaid accounting (independent) auditor by unanimous decision.

4. Present Status of System to Ensure Appropriate Business Activities in Group Companies
Lawson has designated a Company Compliance & Risk Management Officers at its major affiliated companies.
Regarding CRO, Company Compliance & Risk Management Officers and the person in charge of affiliatedcompanies at Lawson attend Lawson Group Compliance and Risk Management meetings, while Overseas BusinessRelated Compliance Subcommittee meetings are held for overseas subsidiaries, thus ensuring that information andknowledge is shared with the Lawson group. In this way, Lawson not only can prevent misconduct and other issues
from occurring, but also can maintain and implement a system for a swift response to any such incident. Company
Compliance and Risk Officers at its major affiliated companies, strive to enhance awareness among employees byformulating the code of ethics and providing training while conducting employee awareness surveys andquestionnaire surveys for business counterparts in collaboration with the Company.
To support sound management at its affiliated companies, Lawson dispatches or loans directors/Audit & Supervisory
Board Members and employees to these companies. In this way, Lawson not only helps to ensure the businesses of
the affiliated companies operate appropriately and efficiently, and but also communicates and shares information withthe affiliated companies. The Company has established a department for supervising Associated Companies, and asystem is in place whereby if a risk emerges at an Associated Company, it is reported to the Company. Furthermore,
information relating to risks at the Company and Associated Companies is reported to the parent company in a timely
and appropriate manner.
The Company has established an organization with jurisdiction over Associated Companies and a dedicateddepartment that can provide support to Associated Companies from technical standpoints and is endeavoring to ensure45

Lawson, Inc.

CORPORATE GOVERNANCE
the soundness of operations at Associated Companies. The internal audit department of the Company normallyconducts an audit of the operations of its affiliated companies once a year to mutually confirm problems as appropriate,such as the maintenance of necessary regulations for the affiliated companies, and to provide advice and guidance for
their improvement, etc.
At the time of annual, quarterly, and monthly closing of accounts, the Company receives reports from the affiliatedcompanies on their business conditions and issues, and provides guidance and advice, etc. necessary to resolve
management issues.
In addition, the Company provides necessary cooperation and support to the auditors of each affiliated company toenable them to properly perform their duties by inviting them to attend the Group Auditors' Liaison Meetings hosted
by the Company's auditors to mutually confirm the progress of audit activities and, when necessary, explain points tokeep in mind during the audit.

1. Basic approach towards the exclusion of antisocial forces
Lawson, considers the prevention of damage from antisocial forces to be an important part of ensuring proper
business activity and in its “2024 Basic Policy for Improvement of Internal Control Systems” it clarifies this by“The Company shall never get involved with antisocial forces or bodies that threaten the order and security ofprivate society, and shall take a firm stance on unjustified demand in cooperation with lawyers, the police and thelike.”

2. Present status of the exclusion of antisocial forces
Lawson provides a statement of principle concerning the exclusion of antisocial forces in the Lawson Corporate
Conduct Charter and the Lawson’s Code of Ethics and the entire organization takes a collective response to suchmatters.
With respect to internal controls, the office that integrates the response to a matter concerning an unjustified
demand by antisocial forces (hereinafter “office responding to antisocial forces”) provides central control of
information relating to antisocial forces. Not only will it give support to organizational frameworks to severrelations with antisocial forces, it will also work in cooperation with the National Police Agency and the prefecturalor metropolitan police department. The office responding to antisocial forces will consult the above institutions
when responding to an unjustified demand from antisocial forces.
We formulated the “Transaction Policies of the Lawson Group” to deal with this issue across the entire supply
chain.

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CORPORATE GOVERNANCE
V Others

Matters Related to Defense against Takeover

None

Supplementary Explanation Associated with the Relevant Item
Nothing to report[Outline of the timely disclosure system](1) Lawson has assigned the Director of the Corporate Communications Division to be in charge of timely
disclosure, with departmental responsibility falling to the Corporate Communications Division. They shall promote
understanding of the importance of timely disclosure within the Company.
(2) The Company’s employees are required to report to and consult the person in charge of timely disclosure withregard to any information they deem important. Furthermore, the person in charge of timely disclosure passes onsuch information to the Director of the Financial Administration Division in order to determine whether the
information constitutes insider information.
(3) With regard to information regarding which consultation or reporting is made, the person in charge of timely
disclosure seeks the advice of the director in charge, the Director of the Corporate Strategy and Planning Division,
the Director of the Financial Administration Division and other relevant departments concerning the necessity of
disclosing the information in a timely manner, what to disclose, and the timing of disclosure in order to ensure
timely disclosure of appropriate information.
(4) Lawson set basic regulations governing information disclosure in August 2006 to establish an internal system forthe disclosure of important information. With regard to insider trading, the Company established regulations toprevent insider trading in July 2000 and develop a monitoring system.

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CORPORATE GOVERNANCE

Corporate Governance and Internal Control Systems(As of May 22, 2024)

Nomination andCompensation Advisory
Committee
Non-executive directors or
part-time outside
corporate auditors: 6(5 of whom are
independent Directors)

General Meeting of Shareholders
Appointment
and dismissal
Consult

Special Committee
ProposeOutside directors: 2
Outside corporate auditors: 3(5 of whom are
independent Directors)

Board of Directors
Outside directors: 2(2 of whom are
independent Directors)
In-house directors: 3
Total: 5

Appointment, dismissaland supervision

Appointment
and dismissal

Auditing

Board of Corporate Auditors
Outside corporate auditors: 3(3 of whom are independent
Corporate Auditor)
In-house corporate auditors: 2
Total: 5

Discussion and reporting

Appointment
and dismissal
Auditingand dismissal

Auditing

Certified Public
Accountant

Account auditing(Business Execution Structure)
President
Management Council
Meeting
Financial Reporting
Internal Control
Committee

Comments
LawyerSDGs Committee
Internal Audit OfficeCompliance and Risk
Management Committee
Information Security
Committee

Corporate organizations

Divisions and Company

Investment and management
Subsidiaries and Affiliates

48