Corporate Governance Report
Last update: September 30, 2024

Canon Marketing Japan Inc.
Masachika Adachi, President
Securities Code: 8060
https://cweb.canon.jp/eng/ir/

The corporate governance of Canon Marketing Japan Inc. (the “Company”) is described below.

I Basic Views of Corporate Governance and Basic Information on Capital Structure, Corporate Attributes, andOther Matters
1. Basic Views
We recognize that the ongoing improvement of management transparency and enhancement of management supervisory
functions, with an eye on monitoring progress toward achieving management targets, are crucial for sustainable growthin corporate value. This recognition is reflected in our wide-ranging initiatives to strengthen corporate governance.
Our corporate governance structure is as described in (ii) basic views and guidelines on corporate governance ([Principle
3.1: Full disclosure] and [Disclosure based on the principles of the Corporate Governance Code]) below.
[Reasons for not complying with the principles of the Corporate Governance Code]We implement all the principles of the Corporate Governance Code.
[Disclosure based on the principles of the Corporate Governance Code][Principle 1.4: Strategic Shareholdings]
1. Policy for Strategic Shareholdings
The Canon Marketing Japan Group (“the Group”) only holds shares of other listed companies when these shareholdings
help to improve the corporate value and the mid- and long-term development of the Group, taking into consideration
things such as management strategies, business alliances, the maintenance and strengthening of transactions, thedevelopment of collaborative businesses, and the creation of new forms of synergy.
2. Review of the reasonableness of Strategic Shareholdings
The Company reviews the reasonableness of individual reciprocal cross-shareholdings at meetings of its Board of
Directors in a comprehensive assessment that considers the significance of shareholdings and other results of a qualitativeevaluation as well as a quantitative evaluation of the transaction value with investment targets, dividends, and whether
unrealized gains are commensurate with capital costs, on a regular basis each year. As a result of the review, when it isjudged that holding certain shares is no longer reasonable, the holding will be reduced through the sale of said shares.
3. Policy for exercising the voting rights of Strategic Shareholdings
While respecting the management philosophy, business strategies, etc. of each investment target, the Company
establishes specific standards based on judgment criterion of whether they contribute to the interests of shareholders ingeneral, and according to that standard, the Company exercises its voting rights of cross-held shares.
If a shareholder of the Company is holding shares of the Company in a cross shareholding and offers to sell its sharesof the Company, the Company shall take no action seeking to interfere with the intended sale of the shares, such as
indicating the possibility of reducing transactions with the shareholder.
[Principle 1.7: Related party transactions]
In regard to a transaction between the Company and a Director and a conflicting interest transaction by a Director, theCompany discloses important information related to the transaction to the Board of Directors, obtains its approval inaccordance with the corresponding laws and regulations, and reports to the Board of Directors after the transaction iscomplete.
In addition, the aforementioned principle regarding Directors also applies to Vice Presidents and those holding higher
positions of Executive Officers who are appointed by a resolution of the Board of Directors.
Important master agreements for transactions with Canon Inc., major shareholder, are concluded following a resolution
by the Board of Directors. In addition, for any transaction with it regarding which deliberations and considerations are
deemed necessary for the purpose of protecting the interests of minority shareholders, the Special Committee consistingof Independent Outside Directors makes discussions, delivers a report to the Board of Directors and take other actions ina bid to ensure that the transaction is implemented in a fair and appropriate manner that does not impair the Company’s

1interests.
[Supplementary Principle 2.3.1: Sustainability issues, primarily social and environmental issues]
The Company established the Sustainability Promotion Committee in February 2021 as a place for the consideration of
measures to enhance corporate value by placing sustainability management at the core of management plans. The
Sustainability Promotion Committee deliberates important matters related to sustainability. The committee reports theresults to the Board of Directors and requests opinions and advice from them. The deliberation, opinions and advice will
be reflected in future activities. The Group analyzes business risks and opportunities. Through the discussions of the
Sustainability Promotion Committee, the Group has defined the six material issues listed below. The Sustainability
Promotion Committee monitors progress related to the materials issues.
1) Provide solutions that advance people’s daily lives, work, and society2) Coexist in harmony with the global environment3) Improve organizational capabilities to enable diverse human resources to thrive4) Promote responsible supply chains
5) Promote risk and crisis management
6) Implement sound governance
The Sustainability Promotion Committee believes that the personal growth of individuals and the increase of theirexpertise will revitalize the organization and increase customer satisfaction, which in turn will increase employees’ jobsatisfaction and their aspiration to grow. Based on this belief, the committee has set KPIs to create this virtuous cycle (anengagement improvement cycle). The committee analyzes and manages the progress made in this cycle to increase
corporate value in a sustainable manner.
■ Material issues
https://canon.jp/corporate/en/sustainability/management/material-issues[Supplementary Principle 2.4.1: Ensuring diversity at the Company, including the empowerment of women]
Under the corporate philosophy of Kyosei, we strive for a society in which all people, regardless of culture, customs,
language or race, harmoniously live and work together in happiness into the future. We aim at creating a company that
can achieve growth, driven by diverse personnel with various characteristics and values who improve each other throughcorporate activities rooted in Kyosei, and will further disseminate the concept of “diversity & inclusion.”<Promotion of the active participation of women in the workforce>
As part of its initiatives for promoting “Diversity,” the Company positions the participation of a greater number ofwomen in the workforce to be one of its top priorities.
(Ratios of female workers who hold the position of chief or higher managerial positions compared to the number of
personnel as of end December 2023)
・Ratio of female managers: 4.8%
・Ratio of female chiefs: 16.4%
In 2023, the Company launched the Empowerment Program, a training program for female chiefs (deputy managers).
Various career development programs are offered to applicants.
For other details, please check the following URL which is the website of the Ministry of Health, Labour and Welfareof Japan showing the “Database of Companies Promoting Women’s Participation and Advancement in the Workplace.”(only in Japanese)
https://positive-ryouritsu.mhlw.go.jp/positivedb/detail?id=877(Results of the childcare and family care systems in 2023)
・Ratio of employees returning to work after having taken childcare leave: 100%・Ratio of the establishment of childcare leave: 100%・Ratio of employees returning to work after having taken family care leave: -% (Not applicable)
We have established the following systems to create an environment to support active participation of women in theworkforce.
(Childcare and family care systems)2

- Prenatal and postnatal leave- Maternity leave system and shortened work hour system- Childcare leave system- Shortened work hour system for childcare- Family care leave system- Re-Entry Program<Current status and policy on appointment of mid-career employees and non-Japanese to management positions>To achieve sustainable corporate growth, the Company is training and effectively deploying internal human resources
and actively recruiting and promoting diverse human resources with experience outside the Company.
Although the Company has not set specific numerical targets or timings for recruitment and promotion to managerial
positions, it will continue to develop and deploy human resources based on fair and impartial judgments, in light of theexperience and aptitude of each individual, regardless of whether they are new graduates, mid-career employees, or
foreign nationals.
<Policy on human resource development and internal environment development>
1) Policy for human resource development
The goal of the Canon Marketing Japan Group is “Professional human resources who demonstrate an enterprising
nature and continue to be selected for creating new value.” The Group is committed acting to advance the capabilities
of its human resources.
<Canon Marketing Japan Group's human resources development policy>
1. Based on the spirit of the San-ji (Three Selfs) Spirit that constitutes the Canon Code of Conduct, we create learning
environments in which participants can study with a sense of ownership.
2. We clarify the gap between aspiration and reality, and design steps to close that distance.
3. As foundation of learning, we require our people to think issues through to the end, and to think their way to solutions.
4. Taking the basic approach that people are trained through experience, we create not only spaces for training but
opportunities to take on real-world challenges.
5. By respecting and sometimes questioning the opinions of others, we create an environment in which we teach and aretaught, educate and are educated.**The diversification of human resources leads to the development of human resources.
<Formulation of a human resources portfolio>
The Company is developing a new human resources portfolio to support its transition to a service-type business model.
The development of a human resources portfolio involves the identification of the human resources that are needed tosupport the business strategy and establishing consistent IT skill standards.
To identify the human resources necessary for supporting the business strategy, we classified the skills required for eachbusiness into levels 1 to 5 and specified the requirements for each level in the Medium-Term Management Plan 20222025. We have determined the number of employees needed at each level and set targets for 2025. Currently, we are
educating employees to achieve the targets.
To establish consistent standards for IT skills, we are evaluating the Company's human resources, in December 2022,
using the Digital Skill Standards (DSS) announced by Japan's Information-technology Promotion Agency (IPA) and theMinistry of Economy, Technology and Industry.
Each employee needs to change their mindset and learn new skills as we change our business model. So far, we
conducted group-wide design thinking, DX certification and DX business certification exams to increase employees’skills and change their mindsets.
We are actively recruiting highly skilled workers from outside the Group who can drive the development of new services
and help launch them quickly. In addition to this, we are focusing on developing our own employees with advanced skills,
particularly in the areas of digital marketing and data science.
(2) Policy for internal environment development<Developing learning environments>
We are developing environments to enable employees to engage in self-directed learning based on the spirit of "theThree Selfs," self-motivation, self-management and self-awareness. We have a human resources development system,
which includes rank-specific training, a distance learning support system, and a qualification assistance system, to support
motivated employees. As we adapt to changing work styles, we are providing a variety of learning methods. An e-learning
tool is now available group-wide, and we have created an environment in which all divisions can share their skills. We
offer managers a program that helps them leverage diverse characteristics of individuals to utilize human resources more
effectively.

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<Implementing health and productivity management practices>
The Canon Marketing Japan Group adheres to the five guiding principles in the Canon Code of Conduct (the San-ji(Three Selfs) spirit, meritocracy, internationalism, familism, and health first) in day-to-day operations to ensure that each
employee has job satisfaction and healthy, fulfilling lives. We believe that working to maintain and improve employees'
health under the Health First principle, one of the guiding principles set in the Canon Code of Conduct, leads to thehappiness of employees and their families and eventually to the sustainable improvement of corporate value. Based on
this belief, we work proactively to implement health and productivity management practices.
[Principle 2.6: Roles of Corporate Pension Funds as Asset Owners]
The Company jointly with Canon Inc. established the Canon Pension Fund, appointing finance and accounting experts
to the roles of Chief Director, Executive Director, and Investment Managing Director. Grounded in the Basic Policy thatwas based on guidelines enacted by the Japanese Ministry of Health, Labor and Welfare—the pension fund employs asset
allocation plans considered optimal from a medium- to long-term investment perspective, and selects investment products
and institutions that align with the asset allocation plans. In asset allocation and the selection of investment institutions,careful deliberation is carried out by the asset investment committee, which consists of the Chief Director, Executive
Director, Investment Managing Director and experienced investment and pension plan experts.
Additionally, scheduled monitoring of investment status, including the stewardship activities of each institution, is
carried out through quarterly reporting sessions. Through this, the Canon Group has established a structure that realizes
steady asset formation for employees and secures the future investment and management of a healthy pension fund thatgives due consideration to avoiding conflicts of interest between pension beneficiaries and the Company.
We are also taking such steps as participating in seminars hosted by the Pension Fund Association of Japan to elevatethe competencies of our investment personnel.
[Principle 3.1: Full disclosure](i) Company objectives, business strategies, and business plans
1. Corporate philosophy
Since 1988, the Canon Marketing Japan Group has been implementing sustainability management under the Canon
Group’s corporate philosophy, Kyosei. The Group is committed to solving social issues through its business activities
while maintaining harmony with people, society and nature.
As social issues became more complex and serious, the Group declared itself to be a MIRAI Marketing Company inJanuary 2024 with a view toward continuing to solve an extensive range of future social issues and contribute to creatinga sustainable society with the power of marketing together with various stakeholders. This expression was adopted as asymbol of the Group. In addition, it has also established the Canon Marketing Japan (hereafter “Canon MJ”) Group's
Purpose, Bringing together hopes and ideas with technologies to create a future beyond imagining, in January 2024. In
an era marked by accelerating change and growing uncertainty, the Group will thus look to the future constantly as a
MIRAI Marketing Company and clarify its significance in society to unite the aspirations of Group employees and speed
up solutions to social issues by increasing collaborative creation and cooperation with stakeholders. To accomplish the
Purpose that has been established, the Group will boldly take on challenges to create unconventional new value keeping
future issues in mind. The Group will implement sustainability management practices from a long-term perspective.
■ Corporate philosophy
https://cweb.canon.jp/eng/corporate/groupvision/philosophy.html■ Purposehttps://canon.jp/corporate/en/purpose

2. Business strategies and business plans
The Canon MJ Group has formulated the Long-Term Management Objectives 2021-2025 for the purpose of sustaining
growth and enhancing corporate value on a medium- to long-term basis. Based on this basic strategy, the Group has
formulated the Medium-Term Management Plan 2022-2025 as an action plan to fulfill its vision for 2025 and achieve its
management indicator targets and it is implementing this plan. The Group considers that the sustained development ofboth society and the Canon MJ Group, which is what its sustainability-oriented management seeks to achieve, is facilitatedby solving social issues through business activities. With this in mind, it has formulated the Long-Term Management
Objectives 2021-2025.
Vision of Long-Term Management Objectives 2021-2025
Professional corporate group that solves social and customer issues using ICT and the power of humans
Basic policies of Medium-Term Management Plan 2022-2025
 Expand ITS business with profit

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・ Carry out and accelerate strategies for different customer groups
・ Implement the service-type business model to expand the stock business
Increase earnings capacity of existing businesses
・ Conduct strategies tailored to customer groups
・ Increase the profitability of the business of main products
Strengthen specialized areas and create new businesses
・ Continue growth of the industrial equipment business・ Create new businesses
Group management aimed at continuous growth・ Maximizing human capital value*
・ Establish an engagement improvement cycle
・ Speed up business investments towards growth* "Maximizing human capital value" has been added to the basic policies in the “Canon Marketing Japan Group
Medium-Term Management Plan 2022-2025 Progress Report” disclosed in January 2023.
2025 Management Indicators
Net income: 650 billion yen (including 300 billion yen from sales of IT Solutions)Operating income: 58 billion yen
ROE: 9.0%* The Company has revised up Operating income and ROE in the “Canon Marketing Japan Group Medium-Term
Management Plan 2022-2025 Progress Report” disclosed in January 2023.
(ii) Basic views and guidelines on corporate governance
The Company conducts business activities in multiple business domains—Business Solutions, IT Solutions,
Imaging Systems, and Industrial/Medical—and hopes to expand into new business domains in the future. We believethat the following corporate governance structure is effective for making timely decisions related to each of thesebusiness domains. We also believe that it is effective for making important decisions from a company-wide
perspective on matters involving the Group as a whole or matters in which several business domains intersect on the
one hand, and ensuring the appropriateness of decision-making and execution on the other.
<The Board of Directors>
We have established a structure that mainly consists of Representative Directors who oversee company-widebusiness strategies and their execution, and Executive Directors who oversee each business domain or eachheadquarters function. In addition, three or more Independent Outside Directors are included as members of theBoard of Directors to ensure the soundness of management. The Board of Directors handles important decisionmaking and oversees the performance status of business operations in accordance with laws and regulations.
Other decision-making is conducted by the Representative Directors, while Executive Officers appointed by aresolution of the Board of Directors handle decision-making and execution as the persons responsible for therespective business domains or headquarters functions under the direction and supervision of Representative
Directors.
<Audit & Supervisory Board>As an auditing organization independent from the Board of Directors, the Audit & Supervisory Board consists ofpersons who have considerable knowledge of the Company’s business and corporate management, and persons who
are well-versed in accounting and other professional fields. At least two of the Outside Audit & Supervisory Board
Members is a person who satisfies the independence standards and qualifications separately prescribed by the Boardof Directors. The Audit & Supervisory Board made up of these Members works together with the accounting auditors
and the internal audit division of the Company to audit the execution of duties by Directors and the status of assetsof the Company to ensure the soundness of management.
(iii) Policies and procedures in determining the remuneration of the senior management and Directors
1. Policies
The remuneration of Representative Directors and Directors consists of base compensation of a fixed amount paid
on a monthly basis as compensation for Stock Compensation-type Stock Options, and a bonus linked to the businessresults for the business year, and performance-based stock remuneration as incentives for enhancing medium- tolong-term business performance and corporate value. The remuneration for Executive Officers in the positions of5

Vice Presidents or higher is paid in an equivalent manner.
Outside Directors are only paid basic compensation of a fixed monthly amount.
2. Procedures
The Company established the voluntary “Nomination and Remuneration Advisory Committee” consisting of fivemembers, the President & Representative Director, one Director and three Independent Outside Directors.
The said committee reviews the appropriateness of the compensation system including the standards for calculationof the basic compensation/bonus and the standards for granting Stock Compensation-type Stock Options for
Directors and Executive Officers in the positions of Vice Presidents or higher.
An amount of individual compensations is determined under the compensation system which the “Nomination andRemuneration Advisory Committee” review based on the fundamental concept for calculation which is decided bya resolution of the Board of Directors.
In addition, the total sum of “basic compensation” for Directors and “Stock Compensation-type Stock Options” iswithin the limit of total compensation (maximum amount) approved by the General Meeting of Shareholders.
With respect to the “bonus” for Directors, payment thereof is determined upon approval of the proposal for paymentof bonus at the Ordinary General Meeting of Shareholders.
For more information, please see II 1. "Matters concerning organizational structure and operations, etc."(Remuneration to Directors) "Content of disclosed policy to determine the amount of remuneration or the method
for calculating this amount."(iv) Policies and procedures in the appointment of the senior management and the nomination of candidates for Directors
and Audit & Supervisory Board Members
1. Policies
In principle, we select candidates for Directors and Audit & Supervisory Board Members and Vice President andExecutive Officers appointed as higher positions from among the persons who are recognized as being able toperform the corresponding duties fairly and accurately, who have deep insight, and who satisfy the following
requirements, regardless of their gender, nationality, age, or other personal attributes.
<Representative Directors and Directors>
The candidates must have a true understanding of the Company’s corporate philosophy and Code of Conduct, abroad and deep understanding of the Company’s business and operations through experience gained as Executive
Officers, etc., and must be able to make effective judgment from a comprehensive perspective of multiple businesses
and headquarters functions.
<Independent Outside Directors>
The candidates must satisfy the independence standards and qualifications separately prescribed by the Board of
Directors and must have a high degree of professionalism and abundant experience in corporate management, risk
management, law, economics, and other fields.
<Audit & Supervisory Board Members>
The candidates must have a high degree of professionalism and a wealth of experience in corporate management,
financial and accounting matters, internal controls, and other fields. Two or more candidates for Outside Audit &Supervisory Board Members of the Audit & Supervisory Board must satisfy the independence standards andqualifications separately prescribed by the Board of Directors.
<Vice President and Executive Officers appointed as higher positions>
The candidates must be highly evaluated in terms of performance, abilities and personality upon assessment ofmanagerial positions and have adequate knowledge/experience to assume responsibility for execution in a specificarea and true understanding of the Company's management philosophy and Code of Conduct.
2. Procedures for appointment/nomination
The Company established the voluntary “Nomination and Remuneration Advisory Committee” consisting of fivemembers, the President & Representative Director, one Director and three Independent Outside Directors.
In nomination of candidates for Directors/Audit & Supervisory Board Members and appointment of Vice President(including successor to President and candidates therefor), President recommends candidates from among persons
who are recognized to satisfy the prescribed requirements and the fairness/appropriateness of recommendation ischecked by the nomination committee. Then the proposal therefor is submitted to and deliberated by the Board of
Directors.
In addition, in regards to candidates for Audit & Supervisory Board Members, deliberation at the Audit &Supervisory Board meeting is conducted and the consent of the board is obtained prior to deliberation at the Boardof Directors meeting.

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3. Procedures for removal of members of the senior management
If it is judged that illegality, unlawfulness or betrayal is found with Representative Directors, Executive Directors
and Vice President and Executive Officers appointed as higher positions (the “senior management”), that they do
not fulfill their roles, and that otherwise they are not suitable to the duties of senior management, Directors/Audit &Supervisory Board Members may demand discussion of the necessity of removal of the senior management fromthe “Nomination and Remuneration Advisory Committee” at any time.
The results of discussion by the “Nomination and Remuneration Advisory Committee” are reported to the Boardof Directors, irrespective of the results, and the necessity of removal is deliberated by the Board of Directors. The
senior management subject to deliberation may not participate in the deliberation.
(v) Explanations for the appointment of each member of the senior management and the nomination of each candidate
for Directors and Audit & Supervisory Board Members
The Company discloses the reasons for electing each candidate for Directors and Audit & Supervisory Board
Members (if it is especially necessary, including reasons for removal or non-appointment) by stating these reasonsin the convocation notices of the general meetings of shareholders, etc.
[Supplementary Principle 3.1.3: Disclosure of sustainability efforts]
The Company's sustainability efforts are disclosed in the Integrated Report. The Integrated Report 2023 was publishedin June 2024 to report that steady progress was being made toward the accomplishment of the Canon MJ Group’s 20222025 Three-Year Management Plan and that we were accelerating business creation based on social issues with a view
towards continuous growth from 2025. We endeavored to make it understood through the publication the business,financial and personnel strategies, what objectives past M&A transactions and investments aimed to achieve, what wasbehind the formulation of the Purpose announced in January 2024 and what initiatives were taken for creating futureoriented new businesses that began with the launch of the Research & Business Development (R&B) function.
 The Integrated Report is posted on the Company’s website below.
https://cweb.canon.jp/eng/ir/library/integrated-report.html[Supplementary Principle 4.1.1: Determination and disclosure of the scope of delegation to the senior management]
The aforementioned is described in Principle 3.1 (ii) Basic views and guidelines on corporate governance and Principle
3.1 (iv) Policies and procedures in the appointment of the senior management and the nomination of candidates for
Directors and Audit & Supervisory Board Members. The details of matters to be discussed by the Board of Directors areset forth in the Regulations of the Board of Directors.
Decision-making and the execution of other matters are conducted by the Representative Directors in accordance withthe regulations concerning the division of roles and job authorities determined by the Board of Directors. Executive
Officers appointed by a resolution of the Board of Directors are in charge of decision-making and execution as the persons
responsible for each business domain or each headquarters function. They work under the direction and supervision ofRepresentative Directors.
[Supplementary Principle 4.2.2: Formulation of a basic policy on sustainability efforts, allocation of management
resources and supervision of the implementation of portfolio strategies]
As stated in [Principle 3.1 (i), 2. Business strategies and business plans], the Company's Long-Term Management
Objectives 2021-2025 say that the sustained development of both society and the Canon MJ Group, which is whatsustainability-oriented management seeks to achieve, is facilitated by addressing social issues through business activities.
The Human Resources Strategy Committee and investment committees deliberate on, and monitor progress in,investments in human capital and intellectual capital. The Board of Directors receives reports on companywide matters.
In this way, the Company strives to achieve effective oversight. Strategies on the allocation of management resources andthe business portfolio are specified in the basic policy of the Three-Year Management Plan and progress in the executionof the strategies is effectively supervised through regular reports to the Board of Directors.
[Principle 4.9: Independence standards and qualification for Independent Directors]
The Company establishes the “Independence Standards for Independent Directors/Audit and Supervisory Board
Members” resolved by the board of directors with the resolution of all Audit and Supervisory Board Members, in orderto clarify the standards for ensuring independence of Independent Directors/Audit and Supervisory Board Members of
the Company, taking into consideration Japan’s Corporate Governance Code (Principle 4.9) and the independence
criteria set by securities exchanges in Japan.
 “Independence Standards for Independent Directors/Audit and Supervisory Board Members” are disclosed on the

Company’s website below.
https://cweb.canon.jp/eng/ir/management/governance.html

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[Supplementary Principle 4.10.1: Ensuring majority of Independent Directors in the Nomination and Remuneration
Committee, disclosure of viewpoints on independence in committee composition, mandates, and roles]
The Company has established a voluntary Nomination and Remuneration Committee, consisting of a total of fivemembers, namely the President & Representative Director, one Director and three Independent Outside Directors, forthe purposes of ensuring fair and appropriate election of candidates for Directors, Audit & Supervisory Board Members
and Vice Presidents, deliberations on whether or not dismiss any Representative Director, Executive Director, Vice
President or higher-level Executive Officer, and an appropriate remuneration scheme for Directors, Vice Presidents andhigher-level Executive Officers.
The Company’s Independent Outside Directors fulfill the Company’s Independence Standards. They have roles of
helping to maintain and improve the independence, transparency, and accountability of the Board of Directors in termsof nomination and remuneration. At Nomination and Remuneration Committee meetings, they give proper remarks
from objective perspectives based on their extensive experience and insights into corporate management and otherareas.
The Nomination and Remuneration Committee thus maintains a sufficient level of independence and carries out
appropriate deliberations and considerations on matters relating to nomination, remuneration and other areas. The
names of its members, its activities and others are as stated in [Supplementary explanation] in [Directors] in II-1.
[Matters concerning organizational structure and operations, etc.].
[Supplementary Principle 4.11.1: Balance between diversity, knowledge, experience and other matters of the Board of
Directors as a whole]
The aforementioned subject is as described in Principle 3.1 (ii) Basic views and guidelines on corporate governance andPrinciple 3.1 (iv) Policies and procedures in the appointment and the dismissal of the senior management and thenomination of candidates for Directors and Audit & Supervisory Board Members. The Company takes into account thebalance between diversity, knowledge, experience, and other matters of not only the Board of Directors, but of the entire
organization consisting of the Board of Directors and the Audit & Supervisory Board which possesses auditing functions.
The skill matrix for the Directors appears on the final page.
[Supplementary Principle 4.11.2: Status of concurrent holding of positions by Directors and Audit & Supervisory Board
Members]
The Company discloses reasons for electing each candidate for Directors or Audit & Supervisory Board Members andthe status of candidates who concurrently hold positions as officers of other listed companies in the convocation noticesof general meetings of shareholders in cases where proposals for the election of Directors or Audit & Supervisory Board
Members are to be submitted for approval by shareholders.
In addition, once every year the Company confirms the status of all Directors and Audit & Supervisory Board members
who concurrently hold positions, and discloses the status in convocation notices of the general meeting of shareholders
in the previously described manner.
 The convocation notices are disclosed on the Company’s website below.
https://cweb.canon.jp/eng/ir/stock/generalmeeting.html[Supplementary Principle 4.11.3: Analysis and assessment of effectiveness of the Board of Directors]
The Company carries out an assessment of the effectiveness of the Board of Directors each year to ensure that decisionmaking and monitoring by the Board are functioning properly.
<Summary of fiscal 2023 evaluation results>
In the fiscal year under review, the Company conducted a questionnaire survey of Directors and Audit & Supervisory
Board Members, and carried out an analysis and assessment of the effectiveness of the Board of Directors.
Assessment criteria in the fiscal year under review were (i) deliberations of the Board of Directors, (ii) composition of
the Board of Directors, (iii) succession planning, and (iv) the sufficiency or process of discussion. The questionnaire
survey results confirmed that the effectiveness of the Board of Directors is mostly ensured.
Going forward, the Company will strive for greater effectiveness and improvement of the Board of Directors by further
enhancing discussions on matters to be considered by the Board as well as its composition, management development,
etc. In doing so, the Company seeks to improve the decision-making function by reflecting the opinions of Directors andAudit & Supervisory Board Members obtained in the questionnaire in the operation of the Board of Directors, to enhance
corporate value in the medium and long term and to achieve sustainable growth.
[Supplementary Principle 4.14.2: Training policy for Directors and Audit & Supervisory Board Members]
The Company conducts training for Directors and Audit & Supervisory Board Members on appointment for the purpose8

of ensuring that they understand their roles and job responsibilities and that they have the knowledge necessary or useful
to appropriately fulfil their duties. In addition, the Company has established a system in which they can attend internaland external training sessions at the Company’s expense after taking office.
Furthermore, the Company provides Outside Directors and Outside Audit & Supervisory Board Members of the Audit& Supervisory Board with opportunities to attend business report meetings and other meetings to help them attain a deeper
understanding of the Company’s business.
[Principle 5.1: Policy for constructive dialogue with shareholders]
1. Policies
To contribute to the sustainable growth and medium- to long-term enhancement of corporate value, the Company holds
constructive dialogue with shareholders through various means, such as general meetings of shareholders, meetings to
explain medium- and long- term business plans, business results briefings, and interviews with major institutional
investors.
2. System to promote dialoguea) The accounting, IR, public relations, and legal divisions collaboratively take charge of promoting dialogue withshareholders. Their activities are controlled by the officer in charge of the IR division.
b) At the beginning of each year, the Representative Directors host a meeting to explain the medium- and long- termbusiness plans to analysts and institutional investors. In addition, the officer in charge of the IR division holds businessresults briefings on a quarterly basis. Furthermore, the Company provides opportunities for interviews as needed. For
individual investors, the Company holds guidance seminars as needed. It also has a dedicated page* on the website
where management policy, financial results, financial data and other information are explained clearly.
The details are as described in the III. 2. Status of IR activities in this report.
* The Investor Relations Information is posted on the Company’s website below.
https://cweb.canon.jp/eng/ir/index.htmlc) In response to requests from shareholders and investors, management, including the President & Representative
Director, are interviewed or take other actions as needed, following the judgment of the officer in charge of the IR
division.
d) Opinions or requests received through dialogue with shareholders are reported to management meeting by thedepartment in charge on a regular basis, and important points and suggestions are reported to Representative Directors
or the Board of Directors by the officer in charge of the IR division.
3. Management of insider information
The Company ensures that it does not carelessly provide important undisclosed information during dialogue withshareholders by maintaining strict control of important undisclosed information in accordance with the Regulations
Concerning the Prevention of Insider Trading, which also set out the procedure for disclosing information.
■ Activities
Activities in 2023 are as follows.
<For individual investors>- Held (online) guidance seminars, where the Representative Director, officers in charge of IR and other IR staff
members provided explanations (four seminars were held).
- Updated the website for individual investors. IR staff distributed e-mail magazines.
<For analysts and institutional investors (in Japan and overseas)>- The Representative Director held a meeting to present the Medium-Term Management Plan (online)- An officer in charge of IR held results briefings (online)- Held IR interviews individually
The Representative Director (9 interviews/year), officers in charge of IR (16 interviews/year), IR staff (102interviews/year)- Held small meetings about business fields (five meetings)- Feedback of the evaluations of investors given to business managers* Interviewers: active investors, passive investors, growth fund managers, value fund managers, analysts[Principle 5.2: Establishing and Disclosing Business Strategies and Business Plans]■ Action to implement management that is conscious of cost of capital and stock price
The Company recognizes the cost of shareholders’ equity as cost of capital and executes corporate management that9

considers cost of capital and return on capital employed.
In the Long-Term Management Objectives 2021-2025 announced in April 2021, sales of ¥650.0 billion, operating
income of ¥50.0 billion and ROE of 8.0% were set out as management indicators for 2025, which exceeded the cost ofshareholders’ equity. Moreover, taking into account the progress of FY2022 when both operating income and ROE
achieved record-high levels, management indicators for 2025 were updated in the Medium-Term Management Plan
2022-2025 Progress Report announced in January 2023 which included sales of ¥650.0 billion, operating income of¥58.0 billion and ROE of 9.0%.
Moreover, PBR and PER, which were 0.97 times and 10.9 times as of the end of FY2022, had risen to 1.28 times and15.2 times respectively at the end of FY2023, mainly attributable to expansion of IT solutions business, a high-growthdomain, and increased information disclosure of the said business.
Furthermore, the Company implemented a tender offer for the acquisition of its own shares during the period between
July 25, 2024 and August 22, 2024, and acquired 20,025,320 shares of its own stock from Canon Inc., its parent
company, and others. As a result, this is expected to produce the effect of contributing to improvement of capitalefficiency, such as ROE and PBR.
The Company believes that it will earn stronger evaluations from markets by continuously raising the ROE level,
increasing the dividend amount in line with the expansion of profits and total shareholder return (TSR) and investing¥200.0 billion or more in growth, as declared in the Medium-Term Management Plan 2022-2025 Progress Report.
The Company aims to achieve its target financial indicators by implementing the basic policies of the Medium-Term
Management Plan; namely, expanding its IT solutions business with profit, increasing the earnings capacity of existing
businesses, and strengthening areas of expertise and creating new businesses. Through the promotion of these policies
and the efficient use of the cash generated, the Company will achieve sustained growth in the future.

2. Capital Structure
Percentage of shares owned by foreign shareholders

More than 10% but less than 20%[Status of major shareholders]Name of shareholder
Canon Inc.
The Master Trust Bank of Japan, Ltd. (Trust account)
Canon Marketing Japan Group Employee Stock Ownership Association
Custody Bank of Japan, Ltd. (Trust account)
STATE STREET BANK AND TRUST COMPANY 505001
SMBC Nikko Securities Inc.
Canon Marketing Japan Group Business Partner Stock Ownership
Association
The Bank of New York Treaty JASDEC AccountMizuho Bank, Ltd.
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

Number of shares held
(shares)
75,708,684
8,248,100
5,146,152
3,865,800
1,411,102
1,304,188

Shareholding
ratio (%)
58.38
6.36
3.97
2.98
1.09
1.01

1,253,846

0.97

1,084,300
1,001,083
966,000

0.84
0.77
0.74

Existence of controlling shareholders(excluding parent company)―――

Existence of parent company

Canon Inc. (Listing: Tokyo, Nagoya, Sapporo, Fukuoka) (Securitiescode) 7751

Supplementary explanation
The above descriptions are as of June 30, 2024. As of the said date, the Company holds 1,399,232 shares(shareholding ratio: 1.07%) as treasury stock in addition to the shares shown above in 2. Capital Structure [Status ofmajor shareholders].
In addition, as described in Principle 5.2, the number of shares of the Company’s stock held by Canon Inc., theparent company, as of September 30, 2024 was 55,708,684 shares, as a result of acquisition of 20,000,000 shares from
Canon Inc. during the period of tender offer for acquisition of its own stock from July 25, 2024 until August 22, 2024.

10

The 20,000,000 shares of its stock acquired from Canon Inc. was cancelled on September 30, 2024.
3. Corporate attributes
Stock exchange listings and market segment

Prime Market, Tokyo

Fiscal year-end

DecemberCategory of business

Wholesale business

Number of employees as of the end of theimmediately preceding fiscal year (consolidated)

No less than 1,000

Net sales as of the end of the immediately preceding
fiscal year (consolidated)

No less than ¥100 billion but less than ¥1 trillion

Number of consolidated subsidiaries as of the end of
the immediately preceding fiscal year

No less than 10 companies but less than 50 companies

4. Guidelines for measures to protect minority shareholders when conducting transactions, etc. with controllingshareholders
The controlling shareholder of the Company is the parent company, Canon Inc. As described in [Principle 1.7 Related
party transactions, Disclosure based on the principles of the Corporate Governance Code, I1. Basic Views], importantmaster agreements for transactions with the controlling shareholder are concluded following a resolution by the Board of
Directors. In addition, for a risk of conflicts of interests occurring between controlling shareholder and minority
shareholders regarding which deliberations and considerations are deemed necessary for the purpose of protecting theinterests of minority shareholders, the Special Committee consisting of Independent Outside Directors makes discussions
and delivers a report to the Board of Directors. No arbitrary decisions are made on terms, etc. of transactions with thecontrolling shareholder. In addition, the Company protects the interests of all its shareholders by conducting alltransactions appropriately and fairly, including transactions with the controlling shareholder, to ensure there is no damage
to the Company’s independence and interests.
The composition of Special Committee (as of September 30, 2024) is as follows.
[Special Committee comprising three members]
Chairperson: Yoshio Osawa (Independent Outside Director)
Members: Toshiharu Hasebe (Independent Outside Director) and Hiroko Kawamoto (Independent Outside Director)
The status of recent activities of the Special Committee is as described below.
May 22, 2024
Deliberation regarding subject of consideration by the Special Committee
July 11, 2024
Deliberation regarding tender offer for acquisition of own stock
July 16, 2024
Deliberation regarding tender offer for acquisition of own stock
July 24, 2024
Deliberation regarding tender offer for acquisition of own stock
August 8, 2024 Confirmation of purchase from parent company
5. Other special circumstances that may have a material impact on corporate governance(1) The parent company’s policy on Group management
Canon Inc., the parent company of the Company, believes that the Canon Group can achieve sustainable growth andincrease its corporate value in the medium to long term if the Canon Group’s companies, including the Company, fulfill
their social responsibilities through their corporate activities based on Canon’s corporate philosophy, Kyosei, andcontinue to strive to realize Kyosei.
Canon Inc. shares its management strategies with its listed subsidiaries, including the Company, to ensure that the Canon
Group will efficiently achieve the targets of its medium- to long-term management plan, Excellent Global Corporation
Plan Phase VI (2021-2025), through comprehensive optimization. The policy of Canon Inc. states that its listed
subsidiaries, including the Company, will seek to post consistent earnings and maximize consolidated earnings to increase
the corporate value of the entire Canon Group.
On the risk management front, all of the Canon Group companies, including the Company, are working to share policies
and information and develop systems to work as one team on sustainability matters, such as compliance, internal control,risk management, economic security, decarbonization, global warming mitigation and respect for human rights.
One of the Canon Group’s important management policies is to protect the interests of the minority shareholders ofCanon Inc. and its listed subsidiaries. This policy involves allowing the listed subsidiaries to maintain a high degree of
independence and flexible management systems. Due to this policy, Canon Inc. does not participate in the Company’s
decision-making process regarding individual issues.

11(2) Reasons why it is significant for the parent company to have a listed subsidiary
In addition to the sale of Canon's products and services, the Company sells other companies' products and provides
services and IT solutions in response to the needs of customers and its own businesses. As described above, the Company
operates independently. As a listed company that is independent of the parent company, the Company has a process thatenables it to make decisions promptly and flexible financing methods. This allows the Company to broaden its non-Canonbusinesses. In addition, the Company can leverage its creditworthiness as a listed company to increase the number ofcustomers and business partners, hire excellent human resources and keep its employees highly motivated. For thesereasons, Canon Inc. has decided that the Company as a listed company will contribute to maximizing the value of theCanon Group.
(3) The parent company's involvement in the Company's management
The management of the Company is independent of the parent company. No officers of the parent company concurrently
serve as officers of the Company. To enhance its governance, the Company has established a Nomination andRemuneration Committee, and a majority of the committee's members are Independent Outside Directors. The
committee’s decisions are duly considered in the Company's appointment and dismissal of Directors, etc. and in
determining their remuneration.
The Company applies the arm’s length rule to the transactions between the Company and the parent company to ensurethat the transactions are proper. We are committed to avoiding unduly harming the interests of the minority shareholdersof both the Company and the parent company.
The Company has established a Special Committee which deliberates and considers the risk of a conflict of interest
occurring between the controlling shareholder and minority shareholders to mitigate these risks. The Special Committee
is explained in [4. Guidelines for measures to protect minority shareholders when conducting transactions, etc. with
controlling shareholders].

II Corporate Governance Structures for Management Decision-Making, Execution and Supervision, and Other
Matters
1. Matters concerning organizational structure and operations, etc.
Organizational form

Company with Audit & Supervisory Board Members[Directors]
Number of Directors stipulated in the Articles
21
of Incorporation
Term of office of Directors stipulated in the
Articles of Incorporation

1 yearChairman of the Board of Directors

President

Number of Directors

7

Status of appointment of Outside Directors

Appointed

Number of Outside Directors

3

Number of Outside Directors who aredesignated as Independent Directors

3

Relationship with the Company (1)Name
Yoshio Osawa
Toshiharu Hasebe
Hiroko Kawamoto

AttributeaAppointed from anothercompany
Appointed from anothercompany
Appointed from anothercompanyb

Relationship with the Company (*)
c
d
e
f
g
h
i
△
△
△

12

j

k

* Selection items that indicate the relationship with the Company* The “○” indicates that the person falls under the item currently or recently, and the “△” indicates that the person fell under theitem in the past.
* The “●” indicates that a close relative of the person falls under the item currently or recently, and the “▲” indicates that therelative fell under the item in the past.
a Person conducting the operations of a listed company or a subsidiary of the listed company
b Person conducting the operations or non-executive director of the parent company of a listed companyc Person conducting the operations of a fellow subsidiary of a listed company
d Person whose major counterparties are listed companies or person conducting the operations of the aforementioned entity
e Major client of a listed company or person conducting the operations of the major clientf Consultant, public accountant, or legal professional who receives a large amount of money or financial assets other than executive
compensation from a listed company
g Major shareholder of a listed company (if the major shareholder is a corporation, person conducting the operations of thecorporation)h Person conducting the operations of a client of a listed company (who does not fall under d, e, or f) (only that person)i Person conducting the operations of an entity with whom a listed company has relationships through outside directors or outside
auditor (only that person)
j Person conducting the operations of an entity to whom a listed company makes donations (only that person)k Other13

Relationship with the Company (2)Name

Yoshio Osawa

Toshiharu Hasebe

Hiroko Kawamoto

Independent
Director○○○

Supplementary information
regarding applicable items
Mr. Osawa previously worked at
Sumitomo Corporation and SCSKCorporation, which are bothclients of the Company. Although
the Company has business
transactions with Sumitomo, theannual transaction amount is lessthan 1% of the consolidated net
sales of both Sumitomo and theCompany. Moreover, while theCompany has business
transactions with SCSK, theannual transaction amount is lessthan 1% of the consolidated net
sales of both SCSK and theCompany.

Mr. Hasebe previously worked at
NTT Communications
Corporation and NTT PublishingCo., Ltd., which are both clientsof the Company.
Although the Company has
business transactions with NTT
Communications, the annualtransaction amount is less than 1%of the consolidated net sales ofboth NTT Communications andthe Company. Moreover, while
the Company has business
transactions with NTT Publishing,
the annual transaction amount isless than 1% of the consolidated
net sales of both NTT Publishingand the Company.

Ms. Kawamoto previously worked
at All Nippon Airways Co., Ltd.
and ANA Strategic ResearchInstitute Co., Ltd. Although theCompany has business
transactions with All Nippon
Airways, the annual amount of thebusiness is less than 1% of theconsolidated net sales of both All
Nippon Airways and theCompany. Although the Company
has business transactions withANA Strategic Research Institute,

14

Reason for appointment
Mr. Osawa has a track record of actively
performing as a top executive at a general
trading company and IT services
company for many years. The Company
elected him as an Outside Director
because it expects him to leverage his
considerable experience and excellent
expertise in company management toprovide supervision andrecommendations to the Company, and it
assessed that he could accomplish theduties as an Outside Director
appropriately.
In addition, he is appointed as anindependent officer because it was judgedthat there is no fear of any conflict ofinterest with general shareholders in lightof the criteria for independence of theTokyo Stock Exchange and theCompany.
Mr. Hasebe has a track record of actively
performing as a top executive at atelecommunications company andadvertisement company for many years.
The Company elected him as an Outside
Director because it expects him toleverage his considerable experience andexcellent expertise in company
management to provide supervision andrecommendations to the Company, and it
assessed that he could accomplish theduties as an Outside Director
appropriately.
In addition, he is appointed as anindependent officer because it was judgedthat there is no fear of any conflict ofinterest with general shareholders in lightof the criteria for independence of theTokyo Stock Exchange and theCompany.
Ms. Kawamoto has held key positions inairline companies over many years incharge of improving service quality andfacilitating the activities of women. The
Company elected her as an Outside
Director because it expects her toleverage her considerable experience andexcellent expertise in corporate
management and the service industry toprovide supervision andrecommendations to the Company fromthe perspective of diversity. Moreover, it
assessed that she could accomplish the

the annual amount of the businessis less than 1% of the consolidated
net sales of both ANA Strategic
Research Institute and theCompany.

Voluntary Establishment of Committee(s)corresponding to Nomination Committee
or Remuneration Committee

duties as an Outside Director
appropriately.
In addition, Ms. Kawamoto is appointed
as an independent officer because it was
judged that there is no fear of any conflictof interest with general shareholders inlight of the criteria for independence of
the Tokyo Stock Exchange and theCompany.

EstablishedState of establishment of voluntary committees, members of the committees, attributes of chairman

Committee’s
NameCommittee
Corresponding
toNominating
Committee
Committee
Corresponding
toRemuneration
Committee

All

Full-time

InsideOutsideOutsideMembers

Directors

Directors

Experts

5

0

2

3

0

0

5

0

2

3

0

0

Committee
Members

Other

Chairman

Nomination
andRemuneration

InsideDirectors

Committee
Nomination
andRemuneration

InsideDirectors

Committee

Supplementary explanation
The Company has established the voluntary “Nomination and Remuneration Committee” consisting of a total of fivemembers, namely the President & Representative Director, one Director and three Independent Outside Directors, for the
purpose of ensuring the fairness and validity of selection of candidates for Directors, Audit & Supervisory Board Members
and Vice Presidents respectively, deliberating dismissal of the Representative Directors, Executive Directors andExecutive Officers in the positions of Vice Presidents or higher as well as ensuring the validity of the compensation
systems for Directors and Executive Officers in the positions of Vice Presidents or higher. Three members of theCommittee among the five are Independent Outside Directors who fulfill the requirements for Independent
Directors/Auditors formulated by the Tokyo Stock Exchange. This maintains the independence of the Committee as anadvisory body to the Board of Directors. The status of the most recent activities of the Committee are as shown below.
For details, please refer to I1. [Disclosure based on the principles of the Corporate Governance Code] [Principle 3.1: Fulldisclosure], (iii) “Policies and procedures in determining the remuneration of the senior management and Directors” and(iv) “Policies and procedures in the appointment of the senior management and the nomination of candidates for Directors
and Audit & Supervisory Board Members.”
January 11, 2019 Deliberation of fairness of selection of new candidates for Vice President/Deliberation of validity of
directors’ compensation system
January 23, 2019 Deliberation of validity of introduction of performance-based stock compensation system
January 21, 2020 Deliberation of fairness of selection of new candidates for Director and Audit & Supervisory Board
Members

15

January 20, 2021 Deliberation on the fairness of the selection of new Representative Director, Director and Vice
President candidates
December 10, 2021

Deliberation on the fairness of the selection of new Director candidates/Deliberation of validity ofrevisions to stock compensation system
January 20, 2022

Deliberation on the fairness of the selection of new Director and Audit & Supervisory Board Member

candidates/Deliberation of validity of revisions to stock compensation system
December 12, 2022

Deliberation on the fairness of the selection of new Director candidates

December 12, 2023

Deliberation on the fairness of the selection of new Audit & Supervisory Board Member and Vice

President candidates
The five members are Masachika Adachi, President & Representative Director (chairperson), Minoru Mizoguchi,
Director, Yoshio Osawa, Independent Outside Director, Toshiharu Hasebe, Independent Outside Director and Hiroko
Kawamoto, Independent Outside Director (Appointed on January 29, 2024).
All of the Independent Outside Directors attended all committee meetings.
Members of the personnel affairs and legal affairs departments make up a secretariat to conduct operations relating to
the preparation of deliberation materials, the preparation of minutes, and the provision of support for operations of thecommittee.
[Audit & Supervisory Board Members]
Establishment of an audit & supervisory board

Established

Number of Audit & Supervisory Board Members
5
stipulated in the Articles of Incorporation
Number of Audit & Supervisory Board Members

5

Status of collaboration among Audit & Supervisory Board Members, accounting auditor, and internal audit division[Status of collaboration between Audit & Supervisory Board Members and accounting auditor]
Audit & Supervisory Board Members constantly work to improve audits when they formulate audit plans throughdiscussions with the accounting auditor at the beginning of each fiscal year. They exchange information and opinionswith the accounting auditor through reports of the results of regular audits and meetings held as needed, and are present
during the on-site audits conducted by the accounting auditor and during the time when the accounting auditor explains
the results of the on-site audits.
[Status of collaboration between Audit & Supervisory Board Members and internal audit division]
Audit & Supervisory Board Members receive explanations about the annual plans and policies for internal audits fromthe internal audit division. They are also informed of the status of conducting internal audits on a quarterly basis. In
addition, both organizations exchange information whenever necessary. The internal audit division provides assistance to
Audit & Supervisory Board Members, and provides assistance with the Board’s secretarial affairs when asked by Audit& Supervisory Board Members for assistance following discussions.
Status of appointment of Outside Audit &Appointed
Supervisory Board Members
Number of Outside Audit & Supervisory
3
Board Members
Number of Outside Audit & Supervisory
Board Members considered to be 2
Independent

16

Relationship with the Company (1)Name
Iwao Hashimoto
Seijun Suzuki
Shigeo Hasegawa

Attributeab

Relationship with the Company (*)
c
d
e
f
g h
i
j
k

Appointed from anothercompany
Appointed from anothercompany
Certified public
accountant

l

m

△

△

* Selection items for relationship with the Company* The “○” indicates that the person falls under the item currently or recently, and the “△” indicates that the person fell under theitem in the past.
* The “●” indicates that a close relative of the person falls under the item currently or recently, and the “▲” indicates that therelative fell under the item in the past.
a Person conducting the operations of a listed company or a subsidiary of the listed company
b Non-executive director or accounting advisor of a listed company or a subsidiary of the listed companyc Person conducting the operations or non-executive director of the parent company of a listed company
d Audit & Supervisory Board member of the parent company of a listed company
e Person conducting the operations of a fellow subsidiary of a listed company
f Person whose major counterparties are listed companies or person conducting the operations of the aforementioned entity
g Major client of a listed company or person conducting the operations of the major clienth Consultant, public accountant, or legal professional who receives a large amount of money or other financial assets other than
executive compensation from a listed company
i Major shareholder of a listed company (if the major shareholder is a corporation, person conducting the operations of thecorporation)
j Person conducting the operations of a client of a listed company (who does not fall under f, g, or h) (only that person)k Person conducting the operations of an entity with whom a listed company has relationships through outside directors or outside
auditors (only that person)l Person conducting the operations of an entity to whom a listed company makes donations (only that person)m Other

Relationship with the Company (2)Name

Iwao Hashimoto

Independent
Audit &
Supervisory
Board
Member○

Supplementary information
regarding applicable items
Mr. Hashimoto previously
worked at Sompo Japan
Insurance Inc., a client of theCompany. Although theCompany has business
transactions with Sompo Japan
Insurance, the annualtransaction amount is less than
1% of the consolidated net salesof both Sompo Japan Insurance
and the Company.

17

Reason for appointment

Because Mr. Hashimoto has extensive
experience and broad insight as a resultof his involvement in the managementof an insurance company for many
years, he is appointed as an Outside
Member of the Audit & Supervisory
Board.
In addition, he is appointed as anindependent officer because it was
judged that there is no fear of any
conflict of interest with generalshareholders in light of the criteria for
independence of the Tokyo Stock
Exchange and the Company.

Seijun Suzuki―――

Shigeo Hasegawa

Mr. Hasegawa previously
worked at Deloitte Touche
Tohmatsu LLC, the accounting
auditor of the Company.
However, he left theaccounting firm before
becoming an Audit &Supervisory Board Member of
the Company and is not in theposition to be influenced by theaudit corporation's intention
and no special interests thatneed to be mentioned exist
between the Company and theaccounting firm.

○

Because Mr. Suzuki has been in chargeof legal and internal audit operations
that includes organizing legal
compliance system and risk
management system at Canon Group formany years. He has extensive
experience and outstanding expertise inthese fields, and on this basis, theCompany assessed that he could
accomplish the duties as an Outside
Audit & Supervisory Board Member
appropriately.
Because Mr. Hasegawa has many yearsof experience and extensive knowledgeof accounting as a certified public
accountant, he is appointed as an
Outside Member of the Audit &Supervisory Board.
In addition, he is appointed as anindependent officer because it was
judged that there is no fear of any
conflict of interest with generalshareholders in light of the criteria for
independence of the Tokyo Stock
Exchange and the Company.

[Independent Directors/Audit & Supervisory Board Members]
Number of Independent Directors/Audit &Supervisory Board Members

5

Other Independent Director/Audit & Supervisory Board Members Related Items
The Company appoints all outside officers eligible for appointment as independent officers.
[Incentives]
Status of implementation of measures togrant incentives to Directors

Introduction of a performance-linked compensation system,
introduction of a stock option system

Supplementary information regarding applicable item
Please refer to【Content of disclosed policy to determine the amount of remuneration or the method to calculate thisamount】.
Stock option grantees

Internal Directors and Others

Supplementary information regarding applicable item
The term "and Others" means Executive Officers who are Vice Presidents or higher. The Company decided to makeExecutive Officers of the Company who are Vice Presidents or higher (including persons serving concurrently as
Directors; excluding Outside Directors) eligible for the granting of stock acquisition rights based on the view that they
are in a position to play a central role in improving business performance and enhancing corporate value.
[Remuneration to Directors]
Status of disclosure of (remuneration toindividual Directors)

Individual disclosure for certain Directors only18

Supplementary information regarding applicable item
Individual disclosure information for those whose total remuneration, for example, compensation on a consolidated
basis, is 100 million yen or above is contained in the Company’s annual securities report (Yuukashouken houkokusho).
Policy established to determine the amountof remuneration or method to calculate thisamountYes

Content of disclosed policy to determine the amount of remuneration or the method to calculate this amount

1．Basic policy on compensation
The Company endeavors to design executive compensation systems that will function as a framework for effectively
encouraging officers to fully demonstrate their abilities and fulfil their roles and responsibilities for the Canon MJ
Group’s sound and sustainable growth. The Company’s basic policy is that the proprietary value of executive
compensation should be set at an appropriate level taking into consideration the attraction and retention of talented
human resources who can fully meet the Company’s expectations.
2．Details of each compensation systema）Representative Directors and Executive Directors
The remuneration of the Representative Directors and Executive Directors is made up of the following “basic
remuneration,” “bonus” and “performance-based stock compensation.”<Basic remuneration>
This is a fixed amount, paid to Representative Directors and Executive Directors each month, as compensation for
execution of their duties. It is a prescribed amount set in accordance with the position, role and degree of contribution ofRepresentative Directors and Executive Directors. The total amount must not be more than 800 million yen per year as
approved in the 39th Ordinary General Meeting of Shareholders held on March 28, 2007.
<Bonus>This is cash remuneration paid to Representative Directors and Executive Directors to reward their achievements overthe course of one year in office and it uses consolidated profit before income taxes, which is the result of the Group’s
operating activities over the course of a year, as an indicator. A standard bonus amount set in accordance with the position
of Representative Directors and Executive Directors is adjusted according to the degree of achievement of the indicator.
Since the Company’s view is that bonuses are like dividends and retained earnings and that they are essentially a
distribution of company profits, the Company consults the annual general meeting of shareholders for approval of thepayment of bonuses and the total amount to be paid calculated in accordance with the foregoing.
The Company’s consolidated profit before income taxes was forecast at 51.6 billion yen at the beginning of the year
(announced in January 2023) but the actual result was 53.057 billion yen.
<Stock Compensation-type Stock Options>
The purpose of the Stock Compensation-type Stock Options is to further motivate Directors to improve businessperformance and enhance corporate value in the medium to long term by sharing both the benefits and risks of fluctuatingstock prices with the shareholders, and stock acquisition rights with respect to the Company's shares will be granted oncea year. The number of stock acquisition rights to be granted will be calculated based on the Officer’s position and stock
price levels at the time of the grant. Under the Plan, the exercise price per share that can be received upon exercise of astock acquisition right shall be one yen Eligible officers may exercise their stock acquisition rights within the range of
0% to 100% according to the degree of achievement of Management indicators set by the Company including consolidated
profit before income taxes which are the results of the Group's operating activities for the year. When allotting stockacquisition rights as stock options, Directors shall be paid the same amount of monetary compensation as the payment
amount determined based on fair value, and the payment shall be carried out by offsetting the payment amount against
said compensation receivables in lieu of delivery of monetary payment. The total amount of compensation must not be
more than 800 million yen per year as approved in the 39th ordinary General Meeting of Shareholders held on March 28,
2007, but this Plan shall be within said limit in accordance with the resolution of the 54th Ordinary General Meeting of
Shareholders of the Company held on March 29, 2022.
Eligible officers shall be allowed to exercise the stock acquisition rights when they cease to be eligible officers on thebasis that this plan is compensation for results throughout their term of office. In the event that the Company recognizes
any acts by the eligible officers that are in violation of laws and regulations or misconduct in the course of their duties,
acts conflicting with the duty of due diligence or duty of loyalty, or any other act equivalent thereto, the Company may

19

limit the exercise of all or some of the stock acquisition rights.
Regarding the ratio between basic remuneration, bonuses and stock compensation-type stock options, the basic policy
is to emphasize the level and stability of basic remuneration based on the thinking that it is important to undertake business
management from a medium- to long-term perspective. As a general rule, Directors bonuses and stock compensationtype stock options are set as 30% and 20% of their base remuneration, at maximum, respectively, for the purpose of
improving the business performance of a single fiscal year.
b）Outside Directors and Audit & Supervisory Board Members
The remuneration of Outside Directors and Audit & Supervisory Board Members, who perform duties from a positionof independence from business execution, is limited to the basic remuneration, which is a fixed amount, paid each monthas compensation for the execution of duties. The remuneration of Outside Directors is determined within the limit of theannual amount determined by resolution of the general meeting of shareholders stated in a) Basic remuneration above
and within the limit of an amount determined in advance by the Company, taking general levels of remuneration into
consideration. The upper limit of remuneration for Audit & Supervisory Board Members of 120 million yen per year set
at the 30th Ordinary General Meeting of Shareholders held on March 26, 1998 was determined through consultation
among Audit & Supervisory Board Members.
3．Compensation determination process
The Company established the voluntary “Nomination and Remuneration Advisory Committee” consisting of the
President & Representative Director, one Director and three Independent Outside Directors, making five members in total,
for the purpose of ensuring the transparency and objectivity of the compensation determination process and the validityof the compensation systems. The committee reviewed the validity of the compensation systems for Directors andExecutive Officers in the positions of Vice Presidents or higher including the standards for calculation of basic
remuneration and bonuses and the standards for granting stock compensation-type stock options and reported to the Boardof the Directors to the effect that the systems are valid.
The individual compensation amounts of Directors are determined based on the compensation systems after the basic
approach to calculation determined by resolution of the Board of Directors has been reviewed by the Nomination andRemuneration Advisory Committee. The Ordinary General Meeting of Shareholders is asked to approve the payment ofbonuses and the total amount of bonuses to be paid on each occasion as stated in 2. a) above.
The process for determination of compensation of Audit & Supervisory Board Members is as stated in 2. b) above.
[Support system for Outside Directors (Outside Members of the Audit & Supervisory Board)]
The Company does not have an organization or employees dedicated to assisting the Outside Directors and Outside
Members of the Audit & Supervisory Board with their duties. Outside Directors receive explanations from Executive
Directors when necessary about the agendas and other matters related to meetings of the Board of Directors prior to themeetings. Outside Members of the Audit & Supervisory Board also receive explanations from internal members of the
Audit & Supervisory Board or Executive Directors when necessary about the agendas and other matters related tomeetings of the Board of Directors prior to the meetings. In addition, Outside Members of the Audit & Supervisory Board
attend meetings of the Audit & Supervisory Board, liaison meetings of the Audit & Supervisory Board held from time totime, and other meetings. They share information about important matters and information concerning the details of each
audit among the members.
[Status of those who have retired from the posts of representative directors and presidents]
Names of counselors/advisers including former representative directors and presidents

Name

―――

Managerial
position/status―――Working form/conditions(full-time, part-time,
with/without
remuneration)

Job duties

―――

―――

Total number of counselors/advisers including0
former representative directors and presidents

20

Date ofretirementfrom thepost ofpresident,
etc.
―――

Term ofoffice―――2. Matters regarding functions of business execution, auditing, supervision, nomination, decision-making forremuneration, etc. (outline of current corporate governance structure)
The Company’s corporate governance structure includes an internal auditing system in addition to the Audit &Supervisory Board.
<Board of Directors, Directors, and Executive Officers>
The outline of the structure for the Board of Directors is as described in (ii) Basic Views and guidelines on corporate
governance, Principle 3.1: Full disclosure, Disclosure based on the principles of the Corporate Governance Code, I1.
Basic Views. The Board of Directors has 7 members, consisting of 4 Directors from within the Company and 3 Outside
Directors who are Independent Directors. The Board aims to conduct management decision-making rationally andefficiently. The term of office for Directors is one year, and we have created a management structure capable of adapting
quickly to changes in the business environment. Under the current structure, routine matters such as financial results andexecutive changes as well as important decisions specified by laws, regulations and the Board of Directors’ Regulations
are made after active discussions by the Board of Directors which normally meets once a month, temporary meetings ofthe Board of Directors that are held when needed, and at management meetings attended by the officers of the Company
and the presidents of major subsidiaries of the Group. In addition, on March 29, 2011, the Company introduced an
executive officer system. The purpose of this system is to speed up management decision-making within the Group by
separating management decision-making from business execution functions and reducing the number of Directors. It also
clarifies the responsibilities for the performance of business operations and strengthens the executive systems. There willbe 21 Executive Officers as of April 1, 2024.
<Audit & Supervisory Board and Audit & Supervisory Board Members>
The outline of the structure for the Audit & Supervisory Board is as described in (ii) Basic views and guidelines on
corporate governance, Principle 3.1: Full disclosure, Disclosure based on the principles of the Corporate Governance
Code, I1. Basic Views. There are five Audit & Supervisory Board Members, of whom three are appointed from outsideof the Company. The Audit & Supervisory Board conducts strict audits by attending meetings of the Board of Directors,
interviewing Directors and other persons, inspecting documents involving important decisions, investigating business
operations and the status of financial assets, etc. in accordance with the audit policies and division of duties, etc. that it
determines. While the Company does not have dedicated organizations or employees to assist the Audit & Supervisory
Board Members in their duties, when consulted by Audit & Supervisory Board Members about their requirements, theinternal audit division, the legal division and other divisions have employees who will assist Audit & Supervisory Board
Members and the Audit & Supervisory Board in their work (the “Assisting Employee”). When ordered to undertake duties
by Audit & Supervisory Board Members, such employees assisting Audit & Supervisory Board Members will prioritize
the execution of such duties.
<Concept for the functions and roles and the status of the appointment of independent Outside Directors andindependent Outside Members of the Audit & Supervisory Board>
The aforementioned subject is as described in [Principle 4.9: Independence standards and qualification for Independent
Directors, Disclosure based on the principles of the Corporate Governance Code, I1. Basic Views]. The independent
Outside Directors and independent Outside Members of the Audit & Supervisory Board of the Company satisfy the
independence standards and qualification, and their role is to contribute to the maintenance and improvement oftransparency and accountability of the Board of Directors.
<Internal audits>
The Internal Auditors Office (IAO) was established as an independent organization dedicated to performing audits of
the Company and operating under the direct supervision of the President of the Company. IAO prepares the policies of
the internal audit divisions of the Company and the entire Group and conducts audits of all management activities to
examine the reliability of financial reports, the effectiveness and efficiency of business operations, compliance with laws
and regulations, and the protection of corporate assets, and assesses the results of audits and provides advice to the audit
targets.
The results of audits are reported regularly to the President & Representative Director, other Directors and the Audit &Supervisory Board.
In addition, the internal audit divisions of Canon IT Solutions Inc. and Canon System & Support Inc. conduct audits
under the same policies. The Group has about 60 audit staff members.
<Independent auditor>
The Company entered into an audit contract with Deloitte Touche Tohmatsu LLC in fiscal year 2020 and since then has
undergone audits from this accounting firm. The names of the certified public accountants who carried out the audits infiscal year 2023 and the accounting firm they belong to are as follows.

21

Masahiro Ide: Designated and Engagement Partner (Deloitte Touche Tohmatsu LLC)
Shinji Hatano: Designated and Engagement Partner (Deloitte Touche Tohmatsu LLC)
Kumiko Shimizu: Designated and Engagement Partner (Deloitte Touche Tohmatsu LLC)
In addition, the composition of assistants, who are to be engaged in the accountancy service, is decided based on theaccounting plan of the accounting firm. Concretely, the main members are certified public accountants and otherassistants are also added.
<Policies and procedures for nomination of candidates for Director and Audit & Supervisory Board Member anddetermination of compensation for senior management and Director>
As stated in I1. “Basic Views” [Disclosure based on the principles of the Corporate Governance Code] [Principle 3.1:
Full disclosure], (iii) “Policies and procedures in determining the remuneration of the senior management and Directors”
and (iv) “Policies and procedures in the appointment of the senior management and the nomination of candidates for
Directors and Audit & Supervisory Board Members” as well as II 1. Matters concerning organizational structure andoperations, etc. [Directors] and [Incentives].
<Liability limitation agreement>
The Company has entered into contracts, in accordance with the Articles of Incorporation, with the Outside Directors
and each of the Audit & Supervisory Board Members to limit their liabilities to compensate for damage under Paragraph
1, Article 423 of the Companies Act, to the limit of amount set forth in the Paragraph 1, Article 425 of the Companies
Act.
<Sustainability>(Promotion of sustainability)
As stated in I1. “Basic Views” [Disclosure based on the principles of the Corporate Governance Code] [Principle 2.3.1:
Sustainability issues, primarily social and environmental issues], the Company established the Sustainability Promotion
Committee in February 2021. The committee is chaired by the President & Representative Director who is ultimately
responsible for sustainability issues.
The Sustainability Promotion Committee was held 5 times in 2022 and 4 times in 2023. It reports on the progress ininitiatives to achieve the Canon MJ Group’s 2030 Medium-Term Environmental Targets and discusses initiatives, theupgrading of initiatives based on the recommendations of Task Force on Climate-related Financial Disclosure (hereafter“TCFD”), updates to information to be disclosed, participation in initiatives, and a wide range of other subjects, including
human rights. Many different initiatives are implemented following these discussions.
The matters discussed and decisions made by the committee are important matters related to the foundation of theCompany’s management. They are company-wide matters that involve multiple committees and divisions. Thus, theCompany has decided that the committee should be directly overseen by the Board of Directors. Since April 1, 2023, thecommittee, which had been placed under the Management Committee, has been placed under the Board of Directors. The
matters approved by the committee are documented. The committee has defined the matters to be reported to and approvedby the Board of Directors.
(Environment)
The Canon MJ Group Environmental Vision 2050 and its interim target, 2030 Medium-Term Environmental Targets
were set up and the Group is proceeding with environment-responsive efforts, including addressing climate changes.
The Company is implementing initiatives towards the realization of carbon neutrality in 2050, including the introductionof renewable energy in its own buildings, energy savings, etc. in office facilities such as lighting and air conditioning
equipment, and improvement of work process and ways of working. We aim at reducing CO2 emissions not onlyinternally but also from our value chain, including customers, and will work to contribute to CO2 emissions through theprovision of products and services.
 Environmental Vision 2050, 2030 Medium-Term Environmental Targets and Environmental Policy
https://canon.jp/corporate/en/sustainability/environment/vision

The Company declared its support for the recommendations of TCFD and is continuously concentrating on the upgradingof the initiatives. It discloses the contents in the Integrated Report and on their website.
 Disclosure on information regarding TCFD
https://canon.jp/corporate/en/sustainability/environment/tcfd

22

(Certification)
The certification obtained for environmental management is as follows (as of September 30, 2024):
ISO14001: 2015 certification[Canon Group integrated EMS] Canon Marketing Japan Inc., Canon IT Solutions Inc., Qualysite Technologies Inc.,
Canon System & Support Inc., Canon Production Printing Systems Inc., Canon ITS Medical Inc., Canon Biz Attenda Inc.
Canon Business Support Inc., Canon Customer Support Inc.
(Risk and Crisis Management)
In order to advance the sustainable management, the Group analyzes business risks and opportunities and has defined
the six material issues. The Sustainability Promotion Committee monitors progress related to the materials issues.
Regarding risk management of the Canon MJ Group, the Director in charge of controlling and promoting risk
management and members of the Risk and Crisis Management Committee discuss the issues. Depending on the detailsof the risk, discussions are also held at the Internal Controls Evaluation Committee and the Quality Improvement
Committee. Many different initiatives are implemented following these discussions.
1. Disasters
For initiatives related to disasters (various natural disasters, infectious diseases, etc.), the Company has established the“Disaster Countermeasure Basic Regulations” and formulated and maintained disaster prevention management, disaster
response systems, and business continuity plans (BCP). In addition, the Company is promoting the strengthening ofdisaster response capabilities in the event of a disaster for Group employees by conducting disaster drills and safety
confirmation drills, distributing a “disaster response pocket manual” that can be carried at all times, and conducting
periodic web-based learning programs.
2. Business ethics and compliance
The initiatives of the Group for observing business ethics and full compliance with laws and regulations include the
distribution of handbooks on the Canon Group Code of Conduct, Practical Business Ethics Reader, etc. and theCompliance Card for employees to carry at all times. Furthermore, to promote understanding and apply laws relevant tobusiness operations and various rules, the Group distributes compliance-related mail magazine. In addition, compliance
meetings are held to confirm job-related compliance risks and countermeasures for each workplace, important compliancematters, etc. In 2005, the Group started operating an internal whistle-blowing system (name: Speak-up System).
3. Information security
Initiatives to strengthen information security governance include the formulation of the Basic Policy for Information
Security, the introduction of the ISMS (Information Security Management System) and PMS (Personal Information
Management System) within the Group with the aim of promoting the homogenization and efficiency of the management
systems, the optimization of various information security measures, the development of human resources for information
security, the ISMS Conformity Assessment Scheme and objective assessment, and continuous improvement through theobtainment and maintenance of the Privacy Mark certification. In addition, as a measure to strengthen cybersecurity, we
have established and run the Canon MJ CSIRT.
4. Certification
The certification obtained for information security and personal information protection is as follows (as of September
30, 2024).
ISMS Conformity Assessment Scheme ISO/IEC 27001 ((Information security management system)[Canon MJ Group Integrated Authentication]
Canon Marketing Japan Inc., Canon IT Solutions Inc., Qualysite Technologies Inc., , Canon System & Support Inc.,
Canon Production Printing Systems Inc., Canon ITS Medical Inc., Canon Biz Attenda Inc., Canon Business Support Inc.,
Canon Customer Support Inc., a part of the organizations of Primagest, Inc. and TCS Inc.
* Primagest, Inc. and TCS Inc. are not included in the scope of Canon MJ Group Integrated Authentication, and only
certain sections of these companies have obtained the authentication.
・ ISO/IEC 27017 (Cloud services security)
The certification was obtained for part of the services of Canon Marketing Japan Inc. and Canon IT Solutions Inc.
Privacy Mark
Canon Marketing Japan Inc., Canon IT Solutions Inc., Canon System & Support Inc., Canon Production Printing Systems

23

Inc., Canon ITS Medical Inc., Canon Biz Attenda Inc., Canon Customer Support Inc. QB5 Inc., Primagest, Inc.
<Information disclosure>
The Company has established the Disclosure Committee in order to strengthen the system for disclosing important
corporate information in a fair, timely, and appropriate manner. The role of the Committee is to make prompt decisions
on the need for timely disclosure, the information to be disclosed, the timing of disclosure, and other matters that arenecessary for the timely disclosure of important corporate information. In addition, we have established a system in which
important corporate information is comprehensively and rapidly collected when it emerges. In this system, individuals ineach division of the Company and each affiliated company are appointed to handle information that needs to be disclosed
in a timely fashion.
<Internal controls>
The Company established the Internal Controls Evaluation Committee on January 1, 2005 and works to continuously
improve its internal control systems on a company-wide scale in accordance with the applicable laws in Japan.
- Response to the Financial Instruments and Exchange Act in Japan
In accordance with the Financial Instruments and Exchange Act, listed companies must now submit reports on internal
controls. The Company started to submit internal control reports on the evaluation of the effectiveness of internal
controls on financial reporting in the fiscal year ended December 31, 2009.
3. Reasons for adopting the current corporate governance structure
The aforementioned subject is as described in Disclosure based on the principles of the Corporate Governance Code, I
1. Basic Views and II 2. Matters regarding functions of business execution, auditing, supervision, nomination, decisionmaking for remuneration, etc. (outline of current corporate governance structure).

III Status of Implementation of Measures Regarding Shareholders and Other Stakeholders
1. Status of initiatives to ensure active general meetings of shareholders and smooth exercise of voting rights

Supplementary explanations
Early dispatch of convocation notices forgeneral meetings of shareholders

For the most recent 56th Ordinary General Meeting of Shareholders(March 27, 2024), we sent out the notice 23 days before (March 4,2024) the date of the meeting.

Exercise of voting rights by electronicmeans

We have made it possible for shareholders to vote over the Internet
and by other electromagnetic means.

Participating in the electronic voting
platform and other initiatives to improve theenvironment for institutional investors to
exercise their voting rights

We use the Electronic Voting Platform for Foreign and Institutional
Investors run by ICJ (Investor Communications Japan).

Provision of convocation notices for general
meetings of shareholders in English(summary)

We prepare English versions of the convocation notices and submit
them to Tokyo Stock Exchange and post them on the Company’s
website.

OthersFor the most recent Ordinary General Meeting of Shareholders, weposted the Notice of Convocation on the Company’s website and to
the Tokyo Stock Exchange’s website, 7 days before (February 26,2024) the date of dispatch of the notice.

2. Status of IR activities
Supplementary explanations
Formulating and publishing disclosure
policyIn 2008, the Company formulated the IR Policythat describes its concept for information
disclosure for IR purposes. It is published on the24

Explanation byrepresentativeCompany’s website. The Company published its
revised IR policy in January 2020.

Holding briefing sessions for individual
investors on a regular basis

The Company holds guidance seminars forindividual investors, the speaker of which is either
the President of the Company or the officer incharge of IR or other IR staff. Online briefing
sessions for individual investors were held in May,
November and December 2022, and in April, May,
September and December 2023.

Yes

Holding briefing sessions for analysts andinstitutional investors on a regular basis

The subject on the left is as described in 2. System
to promote dialogue, Principle 5.1: Policy forconstructive dialogue with shareholders, Disclosure
based on the principles of the Corporate
Governance Code, I1. Basic Views.

Yes

Holding briefing sessions for foreign
investors on a regular basis

We hold individual interviews with foreign
institutional investors.

No

Posting IR materials on the website

The Company has prepared an Investor Relations
website exclusively for investor information on its
corporate website.
In addition to documents that have to be disclosed,
including summaries of financial results andsecurities reports, presentation materials, integrated
reports and other materials are posted. Regarding
presentations, including results presentations andlong-term/medium-term management plan
presentations, we post speech summaries, Q&A
session summaries, and videos in addition topresentation materials to ensure information isdisclosed fairly for investors who cannot attend
presentation meetings.
We actively provide information about businessstrategies and sustainability initiatives. We preparematerials for individual investors and distribute IR
News by e-mail to those who wish to read it. In
addition to providing the information above, wehave established a point of contact that fields
questions and requests from investors to promoteinteractive communication.
Japanese site: canon.jp/8060-ir
English site: canon.jp/8060e-ir

Establishment of division (person) incharge of IR

The IR Promotion Center has been establishedwithin the Corporate Planning Headquarters as theorganization dedicated to IR.

3. Status of initiatives for respecting stakeholders’ standpoints
Supplementary explanations

Establishment of internal rules, etc. toprescribe respect for stakeholders’standpoints

In addition to the Canon Group Code of Conduct, the Company has
established the policies and regulations for protecting the personal
information of customers and employees, regulations concerning theworkplace safety and health of employees, and the Regulations
Concerning the Prevention of Insider Trading, which provide formatters concerning shareholders and investors. The Company
endeavors to fully adhere to these regulations in order to respect theviews of the stakeholders of the Canon MJ Group.

25Implementation of environmental
conservation activities, CSR activities andother activities.

As stated in Principle 3.1.3: Disclosure of sustainability efforts, detailsof the Canon MJ Group's sustainability activities, including its activities
to protect the environment have been disclosed in the Integrated Report.
The latest information is posted on the website.
 Integrated Reporthttps://cweb.canon.jp/eng/ir/library/integrated-report.html

 Website on sustainability activities
https://canon.jp/corporate/en/sustainability

Formulation of policies, etc. for provisionof information to stakeholders

In April 2005, the Company established the Disclosure Committee as a
subsidiary organization under the management meeting for the purposeof guaranteeing that the disclosed information is an accurate, fair, andtransparent. The President of the Company or his/her delegate chairs
the Committee, and the members consist of the people responsible foraccounting, general and personnel affairs, legal affairs and intellectual
property, public relations and sustainability. A structure in whichorganizational approval is given prior to the external disclosure ofimportant corporate information is in place. In November 2008, theCompany formulated its IR Policy with the aim of delivering thenecessary IR information to shareholders and investors at theappropriate time.

IV Matters regarding Internal Control Systems, etc.
1. Basic concept and status of the development of internal control systems
In accordance with the Companies Act, the Company has defined the basic policy for Systems for Ensuring Propriety
of Operations (internal control systems). This policy was resolved at a meeting of the Board of Directors. Under the policy,
the Company promotes efforts to improve the internal control systems.
The basic policy is as described below.
[Basic Policy for Systems for Ensuring Propriety of Operations (Internal Control Systems)]
To ensure the properness of operations and to work for continuous improvement in corporate value, the Company andthe enterprises consisting of the Company and its subsidiaries, the Group, shall foster a sound corporate culture based on
the Spirit of “Three Selfs” (Self-motivation, Self-management, and Self-awareness) – guiding principles of the Canon
Group. The Group shall also work to foster a law-abiding awareness through the “Canon Group Code of Conduct.”
Furthermore, the Group shall firmly strive to ensure management transparency through clearly defined approval processesof important matters of the Group.
1. System for Compliance (Item 6, Paragraph 4, Article 362 of the Companies Act, and Item 4, Paragraph 1, Article 100of the Enforcement Regulations of the Companies Act)
(1) The Board of Directors, in accordance with regulations prescribed by the Board of Directors (the “Regulations of
the Board of Directors”), shall make decisions on the Group’s important managerial matters after careful
deliberation. Additionally, the Board of Directors shall have representative directors, executive directors andexecutive officers (collectively the “Officers”) give reports regarding their execution of duties.
(2) The Company shall thoroughly instill compliance awareness through training and other programs geared towards
new employees, managers, and newly-appointed board members and executive officers, utilizing the “Canon
Group Code of Conduct,” as a standard to be adhered to in the execution of duties.
(3) As a part of the Company’s risk management system, the Company shall put in place businessprocedures/checking systems that prevent violation of laws and regulations and the Company’s articles ofincorporation in the course of daily business. It shall also maintain a compliance education system.
(4) The internal audit division of the Company, which has the authority to audit all executions of duties, shall also
conduct audits regarding the status of compliance with laws and regulations and the Company’s articles ofincorporation.
(5) If an act that violates laws and regulations, or the Company’s articles of incorporation is discovered in the Group,
employees have the ability to report such fact by means of a whistleblowing system. Additionally, the Company
shall prohibit any disadvantageous treatment of any whistleblower.
2. System for Risk Management (Item 2, Paragraph 1, Article 100 of the Enforcement Regulations of the Companies
Act)

26

(1) The Company shall conduct various measures with regard to improving the risk management system inaccordance with the regulations regarding risk management. These measures include the system for grasping any
significant risks (violation of laws and regulations, inappropriate financial reporting, quality issues, work-related
injuries, disasters, etc.) that the Group may face in the course of business. Additionally, the Company shallevaluate the status of improvement and implementation of the risk management system and report its findings to
the Board of Directors.
(2) The Company established the Management Committee, and even if certain item is not submitted to the Board of
the Directors, the Committee shall carefully deliberate those items in case it is considered important.
3. System for Efficient Execution of Duties (Item 3, Paragraph 1, Article 100 of the Enforcement Regulations of theCompanies Act)
(1) Based on regulations regarding approval processes of important matters and the division of duties adopted by the
Board of Directors, the Directors and other officers shall execute shared duties under the supervision and directionof the President.
(2) The Company shall at its Management Committee formulate Long-Term Management Objectives as 5-year
management goals and 3-year priority measures, defined in Medium-Term Management Plan. Based upon theseplans, the Company shall manage operations from a unified group approach.
4. System for Group Management (Item 5, Paragraph 1, Article 100 of the Enforcement Regulations of the Companies
Act)
The Company strengthens the internal control system by requiring Group Companies to follow the respective items:a) to obtain prior approval from the Company or report to the Company important decisions in accordance with the“Regulations of Important Matters Approval of the Group Companies,” prescribed by the Board of Directors,b) to grasp significant risks that the Group Companies may face in the course of business and to verify and evaluate
the status of improvement and implementation of the risk management system and report their findings to theCompany in accordance with the regulations regarding risk management,c) to design an appropriate organization under the governing law of incorporation and to clearly define approval
processes and authorities of executive officers,d) in addition to thoroughly instilling compliance awareness through the “Canon Group Code of Conduct,” to put inplace business procedures/checking systems that prevent violation of laws and regulations and Group Company’s
articles of incorporation in the course of daily business and prepare a compliance education system as a part of
the Group Company’s risk management system, ande) to establish a whistleblowing system and prohibit any disadvantageous treatment of any whistleblower.
5. System for Storing and Managing Information (Item 1, Paragraph 1, Article 100 of the Enforcement Regulations of
the Companies Act)
Information related to the execution of duties of Officers, including meeting minutes of the Board of Directors andsettlement documents, shall be maintained and managed by respective divisions in charge of such management inaccordance with laws and regulations, the “Regulations of the Board of Directors,” and other related rules. Directors
and Audit & Supervisory Board Members have the ability to inspect this information at anytime.
6. System for Auditing by Audit & Supervisory Board Members (Paragraph 3, Article 100 of the Enforcement
Regulations of the Companies Act)
(1) Although the Company does not assign a dedicated full-time employee or set an organization to assist the duties
of Audit & Supervisory Board Members, the internal audit division, the legal division and other divisions willconsult and assign an employee to assist the works of Audit & Supervisory Board Members (the “Assisting
Employee”), on matters requested by Audit & Supervisory Board Members. The Assisting Employee shall givepriority to execute the duties requested by Audit & Supervisory Board Members. Any change in the Assisting
Employee shall require the prior consultation of the Audit & Supervisory Board.
(2) Audit & Supervisory Board Members shall grasp the execution of duties by Director and other officers, byattending not only meetings of the Board of Directors, but also other important meetings such as meetings of theManagement Committee.
(3) The administrative divisions of the headquarters, such as human resources, finance & accounting, and legal affairs,
shall hold meetings with Audit & Supervisory Board Members and report on the execution of duties in a timely
manner. Additionally, if any material breach of laws and regulations occurs, the relevant division shallimmediately report this to Audit & Supervisory Board Members.
(4) Audit & Supervisory Board Members shall be reported from accounting auditors periodically and upon necessity.
(5) Audit & Supervisory Board Members shall hold periodic meetings with counterparts of domestic Group
Companies and work to improve the auditing system from a unified group perspective by sharing information.
Additionally, Audit & Supervisory Board Members shall grasp the execution of duties by Directors and other27

officers of Group Companies, by auditing major Group Companies in and outside Japan as necessary.
(6) The Company prohibits any disadvantageous treatment of any person that reports to Audit & Supervisory Board
Members. The Company also seeks its Group Companies to prohibit any disadvantageous treatment.
(7) For expenses that are required in the execution of the Audit & Supervisory Board Members duties, they shall beborne by the Company as requested by the Audit & Supervisory Board Members.
2. Basic concept and status of the development of measures for eliminating antisocial forces
1. Basic policy
The basic policy of the Company on this subject is that the Company and the Group Companies resolutely opposeand sever any relations with antisocial forces that threaten the order and safety of society.
2. Status of development of measures(1) The Company has established a code of conduct for severing any relations with antisocial forces. It has also set
forth provisions to the same effect in the Employment Regulations to ensure that the employees are aware of thecode of conduct.
(2) The general affairs division of the head office of the Company is in charge of controls regarding response toantisocial forces of the entire Group. It also shares information with general affairs division of the entities of theGroup, and works together with them to deal with antisocial forces and prevent transactions with them.
(3) The Company has established systems for cooperating with the police, attorneys-at-law, and other external organs.
(4) Before paying contributions to supporting members, etc. the Company conducts a prior examination of thesepayments to ensure that they are not problematic from a legal and corporate ethics sense.

V Other matters
1. Adoption of anti-takeover measures
Adoption of anti-takeover measures

No

Supplementary information regarding applicable item
The Company has not introduced any anti-takeover measures.
2. Other matters concerning corporate governance structure, etc.
<Outline of systems for the timely disclosure of information>
The important corporate information of the Company is collected by the Disclosure Committee under a system that
ensures the fair, timely, and appropriate disclosure of information in accordance with the Timely Disclosure Rules andOther Regulations for Issuers of Listed Negotiable Securities or Valuable Instruments.
At each division of the Company and each affiliated company, there is a system in which information is comprehensively
collected. Under this system, persons responsible for handling information subject to timely disclosure are appointed, andthey report important corporate information that is resolved or arises in each division of the Company and each affiliatedcompany to the Disclosure Committee.
The President of the Company or his/her delegate chairs the Committee, and the members consist of the people in chargeof the accounting, general and personnel affairs, legal affairs and intellectual property, public relations and sustainability
departments. The role of the Committee is to make prompt decisions on the necessity of timely disclosure, the content tobe disclosed, the timing of disclosure, and other matters that are necessary for the timely disclosure of important corporate
information.
Information about management resolutions, business results, and the occurrences of facts that are determined to be
subject to timely disclosure by the Disclosure Committee is reported to the President by the persons responsible forhandling information subject to timely disclosure after the Committee determines the content to be disclosed, the timingof disclosure, and other matters. All this information is disclosed upon being approved by the Board of Directors. The
board normally meets once a month, and temporary meetings of the Board of Directors are held when needed. The Board
carries out decision-making in a speedy fashion. However, in regards to matters of absolute urgency among occurrencesof facts, the relevant information is disclosed based on a decision made by the Disclosure Committee and is reported to
the Board of Directors on a later date.
Regarding methods of disclosure, the Company conducts information disclosure via registration with the TDnet, and by
posting information on the Company’s website.
Furthermore, the Audit & Supervisory Board and the Internal Auditors Office confirm the sustainability and operating
effectiveness of the systems for the timely disclosure of information by performing periodic audits to confirm that theDisclosure Committee functions properly.

28

The formats of the corporate governance structure, the outline of timely disclosure system and the skill matrix for the
Directors are shown as below.

29

30

This document has been translated from the Japanese original (as submitted to the Tokyo Stock Exchange) for reference
purpose only. In the event of any discrepancy between this translated document and the Japanese original, the original
shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms ofdamages arising from the translation.

31