Corporate Governance Report
Last Update: March 29, 2024
Dentsu Group Inc.
Hiroshi Igarashi,
Representative Executive Officer, President & Global CEO
Contact: Group IR Office
Securities Code: 4324
https://www.group.dentsu.com/en/
The status of Dentsu Group Inc.’s corporate governance is as follows.
Ⅰ. Basic Policy for Corporate Governance, Capital Structure, Corporate Attributes, and Other
Basic Information
1. Basic Policy Updated
The Group has set the Purpose of extending "an invitation to the never before", WHY/WHAT/
HOW and eight values called "the 8 ways" as its Corporate Philosophy (NORTHSTAR), and asa foundation to realize the NORTHSTAR, the Group established the “Dentsu Group Code of
Conduct” that defines the way everyone who works for, or on behalf of, the Group should act.
According to the NORTHSTAR, the Group will work on the maximization of corporate value forall stakeholders such as shareholders, clients, partners, employees, and consumers by
positioning itself as a Business to Business to Society (B2B2S) corporate group that resolves
social issues through business with clients.
The Group has established a shared vision “To be at the forefront of people-centeredtransformations that shape society.” In a market where marketing, technology, and consulting
converge, the Group have redefined our business domain, as “People-centered Transformation”
and will evolve into a corporation that creates new solutions and generate positive social
impact by using its standout creativity and technology.
To realize the above, pursuing the best corporate governance is important. The Company shallensure sustainable growth and enhance the medium- to long-term corporate value throughtransparent and fair decision-making, effective use of management resources and expeditious
and resolute decision-making.
For the above purposes, the Company shall work on enhancing the corporate governance inaccordance with the basic concepts below.
(i)
To respect shareholders’ rights and ensure their equal treatment(ii) To consider the interests of stakeholders, including shareholders, and cooperate withthem appropriately(iii) To appropriately disclose company information and ensure transparency(iv) To enhance the effectiveness of the supervisory function over business execution(v) To engage in constructive dialogue with shareholders who have an investment policy that
conforms to the medium- to long-term interests of shareholders
For the Company’s response policy to the Corporate Governance Code, please also refer to theCompany’s Corporate Governance Policy.
Corporate Governance Policy
https://www.group.dentsu.com/en/about-us/governance/cgp.html
1[Reasons for not implementing principles of the Corporate Governance Code] Updated
This section is based on the Corporate Governance Code revised in June 2021.
[Supplementary Principle 2.4.1 Ensuring diversity, including active participation of women]<Policy of ensuring diversity>
Dentsu Group, employing over 140 different nationalities across the world, respects diversity
and believes that it is one of our strengths. Our policy is to foster an inclusive corporate culture
and provide equal opportunities to everyone, regardless of gender, nationality, age, sexual
orientation, disability, length of service, or mid-career status, so that everyone can work totheir fullest potential. In accordance with this policy, it is also our policy to promote talented
and diverse personnel to managerial positions. As one of the initiatives to embody thesepolicies, we have defined and incorporated our requirements for leadership in the Group into
the evaluation indicators for executives. This approach makes it possible to embody the actions
expected of leaders in the Group as one of the evaluation items and enables employees to beevaluated and given opportunities for promotion based on actions instead of attributes.
As the Group operates globally and appoints a diverse range of human resources, including
mid-career hires and foreign nationals, to management positions in accordance with the above
policy, we have not set "voluntary and measurable goals" for appointing mid-career hires andforeign nationals to management positions. On the other hand, we position the Dentsu Group
Inc., which is a holding company, as a global headquarters, and at the Group in particular, we
are working to create an environment that enhances our competitiveness through thecollaboration of more diverse talent primarily by transferring personnel from overseas
divisions.
<Status of ensuring diversity and voluntary and measurable goals>(1) Female employees
The ratio of female leaders in managerial positions in the Group as of end of December 2023 is
as follows.
Japan(*2)：11.1%
Americas：45.0%
EMEA：36.2%
APAC：34.3%*1：Female leaders are defined as executive class in Japan and officer class overseas.
*2: Calculated based on information on human resources of the Company and its directly
invested companies in Japan.
To achieve an even higher ratio of female leaders, Dentsu Group has been promoting initiatives
such as elimination of gender bias in hiring, creation of female staff communities, operation of
female leadership development programs, and inclusion of female employees in succession
planning for senior positions, which are implemented not only as group-wide measures but also
as individual initiatives according to the characteristics of each company or multiple companies
working in cooperation.
The Dentsu group has set and is promoting the goal of increasing the ratio of female leaders to
45% globally by 2030.

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We will formulate these medium-term targets under the "One dentsu" structure starting in
2023 in a manner that conforms to various information disclosure guidelines, while taking
advantage of both domestic and global perspectives.
In regards to the Dentsu Group’s other initiatives for the promotion of active participation of
women, please refer to “Other” in “3. Status of Efforts Pertaining to Respecting the Position of
Stakeholders” under “Ⅲ Implementation Status of Measures Related to Shareholders andOther Stakeholders”(2) Midcareer hires and foreign nationals
As of the end of December 31, 2023, the midcareer hires in managerial positions in dentsu
Japan was 50.1% while the percentage of foreign nationals in managerial positions was 2.1%.
These are calculated based on human resource information of the Company and its directly
invested companies.
<Policies for human resource development and internal environment development to ensure
diversity, and status of implementation>
The Dentsu Group considers employees as the source of value creation and believes that
fostering a culture in which employees with diverse capabilities can create teams thattranscend organizational and geographical constraints will significantly enhance our growthstrategy. Therefore, in order to respect the diversity of employees and support their continuous
growth, Dentsu Group provides employees with extensive training programs including
opportunities for career development across Dentsu Group and a next generation leadershipdevelopment program and conducts flexible staff allocation across Dentsu Group. In addition,
Dentsu Group has been working on the creation of a workplace where each individual can
thrive even under drastically changing environments mainly by promoting workstyle reforms
and investment in mental health and wellness support for employees. Through these measures,
Dentsu Group will ensure the growth of our employees and secure human resources which are
the foundation of sustainable business. Moreover, in FY2021, it launched an employee
engagement survey in the entire Dentsu Group with the aim of identifying challenges in theorganization and making improvements while listening to our employees.
For details, please refer to the “People Strategy” (page 41 to 47) in the Dentsu Group’s
Integrated Report.
https://www.group.dentsu.com/en/sustainability/common/pdf/integrated-report2023_all.pdf[Disclosure based on the principles of the Corporate Governance Code] Updated
This section is based on the Corporate Governance Code revised in June 2021.
Among the principles and supplementary principles described in this section, the principles andsupplementary principles updated from the Corporate Governance Report as of March 30, 2023
are as follows.
[Principle 1-4 Cross-Shareholdings][Principle 3-1(i) Company Objectives (e.g., business principles), business strategies and businessplans][Principle 3-1(ii) Basic views and guidelines on corporate governance based on each of theprinciples in this Code][Principle 3-1(iii) Policies and procedures in determining the compensation of the senior
management and directors][Principle 3-1(iv) Policies and procedures in the appointment/dismissal of the senior management
and the nomination of director candidates]

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[Supplementary Principle 3-1-3 Sustainability initiatives and investment in human capital andintellectual property, etc.][Supplementary Principle 4-1-1 Scope delegated to the management][Principle 4-8 Effective use of independent directors (policy for efforts when it is deemednecessary to appoint at least one-third of directors as independent directors)][Supplementary Principle 4-11-1 View on the appropriate balance between knowledge,
experience, and skills of the Board as a whole and on diversity and appropriate board size][Supplementary Principle 4-11-3 Analysis and evaluation of the Board’s effectiveness as awhole and disclosure of the summary of the results][Principle 5-1 Policy for constructive dialogue with shareholders][Principle 5-2 Establishing and Disclosing business strategy and business plan][Principle 1-4 Cross-Shareholdings]
With regard to so-called cross-shareholdings, the Company will examine the significance ofholding such shares from the standpoint of whether the benefit of holding such shares exceed theCompany’s estimated cost of capital in relation to the acquisition price, and whether the holdingof the shares contributes to maintaining and strengthening business relationships with investees
and promoting joint businesses, and if such shares are deemed to have little significance, theCompany will basically reduce the number of shares to be held. Based on this basic policy, theBoard of Directors shall annually examine the appropriateness of holding all shares held by theCompany for policy purposes, economic rationality, etc., from a medium to long-term perspective
for each individual stock, and verify the appropriateness of holding such stocks, and disclose thedetails of such examination in the Corporate Governance Report, etc.
Last year, the Company sold 17 issues (total sale amount: 13 billion yen) under the above basic
policy. As of this year, we have already sold 5 stocks.
With respect to the exercise of voting rights for cross-shareholdings, in order to ensure
appropriate exercise, the Company shall make a comprehensive judgment on each agenda itemfrom the perspective of improving the medium- to long-term corporate value of the company
issuing the relevant shares and increasing the medium- to long-term economic benefits of theCompany and its group companies. In regard to major cross- shareholdings, the status of theexercise of voting rights shall be reported to the Board of Directors. In particular, the Company
shall carefully examine and decide whether to approve or disapprove the below proposals andother proposals that may damage the corporate value and shareholder value of the Company andits subsidiaries and affiliates, regardless of whether they are proposed by the issuing company
or its shareholders.
(1) Appointment of directors and corporate auditor who are responsible for the occurrence ofserious violations of laws and regulations as well as of misconduct(2) Introduction of takeover defense measures(3) Mergers and other organizational restructuring(4) Transfer of important assets
Regarding the voting rights which the Company has exercised at general meetings ofshareholders of the companies in which the Company has cross-shareholdings in FY2021, theCompany exercised its voting rights in favor of all proposals, as none of them threatened todamage the corporate value and shareholder value of the said companies.
In the event that a shareholder who holds shares of the Company as cross-shareholdings(hereinafter referred to as a “Cross-Shareholder”) expresses an intention to sell or otherwise
dispose of such shares, the Company shall not engage in any act to hinder such sale or otherwise4

dispose of such shares, such as suggesting a reduction in the transaction. In addition, theCompany shall fully examine the economic rationality of the transaction with the CrossShareholder and shall not conduct any transaction that would be detrimental to the common
interests of the Company or its shareholders.
[Principle 1-7 Related Party Transactions]With respect to transactions with its directors or executive officers (in this clause, hereinafterreferred to as “Officers”) that conflict with the interests of the Company and competitivetransactions as defined in the Companies Act, the Company shall explain the details of suchtransactions at a meeting of the Board of Directors and obtain the approval of the Board of
Directors. Then, after obtaining the approval, the Company shall continue reporting on thestatus of the said transactions, and rigorously operate and monitor the transactions.
In addition, even for transactions that do not fall under the above, the Company distributes
individual questionnaires to Officers once a year to confirm whether or not there have been anytransactions between the Company or its consolidated subsidiaries and Officers or their close
relatives, and the Company appropriately discloses transactions with major shareholders andother related parties in accordance with the Companies Act, the Financial Instruments andExchange Act, other applicable laws and regulations, and the regulations of the Tokyo Stock
Exchange.
[Principle 2-6 Fulfilling functions as an asset owner of corporate pension]
Many of the Company’s employees (excluding its contract employees and temporary staff) areseconded from other companies, and the Company applies the corporate pension systems of theirrespective companies for these employees. In April 2015, Dentsu Inc., which many employees areseconded from and which is the Company’s main operating subsidiary, transitioned to a defined
contribution pension plan. In Dentsu Inc., since the management of corporate pension
contributions affects the stable asset formation of employees, the relevant corporate pension
organization staffed by personnel who have acquired the qualifications of a corporate pension
manager, etc. conducts appropriate administrative work such as monitoring the investment
institution while regularly receiving appropriate advice from outside experts.
The Company also introduced a defined contribution pension plan for its directly hired employees
in January 2022, established a corporate pension organization similar to that of the abovementioned Dentsu Inc., and outsources administrative work to one of our group companies which
conducts administrative work.
[Principle 3-1(i) Company Objectives (e.g., business principles), business strategies and businessplans]The Group has set the Purpose of extending "an invitation to the never before", WHY/WHAT/
HOW and eight values called "the 8 ways" as its Corporate Philosophy (NORTHSTAR), and as afoundation to realize the NORTHSTAR, the Group established the “Dentsu Group Code of
Conduct” that defines the way everyone who works for, or on behalf of, the Group should act.
According to the NORTHSTAR, the Group will work on the maximization of corporate value forall stakeholders such as shareholders, clients, partners, employees, and consumers by
positioning itself as a Business to Business to Society (B2B2S) corporate group that resolves
social issues through business with clients.
The Group shifted to a globally integrated leadership structure with “One Management Team”
in January 2023 and directly controls business operations across four regions worldwide (Japan,
Americas, EMEA, and APAC).
Under this new structure, the Group has established a shared vision “To be at the forefront ofpeople-centered transformations that shape society.” The Group will reposition its businessdomains, where the convergence of marketing, technology, and consulting is taking place, as
5

“People-centered Transformation” and evolve into a corporation that will create new solutions
and generate a positive social impact by using its standout creativity and technology. In addition,from January 2024, the Group introduced the One dentsu Operating Model, which is a common
global business management model. We will promote the provision of Integrated Growth
Solutions, which integrates the diverse capabilities of our group to achieve top-line growth forour clients.
In February 2021, the Group formulated the Medium-term Management Plan, running from2021 through 2024 as a basic policy to realize growth in the medium- to long-term. In thetransition from structural reform to a phase of business transformation and sustainable growth,
the Group updated the plan in February 2022 after reviewing the results and the businessenvironment. The updated plan focuses on the following four pillars: “Transformation and
Growth,” “Operation and Margin,” “Capital Allocation Priorities & Shareholder Returns,” and“Social Impact and ESG” and features further upgraded strategies and goals. The current
Medium-term Management Plan concludes in FY2024. As announced in February 2024, it will
be difficult to achieve some of the commitments regarding organic growth rate and operating
margin under the current Medium-term Management Plan, although we made steady progressfor commitments related to Capital Allocation Priorities & Shareholder Returns and Social
Impact and ESG. Consequently, in order to achieve more solid organic growth by identifying andaddressing the factors that contributed to the assumption that some commitments are difficult
to achieve, the Group has organized the actions it will take in FY2024 into three tasks: “internal
investment to realize Integrated Growth Solutions,” “business portfolio review and enhancing
financial discipline,” and “restructuring of governance and internal controls.”
First, we will improve profits and cash flow through organic growth and cost structure reforms.
At the same time, we will strengthen our investment discipline and shift the investment balancefrom acquisitions to internal investments. In addition to this, we will optimize our balance sheet
and improve capital efficiency through the review of our business portfolio and investment.
Through these strategies and actions, we will enhance long-term shareholder value.
In January 2023, the Group transitioned to a global management structure with a "OneManagement Team" to directly oversee and manage its four business regions (Japan, Americas,
EMEA and APAC) around the world.
The Group will build a culture of co-creation by promoting and accelerating collaboration forvalue creation with companies and individuals within the Group around the world as well aswith external partners, and deeply instill a corporate culture that links diversity tocompetitiveness. At the same time, based on this corporate culture, the Company will aim tocomplete the Medium-term Management Plan while flexibly responding to any changes, andachieve long-term sustainable growth for our group by continuing to contribute to the growth of
our customers and society as a whole.
For more information on the global management structure of the Group Management Team,
please visit our website below.
https://www.group.dentsu.com/en/about-us/leadership.html
For our Medium-term Management Plan, please refer to the following releases.
Partially updated mid-term management plan in February 2024:
https://www.group.dentsu.com/en/news/release/pdf-cms/2024005-0214en.pdf

6Medium-term Management Plan updated in February 2022:
https://www.group.dentsu.com/en/news/release/000653.html
Medium-term Management Plan announced in February 2021:
https://www.group.dentsu.com/en/news/release/000387.html
For information on the status of the review of the Group's business portfolio, please see thefollowing description of the Integrated Report.
https://www.group.dentsu.com/en/sustainability/common/pdf/integrated-report2023_all.pdf“Medium-term Management Plan” (p21)“Pioneering on industry first: global Clients & Solutions” (p29)“Integrated Growth Solutions” (p30)
For more information about NORTHSTAR, please visit our website below.
https://www.group.dentsu.com/en/brand/[Principle 3-1(ii) Basic views and guidelines on corporate governance based on each of theprinciples in this Code]]
To realize the Company's aim to create a better society through contribution to growth of all
stakeholders such as its customers, partners, employees and consumers, pursuing the best
corporate governance is important. The Company shall ensure sustainable growth and enhancemedium- to long-term corporate value through transparent and fair decision-making, effective
use of management resources, and expeditious and resolute decision-making.
For the above purposes, the Company shall work on enhancing corporate governance inaccordance with the basic concepts below.
(1) To respect shareholders’ rights and ensure their equal treatment(2) To consider the interests of stakeholders, and cooperate with them appropriately(3) To appropriately disclose company information and ensure transparency(4) To enhance the effectiveness of the supervisory function over business execution(5) To engage in constructive dialogue with shareholders who have an investment policy that
conforms to the medium- to long-term interests of shareholders[Principle 3-1(iii) Policies and procedures in determining the compensation of the senior
management and directors]
In accordance with the provisions of the Companies Act regarding companies with a nominating
committee, etc., the Compensation Committee of the Company has established a policy for
determining the amount of compensation for each individual director and executive officer or the
method of calculation of such amount. For details, please refer to "II. Status of Decision-making,Execution, and Supervision of Management and Other Corporate Governance Structures " "1.
Items Pertaining to Organizational Composition, Organizational Operation, etc." "Incentives"and " Compensation for Directors and Executive Officers.
[Principle 3-1(iv) Policies and procedures in the appointment and dismissal of the senior
management and the nomination of director candidates]
1. Nomination Policy
The Company has established the following policies with regard to the appointment of executive
officers (including inside directors who concurrently serve as executive officers):(1) Ability to make judgments from a company-wide perspective.
(2) Expertise in the business of the Company and the Group.

7(3) Excellent ability to make business decisions and execute business operations.
(4) Excellent leadership, determination, foresight, and planning skills(5) Personality and insight appropriate for an executive officer
In addition, candidates for each director are appointed based on the following criteria stipulated
in the Rules of the Board of Directors.
<Criteria for selecting internal director candidates >(1) A person who is able to make determinations from a company-wide viewpoint(2) A person who has expertise with respect to this Company’s business(3) A person who has remarkable business judgment and ability in business execution(4) A person who has remarkable leadership, foresight and decision and planning ability(5) A person who has character and insight suitable for internal directors<Criteria for selecting outside director candidates>(1) A person who has extensive experience in management or who is a professional in legal,
accounting, finance and other such fields(2) A person who can be independent of the representative executive officer of the Company(3) A person who has character and insight suitable for outside directors
2. Nomination procedures
As a company with a Nominating Committee, the Nominating Committee determines thecandidates for directors to be submitted to the General Meeting of Shareholders.
For the selection procedure of executive officer candidates, from the viewpoint of securing
objectivity and transparency, the Board of Directors shall select executive officer candidates after
consultation on the candidate proposal with the Nominating Committee and considering opinionsof the Committee formed through its deliberations.
In the event that an executive officer is deemed as not to be fulfilling their duties adequately,
from the viewpoint of ensuring objectivity and transparency, the Board of Directors shall submit
its dismissal plan to the Nomination Committee and consider opinions of the Committee formed
through its deliberation. Based on such opinions, the Board of Directors shall carry out its
dismissal procedures.
[Principle 3-1(v)The Rationale for the appointments and dismissals of senior management
and nominations of nominations of director candidates.]
The reasons for the nomination of each director candidate shall be described in the referencematerial regarding the relevant appointment proposal(s) of the general meeting of shareholders
to which the proposal to nominate the director is submitted, and the Company shall appropriately
disclose the reasons for appointment and dismissal of senior management required by laws andregulations.
[Supplementary Principle 3-1-3 Sustainability initiatives and investment in human capital andintellectual property, etc.]
The Group considers sustainability to be a core management theme and a prerequisite forrealizing the Group’s Purpose: an invitation to the never before.
In conjunction with the shift to a global management structure, the Group established its new
Materiality and updated the 2030 Sustainability Strategy accordingly. Progress towards thisstrategy is monitored and evaluated by the Group Sustainability Committee, which is directly
under the Group Management Board.
The Group has appointed a Global Chief Sustainability Officer and is promoting this8sustainability strategy as one dentsu.
Sustainability is to value being sustainable in the medium- to long-term instead of solely
pursuing short-term profits and aiming for optimization as a whole from the perspective of the
supply chain, industry, society, and furthermore, a world beyond one’s own profits. The Group
shares this new value with multi-stakeholders and aims to build new relationships.
In 2023, with the Group’s transition to a new management structure (One dentsu) followed by
setting of the Group Vision and expansion of the business model, the Group formulated newmateriality comprised of the following five material issues for the Group’s sustainable growthand continuous value provision amidst the diverse changes in the external environment:
Business ethics & Compliance and Data security, Diversity, Equity & Inclusion (DEI), Human
capital development, Climate action, and Innovation leadership. In the materiality formulation
process, analysis was carried out primarily for the Group’s current and future-oriented strategies
and business models, risk items in group management managed by the Group Risk Committee,
and furthermore, Board of Directors and sustainability-related meeting materials.
The 2030 Sustainability Strategy, which was updated according to above new materiality, sets
as a goal the realization of sustainability of the Group and society by creating innovative
solutions for difficult social challenges under the Group’s Purpose, Vision, and management
policy.
*For more information on the 2030 Sustainability Strategy, please visit our website.
https://www.group.dentsu.com/en/philosophy/sustainability-strategy-2030.html*For more information on the materiality formulation process, please see the Integrated Report
2023 (p. 15).
https://www.group.dentsu.com/en/sustainability/common/pdf/integrated-report2023_all.pdf
Group Sustainability Committee
The Dentsu Group established a Sustainable Business Board in August 2021. The Board met
four times a year to monitor the progress against our goals specified in the 2030 Sustainability
Strategy. With the Group’s transition to a global management structure led by the GroupManagement Team in January 2023, we established a Group Sustainability Committee directly
under the Group Management Board.
The committee comprises 12 members with diverse expertise and regional backgrounds, andmeets four times a year to monitor and evaluate the progress of the 2030 Sustainability Strategy
from various perspectives.
For details on the members of the Group Sustainability Committee for FY2023, please refer tothe Integrated Report 2023 (p. 52).
https://www.group.dentsu.com/en/sustainability/common/pdf/integrated-report2023_all.pdf

Climate Action
Climate action is a material issue with a variety of impacts, including financial, on Group, its
shareholders, investors, partners, and clients and is included in materiality set forth in the “2030
Sustainability Strategy”.
In order to understand the potential impact on the Group’s business as much as possible, the9Group carried out scenario analysis based on analysis of climate change risk by the Network forGreening the Financial System (NGFS) and identified 14 transition risks and physical risks.
Since these risks are also opportunities for the Group to support clients and social adaptation,
the Group uses the strategy which is formulated in consideration of both risk and opportunities.
For details, please refer to the TCFD Report.
https://www.group.dentsu.com/en/sustainability/common/pdf/TCFDreport2023.pdf
The Group has set and is working for the achievement of more ambitious goals that were
formulated in consideration of the aim of the Paris Agreement, which is keeping a global
temperature rise well below 2 degrees Celsius above pre-industrial levels and pursuing efforts tolimit the temperature increase even further to 1.5 degrees Celsius.
(1) Net zero GHG (greenhouse gas) emissions by 2040
The Group has set a target to achieve net zero GHG emissions by 2040 across the GHG Protocol
Scope 1, 2, and 3, and to reduce GHG emissions by 46% by 2030 across the Scope 1, 2 and 3 froma 2019 base year.
For our net zero target, Dentsu International Limited, which monitored overseas business of
the Group at that time, has already received approval from the Science Based Targets initiative(SBTi) in October 2021. We have committed to SBTi to expand the net zero target to beGroupwide, including business in Japan within FY2024.
(2) 100% Renewable Energy
As a member of RE100, which is a global corporate renewable energy initiative to bring together
companies that are committed to 100% renewable power for their power use, we commit to power
our operations with 100% renewable electricity by 2030.
At Dentsu Building in Shiodome, Tokyo, 100% of the power has been sourced by renewableenergy since December 2023. More initiatives to achieve the target are being carried out.

2. Respect for Human Rights
The Group works on protecting human rights based on the UN Guiding Principles on Businessand Human Rights. Our policy for human rights is stipulated in the Dentsu Group Human Rights
Policy.
For details of the Dentsu Group Human Rights Policy, please refer to the website.
https://www.japan.dentsu.com/en/esg/human_rights_policy.html
The Group’s initiatives for human rights are under the management of the global chief
governance officer, and the members in charge of human rights affairs are responsible for daily
operation.
The Group Sustainability Committee always includes human rights in its agenda while issues
unique to Japan are handled by the Dentsu Group Human Rights Committee.
In FY2024, the Group plans to carry out an impact assessment on human rights as a whole.
Key issues as of FY2023 are published in the Integrated Report 2023 (page 48).
https://www.group.dentsu.com/en/sustainability/common/pdf/integrated-report2023_all.pdf

10The Group plans to carry out an impact assessment on human rights as a whole. Key issues asof FY2023 are as follows:(1) Labor environment of contractors(2) Labor environment within the Group(3) Responsible communication (appropriateness of advertising expression)(4) Protection of personal data

3. Human Capital Investment
Human capital is the greatest asset of the Dentsu Group, and the Group aims to boost thecapabilities of the organization and each individual by creating an environment where diverse
human resources will connect and learn together, combining their expertise. Since January 2023,
the Group has built a global human resource leadership framework under the newly-appointed
chief human resources officer (CHRO) to achieve this aim. Specifically, under its humanresources mission statement “coming together to unleash the power of our people,” the Groupestablished a human resources strategy built on three pillars, 1) People Growth, 2) Winning as
One Team, and 3) HR Partnership Excellence, and is pursuing a range of activities.
(1) People Growth
We believe that our approach to leadership is the key to accelerating personal and organizational
growth, and we position it at the center of our strategy. The influence of a leader’s behavior candrastically alter the performance of an organization. For this reason, it is vital for us to identify
and develop the leadership needed to drive dentsu’s vision, and we have so far engaged in thefollowing activities to achieve this. First, we have defined the dentsu Leadership Attributes, ourrequirements for leadership, which we promote as the guidelines for the future selection,
evaluation, and development of human resources. We are also engaging in what we call People
Discussions within each division based on the Attributes, while progressively visualizing key
human resources investments and discussing human resources development policies Group-wide.
By carrying out these activities on an annual cycle, we aim to renew the human resources pool
regularly each year and build systems for appropriate investment and succession planning.
To maximize the potential of the human resources we have visualized, we provide challenging
work experiences that stretch the abilities of our personnel in diverse global environments andtraining programs that broaden their skills and horizons. These include, for example, nextgeneration leader training programs featuring a partnership with a top business school while
also pursuing dentsu’s unique qualities, as well as programs for the global expansion of client
solutions, which are among the strengths of our Japan business.
We also promote skills enhancement and reskilling for a broad range of employees to achieve theGroup’s growth goals. We have established online learning platforms that meet every need andlevel of learning, from data and marketing to the liberal arts that foster creativity. Through these
initiatives, the Group is strengthening its talent in Customer Transformation & Technology(CT&T), with new and expanded skill sets both in and outside of Japan. Consequently, more
employees are engaged in the CT&T domain than the previous year.
At the same time, we aim to give our employees more career options to facilitate long-term
careers. To lay the foundation, we have been introducing Career Framework, a framework witha standardized global job architecture and levelling, and rolling it out Group-wide, starting fromJapanese top management in 2023. This foundation will enable our employees to clearly envision11

their potential careers within the Group and facilitate career enhancement across different
regions and Group companies, enhancing their motivation to grow.
(2) Winning as One TeamThe strength of the Dentsu Group lies in its ability to multiply the diverse and unique power ofindividuals. We believe that this is the source of our distinctive creativity. To maximize thisstrength, we aim for collaboration between a global network of human resources, all striving
towards the same goal: in other words, we aim to be One Team. We are focused on activities
related to culture and Diversity, Equity & Inclusion (DEI), which will provide the groundworkfor this. We see “integrity” as the basis of all our efforts, and we aim to nurture a culture of
freedom and responsibility based on integrity.
As our first step to diversity, we focus primarily on our diversity in terms of factors such as
gender and nationality as a global company. We have set a quantitative target of 45% female
leaders ratio globally by 2030, and we have incorporated this target into the KPIs for executive
compensation to enhance the management team’s commitment to achieving it. At the same time,
we are developing an environment in which talent can play an active role regardless ofnationality. We are developing opportunities for talent exchanges within the Group, as well as a
global policy facilitating smoother talent movement. From 2024, DEI has been placed under thecontrol of the human resources initiatives. This will enable us to build systems for promoting
DEI in close coordination with other human resources initiatives.
Engagement is also a key element in the creation of a corporate culture where employees canwork together with a positive attitude. Each year, we survey employee satisfaction and degree ofrecommendation to calculate engagement scores and share issues on a companywide anddivision-wide level. So far, these surveys have indicated room for improving communication withmanagement and the clarity of management messages, and we have accordingly establishednumerous opportunities for communication and interaction. Meanwhile, recent engagement
surveys have indicated a relatively high level of integrity and compliance awareness amongindividuals. We regard this as a positive opportunity, and we will strive to further raiseawareness and acknowledgement.
We are also engaged in ongoing efforts to reform the work environment, creating environments
where employees can play a full and active part. In addition to the ongoing support of flexible
work styles, we have launched multi-faceted measures including providing two to four days of
special paid leave per year in each region and support in the acquisition of certification for mental
health first aid providers.
(3) HR Partnership Excellence
When implementing our human resources strategy to promote “People-centered Transformation,”
we require our people to build the best possible partnerships with the business. To this end, we
aim to enhance the expertise and productivity of our people to support management strategy anddecision-making both as individuals and as an organization. Specifically, we are boosting ourorganizational capabilities through the establishment of a global structure integrating HR
business partners (HRBPs), who work closely with management and businesses, and Centers of
Excellence (COEs), composed of specialized teams for talent management, compensation design,
etc. We continue to invest in HR data and HR systems that support these activities. Most recently,
we have especially focused on improving data precision and establishing Group-wide data items.
These initiatives enable us to integrate the information previously scattered between various
regions and companies, and we are progressively establishing a platform that will contribute toGroup-wide strategic decision-making.
12

We are also engaged in initiatives to boost the capabilities of the HRBPs who directly support
our businesses. Most recently, we have revised the deployment of HRBPs in line with our new
business operating model, aiming to achieve a structure that enables them to respond moreclosely to business needs. Meanwhile, we are also trialing the introduction of the HRBP functionin Japan, and we will work to strengthen support for the Japan region, the largest base in theGroup.
Our efforts to improve the efficiency of everyday business duties are also continuing. We areprogressing with the optimization and automation of processes for labor-intensive operational
duties and the utilization of shared services in regions where they are highly cost-efficient. We
intend to revise processes and systems for operations that would benefit from overall
optimization, aiming for global integration and standardization while also taking regional
differences into account as we work to further enhance productivity.
Investment in Intellectual Property
To promote business transformation and growth, we will continue to invest aggressively inintellectual property, including new technologies and product innovations.
[Supplementary Principle 4-1-1 Scope delegated to the management]
The Company appoints the Group Management Team including executive officers to directly
control business operations across four regions worldwide (Japan, the Americas, EMEA, andAPAC).
The Company aims to build an expeditious and highly effective business execution system as well
as strengthen the supervisory function of the Board of Directors concerning business execution,
by delegating the authority for the most important business execution from the Board of
Directors to the Group Management Team.
Specifically, the Group Management Board, consisting of the Group Management Team, isestablished under the Board of Directors to deliberate and decide on important matters of theCompany other than those resolved by the Board of Directors, to make resolutions on importantmanagement matters for the entire Group, and to deliberate in advance on matters to be resolvedby the Board of Directors.
[Principle 4-8 Effective use of independent directors (policy for efforts when it is deemednecessary to appoint at least one-third of directors as independent directors)]
The number of directors is 9 (no more than 15 as the Articles of Incorporation stipulate) and six(6) of them, the majority of the members, are independent outside directors.
[Principle 4-9 Independence standards and qualification for independent directors]
The Company has established Independence Standards for Outside Directors.
Please refer to the Company's website. “Independence Standards for Outside Directors”
https://www.group.dentsu.com/en/about-us/governance/isod.html[Supplementary Principle 4-11-1 View on the appropriate balance between knowledge,
experience, and skills of the Board as a whole and on diversity and appropriate board size]
As our policy, the number of directors on the Board of Directors of the Company is fifteen (15) or
less and independent outside directors constitute the majority. As of the date of submission ofthis report, the Board of Directors comprises nice (9) directors, of which six (6) are independent
outside directors. With regard to the members who make up the Board of Directors, the Company
13

gives consideration to the balance of experience, knowledge, and abilities, as well as diversity,
including in terms of gender, internationality, professional experience, and age, and includes
persons with management experience at other companies as independent outside directors.
The Company has identified the skills that the board should have as a whole to allow the
Company to achieve the Medium-term Management Plan formulated in February 2021 andupdated in February 2022. These skills are management, finance/accounting, auditing, legal
affairs/compliance, human resource management, global management, and digital business, andthe Company has described experience, insight, ability, and other significant elements of eachdirector candidate of the Company in the reference material for the relevant appointment
proposal(s) of the general meeting of shareholders.
See Figure 2 at the end of this report for a skills matrix representing the key skills currently
possessed by each director and Figure 3 for the reasons for the selection of each skill.
[Supplementary Principle 4-11-2 Concurrent posts of directors as officers at other listedcompanies]
Directors may concurrently serve as directors, corporate auditors or officers of other listedcompanies only to the reasonable extent that they are able to devote their necessary time andeffort to appropriately fulfill their roles and responsibilities as officers of the Company and after
following necessary procedures and obtaining approval by the Board of Directors. Importantconcurrent posts of directors will be disclosed in the reference material of the relevant general
meeting of shareholders and a business report under applicable laws and regulations.
[Supplementary Principle 4-11-3 Analysis and evaluation of the Board’s effectiveness as awhole and disclosure of the summary of the results]
In order to continuously enhance the effectiveness of the Board of Directors, the Company
conducts an annual evaluation of the effectiveness of the Board of Directors by all directors, basedon an analysis and assessment of the effectiveness and appropriateness of management oversightby the Board of Directors by an independent third party. The Company is working to further
strengthen corporate governance by confirming the status of improvement of issues identified in
the FY2022 evaluation, as well as new issues and directions to be taken in the future, and byimplementing specific measures to improve the effectiveness of the Board of Directors.
１．Methodology for Evaluating Effectiveness in FY2023
For the FY2023 evaluation, as in FY2022, an independent third-party evaluation organization
prepared survey items and distributed and collected surveys for all directors and some GroupManagement Team Members. In addition, based on the results of the surveys, interviews wereconducted with all directors and some Group Management Team members.
The results were collected and reviewed by a third-party organization and compiled into a report,
and the content was explained by the third-party organization and discussed at the Board of
Directors meeting held in January 2024.
(1) Results of initiatives in FY2023 to improve the effectiveness of the Board of Directors• January 2023：Appointed the Chief Governance Officer• February 2023：Held an informal board meetings to discuss the board’s key agenda andannual agenda• March 2023：Transitioned to a company with a nominating committee, etc.
• July to September 2023：Discussions were held on Mindset and Behavior Reform, mediumterm management plan, long-term business portfolio, human capital investment, andintroduction of an operating model.

14

•
•

September 2023：Held a Board of Directors meeting at the New York office. Meetings withdirectors and global leadership.
November 2023：Announcement of new management structure for FY 2024 and introductionof "One dentsu Operating Model," a common global business management model (effective
January 1, 2024)(2) Evaluation method for FY2023(i)
Surveys (for all directors and some Group Management Team members)
An anonymity-secured survey was conducted prior to interviews(ii)
Third-party interviews (for all directors and some Group Management Team members)
Interviews were conducted to obtain candid opinions while ensuring anonymity(iii)
Opinion exchange meeting (for all directors)
Discussions were held with third-party organizations at the Board of Directors meeting
to exchange opinions on the issues identified from the surveys and interviews(3) Main question topics in FY2023 questionnaire and interviews* Items in the survey (11 items, 76 questions)(i)Overall evaluation (effectiveness as a whole, functioning of the monitoring model after
the change in institutional design, transparency, fairness, and rationality of decision
making) (3 questions)(ii)
Strategic alignment and engagement (management strategy, capital policy, businessportfolio review, ESG response, business risk, dialogue with shareholders, etc.) (12questions)(iii)
Composition and structure of the Board of Directors (total number of directors,
independence ratio, succession plan, skill set, etc.) (5 questions)(iv)
Board processes and practices (board operations, institutional design, deliberation topics,
training, etc.) (8 questions)(v)
Management oversight functions (monitoring business activities, risk management,
global governance structure) (10 questions)(vi)
Culture and dynamics of the board of directors (2 questions)(vii)
Nominating Committee (10 questions)(viii) Compensation Committee (10 questions)(ix)
Audit Committee (11 questions)(x)Issues from the FY2022 effectiveness assessment (4 questions)(xi)
Other (1 question)
2. Results of Analysis and Summary of Evaluation
In response to the Tokyo 2020 Olympic and Paralympic Games incident that occurred in FY2022
and the financial issue in the DACH region, we recognize with a sense of urgency thatstrengthening internal controls and transparent disclosure are essential to restore stakeholder
confidence and enhance corporate value. In order to continuously strengthen the corporate
governance structure of the dentsu Group and to achieve sustainable growth and increase
corporate value, we will disclose below the results of the evaluation for FY 2023, the issues basedon the results of the evaluation, and the policy for addressing those issues.
(1) Summary of FY2023 evaluation results, issues from FY2022 and progress in FY2023
The evaluation for FY2023 confirmed the sincere efforts of the Board of Directors to upgrade its
corporate governance structure in order to regain the trust of stakeholders. Among other things,
the evaluation confirmed the high regard for the open and active discussions at the Board
meetings, the time and emotional commitment of each Board member, and the leadership of
the Chairman in fostering a forward-looking culture. On the other hand, it was also confirmed

15

that, in light of the high number of risk incidents and the inability to halt the deterioration ofbusiness performance, it will be necessary to take measures to get to the root causes of the
problems and to reconsider the monitoring of execution.
The status of efforts to address issues (i) through (iv) below, which were identified in the analysis
and evaluation for FY2022, and the Company’s recognition of this status are as follows.
(i)

Deliberation on important agenda items and the determination of direction based on thelong-term vision and strategies
While confirming the progress of the medium-term management plan, it was confirmed thatthe executive side presents specific considerations regarding the long-term vision andstrategy to the Board of Directors and careful and active discussions are held at the Boardof Directors’ meetings.
(ii) Establishment of common frameworks for effective monitoring
It was confirmed that while under the new board structure, efforts are being made to alignthe point of view of supervisory and executive sides of the board, the appropriate sharing ofmanagement information with the Board and the establishment of a method for monitoring
execution by the Board of Directors remain issues that require ongoing efforts.
(iii) Consideration of the approach to monitoring after the transition to the One Management
Team
It was confirmed that although the formalities related to the One dentsu Management model
are in place, PDCA management to strengthen the operations is important in order to ensure
its substantive aspects.
(iv) Consideration regarding changes to organizational design
It was confirmed that although the change in the organizational design (from a company
with an audit and supervisory committee to a company with a nominating committee, etc.)
and the transition of the management structure went smoothly, it is necessary to keep inmind that transition is not a goal, and efforts should be made to strengthen the substantive
aspects of operations, including internal controls and internal audits.
(2) Initiatives for future improvement
Based on the evaluation described in (1) above, the issues to be prioritized by the Board of
Directors and our policy for addressing each issue are as follows, in order to achieve the operationof One dentsu with both supervision and execution, and to lead the entire Group to sustainablegrowth and increase in corporate value while solving the issues at hand.
(i)Establishment of a Group Global Governance Structure
Our Policy for Initiatives: In order to promote the appropriate operation of One dentsu andthe establishment of a structure, secure global human resources to support the global
headquarters functions, strengthen internal controls, and effectively promote the Mindset
and Behavior Reform.
(ii) Accelerate strategic discussions on business portfolio optimization
Our Policy for Initiatives: In order to promote strategic divestiture and portfolio optimizationof businesses, the Board of Directors will discuss the progress of past M&A and businessrestructuring.
(iii) Strengthening monitoring of execution by the Board of Directors
Our Policy for Initiatives: Align the perception of supervisory and executive sides on theroadmap and milestones for addressing execution issues, clarification of , KPIs to bemonitored, and the content and methods of reporting at board meetings.
(iv) Improve quality of materials suitable for discussion at board meetings
Our Policy for Initiatives: Examine ways to prepare and present materials suitable fordiscussion from a supervisory perspective at the board meetings.

16

By promoting the above efforts, we will continue to enhance the effectiveness of our Board of
Directors, and further strengthen our corporate governance.
[Supplementary Principle 4-14-2 Training policy of Directors of the Board]
The Company shall provide directors with opportunities to acquire knowledge essential to the
execution of their duties and to continue their education so that they can adequately fulfill theirroles and responsibilities.
As for newly appointed outside directors, the Company shall explain the Group's business,organizational structure, and contents and progress of the medium-term management plan, etc.,
to them and also provide them with necessary information on business issues, etc., on a regularbasis following their appointment.
Currently, when they become directors (excluding outside directors), the Company provides themwith lectures conducted by inside and outside experts with respect to the Group’s strategies ofmanagement, business, finance, and other applicable fields and important matters and laws andregulations related thereto, and enables them to acquire and update the knowledge required fortheir offices. They are also given opportunities through discussion to find issues to be addressedby the Dentsu Group and solutions thereto. Moreover, after becoming directors (excluding outside
directors), they are given opportunities to attend study seminars on a regular basis to gain thelatest information as to the best practices for various megatrend issues.
[Principle 5-1 Policy for constructive dialogue with shareholders]
The Company has established a Disclosure Policy, and through IR activities, the Company strives
to disclose a wide range of information, from management strategies and financial information
to non-financial information, to shareholders, investors, and others in a timely and appropriatemanner, and to engage in ongoing constructive dialogue with them, thereby contributing to theenhancement of our corporate value over the medium to long term.
More specifically, mainly the Global CEO, Global CFO, and officers in charge of IR and disclosure
carry out various activities, such as regular meetings with securities analysts and institutional
investors, participating in conferences hosted by securities firms in Japan and overseas,
conducting roadshows both within and outside of Japan to visit investors individually, holding
individual meetings using telephone and video conference system, and conducting sufficient
information disclosure on the Company’s website. To ensure the effective functioning of these
activities, the Group IR Office has been established as a specialized department and works
closely with related departments such as the Group Corporate Planning Office, the Group
FR/FP&A Office (accounting function), and the Group Corporate Secretary Office. the Company
has also established two Group IR offices, one in Tokyo and the other in London, to facilitate
dialogue with securities analysts, investors, and shareholders in Japan and overseas.
Opinions and requests obtained through direct dialogue with shareholders and investors by the
management team and investor relations activities. are periodically reported to the Board of
Directors and management team and are utilized in efforts to improve corporate management
and corporate value. To properly manage insider information, the Company has established theInformation Management Committee and a "quiet period" during which we refrain from dialogue
regarding financial results information.
In addition, we conduct periodic shareholder
identification survey in an effort to understand shareholder ownership structure.
For details, please refer to “Disclosure Policy” (established in September 2018) on the Company's
website.
https://www.group.dentsu.com/en/ir/stockandratings/constructivedialogue.html
Please refer to the Company's website for information on the status of dialogue with17

shareholders and investors.
https://www.group.dentsu.com/en/ir/stockandratings/dialogue.html[Principle 5-2 Establishing and Disclosing business strategy and business plan]
In February 2021, Dentsu Group formulated and announced the “Medium-term Management
Plan” spanning over four years from FY2021 to FY2024 as the basic policy to realize medium- tolong-term growth. In the plan, the Company sets targets for revenue growth and profit growth,and the Company will work on improving the profitability of existing business and the collectionof investment in growth investment projects. In addition, the Company will analyze the progressof the plans and targets formulated each year and make flexible revisions, including plans forthe allocation of management resources, such as new business investment, capital investment,
and investment in human resource development, and decisions on relevance of
maintaining/continuing each business in the Group, as necessary. The soundness, fairness, andefficiency of the execution status are verified and supervised by the Board of Directors. The
Company will explain the above matters in an easy-to-understand manner at its financial results
briefings and general shareholders' meetings based on the Corporate Governance Code revisedin June 2021.
The Group released an updated Medium-term Management Plan in February 2022 with specificstrategies and targets based on review of the progress of the execution status, results, andbusiness environment of the plan from February 2021.
For updated targets for revenue growth and profit growth and policies for the allocation ofmanagement resources such as capital investment, M&A investment, and shareholders return,please refer to the following updated Medium-term Management Plan and the materials for theYear Ended December 31, 2021 we used in the financial results briefing. For more informationon the company's performance for the fiscal year ending December 31, 2023 and the progress andrevision of its medium-term management plan, please refer to the following release of
consolidated financial results for the fiscal year ended December 31, 2023 and the presentationmaterials for the fiscal year ending December 31, 2023. A new medium-term management plan
will be announced later this year.
Partially updated mid-term management plan in February 2024:
https://www.group.dentsu.com/en/news/release/pdf-cms/2024005-0214en.pdf
Medium-term Management Plan updated in February 2022:
https://www.group.dentsu.com/en/news/release/000653.html
Medium-term Management Plan announced in February 2021:
https://www.group.dentsu.com/en/sustainability/reports/2021/keywords/index.html#plan
Financial Results Briefing for the Year Ended December 31, 2023 (Recording)https://www.group.dentsu.com/en/ir/data/slides/audio/2023_04.html
Release of Consolidated Financial Results for the Year Ended December 31, 2023
https://www.group.dentsu.com/en/news/release/pdf-cms/2024005-0214en.pdf[Action on Cost of Capital-Conscious Management and Other Requests (Under Consideration)][English Disclosure Available]
In order to achieve sustainable growth and increase corporate value over the medium to longterm, the Board of Directors is discussing measures to realize management that is conscious of
the cost of capital and stock price. Specific initiatives and plans will be disclosed in a new
medium-term management plan to be released later this year.

18

2. Capital Structure
Ratio of Shares Held by Foreigners[Status of Major Shareholders]More than 20%, below 30%

UpdatedNumber of shares
held
47,937,500

Percentage
(%)
18.06

Kyodo News Association

18,988,800

7.16

Jiji Press Co., Ltd.

16,028,680

6.04

Custody Bank of Japan, Ltd. (Trust Account)

15,290,860

5.76

NORTHERN TRUST CO. (AVFC) RE SILCHESTERINTERNATIONAL INVESTORS INTERNATIONALVALUE EQUITY TRUST
Dentsu Group Employee Shareholding Association

11,228,000

4.23

5,247,882

1.98

Hideo Yoshida Memorial Foundation

4,984,808

1.88

4,969,860

1.87

4,929,900

1.86

4,124,978

1.55

133,731,268

50.40

Name
The Master Trust Bank of Japan, Ltd. (Trust Account)

NORTHERN TRUST CO. (AVFC) RE U.S. TAXEXEMPTED PENSION FUNDS
Recruit Holdings Co., Ltd.
NORTHERN TRUST CO. (AVFC) RE NON TREATY
CLIENTS ACCOUNT
Total
Presence or absence of controlling shareholder －(excluding parent company)
Existence of parent company
None
Supplementary explanation

Updated(1) The number of shares held by trust banks includes the number of shares for trust business.
(2) In addition to the above, the Company holds 4,801,599 shares in treasury stock. This does
not include shares of the Company held by Custody Bank of Japan, Ltd. (Trust Account E)(940,300 shares as of December 2023). These shares were previously held by Trust & Custody
Services Bank, Ltd. (Trust Account E), which was a re-trustee of the trust established for theoperation of Board Benefit Trust (BBT) program, and were succeeded by Custody Bank ofJapan, Ltd. (Trust Account E) due to a re-trustee change.
(3)

Silchester International Investors LLP submitted a change report dated November 21,
2023, stating that it holds the following shares as of November 20, 2023. However, theCompany was unable to confirm the actual number of shares held as of December 31, 2023,
and it has not taken into account in the above large shareholders. The contents of thereport are as follows.
19

Name
Silchester International Investors LLP

Number of shares held
22,239,000(4) Nomura Securities Co., Ltd. and its co-owner, Nomura Asset Management Co., Ltd.
submitted a change report dated December 6, 2023, , stating that they each owned thefollowing shares as of November 30, 2023. However, as the Company was unable to confirm
the actual number of shares held as of December 31, 2023, they are not taken into accountin the above status of major shareholders. The contents of the report are as follows.
Name
Nomura Securities Co., Ltd.
Nomura Asset Management Co., Ltd.

Number of shares held

439,821
15,548,400(5) Sumitomo Mitsui Trust Bank, Limited submitted a change report on December 21, 2023,
stating that Sumitomo Mitsui Trust Asset Management Co., Ltd. and Nikko AssetManagement Co., Ltd each held the following shares as of December 15, 2023. However,
the Company is unable to confirm the number of shares actually held by these companies
as of December 31, 2023, and therefore these companies are not considered in the above
status of major shareholders. The details of this report are as follows.
Name
Sumitomo Mitsui Trust & Asset Management
Co., Ltd.
Nikko Asset Management Co., Ltd.

Number of shares held
6,203,100
7,739,700

3. Corporate Attributes
Listed exchange and market segment
Accounting period
Industry(Consolidated) Number of employees at theend of the previous business year
(Consolidated) volume of sales at the end of
the previous business year
Number of companies (consolidated) at theend of the previous business year

Tokyo Stock Exchange Prime Section
December
Service
More than 1,000
More than 1 trillion yen
More than 300 companies

4. Policy on the Protection of Minority Shareholders in Transactions, etc., with the Controlling
Shareholder－
5. Other Special Circumstances that May Have Significant Impact on Corporate Governance
UpdatedIn order to quickly establish a structure that enable us to provide integrated solutions to ourclients’ diverse challenges on a global basis, the Company has formed a corporate groupconsisting of companies that operates in fields and regions that are complementary to our group,
as well as companies which advanced expertise, through M&A and capital alliances and othermeans.
To enhance the effectiveness of group management, it is the Company’s basic policy to hold allshares issued by subsidiaries directly or indirectly. However, some of its subsidiaries haveincreased their competitiveness by securing independence and maintaining their listing in light20

of the special characteristics of their business domains, their unique corporate culture, and therecruitment of human resources.
The Company has three such listed subsidiaries: DENTSU SOKEN INC. (listed on the Prime
Section of the Tokyo Stock Exchange; hereinafter referred to as " DENTSU SOKEN". As ofJanuary 1, 2024, the company name was changed from Information Services InternationalDentsu, Ltd. to DENTSU SOKEN INC.) and CARTA HOLDING, Inc. (listed on the Standard
Section of the Tokyo Stock Exchange; hereinafter referred to as "CARTA") and SEPTENIHOLDINGS CO., LTD. (listed on JASDAQ of the Tokyo Stock Exchange, hereinafter "SEPTENI").
DENTSU SOKEN is a subsidiary whose main business is the construction and maintenance of
information systems, sales of various business software, and consultation services. The Company
believes that maintaining ISID’s competitiveness and acquiring highly specialized humanresources through independent management will lead to improvement in values offered to thecustomers of our consolidated group companies.
CARTA is a subsidiary engaged in the digital marketing business where the company offers
digital marketing support to clients and advertising companies and assistance for digitaltransformation (DX) in media and internet related service businesses including the operation of
owned media and e-commerce sites. CARTA's independent management has enabled it to quickly
respond to a rapidly changing business environment, maintain its unique corporate culture, andachieve the acquisition of highly specialized human resources. The Company believes that thishas helped to improve the values offered to the customers of our consolidated group companies.
In the digital marketing business, SEPTENI has a large client channel and advertising
management capabilities in the rapidly growing digital managed advertising market, full-funnel
integrated marketing capabilities that also integrate the branding domain, and development
capabilities in the data solutions domain. In addition, the subsidiary has expertise in the
recruitment and training of digital human resources through the use of a data-driven AI-typehuman resource system as a foundation for supporting business growth. Its independent
management structure allows swift mobility in response to the ever-changing businessenvironment and acquisition of highly professional talented human resources including
responses to the new business areas, for which the Group was not equipped with sufficientinsights in the past. The Company believes that this has helped to improve the added values
offered to the customers of our consolidated group companies.
In order to ensure the appropriate execution of business and the overall optimization of thecorporate group, the Company or Dentsu Corporate One Inc. has dispatched directors andcorporate auditors to these subsidiaries. As a general rule, the Company respects the judgmentof the management of these subsidiaries, and strives to ensure that the interests of theshareholders and other stakeholders of these subsidiaries are not unduly impaired.

21

Ⅱ Status of Decision-making, Execution, and Supervision of Management and Other Corporate Governance Structures
1. Items Pertaining to Organizational Composition, Organizational Operation, etc.
Organizational format

Company
withCommittee, etc.

[Board of Directors]
Number of Directors in the Articles ofIncorporation
Term of office of Directors in the Articles ofIncorporation
Chairman of the Board of Directors
Number of Directors UpdatedaNominating

15 persons
One year
Other director
9 persons[Outside Directors]
Number of Outside Directors
6 persons
Number of Outside Directors specified as 6 persons
Independent Directors
Relationship with the Company (1)Relationship with the Company

Name

Attribute

Gan Matsui
Paul Candland
Andrew House
Keiichi Sagawa
Mihoko Sogabe

LawyerFrom another company
From another company
From another company
CertifiedPublicAccountant
CertifiedPublicAccountant

Yuka Matsuda

a

b

c

d

e

f

g

h

i

j

k

※Categories for relationship with the company“〇” when the director presently falls or has recently fallen under the category;“△” when the director fell under the category in the past“●” when a close relative of the director presently falls or has recently fallen under the
category;“▲” when a close relative of the director fell under the category in the pasta. Executive of the Company or its subsidiaries
b. Executive or Non-Executive Director of a parent company of the Company
c. Executive of a fellow subsidiary company of the Company
d. A party whose major client or supplier is the Company or an executive thereof
e. Major client or supplier of the listed company or an executive thereof 13
f. Consultant, accountant or legal professional who receives a large amount of monetaryconsideration or other property from the Company besides compensation as a Director
g. Major shareholder of the Company (or an executive of the said major shareholder if theshareholder is a legal entity)
h. Executive of a client or supplier company of the Company (which does not correspond to22

any of d, e, or f) (the Director himself/herself only)
i. Executive of a company, between which the Outside Directors are mutually appointed (theDirector himself/herself only)
j. Executive of a company or organization that receives a donation from the Company (theDirector himself/herself only)
k. Others
Relationship with the Company (2)〇Independent
Director

Member of
the AC〇

Member of
the CC

Member of
the NC

Name
Gan
Matsui〇UpdatedSupplementary
Explanation Regarding
a Compliant Item
Mr. Gan Matsui is anattorney at Yaesu Sogo
Law
Office,andconcurrently serves as
Outside Director (Audit
andSupervisory
Committee Member) ofOrientCorporation,
OutsideCorporate
Auditor of Nagase &
Co.,
Ltd.,
OutsideCorporate Auditor ofTotetsu Kogyo Co. andOutside Director who isa member of the Audit
andSupervisory
Committee
ofGloberide, Inc. Nagase
&
Co.,
Ltd.
has
business relationshipwith Dentsu Inc., asignificant subsidiaryof the Company, but theamount of transactions
during fiscal year 2023
was less than 1% ofconsolidatednet
revenueoftheCompany and there is
no issue with his
independence.
Furthermore, there areno vested interests withother entities or officementioned above forwhich he belongs or
concurrently serves.

23

Reason for Appointment<Reason for appointment as an
outside director>
Mr. Gan Matsui has many yearsof experience as a prosecutor andhas directed the investigation andtrial of many serious cases,
mainly in the field of economic
and tax. Based on this experienceand knowledge, he has chaired socalled third-party investigationcommittees on compliance andcrisis management for several
firms and governmental bodies.
He also assumes office of outside
directors or corporate auditors forsome companies.
Being the chairman of the
Independent Advisory Committeeon Labor Environment Reform at
Dentsu Inc. since February 2017,
and Outside Director of theCompany since March 2020, hehas
madesignificant
contributions,especiallyinstrengthening compliance andgovernance of the Company.
Although he has not been engaged
in corporate management otherthan serving as an Outside
Director or an Outside Auditor,
from these achievements, theCompany expects him to continue
to utilize his experience etc., instrengthening the supervisory
function of the Board of Directors
as our outside director.

Paul
Candland〇〇〇

Mr. Paul Candland
concurrently serves as
Outside Director of
YAMAHA
CORPORATION.
YAMAHA
CORPORATION has abusiness relationshipwith Dentsu Inc., asignificant subsidiaryof the Company, but theamount of transactions
during fiscal year 2023
was less than 1% ofconsolidatednet
revenueoftheCompany and there is
no issue with his
independence.

24<Reason for Designation as anindependent director>
By the independence standards
established by the Tokyo Stock
Exchange (Guidelines concerning
Listed Company Compliance, etc.
III. 5. (3) - 2) and the Company’s
independence
standards
foroutside directors establishedbased on these guidelines, there is
no reason to deny independence,
nor is there any particular reason
to believe that there is a risk of aconflict of interest with generalshareholders.
Therefore,
theCompany designates Mr. Matsui
as an independent director.
<Reason for appointment as an
outside director>
Mr. Paul Candland has been
involved in the management of
the
Asian
and
Japanese
subsidiaries
ofaglobalentertainment company for many
years,
andhas
abundant
experience as a global manager
and achievements and extensive
insight in the digital businessfield and business development.
Since March 2022, he has actively
provided advice and suggestions
from the perspective of global
management as an outside
directoroftheCompany,
especially regarding issues suchas business operations based on
global economic trends andstrengthening competitiveness,and has brought a variety ofperspectives to the Company.
From these achievements, theCompany expects him to continue
to utilize his experience etc., inareas such as enhancing thegovernanceofGroup
management as our outside
director.
<Reason for Designation as anindependent director>
By the independence standards
established by the Tokyo Stock
Exchange (Guidelines concerningAndrew
House

〇

〇

Mr. Andrew House
concurrently serves as
Strategic Advisor ofIntelity,
Executive
Mentor of The Exco
Group,
OutsideDirectorof
NissanMotor Co., Ltd. and
Non-Executive Directorof Viaplay Group AB.
Nissan Motor Co., Ltd.
hasabusinessrelationshipwith
DentsuInc.,asignificant subsidiaryof the Company, but theamount of transactions
during fiscal year 2023
was less than 1% ofconsolidatednet
revenueoftheCompany and there is
no issue with his
independence.
Furthermore, there areno vested interests with
other
entities
mentioned above forwhich he belongs or
concurrently serves.

25

Listed Company Compliance, etc.
III. 5. (3) - 2) and the Company’s
independence
standards
foroutside directors establishedbased on these guidelines, there is
no reason to deny independence,
nor is there any particular reason
to believe that there is a risk of aconflict of interest with generalshareholders.
Therefore,
theCompany
designates
Mr.
Candland as an independent
director.
<Reason for appointment as an
outside director>
Mr. Andrew House possesses
international
management
experience. He has abundant
experience and achievement as amanager and extensive insight,
including promotion of business
transformationandstrengtheningofcorporate
governance, gained in key roles at
global corporations. Since March
2022, he has leveraged thisexperience to actively provide
useful advice and suggestions
from a variety of perspectives
based on examples for global
management as an outside
directoroftheCompany,
especially regarding issues suchasGroupgovernanceandbusiness operations, and has
made a great contribution. Fromthese achievements, the Company
expects him to continue to utilize
his experience etc., in areas suchas enhancing the governance ofGroupmanagement
andstrengthening competitiveness in
the global environment as ouroutside director.
<Reason for designation as anindependent director>
By the independence standards
established by the Tokyo Stock
Exchange (Guidelines concerning
Listed Company Compliance, etc.
III. 5. (3) - 2) and the Company’s
independence
standardsforKeiichi
Sagawa〇〇〇Mr. Keiichi Sagawa
concurrently serves as
OutsideDirectorof
GIMIC CO., LTD. andthiscompanyhasbusinessrelationshipwith Dentsu Inc., asignificant subsidiary of
the Company, but theamountofthetransactions
duringfiscal year 2023 was less
than
1%
of
the
consolidated net revenueof the Company, andthere is no issue with his
independence.

26

outside directors establishedbased on these guidelines, there is
no reason to deny independence,
nor is there any particular reason
to believe that there is a risk of aconflict of interest with generalshareholders.
Therefore,
theCompany designates Mr. House
as an independent director.
<Reason for appointment as an
outside director>
Mr. Keiichi Sagawa possesses
abundant operational experience
regardingbusinesstransformation and expansion of
global business and digitalbusiness in the finance andadministration departments of aholding company. He has also
been engaged in corporate
management for many years as adirector and has enhanced
corporate value and has expertiseand a wealth of experience as acorporate manager. Since March
2022, he has actively provided
accurate advice and suggestions
as an outside director of theCompany, especially regarding
issues such as promoting business
transformation,
strengthening
competitiveness globally, andimproving
management
governance.
From
these
achievements,
theCompany
expects him to continue tocontribute greatly to improving
the management governance,
strengthening competitiveness,and ensuring the soundness of theCompany, which aims to promotebusiness transformation andachieve growth as a global
company, as an outside director.
<Reason for designation as anindependent director>
By the independence standards
established by the Tokyo Stock
Exchange (Guidelines concerning
Listed Company Compliance, etc.
III. 5. (3)-2) and the Company’s
independence
standardsforMihoko
Sogabe〇〇〇Ms. Mihoko Sogabe
concurrently serves as
Representativeof
Sogabe Certified Public
Accountant
Office,Auditor of Japan Kogei
Association,
OutsideDirector(auditandsupervisory committee
member) of Nikko AssetManagement Co., Ltd.,
OutsideAuditorof
SoleBrain, Co., Ltd., andOutside Director (audit
andsupervisorycommittee member) of
MitsuiDM
Sugar
Holdings Co., Ltd. Nikko
Asset Management Co.,
Ltd. has a business
relationshipwith
DentsuInc.,asignificant subsidiary of
the Company, but theamount of transactions
during fiscal year 2023
was less than 1% ofconsolidated net revenueof the Company andthere is no issue with her
independence.

27

outside directors establishedbased on these guidelines, there is
no reason to deny independence,
nor is there any particular reason
to believe that there is a risk of aconflict of interest with generalshareholders.
Therefore,
theCompany designates Mr. Sagawa
as independent director.
<Reason for appointment as an
outside director>
Ms.
MihokoSogabehas
specialized
knowledge
andabundant operational experiencein the fields of finance, accounting
and auditing as a CPA. She also
has profound insight of thesupervision of business execution,
promotingdiversityandstrengthening governance froman investor’s perspective as
Outside Director and Outside
Auditor of several companies.
Since March 2022, she has
activelyprovided
usefulsuggestions and advice as an
outside director of the Company
from her expert insight andabundant practical experience,
especially regarding issues suchas improving the Company’s
financial governance, promotinginternal
controls,
andstrengthening the supervisory
function. Although she has notbeen engaged in corporate
management other than serving
as an Outside Director or an
Outside Auditor, from theseachievements,
theCompany
expects her to continue tocontribute to enhancing andensuring the soundness offinancial governance of theCompany as our outside director.
<Reason for designation as anindependent director>
By the independence standards
established by the Tokyo Stock
Exchange (Guidelines concerning
Listed Company Compliance, etc.
III. 5. (3)-2) and the Company’sindependence
standards
foroutside directors establishedbased on these guidelines, there isnoreasontodeny
independence,nor is there any
particular reason to believe that
there is a risk of a conflict ofinterest
withgeneralshareholders.
Therefore,
theCompany designates Ms. Sogabe
as independent director.
Yuka
Matsuda

〇

〇

Ms.
Yuka
Matsudaconcurrently serves as
Representative of the
Matsuda Yuka CPA andTax Accounting Office,as Outside Corporate
Auditor of DKK Co.,Ltd.,
as
OutsideCorporate Auditor of
Mitsubishi Steel Mfg.
Co.,
Ltd.,
and
as
Supervisory Officer of
Nochu
JAML REIT
Investment Corporation.
Mitsubishi Steel Mfg.
Co., Ltd. has a business
relationshipwith
DentsuInc.,asignificant subsidiary of
the Company, but theamount of transactions
during fiscal year 2023
was less than 1% ofconsolidated net revenueof the Company andthere is no issue with her
independence.

28<Reason for designation as anindependent director>
Ms.
Yuka
Matsudahas
specialized
knowledge
andabundant operational experienceinthefieldsoffinance,accounting, taxation and auditing
as a CPA and tax accountant. She
also
hasexperienceinmanagement as Director of a tax
accounting firm, and experiencein auditing management as
outsideauditorofseveralcompanies. Since March 2023, she
has actively provided usefulsuggestions and advice as an
outside director of the Company
from her expert insight andabundant practical experience,
especially regarding issues suchas improving the Company’s
financial governance, promotinginternal
controls,
andstrengthening the supervisory
function. Although she has notbeen engaged in corporate
management other than serving
as an Outside Director or an
Outside Auditor, from theseachievements,
theCompany
expects her to continue tocontribute to enhancing andensuring the soundness offinancial governance of theCompany, which aims to promotebusiness transformation andachieve global growth, as an
outside director.
By the independence standards
established by the Tokyo StockExchange (Guidelines concerning
Listed Company Compliance, etc.
III. 5. (3)-2) and the Company’s
independence
standards
foroutside directors establishedbased on these guidelines, there is
no reason to deny independence,
nor is there any particular reason
to believe that there is a risk of aconflict of interest with generalshareholders.
Therefore,
theCompany
designates
Ms.
Matsuda as independent director.
[Three statutory committees]
Constitution and Chair of each Committee
Total

FullTime

1

Internal
Directors

Nomination Committee

4

1

3

Compensation
Committee
Audit Committee

3

0

0

3

4

0

0

4

OutsideDirectors

Chairperson
OutsideDirector
OutsideDirector
OutsideDirector[Executive Officers]
Number of Executive Officers 2
Updated
Status of Additional Duties Updated

Name

Hiroshi Igarashi
Arinobu Soga

Representative
Authority〇〇

Additional Duties as Director

Additional
Nomination Compensati- Duties as
Employee
CommitteenMemberCommittee
Member
×
×
〇
×
×
×

〇
〇

[Auditing Structure]
Appointment of Directors and/or Employees to Support the Appointed
Audit Committee
Matters related to the independence of such Directors and/or Employees from Executive
Officers

29

The Company has established the Audit Committee Office as an organization for fulfilling therole of an administration office for the Audit Committee and aiding operation of the Audit
Committee. Dedicated staff members are assigned to the Audit Committee Office, and they reportto the Audit Committee. Evaluation and personnel transfers, etc. of these staff members arecarried out with approval of the Audit Committee, which ensures independence of Audit
Committee Office members from executive officers and the Group Management Team andeffectiveness of instructions and orders from Audit Committee members.
Cooperation among Audit Committee, Accounting Auditors, and Internal Audit
Departments
The Audit Committee shall ask the accounting auditors and internal audit departments forreporting on respective audit approaches and results appropriately, exchange informationindividually in a timely manner, and coordinate with each other. Moreover, the Audit Committee
may ask the internal audit departments for reporting on the establishment and operation status
of internal control as well.
[Independent Directors]
Number of Independent Directors

6 persons

Other Items Pertaining to Independent Directors
All outside directors who fulfill the requirements of independent directors are designated as
independent directors.
The criteria for the independence of outside directors established by the Company are shown in
the “Independence Standards for Outside Directors”.
[Incentive]
Status of Measures Related
Directors/Executive Officers

toIncentives

forIntroduction of a performancebased remuneration system

Supplementary Explanation Regarding Said Item
Annual bonuses and performance-based stock compensation (medium- to long-term bonus) areapplied to directors who concurrently serving as executive officers. For details, please refer to[Compensation for Directors and Executive Officers] below.
Those who granted stock options

None

Supplementary Explanation Regarding Said Item－
[Compensation for Directors and Executive Officers]
Status of Disclosure (of Individual Director’s Compensation)
Status of Disclosure (of Individual Executive Officer’s
Compensation)

Individually disclosed in part
Individually disclosed in part

Supplementary Explanation Regarding Said Item Updated
The amount of directors' compensation for the fiscal year ending December 31, 20232 is as follows.

30

<Before the transition to a company with a nominating committee (from January 2023 to March
2023)>The total amount of compensation for Directors who are not members of the Audit & Supervisory
Committee (including the portion for Group Management Team members for Directors who
concurrently serve as Group Management Team members) was 125 million yen, consisting of 83
million yen in fixed compensation (cash), 38 million yen in annual bonuses (cash), and 2 million
yen in performance-based stock compensation (mid- to long-term bonus) of ¥2 million. The fullamount of annual bonus and performance-based stock compensation through the current fiscal
year is shown below under "After Transition to a Company with a Nominating Committee (from
April 2023 to December 2023)".
However, with respect to Mr. Norihiro Kuretani, who retired as a Director who was not a memberof the Audit and Supervisory Committee at the conclusion of the Ordinary General Meeting of
Shareholders held on March 30, 2023, the total amount of following (i) and (ii) are included in
the annual bonus written above: (i) one-fourth (1/4) of the amount recorded as an expense withrespect to the annual bonus for the fiscal year under review (as a percentage of the term of office
to the term of the fiscal year, during which he served concurrently as a director who was not amember of the Audit and Supervisory Committee) and (ii) the amount of the annual bonus forfiscal 2022 that was actually paid to him during the fiscal year, less the amount recorded as an
expense in fiscal 2022 with respect to such annual bonus. One-fourth of the amount recorded
as an expense in the current fiscal year with respect to performance-based stock compensation
granted in the current fiscal year (This amount includes the amount related to the money thatwould be paid out in proportion to half of the number of units vested.) is included in the amountof performance-based stock awards above.
The total amount of compensation for Directors(excluding Outside Directors) who are Audit and Supervisory Committee Members was 9 million
yen, and the total amount of compensation for Outside Directors who are Audit and Supervisory
Committee Members was 22 million yen.
< After Transition to a Company with a Nominating Committee (from April 2023 to December2023)">
Total compensation for directors (excluding outside directors) was 44 million yen, and totalcompensation for outside directors was 95 million yen. The total amount of compensation for
Executive Officers was 207 million yen, consisting of 117 million yen in fixed compensation (cash),
52 million yen in annual bonuses (cash), and 37 million yen in performance-based stockcompensation (mid- to long-term bonuses).
Annual bonuses are the sum of (1) the amountrecorded as an expense in the fiscal year with respect to annual bonuses for the fiscal year and(2) the difference between the amount of annual bonuses for fiscal 2022 actually paid during thecurrent fiscal year less the amount recorded as an expense in fiscal 2022 with respect to suchannual bonuses, and for performance-based stock compensation, the amount is recorded as an
expense for the fiscal year with respect to performance-based stock compensation granted during
the fiscal year (this amount includes the amount related to money to be paid out in proportion tohalf of the number of units vested) .
The total amount of consolidated compensation paid to directors Hiroshi Igarashi, Arinobu Soga,and Nick Priday was 164 million yen, 128 million yen, and 338 million yen, respectively.
The total amounts shown above include the amounts recorded as expenses in the Company as
described above with respect to annual bonuses and performance-based stock compensation paidby the Company, and for director Nick Priday, the above includes the amount expensed by theCompany during the year with respect to annual bonuses, performance-based cash compensationand performance-based stock compensation received from the Company's major consolidated
subsidiary.

31

Details are as described in the securities report.
Policy on deciding remuneration amounts and theircalculation method Updated

Yes

Disclosure of Remuneration Amounts and Their Calculation Method
In accordance with the provisions of the Companies Act regarding companies with a nominating
committee, etc., the Compensation Committee has established a policy to determine the amountof compensation for each individual director and executive officer or the method of calculation ofsuch amount.
1． Basic policy on determining compensation
In a business domain where marketing, technology and consulting are increasingly converging,
we aim to evolve into a company that embodies “an invitation to the never before.” and createssocial impact by generating innovative ideas and solutions through outstanding creativity andtechnology.
To empower the executives who drive our success, our executive compensation is designed basedon the following objectives and principles. We will continuously review and update our programs
as our business transforms so that they reflect who we are and where we are going.
(1) Attract and retain outstanding talent by providing attractive total rewards and environment(i) Competitive pay(ii) Career growth opportunities(2) Achieve the Group’s strategic goals by maximizing the performance of the globally integrated
management team(iii)Pay for performance(iv) Challenging goals(3) Strengthen alignment with interests of shareholders and all other stakeholders(v) Creating value for society(vi) Accountability
2． Amount of compensation or the method for calculating that amount(1) Compensation Levels
To secure outstanding talent for management on a global basis, the Company sets compensationlevels based on roles, with reference to the levels of compensation among its business competitors
and talent competitors with similar market capitalization, in the main regions where it operates(Japan, the United States, the United Kingdom, etc.). The Company uses compensation survey
data supplied by an external consulting firm to confirm market compensation levels.
(2) Composition of compensation
Remuneration for Directors shall consist only of fixed remuneration as Directors. Remuneration
for Executive Officers consists of a base annual salary as fixed remuneration, and annual bonuses
and performance-based stock compensation (medium- to long-term bonuses) as variable
compensation.
In addition to the above compensation, the Representative Executive Officers are paid a fixedcompensation for the Representative Executive Officers. For Executive Officers residing outside
Japan who do not hold securities accounts that manage domestically listed shares, allperformance-based stock-based compensation (mid- to long-term bonus) may be paid in an32

equivalent amount in cash.
With an emphasis on improving medium- and long-term business performance and corporate
value, the Company sets the ratio of "base annual salary as compensation for Executive Officer:
annual bonus (base amount): performance-based stock compensation (base amount)" to "1:1:1.5"
as a guide for the composition of compensation for the President and Executive Officer. For other
Executive Officers, the payment ratio shall be commensurate with their responsibility for the
global management of the Company. Annual bonus and performance-based stock compensation
will fluctuate in the ratio of 0-200% (target: 100%) and 30-170% (target: 100%), respectively, fromthe base amount that would be paid if each indicator were both at the target value.
(3) Compensation and calculation method(i)Fixed compensation
The base annual salary as compensation for directors and executive officers and thecompensation for the representative executive officer are regular fixed-amount monetarycompensation (monthly) and are paid at a fixed time each month. With respect to thecompensation for directors, a fixed amount determined in accordance with the duties of thedirectors is paid. In addition, an external consulting firm is used to determine the base annualcompensation for Executive Officers, which is appropriate for the size of the responsibility androle assigned to each Executive Officer, with reference to the compensation levels of businesscompetitors and human resource competitors with similar market capitalization in the major
regions where the Company operates (Japan, the U.S., the U.K., etc.). The compensation for the
Representative Executive Officers is based on a single flat rate.
(ii)
Annual Bonus
The annual bonus is performance-based monetary compensation paid to Executive Officers basedon the Company’s performance and each Executive Officer’s individual performance in each fiscal
year. The amount of bonus paid is determined using a formula, with the standard amountcalculated as a certain percentage of the base annual salary paid as compensation for executive
officer, based on the figures for the financial metrics, as well as their respective weights as shown
below, varying within a range from 0% to 200%. The computed amount is paid at a certain timeafter the Ordinary General Meeting of Shareholders for the relevant fiscal year.
The indicators and the weight of each indicator for FY2024 are as follows.
Financial Indicators (organic growth rate and operating margin) measure business profitability
and indicate business growth, while eliminating the effect of exchange rate fluctuations and
M&A activities. The Group believes that they are appropriate metrics for evaluating the businessresults for one year while managing achievement rates for each region and business as well as
on a Group-wide basis. ESG metrics promote the achievement of strategic targets related tocorporate value that cannot be measured using financial metrics, based on the Group Mediumterm Management Plan and issues in the current corporate environment. Furthermore,individual performance evaluation clarifies individual roles in this period of business structuretransition and makes the Executive Officers strongly aware of the importance of enhancing
corporate value by designating the management issues for each Executive Officer and evaluating
the degree to which these issues are resolved. The individual performance evaluation also
evaluates the level of embodiment of the leadership (dentsu Leadership Attributes), which
promotes growth of both individual Executive Officers and the organization. The upper limits,targets, and lower limits of metrics used to determine the range of individual compensation paid,
within 0% to 200%, are decided by the Compensation Committee. If the Compensation
Committee determines that there is a violation of compliance or integrity, the Committee may

33reduce the payout rate of annual bonus according to the level of responsibility of each Executive
Officer.
Metrics
Financial metrics：Organic growth rate
Financial metric ：Operating margin
ESG metrics （Note）2
Individual performance evaluation （Note）3

Weight (Note）1
50%
20%
10%
20%

(Notes)1. This represents the relative composition in the annual bonus amount if all the performancetargets of each metric are met.
2. The ESG metrics are set: improvement of employee engagement, increase of ratio of female
leaders, and CO2 emissions (Scope 1+2).
3. Individual goals of the President & CEO in the individual performance evaluation are
discussed and determined by the Compensation Committee at the start of the fiscal year. In
addition, evaluation of the President & CEO is discussed and determined by the Compensation
Committee following self-evaluation by the President & CEO. Goals and evaluations of other
Executive Officers are discussed and determined following the meetings between the President& CEO and each Executive Officer.
(iii) Performance-based stock compensation (medium- to long-term bonuses)
Performance-based stock compensation (medium- to long-term bonus) is paid to each executive
officer in accordance with the Officers Compensation Rules and the Officers Stock Benefit
Regulations, based on the numerical values of the performance indicators shown below for eachof the three consecutive fiscal years from the fiscal year in which he or she is in office.
Executive officers eligible for performance-based stock compensation (medium- to long-termbonus) receive, on a certain date during each fiscal year during which they are in office (the “Unit
Grant Date”), a standard number of units as consideration for the execution of duties during therelevant fiscal year. In the case of a president concurrently serving as executive officer, thestandard number of units is equivalent to 150% of basic annual compensation received as an
executive officer in the relevant fiscal year, divided by the average closing value of the Company’s
shares during the month of January in the relevant fiscal year. In the case of other executive
officers, the percentage is set in the range of 100% to 230% according to the responsibilities ofeach executive officer in the Company’s global management.) In addition, by taking theprescribed procedure by a certain date (the “Vesting Date”) after the passage of three consecutive
fiscal years, the first of which is the consolidated fiscal year in which the Unit Grant Date falls(the “Performance Evaluation Period”), the grantee may acquire the right to receive delivery of
the Company’s shares, etc. from a trust established based on the performance-based stockcompensation plan (hereafter the “Trust”) on the Vesting Date. In doing so, the standard numberof units granted to each executive officer in the said first fiscal year will be adjusted within thevariable range from 0% to 200% based on the values of the indicators described below, in
accordance with the formula stipulated in the Officers Stock Benefit Regulations (hereinafter,
the number of units after adjustment are referred to as the “Vested Units”). Thereafter, therelevant executive officer may receive delivery of the Company’s shares, etc. from the Trust, in
accordance with the number of Vested Units (in principle, the number of the Company’s commonshares calculated corresponding to half of the Vested Units and an amount of cash equivalent to
the market value of the number of the Company’s common shares calculated corresponding to
the remaining half of the Vested Units as of the Vesting Date). However, the Company may makemonetary payment of the amount equivalent to all performance-based stock compensation
34

(medium- to long-term bonus) to executive officers who reside outside Japan and do not holdsecurities accounts for managing listed shares in Japan in some cases.
The following table shows the indicators and the percentage of each indicator for FY2024.
We have adopted Total Shareholder Return (TSR) because we believe it is an appropriate
indicator for aligning our eyes with our shareholders and other stakeholders. We have also
adopted the Group's consolidated adjusted operating income compound annual growth rate
(CAGR) as a profit indicator to measure the performance of our constant operations, as we believe
it is an appropriate measure to evaluate the performance of our business. From FY2023 onward,
we will set a higher target, in particular by increasing the percentage of TSR to peer group fromthe previous 20% to 30%, in order to achieve a higher total shareholder return (TSR) relative to
our competitors.
Indicators
Percentage of total (Note)1
Total Shareholder Return (TSR) vs. peer group (Note)230%
Total Shareholder Yield (TSR) including dividends vs.
20%
Tokyo Stock Exchange Stock Price Index (TOPIX)
Group consolidated adjusted operating income compound annual growth rate (CAGR) 50%(Note)
1. This is the percentage of the amount that would constitute performance-linked share-based
compensation (medium- to long-term bonus) if all of the figures in each indicator were thetarget values.
2. Six companies have been selected as competitors of the Group: Accenture plc, The InterpublicGroup of Companies, Inc., Omnicom Group Inc., Publicis Groupe S.A., WPP plc and
Hakuhodo DY Holdings Inc.
The Company may withdraw some or all of an Executive Officer’s right to receive annual bonus
or performance-based stock compensation (malus) or demand the return some or all of cash orstock that has been paid from an Executive Officer (clawback), by resolution of the Compensation
Committee, if the Executive Officer has caused serious damage to the Group through intent,
negligence, inappropriate actions, etc., or where there is an error in financial information withthe effect of decreasing the amount payable to the Executive Officer.
6. Procedure for determining compensation and others
In accordance with the provisions of the Companies Act regarding companies with a nominating
committee, etc., the Compensation Committee has established a policy for determining theamount of compensation for each individual director and executive officer or the method for
calculating such amount.
The Compensation Committee also deliberates and determines the level of compensation for
Directors and Executive Officers, the composition of their compensation, and the setting oftargets for variable compensation.
Other details of the compensation for Directors and Executive Officers are described in the
Annual Securities Report.
[Support Structure for Outside Directors]
The secretariat of the Board of Directors provides the outside directors with materials andexplanations of the agenda prior to the Board of Directors meetings. Additionally, the Audit
Committee Office was established as the section in charge of aiding Audit Committee members,
where dedicated staff engages in all work related to the duties of Audit Committee members inorder to support them.

35

In addition, when either of the Nomination Committee and the Compensation Committee is held,
the secretariat of the respective committee briefs the outside directors in advance on the contentsof the agenda items and other matters.
[Status of those who retired from representative directors, etc.]
Names of Advisors, etc. who retired representative directors, etc.

Name

Title

Activity

Tateo Mataki

Dentsu Inc.
SeniorAdvisor(Sodan yaku)
Dentsu Inc.
SeniorAdvisor(Sodan yaku)
Dentsu Inc.
SeniorAdvisor(Sodan yaku)

Industry groupor economic
organizations,etc.
Industry groupor economic
organizations,etc.
Advising forthe executivesof theCompany, etc.

Tatsuyoshi
Takashima
Tadashi Ishii

Full time ornot
Remuneration,etc.

Date ofretirementfrom CEO

Full timeNo
compensation

June 28, 2007

Full timeNo
compensation

March 31, 2011

Full time
Receives
compensation

January 22,
2017

The total number of Corporate Advisors, etc., who retired
from representative directors’ positions

Ter
m
One
year
One
year
One
year

3 persons

Other Items Updated(1) When a former representative director, president and CEO or former representative
executive officer, president and CEO is appointed as a Senior Advisor (Sodanyaku) and
Executive Advisor (Komon) to the Company, the Board of Directors deliberates on the roles
expected of the person and the treatment thereof.
(2) A former representative director, president and CEO or former representative executive
officer, president and CEO is appointed as Senior Advisor (Sodanyaku) and Executive
Advisor (Komon) for one year and the appointment must be approved by the Board of
Directors for reappointment.
(3) When a former representative director, president and CEO or former representative
executive officer, president and CEO assumes the position of Senior Advisor (Sodanyaku)
and Executive Advisor (Komon) of Dentsu Inc., a wholly owned subsidiary, the expected roleand the treatment of such person are deliberated at the dentsu Japan Nomination andCompensation Committee, which is entrusted with the governance of domestic Group
companies by the Board of Directors.
(4) The term of office of the advisors and counselors of Dentsu Inc. who are former President
and Representative Director or former President and Representative Executive Officer shallbe one year, and upon reappointment, the Board of Directors of Dentsu Inc. shall consult thedentsu Japan Nomination and Compensation Committee regarding the proposed candidates,
and the Committee's report shall be considered and approved.
2. Items pertaining to business execution, audit & supervision, nomination, compensation36

determination, and other functions (overview of the current corporate governancestructure) Updated
The company has chosen to adopt a company with a nominating committee, etc. as its corporate
governance structure.
By clearly separating the supervisory and executive functions, the Company aims to accelerate
decision-making, strengthen the supervisory function of the Board of Directors, and further
enhance transparency.
<Board of Directors>
The Company’s Articles of Incorporation stipulates the number of its directors at a maximum of
15. At the date of this report, the Board of Directors comprises ten (10) directors (of whom, six(6) are outside directors). The Board of Directors fulfills a supervisory function over businessexecution and makes decisions on important matters fundamental to the Group's management,
including the formulation of the Group's management strategy, important management
decisions, and the appointment of executive officers.
In order to fulfill the roles described above in selecting the members of the Board of Directors,
consideration is given to the balance among the members in terms of their experience, insights,
and skills, and to diversity in terms of gender, nationality, work experience, age and otherelements.
Six (6) outside directors (who are all independent officers who meet the criteria for
independence stipulated by the Company for its outside directors) provide advice in the Boardof Directors as needed based on their extensive experience in their respective area of expertiseand help upgrade the Company’s management strategy and raise its business efficiency. In
addition, they fulfil the supervision function over business execution by the Company’s
management team from a viewpoint of general shareholders independent from the
management team.
<Nominating Committee>
The Nominating Committee is a committee that establishes criteria for the election of directors
and the independence of outside directors, decides on proposals to be submitted to the General
Meeting of Shareholders concerning the election and dismissal of directors, and decides on thecontent of reports in response to inquiries from the Board of Directors concerning the election
and dismissal of executive officers and other similar matters. The Nominating Committee
consists of four directors, with a majority of the members being independent outside directors,
and is chaired by an independent outside director.
<Audit Committee>
The Audit Committee audits the execution of duties by directors and executive officers, prepares
audit reports, determines the content of proposals to be submitted to the General Meeting of
Shareholders concerning the appointment, dismissal, and non-reappointment of accounting
auditors, and performs other duties as stipulated by law and the Articles of Incorporation. The
Audit Committee consists of four directors, the majority of whom are independent outside
directors, and is chaired by an independent outside director.
<Compensation Committee>
The Compensation Committee is a committee that establishes policies for determining thecompensation of directors and executive officers and determines the details of individualcompensation of directors and executive officers.
The Compensation Committee consists of three directors, with a majority of the members being37

independent outside directors, and is chaired by an independent outside director.
<Liability Limitation Agreement>
The Company concludes a liability limitation agreement with its outside directors and directors
not concurrently serving as executive officers, setting the maximum amount of their liability ateither 10 million yen or the minimum amount of liability prescribed in Article 425, Paragraph 1of the Companies Act, whichever is greater.
<Indemnity Agreement>
The Company has entered into an indemnity agreement with each of directors, which provides
that the Company will indemnify the expenses stipulated in Article 430-2, Paragraph 1, Item 1of the Companies Act and the losses stipulated in Paragraph 1, Item 2 of the same Article to theextent provided for by laws and regulations. In order to ensure that the indemnificationagreement does not impair the appropriateness of the execution of duties by the officer, it isstipulated that indemnification is not applicable in cases where directors perform their duties
with malicious intent or gross negligence or when the company holds directors liable for theiractions.
<Directors and Officers Liability Insurance>
The Company has entered into directors and officers liability insurance (D&O insurance)
agreement with an insurance company, which insures the Company’s directors, executive officers,
Group Management Team Members and their heirs, as well as the directors, executive officers
and corporate auditors of the Company's 37 domestic subsidiaries and their heirs. Such insurance
covers derivative suit, corporate suit and claims from third parties, however, claims for damages
arising from acts committed while aware of the violation of laws and regulations will not becompensated. The premiums under such insurance policies are borne in full by the company inwhich the insured officers and employees perform their duties, respectively, for such officers andemployees.
<Business Execution Structure>
The Company has established the Group Management Board, composed of Group Management
Team members including executive officers, under the Board of Directors. The GroupManagement Board deliberates important items of the Company other than items to be resolvedby the Board of Directors and critical management matters in the entire Group and predeliberates items to be resolved by the Board of Directors.
In addition, issues that require specialized consideration will be decided by the various
committees (Group M&A Committee, Group Sustainability Committee, Group Human Rights
Committee, Group Compliance Committee, Group Risk Committee, Group Nomination
Committee, and Group Compensation Committee), and then submit them to the GroupManagement Board for discussion or report in accordance with its rules. Efficient decisionmaking is carried out by setting items that can be resolved exclusively by each meeting body anditems that need to be referred to a higher-level meeting body.
3. Reason for Choosing the Current Corporate Governance Structure
The Company’s Board of Directors considers that providing a strategic direction for the Company
based on its Purpose and Vison is its main role and responsibility and has chosen a company witha Nominating Committee, etc. as a structure to achieve this.
The Board of Directors delegates a large part of its decision-making authority regarding businessexecution to the Group Management Team members including executive officers and urges

38

expeditious and resolute business judgment thereby. The Board of Directors, in which a majorityof directors are independent outside directors, also enhances corporate value by strengthening
oversight of overall management, including its management strategy and Medium-termManagement Plan, and by improving the effectiveness of auditing and internal controls.
The Company expects outside directors to contribute to the enhancement of corporate
governance by invigorating discussions at meetings of the Board of Directors including by raisingquestions and expressing opinions, and to promote appropriate decision-making by the Board of
Directors including by expressing opinions from their respective professional perspectives. In
addition, one of their roles is to verify and evaluate the results of management and theperformance of the management team in light of the management strategies determined by the
Board of Directors, and from the perspective of shareholders' interests, to determine the pros
and cons of entrusting management to the management team and to express their opinions.
Ⅲ Implementation Status of Measures Related to Shareholders and Other
Stakeholders
1. Efforts to vitalize the General Meeting of Shareholders and ensure the smooth exercise of
voting rights Updated
Supplemental Explanation
Sending of convocation notices of In order to enable its shareholders to secure sufficient time
general meeting of shareholders at to consider the proposals of the General Meeting ofan early timing
Shareholders, the Company shall promptly provide
reference materials for the meeting electronically on the
Company’s website, after the Board of Directors resolves toconvene the meeting. For the 175th Ordinary General
Meeting of Shareholders held on March 28, 2024, referencematerials for the meeting were provided electronically on
the Company’s website and the Tokyo Stock Exchange’s
website on Thursday, March 7, 2024 and were mailed out on
Wednesday, March 13, 2024, which is two weeks before thedate of the general meeting of shareholders.
Exercise of voting rights by an Considering shareholder convenience in exercising theirelectromagnetic method
voting rights, the Company introduced an online voting
platform from the 156th Ordinary General Meeting of
Shareholders (June 29, 2005).
Furthermore, shareholders were given the options of
exercising their voting rights through the internet fromtheir smart phone or through an online voting platform
provided by ICJ, Inc. from the 159th Ordinary General
Meeting of Shareholders (June 27, 2008).
Participation in an electronic The Company uses an electronic voting platform provided
voting platform and other efforts to by ICJ, Inc.
improve the voting environment for
institutional investors
Provision of convocation notice The Company began preparing an English version of(summary) in English
convocation notice from the 166th Ordinary General
Meeting of Shareholders (June 26, 2015) to improve
constructive dialogues with shareholders and to respond to
the growing ratio of overseas institutional investors. The
English version of convocation notice is disclosed on the39

OtherCompany’s website before the convocation notices aremailed out.
The Company provides easy-to-understand explanations at
the general meeting of shareholders by providing visualpresentations of its business report and other information.

2. Status of IR Activities Updated
Supplemental Explanation
Preparation
publication
Disclosure Policy

Explanationby theRepresentati
ve Executive
Officerand The Company has established a Disclosure Policy toof disclose information to shareholders, investors,
securities analysts, and other concerned parties in atimely, accurate, and fair manner in accordance with
relevant laws and regulations such as the Financial
Instruments and Exchange Act and the regulations of
the stock exchanges where our shares are listed. For
more information, please visit our website.
Disclosure Policy
https://www.group.dentsu.com/en/ir/stockandratings/co
nstructivedialogue.html
Regular briefings for The Company holds briefings on financial results Yes
analysts
and following the announcement of full-year results andinstitutional investors
each quarterly results.
Every year, the Company attends a conference
sponsored by a brokerage firm.
The Company also holds roadshows every year andvisits individual investors in Japan.
If it is impossible to provide face-to-face briefings or to
pay individual visits under extenuating circumstances,
we maintain the opportunities for and the frequency of
dialogues using telephone and online video conference
systems.
Regular briefings for The Company holds briefings on full-year results andoverseas investors
each quarterly results with simultaneous interpretation
in English.
Each year, the Company attends a conference sponsoredby a brokerage firm abroad.
The Company also holds roadshows every year andvisits individual investors overseas. If it is impossible topay individual visits under extenuating circumstances,
we maintain the opportunities for and the frequency of
dialogues using online video conference systems.
Posting of IR data on The Company posts on its website the materials we use
websitein financial result briefings for securities analysts andinstitutional investors, highlights of our businessresults, other disclosure materials, and Integrated
Reports and ESG Data book, etc. that include nonfinancial information.

40

Establishment of a Group IR Officesection (persons incharge of) related toIR
3. Status of Efforts Pertaining to Respecting the Position of Stakeholders Updated
Supplemental Explanation
Internal rules and other The Group has positioned to establish an organizational culture
instruments
requiring that places the highest priority on integrity, as well as corporate
respect for stakeholders’ governance, respect for human rights, improvement of thepositionsworking environment, environmental conservation, fair businesspractices, resolution of consumer issues, and contribution tocommunity development as priority areas, and has considered thefulfillment of its social responsibility as a voluntary effort toresolve social issues and realize a sustainable society with all
stakeholders in mind. To fulfill our social responsibility, we haveestablished the “Dentsu Group Code of Conduct” (posted on the
Company’s website) which articulates what all Dentsu Groupmanagers and employees must voluntarily undertake to fulfill
their respective responsibilities to society. All Dentsu Group
companies have expressed their commitment to complying with
the Code.
Implementationof The Company introduces its activities on its website.
environmental
protection, CSR, andother activities
Establishment of policies, The Company are honest and accurate in our record-keeping,etc., pertaining to the financial and non-financial reporting, and our financial and nonprovision of information financial disclosures are timely and transparent. (Quoted fromto stakeholders
the “Dentsu Group Code of Conduct”)
OthersThe Group implements the following DEI promotion activities.
(1) In December 2023, the Group published its second Global
DEI report.
(2) Starting in 2021, the Group are developing an educational
program called "Inspiring Inclusion," which focuses on threemain areas: understanding gender balance, setting
ambitious goals, and establishing clear career paths topromote women's advancement.
(3) From 2020, domestic group companies have conducted
initiatives, specifically implementing the followings as
representative examples.
・"DEI Board": A forum consisting solely of those who have theauthority to change the HR system at each Group company toshare the DEI challenges they are facing and the solutions ofeach company.
・"DEI Park (formerly DEI Seminar)": A mechanism toaccelerate the promotion of DEI within the company bydesignating a person in charge of the program from each Group
company in Japan every half year. The program consists ofthree categories: "learning," "dialogue," and "experience," and22,000 employees are involved in DEI.
・To promote women's active engagement (to increase in theratio of women in management positions), we have beenpromoting activities to create a women's community across theGroup and knowledge sharing to create a business environment,41

as well as the introduction of a "Positive Action List" toimplement and support the annual PDCA cycle at eachcompany, the Group provides support tailored to individual
situations.
As one of the results of the above activities, the dentsu Group(Japan) participates in the following external standards.
・"Eruboshi Certification"（three stars, the highest rank）: The
Goal, Dentsu Creative Force, Dentsu Digital, Dentsu Soken,
Dentsu East Japan, DENTSU AD-GEAR, CARTA, Dentsu PR
Consulting, Dentsu Kyushu, Dentsu Casting and Entertainment
・“Kurumin”： Dentsu Promotion Plus・“Platinum Kurumin”： Dentsu Creative Force, Dentsu Soken*All as of December 2023
(4) Promoting LGBTQ+ Understanding
・The Dentsu Group has already expressed its support for"Business for Marriage Equality", and Group companies inJapan have entered the "PRIDE Index" to promote the ease ofworking in the workplace, and are also actively implementing
measures based on the published index and promoting
understanding.
In the 2023 PRIDE Index, six companies - Dentsu Group Inc.,
Dentsu Inc., Dentsu Digital Inc., CARTA HOLDINGS Inc.,SEPTENI Group Inc. and Dentsu PR Consulting Inc. received"Gold" awards, and Dentsu Hokkaido Inc. received "Silver".
In addition, the Dentsu Group Inc. received for the first time the"Rainbow" certification, which recognizes companies that
promote collective impact-type initiatives.
・Since 2012, we have conducted the "LGBTQ+ Survey" fourtimes to understand the current situation and discover issues
surrounding LGBTQ+ in order to create a society where
everyone can live comfortably regardless of gender identity orsexual orientation. In October 2023, the fifth survey was
conducted, and based on the results of this survey, a digital
book, "Things I've Always Wanted to Ask You" was publishedwhich triggers dialogue in the daily lives of the concerned andnon-participating groups.

42

Ⅳ Items Pertaining to the Internal Control System
1. Basic policy on internal control system and their development status Updated
As of January 1, 2023, with the aim of contributing to the sustainable growth of Dentsu Group andthe enhancement of its corporate value over the medium to long term, the Company transitioned
to a global management system to realize accelerated business transformation and further
enhanced management. Further, pursuant to the approval made at the 174th Ordinary General
Meeting of Shareholders held on March 30, 2023, the Company transitioned from a “company with
an audit and supervisory committee” to a “company with three committees” in order to further
strengthen its corporate governance. By doing so, the supervisory function and the executivefunction have been clearly separated, and a system to accelerate decision-making and clarify theaccountability thereof and to strengthen the management supervisory function and further
enhance the transparency thereof has been established.
In connection with such transition, at the meeting of the Board of Directors held on March 30, 2023,
the Company passed a resolution on the establishment of systems set forth in Article 416,
paragraph (1), item (i), sub-items (b) and (e) of the Companies Act as its Basic Policy on Internal
Control. The details are as follows.
<Basic policy of internal control system>
The Internal Control System at the Group (meaning the Company and its subsidiaries;
hereinafter the same) is designed to encourage compliance among the Group’s Directors,
Executive Officers, Corporate Officers, and employees while it supports continuous corporate
development as the Company strives to meet its social responsibilities.
The Group shall aim to maintain and improve the Internal Control System by setting the“Dentsu Group Code of Conduct” as the common standard of acceptable behavior that must be
observed to ensure that the execution of duties by the Company’s Directors, Executive Officers
and other Group Management Team Members and employees, as well as subsidiaries’ Directors,
Corporate Officers, and employees (“Group Officers and Employees”), comply with laws,
regulations, and the Articles of Incorporation and that business operations are conducted
appropriately.
(1) Company will define matters that subsidiaries must establish and operate as members of theGroup, starting with the following items, and will ensure the appropriateness of operations
throughout the Group through proper support, oversight, and management by the Company as aholding company.
(i) The “Dentsu Group Code of Conduct” was drafted as the standard for acceptable corporate
behavior and embraces the entire Group, including subsidiaries. Each subsidiary passes a
resolution on the adoption of the Code.
(ii) Subsidiaries will define standards pursuant to the “Dentsu Group Code of Conduct”, and byresolution of a meeting of the Board of Directors, etc., will ensure compliance and risk
management as members of the Group.
(iii)In addition to receiving periodic reports from subsidiaries concerning the business operations,business results, and other significant matters that may have significant effect on thebusiness operation or business results of the Company, subsidiaries will request advanceapproval of the Company, consult with the Company, or report to the Company.
(iv) In order to ensure efficient and appropriate decision-making and business execution of thebusinesses, the Group Management Team is responsible for the management and oversight offour areas through the Group Executive Management Meeting: (i) Japan, (ii) Americas, (iii)
Europe, Middle East and Africa, and (iv) Asia Pacific.
(v) The Company will enforce the establishment and the operation of the system described in thefollowing on the subsidiaries.
(2) Compliance System for Group Officers and Employees
43

(i) The Company’s Directors, Executive Officers and other Group Management Team Members,
and subsidiaries’ Directors and Corporate Officers, must perform their duties appropriately,in accordance with rules such as the Board of Directors’ Rules, Rules for the Operation of theImportant Committees of the Group, Directors’ Rules, Executive Officers’ Rules, GroupManagement Team Members’ Rules, and Corporate Officers’ Rules.
(ii) If a Director, Executive Officer or other Group Management Team Member of the Company,
or a Director or Corporate Officer of a subsidiary, discovers a violation of the prevailing laws
or comes across any other serious compliance-related issue, it is imperative that he/shereports it without delay to the Board of Directors or the Important Committees of the Group.
The Audit Committee of the Company or Statutory Auditors, the Board of Statutory Auditors,
the Audit Committee, or the like of each group company must also be immediately advised of
the circumstances.
(iii)In order to foster a corporate culture of compliance and maintain and improve the Group’s
compliance systems, the Company’s Directors, Executive Officers and other GroupManagement Team Members shall take the initiative in establishing compliance-related
rules, and under the supervision of the Company’s Group Management Board, the Group
Compliance Committee shall monitor, among other things, the status of compliance, theenhancement of compliance measures, and the response to such measures at each groupcompany.
(iv) As channels available to the Group Officers and Employees, the Company has set up andproperly operates an internal reporting both inside and outside the Group that can beaccessed directly as well as a proposal system to respond appropriately in the event a law isbroken or some other internal compliance issue arises.
(v) If the Audit Committee of the Company or a Statutory Auditor, the Board of Statutory
Auditors, the Audit Committee, or the like of each group company states opinions on the
Company’s compliance system or requires steps to improve the system, Directors, Executive
Officers and other Group Management Team Members, and Directors and Corporate Officersof subsidiaries, must respond without delay and make the recommended improvements.
(vi) The Company has established a department to facilitate the termination of business
relationships with organized crime groups and elements thereof—termed "antisocial forces"—when a link is discovered and to resolutely refuse any and all future transactions. This
department functions as the liaison between the affected in-house divisions and the relevant
authorities to expedite an appropriate course of action.
(3) Systems to Ensure Efficient Execution of Duties by the Company’s Executive Officers andother Group Management Team Members, and the Directors and Corporate Officers ofsubsidiaries(i) In order for the Company’s Executive Officers and other Group Management Team Members,
and the Directors and Corporate Officers of subsidiaries to carry out their duties efficiently, in
addition to meetings of the Board of Directors, the Group Management Board, and the Group
Executive Management Meeting, meetings of various committees will be held in order tomake decisions on important matters pertaining to management policy and strategy
appropriately and expeditiously.
(ii) Items resolved at such meetings are transmitted to all employees through the corporate
structure for prompt reflection in the execution of duties. Urgent items are posted on theinternal electronic bulletin board in the interest of rapid dissemination.
(4) Storage and Management of Information Related to the Execution of Duties by the Company’s
Executive Officers and other Group Management Team Members, and Directors and Corporate
Officers of subsidiaries
Information concerning the execution of duties by the Company’s Executive Officers and otherGroup Management Team Members, and Directors and Corporate Officers of subsidiaries, is44stored and managed appropriately, in accordance with the Company's Documentation
Management Rules and Information Management Rules etc.
(5) Risk Management System(i) The Company’s Executive Officers and other Group Management Team Members establish
risk management regulations to minimize risks of future uncertainties that may hinder theachievement of the Group’s business objectives, and to take advantage of these asopportunities. The Group Risk Committee performs self-checks with regard to the situation ofrisk management under the Company’s Group Management Board, selects material risks to
be handled with priority, and implements risk management based on concrete response plans.
(ii) The response policy for material risks in management and other material items concerning
risk management are reported to the Board of Directors and the Audit Committee of theCompany or Statutory Auditors, the Board of Statutory Auditors, the Audit Committee, andthe like of each group company.
(6) Internal Structure to Support the Audit Committee and their Independent Status
The Company maintains an Audit Committee Office, which consists of employees who assist the
Audit Committee in their duties. This office reports directly to the Audit Committee, thereby
preserving its independence from Executive Officers and other Group Management Team
Members and effectiveness of instructions from the Audit Committee.
(7) System for Reporting to the Audit Committee and Improving Audit Effectiveness(i) Policies are in place to define issues that Group Officers and Employees (excluding Directors
who are members of the Company’s Audit Committee; hereinafter the same in thisparagraph) are required to report to the Audit Committee, while at the same time, the system
ensures that significant matters that have an impact on the Company’s business operations
or business results are reported by Group Officers and Employees to the Audit Committee ina certain and prompt manner.
(ii) In the event that the Audit Committee requests information other than that indicated above,
Group Officers and Employees and its subsidiaries are still required to respond without delay.
(iii)It will be ensured that parties who report under the condition of the previous items do notreceive harmful treatment as a result of reporting.
(iv) Pursuant to laws and regulations, a policy will be defined to account for expenses, etc.,
incurred during the course of execution of duties by the Audit Committee Members, and thisinformation will be disseminated to concerned parties.
(v) To enhance audit effectiveness, a system will be established to audit the Group as a whole by
the audit committees of organizations overseeing Japanese and overseas businesses,
respectively, together with the Company’s Audit Committee; the Company’s Audit Committee
will receive reports from such audit committees, and ensure collaboration with the Internal
Audit Functions and External Auditors.
(8) System to Ensure Appropriateness of Financial Reporting(i) The President and Chief Executive Officer (CEO), Chief Financial Officer (CFO), and Chief
Governance Officer (CGO) of the Company, under the supervision of the Board of Directors,
shall maintain and continuously improve a system that ensures appropriateness in financial
reporting by the Group.
(ii) The Company’s departments involved in business activities and subsidiaries shall performself-checks through the course of day-to-day operations to determine if internal controls arefunctioning properly, and the subsidiaries shall report the results thereof to the Company.
(iii)The Internal Audit Office shall monitor the Internal Control System from a perspective freeof operational bias to assess the effectiveness of internal controls related to financial
reporting.
45

<The Status of the Internal Control System>
In adherence to the Basic Policy on Internal Control stated in 1. above which has been resolved by
the Board of Directors, the Company is promoting the development and operation of an Internal
Control System upon establishing Internal Control System Management Rules, Risk Management
Policy, Document Management Rules, and other internal rules and regulations, holding meetingsof the Internal Control and Risk Committee and other committees, and with the department incharge of internal control serving as the core. The summary of operational status is as follows:(1) To provide that the Group’s operations are appropriate, the Company is working to make it
known through intranet and e-learning compliance training in accordance with revised the“Dentsu Group Code of Conduct”, as a code of conduct for Group employees. The Company
identifies applicable companies in advance, sets the rules to be followed as a corporate group,and requests each company to comply with them. At the end of a fiscal year, the Company
checks whether applicable companies in Japan and overseas are performing operations inaccordance with the aforementioned rules and calls for improvement if there are any issues.
(2) With regard to the internal control system for Group Officers and Employees, the GroupManagement Board, which is the supreme executive decision-making body, is responsible forestablishing and monitoring the operation of plans in line with the Basic Policy on the Internal
Control System and promotes the improvement of corporate behavior. The new position of
CGO, in charge of internal controls, compliance, risk management, and sustainability, wasestablished in 2023. The CGO is engaged in strengthening corporate governance andimproving disclosure.
(3) With regard to the compliance system, the Company has established the Group Compliance
Committee under the Group Management Board mainly to approve the Group’s basic policy
on compliance, approve and monitor the implementation of the compliance program and action
plan, direct the implementation of the compliance program and action plan in each region, as
well as approve improvement plans based on the results of monitoring and monitor the
implementation status of the plans.
In FY2023, the Company carried out a compliance risk assessment based on the Dentsu Group
Ethics and Compliance Program, which was established with the aim of achieving theCompany’s commitment to help realize a better society. In addition, it established the Dentsu
Group Personal Data Protection and Privacy Policy as well as the Dentsu Group Internal
Reporting Policy as new Group-wide policies related to legal affairs and compliance.
Accordingly, Speak Up@dentsu, which had already been established in the Americas, EMEA,
and APAC, was also adopted by dentsu Japan (where it was established in addition to theexisting compliance line) as a Group-wide internal reporting platform.
On May 15, 2023, in light of the incident related to the Tokyo 2020 Olympic and Paralympic
Games, the Company established the dentsu Japan Reform Committee, chaired by Hiroshi
Igarashi, the Company’s Representative Executive Officer, President & Global CEO, with theaim of fulfilling its responsibility to all stakeholders by reforming its approach to work. The
committee has since played a central role in promoting Group-wide initiatives under arecurrence prevention policy based on the Mindset and Behavior Reform.
In response to the recommendations of the “Report on Inappropriate Coordination, etc., onTokyo 2020 Olympic and Paralympic Games” from the Investigation and Review Committee
regarding to the Tokyo 2020 Olympic and Paralympic Games incident (Chair: Attorney,46

Masayuki Ikegami, former Supreme Court Justice), received on June 9, the Group
implemented the Mindset and Behavior Reform promoted by the dentsu Japan Reform
Committee in order to continuously improve the effectiveness of the Group’s efforts to prevent
recurrence of issues stemming from problems of fairness and transparency in theorganizational culture, legal and compliance matters, and business processes.
To raise awareness of social responsibilities and improve transparency, as well as clarify therules and processes that must be followed, the committee set forth three pillars ofcountermeasures: 1) the establishment of an organizational culture that ensures proper
corporate activities, 2) strengthening of the risk management system and legal/compliancefunctions, and 3) introduction of business processes that ensure fair and transparent
transactions. Based on these pillars, the Group is undertaking new measures such as ensuring
familiarity with the “Dentsu Group Code of Conduct” and pledges to comply with it, theappointment of compliance managers in each organization responsible for business execution,
training and education mainly on compliance with the Antimonopoly Act, preventing bribery
and corruption, and transactions involving conflicts of interest, the development anddissemination of guidelines for public business, sports business and other businesses.
(4) With regard to risk management, the Group Risk Committee was established in 2023. The
Committee is engaged in enhancing and controlling the Group-wide risk management function.
Through the Group Risk Committee, the Company operates the following items as “enterpriserisk management (ERM)” at the Group level, and they have been on the agenda of the Group
Executive Management Meeting; 1) identifying risks that impede the Company’s efforts toachieve its management targets, 2) evaluating identified risks, 3) specifying “material risk,”
which may have a significant impact on the Company, 4) formulating a plan to minimize such“material risk,” and 5) reporting progress in dealing with such “material risk.” In addition to
1) to 5) above, important matters such as the Group’s basic policy on risk management, risk
registers, risk sponsors (executives, etc.), risk response plans, and the status of risk
management in the Americas, EMEA, APAC, and Japan, are deliberated by the risk
committees in each region before being discussed by the Group Risk Committee and submitted
as agenda items or reported to meetings of the Group Management Board. Formulation andimplementation of plans to deal with risks are led by risk sponsors and each specialized
department on a companywide level.
(5) Regarding structures to ensure the appropriateness of financial reporting, in May 2023, in
response to the “Internal Control Reporting System" stipulated in Article 24-4-4 of the
Financial Instruments and Exchange Act, the Company formulated the “Basic Plan" which
provides the companies and business processes applicable for evaluation and the evaluation
system, etc., upon discussion with the Accounting Auditor. Following the Basic Plan, thedepartments executing the business applicable for evaluation and applicable group companies
confirm that internal control is implemented appropriately and functioning effectively in daily
operations and such companies make reports on such confirmation to the Company.
2. Basic Policy on the Rejection of Antisocial Forces and Status of its Development
The Company has established a dedicated section to facilitate the termination of business
relationships with antisocial forces and organizations and to resolutely refuse any demands
made by them. This section fulfills its role by liaising with relevant entities within and outside
the Company. Furthermore, following the nationwide enforcement of ordinances on the
exclusion of antisocial forces in October 2011, we revised various internal rules, established aframework to terminate business relationships with antisocial forces, and resolved to47

strengthen the screening procedures of antisocial forces.
V Other
1. Introduction of anti-takeover measures
Introduction of anti-takeover measures

None

2. Other Items Pertaining to the Corporate Governance Structure, etc.
An overview of the Company’s internal structures for the timely disclosure of its corporate
information are as described below.
(1) On our timely disclosure system
The Company has established a Disclosure Policy and discloses information in a timely,
accurate, and fair manner according to relevant laws and regulations such as the Financial
Instruments and Exchange Act of Japan, rules established by the stock exchanges on which
our shares are listed, and other relevant instruments.
Material facts, etc. concerning the Company and its subsidiaries are centrally managed by the
Information Management Committee based on the Rules for the Timely Disclosure ofInformation and Insider Trading and the Rules of the Information Management Committee.
The officer in charge of disclosure (person in charge of information handling) serves as thechairperson of the Information Management Committee, and the Group Corporate Secretary
Office serves as its secretariat. The Information Management Committee obtains information
within the Company based on the duty of notification of material facts, etc., described below
and determines the level of information management and the period of management for eachpiece of information as necessary. With respect to information that the Information
Management Committee considers may fall under the scope of material facts, the Information
Management Committee Secretariat identifies the Officers and Employees who have received
such information and, if necessary, requests the relevant Officers and Employees to submit awritten confirmation note on the receipt of information and the prohibition of equity tradingin order to ensure rigorous information management and to prevent insider trading until thedisclosure of such information.
(2) Timely disclosure systema. Comprehension of material facts, etc.
The rules mentioned above stipulate the duty to notify material facts, etc. as shown below.
(i) Facts Determined
If the head of any office handles any work that is likely to become a material fact, etc. of theCompany, he/she must immediately report its details to the officer in charge of disclosure,head of the Group Corporate Communication Office, or the Information Management
Committee Secretariat.
(ii) Facts Occurred
If any material fact, etc. other than in (i) above occurs, the head of the responsible section
must check such a fact and report its details to the officer in charge of disclosure, the head of
the Group Corporate Communication Office, or the Information Management Committee
Secretariat.
Additionally, the Group Corporate Communication Office endeavors to obtain information onmaterial facts, etc. through information exchange with relevant sections such as the Group
Strategy Office, the Group Corporate Secretary Office (Information Management Committee
Secretariat), and the Group FR/FP&A Office.
b. Disclosure of material facts, etc.
The Group Corporate Communication Office is the section in charge of information disclosure48

and announcements to news organizations.
The contents and timing of announcements are determined by consultations among thesections in charge of the information to be disclosed and the Group Corporate Communication
Office. With respect to material facts, etc., however, the officer in charge of disclosure makes
final decisions.
Announcements are made by the Group Corporate Communication Office to news
organizations based on the prescribed rules such as TD-NET. In addition, documents released
to news organizations are posted on the Company’s website promptly after the release to themedia.
Please see the Figure 4 "Timely disclosure system".

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Figure 1 Corporate Governance Structure

Figure 2 Directors Skills

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Figure 3 Reasons for selection as a skill set that will contribute to the management structure andenhancing shareholder value

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Figure 4 Timely disclosure system

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