Seibu : Corporate Governance Report (Updated on March 28, 2024)

Corporate Governance Report

March 28, 2024

Seibu Holdings Inc.

NISHIYAMA Ryuichiro, PresidentInquiries:Corporate Communication: +81-3-6709-3112

https://www.seibuholdings.co.jp/en/

The corporate governance of Seibu Holdings Inc. (hereinafter, the "Company") is described below.

• I. Basic Views on Corporate Governance, Capital Structure, Corporate Attributes and Other Basic Information

• 1. Basic views

  The Seibu Group strives to maximize corporate value and shareholder value by fulfilling its social responsibilities through its business activities and earning the trust of its shareholders, customers, and all other stakeholders based on its Group Vision, which incorporates its management philosophy and management policy, and the Seibu Group Code of Corporate Ethics, which sets forth the Group's fundamental rules on compliance. To further promote corporate governance, the Group works to improve management soundness and transparency, to raise the level of and to accelerate decision-making by management, centered on the Board of Directors, and to continuously strengthen the entire Group's internal control systems. In addition, to ensure the rights and equal treatment of shareholders, the Group engages in constructive dialogue with shareholders to improve corporate value and shareholder value over the medium-to long-term, and strives for timely and appropriate disclosure of information and appropriate cooperation with its stakeholders.

(1) Reasons for non-compliance with the principles of the Japan's Corporate Governance Code

The Company's statements are based on the Japan's Corporate Governance Code after its amendment in June 2021 and complies with the principles of that Code.

(2) Disclosure based on the principles of the Japan's Corporate Governance Code

====================================================================== The following items were updated.

• • Principle 3.1 Full Disclosure

• • Supplementary Principle 4.10.1 Nominating Committee and Remuneration Committee

• • Supplementary Principle 4.11.1 Policies and Procedures for Nominating Directors

• • Supplementary Principle 4.11.3 Analysis and Evaluation and Disclosure of Results of the Board of Directors' Effectiveness as a Whole ======================================================================

[Principle 1.4 Cross-Shareholdings]

The Company will hold shares in other stock companies (excluding subsidiaries and associates comprising the Seibu Group) if management makes the overall decision that doing so will contribute to improving the Seibu Group's corporate value over the medium to long term and help benefit stakeholders by strengthening a trade relationship and thereby generating business synergies, or yielding other advantages.

Each year, the Company comprehensively reviews the rationale for continuing to hold individual cross-shareholdings from a qualitative and a quantitative perspective. From a qualitative perspective the Board of Directors considers matters such as the notion of strengthening the trade relationship, business synergies in that regard, and potential going forward in light of changes in the Company's business environment and other factors, and from a quantitative perspective the Board of Directors considers matters such as whether or not capital efficiency indicators calculated on the basis of contribution to annual earnings (trading profit, dividends, etc.) exceed the Company's capital cost. The Company successively reduces holdings of shares for which results of the review indicate that rationale to retain such holdings is lacking.

When exercising its voting rights, the Company appropriately exercises such rights from the perspective of whether or not a proposal put forward by the company in question will contribute to improving the corporate value of the company in question and the Seibu Group over the medium to long term. The Company makes overall decisions to approve or disapprove of important proposals that could particularly affect the corporate value of the company in question and the Seibu Group, upon having engaged in dialogue with the company in question. Proposals that are to be deemed as important by the Seibu Group include the following.

• • Proposals involving election of Directors and Audit & Supervisory Board Members (in cases of prolonged slump in business results, misconduct, legal violations, etc.)

• • Proposals involving organizational restructuring

• • Proposals involving anti-takeover measures, etc.

[Principle 1.7 Related Party Transactions]

When the Company's Directors conduct related party transactions, including transactions involving conflicts-of-interest transactions and competitive transactions, etc., those Directors adhere to the Companies Act, the provisions of the Regulations on the Board of Directors and Rules on Directors, and in principle obtain the approval of the Board of Directors. When deliberating on such transactions, the Board of Directors carefully deliberates on whether the transaction is rational and its conditions are appropriate. Thus, the Board of Directors strives to ensure that the transaction does not harm the interests of the Company or the common interests of its shareholders, and to prevent any concerns with respect to such harm.

In addition, investigations are carried out in the Company on a regular basis in regard to related party transactions carried out by corporate officers in the Seibu Group and major shareholders in order to grasp and recognize related party transactions and stop transactions that are in conflict of interest with the interests of the Company or shareholders.

[Supplementary Principle 2.3.1 Measures to Address Sustainability Issues]

The Seibu Group operates diverse businesses such as the urban transportation and regional, hotel and leisure, and real estate businesses. To be a Group that is trusted and preferred by all stakeholders by fulfilling its social responsibilities and creating new activities and sensations, we conduct business activities that are sensitive to the natural environment and the global environment in accordance with the Group Vision and the Seibu Group Code of Corporate Ethics, which serve as codes of conduct for all employees. Furthermore, the Group conducts business activities with close ties to regions and society in order to advance together with its customers and with local communities.

The Group has positioned its measures related to these activities as "sustainability actions," and is working on 12 key objectives (materiality) in four categories: Safety, Environment, Community Engagement, and Corporate Culture. Through these efforts, the Group will work aggressively to contribute to maximizing corporate value from both risk management and CSV perspectives, starting with mitigation and adaptation to climate change.

The four categories and 12 key objectives are as follows:

Category 1: Safety (Agenda: 1. Ensure safety and reliability)

Category 2: Environment (Agendas: 2. Greenhouse gas reduction, 3. Waste reduction, 4. Ensuring water supply, 5. Protecting forest and species)

Category 3: Community Engagement (Agendas: 6. Invigoration of railroad corridor and local

communities, 7. Universal design, 8. Aging population and low birthrate)

Category 4: Corporate Culture (Agendas: 9. Work style reforms, 10. Recruiting diverse workforce, 11. Human capital development and management, 12. Compliance)

For details, please refer to the following website.

URL:https://www.seibuholdings.co.jp/en/sustainability/

The Seibu Group has prepared the Seibu Group Code of Corporate Ethics, which sets out five items: respect for human rights, customer-focused, compliance, obligation as a corporate citizen, and conduct of executives. In April 2022, the Group formulated the Seibu Group Human Rights Policy, which provides detailed explanation of the respect for human rights stipulated in that code, seeking to ensure that officers and employees and all stakeholders understand the policy, while also indicating the Group's stance on respecting human rights.

For details of the Seibu Group Human Rights Policy, please refer to the following website.

https://www.seibuholdings.co.jp/en/ir/management/governance/Human_Rights_Policy/

In November 2022, the Group formulated the Seibu Group's Sustainable Procurement Policy, which stipulates matters warranting the Group's compliance in regard to procurement, and also formulated the Seibu Group Supplier Guidelines, which stipulate matters for which the Group seeks cooperation from its suppliers who serve as its business partners, thus setting forth its stance on ensuring fair and appropriate transactions throughout the entire supply chain.

For details of the Seibu Group's Sustainable Procurement Policy and Seibu Group Supplier Guidelines, please refer to the following website.

https://www.seibuholdings.co.jp/en/sustainability/procurement/

In November 2019, the Group formulated the Seibu Group's Environmental Policy and is actively engaging in environmental initiatives as a group. Moreover, premised on its awareness that addressing climate change constitutes an urgent challenge, the Group revised and partially established medium- and long-term targets for reducing environmental impact in September 2022 with the aim of steadily reducing greenhouse gases attributable to climate change.

For details of the Seibu Group's Environmental Policy, please refer to the following website.

https://www.seibuholdings.co.jp/en/sustainability/environment/policy/

In addition, the Seibu Group has prepared a framework that enables risk identification, preemptive risk response, and rapid countermeasures in the event risk occurrence, based on the Seibu Group Risk Management Policy, the Seibu Group Rules on Risk Management, and the Seibu Group Rules on Crisis Management, which stipulate fundamental approaches and control frameworks for managing risk in the Seibu Group.

[Supplementary Principle 2.4.1 Ensuring Diversity]

(1) Approach to ensuring diversity

To generate innovation and increase corporate value amid labor shortages caused by population aging and dramatic changes in values regarding work, the Seibu Group needs to cultivate an organizational culture in which diverse individual employees of different genders, ages, nationalities, values, lifestyles, etc. are respected, enabling all employees to demonstrate their abilities and enthusiasm to the greatest extent. The Group considers that in cultivating such an organizational culture it is particularly important to ensure diversity in the management team, which makes up the core of management and conducts decision making, and has therefore set numerical targets for the ratio of female managers and is actively promoting the creation of an environment in which women can play a role. The Group is committed to ensuring diversity among its core human capital, including the aggressive recruitment of not only women, but also non-Japanese and experienced hires who have the requisite skills and experience.

Item

Current status Target (end of FY2025)

* Target values for the four core Group companies (Seibu Holdings, Seibu Railway, Seibu Prince

Hotels Worldwide, Seibu Realty Solutions)

(2) Human capital development policy for ensuring diversity, policy for establishing an internal environment, and status of their implementation

With enabling each and every diverse employee to grow and demonstrate their abilities and enthusiasm to the greatest extent as its basic policy for ensuring diversity, the Seibu Group advances various initiatives, such as human capital development and internal environmental improvement.

1) Encouraging women's career advancement

The Group is encouraging women's career development and reforming their awareness through the SEIBU Diversity College for female employees and their superiors. In addition, the Group holds women's forums on themes such as female-only physical ailments for women continuing to work, and strives to increase awareness through participation of managers regardless of gender. The Group also created the Reemployment Support Network to enable employees to find new positions at Group companies if they have to relocate due to the assignment of a spouse or caregiving, and established in-house childcare centers to

provide an environment where employees can balance their career with childrearing.

2) Establishing an environment that enables diverse workstyles

The Seibu Group is promoting workstyle reform by reviewing work time management and inefficient operations, using ICT and IoT to enable diverse workstyles. Specifically, the Group has introduced the telework system and flextime system to enable employees to produce high quality results efficiently without constraints on location or time. Going forward, the Group will continue working to realize diverse workstyles through workations and other such initiatives, as well as increasing productivity using robotic process automation (RPA).

The Group is also making efforts to create work environments that are conducive to balancing work and childcare with the establishment of a company-operated childcare center, Emi Kids, at the Seibu Railway Headquarters. The Group is also making a proactive effort to encourage men to take childcare leave, and is working to establish an environment that makes it easy for men to take childcare leave as well, including the distribution of "Men's Childcare Leave Point Book" to male employees whose spouses have given birth and to their managers.

In other efforts, the Group recognizes that there are cases where employees are obliged to choose retirement for reasons such as transfer of a spouse, nursing a family member, fertility treatment, and study abroad, and has established the "Reemployment Support Network" system for helping such employees to be reemployed by the Group companies and the "Come Back System," that enables employees to return to the company after leaving the company. These systems help employees to achieve long-term career development with peace of mind.

[Principle 2.6 Roles of Corporate Pension Funds as Asset Owners]

The Company has established a Retirement Benefit Plan Steering Council which consists of general managers and section managers from the Personnel Department, the Accounting Department, the Finance Department, and the Corporate Strategy Department. The council engages in discussions on matters that include management of plan assets, basic policies, ratios of policy-related asset holdings using ALM analysis, and institutions entrusted with managing assets. Moreover, all asset management institutions that the Company entrusts with managing plan assets have established systems for periodically monitoring and conducting quantitative assessment drawing on the knowledge of outside experts, subject to Japan's Stewardship Code. Voting rights with respect to the Company's shares are exercised in accordance with standards for decision-making of institutions entrusted with managing assets, and there are no matters involving conflict of interest in that regard.

[Principle 3.1 Full Disclosure]

(1) Management philosophy and business plans

The Company discloses the Group Vision, which acts as its management philosophy and provides guidelines for employee behavior, as well as the Seibu Group's Long-Term Strategy

and Medium-Term Management Plan. For details, please refer to the Company's website. URL:https://www.seibuholdings.co.jp/en/

(2) Basic views and policies on corporate governance

The Company's basic views on corporate governance and its associated policies based on the five general principles of the Japan's Corporate Governance Code are set out in the section of this report entitled "I. 1. Basic views."

(3) Policies and procedures for the Board of Directors in determining the remuneration of senior management and Directors

The remuneration system of the Company's Directors (excluding outside Directors) consists of basic remuneration and share-based remuneration (annual incentive and long-term incentive), in accordance with the Remuneration Policy for Directors of Seibu Holdings (hereinafter referred to as the "Policy" in this paragraph) stipulated by the Company, and the payment ratio of these is set so as to increase Directors willingness to contribute towards maximizing the business results, corporate value and shareholder value over the medium to long term by clarifying the link between remuneration for Directors and the medium to long-term improvement in business results and shareholder value. The remuneration of outside Directors consists of basic remuneration only, provided from the perspective of their roles and independence.

The Board of Directors determines the basic remuneration of a Director in accordance with the Director's duties and responsibilities, within the maximum total remuneration determined by resolution of the General Meeting of Shareholders. When the Board of Directors determines such matters, to ensure objectivity in making such determination, it consults with and receives advice from the Remuneration Advisory Committee, which is chaired by an independent outside Director and all of whose members are independent outside Directors. The Remuneration Advisory Committee carries out multifaceted deliberations by checking the consistency of the original proposal with the Policy and based on data from external research organizations to compare and examine the level of remuneration of relevant industries and corporate size. As such, the Board of Directors judges that the details of individual Directors' remuneration comply with the Policy.

The share-based remuneration for Director shall consist of a system through which the Directors receive the Company's shares, etc. annually while in office depending on their respective positions (annual incentive) and the degree of achievement of the performance goals and a system through which the Directors receive the Company's shares, etc. upon their retirement as Directors depending on their respective positions (long-term incentive). Advice from the Remuneration Advisory Committee, which all of whose members are independent outside Directors, is obtained to introduce the share-based remuneration system. The Board of Directors sets out the internal rules for deciding on the number of points granted to Directors in accordance with the balance with basic remuneration, their duties, responsibilities, and the

degree of achievement of the performance goals, within the maximum total number determined by resolution of the General Meeting of Shareholders in order to increase their morale and motivation.

For the annual incentive, the number of points granted to Directors will be decided in accordance with their duties, responsibilities, and the degree of achievement of the performance goals within the maximum total number determined by resolution of the General Meeting of Shareholders based on internal rules.

For the long-term incentive, the number of points granted to Directors is decided in accordance with their duties and responsibilities within the maximum total number determined by resolution of the General Meeting of Shareholders based on internal rules.

(4) Policies and procedures for the Board of Directors in appointment or dismissal of senior management and nominating candidates for positions as Directors and Audit & Supervisory Board Members

When nominating the candidates for the position of Director, the Board of Directors nominates candidates for reappointment following deliberation of whether the individual deserves to be reappointed on the basis of his/her contribution to corporate value and other aspects of the Company during his/her term of office. New candidates for appointment are nominated following deliberation of whether the individual has outstanding character and insight, and is a talented individual who can contribute to increasing corporate value. When deciding on new candidates, the Board of Directors deliberates on whether the overall Board of Directors has the knowledge, experience, and ability to fulfill its roles and responsibilities effectively, and decides so that the scale of the Board will be appropriate, while giving consideration also to diversity, including the gender, nationality, career history, and age of each candidate.

The Board of Directors makes decisions after having consulted with the Nomination Advisory Committee, which is chaired by an independent outside Director and all of whose members are independent outside Directors, to ensure objectivity and transparency concerning the decision of candidates for the position of Director.

Matters relating to policies and procedures for dismissal of Directors are stipulated in the Rules on Directors. Accordingly, if a Director acts in a manner that raises suspicions of fraud, illegality or perfidy, or if a Director lacks competence or otherwise acts in a manner unbecoming of a Director, then the Board of Directors is to call for the resignation of the Director or convene a General Meeting of Shareholders where a proposal is submitted calling for his or her dismissal.

Audit & Supervisory Board Members, meanwhile, occupy a highly independent position and their duties entail auditing the execution of duties of the Directors. Bearing that in mind, the Board of Directors decides on candidates for the position of Audit & Supervisory Board Member following deliberation of whether or not the candidate has the keen insight and abundant experience, knowledge, and other attributes necessary to fulfill his/her duties. Before making its decision, it obtains consent of the Audit & Supervisory Board with regard to the

candidate in question. Furthermore, when doing so, the Board selects people who have knowledge of finance, accounting, or legal affairs, and in particular at least one person with sufficient knowledge of finance and accounting.

(5) Explanation of individual appointments or dismissal of senior management and nominations of candidates for the positions as Directors and Audit & Supervisory Board Members by the Board of Directors based on (4) above

In the process of nominating or dismissing Directors and Audit & Supervisory Board Members, the Board of Directors resolves whether to approve the nomination or dismissal of such candidates, after deliberating on the reasons for their nomination or dismissal. Then by including the reasons for nomination or dismissal in the Reference Documents for the General Meeting of Shareholders, the Company ensures full transparency for shareholders and other stakeholders.

[Supplementary Principle 3.1.3 Sustainability Initiatives, TCFD and Equivalent Frameworks, and Investments in Human Capital, Intellectual Property, Etc.]

The Seibu Group operates diverse businesses such as the urban transportation and regional, hotel and leisure, and real estate businesses. To be a Group that is trusted and preferred by all stakeholders by fulfilling its social responsibilities and creating new activities and sensations, we conduct business activities that are sensitive to the natural environment and the global environment in accordance with the Group Vision and the Seibu Group Code of Corporate Ethics, which serve as codes of conduct for all employees. Furthermore, the Group conducts business activities with close ties to regions and society in order to advance together with its customers and with local communities.

The Group has positioned its measures related to these activities as "sustainability actions," and is working on 12 agendas (priority themes) in four domains: Safety, Environment, Society, and Corporate Culture. Through these efforts, the Group will work aggressively to contribute to maximizing corporate value from both risk management and CSV perspectives, starting with mitigation and adaptation to climate change.

The four categories and 12 key objectives are as follows:

Category 1: Safety (Agenda: 1. Ensure safety and reliability)

Category 2: Environment (Agendas: 2. Greenhouse gas reduction, 3. Waste reduction, 4. Ensuring water supply, 5. Protecting forest and species)

Category 3: Community Engagement (Agendas: 6. Invigoration of railroad corridor and local communities, 7. Universal design, 8. Aging population and low birthrate)

Category 4: Corporate Culture (Agendas: 9. Work style reforms, 10. Recruiting diverse workforce, 11. Human capital development and management, 12. Compliance)

For details, please refer to the following website.

URL:https://www.seibuholdings.co.jp/en/sustainability/

The Company also recognizes climate change as a material risk, and is taking steps to respond to it.

Please see the Company's website for the quantitative and qualitative impacts derived from scenario analysis and response measures based on the TCFD recommendations.

URL:https://www.seibuholdings.co.jp/en/sustainability/climate_change/

The Group formulated the "Seibu Group Human Resource Strategy Basic Concept" in conjunction with its management plan, under the slogan of "Bringing smiles to both our customers and employees" with respect to human capital. Through this concept, the Group aims to become a professional organization by focusing on creating and securing of human resources in conjunction with the management plan, as well as improving engagement by allowing each employee to grow and maximize their abilities.

The "Seibu Group Human Resources Strategy Basic Concept" defines six strategic themes: "visualization of human resources," "employee satisfaction (ES) improvement," "strengthening management," "creation and refinement of human resources," "promoting diversity," and "management human resource development." The Group will clarify the basic policies for each human resources management priority (compensation, placement, training, recruitment, and labor relations) and implement each measure in order to enhance the effectiveness of these strategic themes. Specifically, after clarifying the skills required for each business and job, the Group will support employees in independently improving their skills and achieving their career visions by effectively utilizing off-JT and learning outside the company in addition to OJT. In terms of career paths, the Group will promote employees based on their abilities and achievements regardless of factors such as age, length of service, and gender, and actively promote young employees and female employees to match their preferences with the Group's expectations in order to assign the right people to the right jobs for their growth.

In addition to hiring new graduates, the Group will actively hire experienced workers to secure the human resources it needs, promote flexible work styles according to the business so that a diverse range of employees can play an active role, and create an environment that enables employees to lead healthy and happy lives. The Group will also promote diversity and inclusion in order to maximize the results of the above human resources management priorities.

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Seibu Holdings Inc. published this content on 28 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 March 2024 01:06:56 UTC.