The Company and the Group position corporate governance as the most important foundation for facilitating good corporate behavior. The Company and the Group uphold “improving efficiency,” “securing soundness,” and “enhancing transparency” of corporate management as its basic policy for corporate governance. On this basis, the Company and the Group make determinations on important management issues, including the appointment of director candidates, determining director and auditor remuneration, and management oversight.

By establishing a prompt and appropriate decision-making process and improving the efficiency of corporate management, the Company aims to maximize its corporate value, thereby striving to provide appropriate returns to various stakeholders, including shareholders.

Amid significant changes in the business environment, to maximize the Company’s corporate value, the Company and the Group will appropriately recognize and manage the various risks surrounding the Company and the Group. The Company and the Group will strive to secure sound management by establishing a system (compliance system) to ensure compliance not just with laws and regulations, but with ethical standards and societal norms.

With the growing importance of information disclosure for companies, the Company and the Group will fulfill their accountability to all stakeholders, including shareholders, and further improve disclosure through proactive engagement in IR activities, thereby cultivating highly transparent management.

To further promote productive discussions by the Board of Directors and to strengthen its oversight functions, the Company has chosen the structure of a company with an Audit and Supervisory Committee.

This will allow it to delegate a considerable portion of important decisions on business execution to executive directors. In addition, by considering that directors with a wealth of knowledge and experience regarding the industry, market trends, products, merchandise, services, etc. can generate prompt and optimal management decisions, the Group companies have chosen the structure of a company with company auditors. The Company and the Group also appoint external directors and strengthen the executive officer and internal auditing systems, thereby improving corporate governance from the aspects of both oversight and execution.

At ordinary Board of Directors meetings held once a month in principle and extraordinary Board of Directors meetings held as appropriate, the Board of Directors aims to achieve flexible management through the current level of 13 directors. Certain important managerial matters at each business company are also resolved or reported at various bodies, including the Company’s Board of Directors.

The Audit and Supervisory Board consists of four Audit and Supervisory Committee members and holds its meetings generally once a month, or when otherwise necessary. The Audit and Supervisory Committee assigns duties to respective Audit and Supervisory Committee members, and deliberates on key matters for consideration such as those involving the status of establishing and operating the Group’s corporate governance and internal control systems, and evaluations of the independent auditor.

Voluntary Committees are the bodies that discuss and inspect the specified matters regarding the management of the Group which are specifically referred by the Board of Directors, and report and submit the results of such discussions and inspections to the Board of Directors. The following two Voluntary Committees have also been established: an Independent Advisory Committee and a Group Management Committee. In addition, the Group Sustainability Subcommittee and the Group Risk and Compliance Subcommittee are established as bodies that discuss and inspect further specialized matters.

Considering the recent environment surrounding AI, we established the Group AI Subcommittee starting in April 2026 to conduct discussions and evaluations focused on AI advancement and governance.

The Company shall perform analyses and evaluations of the effectiveness of the Board of Directors each year to ensure that the Board of Directors effectively fulfills its roles and responsibilities to “improve efficiency,” “secure soundness,” and “enhance transparency” of the Company’s corporate management.

For the fiscal year ended March 31, 2026, the Company evaluated the effectiveness of the Board of Directors via questionnaires sent to all directors to ascertain the expectations and issues identified by each Director in his or her efforts to enable the Board to better contribute to the Company’s sustained growth.

These questionnaires were used to confirm various matters deemed important in the Board’s roles and responsibilities, including Board composition, management, and the status of deliberations concerning strategy, as well as the effects of initiatives to address issues identified during the previous fiscal year ended March 31, 2026. To ensure objectivity, the Company had an external organization design the questionnaire and analyze and evaluate the responses. Additionally, the Company confirmed performance of each external director.

Based on the report on the results of the questionnaire prepared by the external organization, deliberations took place at meetings of the Board of Directors on various topics, including the effectiveness of the Board of Directors during the fiscal year, where issues might lie, and responses to such issues.

As with the fiscal year ended March 31, 2026, an evaluation of efficacy found that the Board of Directors performed its roles and responsibilities appropriately and functioned effectively.　Recognized as key strengths of the Board of Directors were its diverse membership and the manner in which it ensures the efficacy of its activities through a full range of secretariat support and constructive dialogue with shareholders and investors, based on an effective internal controls infrastructure.

The risk management system was judged to show improvements following efforts to share risk information with the Board of Directors and the Group Management Committee. At the same time, the need was identified for further refinement of monitoring of Group companies, and, in recognition of the importance of this topic, the decision was made to maintain such efforts.

Efforts to establish opportunities for deliberations on resource allocation within the entire Group and other key issues were carried over from the preceding year. Nevertheless, assessments identified the need to further expand the time set aside for deliberations and to clarify the points at issue. In recognition of the importance of this topic, the decision was made to maintain efforts to enhance deliberations.

Efforts were made this year to undertake deliberations based on the need for consistency with the Group’s overall strategies. Despite the trend toward more in-depth deliberations, there appears to be a need to expand the time set aside for further deliberations. Accordingly, the decision was made to have the Board of Directors and secretariat formulate an annual agenda to enhance deliberations.

Despite the establishment of opportunities for deliberations on human capital strategy this year, the actual deliberations are expected to take some time when taking into account differences in the business characteristics. In recognition of the importance of this topic, the decision was made to maintain efforts to both enhance and increase the opportunities for deliberations.

In addition to the above topics, this year’s evaluation identified as new topics requiring consideration efforts to enhance oversight for M&A activities and the composition of the Board of Directors.

Having acknowledged these issues, the Company will strive to allow the Board of Directors to function even more effectively.

The Company has formulated a skills matrix based on the experience and knowledge required for management of a listed company and the experience and knowledge required to achieve the Company’s long-term vision. The basic policy calls for selecting and determining director candidates based on comprehensive assessment of both character and fit with the skills matrix. The Independent Advisory Committee examines a proposal for such candidates submitted by the President (Representative Director), conducts interviews and the like with such candidates, and submits the evaluation results as its opinion to the President (Representative Director). Based on these evaluation results, the President (Representative Director) judges the director candidates in accordance with the above-mentioned policy. The Board of Directors then discusses and approves such judgment. The same applies when the Independent Advisory Committee recommends director candidates to the President (Representative Director).

If a director is deemed unable to perform his or her duties due to mental or physical incapacity or if a material fact such as misconduct or violation of laws, regulations, or the Articles of Incorporation is recognized in the performance of his or her duties, the Independent Advisory Committee shall deliberate to determine the appropriate action in a timely manner. Base on the results of such deliberation compiled in a report to the Board of Directors, the appropriate action with regard to the director shall be determined by the Board of Directors.

The Company selected experience and knowledge required as a publicly traded company, along with those that are required to achieve the long-term vision of the Company

Reasons for Appointment of Directors and Attendance at Board Meetings for the 22nd Ordinary General Meeting of Shareholders is as follows.

The Company’s compensation system for directors and Audit & Supervisory Board members is designed to ensure transparency and provide greater incentive to increase corporate value. The compensation system for directors (excluding directors who are Audit and Supervisory Committee members and external directors) is determined based on the following basic policy.

1. The system must increase management’s focus on shareholder interests and sharing value with shareholders.
2. The system must clarify the responsibilities of management in improving the corporate value of the Group.
3. The system must function as an incentive to support the sustained growth of the Group.
4. The system must have compensation levels for ensuring and maintaining excellent human resources appropriate for executing the roles and responsibilities of directors of the Company.

Based on the basic policy, the remuneration system for Directors of the Company (excluding Audit and Supervisory Committee Members and External Directors) includes fixed remuneration, Directors’ bonuses, and restricted stock units.

SEGA CORPORATION and Sammy Corporation have adopted similar remuneration structures. All remuneration for a Director serving concurrently as Representative Director, President, and CEO of both companies is paid in compliance with the respective officer remuneration systems of both companies.

A compensation table shall be formulated specifying the compensation amounts for each component, namely, basic compensation and role-based compensation, and the Company shall provide the sum of these components as monthly fixed compensation.

Directors’ bonuses are paid as performance-linked remuneration in the amount determined by multiplying the above fixed remuneration by coefficients calculated based on a bonus table that defines the number of months of Directors’ bonuses based on three elements: the level of the adjusted EBITDA; level of business plans achieved; and the year-on-year growth.

The Ordinary General Meeting of Shareholders held June 25, 2024 resolved to adopt a system of remuneration through restricted stock units for Directors (excluding Audit and Supervisory Committee Members and External Directors; “eligible Directors” hereinafter) to further align the long-term interests of Directors with long-term shareholder interests and to provide incentives for increasing corporate value over the medium to long term. This program will supplant the system of share-based remuneration with restrictions on transfer for eligible Directors; eligible Directors will be issued shares of Company common stock allotted over a certain period of time. Upon comprehensive consideration of the contributions and various other factors of the Eligible Directors, a limit for the total amount of compensation and the number of shares would be set for each Performance Share Units (PSU) and Restricted Share Units (RSU) in relation to the Plan for Eligible Directors. In addition, the Board of Directors will decide on cumulative remuneration in the three business years of the Medium-term Management Plan so that the ratio of fixed remuneration, single-year bonuses reflecting business results, and restricted stock units is roughly 1:1:1 if the targets of the Medium-term Management Plan are achieved.

For details on the executive compensation system, please refer to the securities report. (Only available in Japanese)

To improve governance within the Company and the Group, the Company has established a Group Risk and Compliance Promotion Committee and deliberates on and reviews any problems related to the establishment of internal controls for Group management and progress thereon, striving thereby to maintain and improve the corporate governance system.

The Group established a scheme for evaluation and reporting of the internal control system required for corporate groups under the system of Internal Control Reporting System Relating to Financial Reporting (the Japanese Version of the “SOX Act”) as stipulated in the Financial Instruments and Exchange Act, and remedied inadequacies discovered in the course of conducting such evaluation. The Group will continue to strive to assure continuing trust/reliability in its financial reporting and to maintain and refine its internal control systems, taking into account the goals of improved efficiency and soundness.