Sansan : Corporate Governance Report December 13, 2021

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

since the bias of attributes depending on occupation including Engineer exists as an external factor and in order to provide all employees with fair opportunities for assessment and promotion. However, considering the situation of ensuring diversity, we are deepening our awareness of issues, particularly with regard to the ratio of women and the ratio of women in management positions, in order to achieve a higher level than the current level.

[Supplementary Principle 3.1.3 Disclosure, Etc. Based on TCFD Recommendations]

The Company regards addressing climate change-related issues as an extremely important initiative to ensure stable development of the economy and secure a foundation for the livelihoods of people. To this end, the Company is taking actions such as strict energy-saving and reduce greenhouse gas emissions by digitizing documents, etc., as well as allocating a part of its revenue to tree-planting activities, and we are contributing to the establishment of a circular economy toward a decarbonized society. However, the Company does not make any disclosure, etc. based on TCFD recommendations at this time, we recognize the necessity and importance of the framework and will continue to consider establishing our internal system and operations in terms of governance, strategy, risk management, indicators and goals.

[Supplementary Principle 4.1.3 Succession Plan]

The Company regards a succession plan for the CEO and other top executives as an important issue in the long term and believes that it is a matter that should be considered going forward.

[Supplementary Principle 4.10.1 Use of Optional Approach]

The Company is a company with Audit & Supervisory Committee and seeks to enhance overall governance functions of the Board of Directors by multilaterally utilizing the monitoring function of the Audit & Supervisory Committee that consists only of Outside Directors. In addition to the fact that half of the Audit & Supervisory Committee consists of women, each of the Outside Directors has a wide range of abundant knowledge and experience, and we believe that we have established an adequate system in terms of diversity and skills, including gender.

Based on these situations, in order to avoid issues arising from setting up organizations whose purposes overlap, such as an issue of making a decision-making process complicated or conflicted, the Company considers that it has no need to separately set up any optional advisory committees that mainly consist of Independent Outside Directors.

The Audit & Supervisory Committee deliberates on the appointment and dismissal of Directors, and the Company has a policy of deciding the details of individual remuneration for Directors after confirming the intentions of all Outside Directors, in order to establish a system for appropriate involvement and advice.

[Disclosure Based on Principles of the Corporate Governance Code] Updated

[Principle 1.4 Cross-Shareholdings]

From the viewpoint of corporate governance, the Company will not conduct cross-shareholdings for the purpose of merely securing stable shareholders. If the Company conducts cross-shareholdings, the Company will do so only after the Board of Directors examines whether the cross-shareholdings are reasonable and appropriate.

[Principle 1.7 Related Party Transactions]

The Company has established the Rules on Management of Related Party Transactions and strictly operates and properly monitors transactions through a system where an authorized person specified in the Company's internal rules approves those transactions

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English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

in advance with respect to appropriateness of the details and decision methods of those transactions, and the Company subsequently, after the approval, receives reports on the status, etc. of those transactions.

Even for transactions other than those specified above, the Company checks where there were any transactions with its directors and their close relatives by conducting an individual examination on directors once a year. Moreover, the Company properly discloses related party transactions in accordance with the provisions of the Companies Act, the Financial Instruments and Exchange Law and other applicable laws and regulations as well as the rules of the Tokyo Stock Exchange.

[Supplementary Principle 2.4.1 Ensuring Diversity in the Promotion of Core Human Resources]

In order to realize the Group's stated mission and vision and to accelerate business growth, the Company believes that it is vital to maximize the growth of each and every employee and continue sustainable growth. Thus, the Company is working on initiatives aimed at developing the environment and formulating human resource strategies also from the perspective of ensuring diversity, to maximize the productivity of the Company and its employees. Under the policy to aggressively recruit and promote outstanding talents regardless of attributes such as gender, nationality, and disabilities, the Company provides all employees fair opportunities for assessment and promotion.

With respect to the status of ensuring diversity as of the first day of the month preceding the filing of this Report, females accounted for 34.8% of all employees, and the share of females at managerial positions was 14.4%. The percentage of foreign employees was 2.8%.

As the Company provides all employees fair opportunities for assessment and promotion, it does not establish target values for each attribute since the bias of attr butes depending on occupation including Engineer exists as an external factor. However, considering the situation of ensuring diversity, we are deepening our awareness of issues, particularly with regard to the ratio of women and the ratio of women in management positions, in order to achieve a higher level than the current level.

For the Group to achieve sustainable growth, it is crucial that we hire many talented professionals with diverse career backgrounds, and then improve our sales, development, and managerial structures. In order to establish work environments and arrangements that substantially fuel employee motivation for talented professionals who share an understanding of the Group's corporate philosophy and business activities, we allow our staff to work remotely under certain conditions regardless of the COVID-19 pandemic to support flexible workstyles, and introduced the "Strength Matching" system to objectively analyze, recognize, and share the strengths of each and every employee, and the Peer Bonus system. The Company is developing frameworks that will enable our people to respect each other's diversity and advantages, and the Company to synergize their ability to contribute to the organization and business by utilizing the capabilities of employees in a timely and appropriate manner. Also, as initiatives to respect and foster unrestricted ideas and the willingness to take on challenges in employees, we introduced such systems as "Many Projects" employee-originated project system and "Geek Seek" engineering skills promotion system, through which we establish a framework to encourage employees to develop their capacity on their own initiative. Moreover, regarding the point of supporting the active participation of women who bear a greater burden on account of pregnancy, childbirth, and childcare, the Company is aiming to create an environment in which it is easy to work regardless of gender. To support the early return to work of women taking maternity leave and childcare leave, the Company has a support system for their children to enter and attend nursery schools by providing

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English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

allowance to pay the full tuition for nursery schools and aid for taxi fares, and a system to provide aid for babysitter fees with the aim of supporting employees to balance parenting and work.

Also, to respond to the increase in employees of foreign nationality, we are developing an environment in which our people, regardless of nationality, can understand and cultivate the Company's mission and status, for example, by making it a general rule to include an English translation for any group-wide notices.

[Principle 2.6 Roles of Corporate Pension Funds as Asset Owners] The Company has no corporate pension fund plan.

[Principle 3.1 Full Disclosure]

(i) Corporate philosophy, etc.

The Company's corporate philosophy, code of conduct, "The Katachi of Sansan," and management strategies, etc. are described on the Company's website (https://corp-sansan.com/) and its Annual Securities Reports (available in Japanese only) posted on the website.

(ii) Basic views and basic policies on corporate governance

For the Company's basic views and basic policies on corporate governance, please refer to "I. 1. Basic Approach" in this Corporate Governance Report.

(iii) Policies and procedures in determining remuneration for directors

The Company's Board of Directors adopted a resolution at its meeting held on February 16, 2021 regarding the policy for deciding the details of remuneration, etc. for Directors. The amount of remuneration for Directors who are Audit & Supervisory Committee Members is decided following discussion by all Audit & Supervisory Committee Members within the limit of the total remuneration amount resolved at the General Meeting of Shareholders. In addition, at the meeting of the Board of Directors held on May 18, 2021, a resolution was passed to change the method of determining the details of individual remuneration, etc. for Directors (excluding those who are Audit & Supervisory Committee Members) from delegation to Representative Directors to determination by resolution of the Board of Directors. At the time of the resolution by the Board of Directors, the Company will consult with the independent officers regarding the details of the resolution in advance and receive their report. As a result, from the 15th fiscal year onward, decisions on the details of individual remuneration, etc. for Directors (excluding those who are Audit & Supervisory Committee Members) are made by resolution of the Board of Directors.

The details of the decision policy regarding the details of individual remuneration, etc. for Directors are as follows.

a. Policy for determining the amount or calculation method of individual remuneration, etc. of Directors regarding basic remuneration (fixed monetary remuneration)

The amount of individual basic remuneration for Directors (excluding those who are Audit & Supervisory Committee Members) shall be updated and determined each fiscal year within the limits of the total amount of remuneration resolved at the General Meeting of Shareholders, taking into consideration the responsibilities and business execution status of each Director and the Company's performance and economic conditions.

The amount of individual basic remuneration for Directors who are Audit & Supervisory Committee Members is decided following discussion by all Audit & Supervisory Committee Members within the limit of the total remuneration amount resolved at the General

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English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

Meeting of Shareholders.

b. Introduction and decision policy for performance-linked remuneration and non-monetary remuneration

The introduction of a performance-linked remuneration plan or a non-monetary remuneration plan for individual Directors shall require a resolution of the Board of Directors.

When introducing such a remuneration plan, the Board of Directors shall also pass a resolution on the details of the plan, the policy for determining the amount (calculation method), and the ratio of each form of remuneration that constitutes the individual remuneration, etc.

c. Policy for determining the timing and conditions of payment and grant of remuneration, etc. to Directors

The remuneration, etc. of Directors shall, in principle, be fixed remuneration on a monthly basis. This shall not apply in cases where expenses to be paid as remuneration are separately incurred.

d. Matters concerning the delegation of decisions on remuneration, etc.

Individual remuneration, etc. of Directors (excluding those who are Audit & Supervisory Committee Members) shall be determined by resolution of the Board of Directors, and shall be subject to approval by a majority of the Directors and all Outside Directors. As a means to incentivize Directors apart from the remuneration system, the Company has introduced the Stock Acquisition Rights Trust and the Performance Target-linked Stock Acquisition Rights (Stock Options with Charge), which aims to provide an incentive to current and future Directors of the Group to improve corporate value over the medium to long term. The number of shares distributed to each eligible recipient is decided based on their position, expected role (mission grade), etc.

(iv) Policies and procedures in nomination of candidates for directors and dismissal of directors

The Company stipulates in the Articles of Incorporation that the number of directors (excluding Audit & Supervisory Committee Members) shall not exceed 8 and that the number of directors who are Audit & Supervisory Committee Members shall not exceed

5. The Company appoints members who constitutes the Board of Directors, taking into account the balance between experience, knowledge and skills and diversity. Currently, the Company has 9 Directors (male: 7, female: 2), 3 of whom are Independent Outside Directors.

In nominating candidates for directors (excluding Audit & Supervisory Committee Members), the Company nominates, based on its policy, persons who have extensive knowledge and experience in the relevant business, are expended to greatly contribute to the Company through the relevant business, fulfill their duties as directors and contribute to improving corporate value.

In nominating candidates for directors who are Audit & Supervisory Committee Members, the Company nominates, based on its policy, persons who are expected to offer opinions on overall management leveraging their knowledge on corporate management based on their extensive business experience, such as persons who have experience of serving as officers of other companies and legal experts who are familiar with corporate legal affairs and compliance matters.

In appointment procedure for directors (excluding Audit & Supervisory Committee Members), Representative Director & CEO proposes persons who meet the requirements of the Company's policy as candidates for directors and obtains an opinion of the Audit & Supervisory Committee. Then, the Board of Directors discusses and submits such proposal to the General Meeting of Shareholders for resolution.

In appointment procedure for directors who are Audit & Supervisory Committee Members, Representative Director & CEO proposes persons who meet the requirements of the Company's policy as candidates for directors and obtains consent of the Audit & Supervisory Committee. Then, the Board of Directors discusses and submits such proposal to the General Meeting of Shareholders

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