Astellas Pharma : Corporate Governance Report

	CORPORATE GOVERNANCE REPORT	Astellas Pharma Inc.
	Date of last revision:	December 6, 2021

Astellas Pharma Inc. Kenji Yasukawa Representative Director, President and CEO

Contact: Corporate Advocacy & Relations Tel: [phone] Securities Code: 4503 https://www.astellas.com/en

The status of corporate governance of Astellas Pharma Inc. (the "Company") is as follows:

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

1. Basic Views

The Company's raison d'être is to contribute to improving the health of people around the world through the provision of innovative and reliable pharmaceutical products. The Company aims to sustainably enhance enterprise value by being chosen and trusted by all stakeholders. With this business philosophy, we work to ensure and strengthen the effectiveness of corporate governance from the following perspectives:

1. Ensuring transparency, appropriateness and agility of management; and
2. Fulfillment of our fiduciary duties and accountability to shareholders and appropriate collaboration with all stakeholders.

The Company has established the "Corporate Governance Guidelines" which identifies the fundamental concept and guidelines of the Company's corporate governance. Please refer to the Company's website.

https://www.astellas.com/jp/en/about/governance

[Reasons for not implementing the following principles of the Corporate Governance Code] Updated

The Company implements all the principles of the Corporate Governance Code after its revision in June 2021. (including principles for companies listed on the Prime Market that are scheduled to be applied from April 2022 onward.)

[Disclosure based on each principle of the Corporate Governance Code] Updated

[Principle 1-4Cross-Shareholdings]

The Company does not acquire or hold the shares of other companies except in cases where such acquisition or shareholding is considered reasonable from a business strategic perspective, such as business partnership.

The rationale of each shareholding is examined annually by the Board of Directors from the viewpoint of the Company's medium- to long-term business strategies. The Company sells the shares for which there is insufficient rationale of shareholding. The Company confirms the appropriateness of continuing to hold shares on the basis of the policies below.

• As a general rule, the Company holds shares it has acquired in connection with a business partnership for as long as the purpose of that acquisition prevails, and sells such holdings when that purpose ceases to exist.
• The Company sells other shares based on the appropriate timing and method.
• The Company continues to hold shares when it is difficult to carry out the sale of the shares according to the Company's plans because of reasons such as poor liquidity.

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	CORPORATE GOVERNANCE REPORT	Astellas Pharma Inc.

With regard to the exercise of voting rights of shareholdings, the Company appropriately exercises them judging from the viewpoint of increasing shareholder value of the issuing company, on the condition that such exercise of the voting rights contributes to increasing the Company's enterprise value.

The Company has been reducing its shareholdings since 2005. The Company has sold 93 of the 106 stocks it had held in April 2005 (total proceeds from sales: ¥89.2 billion), 2 of which were sold during the business year ended March 31, 2021. As of March 31, 2021, the Company maintains equity holdings amounting to 22 stocks, at a recorded value of ¥27.8 billion on the balance sheet. The Company will continue to reduce its shareholdings going forward.

[Principle 1-7 Related Party Transactions]

The Company endeavors to prevent officers and other personnel concerned from using their positions in order to enter into transactions that conflict with the interests of the Company or the common interests of its shareholders.

Directors intending to engage in transactions with the Company for themselves or for a third- party must receive the approval of the Board of Directors for the said transaction in accordance with the Board of Directors Policy.

[Supplementary Principle 2-4-1]

Astellas ("Astellas" refers to the entire Astellas Group; the same shall apply hereinafter) is working to promote diversity and create an environment in which individuality is valued and diverse individuals can play a role, irrespective of race, nationality, gender or age. We believe that respecting and making the most of the diverse values, approaches, backgrounds, etc. of our employees not only heightens creativity in our organization, but also helps to attract and retain talented people as employees and enhances our competitiveness.

Astellas follows practices that promote equal employment opportunities and provides employees with various opportunities to improve their skills and abilities. All of our decision- making related to employment (hiring, promotions, personnel performance evaluations, training, career development, etc.) is conducted based on appropriate criteria (skills, abilities, experience, aptitude, achievements, motivation, etc.) according to the type of work.

We confirm whether these practices are properly being followed based on the performance in each situation. We implement measures led by its HR functions in each region to promote diversity tailored to the situation in each region, rather than setting targets and initiatives for specific indicators.

In Japan, promoting of women's empowerment has been positioned as a high-priority issue, we will work to create a work environment and foster awareness among employees so that life events do not create limitations on performing one's job, and aim to create a workplace where female employees in all positions at Astellas can work with motivation and passion.

1. Promoting women to management positions

Based on performance, we appropriately appoint people to positions designed with a global report line based on the concept of right person in right position regardless of gender. In addition, for positions at a specified level or higher, we check and analyze the conditions to make sure that there are no major differences according to gender, and promote planning for developing successors.

In Japan, where the ratio of women in management positions is lower than in other regions, we have positioned promoting women's empowerment as a high-priority issue and have set numerical targets as part of our efforts to address this issue.

Our targets and initiatives are posted on the Company's website. https://www.astellas.com/jp/en/sustainability/major-programs-japan

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	CORPORATE GOVERNANCE REPORT	Astellas Pharma Inc.

2. Promoting non-Japanese employees and mid-career hires to management positions

We appropriately appoint people to positions designed with the global reporting line based on the concept of right person in right position and their performance. As a result, Astellas has promoted many non-Japanese employees and mid-career hires to management positions globally, and will continue these efforts going forward.

1. Promoting women to management positions

The ratio of female employees and ratio of female managers per region, including Japan, are posted on the Company's website. https://www.astellas.com/jp/en/sustainability/diversity-management

2. Promoting non-Japanese employees and mid-career hires to management positions Astellas has an organizational structure that reports globally within each function, and assigns the most suitable personnel to each position globally. Therefore, non-Japanese employees are playing active roles as core personnel around the world.

In addition, in countries other than Japan, many of these employees are mid-career hires and we are actively promoting them to serve as core personnel.

As of March 31, 2021, the percentage of non-Japanese employees serving in the position of Vice President or above was 48.6% and in the position of Manager or above was 63.5%.

Astellas is working to ensure diversity by providing employment based on equal opportunity and individual capability regardless of race, nationality, age, disability or other personal attribute, and optimizing personnel placement based on the concept of placing right person in right position regardless of attributes for realizing our management strategies.

Regarding talent development, we provide the resources necessary for each employee to achieve their own highest potential, while ensuring that each employee takes ownership. By actively providing attractive growth opportunities to talented and motivated personnel who continue to perform at a high level, we enable diverse personnel to play an active role.

Regarding internal work environments, we ensure fair evaluations based on roles and achievements regardless of personal attributes through the establishment of an evaluation process that is controlled and consistent globally, as well as provide a global common job posting system, and global assignments for work in different countries and regions, etc. The formation of teams and groups comprised of global members irrespective of the country or region is leading to increased diversity in each organization. In addition, not only are we realizing diversity in the organizations, we are working to create inclusive organizations that understand, accept, respect and make the most of each and every person's strengths and differences so that each and every employee can demonstrate their full potential. In addition to these, we are enhancing internal work environment locally, tailored to the situation in each region.

In Japan, we are working to create a work environment and foster awareness among employees so that life events do not create limitations on performing one's job. Information on each system and actual usage are posted on the Company's website. https://www.astellas.com/jp/en/sustainability/major-data-japan

[Principle 2-6 Roles of Corporate Pension Funds as Asset Owners]

The Company manages its corporate pension through Astellas Pension Fund, with the aim of ensuring that its employees lead secure lives into the future. In managing the pension fund, Astellas Pension Fund has established the "Basic Policies on Pension Asset Management," and makes relevant decisions by resolution of the Board of Trustees and Board of Representatives, after deliberation by the Asset Management Committee on the basis of the basic policy. The Company appropriately assigns qualified personnel such as heads of the Company's personnel

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	CORPORATE GOVERNANCE REPORT	Astellas Pharma Inc.

and finance departments as members of the Asset Management Committee, Board of Trustees, and Board of Representatives, and also assigns personnel from labor unions to the same positions from the standpoint of providing representation for the beneficiaries. In addition, the Company appropriately assigns personnel to the Fund secretariat, while the Asset Management Committee monitors the management of the pension fund to ensure that management is carried out on the basis of the basic policy on asset management, and that there are no conflicts of interest.

[Principle 3-1 Full Disclosure]

1. Business Philosophy, Business Strategies, Management Plan

The Company's business philosophy is composed of three basic principles - "raison d'être," "mission," and "beliefs," which is published on the Company's website. https://www.astellas.com/jp/en/about/philosophy

The Company has formulated the VISION, which is published on the Company's website. https://www.astellas.com/jp/en/about/vision

The Company has formulated its management plan CSP2021 (Corporate Strategic Plan) that starts from FY2021 and is published on the Company's website. https://www.astellas.com/jp/en/investors/strategic-plan

1. The Basic Views and Guidelines of the Corporate Governance

The basic views and guidelines are identical to those listed under "I. 1 Basic Views" of this report or in "Corporate Governance Guidelines" (https://www.astellas.com/jp/en/about/governance) of the Company.

1. Policies and Procedures on determining Remunerations for Directors

Remunerations for Directors are so designed as to enable the Company to recruit and retain talents, and to make the remuneration levels and structures fully commensurate with the responsibilities of the position.

Remunerations for internal Directors who are not Audit & Supervisory Committee Members are determined based on the following factors.

1. Competitive remuneration system

• A remuneration structure and levels that enable the Company to recruit and retain talents ii) Remuneration system that emphasizes increasing enterprise value and shareholder value

• A remuneration system and composition that are closely linked to performance with an emphasis on increasing enterprise value and shareholder value over the medium- to long-term

iii) Fair and impartial remuneration system

• A fair and impartial remuneration system based on responsibility and results regardless of country and region

Based on the factors above, remunerations for internal Directors who are not Audit & Supervisory Committee Members are to consist of basic remuneration (fixed remuneration), bonus (short-term incentive remuneration) and stock compensation (medium- to long-term incentive remuneration). Levels of remunerations are determined based on the factors such as professional responsibilities, by utilizing objective remuneration survey data of an external expert organization. The individual remuneration for internal Directors who are not Audit & Supervisory Committee Members are determined by a resolution of the Board of Directors, based on results of discussions carried out by the Compensation Committee, within the total amount resolved in the Annual Shareholders Meeting.

Remunerations for outside Directors who are not Audit & Supervisory Committee Members are to consist solely of basic remuneration (fixed remuneration), given that their roles involve supervising the Company's management from an objective and independent standpoint. Levels

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	CORPORATE GOVERNANCE REPORT	Astellas Pharma Inc.

of basic remuneration are determined based on the factors such as professional responsibilities, in reference particularly to objective remuneration survey data of an external expert organization. The individual remuneration for outside Directors who are not Audit & Supervisory Committee Members are determined by a resolution of the Board of Directors, based on results of discussions carried out by the Compensation Committee, within the total amount resolved in the Annual Shareholders Meeting.

Remunerations for internal Directors who are Audit & Supervisory Committee Members are to consist solely of basic remuneration (fixed remuneration), given that their roles involve supervising and auditing the management. Levels of basic remuneration are determined based on the factors such as professional responsibilities, in reference particularly to objective remuneration survey data of an external expert organization. The individual remuneration for internal Directors who are Audit & Supervisory Committee Members are determined by deliberation of Directors who are Audit & Supervisory Committee Members, within the total amount resolved in the Annual Shareholders Meeting. Remunerations for outside Directors who are Audit & Supervisory Committee Members are to consist solely of basic remuneration (fixed remuneration), given that their roles involve supervising and auditing the Company's management from an objective and independent standpoint. Levels of basic remuneration are determined based on the factors such as professional responsibilities, in reference particularly to objective remuneration survey data of an external expert organization. The individual remuneration for outside Directors who are Audit & Supervisory Committee Members is determined by deliberation of Directors who are Audit & Supervisory Committee Members, within the total amount resolved in the Annual Shareholders Meeting.

Further details on the remuneration system for Directors are stated in the "Annual Securities Report for the Business Year Ended March 31, 2021 (16th Term)" (in Japanese). https://www.astellas.com/jp/ja/investors/ir-library/securities-report

1. Policies and Procedures in Appointment/Removal of Senior Management and

Nomination of Candidates for Directors

Through the deliberations of the Nomination Committee, the Company enhances the transparency and objectivity of the nomination process for candidates for Director.

When nominating candidates for outside Directors, the Company, as a general rule, nominates the candidates who are considered to be independent from the Company and without risk of conflict of interest with general shareholders, based on the Company's "Independence Standards for outside Directors."

The terms of the Company's "Independence Standards for outside Directors" are identical to those stated in this report. Please also refer to the Company's website. https://www.astellas.com/jp/en/about/governance

Directors who are not Audit & Supervisory Committee Members are subject to election by resolution of the Annual Shareholders Meeting each year.

When nominating candidates for Directors who are not Audit & Supervisory Committee Members, those who satisfy the election/re-election standards separately established by the Board of Directors are nominated, and efforts are made to ensure that the composition of the Board of Directors is diverse and well-balanced from the perspectives of expertise and experience and so forth.

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