Konica Minolta : Corporate Governance Report

(Note) This document has been translated from the Japanese original for reference purpose only. In the event of any discrepancy between this translated document andthe Japanese original, the original shall prevail.

Corporate Governance Report

Last Update: July 13, 2021

Konica Minolta, Inc.

Shoei Yamana

President & CEO

Representative Executive Officer

Contact: Corporate Communications Division

(81) 3‐6250‐2100

Securities Code: 4902

http://konicaminolta.com

The corporate governance of Konica Minolta, Inc. (the "Company") is described below.

1. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other

Basic Information

1. Basic Views

The "Basic Policy on Corporate Governance" that was formulated in September 2015 defines the basic views

regarding corporate governance.

<Basic Concept for Corporate Governance>

The Company believes that corporate governance should contribute to sustainable corporate growth and increased corporate value over the medium to long term by encouraging appropriate risk-taking as part of management execution. On the other hand, the Company has established a corporate governance system from the standpoint of the supervisory side in the belief that setting up and managing a highly effective supervisory function is also necessary. As part of its institutional design in accordance with the Companies Act, in 2003 the Company selected the "company with committees" system (now, a "company with three committees" system) and established a system that eliminated dependency on personal characteristics, thereby pursuing governance in a style specific to the Company.

The Company's basic views with regard to its governance system are as follows.

-Ensuring business supervisory functions by separating the supervisory and execution functions in order to increase the corporate value;

-Election of an Independent Outside Director who can provide supervision from a shareholder perspective; and

-Improvement of the transparency, integrity and efficiency of management through the above-mentioned points.

Specifically, the Board of Directors and the three committees are composed as follows.

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1) Board of Directors

・One-third or more of Directors are Independent Outside Directors, and Directors who do not concurrently serve as Executive Officers constitute the majority of the total number of Directors.

・The Chairman of the Board is selected from among Directors not concurrently serving as Executive Officers.

2) Nominating, Audit and Compensation committees

・Each committee is composed of around five members, and a majority of its members is Outside Directors.

・The Chairperson of each committee is selected from among the Outside Directors.

・The President & CEO is not selected as a member of the Nominating, Audit or Compensation committee.

[The reason for non-compliance with Japan's Corporate Governance Code] Updated

The Company complies with every principle of Japan's Corporate Governance Code (revised on June 1, 2018) based on the above Basic Views, with the following exception.

Reason for non-compliance with 【Principle 4-11 Preconditions for Board of Directors and Kansayaku Board

Effectiveness】

Regarding <_diversity2c_ including="" gender="" and="" international="" _aspects2c_="" appropriate="" size="">

The Company has paid due heed to "the board should be well balanced in knowledge, experience and skills in order to fulfill its roles and responsibilities," and "it should be constituted in a manner to achieve both diversity and appropriate size," as stipulated in the principle. In addition to naturally taking into account gender and internationality for consideration of diversity, in the Company's decision on the nomination of candidates to make up a Board of Directors of an appropriate size, the highest priority is given to matching for the following two requirements: (i) overall balance of knowledge, experience and capabilities; and (ii) a person who can provide appropriate supervision for the Company's medium-term management issues.

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

【Principle 1-4Cross-shareholdings】

The Company has prepared and disclosed a policy for cross-shareholdings (reduction policy and voting standards).

(1) Views on cross-shareholdings

In principle, the Company will not hold listed stocks as cross-shareholdings except in cases where it recognizes there is significance or justification for ownership. Significance or justification for ownership will be judged from the results of yearly examinations conducted on each stock based on whether there are

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expectations of collaboration with the issuers and business synergies, as well as on whether the benefit and risk of holding said stock are appropriate to its capital cost. Consequently, stock where there is little significance or justification for ownership will be sold while taking into account the proper stock price, market conditions and other factors.

As of March 31, 2021, the results of examinations into the Company's cross-shareholdings are as follows. Furthermore, each year, the Company verifies the economic justification and checks the qualitative significance of each individual stock through the Management Consultation Committee and reports its findings to the Board of Directors.

In terms of economic justification, each individual stock was examined as to whether revenues from dividends and related-party transactions exceeded the capital cost to the Company and it was confirmed that the most of stocks subject to examination produced revenues that exceeded capital cost of the Company.

In addition to the above, the stocks were checked regarding their qualitative significance which confirmed the purpose of holding stocks that are to continue being held by the Company, such as the maintenance or strengthening of business relations with investees or expectations of collaboration and business synergies.

This also confirmed stocks that the Company should consider selling due to the dilution of the significance or justification for ownership, or other factors. Additionally, nine stocks that were recognized as having a diluted significance for ownership (excluding shares deemed held) were sold in fiscal 2020, and the sales amount was 8,615 million yen.

(2) Standard for voting cross-shareholdings

• The execution of voting rights is an important means of communicating with investees and the Company exercises its voting rights related to all cross-shareholdings. In exercising these rights, the Company checks each proposal and rather than making a uniform judgement on whether to approve or reject it based on formulaic or short-term standards, it makes a judgement from the perspective of whether said proposal will lead to continuous growth and a medium- to long-term increase in corporate value for the Company and the investee, based on sufficient consideration of said investee's management policy, strategies, and the like. Judgement on whether to approve or disapprove a proposal includes careful consideration of the following items in particular, as they may have a significant impact on shareholder return.
• 1. Transfer of important assets
  2. Merger or share transfers which cause or cease wholly owned subsidiary
  3. Third-partyallotments through favorable issuances
  4. Introduction of measures to defend against hostile takeovers

【Principle 1-7 Related Party Transactions】

If the Company, by any chance, engages in transactions with conflicting interests as prescribed in the Companies Act with Directors and Executive Officers ("executives"), the Board of Director rules require a

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resolution of approval by the Board of Directors. In addition, to identify conflict-of-interest transactions by executives, every year on a regular basis there are confirmations with these executives to determine if there were any transactions (except compensation) between the Konica Minolta Group (the "Group") and an executive or close relative (relatives within the second degree). Furthermore, with regard to transactions between the Company and its related parties, including major shareholders, subsidiaries and related companies, the Company has created internal approval procedures based on its authority rules equivalent to those governing transactions with third parties to ensure such transactions do not harm the interests of the Company or the common interests of its shareholders.

【Principle 2-6 Roles as Asset Owners of Corporate Pension Funds】

The Company has established a Pension Asset Management Committee comprising the Executive Officer responsible for finance, the General Manager of the Human Resources Department, the General Manager of the Accounting Department, the General Manager of Finance Department, representatives from labor unions, and others. The committee is tasked with the appropriate management of the corporate pension fund.

Also, in order to perform the expected roles as Asset Owners by increasing the expertise used in management of the fund, dedicated fund management personnel who possess appropriate credentials and business experience in the Accounting and Finance departments have been appointed. Furthermore, the Company has declared acceptance of Japan's Stewardship Code for Corporate Pension in March 2021. In addition, for stocks of listed companies in Japan, management is entrusted to asset management institutions that profess to follow Japan's Stewardship Code, and stewardship activities are monitored.

Conflicts of interest which could arise between corporate pension fund beneficiaries and the Company are managed appropriately as follows: 1) when selecting asset management institutions, the Company carries out a comprehensive assessment that covers not only quantitative aspects such as investment performance, but also qualitative aspects such as an institution's investment policy, management framework, and compliance,

1. asset management institutions are required to formulate and disclose a policy regarding the management of conflict of interests, and 3) decisions regarding the exercise of voting rights are left to the sole discretion of the entrusted asset management institution to remove any possibility of interference by the Company.

【Principle 3-1 Enhancement of Full Disclosure】

The Company discloses information properly in accordance with laws and regulations. In addition, to ensure that decisions are made with transparency and fairness, the following information is disclosed from the standpoint of maintaining an effective corporate governance system. The Company discloses information proactively. Specifically, the Company uses its website, integrated report, CSR report, corporate governance report, business report and other reports, and reference materials at general shareholder meeting to disclose information. In addition, there are proactive measures to supply information by using Management Policy Briefings, Investor Briefings for Individual Investors and other activities.

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(1) Management Philosophy and Business Plan

The Company's management philosophy and business plan are disclosed in the integrated report and on the Company's website. Furthermore, explanation is also actively provided through Management Policy Briefings and Investor Briefings for Individual Investors and other activities. The following link is provided for this Corporate Governance Report.

Management Philosophy

Please refer to the "Konica Minolta Philosophy" on the Company's website. https://www.konicaminolta.com/us-en/corporate/vision.html

Business Plan

Please refer to the medium-term business strategy on the Company's website. https://www.konicaminolta.com/jp-ja/investors/management/midterm_plan_presentations/index.html

(2) Basic views on corporate governance

Please refer to the "Basic Policy on Corporate Governance" on the Company's website. http://www.konicaminolta.com/about/investors/management/governance/index.html

(3) Policy and procedure for determining compensation for Executive Officers and Directors

Please refer to the Supplementary Explanation of "Incentives" and the Policy on Determining Compensation Amounts and Calculation Methods of "Compensation for Directors and Executive Officers" in section II. 1 of this report.

1. Policy and procedure for selections or dismissals of Executive Officers and nominations of Director Candidates
   (a) Policy and procedure for selections or dismissals of Executive Officers
   The Board of Directors uses a fair, timely and appropriate method to select people who have the capabilities to serve as Executive Officers. These individuals must be able to create new value for the Group and earn the support of internal and external stakeholders. Standards for making these judgments about capabilities are defined in "Standards for the Selection of Executive Officers". These standards include qualification standards. Individuals must have the ability and experience for the internal and external management of the Group's business operations. Qualification standards also take into consideration knowledge about specialized fields and technologies, an individual's age when the time for renewing the appointment comes, and other items. In addition, the Board of Directors selects individuals with a strong commitment to ethics, the ability to put customers first, the ability to drive innovation, strong motivation to achieve goals, and other characteristics.
   To select new Executive Officers, candidates who have completed senior executive candidate training must do the first stage of the selection process, which involves submitting documents and completing an interview. Next, an assessment is performed in order to reach a highly objective and appropriate decision. This process
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