NSK : Corporate Governance Report

This document is a translation of a document originally prepared in the Japanese language and is provided for your convenience. NSK makes no representation or warranty that this document is a complete or accurate translation of the original Japanese text, and it is not intended to be relied upon. In the event that there is a discrepancy between the Japanese and English versions, the Japanese version shall prevail. This document is not intended and should not be construed as an inducement to purchase or sell stock in NSK.

Corporate Governance Report

Last Update: July 1, 2022

NSK Ltd.

Representative Executive Officer and President Akitoshi Ichii Contact: 03-3779-7111 Securities Code: 6471

https://www.nsk.com/jp/

The corporate governance of NSK, Ltd. (the "Company") is described below.

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

1. Basic Views

The NSK Mission Statement is as follows: "NSK contributes to a safer, smoother society and helps protect the global environment through its innovative technology integrating Motion & Control™*." As a truly international enterprise, we are working across national boundaries to improve relationships between people throughout the world. NSK Ltd. aims to fulfill this responsibility to society while maintaining an appropriate level of profitability that meets the expectations of our shareholders, thereby achieves sustainable growth and increases our mid- to long-term corporate value.

NSK believes that the establishment and maintenance of systems that ensure transparent, fair and timely decision-making is essential in order to achieve sustainable growth and increases our mid- to long-term corporate value. To realize this objective, we are working to construct our corporate governance systems based on the following four guiding principles.

We aim:

1. To increase the efficiency and agility of management by proactively delegating decision-making on the execution of the operations from the Board of Directors to the Company's executive organizations.
2. To ensure that supervisory organizations have oversight of executive organizations by clearly separating the two.
3. To strengthen supervisory organizations' oversight of the executive organizations by ensuring cooperation between the two.
4. To improve the fairness of management by strengthening compliance systems.

NSK has adopted a Company with Three Committees (Nomination, Audit and Compensation) system as its form of corporate organization to better achieve the aforementioned basic approach. We have articulated

- 1 -

this basic approach to corporate governance and its structure in our Corporate Governance Rules, which guide directors and executive officers in the performance of their duties.

(*MOTION & CONTROL™ defines the scope of NSK's present and future business. "MOTION" symbolizes our complex hardware, machinery, and systems, while "CONTROL" represents our sophisticated software and electronics systems.)

[Reasons for Non-compliance with the Principles of the Corporate Governance Code]

NSK complies with all principles of the Corporate Governance Code.

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

[Principle 1-4Cross-Shareholdings]

(1) Policy on cross-shareholding

NSK aims to reduce the cross-holding of shares deemed to have little benefit in increasing mid- to long- term corporate value. Conversely, if we believe that there is a valid rationale for holding such shares, we will continue to do so. Regarding the appropriateness of cross-shareholdings, our executive organizations conduct quantitative and qualitative evaluations on an annual basis to determine whether each individual shareholding is delivering acceptable benefits in relation to our capital cost. The Board of Directors receives regular reports from the aforementioned executive organizations and studies the matter accordingly. We will sell any cross-shareholdings whose possession we believe cannot be justified, taking into account stock prices and market trends.

(2) Criteria for exercise of voting rights concerning cross-shareholdings

NSK has defined specific criteria for exercise of voting rights concerning cross-shareholdings. When exercising voting rights, we confirm that the proposal in question does not damage shareholder value, and that it serves to improve the mid- to long-term corporate value of both NSK and the company in which the stake is held.

[Principle 1-7 Related Party Transactions]

NSK's Board of Directors conducts prior approval of transactions with officers or major shareholders (transactions between related parties) in accordance with relevant laws such as the Companies Act, as well as internal regulations, to ensure that the interests of the Company and its shareholders are not harmed. The Board also receives regular status reports. Furthermore, the Audit Committee conducts audits on transactions where required.

[Supplementary Principle 2-4-1 Ensuring Diversity in Core Human Resources]

(1) Policy on ensuring diversity in core human resources

The NSK Group Management Principles clearly state that our aim is "to provide challenges and opportunities to our employees, utilizing their skills and encouraging their creativity and individuality." In acknowledgment of the fact that each employee is a priceless asset, we have committed ourselves to creating a "fair workplace that empowers the individual." This commitment features three key areas of focus: leveraging a diverse workforce, building more engaging workplaces and providing opportunities for growth.

As one concrete measure under "leveraging a diverse workforce," NSK is working to promote greater diversity and inclusion. We believe that employing people from diverse backgrounds - in gender, age, nationality, culture, lifestyle, values and career (knowledge and experience) - will foster a work environment full of new perspectives and ways of thinking. This, in turn, will strengthen NSK's competitiveness and capacity to avoid risks. We also place an emphasis on ensuring diversity among

- 2 -

managers and managerial candidates, and are working in a systematic manner to utilize human resources with diverse attributes and backgrounds.

More information on NSK's policy and key initiatives on diversity and inclusion can be found at the following website: https://www.nsk.com/sustainability/hr/index/

<>	<>	<>
・Number of women in managerial positions and managerial candidates
Japan	FY26: 100		77
・Ratio of midcareer hires among managers and managerial candidates
Japan	FY26: 25% or more	23%

NSK has worked to localize its management with the aim of establishing a framework that enables it to conduct locally-oriented, agile business management in each region as it expands its operations outside Japan. Currently, we are expanding our business under local leadership by appointing a number of national employees to the "global posts" in each regional headquarters that we have defined as key positions in our global business operations, including regional heads.

<>	<>	<>
・Ratio of national employees assigned to global posts
Global	70% or more is kept	73%

1. Policies for human resource development to ensure diversity and the status of their implementation NSK created a roadmap for a three-phase initiative lasting from 2016 to 2026, and is promoting diversity and inclusion in line with this. In addition to empowering women, which is one of our important management objectives, we are also expanding our initiatives to other areas including empowerment of non-Japanese employees and those who identify as LGBTQ+. We also recognize that encouraging diverse employees to play an active role requires that we make progress in creating work arrangements with more flexibility. This is why we are moving forward with work-style reform, hand in hand with diversity and inclusion, recognizing that each complements the other.
   Information on NSK's diversity and inclusion roadmap, key initiatives and status of implementation, policy on facilitating work-life balance and key initiatives can be found at the following websites and NSK Report:
   - NSK website: Diversity - Leveraging a Diverse Workforce: https://www.nsk.com/sustainability/hr/diversity/

• NSK website: Diversity - Safe and Healthy Workplaces and Work-Style Reforms: Building More Engaging Workplaces
  https://www.nsk.com/sustainability/hr/health_wellness/

(Reference: Evaluation of NSK's human resources initiatives by external agencies) ■ Nadeshiko Brand: Selected for the 3rd straight year (Mar. 2022)*

https://www.nsk.com/jp/company/news/2022/0322a.html

■ PRIDE index, gold award (Nov. 2021)* https://www.nsk.com/jp/company/news/2021/1111a.html

- 3 -

■ Outstanding Health and Productivity Management Organization (White 500) Selected for the 5th straight year (Mar. 2022)*

https://www.nsk.com/jp/company/news/2022/0309b.html*Only available in Japanese

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

NSK has established a Pension Administration Committee, to which it has assigned personnel from the human resources and finance divisions possessing appropriate knowledge and skills, and operates its pension assets in accordance with defined operating policies. We select the organizations to which we entrust the operation of our pension fund based on a comprehensive evaluation which encompasses investment policy, investment performance, compliance, and other perspectives. The management of our pension assets is commissioned to several organizations, and by entrusting the selection of investment targets and exercise of voting rights to each fund we ensure that no conflict of interest arises between pension beneficiaries and the Company.

[Principle 3-1 Full Disclosure]

(i) Company objectives, business strategies and business plans

NSK's mission is outlined in our Corporate Philosophy. The Board of Directors resolves mid- to long- term management strategies, management plans, and other key policies in line with this Philosophy. Further information on our Corporate Philosophy can be found on the following website: https://www.nsk.com/company/visionandphilosophy.html

For more information regarding our management strategies and management plans, NSK's mid-term plan and long-term vision can be found at the following website: https://www.nsk.com/investors/library/mtp.html

(ii) Basic views and guidelines on corporate governance

NSK's basic approach and policy on corporate governance are as described in the section of this report entitled "I-1 Basic Views".

1. Policies and procedures of Compensation Committee in determining the compensation of senior management and directors
   The policy in determining the compensation of directors and executive officers is as described in the section of this report entitled "II-1. [Compensation for Directors and Executive Officers (Shikkoyaku)] Disclosure of Policy on Determining Compensation Amounts and Calculation Methods".
2. Board policies and procedures in the appointment/dismissal of senior management and the nomination of director candidates
   NSK's directors are required to possess experience and insight into either general business and management or a specific field of expertise, as well as high ethical principles and a sound knowledge of corporate governance. Based on this approach, candidates for director are determined by the Nomination Committee, and the Board of Directors then submits a resolution to the General Meeting of Shareholders for approval.
   In the event that it is deemed that a director has failed to exercise appropriate duty of care or duty of loyalty, or is otherwise unsuitable to continue serving in the position, the Nomination Committee deliberates on their removal. The Board of Directors then submits a resolution to the General Meeting of Shareholders for approval.
   NSK's executive officers are required to possess sufficient capability to swiftly and appropriately enact the decision-making responsibility delegated to them by the Board of Directors. This includes considerable knowledge and insight into business and/or a specific field of expertise, as well as high ethical principles and a sound knowledge of corporate governance. Appointment of executive officers is made via resolution by the Board of Directors, in order to construct an optimal operating framework for
3. • 4 -

management of the Group. In the event that the Board of Directors deems that an executive officer has failed to exercise appropriate duty of care or duty of loyalty, or is otherwise unsuitable to continue in the position, it shall pass a resolution to remove the officer in question from the position.

1. Explanations with respect to the individual appointments/dismissals and nominations by the Board of Directors based on (iv), when appointing/dismissing senior management or nominating director candidates
   Reasons for selection of director candidates and the career history, positions, and assignments of directors and executive officers are listed in the Notice of the Ordinary General Meeting of Shareholders and the Securities Report, as well as disclosed on the following website:
   [Notice of the Ordinary General Meeting of Shareholders] https://www.nsk.com/investors/stockandbond/meeting.html

[Supplementary Principle 3-1-3 Initiatives for Sustainability]

(1) Our initiatives for sustainability

Under NSK's corporate philosophy, which is to contribute to a safer, smoother society and help protect the global environment through its innovative technology integrating Motion & Control™ while working across national boundaries to improve relationships between people throughout the world, we will continue to collaborate with stakeholders to create value with the aim of contributing to the resolution of social issues while achieving sustainable growth as a company. The NSK "spirit" and "direction" espoused in our Corporate Philosophy continues to be the starting point of NSK's efforts at sustainability. With the goal of realizing this aim in mind, we will contribute to sustainable society development and aim to become a company that is needed, trusted, and relied upon by society, by creating synergies of tribology and digitalization, and undertake 3 key management tasks of "Growth with profitability", "Enhancement of managerial resources" and "ESG management" in our Mid-Term Management Plan 2026.

For more information and details regarding our sustainability initiatives, refer to NSK's website:

• NSK website, Sustainability Information:https://www.nsk.com/sustainability/index.html

NSK has formulated an SDGs Declaration that respects the spirit of the SDGs to realize a sustainable society and has selected seven key goals that are particularly interlinked with our business. In addition, we have formulated the Declaration of NSK's Initiatives as more concrete strategic measures. We are continuing to create collaborative value with our stakeholders through our business activities in order to achieve sustainable growth while contributing to the resolution of social issues and the achievement of the SDGs goals. Please see our website for more information on our SDGs initiatives:

• NSK website: Realizing the World Envisioned by NSK and the SDGs:https://www.nsk.com/sustainability/sdgs/

1. Investments in Human Capital

The NSK Group Management Principles clearly state that our aim is "to provide challenges and opportunities to our employees, utilizing their skills and encouraging their creativity and individuality." In acknowledgment of the fact that each employee is a priceless asset, we have committed ourselves to creating a "fair workplace that empowers the individual." This commitment features three key areas of focus: leveraging a diverse workforce, building more engaging workplaces, and providing opportunities for growth. We have set "Create sustainable corporate value by maximizing human capital" as the HR policy in our Mid-Term Management Plan 2026, and put together initiatives of securing a diverse workforce and advancement, stimulating individual growth and motivating employees to take on new challenges, and have moved forward the measures.

Information on our specific measures can be found at the following websites:

- 5 -