Toshiba : Corporate Governance Report (August 16, 2022)

Corporate Governance Report

Last Update: August 16, 2022

Toshiba Corporation

Taro Shimada, Representative Executive Officer, President and CEO

Contact: 03-3457-2148

Securities Code: 6502

https://www.global.toshiba/ww/top.html

The corporate governance of Toshiba Corporation (the "Company") is described below.

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

Other Basic Information

1. Basic Views (Updated)

The basic objectives of Company's Corporate Governance are to realize sustainable growth and raise the enterprise value of the Company's Group (hereinafter referred to as "Group") over the medium- to long-term, and to contribute to the interests of all stakeholders, including shareholders, investors, employees, customers, business partners, creditors, and local communities.

Board of Directors has also established Corporate Governance Guidelines (hereinafter referred to as "Guidelines") that form the framework of governance of the Company.

For more information, please refer to the following URL: https://www.global.toshiba/ww/ir/corporate/esg/governance.html

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

[Supplementary Principle 1.1.3 Securing the Rights of Shareholders / Supplementary Principle 4.11.1 Preconditions for Ensuring the Effectiveness of the Board of Directors]

On November 12, 2021, The Company received from the Governance Enhancement Committee a report (hereinafter referred to as "Committee Report") regarding "Issues Concerning Acts of Executive Officers and Directors of Toshiba", "Root Cause Analysis", "Clarification of Responsibilities", and "Suggestions for Developing Recurrence Prevention Measures") in the so-called "pressure is- sue" (hereinafter referred to as "Issue"). Based on the advice given in the Committee Report, the Company formulated measures to prevent a recurrence and revised its related internal rules. Taking concrete actions based on the recurrence prevention measures, the Company will continue efforts to quickly recover the trust of all stakeholders, particularly with shareholders who were disadvantaged by this incident.

1. Development of Sound Trust Relationship with Shareholders
2. Rectification on the Company's Tendency to be Overly Dependent on Administrative Authorities
3. Redevelopment of Corporate Governance
4. Tone at the Top

For more information, please refer to the following URL: https://www.global.toshiba/content/dam/toshiba/migra- tion/corp/irAssets/about/ir/en/news/20211216_1.pdf

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

- 1 -

[Principle 1.4 Strategic Shareholdings]

Please refer to Article 10 (Policy on Strategic Shareholdings) of the Guidelines. The Company has a basic policy of reducing the outstanding amount of its strategic shareholdings as much as possi- ble. The Company will check and confirm the economic rationale of its strategic shareholdings in terms of their value based on their necessity in building, maintaining, and strengthening business alliances, other similar relationships, and relationships of trust with the issuer companies in which those shares are held, the status of business transactions with those companies, and other such matters, as well as in terms of whether the benefits and risks from each strategic shareholding cover the Company's cost of capital. The Company will engage in such shareholdings only when it determines that doing so is necessary in consideration of factors such as the results of that confirmation, the market environment, and management and financial strategies. Based on this policy, the value and economic rationale of each strategic shareholding currently held were checked and confirmed at a meeting of the Company's Board of Directors held in May 2022, and the Company decided to consider future holding policies continuously as a result of this confirmation. In addition, the Company exercises its voting rights after determining how to exercise those voting rights in consideration of whether or not each proposal will contribute to the sustainable growth and mid- to long-term increase of corporate value of the issuer company in which those shares are held.

[Principle 1.7 Related Party Transactions]

Please refer to Article 11 (Related Party Transactions) of the Guidelines for details.

[Supplementary Principle 2.4.1 Diversity in the Promotion to Core Human Resources] (1)Policies for ensuring diversity

The Company believes that promoting "diversity and inclusion" and "equal opportunity" leads to greater corporate value in such areas as securing labor and creating innovation, and aims to establish a corporate culture that enables diverse personnel to play active roles irrespective of gender, nationality, or whether they have disabilities or not.

The Company is working to enhance its systems and initiatives, especially for female employees, foreign employees, employees with disabilities, and LGBT+ employees.

(2)Voluntary and measurable goals and their status

The Company formulated an action plan based on the Act to Advance Women's Success in Their Working Life enacted in FY2016 and set its target to increase the percentage of female managers (4.1% as of FY2015) to at least 7% by the end of FY2020; however, due to factors such as the subsequent status of the Company brought by organizational and business restructuring, such percentage only reached 5.1%. In the 2nd action plan formulated in April 2021, Toshiba Corporation and its key Group companies (meaning Toshiba Energy Systems & Solutions Corporation, Toshiba Infrastructure Systems & Solutions Corporation, Toshiba Electronic Devices & Storage Corporation, Toshiba Digital Solutions Corporation) established a target to increase the percentage of female managers to 8% by the end of FY2025 through systematic human resource development and mid- career employment. The percentage of female managers at the end of FY 2021 is 5.5%.

Also, the number of foreign national employees in Toshiba Corporation and its key Group companies was 344 at the end of FY2021, and 17 of them hold manager posts.

In addition, mid-career employment is actively promoted, and Toshiba Corporation and its key Group companies hired 80 mid-career recruits last fiscal year.

From the view point of securing diversity in the appointment of managers, the Company believes that increase in the percentage of female managers is its most urgent and high-priority issue; there- fore, no voluntary and measurable goal is currently established in regard to appointment of foreign national employees and mid-career recruits to manager posts. However, going forward, the Company will make further efforts to promote managerial diversity, appointing diverse human resources as women and foreign national employees in manager posts, as well as developing candidates.

(3)Policies for human resource development and internal environment development to ensure di- versity, and the status of their implementation

- 2 -

The Company strives to create an organizational culture where diverse individuality and employee values are accepted and respected and where each employee is provided the opportunity to maximize their capabilities and strengths. Our efforts include diversity training where employees learn to accept and respect diversity of each individual and study about human rights for all employees. Further, the Company conducts awareness surveys targeted at domestic Group employees, and monitor the level of diversity awareness throughout the workplace. Where improvements are called for, the Company conducts training as necessary, and strive for better work environments.

For more information, please refer to the following URL: https://www.global.toshiba/ww/sustainability/corporate/performance/social/diversity.html

[Principle 2.6 Roles of Corporate Pension Funds as Asset Owners]

The Toshiba Corporate Pension Fund appoints personnel with appropriate qualifications, such as experience in the operations of the Finance Division, as the governor or person in charge of the management of the Fund. Furthermore, the Fund strives to foster human resources by promoting continued participation of such personnel in external training including seminars organized by the Pension Fund Association. With regard to the Fund's management, the Asset Management Committee has been established as an organization to assist the governing board based on the basic policy for asset management established by the Toshiba Corporate Pension Fund. The Asset Management Committee deliberates on important matters such as the formulation and review of basic asset management policies and basic asset allocation, reports to the governing board, and monitors the status of asset management. In addition, the Fund ensures that conflicts of interest will not arise by entrusting the selection of managed stocks to asset management agencies regularly entrusted with similar asset management.

[Principle 3.1 Full Disclosure] (1)Basic Commitment

Please refer to Article 5 (Basic Commitment) of the Guidelines and the Company website. https://www.global.toshiba/ww/outline/corporate/philosophy.html

(2)Basic views and policies on corporate governance Please refer to "1. Basic Views" above and the Guidelines.

(3)Policies and procedures for determining the compensation of senior executives and directors Please refer to Article 21 (Compensation Committee) of the Guidelines and section "II. Business Management Organization and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Supervision in Management," "1. Organization Composition and Oper- ation," [Compensation for Directors and Executive Officers] of this Report.

(4)Policies and procedures for the election and dismissal of senior executives and nomination of candidates for director

The Company elects and dismisses senior executives and nominates candidates for director in accordance with Article 17 (Nomination Committee) of the Guidelines, and Director Nomination Criteria and Executive Officer Election Criteria in the attached Exhibit. In the selection of the President and CEO, the Nomination Committee makes a decision on reappointment on a regular basis once a year based on the terms of office of the Executive Officers of the Company, during which it implements evaluations of the President and CEO (investigations of confidence) by senior management, and refers to the results of these evaluations in its decision.

(5)Explanation of individual assignments/nominations when electing and dismissing senior executives and nominating candidates for director

Reasons for candidacy as director are included in "Reference Material" of the convocation notices of general meeting of shareholders.

[Supplementary Principle 3.1.3 Initiatives on Sustainability] (1)Initiatives on sustainability

"Committed to People, Committed to the Future" is the cornerstone text of the basic commitment adopted by Toshiba Group, declaring its unfaltering belief to contribute to the development of society

- 3 -

through its business activities. Under such principle, the Group, as a member of the world that faces various challenges such as energy shortage, resource depletion and climate change, has considered the long-term impact of its corporate activities on our society, and promoted its effort to solve social issues. In order to further advance such effort and to strengthen its activities that contributes to social sustainability, the Group established Toshiba Group Sustainability Policy, and promotes its sustainability management, leading to the enhancement of its corporate value. Toshiba Group Sustainability Policy was resolved at the Board of Directors. https://www.global.toshiba/ww/sustainability/corporate/csr-management/management.html

For more information, please refer to the Sustainability Reports and the following URL: https://www.global.toshiba/ww/sustainability/corporate.htmlhttps://www.global.toshiba/ww/sustainability/corporate/report/download.html

(2)Investments in human capital and intellectual properties

The Group states "We turn on the promise of a new day" in "The Essence of Toshiba." To achieve this, the Company is creating and promoting an open corporate culture, and has established fair evaluation systems while seeking to develop and deploy talents to the greatest extent in order for its sincere and richly diverse human resources acting autonomously with a passion for change to work together and to generate new value based on a vision of the future of the Company.

For more information, please refer to the following URL: https://www.global.toshiba/ww/sustainability/corporate/performance/social/hrd.html

Also, the Group believes that proper management and utilization of intellectual property (hereinafter referred to as "IP") is essential to enhance corporate value. The Group aims to enhance corporate value (i) by formulating IP strategies from various perspectives including collaborative creation with business partners and utilization of IP, overviewing the entire business scheme, and (ii) by strengthening our IP capabilities through such measures as analyzing IP information, developing IP based on the IP strategies, and optimizing our IP portfolio in consideration of the competition. For more information, please refer to the following URL: https://www.global.toshiba/content/dam/toshiba/ww/ir/corporate/finance/annual-re-port/pdf/ar2021/tir2021e_a4.pdf#page=27

(3)Disclosure about impacts from climate change

The Group sees impacts from climate change as material risks and, following the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), we are analyzing impacts on our business. We predict physical risks from natural disasters and transition risks from the rising cost of responding to regulations, loss of sales opportunities due to delays in responding techno- logically, and impaired reputation from delays in initiatives. As such, we are striving to strengthen our frameworks and activities for addressing these risks. At the same time, identifying opportunities from increased demand for decarbonized energy technologies, energy-saving products and ser- vices, and the like, we are proceeding to develop our renewable energies business and other businesses with carbon neutrality as one of our business strategies. We have established a framework under which important issues related to climate change that could affect our business are discussed at the Sustainability Strategy Committee, which is chaired by the President, and then reported to the Board of Directors.

As a response to climate change and as stated in our Environmental Future Vision 2050, the Group seeks to achieve carbon neutrality throughout the value chain by FY2050 and, as a new target, reduce GHG emissions by 70% by FY2030 compared to the FY2019 level. For our FY2030 reduction targets, in FY2020, we acquired the approval of the Science Based Targets (SBT) initiative, which is consistent with the Paris Agreement. At present, we are pursuing the detailed Seventh Environmental Action Plan, which takes us to FY2023, and are proceeding to reduce GHG emissions in our business activities, as well as in our products and services. We aim to hold total GHG emissions in our business activities in FY2023 to 1.04 million t-CO2 and to achieve a 1% year-on- year improvement every year in our total energy-derived CO2 emissions intensity. Furthermore, in our products and services, we aim to continue developing and delivering renewable energies as well as products and services that have robust energy-saving features. We aim to reduce GHG emissions (Note 1) during energy supply by 13.6% in FY2023 (versus FY2019), while aiming for a 43 million t-CO2 contribution to GHG reduction (cumulative from FY2021) through the adoption of

- 4 -

renewable energies and an 84 million t-CO2 contribution to GHG reduction (cumulative from FY2021) during product use (Note 2).

For more information, please refer to the following URL: https://www.global.toshiba/ww/environment/corporate/climate/tcfd-cdp.html(Notes)

1. The items subject to the target are products and services associated with power supply, such as thermal power generation.
2. The items subject to the target are products and services associated with power consumption, such as social infrastructure products.

[Supplementary Principle 4.1.1 Roles and Responsibilities of the Board of Directors (1)]

Please refer to Article 16 (Matters Delegated by the Board of Directors to Executive Officers) of the Guidelines for details.

Mission of the Board of Directors is to monitor and supervise business execution by management and to determine the company's basic strategies. Strategic issues will be discussed by the whole Board of Directors with diversified skill sets.

[Supplementary Principle 4.2.2 Roles and Responsibilities of the Board of Directors (2)]

For details on the basic policy for the Company's sustainability initiatives developed by the Board of Directors, please refer to "Supplementary Principle 3.1.3 Initiatives on Sustainability" above. Also, at the Company, the Executive Officers in charge make reports to the Board of Directors of the allocation of management resources, including investments in human capital and intellectual properties, and the implementation of business portfolio strategies, and receive supervision and advice from the Board of Directors.

[Principle 4.8 Effective use of Independent Outside Directors]

Please refer to Article 15 (Board of Directors) of the Guidelines for details.

[Principle 4.9 Independence Standards and qualification for Independent Outside Directors] Please refer to Exhibit (Independence Criteria for Outside Directors) of the Guidelines for details.

[Supplementary Principle 4.11.1 Preconditions for Ensuring the Effectiveness of the Board of Direc- tors]

Please refer to Article 15 (Board of Directors) and Article 17 (Nominations Committee) of the Guide- lines. The Board of Directors discloses policies and procedures for nominating directors along with what is known as a "skills matrix," the combination of skills, etc. that each director possesses. Based on this, the Board of Directors is made up of independent outside directors with expertise in man- agement, accounting expertise, legal expertise etc., in addition to executive officers, who are also responsible for business execution, in order to fulfill their roles and responsibilities. Further, the Board of Directors is comprised of diverse perspective as much as possible, such as a female director and directors with abundant experience in global business, which may support to manage the company.

The current Board of Directors consists of 12 Directors (2 executive officers and 10 independent outside directors). The Company previously had a principle to have approximately 11 directors in order to enable the Board of Directors to deliberate substantially and thoroughly and to ensure that more than half of the directors will be outside directors in order to secure the effectiveness of the oversight and supervisory functions over business execution. However, in light of the current situa- tion, the Company has judged that it is necessary to expand the human resources of the Board of Directors, including through establishing the Special Committee, and decided to increase the number of outside directors by 5 to 11 in total and have two directors concurrently serving as executive officers, in order to ensure the stable execution of the Company's operations.

The Board of Directors remains innovative in its composition - while reflecting the composition of the Company's shareholders and including directors recommended by our major shareholder as a shareholder representative, the Board of Directors is equipped with skill sets required for promoting business transformation for the Company and handling high-risk matters, comprising directors who have experience in international business, expertise in business portfolios management, business restructuring, M&A, capital markets and capital allocation, and law and compliance, including five

- 5 -