Wowow : Corporate Governance Report(June 23,2021)

CORPORATEGOVERNANCE

	Last updated:	June 23, 2021
		WOWOW INC.
		Representative Director,
		President & CEO, Akira Tanaka
Contact		Mototaka Yamaguchi,
person:	General Manager, Human Resources & General
		Affairs Division Tel: [phone]
		Securities code: 4839
		https://corporate.wowow.co.jp/en/

The Company's corporate governance conditions are as follows.

I. Basic Philosophy Regarding Corporate Governance, Capital Composition, Company Attributes, and Other Basic Information

1. Basic Philosophy

The Company is working to expand business and enhance corporate value, with a basic stance on corporate management of aiming to continue developing as a company that is trusted and respected by society by conducting fair and appropriate corporate management while recognizing our social responsibility to contribute to the happiness of people and the creation of rich culture, as stated in our corporate philosophy and code of conduct, in order to honor our public mission as a broadcaster. To that end, enhancing corporate governance not only serves to achieve fair and appropriate corporate management but is also indispensable for building relationships of trust between the Company and shareholders, viewers, employees, business partners and other stakeholders supporting the Company and thereby making it a company that is trusted and respected by society. The Company positions the enhancement of corporate governance as one of the key management tasks, and believes that the enhancement of corporate governance through ensuring appropriate functions of the Board of Directors, the Audit & Supervisory Board (the Company's kansayaku-kai) and other organizational units and further strengthening the management monitoring structure serves to secure and enhance both the Company' s corporate value and the common interests of shareholders. Furthermore, the Company will strive to strengthen corporate governance in due respect of Japan's Corporate Governance Code as prescribed by the financial instruments exchange.

Reasons for Not Implementing Principles in Corporate Governance Code

Principle 4-11: Preconditions for Ensuring Effectiveness of Board of Directors/Audit & Supervisory Board The Company's Board of Directors is comprised of individuals with expertise in various business areas, including management, accounting, human resources and administration, marketing, sales, organization, production, entertainment, and technology, individuals with knowledge and experience accumulated in the broadcasting sector and related industries, individuals with experience in corporate finance and who have sufficient expertise in finance/accounting, individuals with extensive specialized knowledge and experience as managers, etc. While the necessity of appointing persons with international experience and women as directors is recognized, there are not any qualified individuals. This issue will therefore be considered in the future. In addition, the Audit & Supervisory Board is composed of individuals with appropriate experience and skills and abundant expertise in management, including those experienced in corporate finance who possess sufficient expertise in finance/accounting. The Company's Board of Directors analyzes and evaluates this structure's effectiveness every year with the aim of improving its functioning.

Disclosure Based on Various Principles of the Corporate Governance Code - Update Principle 1-4:Cross-Shareholdings

When shares in other listed companies are to be held for purposes other than pure investment, the rationality behind the cross-shareholdings is determined based on a careful examination of not only

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dividends and share price trends but also the risks and benefits such as whether or not the cross- shareholdings maintain/foster collaborative business ties, etc. with the invested companies, whether or not synergistic effects with the Company's business are anticipated and whether or not the cross- shareholdings serve to enhance the Company's mid- to long-term corporate value. Selling will be considered for shares that have lost their holding rationality. The rationality of continued holding is considered based on capital costs by the Board of Directors every year, and regarding the currently-held shares in eight listed companies (1,828 million yen at the end of March 2021), the Board has decided to continue holding them as their purpose has been deemed appropriate and rational as even in light of the risks, the benefits are sufficient. In addition, concerning exercise of the voting rights to the cross- shareholdings, the general rule shall be to exercise the voting rights to all cross-shareholdings, and whether to vote in favor or against the proposals shall be determined in light of such factors as whether it contributes to the sustainable growth of the invested company by enhancing its mid- to long-term corporate value, or the realization of the purposes for holding as well as whether it enhances the Company's mid- to long-term corporate value and contributes to its sustainable growth, while dialoguing with the invested companies as necessary and respecting their management policies.

Principle 1-7: Transactions with Related Parties

If the Company engages in a transaction with a director, advance approval by the Board of Directors and subsequent reporting is implemented based on the provisions of the Companies Act.

If the Company engages in a transaction with a major shareholder, important matters are approved in advance by the Board of Directors or reviewed by the Management Council and the transaction is reported to the Board of Directors as appropriate.

Principle 2-6: Exercising of Role as Corporate Pension Fund Asset Owner

The Company has introduced a defined contribution pension system but has not introduced a fund- or contract-type defined benefits pension plan or welfare pension fund. It is therefore deemed that Principle 2-6 does not apply.

However, with respect to the defined contribution pension, the Company does implement measures such as providing employees with education and training related to asset management and monitoring financial institutions entrusted with management tasks.

Principle 3-1: Full Disclosure

(1) Company objectives (e.g., business principles), business strategies, and business plans

Please see the corporate website (https://corporate.wowow.co.jp/en/) for the Company's Corporate Philosophy, management policies, "10-Year Strategy" long-term vision, "Medium-Term Management Plan (FY2021-2025)" and FY2021 business plan.

(2) Basic views and guidelines on corporate governance

Please see Section 1.1 ("Basic Philosophy") of this document for the Company's basic views on corporate governance.

In addition, the Company's basic policies regarding corporate governance are as follows:

〔Securing the Rights and Equal Treatment of Shareholders〕

The Company takes appropriate measures and provides prompt information disclosure as appropriate in accordance with laws and regulations to serve to fully secure the rights and equal treatment of shareholders and appropriate exercise of shareholder rights.

〔Appropriate Cooperation with Stakeholders Other Than Shareholders〕

The Company recognizes that efforts should be made to appropriately cooperate with the various stakeholders for sustainable corporate growth and creation of mid-tolong-term corporate value. In addition, led by the management team, efforts are being made to foster a corporate culture that respects the rights and positions of stakeholders as well as corporate ethics so that cooperation with stakeholders is put into practice. Such efforts include setting the corporate philosophy and code of conduct, and holding a management policy briefing once every six months as an opportunity for these to be explained

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to all employees directly by the president and other management in their own words.

〔Ensuring Appropriate Information Disclosure and Transparency〕

The Company recognizes information disclosure as one of the key management tasks and that appropriate information disclosure is also essential for gaining the understanding of shareholders and other stakeholders. To put such recognition into practice, the Company strives for proactive disclosure of information (including non-financial information) that is deemed to be important to shareholders and other stakeholders, beyond the requirement of laws and regulations, through the Company's website and voluntary timely disclosure.

〔Duties of Board of Directors, etc.〕

In addition to separating the structure for corporate management-relateddecision-making/oversight and the structure for executing business operations with the aim of establishing a framework for efficient management and execution, the Company appoints five outside directors (including two independent outside directors) in an effort to achieve highly transparent corporate management. Along with establishing a highly effective structure for overseeing directors by appointing outside directors, two of the four appointed auditors are independent outside auditors. This establishes an independent structure for oversight of directors' execution of their duties. Furthermore, a voluntarily formed Nomination & Compensation Advisory Committee, many of whose members are independent outside directors, is involved in the process of nominating directors, deciding on their compensation, and so forth. By ensuring the objectivity and transparency of this process, the committee enhances supervisory functions relating to directors and contributes to a more robust corporate governance structure.

〔Dialogue with Shareholders〕

The Company recognizes that continuing to grow together with shareholders by proactively engaging in constructive dialogue with shareholders in day-to-day operations and reflecting the opinions and requests of shareholders in corporate management is important for sustainable growth and mid-to long- term corporate value enhancement. From such point of view, the Company develops the IR structure around an executive officer in charge of IR and strives to hold a constructive dialogue with the shareholders and investors by proactively responding to interview requests in order to gain understanding against the Company's corporate strategy and business plan.

1. Policies and procedures for determination of compensation for senior management and directors by the Board of Directors
   The maximum total amount of compensation payable to directors is determined by means of a resolution at a general meeting of shareholders, and the representative director, president & CEO is delegated by the Board of Directors to determine the amount of compensation for each director separately within the aforementioned maximum range. Individual compensation amounts are determined by comprehensively considering factors such as each director's role and responsibilities, the Company's short and medium- term business performance, and the degree to which the director contributes to that performance. In addition, when determining individual compensation amounts, the amounts are reviewed in advance by the voluntarily formed Nomination & Compensation Advisory Committee, of which over half of whose members are independent outside auditors, which provides advice and recommendations.
2. Policies and procedures for the appointment/dismissal of senior management and nomination of candidates for director/auditor by the Board of Directors
   When appointing senior management, the Company selects candidates based on the advice and recommendations of the voluntarily formed Nomination & Compensation Advisory Committee, of which over half of whose members are independent outside auditors, which scrupulously reviews whether candidates are suitable in light of the Company's business principles, corporate code of conduct, and financial conditions (including the Company's performance during the candidate's previous term as a senior manager in the case of a re-appointment), regardless of whether it is an internal promotion or external hire. The candidate is then appointed based on a resolution of the Board of Directors after the

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conducting of a thorough review. Furthermore, in the event that a senior manager is notably unfit to serve as a senior manager at the Company due to improper conduct in the execution of his or her duties, a serious breach of the law or the articles of incorporation, or another reason, the Board of Directors will call a meeting without delay, and if it is deemed appropriate to dismiss the senior manager in question following a scrupulous review of the situation (including the advice and recommendations of the voluntarily formed Nomination & Compensation Advisory Committee, over half of whose members are independent outside auditors), he or she shall be dismissed by the Board of Directors. The nomination of directors or auditors is reviewed in advance by the voluntarily formed Nomination & Compensation Advisory Committee, over half of whose members are independent outside auditors, and based on its advice and recommendations, the Board of Directors then reviews the nomination by comprehensively evaluating items i to iii below.

i. Nomination of candidates for director (internal)

Based on the Company's philosophy, nominates candidates by comprehensively evaluating whether they are individuals who may be expected to contribute to the development of both the Company itself and the broadcasting sector as a whole, whether they have the ability to identify issues within the department they manage accurately and resolve them in collaboration with other executives and employees, whether they possess the discernment to comply with the law and corporate ethics, etc. in a thorough manner.

ii. Nomination of candidates for auditor (internal)

Based on the Company's philosophy, it nominates candidates by comprehensively evaluating whether they will strive to supervise directors' execution of their duties, proactively prevent breaches of the law or articles of incorporation, and maintain and enhance the Company's sound management and social credibility, whether they will be able to perform supervision in a neutral, objective manner to help ensure the health of the business, etc.

iii. Nomination of external directors

With regard to external directors, candidates are nominated by comprehensively evaluating whether they possess extensive knowledge and experience of, and have played a leading role in, a field such as management, law, finance/accounting, human resources, or broadcasting and whether they have the ability to grasp the nature of problems faced by the Company and appropriately express opinions and provide advice, guidance, and supervision to the management team, etc. Moreover, candidates for outside director who would be registered as independent directors with the Tokyo Stock Exchange are required to meet the Company's own independence criteria.

1. Explanations with respect to individual appointments/dismissals of senior management or nominations of candidates for director/auditor by the Board of Directors based on (4)
   Each time the Company appoints/dismisses a senior manager, the reason for appointment/dismissal and other information will be posted on the corporate website. Furthermore, the reasons for appointing individual candidates for director and auditor will be disclosed in the notice of the ordinary general meeting of shareholders. Please see the corporate website (https://corporate.wowow.co.jp/en/) with regard to the notice of the ordinary general meeting of shareholders.

Supplementary Principle 4-1-1: Roles and Responsibilities of the Board of Directors (Scope of Matters Delegated to Management)

Based on its policy of separating the structure for corporate management-related decision- making/oversight and the structure for executing business operations, the Company has established a Board of Directors and Management Council.

The Board of Directors decides important matters relating to the execution of operations, including basic policies for corporate management, and in terms of criteria for determining specific matters to be addressed, the regulations of the Board of Directors stipulate standards for budgeting based on factors such as the Company's size and clarify the scope of matters to be decided by the Board of Directors. Meanwhile, decision-making related to matters not stipulated as being decided by the Board of Directors in the regulations of the Board of Directors is handled in accordance with the standards stipulated in the

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regulations for approving important matters and regulations for approving operations. Based on the importance of the matter in question, decision-making is assigned to the Management Council (attended by executive officers and full-time auditors), the representative director president & CEO, or a general manager.

The Management Council provides support for the execution of the president & CEO's duties by reviewing important matters within those approved by the president, with a view to ensuring appropriate execution of operations as well as timely and effective decision-making. In addition to considering practical management issues and important matters raised by the Board of Directors, it receives reports on the sharing of information on operations in each division, including group companies, etc.

Principle 4-9: Independence Criteria and Qualifications of Independent Outside Directors

The Company has formulated its own criteria relating to the independence of independent outside directors based on the requirements for outside directors stipulated in the Companies Act and the independence criteria stipulated by the Tokyo Stock Exchange, and appoints its independent outside directors accordingly.

See "Independent Director-Related Information" in Section 2-1 of this document with regard to the Company's criteria.

Supplementary Principle 4-11-1: Views on the Balance, Diversity, and Size of the Board of Directors With a view to promote comprehensive discussion and timely decision-making, the Company's Board of Directors is comprised of twelve directors (including five outside directors).

In terms of composition, the Board comprises executive officer directors with expertise in various business areas, including management, accounting, human resources and administration, marketing, sales, organization, production, entertainment, and technology, and outside directors with expertise in the broadcasting sector, business strategy, etc. in order to ensure diversity and maintain a good balance of the knowledge, experience, and skills required to fulfill the roles and responsibilities of the Board of Directors.

Supplementary Principle 4-11-2: Directors/Auditors Concurrently Serving as Directors of Other Listed Companies

Directors and auditors who concurrently serve as directors for other companies are disclosed in securities reports.

Securities reports (Japanese only) are published on the

corporate website (https://corporate.wowow.co.jp/). See the site for more information.

Supplementary Principle 4-11-3: Evaluating the Effectiveness of the Board of Directors

With regard to analyzing and evaluating the effectiveness of the Board of Directors and disclosing the results, the Board conducts periodic analyses and evaluations, including revising its analysis and evaluation methods (e.g., introducing self-evaluations by each director), and the evaluation results are reported to the Board of Directors.

For the evaluation of the effectiveness of the Board of Directors conducted in March 2021, all directors and auditors complete a questionnaire on the effectiveness of supervising execution of the Board of Directors ' management plan, the Board ' s composition and operation, and the risk management structure. The analysis results have indicated that there are no problems with the effectiveness of the Board of Directors and a robust structure is in place for exercising management oversight functions.

Supplementary Principle 4-14-2: Training of Directors and Auditors

At the time of appointment, the Company provides training for newly appointed directors to ensure they acquire the knowledge required to fulfill their roles and responsibilities adequately as corporate directors.

In addition, following their appointment, the Company holds training workshops for directors and auditors run by third-party organizations, external specialists, etc., whose costs are borne by the company. Advance briefings and related information are also provided to outside directors with the aim of enhancing their contributions to discussions at Board of Directors' meetings, and opportunities to

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