Corporate Governance Organization

Basic Views

The Nikon Group will strive to achieve sustainable growth and enhancement of its corporate value over the medium to long term, by improving management efficiency and transparency and further strengthening the supervisory function over management in light of the purpose of Japan's Corporate Governance Code.

Corporate Governance Guideline

System

Aiming to further enhance corporate governance, Nikon adopted a company with an Audit and Supervisory Committee. This position further strengthens the supervisory function of the Board of Directors as it strives to streamline decision-making and clarify management responsibility arising through delegation of authority.

Board of Directors

The Board of Directors supervises management by directors and assumes the decision-making functions regarding matters prescribed under laws and regulations, the Articles of Incorporation of the Company, as well as the important matters concerning the Nikon Group. For the purpose of clarifying the scope of delegation to executive directors and officers while ensuring prompt decision-making and management by executive directors and officers, the Company specifically sets out the matters subject to deliberation at Board of Directors' meetings in the criteria for matters subject to deliberation and reporting at Board of Directors' meetings. For example, the Board of Directors makes decisions on matters concerning important management issues, including the basic management policies, the Medium-Term Management Plan, the annual plan, the Basic Policy on Internal Control System, and investments and loans exceeding a certain amount. Moreover, in order to further strengthen the supervisory function of the Board of Directors, the Company has appointed six independent external directors (including three Audit and Supervisory Committee members).
Meetings of the Board of Directors are presided at by Chairman of the Board, who is a non-executive director.

Audit and Supervisory Committee

The Audit and Supervisory Committee audits and supervises the status of management by directors other than those who are Audit and Supervisory Committee members, and officers as an independent body. For such a purpose, Audit and Supervisory Committee members regularly attend meetings of the Board of Directors as well as important meetings such as the Executive Committee, and conducts audits and supervision over management and directors. In addition, to further enhance the independence and neutrality of the audit system, the Audit and Supervisory Committee shall consist of five Audit and Supervisory Committee members, including three independent external directors.

Nominating Committee

The Company has a Nominating Committee as a voluntary advisory body to the Board of Directors. External directors comprise a majority of the members, and an external director chairs the Committee.
The Nominating Committee primarily formulates criteria for the election and removal of the chief executive officer, president and directors, nominates candidates, considers the composition of the Board of Directors, and oversees evaluation and assignment of officers so as to ensure that decisions on the election and removal of directors and officers are transparent and objective.

Compensation Committee

The Company has a Compensation Committee as a voluntary advisory body to the Board of Directors. External directors comprise a majority of the members, and an external director chairs the Committee. The Compensation Committee deliberates and makes proposals for policy regarding executive compensation as well as various related systems so as to ensure objectivity, transparency, and linkage with performance in the process of determining executive compensation.

Independent External Directors' Meeting

The Company has an Independent External Directors' Meeting whose members are all external directors. The meeting serves as an opportunity for the members to freely exchange opinions and have discussions from an independent and objective standpoint about issues and matters to be deliberated by the Board of Directors. Based on the results of this meeting, the Independent External Directors' Meeting makes proposals to the Board of Directors and helps stimulate discussions at Board of Directors' meetings.

Executive Committee

The Executive Committee, as the highest decision-making body of management, swiftly and decisively makes decisions on individual major management issues delegated by the Board of Directors, in accordance with basic management and other policies, as determined by the Board of Directors.

Directors' Skills Matrix

To accomplish its management strategy, the Company has selected the specific skills expected from its directors as shown in the table below, and authorized them following the deliberation by the Nominating Committee. The skills include knowledge on and experience in corporate management, management strategy, internal control, and governance as well as the Company's business characteristics and issues. The composition of the Board of Directors is designed to ensure that each director possesses these skills in a well-balanced manner and the Board as a whole can demonstrate its effectiveness, taking into account the need to maintain diversity and an appropriate number of directors.

*Indicates the External Director

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Title	Name	Nominating Committee	Compensation Committee	Knowledge and experience expected from directors
Title	Name	Nominating Committee	Compensation Committee	Corporate management and management strategy	Internal control and governance	Legal and risk management	Finance and accounting / M&A	Global business	Technology
Representative Director	Toshikazu Umatate	✓	✓	✓				✓	✓
Representative Director	Muneaki Tokunari	✓	✓	✓	✓		✓
Director	Yasuhiro Ohmura			✓				✓	✓
Director^* Chairman of the Board	Shiro Hiruta	✓ (Chairperson)		✓	✓				✓
Director^*	Makoto Sumita		✓ (Chairperson)	✓	✓				✓
Director^*	Tsuneyoshi Tatsuoka		✓		✓	✓		✓
Director Full-time Audit and Supervisory Committee Member	Satoshi Hagiwara			✓	✓		✓
Director Full-time Audit and Supervisory Committee Member	Seiji Kikuchi				✓		✓	✓
Director^* Chairperson of Audit and Supervisory Committee	Shigeru Murayama	✓		✓				✓	✓
Director^* Audit and Supervisory Committee Member	Asako Yamagami	✓			✓	✓		✓
Director^* Audit and Supervisory Committee Member	Michiko Chiba		✓		✓	✓	✓

(Of skills each director possesses, up to three items of knowledge and experience on which the Board particularly relies are listed.)

External Director

In the appointment of its external directors, the Company attaches importance to ensuring their independence. Nikon appoints external director candidates from among those with a wealth of knowledge and experience as executives of other companies or with expertise and experience as specialists such as attorneys and certified public accountants, and who are qualified to take part in the management supervision function from a fair and objective standpoint independent of management.

Criteria for Determining Independence of External Directors

Reasons for Appointment

Reasons for Appointment of External Directors, except Audit and Supervisory Committee Members

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Name	Reasons for Appointment
Shiro Hiruta	Shiro Hiruta served as Representative Director of Asahi Kasei Corporation and other important positions, and possesses long years of management experience and outstanding insight, and we believe that he will be able to contribute to the Company’s overall management from a big-picture perspective and that he can also contribute to securing the soundness and appropriateness of the Company’s management as well as to the enhancement of its transparency.
Makoto Sumita	Makoto Sumita served as President and Representative Director of INNOTECH CORPORATION, Chairman & Director of TDK Corporation and other important positions, and possesses long years of management experience and outstanding insight, and we believe that he will be able to contribute to the Company's overall management from a big-picture perspective and that he can also contribute to securing the soundness and appropriateness of the Company's management as well as to the enhancement of its transparency.
Tsuneyoshi Tatsuoka	Tsuneyoshi Tatsuoka has held important positions at the Ministry of Economy, Trade and Industry, and possesses exceptional knowledge regarding industrial and economic policies, and we believe that he will be able to contribute to the Company's overall management from a big-picture perspective.

Reasons for Appointment of External Directors who are Audit and Supervisory Committee Members

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Name	Reasons for Appointment
Shigeru Murayama	Shigeru Murayama served as Representative Director of Kawasaki Heavy Industries, Inc. and other important positions, and possesses long years of management experience and outstanding insight, and we believe that he will be able to contribute to the Company’s overall management from a big-picture perspective.
Asako Yamagami	Asako Yamagami has work experience as an in-house lawyer and possesses expertise and experience as a lawyer regarding governance, compliance and other matters, and we believe that she will be able to contribute to securing the soundness as well as to the enhancement of its transparency.
Michiko Chiba	Michiko Chiba possesses outstanding insight regarding corporate accounting and governance through her involvement as the person responsible for various auditing operations at an auditing firm, and we believe that she is qualified to fulfill the responsibilities of an Audit and Supervisory Committee Member.

Attendance at Meetings of the Board of Directors, and Audit and Supervisory Committee (Fiscal year ended March 31, 2023)

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Name	Category	Board of Directors	Audit and Supervisory Committee
Shigeru Murayama	Director	17 of 17	-
Makoto Sumita	Director (Audit and Supervisory Committee member)	17 of 17	4 of 4
Tsuneyoshi Tatsuoka	Director	16 of 17	-
Shiro Hiruta	Director (Audit and Supervisory Committee member)	17 of 17	14 of 14
Asako Yamagami	Director (Audit and Supervisory Committee member)	17 of 17	14 of 14
Michiko Chiba	Director (Audit and Supervisory Committee member)	11 of 12	9 of 10

•Makoto Sumita resigned as Director who is an Audit and Supervisory Committee Member at the 159th Annual General Shareholders’ Meeting held on June 29, 2023, and was appointed as Director other than those who are Audit and Supervisory Committee Members. Accordingly, his attendance at meetings of the Audit and Supervisory Committee represents the number of the meetings held and the number of the meetings he attended during his service as Director who is an Audit and Supervisory Committee Member.
•Michiko Chiba was appointed as Director who is an Audit and Supervisory Committee Member at the 159th Annual General Shareholders’ Meeting held on June 29, 2023. Accordingly, her attendance at meetings of the Board of Directors and the Audit and Supervisory Committee represents the number of the meetings held and the number of the meetings she attended after her appointment as Director who is an Audit and Supervisory Committee Member.

Evaluation of the Board of Directors' Effectiveness

Nikon asks a third-party organization to analyze and evaluate the effectiveness of its Board of Directors in order to further improve its functions. The efforts to address issues identified through the previous evaluation (for the fiscal year ended March 31, 2023) as well as the issues identified in this evaluation (for the fiscal year ended March 31, 2024) and future responses are outlined below.

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Evaluation Method	A third-party organization conducted a survey and individual interviews of all directors on general matters related to the Board of Directors, its composition, meeting preparations, and details of deliberations, among others, to evaluate Board effectiveness and identify issues. The evaluation results and identified issues were shared at a meeting of the Board of Directors and discussions on how to improve the functions of the Board of Directors were held by the Independent External Directors' Meeting.
Efforts to Address Issues Identified in Previous Evaluation	Monitoring of progress of Medium-Term Management Plan and growth strategies Continued regular monitoring of progress in Medium-Term Management Plan and growth strategies by the Board of Directors and discussed the necessity of partial modification of the strategies to adapt to environmental changes Reinforcement and monitoring of internal control and risk management systems The Board of Directors received regular reports on internal control and risk management systems and their implementation and conducted monitoring with a focus on important matters Enhancement of coordination between Nominating Committee and Board of Directors Deepened discussions on the succession plan of President at Board of Directors’ meetings by promoting the sharing of information on progress in deliberation by the Nominating Committee with the Board of Directors
Response Policies for Issues Identified in This Evaluation	Reinforcement of monitoring of internal control and risk management systems Set agendas that allow the Board of Directors to monitor internal and risk management systems more effectively and conduct monitoring by receiving regular reports from management Further deepening of discussions at Board of Directors’ meetings Enhance discussions by the Executive Committee, the highest decision-making body of management, to provide appropriate inputs to the Board of Directors, thereby further deepening discussions at Board of Directors’ meetings

Taking into account the issues raised by this evaluation, Nikon plans to continue implementing measures to further enhance Board effectiveness going forward.

Compensation of Directors and Officers

Compensation for Directors (Fiscal year ended March 31, 2024)

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Category			Directors other than those who are Audit and Supervisory Committee Members (of which External Directors)	Directors who are Audit and Supervisory Committee Members (of which External Directors)	Total
Fixed compensation	Fixed monthly compensation	Number of persons	7 (3)	6 (4)	13 (7)
Fixed compensation	Fixed monthly compensation	Amount of compensation(million yen)	257 (44)	111 (48)	368 (92)
Performance-based compensation	Bonuses	Number of persons	3 (–)	-	3 (–)
	Bonuses	Amount of compensation(million yen)	78 (–)	-	78 (–)
	Performance-based stock remuneration	Number of persons	3 (–)	-	3 (–)
	Performance-based stock remuneration	Amount of compensation(million yen)	15 (–)	-	15 (–)
Stock compensation	Restricted stock remuneration	Number of persons	3 (–)	-	3 (–)
Stock compensation	Restricted stock remuneration	Amount of compensation(million yen)	61 (–)	-	61 (–)
Total		Number of persons	7 (3)	6 (4)	13 (7)
Total		Amount of compensation(million yen)	411 (44)	111 (48)	521 (92)

1.The number of persons and the amount of compensation pertaining to fixed compensation/fixed monthly compensation, and total shown above include one Director who is an Audit and Supervisory Committee Member (of which, one External Director) who resigned at the conclusion of the 159th Annual General Shareholders’ Meeting held on June 29, 2023, and the amount of compensation pertaining to the said Directors.
2.The amount of bonuses shown above indicates the total amount of bonuses for Directors other than those who are Audit and Supervisory Committee Members (excluding Non-Executive Directors) resolved at the Board of Directors’ meeting held on May 17, 2024 after deliberation by the Compensation Committee.
3.The amount of performance-based stock remuneration shown above indicates the total amount to be paid to Directors other than those who are Audit and Supervisory Committee Members (excluding Non-Executive Directors) during the fiscal year, by resolution of the Board of Directors held on May 17, 2024.
Note that the number of persons and the amount of compensation include the monetary compensation paid in exchange for shares as the performance-backed stock remuneration to an individual who resigned as Director as of March 31, 2024.

Number of Women and Non-Japanese Appointed as Nikon Group Directors / Officers and Corporate Auditors (As of March 31, 2024)

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Category	Women	Non-Japanese
Nikon Corporation	2	1
Group companies^*	4	51

*Local equivalent to director, officer, and corporate auditor included in the count. Cases of directors or officers serving in concurrent posts are counted as one individual.