Will : Corporate Governance Report

Corporate Governance Report

WILL GROUP, INC.

Last Update: November 22, 2021

WILL GROUP, INC.

Representative: Shigeru Ohara, President and Representative Director

Contact: Tel: [phone]

Stock code: 6089

https://willgroup.co.jp/en/

The corporate governance of WILL GROUP, INC. ("WILL GROUP," or the "Company") is described below.

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

1. Basic Views

In order to ensure management transparency and compliance, the Company will build a system that can respond quickly and flexibly to changes in the business environment of the entire Group while enhancing corporate governance. In addition, the Company develops company-wide activities through various measures in order to permeate corporate ethics and corporate philosophy throughout the entire Group.

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

[Supplementary Principle 3.1.3] Full Disclosure

1. Initiatives for sustainability and initiatives for human capital
   WILL GROUP and its subsidiaries (the "Group") are guided by the mission of serving as an agent of change to bring about positive changes to both individuals and organizations. As a company that creates positive changes, WILL GROUP is dedicated to grow in a sustainable manner with society. In recent years, the importance of non-financial information has been increasing from the standpoint of corporate value. WILL GROUP recognizes that activities for sustainability have become a key indicator of corporate value. The Group has been playing a role in solving social issues by meeting the needs of client companies while providing job seekers with learning and job opportunities. There will be more disclosures of information regarding self-assessments of sustainability activities, the implementation of necessary actions and progress regarding these actions. These disclosures will be made based on the perspective of sustainability guidelines such as ISO26000, ESG themes and the Sustainable Development Goals.
   WILL GROUP added a sustainability page to its website in October 2020 for the disclosure of information about the Group's ESG activities. This page includes the environmental policy, human rights policy, other policies and guidelines such as standards for supplier conduct, and information about a variety of ESG initiatives and sustainability data.
   WILL GROUP started the SDGs Project in November 2020 for the purpose of integrating social value and economic value. This project identifies key topics and targets and KPIs for our sustainability initiatives, based on the SDG Compass guidelines. Through reporting progress to the Board of Directors, this project will obtain and reflect the opinions and advice from the Board of Directors. WILL GROUP plans to issue an Integrated Report and by using its website, more detailed information will be disclosed in an easily comprehensive format that is consistent with management strategies and challenges.
   *The SDG Compass, advocated by United Nations, provides guidance on how companies can align their strategies with contributions to the achievement of the SDGs.
2. Impact of climate change on risk and profit earning opportunities

- 1 -

As an initiative for combating climate change, the Group has established the goal of reducing total CO2 emissions of the fiscal year ending in March 2023 by 20% compared to the level in the fiscal year that ended in March 2020 This goal is on the WILL GROUP website. Measures will be taken to increase the quality and quantity of information disclosed in accordance with the Task Force on Climate-Related Financial Disclosures (TCFD) and other guidelines about risks, profit opportunities and other impacts of climate change.

(Medium-term management plan: https://willgroup.co.jp/ir/strategy.html)

(Sustainability: https://willgroup.co.jp/sustainability/index.html)

[Supplementary Principle 4.10.1] Use of Optional Approach]

WILL GROUP has a Nomination Committee (formerly the Selection Committee) and a Remuneration Committee for the purpose of increasing the transparency and objectivity of the examination process for the appointment of director candidates and the remuneration of directors. There are three internal directors and two independent outside directors. Although currently, independent outside directors are not the majority of members of these committees, to ensure the independence and objectivity of the functions of the Board of Directors at all committees, WILL GROUP plans to change the composition of these two committees by adding independent outside directors and outside Audit & Supervisory Board members.

- Nomination Committee (formerly the Selection Committee)

It discusses on matters related to the training and development of successors as part of the succession planning for the CEO, and matters related to the appointment and dismissal of directors.

Committee members: Independent outside directors: 2 (including one chairperson)

Internal directors: 3

- Remuneration Committee

In accordance with authority granted by the Board of Directors, this committee discusses and evaluates the remuneration of the directors in compliance with the remuneration frameworks and limits established at the general meeting of shareholders and by the Board of Directors. From the standpoint of objectivity, fairness, and transparency, the evaluation by the Remuneration Committee is discussed and confirmed in advance by the Independent Officers Liaison Committee, which consists mainly of outside directors and Audit & Supervisory Board members, to ensure that it is in line with the decision-making policy regarding the details of remuneration for each individual director.

Committee members: Internal directors: 3

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

[Principle 1.4 Cross-shareholdings]

(i) Policies for strategic shareholdings

The Company does not hold listed shares as cross-shareholdings. It is its policy not to hold listed shares as cross-shareholdings in the future either, unless the Company judges that it will contribute to the enhancement of the corporate value over the medium to long term, taking into consideration the creation of business opportunities and the establishment, maintenance, and strengthening of business and cooperative relationships.

When WILL GROUP holds cross-shareholdings, its policy is to reduce these shares as quickly as possible when the significance of holding these shares is believed to have declined based on the above policy.

1. Verifications related to cross-shareholdings
   For shares held as cross-shareholdings, the Board of Directors periodically evaluates the merits, risks, economic rationale such as return on investment against the cost of capital, and future prospects of holding the shares, and decides whether or not to retain these investments.

1. Standards for voting rights in cross-shareholdings
2. • 2 -

When exercising its voting rights, WILL GROUP will evaluate each proposal to decide whether to approve or disapprove, rather than making a uniform decision. Each proposal will be considered from the perspective of improving corporate value and shareholder returns over the medium to long term, while fully respecting the management policies and strategies of the investee company.

[Principle 1.7 Related Party Transactions]

When there are transactions between related parties, in accordance with the Company rules, the Representative director deliberates the transaction and for significant transactions, the Company will obtain approval from the Board of Directors. The Company regularly checks and monitors the officers of our group companies regarding related party transactions.

The conditions and policies for transactions are disclosed with the convocation notices for general meetings of shareholders, the securities report, and other channels.

(Securities report: https://willgroup.co.jp/ir/library/sr.html)

(Internet disclosure items: https://willgroup.co.jp/ir/library/report.html)

[Supplementary Principle 2.4.1 Workforce Diversity, Including Initiatives for Empowering Women]

As the business climate changes rapidly and with the difficulty to predict the future, WILL GROUP must continue to create business opportunities that are not restricted to current business domains. Accomplishing this will require the Group to operate with a diverse range of perspectives and values. The Group will continue to recruit and promote a diversified workforce regardless of gender and nationality and including mid-career employees with various work experience. Activities will also include improving workplace environments where people can maximize their attributes and capabilities, and to provide training and development programs to managers. The Group will continue to take initiatives with the goal of having the management personnel ratio of women, non-Japanese and people hired with previous work experience to be the same as the ratio of each of these categories of employees to all employees by 2030.

(i) Appointment of women to key positions

The Group has been actively promoting initiatives to support the advancement of women. Initiatives include career development seminars for young women and classes for enabling women to advance to management positions. Currently, 40.9% of the Group's full-time employees are women, but only 27.6% of managerial positions are held by women. The Group's goal is to have 40% of managerial positions filled by women by 2030. The Group will continue to improve workplace environments, encourage women to establish career goals and introduce other initiatives to reach this goal, which will result in more women being involved in management decision making processes.

(ii) Appointment of non-Japanese employees to key positions

Apart from having 31 consolidated subsidiaries outside of Japan, the Group has a substantial number of foreign employees in Japan as the Group provides temporary staffing of assistant language teachers, and services to foreigners who intend to be medium to long-term residents of Japan. The ratio of foreign employees has been high. Currently, 24.6% of the Group's full-time employees are foreigners and

37.8% of managerial positions are held by foreigners. The Group will continue to actively recruit and promote foreign employees in and outside of Japan.

1. Hiring of mid-career employees with job experience for key positions (applicable to companies in Japan)
   The Group hires a substantial number of employees with job experience covering many fields and promotes these employees to management positions. Currently 66.8% of all full-time employees have worked for at least one other company and these employees account for 73.1% of all employees in managerial positions, which is about the same as the full-time employee ratio. The Group will continue to provide training for all employees, whether hired as a new graduate or from another company, and assign employees to positions where they can fully utilize their skills.

- 3 -

[Principle 2.6 Roles of Corporate Pension Fund as Asset Owner]

The Company is not an asset owner as it has not introduced a fund-type or contract-type defined benefit pension plan or welfare pension fund, as envisioned by the Corporate Governance Code.

[Principle 3.1 Full Disclosure]

1. The Company discloses its corporate philosophy, management strategies and medium-term management plan on its website.

(Corporate philosophy: https://willgroup.co.jp/profile/policy.html)

(Medium-term management plan: https://willgroup.co.jp/ir/strategy.html)

1. This is as written in Section I-1 titled "Basic Views" of this document. For the detailed policies and initiatives, please refer to the respective sections of this document.
2. The policy for determining the remunerations of directors is written in Section II-1 "Organizational Composition and Operation, Director Remuneration" of this document.
3. When appointing executives and nominating candidates for directors, the Company comprehensively considers the right person for the right position, taking into consideration the balance between accurate and prompt decision-making, appropriate risk management, oversight of business execution, and the ability to cover the various functions of the Company and the various business divisions of group companies, in accordance with internal rules. When nominating candidates for Audit & Supervisory Board members, the Company comprehensively considers the right person for the right position, while ensuring the balance between the knowledge of finance and accounting, the familiarity with the company's business field, and diverse perspectives regarding business management.
   Based on these policies, Nomination Committee (formerly the Selection Committee), which includes outside directors, discusses selections in advance for final decisions by resolutions of the Board of Directors
   For the dismissal of executives, an advisory committee consisting mainly of outside directors and Audit & Supervisory Board members is formed on a case-by-case basis for deliberations in accordance with internal rules, and final decisions are made by a resolution of the Board of Directors
4. The Candidates for directors and Audit & Supervisory Board members, the reasons for their election, as well as their career summaries, are provided in the reference materials for the general meeting of shareholders, which are described in the convocation notice for a general meeting of shareholders in the Company's website. In the event of dismissal, appropriate disclosure will be made in accordance with

the Company's policies and procedures.

(Convocation notice for a general meeting of shareholders: https://willgroup.co.jp/ir/library/report.html)

[Supplementary Principle 4.1.1 Summary of Scope of Matters Delegated by the Board of Directors to the Management]

The Company's Board of Directors regulations specify the items to be discussed and decided by the Board of Directors in accordance with laws and regulations. In addition, the regulations for delegation of authority specify the scope of management's authority.

[Principle 4.9 Independence Criteria and Qualification for Independent Directors]

In selecting outside directors/Audit & Supervisory Board members (hereinafter "Outside Officers") or candidates for Outside Officers, the Company ensures that they satisfy the requirements for independence set forth by the Tokyo Stock Exchange and the Company's Criteria for Independence of Outside Directors/Audit & Supervisory Board Members as described below.

Criteria for Outside Directors/Audit & Supervisory Board Members (hereinafter "Outside Officers"):

- 4 -

The Company judges Outside Officers or candidates for Outside Officers as independent if, as a result of the investigation conducted by the Company as far as reasonably possible, they do not fall under any of the following items:

1. An executive Note 1 of the Company and its affiliates;
2. A party that regards the Group as major client Note 2, or an executive thereof;
3. A major client of the Group Note 3, or an executive thereof;
4. A major shareholder of the Company (holding directly or indirectly 10% or more of total voting rights) or an executive thereof;
5. A party of which the Group directly or indirectly holds 10% or more of the total voting rights or an executive thereof;
6. A person who belongs to an audit firm appointed as Accounting Auditor of the Group;
7. An attorney, certified public accountant, licensed tax accountant, consultant and the like who receives a large amount Note 4 of monetary or other property benefits other than officers' remuneration from the
   Group;
8. A person who belongs to corporations, cooperatives, and the like including law firms, auditing firms, tax accountant corporations, and consulting firms, which receive a large amount Note 4 of monetary or other property benefits from the Group;
9. A person, or a council member or other executive of a corporation or cooperative, which receives a large amount Note 4 of donations or assistance from the Group;
10. A person who serves as executive director, executive officer (shikko-yaku), executive officer (shikko- yakuin), manager or other important employee of such company in cases where executive directors, or full-time Audit & Supervisory Board members concurrently serve as outside directors or outside Audit & Supervisory Board members of other companies;
11. A person who falls under the definition of the above (2) to (10) in the last ten years; and
12. In cases where a person falling under the definition of the above (1) to (10) is an important person Note 5,

their spouse or relative within the second degree of kinship.

Notes:

1. An "executive" refers to a director, executive officer (shikko-yaku), executive officer (shikko-yakuin), employee with executive powers, council member, or party or employee equivalent thereto of corporations and other bodies, as well as a party who belonged to the Group in the past even once.
2. A "party regarding the Group as major client" refers to a party who has received from the Company the payment of 2% or more of their consolidated annual sales in the most recent fiscal year.
3. A "major client of the Group" refers to a party who pays the Company 2% or more of its consolidated annual sales in the most recent fiscal year, or who loaned the Company 2% or more of its consolidated total assets at the end of the most recent fiscal year.
4. A "large amount" refers to, in terms of the average for the past three fiscal years, 10 million yen or more for individuals, or for entities including corporations and cooperatives, more than 2% of the consolidated sales or total revenues.
5. An "important person" refers to a director (excluding outside director), audit & supervisory board member (excluding outside audit & supervisory board member), executive officer (shikko-yakuin) and an employee who is senior manager in the position of general manager or higher.

[Supplementary Principle 4.11.1 Preconditions for Board and Audit & Supervisory Board Effectiveness] The Board of Directors has three internal directors who have a thorough knowledge of the Group's business operations and two independent outside directors and three outside Audit & Supervisory Board members. These Outside Officers have considerable experience and knowledge that encompasses corporate management, finance and accounting, global business operations, and other areas of expertise. This composition of the board allows the directors to perform their functions effectively and efficiently as well as to effectively oversee business execution.

- 5 -