Daiwa Securities Group Inc. will respect the rights and interests of the shareholders, consider the position of all stakeholders and strive for sustainable growth and improvement of medium to long term corporate value through realization of our corporate principles "Building trust," "Placing importance on personnel," "Contributing to society," and "Maintaining healthy earnings results."

For that purpose, the Company practices group management based on a holding company structure, establishes a highly transparent and objective governance environment that conforms to international standards, realizes highly efficient oversight of group companies and builds a unified group management system that elicits synergies among group companies.

The Company has adopted a Three Committees system (a company with Nominating committee, etc.) as an institutional design in order to supervise management through the following (1) and (2).

1. (1)Making swift and decisive decisions by having the Board of Directors assign wide-ranging authority to Corporate Executive Officers (Shikkoyaku) and clarifying the division of the duties among Corporate Executive Officers (Shikkoyaku)
2. (2)Improving transparency and fairness of the management by establishing three committees: the Nominating Committee, Audit Committee, and Compensation Committee with highly independent Outside Directors as a majority of the members

Furthermore, the Company positively addresses corporate social responsibility activities in order to obtain trust from all of the stakeholders. There are indeed various aspects to corporate social responsibility, such as providing superior products, services, and sincere responses to customers; returning profits appropriately and disclosing information to shareholders appropriately; taking measures for labor environment and evaluation of the employees; establishing legal compliance and corporate ethics; environmental management; as well as social contribution.

The Company believes that these approaches, together with a strengthened corporate governance system which emphasizes transparency, agility and efficiency will lead to the sustainable improvement of the corporate value.

• Corporate Principles of the Daiwa Securities Group
• Daiwa Spirit

The Company's Corporate Governance Guidelines define the basic framework and policies of the Daiwa Securities Group's corporate governance.

Key Points of the Corporate Governance Guidelines

• Corporate Governance Guidelines
  (as of June 1, 2023) Complete Text

The corporate governance system of the Company consists of the Board of Directors and the following Three Committees (Nominating Committee, Audit Committee, and Compensation Committee) as a supervising body, Outside Directors' Committee as a subcommittee of the Board of Directors, Executive Management Committee and its subcommittees (Group Risk Management Committee, Group Compliance Committee, Disclosure Committee, Group Digital Strategy Committee, and Group Internal Audit Committee), which is in direct control of the CEO as an internal audit body.

For roles, duties, composition and activities of the Board of Directors and the Committees, refer to:

• Corporate Governance Report
• Securities Reports
• Daiwa Securities Group Integrated Reports
• Sustainability Data Edition

• *1Criteria: People with experience in sustainability-related work (including experience in promoting the Group's sustainability strategy)
• *2Ms. Mami Yuzuki's name in her family register is Mami Kato.

• Daiwa Securities Group Inc. has conducted annual evaluations of the effectiveness of the Board of Directors with the aim of identifying issues and implementing improvements to enhance its effectiveness. For details, please refer to the Corporate Governance Report.
• Questionnaire items are established based on past Board effectiveness evaluations, agenda items discussed by the Board, its committees, and Outside Directors' Committee during the fiscal year, peer benchmarking based on public disclosures, and advice from a specialized evaluator. All directors complete the questionnaire, following which the specialized evaluator conducts interviews and analyzes the results. Based on the evaluator's report, the evaluation findings are reported to and discussed by the Board of Directors, and actions are taken accordingly, ensuring a continuous PDCA cycle for enhancing Board effectiveness. For further details, please refer to the Corporate Governance Report. The summary of findings and responses from past effectiveness evaluations is shown in the table below.

• Note:Please refer to the Corporate Governance Report for the comments and responses from the FY2024 evaluation, as well as the results of the 2025 evaluation and future action plans.

Conflict-of-interest transactions can occur between Daiwa Securities Group Inc. and Group companies in situations such as intra-Group transactions. Daiwa Securities Group applies rules regarding conflicts of interest stipulated by Japan's Companies Act to the Executive Management Committee as well as the Board of Directors. Conflicts of interest between Daiwa Securities Group Inc. and Group companies are appropriately prevented through a rule prohibiting an executive officer from voting when he or she concurrently serves as an officer of an interested Group company and thus has a special interest in a matter to be decided.

At Daiwa Securities Group, Inc., as stipulated by the Companies Act, the Compensation Committee has determined "Policies for Determination of Remuneration of Directors and Corporate Executive Officers."

< Performance-linked remuneration >
The Company refers to KPIs, which are set as the Group numerical goals in the Medium-Term Management Plan "Passion for the Best" 2026 to calculate Performance-linked remuneration.
The performance assessments used in calculating Performance-linked remuneration reflect the financial performance evaluation, which is based on the Performance KPIs using the financial information and the quality evaluation, which is a comprehensive assessment of the KPIs other than the Performance KPI. The Financial Performance Evaluation and the Quality Evaluation are determined by the Compensation Committee.
Performance-linked remuneration is calculated by multiplying the reference amount determined for each position by the performance evaluation, and reflecting the degree of individual contribution. The same calculation formula is applied to all positions for performance evaluation.

The indicators pertaining to Performance-linked remuneration are as shown below.

• (Note) The standard value is determined at the Compensation Committee, based on the target of the Medium-term Management Plan.

< Image of Remuneration >

• Restricted stocks and phantom stocks in a value corresponding to a certain ratio of performance-linked remuneration (cash) are paid to foster a system that increases incentivizes for long-term performance improvement and sustainable growth.
• In order to foster a system that increases incentivizes for long-term performance improvement and sustainable growth, if Performance-linked remuneration exceeds a certain limit, the excess amount will be paid in the form of phantom stocks.

< Stock Compensation Plan >
The Company introduced the Stock Compensation Plan to increase incentives for the Company and its subsidiaries' Directors, Corporate Executive Officers (Shikkoyaku), and Executive Officers (Shikkoyakuin), etc., to enhance performance in the medium and long term and strengthen values shared among the Eligible Officers, etc. and shareholders.

• (Note 1)RS II is calculated by multiplying the ratios established by position by performance-linked remuneration (cash).
• (Note 2)PS is calculated by applying a uniform percentage to performance-linked remuneration (cash), regardless of position. Regarding the President and CEO, a structure is in place to decide the ratio of performance-linked remuneration based on the Company's TSR (total shareholder return) during the results evaluation period, the rate of change of the TOPIX, and a comparative valuation with the TSR of competitors.
• (Note 3)Where serious compliance violations are discovered within the Group, in addition to the forfeiture of unpaid stock remuneration (malus), based on deliberation by the Compensation Committee, a clawback scheme is being introduced to allow the Company to demand the return of all or part of the stock remuneration that has already been paid.

< Procedures on decision of remuneration for Directors >
For details on the procedures on decision of remuneration for Directors, etc., please see below.

• Corporate Governance Report

< Consolidated Compensation, etc. by officer >
For details on Consolidated Compensation, etc. by officer, please see below.

• Securities Reports

The Group has created a management structure centered on the Company with regard to the Group's various main risks in relation to the Group’s business, and seeks to ensure the effectiveness and efficiency of operations, the reliability of the financial report, compliance with the laws and regulations concerning business operations, and the preservation of assets, etc. This is based on the recognition that the maintenance of the internal control system to accomplish the sound and appropriate operation is the responsibility of the management.

Based on the recognition that the establishment of a sound and efficient internal control system enhances the value of the Group, and having concluded that the internal audit plays an important role in such a system, the Company has positioned a full-time Internal Audit Corporate Executive Officer (Shikkoyaku) in charge, and has the Internal Audit Department, which is independent from other sections, that verifies the internal control system.

The Internal Audit Department conducts risk-based audits and strives to enhance the Group's corporate value.

The focus items in the internal audits of the Group’s business include:

• The internal control system at Daiwa Securities and its overseas locations as a global financial instruments business operator
• The state of business at Group companies, and the state of control from the Company.

In order to establish an effective risk governance system, the Group has created guidelines for Three Defensive Lines and a comprehensive structure for risk management. The First Defensive Line is front offices, where various operational risks are identified and managed autonomously. The Second Defensive Line is Group-wide risk management, which is conducted mainly by the risk management and compliance departments. The Internal Audit Department constitutes the Third Defensive Line by verifying and evaluating whether or not the other two lines of defense are functioning effectively.

Globally operating financial institutions are required to ensure that they are sound enough to adequately perform their financial intermediation function even in times of economic or market stress. Additionally, to be well prepared for stress, they need to secure sufficient liquidity and capital for risks even in ordinary times.

Under these circumstances, the Group has introduced the Risk Appetite Framework (RAF). The Group's RAF is documented as the Risk Appetite Statement and deliberated and decided at the Board of Directors. The Group is making efforts to instill it within the Group and improve the management structure.

Quantitative indicators of risk appetite are deliberated and decided as part of the Risk Appetite Statement and reviewed twice a year at the Board of Directors. The Audit Committee audits RAF-related execution of duties by the Board of Directors and the management.