ウェルスナビ（7342） – Corporate Governance Report

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. WealthNavi Inc. assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. Corporate Governance Report Last Update: March 24, 2022 WealthNavi Inc. Contact: Corporate Planning: 03-6632-4911 Securities Code: 7342 https://corp.wealthnavi.com/en The corporate governance of WealthNavi Inc. (the “Company”) is described below. I. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information 1. Basic Views With the mission of “Helping working families build wealth,” the Company offers a fully automated robo-advisor called “WealthNavi” which helps working families in Japan make long-term investment with a globally diversified portfolio and build wealth for their comfortable retirement. The Company recognizes the importance of sustainable growth as well as improvement of mid- to long-term corporate value on top of securing transparency and objectivity of the management. The Company also believes that the enhancement of corporate governance is one of the most important issues of the Company’s management. The Company also recognizes that, based on the belief of giving top priority to customer benefits and convenience, gaining a high level of the trust from society is essential to continue the business, and that such a philosophy will lead to the maximization of corporate value. Accordingly, the directors and employees strive for the fulfillment of corporate governance by understanding their roles and by continuously trying to maintain and improve the awareness of laws, social norms, and ethics, etc. required of a financial institution, and by securing transparency and objectivity of business activities. Moreover, the Company has been working on reinforcing its corporate governance by establishing voluntary bodies such as the Risk Compliance Committee and the Investment Committee in addition to the bodies required by the Companies Act. Reasons for Non-compliance with the Principles of the Corporate Governance Code The Company has complied with all five basic principles of the Corporate Governance Code. Foreign Shareholding Ratio 30% or more 2. Capital Structure Status of Major Shareholders Name or Company Name Percentage (%) Kazuhisa Shibayama NORTHERN TRUST CO.(AVFC) RE IEDU UCITS CLIENTS NON TREATY ACCOUNT 15.315 PCT SBI Holdings, Inc. STATE STREET BANK AND TRUST COMPANY 505303 THE BANK OF NEW YORK MELLON 140051 Custody Bank of Japan, Ltd. (TRUST ACCOUNT 9) SSBTC CLIENT OMNIBUS ACCOUNT THE BANK OF NEW YORK 133652 BNYM SA/NV FOR BNYM FOR BNY GCM CLIENT ACCOUNTS M LSCB RD Number of Shares Owned 11,086,045 1,412,800 1,162,540 950,000 930,200 924,500 903,000 844,000 776,042 23.59 3.00 2.47 2.02 1.97 1.96 1.92 1.79 1.65 1 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. WealthNavi Inc. assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. THE MASTER TRUST BANK OF JAPAN, LTD. (TRUST ACCOUNT) 750,400 1.59 Supplementary Explanation Coupland Cardiff Asset Management LLP filed the Change Report of the Large Shareholder Report on November 26, 2021 that, as of November 19, 2021, it owned 3,220,600 shares of the Company (7.06% of total number of outstanding shares). However, the Company did not include the firm’s name in the list above as the Company could not confirm the beneficial shares ownership as of December 31, 2021. Also, Coupland Cardiff Asset Management LLP filed the Change Report of the Large Shareholder Report on February 1, 2022 that, as of January 25, 2022, it owned 5,340,600 shares of the Company (11.48% of total number of outstanding shares). JPMorgan Asset Management (Japan) Limited. and its co-owners JPMorgan Asset Management (Asia Pacific) Limited, JPMorgan Securities Japan Co., Ltd. and J.P. Morgan Securities plc filed the Change Report of the Large Shareholder Report on December 20, 2021 that, as of December 15, 2021, it owned 2,604,088 shares of the Company (5.60% of total number of outstanding shares). However, the Company did not include the firm’s name in the list above as the Company could not confirm the beneficial shares ownership as of December 31, 2021. Also, JPMorgan Asset Management (Japan) Limited. and its co-owners JPMorgan Asset Management (Asia Pacific) Limited, JPMorgan Securities Japan Co., Ltd., J.P. Morgan Securities plc and J.P. Morgan Securities LLC filed the Change Report of the Large Shareholder Report on February 18, 2022 that, as of February 15, 2022, it owned 3,084,642 shares of the Company (6.56% of total number of outstanding shares). Wasatch Advisors, Inc. filed the Change Report of the Large Shareholder Report on December 2, 2021 that, as of November 30, 2021, it owned 2,828,900 shares of the Company (6.20% of total number of outstanding shares). However, the Company did not include the firm’s name in the list above as the Company could not confirm the beneficial shares ownership as of December 31, 2021. Also, Wasatch Advisors, Inc. filed the Change Report of the Large Shareholder Report on January 18, 2022 that, as of January 14, 2022, it owned 1,883,654 shares of the Company (4.05% of total number of outstanding shares). 3. Corporate Attributes Listed Stock Exchange and Market Segment Fiscal Year-End Business Sector Number of Employees (Consolidated) as of the End of the Previous Fiscal Year Net Sales (Consolidated) as of the End of the Previous Fiscal Year Number of Consolidated Subsidiaries as of the End of the Previous Fiscal Year Mothers section of the Tokyo Stock Exchange December Securities & Commodity Futures 100 or more and fewer than 500 \10 billion or more and less than \100 billion Fewer than 10 4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder ― ― 5. Other Special Circumstances which May have Material Impact on Corporate Governance 2 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. WealthNavi Inc. assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. II. Business Management Organization and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversight in Management 1. Organizational Composition and Operation Corporate Governance System Company with Supervisory Committee Directors Number of Directors Stipulated in Articles of Incorporation Directors’ Term of Office Stipulated in Articles of Incorporation Chairperson of the Board Number of Directors Election of Outside Directors Number of Outside Directors Number of Independent Directors 10 1 year CEO and Representative Director 7 Elected 5 5 Outside Directors’ Relationship with the Company (1) Name Attributes Sumito Togo Ogawa Maki Akira Enomoto Eriko Matsuno Sachihiko Fujimoto *Categories for “Relationship with the Company”. (Use “○” when the director presently falls or has recently fallen under the category; “△” when the director fell under the category in the past; “●” when a close relative of the director presently falls or has recently fallen under the category; and “▲” when a close relative of the director fell under the category in the past.) From another company From another company From another company Lawyer CPA Relationship with the Company* f g h 〇 △ d e c i k b a j a. Person who executes business of the Company or a subsidiary b. Person who executes business or a non-executive director of a parent company c. Person who executes business of a fellow subsidiary d. Person/entity for which the Company is a major client or a person who executes business for such person/entity e. Major client of the Company or a person who executes business for such client f. Consultant, accounting expert, or legal expert who receives large amounts of cash or other assets in addition to director/Audit and Supervisory Board Member compensation from the Company g. Major shareholder of the Company (in cases where the shareholder is a corporation, a person who executes business of the h. Person who executes business for a client of the Company (excluding persons categorized as any of d, e, or f above) (applies to i. Person who executes business for another company holding cross-directorships/cross-auditorships with the Company (applies to corporation) self only) self only) j. Person who executes business for an entity receiving contributions from the Company (applies to self only) k. Other Outside Directors’ Relationship with the Company (2) Name Sumito Togo Membership of Supervisory Committee Designation as Independent Director 〇 Supplementary Explanation of the Applicable Relationship Reasons for Appointment Mr. Sumito Togo is a Director and the CFO of freee K.K. Although the services Company uses provided by that company, the transaction amount for Mr. Togo has thorough knowledge, experience and insights on Internet and The industries. SaaS Company appointed him as an Outside Director with the 3 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. WealthNavi Inc. assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. on their fiscal year the current relating business the relationship is less than 2% total operating of the revenue. Therefore, Company determines that the transactions do not have any his impact independence. Ms. Ogawa was a member of Board of Directors of Sony Bank, Inc. which has business relationship with the Company through offering of “WealthNavi for Sony Bank,” the transaction amount for the current fiscal year relating the business relationship is less than 2% total operating of revenue. Therefore, the Company determines that the transactions do not have any her impact independence. their on expectation that he will to provide us with appropriate advice. Ms. Ogawa has extensive experience financial at institutions. The Company appointed her as a Director with the expectation that she will continue to provide us with appropriate advice. a has over of from an Mr. Enomoto extensive experience in the financial industry. As the Company believes that he will provide highly effective the supervision the management Company an independent and objective standpoint, it appointed him as a Director who is an Audit & Supervisory Committee Member. Ms. Matsuno has profound knowledge and experience as the Company believes that she will provide highly effective the supervision the management an Company independent and objective standpoint, it appointed her as a Director who is an Supervisory Audit & Committee Member. Mr. Fujimoto has thorough knowledge, experience and insights as a CPA and a tax accountant. the Company believes that he will provide highly effective over of from lawyer. As As Ogawa Maki 〇 Akira Enomoto 〇 〇 Eriko Matsuno 〇 〇 Sachihiko Fujimoto 〇 〇 4 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. WealthNavi Inc. assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. over of from the supervision the management Company an independent and objective standpoint, it appointed him as a Director who is an Audit & Supervisory Committee Member. Supervisory Committee Composition of Supervisory Committee and Attributes of the Chairperson All Committee Members Supervisory Committee Full-time Members Inside Directors Outside Directors Committee Chair 3 1 0 3 Outside Director Appointment of Directors and/or Staff to Support the Supervisory Committee Appointed Matters Concerning Independence of Said Directors and/or Employees from Executive Officers A member of the Internal Audit Department supports the role of the Audit and Supervisory Committee, but the executive officers are not involved, and the independence of the Audit and Supervisory Committee is ensured. Status of Coordination between Supervisory Committee, Accounting Auditor, and Internal Audit Department The Audit and Supervisory Committee, the Accounting Auditor, and the Internal Audit Department strive to audit efficiently and effectively by sharing on information on issues and improvements as necessary. Matters Concerning Independent Directors Number of Independent Directors 5 Other Matters Concerning Independent Directors Every person eligible to be an Independent Officer has been appointed an Independent Officer. Incentives Implementation Status of Measures related Incentives Granted to Directors to Introduction of Stock Options Scheme / Other Supplementary Explanation for Applicable Items The Company has introduced stock-option program for the purposes of increasing morale and motivation for improving business results and corporate value in the mid-term. In addition, we have granted restricted stocks to Directors (excluding Directors who are Audit & Supervisory Committee members). Persons Eligible for Stock Options Inside Directors / Outside Directors / Employees / Other Supplementary Explanation for Applicable Items Stock options are granted to the aforementioned eligible recipients for the purposes of increasing morale and 5 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. WealthNavi Inc. assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. motivation for improving business results and improving medium-term corporate value. Director Remuneration Status of Disclosure of Remuneration Individual Directors’ No Disclosure for any Directors Supplementary Explanation for Applicable Items Since no Directors receives remuneration of JPY 100 million or more in total, individual Directors’ remuneration is not disclosed. The total amount of remuneration for Directors and Audit & Supervisory Board Members is disclosed for each respective classification. Policy on Determining Remuneration Amounts and the Calculation Methods Thereof Established Disclosure of Policy on Determining Remuneration Amounts and the Calculation Methods Thereof For the purpose of evaluating whether the remuneration is adequate to secure the Director necessary in order to achieve sustained growth and to ensure objectivity and transparency of the remuneration decision-making process, etc., the method of determining remuneration amount and calculation method is explained and an appropriate advice from Outside Directors is provided at the Board of Directors meeting. In addition, the remuneration for the Company’s Directors (excluding Directors who are Audit & Supervisory Committee members) is a combination of basic remuneration and (non-cash) stock-price-linked remuneration, and the amount of an individual Director’s remuneration shall be determined at the Board of Directors in accordance with the remuneration decision-making policy within the range of the remuneration limit resolved at the General Meeting of Shareholders. Support System for Outside Directors Dedicated employees are not assigned in relation to Outside Directors and Audit & Supervisory Board Members, but the Corporate Group serves as a contact point and provides support as necessary. 2. Matters Concerning Functions of Business Execution, Auditing and Supervision, Nomination, and Remuneration Decisions (Overview of Current Corporate Governance System) a. Board of Directors The Company’s Board of Directors is composed of four Directors (including two Outside Directors), and it has the authority to adopt resolutions for important matters and supervises Directors’ execution of duties, based on the “Rules of the Board of Directors.” The Company has invited Mr. Sumito Togo and Ms. Maki Ogawa as an Independent Officer and is promoting a management system that makes it possible to improve the soundness and transparency of management decision-making. In principle, the Board of Directors holds a regular meeting of the Board of Directors once a month, and it flexibly holds extraordinary meetings of the Board of Directors as necessary. b. Audit & Supervisory Committee The Company has established an Audit & Supervisory Committee. The Audit & Supervisory Committee comprises three Audit & Supervisory Committee Members (including three Outside Audit & Supervisory Committee Members), and it audits Directors’ daily activities, including their execution of duties. The Audit & Supervisory Committee Members include members who have experience as an accountant, a tax accountant and an attorney, and they utilize their knowledge to express objective opinions from an independent and neutral position. Audit & Supervisory Committee Members conduct effective monitoring by attending the General Meetings of Shareholders and meetings of the Board of Directors and exercising their legal rights of receiving reports from Directors, employees and the Company’s accounting auditor and such that a full-time Audit & Supervisory Committee Member attends management meeting. In principle, the Audit & Supervisory Committee holds a regular Audit & Supervisory Committee meeting once each month and holds meetings 6 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. WealthNavi Inc. assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. extraordinarily as necessary. c. Internal Audits The Internal Audit Department (two employees) audits adequacy of the Company’s business, and for the purpose of ensuring the effectiveness and efficiency of its audit work, the Internal Audit Department performs audits based on annual internal audit plans and reports audit results to the Representative Director as well as to Audit & Supervisory Board Members, management meetings and the Board of Directors. The Internal Audit Department shares audit results and instructions for improvement with each audited department and confirms the progress of improvement on an ongoing basis and reports the results of the follow-ups at management meetings. d. Accounting Auditors The Company has concluded an auditing contract with KPMG AZSA LLC. There are no particular conflicts of interest between the Company and that audit firm and/or its employees who execute audits on the Company. e. Management Meetings The Company’s Management Meeting comprises the Representative Director, who also serves as the chairperson of the Management Meeting, Directors (excluding Outside Directors), a full-time Audit & Supervisory Committee Member, executive officers, the person responsible for internal management and control, and the person designated by the chairperson or the person responsible for internal management and control. Management Meetings are generally held once a week. The Company strives to make management activities more efficient through discussions related to management in general and deliberation about important business matters. f. Risk Compliance Committee The Company has established a Risk Compliance Committee as an organization for conducting discussions and considerations related to the promotion of risk management and compliance. The Committee comprises the Representative Director, who also serves as the chairperson, Directors (excluding Outside Directors), the person responsible for internal management and control, the head of the Corporate Group, and the person designated by the chairperson or the person responsible for internal management and control. In principle, meetings of Risk Compliance Committee are held once each quarter and are also held flexibly and extraordinarily as necessary. The Risk Compliance Committee discusses the Company’s related to risk management and compliance, organizational systems, formulation/revision/abolition of the Company’s rules etc., monitoring of compliance with laws and regulations, education and training plans to increase awareness of compliance, and discussions related to risk management. g. Investment Committee The principle of the Company’s business operations is to faithfully conduct business activities for customers. The Company has established Investment Committee in order to execute investment management that aligns interest of customers and to properly handle changes in the external environments such as the economic environment and the market environment that may affect the Company’s investment management operations. The Investment Committee comprises the person responsible for the Research & Quants Department, who also serves as the chairperson, the Representative Director, who also serves as the vice chairperson, and members who are outside experts in domestic and foreign investment theories and asset management. The chairperson and members are appointed by the Representative Director based on approval by the Board of Directors. In principle, Investment Committee meetings are held once each quarter, and the Committee verifies the appropriateness of recommendation algorithms for optimal portfolios, gives advice to the Company’s Research & Quants Department in times of sudden changes of the market environment, verifies the actual investment performance of optimal portfolios, and conducts other verifications and gives advice for matters that are necessary in order to appropriately operate investment management business. h. Reward and Punishment Committee The Company’s Reward and Punishment Committee chaired by the Representative Director consists of members selected by the Representative Director. Reward and Punishment Committee meetings are held whenever a case corresponding to the “Rules of Employment” arises. This Reward and Punishment Committee conducts resolution related to cases concerning commendations and discipline and has been established for the 7 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. WealthNavi Inc. assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. purpose of ensuring fairness in the rewards and punishments for the Company’s employees. i. Executive Officer System The Company has introduced an Executive Officer System in order to reinforce execution of the Company’s business operations. Executive officers selected by the Board of Directors execute their operations under their control. An executive officer’s term of office is until the time of the conclusion of the annual General Meeting of Shareholders for the last business year that ends within one year after the executive officer’s appointment. 3. Reasons for Adoption of Current Corporate Governance System Based on the “Basic Views on Corporate Governance,” decision-making authority and responsibility for business execution is centralized at the Board of Directors, and the Audit & Supervisory Committee Members and the Audit & Supervisory Committee, which are independent from business execution and the Board of Directors, audits and supervises the Board of Directors. The Company thereby realizes appropriate management decision-making and business execution and secures the function of a check-and-balance system as a company with an Audit & Supervisory Committee. Specifically, the Company has appointed two Outside Directors (excluding Directors who are Audit & Supervisory Committee Members) and three Outside Audit & Supervisory Committee Members. The Outside Directors (excluding Directors who are Audit & Supervisory Committee Members) are responsible for management supervision to monitor appropriateness of decision-making and promote efficiency in management. Also, experts who have diverse knowledge and expertise related to finance, accounting and tax matters, risk management and compliance with laws are appointed as the Outside Audit & Supervisory Committee Members, and as a result, the Board of Directors and the Audit & Supervisory Committee are monitoring management from technical and objective perspectives from independent and fair positions. In addition, the Company has adopted an executive officer system, and has strengthened the corporate governance system by ensuring the soundness and efficiency of management, separating management supervision functions from business execution functions, by establishing three voluntary expert committees in the form of the Risk Compliance Committee, the Investment Committee, and the Reward and Punishment Committee, and by receiving advice and guidance from external experts such as attorneys, etc. as necessary. III. Implementation of Measures for Shareholders and Other Stakeholders 1. Measures to Vitalize the General Shareholder Meetings and Facilitate Exercise of Voting Rights Early Posting of Notice of the General Shareholders Meeting Scheduling of Meeting During Non-Peak Days the General Shareholders Electronic Exercise of Voting Rights Participation in a Platform for the Electronic Exercise of Voting Rights and Other Initiatives to Enhance Environment for Institutional Investors to Exercise Voting Rights Provision of Notice (or Summary of Notice) of the General Shareholders Meeting in English Other － Supplementary Explanation The Company strives to send a convocation notice as early as possible in order to enable shareholders to exercise their voting rights based on sufficient consideration of proposed matters. In relation to setting the date of holding a meeting, the Company takes care to avoid dates when general meetings tend to be concentrated so that many shareholders can participate in the Company’s meeting. The Company has enabled shareholders to exercise their voting rights over the Internet. The Company will consider this matter. A part of the Notice of Convocation of the Annual General Meeting of Shareholders is translated into English and has been posted on the Company’s website (https://corp.wealthnavi.com/en/ir/stock). 8 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. WealthNavi Inc. assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. 2. Status of IR-related Activities Explanation by a representative director or a representative executive officer Supplementary Explanation Formulation and Publication of Disclosure Policies Regular Investor Briefings held for Individual Investors Regular Investor Briefings held for Analysts and Institutional Investors Regular Investor Briefings held for Overseas Investors Online Disclosure of IR Information Establishment Placement of a Manager in Charge of IR of Department and/or Other － The Company has disclosed the Disclosure Policy on the IR page (https://corp.wealthnavi.com/en/ir/disclosurepolicy) of the Company’s website. The Company explains about its business and takes opportunity individual to communicate with investors in the General Meeting of Shareholders. The Company will consider holding briefings for individual investors based on the future shareholder composition. The Company plans to regularly conduct briefings results following announcement institutional investors. The Company has held meetings etc. with institutional investors overseas. The Company posts financial results and timely IR page disclosure materials, etc. on (https://corp.wealthnavi.com/en/ir) the Company’s website. Corporate Planning team of Corporate Group is responsible for IR for analysts and every quarterly financial the of Held Held Held 3. Status of Measures to Ensure Due Respect for Stakeholders Establishment of Internal Rules Stipulating Respect for the Position of Stakeholders Supplementary Explanation The Company believes that it is important to gain the trust of the stakeholders such as shareholders, investors and customers, and the Company’s code of ethics, compliance manual and fiduciary duty its that (FD) declaration stipulate stakeholders. The Company acknowledges that this is a matter that should be considered in the future. The Company proactively discloses information to stakeholders through the Company’s website and financial results briefings. the Company respects Implementation of Environmental Preservation Activities and CSR Activities, etc. Formulation of Policies, etc. on Provision of Information to Stakeholders Other － IV. Matters Concerning the Internal Control System 1. Basic Views on Internal Control System and Status of Development The Company’s Board of Directors has made a resolution to formulate a “Basic Policy on Establishing an Internal Control System” to ensure appropriateness of the Company’s business activities, and the Company is currently operating the internal control system in line with that policy. An overview of the systems is as stated below. 1. System to ensure that Directors’ execution of duties complies with laws and the Articles of Incorporation 9 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. WealthNavi Inc. assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. The Company establishes “Compliance Manuals” and not only complies with laws but also acknowledges that it is essential for each Director and employee to act with a high degree of ethics to respond to society’s trust. The Company also positions thorough compliance as the most important issue for management. The Company manages and promotes matters related to compliance based on the “Rules of Compliance Management.” In principle, meetings of the Board of Directors are held once a month based on the “Rules of the Board of Directors,” and the Board members communicate and supervise work each other. The Board of Directors also strives to maintain transparency and soundness of management by having Outside Directors participate on the Board of Directors. Directors and employees conduct proper execution of their duties, and internal audits are conducted by the Internal Audit Department which is an independent organization under the direct control of the Representative Director. The Audit and Supervisory Committee establishes the audit implementation standards for internal control systems and conducts audits in accordance with the implementation standards. Directors and employees strive to maintain a system that strictly avoid any association with antisocial forces. 2. System for storing and managing information about Directors’ execution of duties Each Directors shall appropriately store and manage important information and documents related to execution of duties in accordance with the “Rules of Document Management,” and Directors shall be able to access those documents at any time. 3. Rules and other systems relating to management of risk of loss of the Company The Company appropriately handles various risks that arise in association with business activities in compliance with the “Rules of Risk Management,” and also formulates preventive measures and manages progress of the status. When an abnormal situation occurs, the Company communicates appropriate information promptly, and puts an emergency system in place. For risks related to information security, information management supervisor is assigned, and a risk management system is implemented and continuously improved based on the “Rules of Information Security Management.” 4. System to ensure the efficient execution of duties by Directors The Company has adopted an executive officer system in order to promptly handle changes in the management environment, and the Company also conducts appropriate and efficient decision-making and execution of duties, etc. based on the “Rules of Authority for Duties,” etc. 5. System to ensure that employees’ execution of duties complies with laws and the Articles of Incorporation The Company has established “Compliance Manuals, etc.” as codes of conduct for Board members and employees and strives to make such codes of conduct thoroughly understood. For the purpose of preventing the occurrence and the spread of misconduct within the Company, an internal whistleblowing system has been set based on the “Rules of Internal Whistleblowing,” and the Company strives to discover violations of laws or the possibility of such violations, in the early stage. 6. Matters concerning Directors and employees who shall support the roles of the Audit and Supervisory Committee of the Company (hereinafter referred to as “auxiliary employees”) / Matters concerning independence from other Directors of the Company (excluding directors who are Audit and Supervisory Committee members) / Matters concerning the feasibility of instructions given to the relevant Directors and employees of the Audit and Supervisory Committee of the Company In case that the Audit & Supervisory Committee requests auxiliary employees to support the Audit & Supervisory Committee in their roles, the auxiliary employees who were designated are to conduct those duties. The right to give direction and orders related to auditing work to auxiliary employees who assist with duties of Audit & Supervisory Committee Members is to attribute to Audit & Supervisory Committee Members. 7. System for Directors (excluding Directors who are Audit & Supervisory Committee Members) and employees of the Company or a person who received a report from Directors and employees and then 10 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. WealthNavi Inc. assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. report to the Company’s Audit & Supervisory Committee and other reporting system, and a system to ensure that a person who reported to the Company’s Audit & Supervisory Committee will not receive adverse treatment due to the reporting The Board of Directors and employees shall report the Company’s matters below to the Audit & Supervisory Committee. – Matters that may cause significant damage to the Company – Serious violations of laws and the Articles of Incorporation – Other important matters related to compliance that are reported by using the internal whistleblowing Notwithstanding the foregoing, Audit & Supervisory Committee can request board members and system employees to report as necessary. Any adverse treatment of the director or employee who made the report for the reason that the person reported to the Audit & Supervisory Board Members is prohibited. The Company articulates, in written form, that any directors and employees who used the Company’s whistleblowing system shall not receive adverse treatment, retaliation, or discrimination, and the Company makes best efforts to ensure privacy and human rights. 8. Procedures for advance payment or reimbursement of expenses that arise for the execution of duties of the Audit & Supervisory Committee Members, and other matters related to policies for processing expenses or debts that arise for execution of those duties In the event that an Audit & Supervisory Committee Member makes a request for advance payment or a request for settlement of reimbursements for expenses related to the execution of audits, the Company shall make payments immediately. 9. System to ensure the effectiveness of audits by Audit & Supervisory Committee Based on the “Rules of Audit & Supervisory Committee,” Audit & Supervisory Committee Members attend important meetings and express their opinions, hold regular meetings with the Representative Director, ascertain the Representative Director’s management policies, and exchange opinions about tasks that the Company should handle, risks faced by the Company, the status of maintaining the audit environment surrounding Audit & Supervisory Committee, and important tasks related to audits. Audit & Supervisory Committee (or a selected audit and supervisory committee member if selected) are able to set up an opportunity for individual hearings from Directors and important employees as necessary. 2. Basic Views on Measures for Eliminating Anti-Social Forces and Status of Development In order to maintain transparency as a financial institution and realize sound corporate management, the Company declares that it strictly avoids any association with antisocial forces and has formulated a fundamental policy as follows and posted it on the Company’s website. 1. The Company strives to handle antisocial forces with commitment of the Company as a whole and is firmly committed to ensure the safety of employees who handle antisocial forces. 2. The Company collaborates closely on an ongoing basis with outside specialized organizations, including the police, the National Center for Removal of Criminal Organizations, attorneys and the Japan Securities Dealers Association, etc. 3. The Company refuses to have any relationships, including business relationships, with antisocial forces. 4. The Company strictly rejects any unjustifiable requests by antisocial forces and will resolutely take both civil and criminal legal approaches. 5. The Company will never engage in any backdoor deal with or provide any funds to antisocial forces. The Company organizes a dedicated department in charge to deal with elimination of relationships with antisocial forces and builds up unified management system in order to prevent damages due to antisocial forces. The Company has established “Rules for Eliminating Relationships with Antisocial Forces,” a “Manual for Handling of Eliminating Relationships with Antisocial Forces,” and “Rules on Money Laundering and Provision of Funds for Terrorism,” and has designated the Risk Compliance Department as the department responsible for taking measures to refuse to have any relationships with antisocial forces. In order to prevent transactions with antisocial forces, the Company conducts appropriate advanced screening 11 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. WealthNavi Inc. assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. of new customers and vendors, etc. by utilizing information related to antisocial forces, and is also taking measures to prevent antisocial forces from becoming transaction partners by incorporating provisions regarding the exclusion of organized crime syndicates in written agreements and transaction agreements. Specifically, for a new customer, the Risk Compliance Department cross-checks the Company’s antisocial forces database and the relevant customer’s name and also checks the new customer’s name on Internet sites in order to judge whether or not the customer falls under antisocial forces. The Company also conducts cross-checks with the inquiry system related to antisocial forces provided by the Japan Securities Dealers Association. Furthermore, the Company’s board members and employees collaborate closely on an ongoing basis with outside specialized organizations including the police’s Center for Removal of Criminal Organizations, the Company’s general counsels, and the Japan Securities Dealers Association’s Center for Support for Securities Protection Measures and are promoting elimination of transactions with antisocial forces under the appropriate instructions and involvement of the management team. The Company takes due care to avoid providing benefits to antisocial forces as stipulated in the “Rules for Eliminating Relationships with Antisocial Forces.” when it cancels transactions with antisocial forces. Members of the Risk Compliance Department participates in lecture and training sessions held by the Financial Services Agency, etc. and conducts internal training sessions for the Company’s board members and employees concerning guidance on handling of antisocial forces and management of information related to antisocial forces. V. Other 1. Adoption of Anti-Takeover Measures Adoption of Anti-Takeover Measures Not Adopted Supplementary Explanation for Applicable Items － 2. Other Matters Concerning the Corporate Governance System An overview of the Company’s corporate governance structure and framework for timely disclosure of IR information is provided below. 12 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. WealthNavi Inc. assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. [Corporate Governance Diagram] 13 Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. WealthNavi Inc. assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. [Overview of Timely Disclosure System] END 14