Corporate Governance

Key Strategic Initiatives

• Focus on the Premium Skin Beauty area.
• Strengthen business portfolio combining the Company’s R&D with open innovation and strategic M&A.
• Develop the inner beauty category.
• Develop cross-border marketing.

Uncertainties

• Loss of competitiveness due to delayed or inadequate response to changing consumer values relating to beauty, changing tastes related to cosmetics or inner beauty, price acceptability, and diversifying purchasing behavior including touchpoints. (Threat)
• Successful marketing strategies addressing changing consumer values may lead to higher-than-expected sales and profits. (Opportunity)

Response Measures

• Expand live e-commerce and online counseling across brands and Regions.
• Strengthen brand portfolio to respond to diversifying consumer values (e.g., accelerate the rollout of Drunk Elephant, BAUM, THE GINZA and EFFECTIM, development of new brands and M&A).
• Set up Consumer and Market Intelligence Department to gather consumer information in an accurate and timely manner.
• Strengthen value development functions (e.g., R&D, marketing) for Chinese consumers.
• Promote innovation from existing businesses and new business development through China Business Innovation & Investment Representative Office (CBI).
• Accelerate diversity of human resources, especially at the Global Headquarters.
• Accelerate value creation and business development through open innovation with other companies.

Relationship with WIN 2023 Key Strategies

• 4,5,6,7,8 and 9

Key Strategic Initiatives

• Strengthen consumer engagement and e-commerce to cultivate loyal consumers in line with structural channel shift behaviors.
• Obtain and analyze consumer data in compliant manner to develop more personalized marketing through digital CRM. Strengthen retention and loyalty.

Uncertainties

• Possibility of decline in market share due to lack of speed in shifting to digital business model and losing existing/new consumers to competitors. (Threat)
• Offer unique value through combination of e-commerce and store-counter sales. (Opportunity)

Response Measures

• Appoint Chief Digital Officer for the Global Headquarters (GHQ) and Regional Headquarters (RHQ).
• Establish Shiseido Interactive Beauty Company, Limited, to innovate business model with digital transformation.
• Reinforce hiring, retention, and development of digital marketing experts.
• Launch of Group-wide Digital Academy to promote a digital mindset as a core competency.
• Promote omni-channel marketing integrating e-commerce and in-store sales.
• Promote introduction and development of beauty technology to enhance personalized engagement with consumers and improve unique digital content to analyze skin condition.
• Promote first-party data acquisition through service and technology offers to consumers online and at store counters.
• Accelerate digital marketing through ties with e-commerce platformers in China or other technology startup companies.
• BCs dedicated to omni-channel in Japan to start full-fledged operations (YouTube, Instagram, ‘team-escort type’ beauty program ONLINE BEAUTY STUDIO, etc.)

Relationship with WIN 2023 Key Strategies

• 8,9 and 10

Key Strategic Initiatives

• Selection and concentration of R&D through introduction of unique R&D philosophy DYNAMIC HARMONY.
• Strengthen R&D in the Premium Skin Beauty area.
• Invest in R&D with ca. 3% of net sales ratio target.
• Strengthen R&D and regulatory compliance activities at each RHQ.
• Effectively share innovation-related information with consumers and clients, including successful R&D initiatives.

Uncertainties

• New and competing technologies may make existing technologies obsolete. Pharmaceutical regulations of certain countries and regions could result in restriction of our technologies, making it difficult to provide new value to consumers. (Threat)
• Short-term delay such as launch of new technologies, mid-to-long-term slowdown in basic research or formula development/alternative ingredients to boost sustainability, or delay in M&A progress and partnerships with third parties could prevent us from achieving planned synergies. This would limit our overall competitiveness and ability to meet the needs of consumers. (Threat)
• Establishing competitive superiority through the creation of new value via innovation in fields such as services, processes, and organization. (Opportunity)

Response Measures

• Investment/re-expansion of resources in R&D of cosmetics.
• Reorganize R&D functions (Brand Value R&D Institute, MIRAI Technology Institute).
• Establishment of Sustainable Technology Acceleration Department in Brand Value R&D Institute, which oversees eco-friendly R&D (packaging, formula, ingredients) and acts as a hub for technological development/strategy execution to realize rapid commercialization, in collaboration with product development functions.
• Establishment of Regulatory Strategy Department for global regulatory monitoring and strategy building.
• Establishment of a new branch of China Innovation Center to drive innovation in collaboration with other companies.
• Establishment of Nasu Factory, Osaka Ibaraki Factory and Fukuoka Kurume Factory leveraging the latest technologies.
• Drive innovation through Shiseido Global Innovation Center (GIC) (Yokohama) and Beauty Innovation Hub (Shanghai).
• Conduct joint research with external organizations. Harness expertise of U.S. startup ventures. Focus on consumer trends.
• Collaborate for innovation with external parties through initiatives such as “fibona” (open innovation program involving startup companies led by GIC).
• Define KPIs for measuring the return on Research and Development (such as R&D expenses to net sales ratio, number of researchers, sites, patent applications, and academic papers, etc.) and regularly monitor against competitors.

Relationship with WIN 2023 Key Strategies

• 3, 4, 5, 6, 7, 8 and 9

Key Strategic Initiatives

• Aggressive marketing activities including digital marketing to increase brand value.
• Proactive marketing activities to create both corporate brand and each brand images using ambassadors and social media influencers.

Uncertainties

• Rumors, whether true or unfounded, regarding our official communications or comments and actions by ambassadors and social media influencers associated with Shiseido could result in public criticism of the Group and damage our reputation. (Threat)
• Sale of counterfeit products can damage our ability to share our values with consumers, resulting in damage to our brand. (Threat)

Response Measures

• Formulate and implement a strict social media policy and ensure familiarization among employees.
• Provide in-house training on maintaining and enhancing brand image for brand holder marketing and communications staff.
• Introduced a review system for language used in advertising and promotional materials, as well as selection of ambassadors and social media influencers, to avoid behavior/messaging leading to criticism on the grounds of ethical or social norms.
• Perform website and social media monitoring to discover and respond to negative information in an accurate and timely manner.
• Coordinate with government authorities to combat counterfeit products.

Relationship with WIN 2023 Key Strategies

• 4, 8 and 9

Key Strategic Initiative

• As part of our initiatives “for a Better World,” execute actions contributing to a happier society or solutions for social issues through beauty, our core business.

Uncertainties

• Lack of environmental measures may lead to loss of trust of consumers/society at large and a decline in shopping motivation. (Threat)
• Inadequate responses to environmental issues, particularly climate change risks, would negatively affect business, finance, and corporate value. (Threat)
• Efforts such as development of sustainable products could establish greater trust with consumers and society at large, create new social value in beauty, and rapidly increase corporate value. (Opportunity)

Response Measures

• Regular meetings held by the Sustainability Committee for medium-to-long-term strategy development/KPI setting, deliberation/resolution on sustainability issues, and monitoring of the strategy implementation progress involving related departments of GHQ and RHQs.
• Sustainability/SDGs-related activities by each brand (SHISEIDO, Clé de Peau Beauté, etc.).
• Promote ISO14001 certification at all factories and distribution centers by end of 2024.
• Issue Sustainability Report reflecting corporate policies, initiatives, and KPIs.
• Adopt eco-friendly packaging (co-developed Kaneka’s biodegradable polymer Green Planet and joined “Loop” rollout in Japan).
• Promote switch to certified palm oil and paper.
• Set and disclose medium-term targets for major environmental load reduction items (CO₂, palm oil, paper, water, waste) and work toward achieving them.
• Support the Task Force on Climate-related Financial Disclosures (TCFD). Prepare a scenario based on quantitative/qualitative analysis of climate change impact on business and disclose specific actions to be taken, in line with TCFD recommendations.

Relationship with WIN 2023 Key Strategies

• 4, 7 and 10

Key Strategic Initiatives

• Focusing on the two strategic pillars of "Empowerment of women" and "Diversity and inclusion through the power of beauty," actions taken by GHQ/RHQs/brands in collaboration with external international organizations and NGOs.
• Provide information to employees as well as external companies, particularly in Japan, where empowerment of women lags behind, thereby driving transformation of Japanese companies and Japanese society as a whole.

Uncertainties

• Possibility of losing the trust of society at large and consumers due to insufficient efforts in Diversity & Inclusion (D&I), which is a strength of Shiseido. (Threat)
• Our efforts to promote D&I may create new social values, building trust with consumers and society at large. (Opportunity)
• Organizational culture rooted in diversity and inclusion may lead to recruitment/retainment of diverse and talented people, promoting innovation and dramatically increasing our corporate value. (Opportunity)

Response Measures

• Medium-to-long-term strategy development, setting KPIs, and monitoring of the strategy implementation progress, involving related departments of GHQ and RHQs.
• Activities by each brand for sustainability and SDGs realization (SHISEIDO, Clé de Peau Beauté, etc.)
• Issuance of Sustainability Report containing corporate policy, initiatives, and KPIs.
• Participation in 30% Club Japan which aims to raise the percentage of women officers in Japanese companies, with our President and CEO acting as chair to lead the activities of TOPIX Presidents’ Association.
• Expand opportunities to experience the power of makeup through Shiseido Life Quality Makeup (SLQM) and Lavender Ring Makeup & Photos with Smiles programs, supporting QOL improvement of cancer survivors.

Relationship with WIN 2023 Key Strategies

• 7, 10

Key Strategic Initiative

• Reinforce human resources and management infrastructure to rebuild our foundation for growth on a global scale.

Uncertainty

• Recent natural disasters (such as earthquakes, flood damages, and tornadoes) and other events around the world (such as terrorism and riots) threatening employee safety and/or causing property damage, resulting in negative impact on supply network and business. (Threat)

Response Measures

• Formulate business continuity plans (BCPs) for GHQ and major regional sites and hold regular training at each site to ensure effectiveness.
• Strengthen and leverage our global supply network, such as through establishment of a new factory, to allow flexible and continuous supply during a crisis.

Relationship with WIN 2023 Key Strategies

• 2, 10

Key Strategic Initiatives

• Reinforce human resources and management infrastructure to rebuild our foundation for growth on a global scale.
• Build a digitally driven business model and organization.

Uncertainties

• Prolonged COVID-19 or outbreak of similar pandemics may lead to decline in consumption, sales, and profits, plus a decline in productivity due to employee health absenteeism. (Threat)
• Possibility to secure a competitive advantage in the market by quickly and flexibly addressing the changes in consumer values and needs. (Opportunity)

Response Measure

• Putting the safety and security of employees first, taskforce established at GHQ and RHQs in response to COVID-19. BCP for infectious diseases revised and response system strengthened.

Relationship with WIN 2023 Key Strategies

• 2, 9 and 10

Key Strategic Initiatives

• Focus investment on the growth areas of the Chinese consumers including China mainland, Asia Pacific (APAC) and Travel Retail business.
• Rebuild the business foundation to boost profitability in the Japan Region.
• Improve profitability in the Americas and EMEA Regions.

Uncertainties

• Possibility of boycott on our products due to increased anti-Japan sentiments in Asian countries and regions. (Threat)
• Deterioration of business environment due to U.S.-China conflict and political instability in Asia. (Threat)
• Our business plans may not be achieved if increased cost of raw materials caused by global price inflation is not absorbed through corporate efforts and the price of goods/services is lifted, as consumers may be less motivated to purchase our products. (Threat)
• Unstable political conditions and strained diplomatic relationships of countries and regions where we operate could deteriorate our business environment and lead to negative impacts on production, supply, and sales of our products. (Threat)

Response Measures

• Further develop our Premium Skin Beauty business in China, Japan, and across the APAC Region.
• Further acceleration of growth in China through new businesses and new brands.
• Balance sales portfolio across Regions. Gain increased support from consumers and expanded sales/profits in Japan, the U.S., and Europe.
• Strengthen and leverage the scale of our global supply network to allow flexibility at a time of crisis, without interrupting supply.

Relationship with WIN 2023 Key Strategies

• 3

Key Strategic Initiatives

• Acquire/develop human resources as catalysts for change and sources of innovation under our “PEOPLE FIRST” principle.
• Established the following working principles for all Shiseido employees to follow as OUR PRINCIPLES (TRUST 8): “Think Big”, “Take Risks”, “Hands On”, “Collaborate”, “Be Open”, “Act with Integrity”, “Be Accountable”, and “Applaud Success.”

Uncertainties

• Inability to attract and retain the best talent may lead to talent shortages in realizing our business objectives. Due to a lack of IT and digital talent resources, an accelerated shift to a digitally driven business model and organization may take longer. (Threat)
• Possibility of securing a competitive advantage by hiring and retaining the best talent. (Opportunity)
• Possible increase in productivity of the entire Group through work style reforms tailored to each task. (Opportunity)

Response Measures

• Continue to reinforce a strong culture of transparent leadership and governance globally and reinforce the culture through employee communications and town halls.
• Promote a workplace environment with flexibility and diversity, such as a new workstyle combining office and remote work to achieve maximum results (Shiseido Hybrid Work Style) and permitting part-time jobs. Improve employee wellbeing.
• Improve infrastructure for human resource (HR) information, introduce the global HR database MIRAI, and unify employee performance management.
• Introduce a job-grade-based HR system and a remuneration system commensurate with individual contributions to ensure transparency in personnel evaluation and improve employee motivation.
• Establish Shiseido Interactive Beauty (SIB) to accelerate a shift to digitally driven business model and reinforce IT/digital capabilities.

Relationship with WIN 2023 Key Strategies

• 8, 9 and 10

Key Strategic Initiative

• Improve profitability through reduction of COGs and SG&A expenses.

Uncertainties

• Business plan achievement may be negatively affected if regional/divisional business restructuring does not progress as planned and profitability and cash flow are not improved. (Threat)
• The timing of the COVID-19 pandemic end and slower-than-expected recovery of Japan market may result in changed purchasing behavior of cosmetics, negatively affecting management plans. (Threat)
• Growth in the cosmetics market may fall below expectations with slowdown of China's economic growth, affecting management plans. (Threat)
• Possibility of competitive advantage in the global market by improving profitability in EMEA and the Americas, rebuilding the foundation around local business in Japan, and establishing a strong growth foundation in China. (Opportunity)

Response Measures

• Establish and promote the Global Transformation Committee led by the CEO to establish, implement, manage and expedite decision-making for corporate strategy and to formulate/implement reform proposals for each regional structure or division.
• Complete the transfer of the Personal Care business.
• Complete the termination of Dolce＆Gabbana license.
• Complete transition services following the sale of the prestige makeup brands bareMinerals, BUXOM, and Laura Mercier.

Relationship with WIN 2023 Key Strategies

• 1, 2 and 3

Key Strategic Initiative

• Globally improve effectiveness of information systems, business management systems, and core business processes related to procurement/production/sales.

Uncertainties

• If IT system reconstruction/transition at our local offices do not proceed as planned, or faces issues hindering smooth operation after introduction, the initiative to improve global business base may be hindered and management plans negatively affected. (Threat)
• Updating global IT systems contributes to a stronger business foundation and improved competitiveness. (Opportunity)

Response Measures

• Establishment of the Business Transformation Department at GHQ and dedication to standardizing and updating IT systems and business processes globally, in line with the overall objectives of the FOCUS project.
• Proceed the system implementation based upon the robust methodology to ensure business, system, and people readiness.
• Implement a high-availability global Cloud IT infrastructure to ensure resilience.
• Activate the Business Contingency Plan, when required, to avoid any operational impact.

Relationship with WIN 2023 Key Strategies

• 2, 9 and 10

Key Strategic Initiatives

• Establish three factories in Japan and a supply chain base to enable stable production over the medium-to-long-term.
• Improve our global supply chain management.
• Continuous process improvement and state-of-the-art technology investments in manufacturing and distribution.
• Focus on safety and sustainability.

Uncertainties

• Possible delays in raw material supply for certain products from specific suppliers and unstable production due to elevated demand for raw materials, price hikes, business withdrawals, natural disasters, and other factors affecting the supply chain. (Threat)
• Leverage Japan’s high-quality manufacturing at our six factories in Japan to increase consumer value. (Opportunity)

Response Measures

• Reinforce supply structure of important ingredients by using multiple suppliers, securing emergency stocks, and creating strategic alliances with suppliers.
• Strengthen our monitoring capabilities to ensure compliance with the Shiseido Group Supplier Code of Conduct.

Relationship with WIN 2023 Key Strategies

• 2, 10

Key Strategic Initiative

• Strengthen global legal compliance structure as we rebuild business foundation through new business models such as digital and beauty tech, wellness, new M&A, etc.

Uncertainty

• Shiseido is subject to laws and regulations in countries and regions in which we operate around the world relating to product safety, ingredients and labeling, employee health and safety, intellectual property, antitrust and competition, data privacy, environment, employment and labor, taxes, product claims, corporate governance, TSE listing and disclosure. Unexpected changes to these laws and regulations could have a material impact on the cost of doing business. Failure to comply with these laws and regulations could expose the Company to civil and/or criminal fines, penalties and sanctions impacting our corporate reputation. (Threat)

Response Measures

• Shiseido Group Standards of Business Conduct and Ethics (the “Standards”) govern the behaviors of our employees globally.
• We appointed a Chief Legal Officer (CLO), in addition to a dedicated Global Risk Management Team that reports into the CLO, to ensure global compliance with the Standards and with laws and regulations impacting our business.
• We foster an ethical culture and a framework of our work process through non-negotiable compliance with the Standards expected from all employees. We also provide training and education on compliance areas such as anti-corruption, anti-trust, anti-harassment, anti-discrimination and privacy, in addition to developing areas concerning the use of consumer data.
• The Company provides an anonymous employee reporting system via phone or online, to report and respond to alleged Standards violations.
• The Company has dedicated team members within functions who monitor compliance and our rigorous standards in areas such as regulatory, safety, quality, employment, claim substantiation, and product labeling to ensure compliance with all laws and regulations. Incident management teams are activated in any affected Regions or markets to ensure timely and effective actions in protecting the safety of our consumers and employees.

Relationship with WIN 2023 Key Strategies

• 10

Key Strategic Initiative

• Offering safe products is a core Shiseido value, the foundation of our business strategies, and our competitive advantage; thorough measures are taken to ensure high quality throughout product design, production, and sales.

Uncertainties

• Company-wide challenges to the thorough implementation of the Group’s high standard of quality assurance at various stages of product lifecycles and providing safe products to consumers. (Threat)
• Globally provide Japan-standard quality, leading to improved brand image and increase in consumers, especially outside Japan. (Opportunity)

Response Measures

• Developed Basic Guidelines on Quality Assurance and Global Quality Policy and Guidance and established Shiseido’s own quality and safety assurance standards. Confirm adherence to such guidelines and standards at all stages, including new product design and development, management of raw materials, production, and delivery. Established a dedicated quality assurance department.
• Launched Global Quality Transformation Project directly led by Global CEO to improve global quality standards by strengthening governance, risk assessment, and operating protocols.
• Implementation of Global Quality System, a system allowing global sharing of voice of consumers collected at consumer centers.
• Set up a consumer service desk and a dedicated internal system for reporting and responding to potential quality risks, in addition to conducting regular simulation training.

Relationship with WIN 2023 Key Strategies

• 4, 5, 6 and 10

Key Strategic Initiative

• Creation of a matrix organization composed of six Regions and brand categories to allow GHQ to manage the entire Group business, whilst also transferring greater authority to RHQs overseeing Japan, China, APAC, the Americas, EMEA, and Travel Retail. We will promote the localization of responsibilities and authority.

Uncertainties

• If RHQs push through decisions that do not align with the Group’s overall policies, or, conversely, if authority is not appropriately delegated to RHQs and they are unable to effectively fulfill their responsibilities, it may become increasingly challenging to maintain efficient and legally compliant operations and may damage the organization’s reputation and sustainability. (Threat)
• Possibility of increased consumer loyalty as RHQs practice “Think Global, Act Local” in their area of responsibility and make speedy decisions or successfully execute marketing strategies to address local market needs. (Opportunity)

Response Measure

• Introduction of a new management system of executive officers, in which officers bear responsibility for the Company-wide execution of business.
• We create and disseminate rules for responsibility and authority of GHQ/ RHQs for each function and brand.
• For all significant risks, we established a continuous risk management framework detailing the controls we have in place and who is responsible for managing such risk. The Global Risk Management team considers both short-term and long-term risks, together with emerging risks in forming a global internal control structure with regular reporting to the executive and senior management, including the Board of Directors.
• We foster a spirit of collaboration and Group-wide mitigation and communication of risks, as many risks are interdependent and require a Group-wide solution approach that is focused on increasing trust among our stakeholders.
• We ensure corporate governance within each affiliate structure is linked to oversight and approvals from GHQ in all material matters through regular reporting and on-going global leadership meetings.
• Significant strategic, transformational, and material decisions relating to the Company’s business operations, assets, business value, reputation, and compliance are regularly reviewed by the Company’s Executive Officers and presented to the Board of Directors as part of our governance structure.

Relationship with WIN 2023 Key Strategies

• 7,8,9 and 10

Key Strategic Initiatives

• Strengthen digital marketing globally by utilizing data and enhancing e-commerce to match consumer needs and fierce competitive environment.
• Acquire and utilize more personal data, including sensitive information, to provide new curated experience/services to consumers and co-creation.
• Shift to Shiseido Hybrid Work Style, a new way of working where productivity is high regardless of place or time.
• Further collaboration and co-creation with external partners such as startups to generate innovation.

Uncertainties

• Liability for damages and loss of trust in the Company due to system failures caused by cyberattacks and leakage of consumer data. (Threat)
• With the increase in access points to important data accompanying new working styles and further collaboration/ co-creation with external partners, information leakage risks may be heightened if management/operation is inadequate.(Threats)
• Violation of laws and regulations, fine payments and loss of trust in the Company due to delayed or inappropriate response to data privacy-related laws and regulations in each country/region. (Threat)
• Loss of trust in the Company and business opportunity due to failure to understand the sensitivity of society regarding data privacy and appropriately understand the concerns / expectations of consumers regarding data privacy. (Threat)
• By taking appropriate response measures to the above threats, possibility of contributing to the achievement of business goals; for example, consumers feel safe to entrust their personal data to the Company. (Opportunity)

Response Measures

The following measures are implemented, referencing the ISO and NIST frameworks.

• Establish a dedicated information security department leading global collaboration, governance, and control.
• Appoint a person responsible for data privacy to reestablish and strengthen global collaboration system.
• Promote information disclosure and notification regarding protection of data privacy. Promote communication with relevant authorities.
• Continuously revise the Company’s information security/data privacy regulations, considering both internal and external environmental changes.
• Identify/securely manage personal data held by the Company. Continuously promote information security awareness among employees.
• Reinforce medium-to-long-term response to external cyberattacks increasing in sophistication and diversification (Protect, Detect, Respond, Recover) (e.g., stronger security related to filters, computer devices, and cloud use).
• Strengthen the establishment and monitoring of the Security Operations Center (SOC) on a global scale, involving external experts, for improved management/operation of increasing amount of sensitive data and diversifying data access points.

Relationship with WIN 2023 Key Strategies

• 5, 6, 8, 9 and 10

Key Strategic Initiative

• Increase our ratio of overseas sales as a global beauty company.

Uncertainties

• Significant fluctuations in exchange rates for settlements in foreign currencies related to import/export transactions.
• When transaction figures reported in local currencies for an overseas affiliate are converted into Japanese yen at the time of preparing the consolidated financial statements, the appreciation of the Japanese yen may adversely affect business results when revenues exceed costs.
• Investments in overseas affiliates could result in reduced net assets due to currency exchange adjustments and the appreciation of the Japanese yen.

Response Measures

• Hedge exchange rate fluctuation risks with forward exchange contracts.
• Monitor and respond to fluctuations in major global currencies.

Relationship with WIN 2023 Key Strategies

• 3

Key Strategic Initiative

• Promote growth investments that align with the Company’s strategy and improve profitability and strengthen our skin beauty business.

Uncertainty

• If market/business conditions deteriorate at levels not anticipated at the time of investment decisions and our business plans are not successfully carried out, impairment losses on goodwill and intangible assets recorded through M&A may negatively affect company performance. (Threat)

Response Measures

• Regular performance monitoring and reporting of monitoring results to the Board of Directors.
• Consider future directions and countermeasures to improve business performance in cooperation with relevant brands, regions, and functional departments.

Relationship with WIN 2023 Key Strategies

• 1, 4 and 6

Key Strategic Initiatives

• Continuously strengthen legal compliance structure and governance with a risk mitigation focus as we rebuild our business foundation and focus on growth through new business models such as digital and beauty tech, transformation initiatives and M&A, beauty wellness, etc.
• Robust management and mitigation of material litigation/claims and heightened attention on proper controls and preventative measures, including employee training and employee reporting avenues such as ethics hotlines.

Uncertainties

• With a presence across approximately 120 countries/regions globally, there is a possibility that we will face lawsuits and/or claims and/or government investigations under the different legal systems of each country and region. (Threat)
• Significant impact on the Group’s business performance, should a major material litigation occur in the future with an unfavorable ruling for the Group; possibility of an adverse effect on our financial position and business performance. (Threat)

Response Measures

• Established legal teams at our GHQ and Regional Affiliates, led by the Company’s Chief Legal Officer to ensure effective strategies and defenses. Subject matter legal experts/external law firms are retained in support of all legal strategies and defenses in material matters.
• Continuously provide legal training to employees regarding legal environment and country-specific laws and regulations in areas of legal impact to the business, such as anti-corruption, antitrust, anti-discrimination.
• Ensure that all commercial agreements have clear business terms that include indemnification and other protections to reduce the threat of disputes.
• Proactively ensure all IP is protected globally to guard against infringement claims.
• Conduct due diligence on all significant commercial and business transactions.

Relationship with WIN 2023 Key Strategies

• 10