At the 95th Ordinary General Meeting of Shareholders held on June 24, 2026, it was resolved that the Company shift its corporate governance system from a company with an audit & supervisory board to a company with an audit and supervisory committee.

The Board of Directors makes core business decisions, such as those involving basic management policy, and oversees the execution of business, while the Audit and Supervisory Committee audits the performance of duties by Directors.
The delegation by the Board of Directors of decisions on the execution of important business to individual Directors is aimed at speeding up management decision-making, further enhancing deliberations by the Board of Directors, and strengthening oversight functions.
The Company established the Governance and Executive Nomination Committee and Executive Compensation Committee as voluntarily established committees, a majority of each of which are Independent Outside Directors, with the aim of strengthening the independence, objectivity, and accountability of Board of Directors functions pertaining to the nomination and compensation, etc. of Directors, the CEO, and other members of the management team, thus strengthening the effectiveness of the corporate governance system.

FY2026 Composition of the Board of Directors, Governance and Executive Nomination Committee, Executive Compensation Committee, and Audit and Supervisory Committee

◎ indicates the Chairperson, and ○ indicates Members.

The principal activities of the Board of Directors, the Governance and Executive Nomination Meeting, and the Executive Compensation Meeting are as follows.

Board of Directors

The Board of Directors is comprised of eight members including three highly independent Outside Directors. Chaired by Director and Chairman Tomomi Nakamura, it met 13 times* during the fiscal year under review.

*In addition to these Board of Directors meetings, one resolution was adopted in writing that was deemed to be a resolution of the Board of Directors in accordance with Article 370 of the Companies Act and the Articles of Incorporation of the Company.

＜Main themes of deliberations in FYE March 2026＞

• Determination of candidates for Directors and Audit & Supervisory Board Members, as well as the CEO and other members of the management team
• Matters pertaining to repurchase and cancellation of own shares
• Revision of the executive compensation system and the policy for determining details of the compensation for individual Directors, and delegating matters regarding the determination of compensation, etc. for individual Directors and Executive Officers based on the executive compensation system to the Executive Compensation Meeting
• Discussions on reports related to medium- and long-term management issues, including the EV strategy, IR/SR activities, the Sustainability Committee, and the Risk Management and Compliance Committee
• Discussions on initiatives for realizing management conscious of cost of capital and stock price
• Discussions on ideal state of the Board of Directors in terms of speeding up management decision-making and strengthening oversight functions, as well as revisions to standards for deliberation to achieve the same
• Discussions concerning changes in organizational design that would lead to improvements of corporate value of the Company
• Formulation of the SUBARU Management Policy 2025

The Company’s Board of Directors believes that specific initiatives for formulation and implementation of CEO succession plan may differ depending on the situation of each company, corporate culture, and status of candidate human resources and that it is important to continuously discuss necessary initiatives and repeatedly devise initiatives through trial and error to ensure a successful succession at the right timing. For that reason, the Company has formulated the CEO Succession Plan, which forms the base of discussion, as well as Abilities Required of the SUBARU Group’s CEO and the five key qualities required of the Group’s CEO, taking into consideration the objective of ensuring objectivity and transparency of the process for nominating successors.

*Expenses incurred for the above training are borne by the Company.

• Outside Directors are expected to fulfill the two roles of overseeing management from a standpoint that is independent of the management team, and providing appropriate advice to management that is based on a wide range of sophisticated knowledge.
• In addition to the above two functions of oversight and advice, Outside Directors who are Audit and Supervisory Committee Members are expected to conduct audits from the viewpoint of legality and appropriateness on the basis of a wide range of advanced knowledge.
• The Company has established criteria for the independence of outside officers in addition to the criteria for independence established by the Tokyo Stock Exchange, and appoints independent outside directors who meet those criteria.

Please refer to the Corporate Governance Report for details regarding the reasons for the appointment of each Outside Officer.

Matters concerning the policy for determining details of compensation for Individual Directors

The Company deliberated and decided on the proposal of the policy for determining details of compensation for individual Directors approved by the Executive Compensation Meeting at the Board of Directors meeting held on March 6, 2026. The Board of Directors has judged that the content of the compensation for individual Directors for the fiscal year under review adheres to the determination policy (including the determination policy that was revised by a decision of the Board of Directors on March 3, 2026, to the extent applicable to the fiscal year under review), as the Executive Compensation Meeting has been delegated by the Board of Directors to decide the details of the compensation, and has been decided after sufficient deliberations by the meeting members including Outside Directors.

Please refer to the Corporate Governance Report for details of the Policy for Determining Compensation for Individual Directors.

Overview of executive compensation system for Directors

Basic Compensation

Fixed monthly compensation is paid as basic compensation. The amount of compensation for each individual is determined based on position, taking into consideration factors such as the business environment.

Annual performance-linked bonuses (Short-term incentive)

Directors, excluding Outside Directors and Directors who are Audit and Supervisory Committee Members, shall receive annual performance-linked bonus by cash at a certain time of the year. The specific amount is determined according to a compensation table by position prepared using the consolidated profit before tax for the current fiscal year as a KPI.

Restricted Stock Compensation (Medium- to Long-term Incentive)

Fixed Compensation Type (RS)

Directors, excluding Outside Directors and Directors who are Audit and Supervisory Committee Members, are granted shares of the Company’s common stock at a certain time each year in an amount corresponding to a base amount determined in consideration of the Company’s business performance, the scope of each Director’s responsibilities, and other relevant factors.

Performance Share Unit Plan (PSU)

Directors, excluding Outside Directors and Directors who are Audit and Supervisory Committee Members, are granted units (one unit = one share) at a certain time each year in an amount corresponding to a base amount determined in consideration of the Company’s business performance, the scope of each Director’s responsibilities, and other relevant factors. After the evaluation period, shares of the Company’s common stock are delivered in a number calculated by multiplying the number of units by a payout ratio determined according to the level of achievement of performance targets.

＜KPI for PSU in FYE March 2026＞

For PSU performance evaluation, the Company uses consolidated ROE and relative TSR (compared to the TOPIX growth rate including dividends) as quantitative (financial) performance indicators, and improvement in the employee engagement score as a qualitative (non-financial) performance indicator.

Compensation System for Directors (Representative Director, President and CEO）

*The ratio of annual performance-linked bonuses and restricted stock compensation (variable/fixed compensation types) are indexed to a basic compensation of 1.

＜Matters concerning resolutions of the General Meeting of Shareholders regarding Directors’ compensation, etc.＞

At the 95th Annual General Meeting of Shareholders held on June 24, 2026, it was resolved that the total amount of compensation, etc. payable to Directors (excluding Directors serving as Audit and Supervisory Committee Members) shall not exceed ¥1.2 billion per year, of which no more than ¥200 million shall be payable to Outside Directors. The number of Directors (excluding Directors serving as Audit and Supervisory Committee Members) as of the conclusion of the said Annual General Meeting of Shareholders was seven, including three Outside Directors.
In addition, at the 95th Annual General Meeting of Shareholders held on June 24, 2026, it was resolved that the total amount of monetary compensation relating to restricted stock compensation shall not exceed ¥200 million per year within the above limit. The number of Directors eligible for such compensation as of the conclusion of the said Annual General Meeting of Shareholders was four, excluding Outside Directors, internal Directors serving as Audit and Supervisory Committee Members, and Directors residing outside Japan.

Total Compensation for Directors and Audit & Supervisory Board Members for FYE March 2026

Notes:

1.

Figures in the above table include one Inside Director and one Inside Audit & Supervisory Board Member who resigned before the last day of the fiscal period under review. At the end of the period, there were eight Directors, including three Outside Directors, and four Audit & Supervisory Board Members, including two outside Audit & Supervisory Board Members.

2.

The total amount of the above indicates the amount recorded as an expense at the end of the period and includes undetermined compensation (phantom stock granted to non-residents, PSU, etc.).

3.

The amounts of phantom stock and PSU were calculated using the closing price of the shares in the Company’s common stock on Prime Market of the Tokyo Stock Exchange on March 31, 2026. When they are granted in reality, the Company will apply the share price as of the issuance.

＜Performance-linked compensation＞

　The table below shows the results of key performance indicators (KPIs) used to calculate the annual performance-linked bonus amounts and the number of PSUs granted corresponding to the financial results for the fiscal year under review.
　The Company decides the annual performance-linked bonuses for individual Directors based on the consolidated profit before tax by setting a compensation table in which the higher his/her position is, the more closely his/her compensation is linked to annual performance.
　In addition, in order to facilitate the achievement of the Group’s medium- and long-term strategy targets, the Company has adopted the Performance Share Units (PSU), in which the number of shares granted is linked to the degree of achievement of the targets for key financial indicator (ROE and relative TSR [compared to the TOPIX growth rate including dividends]) and non-financial indicator (employee engagement), for a portion of the restricted stock compensation to be granted as non-monetary compensation. Annual performance-linked bonuses and restricted stock compensation are not granted to Outside Directors in view of their roles of fulfilling monitoring and oversight functions of corporate management from an independent position.

＜Non-monetary compensation＞

The Company grants restricted stock units to Directors (excluding Outside Directors; hereinafter the same shall apply) for the purpose of providing them an incentive for sustained improvement of the Company’s corporate value and further value sharing with the shareholders, and provides monetary compensation for that (hereinafter, “Restricted Stock Compensation Plan”). Based on the resolution of the Board of Directors, Directors shall wholly contribute the monetary compensation claim paid as above in the form of properties contributed in kind, and shall, in return, receive shares of the Company’s common stock through issuance or disposal. In addition, for the issuance or disposal of shares of the Company’s common stock, the Company and eligible Directors shall enter into a restricted stock allotment agreement that includes provisions such as the one to restrict the transfer of the shares for the period starting from the date of allotment through the date the Director retires from the position (however, if the Director is consecutively appointed the Company’s Executive Officer after retiring from the Director’s position, the period through the date of retirement as Executive Officer).

The approval of the Board of Directors is obtained in advance where a transaction poses the risk of a conflict of interest. A report on the positions that each director has held concurrently over the past financial year is provided once a year at the April meeting of the Board of Directors (a report to confirm that there have been no improper transactions or positions held).

　With the approval of shareholders at the 95th Ordinary General Meeting of Shareholders held on June 24, 2026, the Company transitioned from a company with an Audit & Supervisory Board to a company with an Audit and Supervisory Committee. Accordingly, the following description relates to the structure and activities of the Company prior to this transition.

　The Audit & Supervisory Board is comprised of four Audit & Supervisory Board Members, including two highly independent Outside Audit & Supervisory Board Members. It deliberates and checks audit policy and implementation status.
　Chaired by Standing Audit & Supervisory Board Member Hiromi Tsutsumi, the board met 12 times in FYE March 2026.

＜Main resolutions and discussions in FYE March 2026＞

（1）

Main matters for resolution

• Audit policy, audit plan, and division of audit duties for the fiscal year under review
• Consent to agenda items for the General Meeting of Shareholders (appointment of Audit & Supervisory Board Members)
• Preparation of the audit report
• Evaluation and selection / dismissal of the Accounting Auditor
• Consent to the audit fee for the Accounting Auditor

（2）

Main matters for reporting and sharing

• Sharing of the results of visiting audit of the Company’s business establishments and affiliated companies as well as observations
• Sharing of information regarding important matters of the Company’s Executive Management Board Meeting, Executive Meeting, etc. by Standing Audit & Supervisory Board Member with outside Audit & Supervisory Board Members
• Reports on risk management issues internally and in the industry that require special care from a preventive audit perspective

　Opinions of individual Audit & Supervisory Board Members expressed at the meeting of Audit & Supervisory Board are presented to involved officers, etc. as needed to contribute to their forming appropriate executive decisions.

Internal audits at the Company are conducted by the Audit Department (16 members), which reports directly to the President. The Audit Department evaluates the status of the development and operation of internal controls and the effectiveness of risk management from an independent and objective standpoint with respect to the business activities of the Company and its domestic and overseas group companies, and provides recommendations and proposals for improvement.

As part of its efforts to ensure the effectiveness of internal audits, the Audit Department formulates an annual internal audit plan at the beginning of each fiscal year, taking into account the status of risks and internal controls across the Group, and conducts audits in a systematic manner. Internal audit reports are submitted directly to the President at monthly reporting meetings and are also distributed to all Directors, Corporate Auditors, and relevant departments. In addition, the Audit Department reports semi-annually to the Board of Directors and quarterly to a joint meeting consisting of all Executive Officers.

The Audit Department and the Corporate Auditors work closely together to strengthen the audit function. In addition, the Company seeks to enhance audit effectiveness through quarterly information sharing with the Accounting Auditor regarding audit plans, audit results, and other matters. Furthermore, the Audit Department regularly exchanges information with Group companies that have internal audit functions in order to promote coordination and cooperation.

The Audit Department also conducts annual self-assessments of its activities and periodically undergoes evaluations by external specialists to confirm that audit activities are being conducted appropriately.

Management System

With the aim of increasing the effectiveness of internal controls and risk management, the Internal Audit Department was made independent of the Risk Management Group (overseen by the Chief Risk Management Officer (CRMO)) to ensure a higher level of independence of internal audit units in the organization and to enhance the effectiveness of internal controls.

Internal Control System

As one of the key foundations for realizing the SUBARU Group’s vision of becoming a company “Delivering Happiness to All,” we position our internal control system accordingly. To ensure the appropriate operations of the SUBARU Group, we have, in accordance with the Companies Act and the Ordinance for Enforcement of the Companies Act, adopted a policy on the development of the internal control system by resolution of the Board of Directors.
Based on this policy, we maintain and operate our internal control system as a foundation that supports efficient and effective business management through compliance with laws and regulations, the acceleration of decision-making through delegation of authority from directors and the Board of Directors, and appropriate risk responses. At the same time, we continuously evaluate the effectiveness of the system and make timely and appropriate improvements as needed.

Regarding internal control reporting systems pursuant to the Financial Instruments and Exchange Act, the evaluation of the internal control system related to financial reporting is dated the final day of the consolidated accounting period and is conducted in accordance with generally accepted assessment standards for internal control over financial reporting.
The President and Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) evaluated the status of the development of the internal control system related to financial reporting as of March 31, 2026 and affirmed that it has been established properly and functions effectively, and issued an internal control report audited by the accounting auditors to that effect.

(1) Policy for cross-shareholding
　The Company holds discussions with the companies whose shares it holds as cross-shareholdings and the Board of Directors every year measures the benefits of holding them quantitatively using dividend yield and capital cost using WACC and compares and verifies them. Based on the result, it continues with the cross-shareholdings only when it judges that they would qualitatively contribute to the medium- to long-term management and business strategies.

(2) Verification details for cross-shareholding
Based on the above policy, the Company has steadily reduced the number of listed stocks held as cross-shareholding. As a result, 60 issues held at the end of March 2015 decreased to 3 issues at the end of March 2026. At this point, the Company judges that retaining cross-shareholdings in the three issues is indispensable at this time for the reasons described below, and it will continue to hold discussions with these companies at least once a year and the Board of Directors will evaluate and examine the cross-shareholdings every year and judge whether or not to retain them.