Policy

Euglena Group is working to improve corporate governance in order to improve management transparency and ensure compliance-oriented management. Therefore, we have positioned the establishment of organizational structures and mechanisms and the implementation of necessary measures to continually increase corporate value as one of our most important management tasks.

• Our group discloses information appropriately and promptly to ensure equality for all shareholders. In addition to disclosure based on laws and regulations, we also voluntarily disclose information (including non-financial information) that is deemed important to shareholders and other stakeholders. Furthermore, regarding the rights granted to minority shareholders, we have stipulated procedures in our stock handling regulations and strive to ensure that these rights are exercised.
• Our group operates a diverse range of businesses, including the healthcare business, which sells health foods such as foods with functional claims, supplements, and cosmetics, the biofuel business, and new businesses. We recognize that collaboration with others is essential for the company's sustainable growth and contribution to society. Our directors and management strive to foster a corporate culture that respects stakeholders through group meetings, education and training, etc.
• In order to contribute to sustainable growth and the improvement of our corporate value over the medium to long term, our Representative Director and Director and Representative Executive Officer Co-CEO engage in constructive dialogue with shareholders outside of the General Meeting of Shareholders.

Corporate governance framework

The Group's Board of Directors is comprised of 4 out of 8 directors who are outside directors, and the Audit and Supervisory Committee is comprised of 3 out of 3 outside directors, ensuring highly transparent management. We are working to establish a system and strengthen supervisory functions.

Based on the size and nature of our group's business, we determined that a company structure with an audit and supervisory committee is optimal. Therefore, we have appointed three independent outside audit and supervisory committee members to enhance the checks and balances and oversight functions of the Board of Directors, which holds the power of management decision-making. Furthermore, we have appointed four outside directors, including the three outside audit and supervisory committee members, to further strengthen and enhance corporate governance. In addition to the above, we hold a management meeting once a week with Executive Officer and other relevant personnel.

Number of directors	8 persons
Number of external directors	4
Number of external directors designated as independent directors	3
Number of female directors	3
Number of auditors and Audit and Supervisory Committee members	3
Number of external directors who are external auditors or Audit and Supervisory Committee members	3
Number of Audit and Supervisory Committee members designated as independent officers	3

1. board of directors

   The Group's business contributes to the achievement of the Sustainable Development Goals (SDGs), and it is necessary for the Board of Directors, in particular, to grasp the rapidly changing social situation and discuss medium- to long-term risks and opportunities for our business. Based on this belief, we promote diversity in nationality and gender among directors and ensure a balance of knowledge, experience, and abilities. Our goal for the ratio of women on the Board of Directors was 30% by 2030, and as of the end of March 2025, we had achieved 37.5%.

   ・ Director skill matrix

2. Audit and Supervisory Committee
   All three members of our Audit and Supervisory Committee are independent outside directors, each possessing professional knowledge as a lawyer or certified public accountant. Each outside director provides appropriate opinions at board meetings from an objective standpoint, without bias toward any particular agenda item. In addition to holding monthly Audit and Supervisory Committee meetings, we share information necessary for audits through meetings with the Group Internal Audit Office and the external auditors, and monitor and verify our internal control system.
3. Nomination and Remuneration Committee
   We have established a Nomination and Remuneration Committee, the majority of whose members are outside directors, which reports to the Board of Directors on matters related to the nomination and remuneration of directors.
4. Sustainability Committee
   At the Board of Directors meeting in December 2022, the policy to establish a Sustainability Committee directly under the Board of Directors was resolved, and in February 2023, the committee, consisting of directors including outsiders, Executive Officer from related departments, etc., was officially established. It was installed in Starting in 2023, the Sustainability Committee has been deliberating, presenting and reporting to the Board of Directors regarding group-wide sustainability policies and strategies.

Related links

Board Members

Number of meetings held by each committee and attendance rate of each committee member (2025 ESG Data Book, p. 5)

Corporate Governance Report

Evaluation of the effectiveness of the board of directors

Regarding the effectiveness of the Board of Directors and its evaluation, we analyze and evaluate the effectiveness of the Board of Directors in a timely manner once a year and strive to improve the functions of the Board of Directors.

(1) Implementation details

In January 2026, our company conducted a survey in the form of a signed questionnaire to evaluate the effectiveness of the Board of Directors, targeting all eight directors who make up the Board, regarding the following matters.

1. Composition of the Board of Directors
2. Management by the Board of Directors
3. Board of Directors Proposals and Discussions
4. Providing information to directors

Based on the survey results, the Board of Directors held discussions and made a final evaluation.

(2) Evaluation results

It has been determined that the effectiveness of the Company's Board of Directors is generally ensured.
The individual items related to the survey results are as follows.

Highly rated item

• Are potential conflicts of interest between management and the company being properly managed?
  →This was an item that received particularly high marks this fiscal year, with an assessment that the scope of coverage for tracking related-party transactions had improved and that it was being managed appropriately.
• Is there an atmosphere that supports proposals that involve appropriate risk-taking by management?
  →This is an area that consistently receives high marks every year, and in particular, regarding individual proposals that require discussion at the board of directors meeting, it was evaluated that a culture of allowing appropriate risk-taking based on thorough discussion is deeply ingrained.
• Are directors, including outside directors, adequately provided with opportunities to provide the company with additional information when deemed necessary?
  →This was another item that received a high rating last year, with the company praising its comprehensive prior information provision and its environment for prompt responses when directors request additional information from the company.

Items with room for improvement

• Have matters concerning internal controls and the development and operation of risk management systems been sufficiently discussed?
• Have the major risks affecting the business been fully understood and discussed?
  →Regarding this item, while there was an assessment that explanations of business risks, discussions during decision-making, and responses and discussions on a case-by-case basis were being conducted appropriately, it was pointed out that the Board of Directors had not adequately "visualized" which areas of major risks exist for the group as a whole, or discussed internal control and risk management systems based on that.
  For fiscal year 2026, it was agreed to review the allocation of resources to internal control and risk management, to promote the establishment of a more appropriate risk management system, and to position "Status of Internal Control, Risk Management, and Major Risks" as one of the main agenda items for the Board of Directors, thereby creating more continuous opportunities to discuss company-wide issues and improvement measures.

Prevention of conflicts of interest among directors

In the case of directors engaging in self-dealing or transactions involving conflicts of interest, approval must be obtained from the Board of Directors in accordance with the provisions of the Companies Act. In addition, we check with all of our directors (including Executive Officer) every fiscal year whether they have engaged in related party transactions, and we have established a system for managing related party transactions.

Executive remuneration 

With regard to the remuneration of directors (excluding directors who are audit and supervisory committee members), we have established a Nomination and Remuneration Committee, the majority of whose members are outside directors, which reports to the Board of Directors on matters related to the nomination and remuneration of directors.
Based on the report of the Nomination and Remuneration Committee, the remuneration will be decided through deliberation at the Board of Directors meeting, taking into consideration whether the director is working full-time or part-time, the company's performance, the performance of the business that each director is responsible for, etc. In addition, the remuneration for directors who are audit and supervisory committee members will be decided through deliberation at the Audit and Supervisory Committee, taking into consideration whether the director is working full-time or part-time, the division of duties, etc.
With regard to incentives, we have introduced a stock-based compensation plan with the aim of sustainably increasing our corporate value and further sharing that value with our shareholders.
Please refer to the Corporate Governance Report for details on executive compensation.

Related links

Corporate Governance Report

Internal control

In order to achieve sound and sustainable growth and medium- to long-term corporate value creation, and to establish a high-quality corporate governance system that responds to social trust, the Group has established the following internal control system. In addition, we determine and operate the matters listed below.

1. A system to ensure that the execution of duties by the directors of the Company complies with laws and regulations and the Articles of Incorporation.
2. System for storing and managing information related to the execution of duties by the directors of the Company
3. Our rules and other systems for managing the risk of loss
4. A system to ensure the efficient execution of duties by the directors of the Company
5. A system to ensure that the execution of duties by our employees complies with laws and regulations and the Articles of Incorporation
6. A system for ensuring the appropriateness of operations in a corporate group consisting of the Company and its subsidiaries
7. Matters concerning directors and employees who assist the duties of the Company's Audit and Supervisory Committee
8. Matters concerning the independence of the directors and employees in the preceding paragraph from other directors of the Company (excluding directors who are Audit and Supervisory Committee members) and matters concerning ensuring the effectiveness of instructions given to such directors and employees
9. System for the Company's Directors (excluding Directors who are Audit and Supervisory Committee Members) and employees to report to the Company's Audit and Supervisory Committee
10. A system for reporting to the Audit and Supervisory Committee by officers and other persons equivalent to officers and employees of subsidiaries, or persons who have received reports from these persons
11. A system to ensure that the person who made the report in paragraphs 9 and 10 is not treated unfavorably because of the report.
12. Concerning policies related to procedures for prepayment or reimbursement of expenses arising from the execution of duties by Audit and Supervisory Committee members of the Company (limited to those pertaining to the execution of duties of the Audit and Supervisory Committee) and other expenses arising from the execution of such duties or processing of debts matter
13. Other systems to ensure that audits by the Audit and Supervisory Committee of the Company are conducted effectively
14. System to eliminate anti-social forces

Risk management system

Under the supervision of the Co-CEO, Euglena Group identifies company-wide critical risks and continues to systematize and enhance its existing risk management system to manage those risks. Risk information within the group is reported to the Board of Directors through the relevant departments, and feedback is received.

In addition, the Board of Directors oversees the Code of Conduct and Code of Ethics and deliberates and decides on improvement measures, and the Audit and Supervisory Committee fulfills its responsibilities by carrying out various audits during its term of office.
Specifically, in order to continue stable business activities, the Board of Directors is working to prevent risks from occurring based on the "Crisis Management Regulations" which systematically prescribe risk management. When a risk occurs, appropriate measures are taken promptly in accordance with the regulations, and if it is a serious risk, a system is established in which a crisis management headquarters is established after reporting to the Director and Representative Executive Officer Co-CEO.

Initiatives to strengthen risk management

1. Formulation of BCP
   In order to be able to respond appropriately and quickly to minimize damage and continue business operations even in the event of various disasters, we are formulating a basic BCP policy and response manual in 2024 to further strengthen our company's resilience.
2. Risk assessment
   When formulating plans for the following fiscal year, each business division conducts a risk assessment to determine what risks are expected to occur as a premise for formulating the plan.
   In addition, our business objectives under our Articles of Incorporation are aligned with the SDGs, and under our management philosophy of "Sustainability First," ESG risks are also discussed at board meetings.
3. training
   As needed, we conduct training on risk management for senior management (Executive Officer, business unit managers, etc.) (including the content of ISO 31000 and COSO).

Policy

The Group positions compliance as the basis of management, and promotes business activities in compliance with the laws and corporate ethics of all countries in which it conducts business activities. The spirit of compliance is described in codes of conduct such as the Euglena Philosophy and Euglena, and employees act accordingly.
By stipulating the handling of laws, internal rules, compliance with social norms, and establishment of professional ethics, we will strive to establish fair and transparent management, prevent scandals, and gain the trust and sympathy of society.

Compliance system

The Group reports personnel information, risk information, and legal compliance within the Group from each group company to the department in charge, and in the event of a legal violation, timely investigation, audit/supervision, and corrective action are taken, reporting to the Audit and Supervisory Committee and the Board of Directors, and establishing a system for discussion.

Establishment of an internal reporting system

Our company aims to promptly detect and correct compliance violations (including violations of laws and regulations, various types of misconduct, various types of harassment, information leakage, goods/inventory manipulation, etc.), and to contribute to strengthening compliance management. We have set up a whistle-blowing contact point where you can contact us and report if you discover such matters.
Target users include all regular employees, contract employees, outsourced workers, and temporary workers belonging to our group (including retirees and those whose contracts have ended), as well as our group's business partners and customers. Stakeholders can choose to use the internal reporting desk or an external reporting desk for contacting and reporting.

In addition, when using the hotline, the confidentiality of those who call the hotline, whistleblowers, and information providers will be protected regardless of whether there is an investigation or not, and they will be prevented from suffering any disadvantage. We will share the content of your contact/report with only the minimum number of related parties in order to resolve the content of the contact/report, and each party will be obligated to maintain confidentiality. We accept both real name and anonymous reports.

Hotline Desk: Whistleblower Desk (Euglena Group Hotline)

As measures to prevent compliance violations, we require all employees, including management, to undergo training that explains the details of compliance regulations and hotline regulations, as well as governance training for management and harassment training for all employees. We also conduct training to prevent the occurrence of individual compliance violations.

Additionally, we regularly review our auditing firm.

Number of reports to the hotline ^*

	Human rights / harassment	Employment / employment	Manners / morals	Appropriate business execution	total
2022/12 term (2022/1-2022/12)	2 cases	0 cases	0 cases	0 cases	2 cases
2023/12 term (2023/1-2023/12)	2 cases	0 cases	0 cases	0 cases	2 cases
2024/12 period (2024/1-2024/12)	3 cases	3 cases	0 cases	0 cases	5 cases
2025/12 term (2025/1-2025/12)	6	2 cases	0 cases	0 cases	8 items

*A single report may cover multiple incidents. The breakdown is determined and reported based on the information provided by the reporter.

Policy

Our company has created anti-corruption regulations, which we disseminate within the company and operate accordingly. We aim to comply with the following compliance matters, create an environment where our colleagues can perform at their best, and gain the trust and sympathy of society.

• We respect and comply with the relevant laws and regulations in all countries and regions where we do business.
• Our company recognizes corruption as the use of entrusted power, whether monetary or non-monetary, for personal gain. We will not engage in any form of corrupt behavior, such as entertainment, giving or receiving gifts, embezzlement, money laundering, insider trading, etc.

Efforts to prevent corruption

As part of our commitment to compliance, we are also working to prevent corruption. Our Legal Department is responsible for investigating and correcting compliance violations. The Legal Department regularly reviews important compliance matters and reports them to the Board of Directors as appropriate. We have established an internal whistleblowing system and promote our compliance system under the supervision of senior management.
For employees, the legal department takes the lead in establishing compliance with laws and regulations through anti-corruption regulations and employment rules. These regulations are shared on the company portal, and training is conducted to ensure their understanding.
Training sessions are conducted for all employees, and a short test is administered after the session to reinforce understanding.
There will be no disciplinary actions or dismissals of employees related to anti-corruption in fiscal year 2025.
In fiscal year 2025, there will be no costs associated with fines, penalties, or settlements related to corruption.

Policy

Our group believes that paying taxes is one of the most basic and important social responsibilities a company must fulfill, and we comply with the tax laws applicable in each country and pay taxes appropriately while respecting the spirit of the tax laws.
In addition, our group understands that taking advantage of excessive tax benefits in countries or regions with no or low tax rates, known as tax havens, will impede appropriate tax payments in each country, and we do not intend to avoid tax avoidance. We do not use tax havens for the purpose of doing business, and pay appropriate taxes in the countries and regions where we do business.

[Click here for a data book on general governance]