Opinions of the Nominating Committee and the Board of Directors on Proxy Advisory Firms' Recommendation

Kadokawa Corporation maintains its support for company-sponsored proposals while formally opposing shareholder-led initiatives ahead of the 12th Ordinary General Meeting of Shareholders scheduled for June 24, 2026. The Nominating Committee and the Board of Directors assert that the current management strategy is essential for long-term corporate value and the protection of shareholder interests. This position is rooted in the ongoing execution of a new Medium-Term Management Plan, which prioritizes earnings structure reforms within the domestic publishing and animation sectors, cost optimization, and improved return on equity.

The Board of Directors warns that removing the CEO without a clearly defined successor or a viable alternative strategic plan would introduce significant instability. Such a leadership transition at this critical juncture threatens the continuity of current reforms and the overall stability of the organization. The Board emphasizes that its governance structure, led by independent outside directors, remains committed to rigorous oversight and the monitoring of key performance indicators to ensure the successful implementation of the existing management plan.

Regarding the role of external oversight, the company notes that Institutional Shareholder Services issued its recommendation report without engaging in direct dialogue with management, despite a formal request for a meeting. Consequently, the company urges institutional investors to weigh this lack of direct consultation when evaluating the advisory firm’s findings. The Board of Directors continues to advocate for its strategic direction, encouraging shareholders to review the comprehensive rationale provided in its official communications to ensure an informed vote during the upcoming general meeting.