Message from the Chair of the Board and Chair of the Nominating Committee

Wendy Becker
Outside Director and Chair of the Board and the Nominating Committee

Progress in the Strategic Discussions with Management That We Consider Most Important

Since I became Chair of the Board of Sony Group Corporation in June 2025, the Board of Directors has continuously deepened its discussions, focusing primarily on the Group-wide growth strategy led by CEO Mr. Totoki and CFO Ms. Tao, and on the business portfolio and capital allocation needed to realize that strategy. These discussions are among the matters the Board of Directors should prioritize under Sony’s governance model, which separates management execution from oversight. Within these discussions, including our review of progress under the fifth mid-range plan, we have confirmed the mid- to long-term direction of creating and cultivating IP and maximizing its value, principally through the entertainment businesses, while concentrating management resources on the technologies and business infrastructure that support these efforts. We have also discussed specific management initiatives. For example, with respect to the partial spin-off of the Financial Services business executed in October 2025, we continued to monitor progress from confirmation of the policy through to the resolution approving its execution. We also received updates as appropriate on the strategic partnership with Taiwan Semiconductor Manufacturing Company Limited in the I&SS business, the strategic partnership with TCL Electronics Holdings Limited in the Home Entertainment domain, and the future business direction of Sony Honda Mobility Inc. After conducting the necessary review and discussion with management, we have supported their views on each of these matters.

At a time when the business environment is changing dramatically at an unprecedented speed and uncertainty is increasing, the Board of Directors has also continued to discuss themes such as geopolitical risks, economic security, and cybersecurity. For example, in October 2025, we engaged in dialogue in Washington, D.C., with Sony’s local team and outside experts on geopolitical risks, deepening the Board’s understanding of these issues. The rapid evolution of AI and related technologies is another important theme with wide-ranging implications for our businesses. The Board has discussed this topic from the perspectives of both opportunity and risk.

We also believe that deepening our understanding of each business is important to these discussions. In conjunction with the dialogue in Washington, D.C., mentioned above, we visited Sony Music Entertainment’s office in New York and exchanged views with local management on the current state and strategy of Sony’s overseas music business. At the annual strategic workshop, we also discuss mid- to long-term strategies and challenges directly with the management of each business.

Evaluation of Succession Planning and Board Composition Review Led by the Nominating Committee

One of the Nominating Committee’s important roles is to evaluate and provide its views on the CEO succession plan. Following thorough discussion and consideration, Sony transitioned to a new management structure with Mr. Totoki as CEO in April 2025. Against this backdrop, in FY2025, the Nominating Committee monitored the management team following the launch of the new structure and continued to discuss the CEO succession plan from a mid- to long-term perspective. The Committee also received reports on succession candidates for the leaders of key businesses and functions, and confirmed the leadership transitions in the Music business (Japan) and the ET&S business.

In selecting candidates for the Board of Directors, the Committee’s other important role, we considered the matter from multiple perspectives, including the appropriate size of the Board, expertise, and diversity. As a result, we confirmed that we would not appoint new outside Directors in FY2026 and would continue our deliberations. We also decided to nominate Ms. Tao, who serves as CFO, as a new candidate for Director concurrently serving as a Corporate Executive Officer. Ms. Tao brings deep expertise in financial strategy and capital markets, and we believe her participation will enable deeper discussions and strengthen the Board’s effectiveness. We would also like to take this opportunity to express our sincere gratitude to Ms. Kishigami and Mr. Yoshida, who stepped down from the Board in June 2026, for their many years of valuable contributions.

Looking Ahead: Contributing to the Enhancement of Corporate Value from a Longer-Term Perspective

Sony has continued to maintain a high level of profitability in recent years, and the Board of Directors has a high regard for the current management team, including Mr. Totoki and Ms. Tao. Drawing on management’s insights, we believe that we will be able to engage in further in-depth discussions on the sixth mid-range plan, which will commence in FY2027. At the same time, in light of the various developments currently unfolding around the world, we expect the business environment surrounding Sony to continue to change significantly. In these circumstances, we believe it is important for the Board of Directors to look beyond environmental changes that may occur in the near term, take a longer-term view of the megatrends that could affect Sony, and identify the themes that warrant our close attention. With the further escalation of geopolitical risks, advances in technologies including AI, and changes in people’s behavior in mind, we will identify through our discussions going forward the themes that the Board of Directors should monitor closely. We will then continue constructive dialogue with management regarding the opportunities and risks Sony may face from a long-term perspective, with the aim of deepening our strategic discussions.

The Nominating Committee will also further deepen its discussions on management succession planning and continue considering candidates for the Board of Directors to ensure that the Board maintains the necessary expertise and diversity.

Through active discussions among Directors and members of management with diverse backgrounds, I will, as Chair, lead the Board of Directors in a manner that contributes further to the Sony Group’s future growth and the enhancement of its corporate value.

Message from the Chair of the Audit Committee and a Director in Charge of Information Security

Joseph A. Kraft Jr.
Outside Director, Chair of the Audit Committee, Nominating Committee member and a Director in Charge of Information Security

In FY2025, the Audit Committee’s key themes were developing focus areas and the governance framework under the new management structure, responding to changes in the business portfolio, and addressing newly applicable accounting and disclosure standards. For each theme, the committee conducted its audit activities by receiving reports from and maintaining ongoing dialogue with the internal control department of management, the internal audit departments of headquarters and each business domain, and the independent auditor. Amid rapid technological and geopolitical changes, the committee held repeated discussions with the Business CEO and each Chief Officer on timely risk responses and measures to strengthen the revenue structure. In particular, regarding the partial spin-off of the Financial Services business, the committee confirmed the appropriateness of accounting treatment and disclosure at each stage before and after execution. Taking into account the overall picture of the series of transactions, the committee deepened discussions with the internal control department and the independent auditor on whether each disclosure was appropriate and sufficient for stakeholders. In FY2026, changes in the business portfolio continue, including the strategic partnership with TCL Electronics Holdings Limited in the Home Entertainment domain. The Audit Committee will continue to assess the timeliness and appropriateness of accounting treatment and disclosure in response to such changes. In addition, to support Sony's sustainable growth strategy, the committee will contribute to further strengthening the compliance framework, including risk assessment.

Threats in cyberspace continue to grow year by year and have become one of the biggest risk factors companies face throughout the world. In particular, the emergence of AI with advanced capabilities has further heightened these threats. As Directors in charge of information security, we worked on increasing awareness of the crisis regarding cyber risks at the Board of Directors and among the management team by identifying the group’s critical assets and outlining the programs in place to protect them in addition to improving the visibility of our information security controls status, coordinating with organizations responsible for information security. In FY2026, we will continue to focus on contributing to the maintenance and enhancement of an effective information security system to uphold the trust placed in us by diverse stakeholders including customers and investors.

Message from the Chair of the Compensation Committee

William Morrow
Outside Director, the Chair of the Compensation Committee and Nominating Committee member

Sony’s executive remuneration is, in principle, comprised of fixed remuneration, remuneration linked to business results (“bonus”), and stock-based compensation. It is designed to serve as an incentive for both short-term performance and the mid- to long-term enhancement of corporate value, by aligning our efforts with the expectations of our shareholders and various stakeholders, including our communities and employees. In FY2025, taking into consideration the role and position of Sony’s headquarters as a global entertainment company, the Compensation Committee implemented revisions to the executive compensation structure and levels, following a comprehensive review of trends regarding executive compensation at both domestic and international companies, including those in the entertainment industry. The Committee also discussed and determined the design of the bonus structure under an uncertain external environment, as well as changes to grant plans for stock-based compensation and adjustments to stock-based compensation to ensure that mid- to long-term incentives function appropriately. In FY2026, we will continue to review the current remuneration system and compensation structure, taking into account changes in the business environment and Sony’s mid- to long-term growth strategy. In addition, we will review mid- to long-term incentives aimed at the further enhancement of corporate value beyond the use of existing plans, thereby supporting Sony’s growth from a remuneration perspective.