Honda Motor : Corporate Governance Report

CORPORATE GOVERNANCE

HONDA MOTOR CO., LTD.

Last updated: July 3, 2023

Honda Motor Co., Ltd.

Toshihiro Mibe

Contact and telephone number: Governance and Compliance Division

Telephone: [phone] (main number)

Securities code number: 7267 https://global.honda/

The status of corporate governance at Honda Motor Co., Ltd. (hereinafter, "Honda", the "Company") is as follows.

1. Basic Approach to Corporate Governance, and Capital Composition, Corporate Attributes and Other Basic Information

1. Basic Approach

Honda strives to enhance corporate governance as one of the most important tasks for its management, based on the Company's basic principle, in order to strengthen the trust of our shareholders/investors, customers and society; encourage timely, decisive and risk-considereddecision-making; seek sustainable growth and the enhancement of corporate value over the mid- and long-term; and become "a company that society wants to exist".

In order to clearly segregate the supervisory function and execution function of management and to strengthen the supervisory function and to enable prompt and flexible decisions, the Company has "Nominating Committee", "Audit Committee", and "Compensation Committee", which each are composed of more than one half

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of Outside Directors, and has adopted a company with three committees structure which allows broad delegation of the business execution authority from Board of Directors to the Executive Officers.

We are making efforts to appropriately disclose corporate information including the release and disclosure of quarterly financial results and management policies in a timely and accurate manner to bolster trust and appreciation from shareholders/investors and society. Going forward, we will continue to strive to ensure the transparency of our management.

Reasons for not complying with certain principles under the Corporate Governance Code

[Supplementary Principle 2.4.1] Approaches for securing diversity in assignment, etc. of core human resources

For Honda, diversity of the workforce means to enhance our total strength by providing equal opportunities to people regardless of their personal attributes, such as race, nationality, cultural background, age, gender, gender identity, sexual orientation, past career, educational background and having disabilities or not. Honda also encourages them to respect each other's individual differences and talents while exerting their own abilities to the fullest, based on Honda's philosophy of "Respect for the Individual".

Honda has always strived to assign the right people to the right positions depending on their capabilities toward achieving the business strategy regardless of individual attributes (such as nationality or gender).

Regarding assigning women to management positions, Honda has set numerical targets and is engaged in initiatives such as talent development. For details, please refer to "4. Social - Human Resources" in the "Honda ESG Data Book 2023" published on our website.

Although Honda has not set numerical targets for assigning mid-career employees to management positions, the ratios of employees in management positions are almost equal for graduate hires and mid-career hires, indicating that assignment to management positions does not depend on attributes such as hiring paths.

The Honda group has also launched a "Global Succession Plan" to systematically develop and appoint competent and motivated personnel regardless of individual attributes. More specifically, Honda has developed a "Global Competency Model

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(GCM)", which represents behavioral traits required for a global leader, has introduced a GCM-based talent assessment system (personnel capabilities and characteristics evaluation) within the global training programs renewed in 2021, and has promoted the development of talent profiles on a global basis. At the same time, by defining the preconditions and capabilities required of major global positions, Honda has started building a foundation for finding matches using talent profile data and more strategically nurturing successor candidates.

Going forward, in collaboration with each business operation overseas and region, Honda will further stimulate discussions at the Talent Board, which was established in 2021, for promoting the development and appointment of human resources on a global basis.

[Supplementary Principle 4.1.2] stating that recognizing that a mid-term business plan is a commitment to shareholders, the board should do their best to achieve the plan.

In order to make the optimum business judgment promptly and flexibly in today's constantly changing business environment and at the same time to disclose information in an ideal way for shareholders and investors to help them understand the Company's business strategies and financial performance correctly, the Company announces the business visions and strategies, as well as business outlook for the single fiscal year.

The Company's midterm business plans are not announced currently: however, the Executive Council decides on a midterm business plans, checks the progress of such plans, conducts analysis, and revises them as necessary. The Board of Directors deliberates and passes the resolution on a midterm business plans developed by the Executive Council, receives reports on the progress and analysis, and supervises the conditions.

[Supplementary Principle 4.2.2] Initiatives, etc. regarding sustainability

For Honda's initiatives for sustainability, please refer to "4. Initiatives to Support Value Creation" in the Integrated Report "Honda Report 2022".

Honda has facilitated opportunities for discussions among Directors regarding mid- and long-term business expansion and management resource allocation including electrification and the like of our automobile business, and formulated a medium-term management plan based on these discussions. Also, our Board of Directors regularly confirms the progress of the medium-term management plan.

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[Supplementary Principle 5.2.1] Basic policies and the like regarding business portfolio

Honda has facilitated opportunities for discussions among Directors regarding mid- and long-term business expansion and management resource allocation including electrification and the like of our automobile business, and formulated a medium-term management plan based on these discussions.

For the basic policy on our business portfolio, please refer to "3. Value Creation Strategy - Message from the CFO" in the Integrated Report "Honda Report 2022".

Disclosure based on each Corporate Governance Code principle

Based on the Board of Directors resolutions, "Honda Corporate Governance Basic Policies" showing the company's basic concept, framework and implementation policy are determined and posted on our website.

URL of "Honda Corporate Governance Basic Policies":

https://global.honda/content/dam/site/global/investors/cq_img/policy/governance/2023 0401_governance_policy_e_2.pdf

[Principle 1.4] Basic policy about cross-shareholdings, verification of appropriateness of the holding, and the voting rights as to the cross-shareholdings

Refer to Article 16 (Basic Policies for Cross-Shareholdings and Exercise of Voting Rights as to Cross-Shareholdings) of the "Honda Corporate Governance Basic Policies".

[Principle 1.7] Related Party Transactions

Refer to Article 10 (Conflicting Interest Transactions) of the "Honda Corporate Governance Basic Policies".

[Principle 2.6] Effort for company pension fund to function as an asset owner

• Pension fund management for the Company is conducted by the Honda Corporate Pension Fund (hereinafter, the "Fund").
• The Fund avoids conflicts of interests between the fund beneficiaries and the Company by entrusting the management of its reserve fund to multiple investors in

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and out of Japan, and the portfolio managers of the entrusted investors make investment decisions and exercise voting rights at their discretion.

• In order for the Fund to enhance its specialist knowledge in fund management and to exercise its function such as monitoring against investors sufficiently, the Company dispatches its officer(s) and/or staff with expertise in finance and human resources to the Fund. Moreover, the Company checks soundness of the overall operation of the Fund through the activities such as deliberations of asset management committee held quarterly.

[Principle 3.1]

(1) Business principles, business strategies and business plans

Basic principles:

Honda Philosophy is posted on our website.

Business strategies: "2030 vision" is planned and announced in 2017 and goals of realizing "carbon neutrality and zero traffic collision fatalities by 2050" are set and announced.

Business plans:

Business forecast for each fiscal year is announced.

1. Basic views and guidelines on corporate governance Refer to the "Honda Corporate Governance Basic Policies".
2. Basic policies and procedures in determining the remuneration of the Directors and Executive Officers

Refer to Article 13 (Remuneration Policies) of the "Honda Corporate Governance Basic Policies".

1. Policies and procedures in the nomination and dismissal of Directors and Executive Officers

Refer to Article 3 (Constitution of the Board of Directors), Article 4 (Directors), Article 6 (Nominating Committee), and Article 12 (Executive Officers) of the "Honda Corporate Governance Basic Policies".

(5) Explanations with respect to the individual nominations of candidates for Directors

Refer to the "convening notices for general shareholder meetings" posted on our

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