Nidec’s improvement measures and actions

Based on the improvement plan and status report it submitted on January 28, 2026, Nidec Corporation (“Nidec,” the “Company,” or “we”) strives to drastically improve its governance system and corporate culture.

After receiving the final version of the Third-Party Committee’s investigation report on April 17, 2026, we accepted with sincerity the facts identified by the Committee, the results of its cause analysis, and its suggestions to prevent a recurrence of problems, and announced on April 27, 2026, our revised improvement plan, evolved from and more specific than its initial version.

Going forward, we will successfully complete this revised plan to totally eliminate our past rigid system and strongly launch drastic improvement measures to “revive” Nidec.

1 Identifying causes of the problems and facts (examination by the Third-Party Committee)

To build an effective system to prevent problems’ recurrence, objective investigations by the Third-Party Committee, an independent organization, were launched.

Receiving the investigation report

The investigation report that we received on February 27, 2026 points out both the large number of accounting misconducts at various Nidec Group business bases and their root causes (e.g., excessive pressure to achieve targets). We received the final version of the report on April 17 of the same year.

Examination of financial impact

In addition to the impact of identified matters, we will continue our comprehensive examination of derivative impact – including the downward revision of past fiscal years’ profit and loss based on the results of the Third-Party Committee’s investigations – to strive for highly transparent information disclosure.

Reflecting changes into our plan

Based on the suggestions on the prevention of problems’ recurrent in the investigation report’s final version, we made necessary corrections and added information to the improvement plan (issued on January 28, 2026) to make effective recurrence prevention measures.

2 Basic improvement policy (revamping the management system and voluntary reform)

Based on the recommendations of the Nidec Corporate Reform Committee and the new management system, we will launch a drastic, group-wide reform according to the following pillars.

A) Actions in response to the investigation report

Revamping executive members

Based on the Third-Party Committee’s investigation results, the Company’s Chairman, Executive Vice President, CFO, and other main executives resigned from office effective March 03, 2026, while an executive whose business duties were suspended effective March 02 resigned from office on March 23.

Returning compensations

President (CEO) will return 100% of his basic compensation until the Company submits its Written Confirmation of Internal Management System (planned for the end of October 2026) while other executives will return part of their compensations as well.

Establishing legal responsibilities

To investigate legal responsibilities for the execution of duties by current and former executives, we launched an Executive Responsibility Investigation Committee on March 13, 2026.

B) Better planning and performance management

Bottom-up-type planning

We will completely transition into a feasibility-oriented bottom-up planning process to eliminate the excessive target-achieving pressure that has been a hotbed of misconducts.

Assessment standard reform

We will depart from the short-range profit-based supremacism to build an assessment system with mid-/long-term growth and non-financial indexes.

C) Launch a stricter accounting policy

Maintaining the accounting organizations’ independence

We will separate our accounting function and business management function (that, among other tasks, monitor the execution of management strategy) and consolidate the accounting function’s personnel-related authorities into the head office’s accounting function. In addition, we will reorganize dual-reporting lines (individual organizations’ CEOs and Nidec Corporation’s CFO for Business Units and Japanese domestic Nidec Group companies’ CFOs; and individual organizations’ CFOs and Nidec Corporation’s accounting personnel for Business Units and Japanese domestic Nidec Group companies) to eliminate the structure that has constrained the accounting department into working with business departments to achieve profit targets.

Strict unification of accounting policies

We will review the Nidec Group’s accounting policies (NIAP) to always abide by accounting rules and eliminate arbitrary account processing. We abolished exceptional applications, which reduced NIAP to mere skeletons, in the FY2025 year-end account settlement.

D) Revamp Nidec’s corporate culture

Reform led by Culture Transformation Lab (the “Lab”)

Established on February 01, 2026, the Lab engages in various activities ranging from holding job-grade-based corporate culture seminars to creating opportunities for dialogues among employees. By delivering employees’ voices directly to the management, the Lab will build trust-based relations where employees can make changes by expressing themselves and reform the Company’s current “opinion-oppressing” culture.

E) Strengthen the governance and internal control systems drastically

Diversify the Board of Directors (“BOD”)

To strengthen the Company’s supervisory function, we will launch actions including improving the way to share information with the BOD and run the Executive Management Meeting, designing a system to discuss issues with outside BOD members, and build a better support system for them. In addition, we will invite onboard former business leaders and accounting experts to join the BOD in an effort to create a new, expertise-rich and diverse system.

Secure corrective capability

We will improve our internal audit and whistleblowing systems to obtain an autonomous corrective capability that can identify and correct misconducts early.