FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of …. ~~September~~October ……………………………………………… , 2023



		CANON INC.
		(Translation of registrant’s name into English)

		30-2, Shimomaruko 3-Chome, Ohta-ku, Tokyo 146-8501, Japan
		(Address of principal executive offices)

[Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.


Form 20-F		X		Form 40-F

[Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.


Yes				No		X

[If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-....................

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		CANON INC.
		(Registrant)
Date….	September 29, 2023	By……/s/………Sachiho Tanino……………
		(Signature)*
		Sachiho Tanino
		General Manager
		Consolidated Accounting Division
		Finance & Accounting Headquarters
		Canon Inc.


CANON INC.
(Registrant)


Date….	October 26, 2023	By....../s/.......... Sachiho Tanino.............
		(Signature)*




		Sachiho Tanino General Manager Consolidated Accounting Div. Canon Inc.

*Print the name and title of the signing officer under his signature.

The following materials are included.

1. AnRESULTS ~~overview~~FOR ofTHE ~~Corporate~~THIRD ~~Governance~~QUARTER atAND ~~Canon~~THE ~~Inc.~~NINE MONTHS ENDED SEPTEMBER 30, 2023

LOGO

~~The~~CONSOLIDATED ~~following~~RESULTS isFOR anTHE ~~overview~~THIRD ofQUARTER ~~Corporate~~AND ~~Governance at Canon Inc. (the “Company”)~~

~~September 29~~THE NINE MONTHS ENDED SEPTEMBER 30, 2023

~~Canon Inc.~~October 26, 2023

I.CONSOLIDATED ~~Fundamental~~RESULTS ~~Policy~~FOR ~~Concerning~~THE THIRD ~~Corporate~~QUARTER ~~Governance and Basic Information about Capital Structure, Corporate Attributes, etc.~~

1. Fundamental Policy


			(Millions of yen, thousands of U.S. dollars, except per share amounts)

	Actual
	Three months ended September 30, 2023		Three months ended September 30, 2022		Change(%)		Three months ended September 30, 2023
Net sales	¥	1,025,247	¥	996,090	+	2.9	$	6,834,980
Operating profit		82,624		81,440	+	1.5		550,827
Income before income taxes		87,320		79,076	+	10.4		582,133
Net income attributable to Canon Inc.	¥	62,134	¥	54,118	+	14.8	$	414,227

Net income attributable to Canon Inc. shareholders per share:
- Basic	¥	62.65	¥	52.90	+	18.4	$	0.42
- Diluted		62.62		52.88	+	18.4		0.42


CONSOLIDATED RESULTS FOR THE NINE MONTHS
			(Millions of yen, thousands of U.S. dollars, except per share amounts)

	Actual								Projection
	Nine months ended September 30, 2023		Nine months ended September 30, 2022		Change(%)		Nine months ended September 30, 2023		Year ending December 31, 2023		Change(%)
Net sales	¥	3,017,254	¥	2,874,239	+	5.0	$	20,115,027	¥	4,220,000	+	4.7
Operating profit		259,373		256,055	+	1.3		1,729,153		400,000	+	13.2
Income before income taxes		275,982		231,969	+	19.0		1,839,880		425,000	+	20.6
Net income attributable to Canon Inc.	¥	183,947	¥	159,118	+	15.6	$	1,226,313	¥	292,000	+	19.7


Net income attributable to Canon Inc. shareholders per share:
- Basic	¥	182.98	¥	153.70	+	19.1	$	1.22	¥	291.65	+	23.2
- Diluted		182.91		153.65	+	19.0		1.22		291.53	+	23.2


	Actual
	As of September 30, 2023		As of December 31, 2022		Change(%)		As of September 30, 2023
Total assets	¥	5,619,004	¥	5,095,530	+	10.3	$	37,460,027

Canon Inc. shareholders’ equity	¥	3,291,205	¥	3,113,105	+	5.7	$	21,941,367

InNotes: ~~order~~1. toCanon’s ~~establish~~consolidated afinancial ~~sound~~statements ~~corporate~~are ~~governance~~prepared ~~structure~~in ~~and~~accordance ~~continuously~~with ~~raise~~U.S. ~~corporate~~generally ~~value,~~accepted ~~the~~accounting ~~Company~~principles. ~~believes~~2. ~~that it~~U.S. isdollar ~~essential~~amounts toare ~~improve~~translated ~~management~~from ~~transparency~~yen ~~and~~at ~~strengthen~~the ~~management~~rate ~~supervising~~of ~~functions~~JPY150=U.S.$1, At the ~~same~~approximate ~~time,~~exchange arate ~~sense~~on ofthe ~~ethics~~Tokyo ~~and~~Foreign ~~mission~~Exchange ~~held~~Market byas ~~each executive and employee~~ of aSeptember ~~company~~29, is2023, ~~very~~solely ~~important~~for inthe ~~order~~convenience toof ~~achieve~~the ~~continuous corporate growth and development~~reader.

The Company’s corporate governance structure is described as follows under “Disclosure Based on the Principles of the Corporate Governance Code,” “Principle 3.1 Full Disclosure,” “ii) Basic Views and Guidelines on Corporate Governance.”


Canon Inc.		30-2, Shimomaruko 3-chome, Ohta-ku,
Headquarter office		Tokyo 146-8501, Japan
		Phone: +81-3-3758-2111

~~Reasons for Non~~-~~compliance~~ 1 - ~~with the Principles of the Corporate Governance Code (Revised)~~

~~Relevant~~I. ~~Code~~Operating Results and Financial Conditions

~~Information~~2023 ~~contained~~Third inQuarter ~~this report is based on Japan’s Corporate Governance Code as revised~~ in ~~June~~Review ~~2021, which includes details for the Prime Market.~~

~~Supplementary~~Looking ~~Principle~~back 4at the third quarter of 2023, although the economic situation varied from one region to another, the global economy recovered modestly.11 In the United States, thanks to the strong employment situation, consumer spending remained solid.1 ~~Balance~~In ~~Between~~Europe, ~~Diversity~~however, ~~Knowledge~~the economy remained stagnant with strong uninterrupted downward pressure on the economy due to the continuation of tight monetary policy. In China, ~~and~~the economy slowed down due to sluggish real estate market. In other emerging countries, the economy ~~Experience~~remained ~~etc~~solid, mostly centering around consumer spending and the service industry. In Japan, the economy recovered moderately, with consumer spending showing signs of picking up on the ~~Board~~back asof aimprovement ~~Whole~~in the employment and personal income environment.

~~Descriptions~~In ofthe ~~this~~markets ~~are~~in ~~included~~which inCanon ~~“(ii)~~operates, ~~Basic~~demand ~~Views~~was ~~and~~impacted ~~Guidelines~~by onthe sluggish Chinese economy. On a product basis, despite stagnant market ~~Corporate~~conditions ~~Governance”~~in ~~and~~China, “demand for office multifunction devices (ivMFDs) ~~Board~~remained ~~Policies~~firm ~~and~~thanks ~~Procedures~~to solid demand for printing equipment offering high productivity in other countries. For inkjet printers, while the ~~Appointment~~demand ~~and~~from ~~Dismissal~~customers working from home slowed, sales of ~~Senior~~refillable ~~Management~~ink ~~and~~tank ~~Nomination~~models remained firm. For laser printers, demand slowed due to the curbing of ~~Director~~corporate ~~and~~investments. ~~Audit &~~For ~~Supervisory~~cameras, ~~Board~~demand ~~Member~~remained ~~Candidates”~~solid due to a recovery in travel and leisure. The market of ~~“Principle~~network 3cameras continued to grow as well.1 ~~Full~~For medical equipment, demand remained firm, particularly in Japan and Europe. For semiconductor lithography equipment, although demand for memory devices remained weak, investments remained at a high level, particularly ~~disclosure~~for power devices, analog devices and sensors.” For FPD (Flat Panel Display) lithography equipment, the market continued to shrink due to restrained investments by panel manufacturers.

•The Ataverage ~~present,~~value ~~though~~of the ~~Company’s~~yen ~~Board~~against ofthe ~~Directors~~U.S. ~~does~~dollar ~~not~~in ~~include~~the ~~any~~third ~~females~~quarter orand ~~non-Japanese,~~for itthe isfirst nine months of the ~~Company’s~~year ~~basic~~was ~~policy~~¥144.76, toa ~~appoint~~year-on-year ~~people~~depreciation ~~who~~of ~~are~~approximately ~~deemed~~¥6, toand be¥138.27, ~~capable~~a year-on-year depreciation of ~~performing~~approximately ~~his~~¥10, orrespectively. ~~her~~Correspondingly, ~~duties~~against ~~fairly~~the ~~and~~euro, ~~appropriately~~¥157.32 ~~regardless~~a ofyear-on-year ~~individual~~depreciation ~~attributes~~of ~~such~~approximately as¥18, ~~gender~~and ¥149.59, ~~nationality~~a oryear-on-year ~~age~~depreciation of approximately ¥14.

~~Moreover~~As for the third quarter, net sales increased by 2.9% year-on-year to ~~respect~~¥1,025.2 billion ~~diversity~~due to solid demand for network cameras and other new businesses, and the ~~Company~~favorable ~~plans~~effects of depreciation of the yen. Net sales for the third quarter exceeded ¥1,000 billion for the first time in sixteen years since 2007. Net sales for the first nine months of the year increased by 5.0% year-on-year to ~~appoint~~¥3,017.3 billion. ~~one~~Gross ~~female~~profit ~~director~~as a percentage of net sales increased by 1.7 points year-on-year to ~~This~~47.0% ~~matter~~due ~~will~~to bean ~~officially~~improvement ~~decided~~in atcosts, resulting from easing of component shortages and logistics disruptions, and the ~~Ordinary~~favorable ~~General~~effects ~~Meeting~~of depreciation of ~~Shareholders~~the yen. Gross profit for the ~~123rd~~third ~~Business~~quarter ~~Term~~increased by 6.9% year-on-year to be¥482.1 billion. ~~held~~Operating expenses increased by 8.1% year-on-year to ¥399.4 billion due to an increase in ~~March~~sales-related ~~2024~~expenses with the normalization of sales activity. In addition, operating expenses denominated in foreign currencies increased due to depreciation of the yen. As ~~for~~a ~~Executive~~result, ~~Officers~~operating profit increased by 1.5% year-on-year to ¥82.6 billion. Other income (deductions) increased by ¥7.1 billion year-on-year to ¥4.7 billion due to a decrease of currency exchange losses, ~~please~~which ~~note~~were ~~that~~substantially incurred ~~two~~last ~~females~~year. As a result, income before income taxes increased by 10.4% year-on-year to ¥87.3 billion and ~~one~~net income attributable to Canon Inc. increased ~~non~~by 14.8% year-~~Japanese~~on-year ~~are~~to ~~already~~¥62.1 billion. ~~included~~Consequently, operating profit, income before income taxes and net income attributable to Canon Inc. for the third quarter exceeded last year. Operating profit for the first nine months of the year increased by 1.3% to ¥259.4 billion, while income before income taxes increased by 19.0% to ¥276.0 billion and first nine months net income attributable to Canon Inc. increased by 15.6% to ¥183.9 billion.

•Basic ~~Currently,~~net ~~none~~income ofattributable ~~the~~to ~~Company’s~~Canon ~~Outside~~Inc. ~~Directors~~shareholders ~~have~~per ~~experience~~share ~~managing~~was ¥62.65 afor ~~business~~the asthird quarter, a ~~chief~~year-on-year ~~executive~~increase ~~officer~~of or¥9.75, ~~other~~and ~~senior level executive~~¥182.98 ~~However,~~for the ~~Board~~first ofnine ~~Directors as a whole~~months, ~~holds~~ a ~~wide~~year-on-year ~~range~~increase of ~~business management perspectives~~¥29.28.

~~The~~- 2 - Company is broadly engaged in four businesses, namely Printing, Imaging, Medical, and Industrial. While common core competence technologies form the basis of each business, the market environment surrounding each business differs greatly. Going forward, the Company will continue to focus on sustainable growth and raising corporate value through the evolution and innovation of core competence technologies. Accordingly, the Company believes that it is meaningful for experienced managers with knowledge of these markets and technologies to participate in meetings of the Board of Directors.

1Results by Segment

•Looking ~~The~~at ~~skills~~Canon’s ~~that~~third-quarter performance by business unit, in the ~~Company’s~~Printing ~~Board~~Business Unit, unit sales of ~~Directors~~MFDs ~~should~~for ~~generally~~offices ~~possess~~decreased ~~overall~~compared with the same period of the previous year, due to stagnant market conditions in China this year and the ~~skills~~high ~~possessed~~level byof ~~each~~unit ~~current~~sales ~~Director~~last ~~are~~year ~~publically~~resulting ~~disclosed~~from on the ~~Company’s~~resumption ~~website~~of ~~below~~product supply. ~~The~~As ~~Company~~for inkjet printers, ~~taking~~unit ~~into~~sales ~~account~~were at the ~~changing~~same ~~business~~level ~~environment~~as the previous year thanks to solid sales of refillable ink tank models, ~~and~~even as ~~appropriate~~the surge in working from home demand subsided. As for laser printers, ~~will~~unit ~~continue~~sales todecreased ~~explore~~compared with the ~~most~~same ~~suitable~~period ~~makeup~~of the previous year due to the curbing of corporate investments. Regarding equipment for the ~~Board~~production printing market, unit sales increased compared with the same period of ~~Directors~~the previous year, ~~reviewing~~thanks to enhancing its product lineup by adding the ~~skills~~imagePRESS ~~that~~V1350. As a result, sales of the ~~Company’s~~Printing Business ~~Board~~Unit increased by 2.8% compared with the same period of ~~Directors~~the ~~should~~previous ~~possess~~year ~~overall~~to ¥570.4 billion. Income before income taxes for the third quarter increased by 6.5% compared with the same period of the previous year to ¥46.8 billion mainly due to decrease in logistics costs. Sales for the first nine months of the year totaled ¥1,703.4 billion, a year-on-year increase of 4.3%, while income before income taxes totaled ¥161.5 billion, a year-on-year decrease of 5.1% due to such effects as weak sales of consumables in the first half of the year.

~~https://global~~In the Imaging Business Unit, sales of interchangeable-lens digital cameras, in particular mirrorless cameras like the EOS R6 Mark II, a full-frame mirrorless camera released last year, and the new entry-level EOS R50 and EOS R100 mirrorless cameras launched in the first half of this year, remained solid.~~canon/en/csr/management/governance~~ Sales of RF-series interchangeable-lenses remained solid as well.~~html~~ Sales of network cameras increased thanks to solid demand and enhanced sales activity against the background of diversifying applications. As a result, sales for the third quarter of the Imaging Business Unit increased by 8.7% compared with the same period of the previous year to ¥220.7 billion, while income before income taxes for the third quarter increased by 10.2% compared with the same period of the previous year to ¥40.6 billion. Sales for the first nine months of the year totaled ¥632.3 billion, a year-on-year increase of 12.7%, while income before income taxes totaled ¥113.0 billion, a year-on-year increase of 35.5% due to the steady sales of network cameras and other highly competitive products, as well as non-recurring expenses incurred to close a certain production facility in the previous year.

~~Disclosure~~In ~~based~~the onMedical Business Unit, sales remained firm mainly in Japan and Europe. As a result, sales of the ~~Principles~~Medical Business Unit increased by 5.0% compared with the same period of the ~~Corporate~~previous ~~Governance~~year ~~Code~~to ~~(Revised)~~¥132.4 billion. Income before income taxes for the third quarter increased by 0.3% compared with the same period of the previous year to ¥6.6 billion. Sales for the first nine months of the year totaled ¥389.6 billion, a year-on-year increase of 7.5%, while income before income taxes totaled ¥17.9 billion, a year-on-year decrease of 17.1% mainly due to active investments to augment its workforce in order to enhance its sales capacity.

~~Principle~~In 1the Industrial Business Unit, sales of semiconductor lithography equipment remained strong, particularly for those used in the production of power devices.4 As ~~Strategic~~a ~~Share~~result, ~~Holdings~~unit ~~(So-called~~sales ~~“Cross-Shareholdings”~~were on par with the same period of the previous year, which saw a significant increase in unit sales. For FPD lithography equipment, unit sales decreased compared with the previous year due to reduced investments by panel manufacturers as the ~~Corporate~~panel ~~Governance~~market ~~Code)~~worsened. As a result, net sales of the Industrial Business Unit decreased by 9.4% compared with the same period of the previous year to ¥78.8 billion, and income before income taxes for the third quarter decreased by 6.6% compared with the same period of the previous year to ¥15.9 billion. Sales for the first nine months of the year totaled ¥215.8 billion, a year-on-year decrease of 7.7%, while income before income taxes totaled ¥35.7 billion, a year-on-year decrease of 21.9%.

1.- 3 - ~~Policy Regarding Strategic Holdings~~

~~For~~Cash ~~the~~Flow medium- to long-term growth of the Company, ceaseless improvement of respective systems like development, production, and sales, is essential. It is, however, difficult to achieve all of this solely through the management resources of the Canon Group. The Company decides in some cases to hold shares of companies outside the Canon Group as part of cooperation with such companies, when it determines that such shareholding would be beneficial to strengthening of those systems.

2During the first nine months of 2023, cash flow from operating activities increased by ¥81.4 billion ~~Examining~~year-on-year to ¥269.9 billion, mainly due to an increase in profit and efforts to limit the ~~Rationale~~rise in inventory. Cash flow used in investing activities increased by ¥71.7 billion to ¥204.0 billion from the same period of ~~Strategic~~the ~~Share~~previous ~~Holdings~~year due to an acquisition of Minaris Medical Co., Ltd., which has in vitro diagnostics and automated analyzer businesses, as well as continued capital investments to improve efficiency and productivity. Accordingly, free cash flow increased by ¥9.7 billion compared with the previous year to ¥65.9 billion.

AsCash ~~for~~flow from ~~strategic~~financing ~~share~~activities ~~holdings,~~increased ~~the~~by ~~Company~~¥94.7 billion ~~examines the medium~~year-on-year to ~~long-term~~¥65.1 billion ~~rationale~~due ofto ~~each~~an ~~holding~~increase ~~every~~in ~~year~~proceeds onreceived ~~a regular~~from ~~basis~~short-term ~~evaluating~~loans despite ~~its~~dividends ~~significance,~~paid ~~the~~increased ~~performance~~by of¥11.5 billion from the ~~invested~~same ~~company,~~period ~~whether~~of orlast ~~not~~year ~~the~~due ~~yield~~to onan ~~the~~increase ~~investment~~in ~~exceeds~~last ~~the Company~~year’s ~~cost~~year-end ofdividend ~~capital,~~ and ~~other~~this ~~aspects,~~year’s ~~and~~interim ~~making~~dividend, ~~reports~~as towell ~~the~~as repurchases ~~Board~~ of ~~Directors~~¥100.0 billion ~~If the rationale for the holding is not recognized, it will be sold. As for current share holdings, the rationale for the holdings were recognized at the Board~~ of ~~Directors~~treasury ~~meeting held in February 2023~~stock.

3.Owing ~~Policy~~to ~~Regarding~~these factors, as well as the ~~Exercise~~impact offrom ~~Voting~~foreign ~~Rights~~currency ~~Pertaining~~exchange adjustments, cash and cash equivalents increased by ¥158.6 billion to ~~Strategic~~¥520.7 billion ~~Share~~from ~~Holdings~~the end of the previous year.

~~The~~Outlook Company decides to vote for or against a proposal of invested companies based on a standard of whether or not such proposal would contribute to the profit of all shareholders, while respecting the management policies, business strategies etc. of the invested companies.

~~Principle~~There 1are still some global economic uncertainties for the fourth quarter onward due to various geopolitical risks, tightening monetary policies across the world in response to inflation, and the risk of an economic slowdown caused by China’s market stagnation and other factors.7 ~~Related~~However, ~~Party~~Canon ~~Transactions~~expects the global economy to continue down the track of recovery due to the strong employment situation and improved personal income, particularly in the United States and Japan.

In ~~accordance~~the ~~with~~market ~~laws~~in ~~and~~which ~~regulations~~Canon operates, ~~transactions~~demand ~~between~~for ~~the~~office ~~Company~~MFDs ~~and~~as ~~Directors~~key office devices is expected to remain firm, thanks to strong demand for high-productivity printing as well as ~~Director’s~~their reputation. For inkjet printers, the demand for refillable ink tank models is expected to remain solid even though the market of inkjet ~~transactions~~printers ~~involving~~is aexpected ~~conflict-~~to shrink due to decreased working from home demand. For laser printers, demand is expected to remain weak due to the curbing of corporate investments despite new demand generated from decentralization of offices. As for digital interchangeable-~~interest~~lens ~~with~~cameras, demand is expected to remain solid during the ~~Company~~year-end ~~should~~selling beseason ~~approved~~in bythe fourth quarter. For network cameras, market growth is expected to remain stable due to the ~~Board~~continued expansion of ~~Directors~~security ~~based~~applications onand growing demand for applications to enhance productivity and quality at manufacturing and sales sites. In addition, the ~~material~~needs ~~facts~~for ondownsizing ~~such~~and ~~transactions~~remote control in professional video production equipment are expected to continue, supported by continued growth in demand for online video content. ~~And~~As ~~after~~for the medical equipment market, demand is expected to remain solid despite ongoing uncertainty due to increasing interest rates and delayed purchase of equipment by medical institutions caused by increasing interest rates and labor cost. Canon will steadily execute equipment installation for placed orders. For semiconductor lithography equipment, despite concerns that the ~~transaction~~temporary decline in some memory device market will continue, demand of equipment for such products as power devices is ~~complete~~expected to remain solid. Furthermore, arobust ~~report~~demand is ~~given~~expected to continue as semiconductor factories are being constructed in various countries and regions from the ~~Board~~viewpoint of ~~Directors~~economic security. For FPD lithography equipment, the harsh market condition is expected to continue due to ongoing delayed investments by panel manufacturers amid market sluggishness.

~~Executive~~Regarding ~~Officers,~~currency exchange rates on which ~~are~~Canon ~~elected~~bases ~~through~~its performance outlook for the fourth quarter onwards, Canon anticipates exchange rates of ¥145 to ~~resolution~~the U.S. dollar and ¥155 to the euro, representing depreciation of approximately ¥8 against the ~~Board~~U.S. dollar and depreciation of ~~Directors,~~approximately ~~are~~¥13 ~~treated~~against the ~~same~~euro asfrom ~~Directors~~the previous year. For the U.S. dollar and the euro, Canon expects the yen to depreciate by ¥5 and depreciate by ¥6 from its previous forecast, respectively.

~~Supplementary~~Upon ~~Principle~~taking 2into consideration the currency exchange rates and the current market conditions, Canon revised its forecast to full-year consolidated net sales of ¥4,220.0 billion, a year-on-year increase of 4.17%, due ~~Ensuring~~to ~~Diversity~~the market slowdown in China, which mainly affects its laser printer business, as well as postponement of installation of semiconductor lithography equipment and FPD lithography equipment for customer reasons. On the other hand, taking into consideration the decrease in the ~~Appointment~~cost ~~etc~~of logistics and components, as well as the gains from depreciation of the yen, Canon maintained its previous outlook, expecting operating profit of ¥400.0 billion, a year-on-year increase of ~~Core~~13.2%; ~~Human~~income ~~Resources~~before income taxes of ¥425.0 billion, a year-on-year increase of 20.6%; net income attributable to Canon Inc. of ¥292.0 billion, a year-on-year increase of 19.7%, recording highs since 2009.

~~(i)~~- 4 - ~~Stance regarding ensuring diversity, Status and goals of ensuring diversity~~

2Consolidated Outlook

1. Stance Regarding Ensuring Diversity


Fiscal year	Millions of yen
	Year ending December 31, 2023				Change			Year ended December 31, 2022		Change (%)
	Previous Outlook (A)		Revised Outlook (B)		(B - A)			Results (C)		(B - C) / C
Net sales		4,363,000		4,220,000		(143,000	)		4,031,414		+4.7%
Operating profit		400,000		400,000		-			353,399		+13.2%
Income before income taxes		425,000		425,000		-			352,440		+20.6%
Net income attributable to Canon Inc.		292,000		292,000		-			243,961		+19.7%

~~Guided~~This bydocument ~~the~~contains ~~Company~~forward-looking statements with respect to future results, performance and achievements that are subject to risk and uncertainties and reflect management’s ~~corporate~~views ~~philosophy~~and assumptions formed by available information. All statements other than statements of ~~Kyosei,~~ ~~enacted~~historical fact are statements that could be considered forward-looking statements. When used in ~~1988~~this document, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project” or “should” and similar expressions, as they relate to Canon, ~~respects~~are ~~diversity~~intended to identify forward-looking statements. Many factors could cause the actual results, performance or achievements of ~~culture~~Canon to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, changes in currency exchange rates and interest rates, ~~customs~~introduction of competing products by other companies, ~~language~~lack of acceptance of new products or services by Canon’s targeted customers, inability to meet efficiency and ~~ethnicity~~cost reduction objectives, changes in business strategy and ~~actively~~various ~~encourages~~other factors, both referenced and not referenced in this document. A detailed description of these and other risk factors is included in Canon’s annual report on Form 20-F, which is on file with the ~~fair~~United ~~promotion~~States Securities and ~~utilization~~Exchange Commission. Should one or more of ~~human~~these ~~resources~~risks or uncertainties materialize, ~~regardless~~or ofshould ~~such~~underlying ~~characteristics~~assumptions asprove ~~gender~~incorrect, ~~age~~actual results may vary materially from those described herein. Canon does not intend or ~~disability~~assume any obligation to update these forward-looking statements.

~~To promote diversity, the Company is encouraging company~~-~~wide~~ 5 - ~~activities through a horizontally integrated organization known as VIVID (Vital workforce and Value Innovation through Diversity).~~

~~VIVID~~CANON ~~Activities~~INC. ~~Policy~~AND SUBSIDIARIES

•CONSOLIDATED Respecting diversity as an important issue, promote the introduction of new systems across the Canon Group, seeking to replace existing systems, and strive to change employees’ thinking and awareness of diversity issues.

•II. ~~Revise~~Financial HRStatements ~~policies and workplace conditions to avoid any limitations or restrictions being placed on the career opportunities afforded to talented people with the ambition to succeed.~~

•1. ~~Promote~~CONSOLIDATED ~~internal/external~~BALANCE ~~dissemination~~SHEETS ~~of information on diversity promotion activities to help identify/develop role models and encourage wider adoption of best workplace practices.~~

2. Promotion of Females to Management Positions (Stance, status and targets regarding the appointment of females to management positions)


	Millions of yen
	As of September 30, 2023			As of December 31, 2022			Change
ASSETS
Current assets		2,461,346			2,155,914			305,432
Cash and cash equivalents		520,745			362,101			158,644
Short-term investments		4,321			10,905			(6,584	)
Trade receivables		622,081			636,803			(14,722	)
Inventories		913,872			808,312			105,560
Current lease receivables		159,947			137,038			22,909
Prepaid expenses and other current assets		256,424			215,990			40,434
Allowance for credit losses		(16,044	)		(15,235	)		(809	)
Non-current assets		3,157,658			2,939,616			218,042
Noncurrent receivables		12,291			12,996			(705	)
Investments		74,264			65,128			9,136
Property, plant and equipment, net		1,101,574			1,035,065			66,509
Operating lease right-of-use assets		123,751			117,843			5,908
Intangible assets, net		271,331			280,995			(9,664	)
Goodwill		1,040,689			972,626			68,063
Noncurrent lease receivables		323,198			279,332			43,866
Other assets		214,443			179,297			35,146
Allowance for credit losses		(3,883	)		(3,666	)		(217	)

Total assets		5,619,004			5,095,530			523,474

LIABILITIES AND EQUITY
Current liabilities		1,725,316			1,365,353			359,963
Short-term loans and current portion of long-term debt		607,573			296,384			311,189
Short-term loans related to financial services		40,200			41,200			(1,000	)
Other short-term loans and current portion of long-term debt		567,373			255,184			312,189
Trade payables		344,065			355,930			(11,865	)
Accrued income taxes		45,251			48,414			(3,163	)
Accrued expenses		393,784			365,847			27,937
Current operating lease liabilities		36,489			33,281			3,208
Other current liabilities		298,154			265,497			32,657
Non-Current liabilities		358,184			381,147			(22,963	)
Long-term debt, excluding current portion of long-term debt		2,920			2,417			503
Accrued pension and severance cost		169,745			189,215			(19,470	)
Noncurrent operating lease liabilities		88,899			85,331			3,568
Other noncurrent liabilities		96,620			104,184			(7,564	)

Total liabilities		2,083,500			1,746,500			337,000

Canon Inc. shareholders’ equity		3,291,205			3,113,105			178,100
Common stock		174,762			174,762			-
Additional paid-in capital		404,934			404,838			96
Retained earnings		3,782,280			3,729,244			53,036
Legal reserve		61,554			64,509			(2,955	)
Other retained earnings		3,720,726			3,664,735			55,991
Accumulated other comprehensive income (loss)		287,503			62,623			224,880
Treasury stock, at cost		(1,358,274	)		(1,258,362	)		(99,912	)
Noncontrolling interests		244,299			235,925			8,374

Total equity		3,535,504			3,349,030			186,474

Total liabilities and equity		5,619,004			5,095,530			523,474


	Millions of yen
	As of September 30, 2023			As of December 31, 2022
Notes:
1. Accumulated depreciation		3,107,984			2,962,228
2. Accumulated other comprehensive income (loss):
Foreign currency translation adjustments		413,202			191,287
Net unrealized gains and losses on securities		26			(34	)
Net gains and losses on derivative instruments		(1,704	)		(428	)
Pension liability adjustments		(124,021	)		(128,202	)

~~The~~- 6 - ~~Company is committed to providing equal opportunities according to ability and fair treatment for all, irrespective of gender.~~

OnCANON ~~top of this, the Company organizes leadership training for women with the goal of developing female candidates for management positions~~INC. AAND ~~total~~SUBSIDIARIES of 244 women have completed this training by 2022. Additionally, the Company holds seminars for employees returning to work from childcare leave and their supervisors, and provides mentoring by female managers. Please be aware that the number of female managers increased from 58 in 2011* to 147 in 2022.

InCONSOLIDATED 2020, based on the Act on the Promotion of Female Participation and Career Advancement in the Workplace, the Company formulated an action plan with a goal of having more than three times the ratio of women in management, compared with 2011* levels, by the end of 2025.

*The2. ~~year~~CONSOLIDATED ~~before~~STATEMENTS ~~VIVID~~OF INCOME ~~was introduced.~~ AND

~~Female~~CONSOLIDATED ~~Ratio~~STATEMENTS ~~(In~~OF ~~2011~~COMPREHENSIVE ~~and~~INCOME ~~over the past three years) (No. of females)~~

	2011		2020		2021		2022
Employees		3,790 (15.4%)		4,179 (16.5%)		4,162 (16.6%)		4,144 (16.8%)
Managers		58 (1.4%)		126 (3.0%)		138 (3.3%)		147 (3.6%)
Directors*		0 (0.0%)		2 (4.2%)		2 (4.0%)		2 (3.8%)

Consolidated statements of income

*Directors, Audit & Supervisory Board Members, and Executive Officers

Results for the third quarter

Millions of yen

Three months
ended
September 30, 2023

Three months
ended
September 30, 2022

Change(%)

Net sales

1,025,247

996,090

2.9

Cost of sales

543,197

545,057

Gross profit

482,050

451,033

6.9

Operating expenses:

Selling, general and administrative expenses

315,099

294,576

Research and development expenses

84,327

75,017

399,426

369,593

Operating profit

82,624

81,440

1.5

Other income (deductions):

Interest and dividend income

3,550

1,542

Interest expense

(659

)

(207

)

Other, net

1,805

(3,699

)

4,696

(2,364

)

Income before income taxes

87,320

79,076

10.4

Income taxes

21,379

21,827

Consolidated net income

65,941

57,249

Less: Net income attributable to noncontrolling interests

3,807

3,131

Net income attributable to Canon Inc.

62,134

54,118

14.8

Results for the nine months

Millions of yen

Nine months
ended
September 30, 2023

Nine months
ended
September 30, 2022

Change(%)

Net sales

3,017,254

2,874,239

5.0

Cost of sales

1,596,423

1,564,776

Gross profit

1,420,831

1,309,463

8.5

Operating expenses:

Selling, general and administrative expenses

914,628

832,335

Research and development expenses

246,830

221,073

1,161,458

1,053,408

Operating profit

259,373

256,055

1.3

Other income (deductions):

Interest and dividend income

9,103

3,167

Interest expense

(1,474

)

(737

)

Other, net

8,980

(26,516

)

16,609

(24,086

)

Income before income taxes

275,982

231,969

19.0

Income taxes

77,951

61,962

Consolidated net income

198,031

170,007

Less: Net income attributable to noncontrolling interests

14,084

10,889

Net income attributable to Canon Inc.

183,947

159,118

15.6

~~3. Promotion of non~~-~~Japanese to management positions (Stance, status and targets regarding the appointment of non~~ 7 -~~Japanese~~ ~~to management positions)~~

~~For~~CANON ~~the Company, which operates globally, an international perspective is essential~~INC. IfAND ~~necessary,~~SUBSIDIARIES to achieve this the Company believes that it must consider also appointing non-Japanese to executive and other management positions. To facilitate this, the Company is actively working to develop executive candidates on a global basis, for example, by promoting personnel exchange among overseas Group companies, promoting appropriate personnel regardless of nationality to the top management and executive staff of overseas group companies, and conducting “Global Executive Management Training” to share Canon’s management philosophy with the top management of overseas group companies. However, the Company believes that it is not important to formally request an increase in the number of non-Japanese managers at this point in time, and has not set specific targets for the timing or number of non-Japanese managers to be appointed.

3CONSOLIDATED

~~At present, only a small number of~~Consolidated ~~non-Japanese~~statements ~~nationals have been appointed to executive and other management positions at the Company. However, the above initiatives are expected to increase the number~~ of ~~such non-Japanese~~comprehensive ~~candidates~~income ~~in the near future.~~

4. Promotion of mid-career recruits to management positions (Stance, Status and targets regarding the appointment of mid-career recruits to management positions)


Results for the third quarter	Millions of yen
	Three months ended September 30, 2023			Three months ended September 30, 2022			Change(%)
Consolidated net income		65,941			57,249			+	15.2
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		40,004			42,987
Net unrealized gains and losses on securities		21			(21	)
Net gains and losses on derivative instruments		(752	)		617
Pension liability adjustments		842			4,254

		40,115			47,837

Comprehensive income (loss)		106,056			105,086			+	0.9
Less: Comprehensive income (loss) attributable to noncontrolling interests		4,248			3,965

Comprehensive income (loss) attributable to Canon Inc.		101,808			101,121			+	0.7


Results for the nine months	Millions of yen
	Nine months ended September 30, 2023			Nine months ended September 30, 2022			Change(%)
Consolidated net income		198,031			170,007			+	16.5
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		223,928			309,018
Net unrealized gains and losses on securities		60			(21	)
Net gains and losses on derivative instruments		(1,214	)		(1,867	)
Pension liability adjustments		3,993			3,519

		226,767			310,649

Comprehensive income (loss)		424,798			480,656			-	11.6
Less: Comprehensive income (loss) attributable to noncontrolling interests		15,971			12,757

Comprehensive income (loss) attributable to Canon Inc.		408,827			467,899			-	12.6

The Company believes that in order to achieve sustainable growth in the current business environment, which requires more diverse perspectives and is undergoing rapid changes, it is necessary to actively seek outside human resources rather than rely solely on internal human resources. In particular, in order to transform our business portfolio and subsequently strengthen our business, it is essential not only to make effective use of our internal human resources, but also to recruit mid-~~career personnel who are necessary for the business areas we need to strengthen. In the future, the Company will further increase the ratio of mid~~ 8 -~~career~~ hires, and if there are qualified mid-career hires, the Company will actively promote them to management positions without giving preference to internal personnel. As of the end of 2022, the ratio of mid-career employees to all employees was approximately 20% (4,439 people), and the ratio of mid-career employees to managers was approximately 13% (583 people), both of which are considered to be appropriate. Going forward, the Company expects the appointment ratio of mid-career hires to management positions to generally remain at this level.

~~Mid-career~~CANON ~~Hire Ratio (Past three years) (No~~INC. ofAND ~~people)~~SUBSIDIARIES

	2020		2021		2022
Employees		4,734 (20%)		4,545 (19%)		4,439 (20%)
Managers		601 (13%)		590 (13%)		583 (13%)
Directors*		6 (13%)		6 (12%)		6 (12%)

CONSOLIDATED

*Directors3. ~~and~~DETAILS ~~Audit &~~OF ~~Supervisory~~SALES ~~Board Members, excluding Outside Directors and Outside Audit & Supervisory Board Members, and Executive Officers~~

~~(ii)~~Results ~~Policies~~for ~~regarding~~the ~~Human~~third ~~Resource Development~~quarter ~~and Internal Working Environment to Ensure Diversity and their Status~~

In addition to the description in (i) of the preceding paragraph, it is described in “Others” of “III. 3. Status of Initiatives for Respect for Stakeholders.”


	Millions of yen
Sales by business unit	Three months ended September 30, 2023			Three months ended September 30, 2022			Change(%)
Printing		570,360			554,778			+	2.8
Imaging		220,686			202,933			+	8.7
Medical		132,406			126,074			+	5.0
Industrial		78,849			87,037			-	9.4
Others and Corporate		44,744			53,790			-	16.8
Eliminations		(21,798	)		(28,522	)			-

Total		1,025,247			996,090			+	2.9


	Millions of yen
Sales by region	Three months ended September 30, 2023			Three months ended September 30, 2022			Change(%)
Japan		213,428			201,091			+	6.1
Overseas:
Americas		328,008			311,553			+	5.3
Europe		270,461			251,981			+	7.3
Asia and Oceania		213,350			231,465			-	7.8

		811,819			794,999			+	2.1

Total		1,025,247			996,090			+	2.9


Results for the nine months
	Millions of yen
Sales by business unit	Nine months ended September 30, 2023			Nine months ended September 30, 2022			Change(%)
Printing		1,703,444			1,632,443			+	4.3
Imaging		632,347			561,031			+	12.7
Medical		389,576			362,503			+	7.5
Industrial		215,765			233,779			-	7.7
Others and Corporate		141,359			157,102			-	10.0
Eliminations		(65,237	)		(72,619	)			-

Total		3,017,254			2,874,239			+	5.0


	Millions of yen
Sales by region	Nine months ended September 30, 2023			Nine months ended September 30, 2022			Change(%)
Japan		652,598			627,576			+	4.0
Overseas:
Americas		944,583			893,993			+	5.7
Europe		790,223			720,649			+	9.7
Asia and Oceania		629,850			632,021			-	0.3

		2,364,656			2,246,663			+	5.3

Total		3,017,254			2,874,239			+	5.0

~~Principle~~* ~~2.6~~Based ~~Roles~~on the realignment of Canon’s internal management structure, from the fourth quarter ended December 31, 2022, Canon has changed the name and structure of segments from Industrial and Others Business Unit and Corporate ~~Pension~~and ~~Funds~~eliminations asto ~~Asset~~Industrial ~~Owners~~Business Unit, Others and Corporate and Eliminations. Also, a certain business, which was previously included in Others, has been presented within the Printing Business Unit from the beginning of the first quarter of 2023. Operating results for the three and nine months ended September 30, 2022 have also been reclassified.

Canon Inc. and major Canon Group companies in Japan jointly established the Canon Pension Fund, appointing finance and accounting experts to the roles of Chief Director, Executive Director, and Investment Managing Director. Grounded in the Basic Policy which was based on guidelines enacted by the Japanese Ministry of Health, Labour and Welfare—the pension fund employs asset allocation plans considered optimal from a medium- to long- term investment perspective, and selects investment products and entrusted institutions that align with the asset allocation plans. In asset allocation and the selection of investment institutions, careful deliberation is carried out by the asset investment committee, which consists of the Chief Director, Executive Director, Investment Managing Director and experienced investment and pension plan experts.


Notes:		1. The primary products included in each of the segments are as follows:
		Printing Business Unit :
		Office multifunction devices (MFDs) / Document solutions / Laser multifunction printers (MFPs) / Laser printers / Inkjet printers / Image scanners / Calculators / Digital continuous feed presses / Digital sheet-fed presses / Large format printers
		Imaging Business Unit :
		Interchangeable-lens digital cameras / Interchangeable lenses / Digital compact cameras / Compact photo printers / MR Systems / Network cameras / Video management software / Video content analytics software / Digital camcorders / Digital cinema cameras / Broadcast equipment / Projectors
		Medical Business Unit :
		Computed tomography (CT) systems / Diagnostic ultrasound systems / Diagnostic X-ray systems / Magnetic resonance imaging (MRI) systems / Clinical chemistry analyzers / Digital radiography systems / Ophthalmic equipment
		Industrial Business Unit :
		Semiconductor lithography equipment / FPD (Flat panel display) lithography equipment / OLED Display Manufacturing Equipment / Vacuum thin-film deposition equipment / Die bonders
		Others :
		Handy terminals / Document scanners

		2. The principal countries and regions included in each regional category are as follows:
		Americas: United States of America, Canada, Latin America Europe: United Kingdom, Germany, France, Netherlands, European countries, Middle East and Africa Asia and Oceania: China, Asian countries, Australia

4- 9 -

~~Additionally,~~CANON ~~scheduled monitoring of investment status, including the stewardship activities of each entrusted institution, is carried out through quarterly reporting sessions~~INC. ~~Through~~AND ~~this,~~SUBSIDIARIES the Canon Group has established a structure that realizes steady asset formation for employees and secures the future investment and management of a healthy pension fund that gives due consideration to avoiding conflicts of interest between pension beneficiaries and the Company.

WeCONSOLIDATED ~~are also taking such steps as participating in seminars hosted by the Pension Fund Association of Japan to elevate the competencies of our investment personnel.~~

~~Principle 3~~4.1 ~~Full~~CONSOLIDATED ~~Disclosure~~STATEMENTS OF CASH FLOWS

(i) Company Objectives (e.g., Business Principles), Business Strategies and Business Plans


	Millions of yen
	Nine months ended September 30, 2023			Nine months ended September 30, 2022
Cash flows from operating activities:
Consolidated net income		198,031			170,007
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization		174,112			166,225
Loss (gain) on disposal of fixed assets		3,059			(9,549	)
Deferred income taxes		(10,060	)		(6,081	)
Decrease in trade receivables		61,379			8,399
Increase in inventories		(41,126	)		(153,886	)
Increase in lease receivables		(19,082	)		(11,070	)
(Decrease) increase in trade payables		(26,576	)		75,275
Decrease in accrued income taxes		(4,964	)		(12,740	)
Increase in accrued expenses		1,072			20,144
Decrease in accrued pension and severance cost		(22,926	)		(29,442	)
Contribution of cash to retirement benefit trust		(18,000	)		-
Other, net		(25,034	)		(28,801	)

Net cash provided by operating activities		269,885			188,481
Cash flows from investing activities:
Purchases of fixed assets		(156,948	)		(132,251	)
Proceeds from sale of fixed assets		2,533			14,316
Proceeds from maturity of held to maturity securities		-			2,151
Purchases of securities		(6,685	)		(20,053	)
Proceeds from sale and maturity of securities		13,181			6,518
Acquisitions of businesses, net of cash acquired		(56,219	)		(5,890	)
Other, net		117			2,859

Net cash used in investing activities		(204,021	)		(132,350	)
Cash flows from financing activities:
Repayments of long-term debt		(1,456	)		(1,546	)
Decrease in short-term loans related to financial services, net		(1,000	)		(800	)
Increase in other short-term loans, net		306,280			197,840
Dividends paid		(130,870	)		(119,326	)
Repurchases and reissuance of treasury stock, net		(100,014	)		(100,012	)
Other, net		(7,860	)		(5,738	)

Net cash provided by (used in) financing activities		65,080			(29,582	)
Effect of exchange rate changes on cash and cash equivalents		27,700			37,354

Net change in cash and cash equivalents		158,644			63,903
Cash and cash equivalents at beginning of period		362,101			401,395

Cash and cash equivalents at end of period		520,745			465,298

1.* ~~Corporate~~Certain ~~Philosophy~~items in the consolidated statements of cash flows for the nine months ended September 30, 2022, have been reclassified to conform to the current year’s presentation.

~~Truly~~- 10 - global companies must foster good relations with customers and communities, as well as with governments, regions, and the environment, as part of their fulfillment of social responsibilities. The Company, under a corporate philosophy of Kyosei—living and working together for the common good— will fulfill its corporate social responsibility, and will contribute to expand society, through offering superior products and services to people all over the world in order to remain an Excellent Global Corporation.

~~Note:~~CANON ~~The~~INC. ~~Company’s~~AND ~~Corporate~~SUBSIDIARIES ~~Philosophy and CSR Activity Policy are posted on the Company’s website at the addresses provided below.~~

~~https://global.canon/en/corporate/philosophy/~~CONSOLIDATED

~~https://global~~5.~~canon/en/csr/policy/index.html~~ NOTE FOR GOING CONCERN ASSUMPTION

2Not applicable. ~~Business Strategies and Business Plans~~

~~To fulfill the Company’s social responsibility, it needs to enhance its corporate competitiveness and maintain its sound financial position~~6. ~~Since 1996, the Company has been implementing 5-year management phases of the Excellent Global Corporation Plan, promoting the enhancement of competition and the establishment and~~NOTE ~~maintenance~~ON ofSIGNIFICANT aCHANGES ~~sound~~IN ~~financial~~CANON ~~structure~~INC. SHAREHOLDERS’ EQUITY

Under Phase V of the Excellent Global Corporation Plan, the Company’s medium- to long-term management plan for the period from 2016 to 2020, the Group was focused on transforming its business portfolio, concentrating on four areas, namely commercial printing, network cameras, medical, and industrial equipment, and making them into pillars of new businessesNone. And in Phase VI (2021 – 2025), the Group aims to create further innovation, reorganizing the organization into 4 industrial groups, namely Printing, Imaging, Medical, and Industrial, to further accelerate the strengthening of businesses after the transformation.

57. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

~~The Company~~Canon’s ~~business~~consolidated ~~portfolio~~financial isstatements are prepared in ~~line~~accordance with ~~the Company’s philosophy of Kyosei, which is to contribute to the prosperity of the world and the well-being of mankind by achieving corporate growth and development~~U.S. ~~The~~generally ~~portfolio~~accepted ~~consists~~accounting of businesses determined from various viewpoints, including 1) the ability to leverage the Company’s technological advantages, which are derived from core competence technologies that have been cultivated over many years, such as optical technology, image processing and analysis technology, and network technology; 2) the ability to contribute to solving social issues such as safety and security; and 3) the expectation for sustainable business growth, capturing changes in the social and economic environmentprinciples.

At Corporate Strategy Committee meetings, which are chaired by the CEO and attended by the CFO, CTO, as well as people that are in charge of business groups, the Company regularly discusses the business strategy of each business group, including technology strategies, R&D investments, and capital expenditures, and determines the allocation of resources within the business portfolio8. AtNOTES ~~the~~TO ~~same~~CONSOLIDATED ~~time,~~FINANCIAL itSTATEMENTS also reviews the business portfolio itself as necessary. Outside Directors and Audit & Supervisory Board Members also attend Corporate Strategy Committee meetings, but if there is a major change in strategy, it will be discussed and resolved at meetings of the Board of Directors

~~Note: The Excellent Global Corporation~~SUBSEQUENT ~~Plan~~EVENT ~~is posted on the Company’s website at the address provided below.~~

~~https://global~~On October 2, 2023, Canon Marketing Japan Inc.~~canon/en/corporate/strategies/~~, a subsidiary of the Company, acquired 93.09% of the issued shares of Tokyo Nissan Computer System Co., Ltd. excluded treasury stock through a public cash tender offer for consideration of ¥10,249 million in order to expand its IT solution business. Further information related to the accounting for this business combination has not been disclosed, because none of the activities required to complete the initial accounting for this acquisition have been completed as of the announcement date of the third quarter of 2023 consolidated results.

3.- 11 - ~~Capital Policy~~

In order to steadily and continuously make necessary investment in medium- to long-term growth, the Company attaches importance to enhancing shareholders’ equity.

Furthermore, the Company strives to return profits to shareholders through a stable and active dividend, comprehensively taking into consideration mid-term profit forecasts, planned future investments, cash flow and other factors while also acquiring its own shares as necessary.

(ii) Basic Views and Guidelines on Corporate Governance

The Company is globally expanding its businesses in various business fields, including printing, imaging, medical, and industrial, and aims to aggressively expand into new business fields in the future. In order to make prompt decisions in each business field, and make important decisions for the entire Canon Group or matters that straddle several business fields from a company-wide perspective and at the same time secure appropriate decision making and execution of operation, the Company judges the corporate governance structure below to be effective.

• Board of Directors

While the focus of the organizational structure of the Board of Directors is on Representative Directors that oversee company-wide business strategies or execution such as the CEO, COO, CFO, CTO, and Representative Directors or Executive Directors that oversee multiple business fields or headquarters functions, at least two Independent Outside Directors are appointed while also assuring that they account for one third or more of the total number of Directors, in order to secure sound management. The Board of Directors, in accordance with laws and regulations, makes important decisions and supervises the execution of duties by officers.

Except for the above, the CEO and other Representative Directors are active in decision making and execution, and under the command and supervision of the Representative Directors, Executive Officers that are elected through resolution of the Board of Directors make decisions and execute operations of each business field or function.

• Audit & Supervisory Board

As a body which is in charge of the audit of operations, under the principles of autonomy, which is independent from the Board of Directors, the Company has full-time Audit & Supervisory Board Members that are familiar with the Company’s businesses or its management structure, and Independent Outside Audit & Supervisory Board Members that have extensive knowledge in specialized areas such as law, finance and accounting, and internal control. The Audit & Supervisory Board, which is composed of these individuals, cooperates with the Company’s accounting auditors and internal audit division, oversees the status of duty execution of operations and corporate assets to secure the soundness of management.

(iii) Board Policies and Procedures in Determining the Remuneration of the Senior Management and Directors.

1. Policy

The remuneration of Representative Directors and Executive Directors consists of a basic remuneration, which is a fixed amount, paid each month, as a compensation for execution of duties required in accordance with their position and the degree to which they contribute in their role, a bonus that is linked to the Company’s business performance in each business year, and a stock-type compensation stock option plan to provide an incentive to improve medium- to long-term performance and raise corporate value.

The remuneration of the Executive Officers is also in line with the above.

As for Outside Directors, remuneration is limited to the basic remuneration, which is a fixed amount, paid each month.

2. Procedure

The Company, with the aim of ensuring the transparency and objectivity of the remuneration decision-making process as well as the validity of the remuneration system, established the “Nomination and Remuneration Advisory Committee,” a non-statutory committee, which consists of the CFO, two Independent Outside Directors, and one Independent Outside Audit & Supervisory Board Member. The Committee, after examining the rationale of the remuneration system, including calculation standards of the basic remuneration, the bonus, and the granting standards of stock-type compensation stock option plan, reports to the Board of Directors to the effect that the system is reasonable.

Decisions regarding the amount and content of remuneration (the amount of basic remuneration and bonus as well as the number of stock-type compensation stock options) of each director is delegated to the CEO. However, the CEO must make decisions based on the prescribed criteria in accordance with the policy described above and as described in “Incentives” within “1. Items Concerning Institutional Structure, Organizational Operation, etc.,” under “II. Overview of Corporate Governance Structure in terms of the Organization of Management regarding Managerial Decision-Making, Execution of Duty, Oversight and other matters.” below. And prior to making a decision, the CEO must present the proposal to the Nomination and Remuneration Advisory Committee for confirmation.

The total amount of directors’ basic remuneration and stock-type compensation stock options is within the total remuneration (upper limit) that is approved by the shareholders’ meeting. As for the bonus for Directors, the payment is fixed provided that the proposal about such payment submitted at the ordinary general meeting of shareholders is approved.

(iv) Board Policies and Procedures in the Appointment and Dismissal of Senior Management and the Nomination of Director and Audit & Supervisory Board Member Candidates

1. Policy

Director and Audit & Supervisory Board Member candidates and Executive Officers are people that have the ability to fairly and effectively execute duties and, in principle, are selected from people that have met the following requirements, regardless of personal attributes such as gender, nationality, age etc.

• Representative Directors and Executive Directors

Have a true understanding of the corporate philosophy and code of conduct of the Company. At the same time, have broad familiarity with the Company’s businesses and operations, gained through, for example, Executive Officer experience. Have the ability to make effective decisions that overlook multiple businesses and functions. In addition to this, the CEO shall be a person with the ability to lead the Canon Group, having, in particular, a wealth of knowledge and skill related to management and a clear vision and a strong sense of responsibility.

• Independent Outside Directors

In addition to meeting the independence standard that is separately determined by the Board of Directors, have an abundance of experience and superior insight into fields such as business management, risk management, law, and economics.

• Audit & Supervisory Board Members

Be familiar with the Company’s businesses or its management structure, or have an abundance of experience and superior insight into professional fields such as law, finance, accounting, and internal control. As for Outside Audit & Supervisory Board Members, additionally meet the independence standards that are separately determined by the Board of Directors.

• Executive Officers

Have been highly evaluated in terms of character and ability in managerial assessment and managerial talent training programs, and also have sufficient knowledge, experience and judgment, to shoulder the responsibility of execution in specific fields, and truly understand the corporate philosophy and code of conduct of the Company.

2. Appointment and Nomination Procedures

The Company established the “Nomination and Remuneration Advisory Committee,” a non-statutory committee, which consists of the CFO, two Independent Outside Directors and one Independent Outside Audit & Supervisory Board Member. At the time, Director and Audit & Supervisory Board Member candidates are nominated and Executive Officers are appointed, including the selection of a successor for the chief executive officer position, the CEO recommends candidates thereof from among individuals that have been recognized as having met the prescribed requirements, and the Committee checks the fairness and validity of such recommendation prior to submission to and deliberation by the Board of Directors. In particular, with regard to chief executive officer candidates, it is the CEO’s responsibility to select and train candidates through an executive training system and a mechanism for accumulating management experience, including the transfer of persons who have been selected as executive officers and involvement in company-wide projects. And the process is confirmed by the Nomination and Remuneration Advisory Committee.

Additionally, as for Audit & Supervisory Board Member candidates, prior to deliberation of the Board of Directors, consent of the Audit & Supervisory Board shall be acquired.

3. Procedures for the Dismissal of Senior Management

In cases where a Representative Director, including the CEO, or an Executive Director, together referred to as “Senior Management,” commits an illegal, dishonest, or unfaithful act, or is deemed to have not fulfilled their role, or is judged not to be suitable for responsibilities of Senior Management, Directors, Audit & Supervisory Board Members can at any time demand that the Nomination and Remuneration Advisory Committee discuss the need for dismissal of the concerned Senior Management member.

The outcome of the Nomination and Remuneration Advisory Committee discussion, regardless of content, is presented to the Board of Directors where deliberation regarding the need for dismissal is held. Senior management subject to the deliberation are not allowed to participate in the discussion.

(v) Explanations with Respect to the Appointment, Dismissal and Nomination of Individuals

The reasons for selecting (if deemed especially necessary, the reasons for dismissing or not appointing) a candidate for Director or Audit & Supervisory Board Member are stated in the reference documents for the notice of convocation of the general meeting of shareholders.

Supplementary Principle 3.1.3 Measures etc. regarding Sustainability

1. Approach to Sustainability

Since 1988, and as stipulated by the Board of Directors, Canon has been striving to uphold our corporate philosophy of kyosei (living and working together for the common good) in order to contribute to worldwide prosperity and happiness.

A society in which all people live and work together, respect each other and get along happily, transcending culture, customs, language, ethnicity, and region. And a society in harmony with nature, that can preserve Earth’s irreplaceable environment to future generations.

To realize such a society, Canon will create new value through the power of technology and innovation, providing world-first technologies and world-leading products and services while also contributing to solutions for the problems our society faces. By providing greater value while using fewer resources throughout all product lifecycles, we aim to enable affluent lifestyles while protecting the environment.

Through our corporate activities, Canon will continue to proactively work toward realizing a sustainable society.

2. Human Capital and Intellectual Property Investment etc.

Important issues surrounding sustainability and the allocation of management resources, including investments in human capital and intellectual property, are discussed at Corporate Strategy Committee meetings, which is also attended by Outside Directors and Audit & Supervisory Board Members, and further reported to and deliberated by the Board of Directors, as needed.

(1) Investing in Human Capital

Canon strives to foster a corporate culture in which an enterprising spirit comes into play by thoroughly implementing fair and equitable placement, evaluation, and treatment based on the principles of meritocracy as well as respect for humanity, which respect aspirations, responsibility, and a sense of mission. In human resource development, Canon systematically implements training programs and trainee systems to develop professionals in R&D, manufacturing, and sales, including the LEAD Program, which seeks to identify, develop, and appoint next-generation leaders.

Additionally, as stated in Principle 3.1 Enhancement of Information Disclosure (i) (2) Management Strategy and Management Plan, the Company is transforming its business portfolio and continuing to strengthen its business. And to support these activities, investing in human capital is an important management issue.

Given the growing need for DX human resources across all business groups, the Company established the training facility, Canon Institute of Software Technology (CIST). And in 2022, a total of approximately 6,000 people received training on software. While strengthening digital-related training, to transfer human resources to business areas with high growth potential, the Company has implemented a training-type career matching system that combines training and in-house recruitment, promoting a wide range of human resource retraining and internal job transfers. Through these measures, Canon is working to maximize the utilization of human capital, by placing the right people in the right place.

(2) Investing in Intellectual Property

Canon has grown as an R&D-driven company that develops new markets and customers through products equipped with proprietary technologies. The corporate culture that emphasizes technology and innovation has remained unchanged to this day, and since 2007, the ratio of R&D expenses to net sales has generally been more than 8%. Intellectual property-related activities, which aim to connect various intangible assets such as core competence technologies to business development and value creation, have always been an important part of Canon. Since 1986, Canon has ranked among the top five companies in the world in terms of the number of patents registered in the United States, and has maintained the number one position among Japanese company since 2005.

The Intellectual Property Division clearly defines the purpose of its intellectual property activities as “support for business development.” Under Phase V of the Excellent Global Corporation Plan (2016 – 2020), followed by Phase VI (2021 – 2025), in order to support the transformation of its business portfolio and the strengthening of its business, the Company is systematically strengthening its patent portfolio with a vision of what it will look like 10 or 20 years from now. In addition to protecting core competence technologies in existing and new businesses as intellectual property, we are also increasing the number of general-purpose patent applications related to standard technologies and AI, which are essential for the IoT society, in anticipation of collaboration with other industries and changes in the business portfolios of our competitors.

In this way, we are focusing on the future of our business and the surrounding environment, setting priority themes, strengthening our intellectual property capabilities, evaluating the value of our patents, and replacing them to maintain a strong patent portfolio. As a result, while maintaining our competitive advantage by protecting our core competence technologies, we are able to negotiate with other companies in an advantageous manner to use the rights we need, thereby ensuring a degree of freedom in our business.

Note: Information regarding Canon’s intellectual property is posted on the Company’s website below.

https://global.canon/en/intellectual-property/

3. Response to Requests for TCFD Disclosure

The Company’s response to requests for TCFD disclosure

In addition to expressing support for TCFD recommendations, the Company discloses information through its Sustainability Report and CDP Climate Change Questionnaires.

*The Company’s initiatives related to sustainability and human capital investing etc. are disclosed in the Company’s Sustainability Report.

https://global.canon/en/csr/report/index.html

Supplementary Principles 4-1-1 Disclosure of Scope and Content of Matters Delegated to Management.

As stated in “Principle 3.1 Full Disclosure” under “(ii) Basic Views and Guidelines on Corporate Governance,” the Board of Directors in addition to matters that are required by laws and regulations or articles of incorporation (Example: As certain amount or more of assets that are acquired or disposed of), is responsible for supervising the execution of duties and at the same time making decisions on important matters involving the entire Canon Group or important matters that straddle several business fields.

Details of items that are deliberated by the Board of Directors are determined by Regulations of the Board of Directors.

As for decision-making and execution outside of this area, based on regulations regarding the division of duties and administrative authorities prescribed by the Board of Directors, the CEO and other Representative Directors undertake some of them, and Executive Officers selected by resolution of the Board of Directors undertake the others under the direction and supervision of the CEO as persons in charge of a business field or function.

Principle 4.8 Effective Use of Independent Directors

As stated in Principle 3.1 “Full Disclosure” under (ii) “Basic Views and Guidelines on Corporate Governance,” while the focus of the organizational structure of the Board of Directors is on Representative Directors that oversee company-wide business strategies or execution such as the CEO, COO, CFO, CTO, and Representative Directors or Executive Directors that oversee multiple business fields or headquarters functions, at least two Independent Outside Directors are appointed while also assuring that they account for one third or more of the total number of Directors, in order to secure sound management. Currently there are a total of five directors (three Representative Directors and two Independent Outside Directors).

Principle 4.9 Independence Standards and Qualification for Independent Directors

Note: The “Independence Standards for Independent Directors/Audit and Supervisory Board Members” are available on the Company’s website at the address provided below.

https://global.canon/en/ir/strategies/governance.html

“Independence Standards for Independent Directors/Audit and Supervisory Board Members”

Canon Inc. deems that a person who satisfies the requirements for Outside Directors/Audit and Supervisory Board Members prescribed by the Corporation Law of Japan, and meets the independence criteria set by securities exchanges in Japan, and does not fall into any of the items below, is an “Independent Director/Audit and Supervisory Board Member” (a person who is independent from the management of Canon Inc. and unlikely to have conflicts of interest with general shareholders).

1. A person/organization for which Canon Group (Canon Inc. and its subsidiaries; hereinafter the same) is a major client, or a major client of Canon Group, or an executing person of such organization or client

2. A major lender to Canon Group, or an executing person of such lender

3. A large shareholder of Canon Inc., or an executing person of such shareholder

4. A person/organization receiving large amounts of contributions from Canon Group, or an executing person of such organization

5. A consultant, accounting professional or legal professional who has received a large amount of money or other properties from Canon Group, other than as compensation for being a director/Audit and Supervisory Board Member (if the recipient is a corporation, partnership or any other organization, this item applies to any person belonging to said organization.)

6. A certified public accountant belonging to the audit firm engaged to conduct the statutory audit of Canon Group (including any such accountant to whom this item has applied in the last 3 business years)

7. An executing person of another company in cases where an executing person of Canon Group is an outside director/Audit and Supervisory Board Member of such other company

8. An immediate family member (spouse and a relative within the second degree of kinship) of any of the persons listed in each of items 1 to 7; provided, however that the persons to whom this is applicable shall be limited to key executing persons such as directors, executive officers of companies and partners of advisory firms

Supplementary Principle 4.10.1 Stance, authority, duty etc. regarding independence of Nomination Committee and the Remuneration Committee and its Makeup

The Company’s Nomination and Remuneration Advisory Committee includes both Independent Outside Directors and one Independent Outside Audit & Supervisory Board Member in order to ensure its independence. Its role is to deliberate, after receiving an inquiry from the Board of Directors, and report the results to the Board of Directors with respect to the following and other matters.

a. Fairness in selecting each candidate for Director, Audit & Supervisory Board Member, and Executive Officer

b. Validity of remuneration system for Directors and Executive Officers

Additionally, the Nomination and Remuneration Advisory Committee deliberates on the qualities, skills, etc. required of Directors (including the Chief Executive Officer), Audit & Supervisory Board Members and Executive Officers as necessary, and deliberates on the necessity of the dismissal of Representative Directors and Executive Directors (including the CEO) who are deemed unsuitable for their duties, and reports the results of each deliberation to the Board of Directors.

Supplementary Principle 4.11.2 The Status of Directors and Audit & Supervisory Board Members Holding Concurrent Posts

The Company discloses important concurrent posts of Directors and Audit & Supervisory Board Members along with the reasons for being selected as a candidate, in the reference documents for the notice of convocation of the general meeting of shareholders where the elections of Directors and Audit & Supervisory Board Members are proposed.

Additionally, at least once a year, the status of Directors and Audit & Supervisory Board Members holding of concurrent posts are checked and disclosed. Currently, the status of holding concurrent posts, including holding of a director or officer position in other listed companies is as follows:

Directors

Fujio Mitarai

• Audit & Supervisory Board Member of the Yomiuri Shimbun Holdings

Kunitaro Saida

• Attorney.

Yusuke Kawamura

• Director of Mitsui DM Sugar Holdings Co., Ltd.

• Chairman & CEO of Institute of Glocal Policy Research

Audit & Supervisory Board Members

Yutaka Tanaka

• Attorney.

• Director of Laws & Ordinances Compliance Investigation Office, Financial Services Agency of Japan

Supplementary Principle 4.11.3 Analyzing and Evaluating the Effectiveness of the Board of Directors

Once a year, a questionnaire survey of Directors and Audit & Supervisory Board Members on the items below is conducted. Based on the result of the questionnaire survey, analysis and evaluations regarding the effectiveness of the entire Board of Directors are carried out at the Board of Directors’ meeting.

• As for the operation of Board of Directors (including the appropriateness of when documents are distributed, how often meetings are held, and the time spend deliberating)

• As for the decision making and supervisory function of the Board of Directors (including the appropriateness of agenda items and agenda criteria of the Board of Directors as well as appropriateness etc. of content that is reported)

• As for the roles of Outside Directors and Audit & Supervisory Board Members (including the necessity of training etc. regarding the understanding of company affairs and corporate structure)

As for fiscal year 2022, at the Board of Directors meeting held in February 2023, it was determined that there was no problem with the effectiveness of Board of Directors meetings due to ongoing measures to enhance deliberation at these meetings. These measures include, providing Outside Directors and the Audit & Supervisory Board with prior explanations of the meeting agendas, sharing management information by having Outside Directors attend Corporate Strategy Committee meeting, etc., the periodical exchanging of opinions between Outside Directors and the Audit & Supervisory Board based on the findings of Audit & Supervisory Board Members, creating opportunities for Outside Directors and Audit & Supervisory Board members to receive individual explanations from each business group about their business strategy, and for Outside Directors and Audit & Supervisory Board members to receive explanations from the department in charge of sustainability about concrete measures.

In the future, yearly analysis and evaluations will be continued and an overview of the results will be disclosed. At the same time, when necessary, efforts will be made to improve the running etc. of Board of Directors meetings.

Supplementary Principle 4.14.2 Training Policy for Directors and Audit & Supervisory Board Members

For Directors and Audit & Supervisory Board Members, when assuming their positions, training is carried out with the aim of thoroughly understanding their roles and responsibilities and securing necessary or useful knowledge for them to properly fulfill their duties. Also incumbent Directors and Audit & Supervisory Board Members can, at the Company’s expense, attend training courses held inside and outside the Company.

Furthermore, Outside Directors and Outside Audit & Supervisory Board Members, to familiarize them with the Company’s business, are given opportunities, including attending important meetings such as meetings of the Corporate Strategy Committee, holding meetings with the person in charge of business divisions, and visiting operation sites as necessary.

Principle 5.1 Policy for Constructive Dialogue with Shareholders

1. Policy

For sustainable growth and to help improve corporate value over a medium- to long-term perspective, the Company has constructive dialogue with shareholders through an ordinary general meeting of shareholders, corporate strategy conferences, financial results conferences, and interviews with major institutional investors.

2. The Structure to Promote Dialogue

a. Investor Relations (IR), sustainability, and legal divisions are responsible for working together and promoting dialogue. The Executive Vice President & CFO oversees the entire structure to promote dialogue.

b. For analysts and institutional investors, the CEO hosts a corporate strategy conference at the beginning of the year. Other than this, the CFO hosts quarterly financial results conferences. For individual investors, on the Company’s website, specific pages containing information about corporate strategy, financial results, and financial data etc. have been set up using descriptions that are easy to understand. Additionally, the Company provides opportunities to meet with executive officers, outside directors, audit & supervisory board members etc., as necessary, to engage in dialogue with analysts and institutional investors in Japan and overseas. For detail, see special publications “III 2. IR Activities.”

Note: Investor information is available on the Company’s website at the address provided below.

https://global.canon/en/ir/

c. As for the opinions or demands that are obtained through dialogue with shareholders, accordingly, the department in charge reports to the CFO and the CFO reports important ones to the CEO or the Board of Directors.

3. Controlling Insider Information

The Company has set the “Rules on Prevention of Insider Trading,” which makes thorough control of undisclosed material information and provides the procedure of information disclosure.

2. Capital Structure

	Percentage of Shares Held by Foreign Investors	From 10% to less than 20%
Overview of Major Shareholders (Revised)
	Name of Shareholders	Number of Shares Held(Shares)	Shareholding Ratio (%)
	The Master Trust Bank of Japan, Ltd. (Trust Account)	176,492,500	17.66
	Custody Bank of Japan, Ltd. (Trust Account)	69,360,700	6.94
	Mizuho Bank, Ltd.	22,558,173	2.26
	SMBC Nikko Securities Inc.	22,420,209	2.24
	State Street Bank West Client - Treaty 505234	21,958,878	2.20
	The Dai-ichi Life Insurance Company, Limited	16,695,780	1.67
	OBAYASHI CORPORATION	16,527,607	1.65
	Barclays Securities Japan Limited BNYM	14,796,800	1.48
	Moxley and Co. LLC	14,166,157	1.42
	Sompo Japan Insurance Inc.	13,080,087	1.31
	Existence or Nonexistence of Controlling Shareholder, excluding Parent Company	-----
	Existence or Nonexistence of Parent Company	Nonexistent
	Supplementary Information (Revised)

“Overview of Major Shareholders” is as of June 30, 2023.

With respect to The Dai-ichi Life Insurance Company, Limited, in addition to the above, there are 6,180 thousand shares of the Company’s stock included in trust property relating to retirement allowance trust.

Shareholding ratio is calculated by deducting the number of treasury shares (334,635,475 shares, or 25.09% of total shares issued as of June 30, 2023) from total shares issued.

Between June 16, 2023 and August 9, 2023, the Company acquired a total of 13,433,500 of its own shares as treasury stock through market purchases. (Of this, 11,326,200 shares was purchased after July 1, 2023.)

3. Corporate Attributes

		Stock Exchange		Tokyo (Prime Market), Nagoya (Premier Market), Sapporo (Existing Market), and Fukuoka (Existing Market)
		Fiscal Year-end		December
		Sector		Electric appliances
		Number of Employees (Consolidated)		1,000 and above
		Net Sales (Consolidated)		1 trillion yen and above
		Number of Subsidiaries and Affiliates		300 and above

4. Guidelines for the Protection of Minority Shareholders When Making Transactions with Controlling Shareholders, etc.

-----

5. Other Special Circumstances that may have a Material Impact on Corporate Governance

The Company has Canon Marketing Japan Inc. and Canon Electronics Inc. as listed subsidiaries. The Canon Group strives to improve corporate value in a way that is in line with the interests of all shareholders, including minority shareholders, by posting stable profit. To facilitate this, the Canon Group aims to maximize consolidated results, maintaining the independence and leaving in place the dynamic management systems of listed subsidiaries.

Canon Marketing Japan Inc. not only sells Canon products, but also develops its own businesses such as IT solutions. As for Canon Electronics Inc., in addition to producing products on consignment from the Company and selling its own products, it is engaged in new space-related businesses.

Both subsidiaries have their own businesses and Canon-related businesses. The Company has comprehensively determined that maintaining decision-making and financing means that are independent of the Company while making the best use of its strengths as a member of the Canon Group is a system that contributes to maximizing the Group’s value and reason for maintains listings.

The operation of both subsidiaries is independent. Additionally, officers of the Company do not concurrently serve as officers of the two subsidiaries. Both subsidiaries are working to improve governance through the use of independent outside directors. In addition, in transactions between the Company and the two subsidiaries, the Company endeavors not to unreasonably harm the interests of minority shareholders of both the Company and the two subsidiaries by applying the arms-length rule to ensure the appropriateness of transactions.

II. Overview of Corporate Governance Structure in terms of the Organization of Management regarding Managerial Decision-Making, Execution of Duty, Oversight and other matters

1. Items Concerning Institutional Structure, Organizational Operation, etc.

	Organization Form	Company with Audit & Supervisory Board
Directors
	Number of Directors in the Company’s Articles of Incorporation	30
	Term of Directors specified in the Company’s Articles of Incorporation	1 year
	Chairman of the Board of Directors	CEO
	Number of Directors	5
	Elected Outside Directors	Elected
	Number of Outside Directors	2
	Number of Outside Directors designated as Independent Directors	2
	Relationship with the Company (1)

Name

Occupation

Relationship with the Company (Notes 1,2, and 3)

Kunitaro Saida

Attorney

☐

Yusuke Kawamura

Former employee of another company

Note 1: Items of selection regarding “Relationship with the Company”

Note 2: If the item currently applies or recently applied to the referenced person mark as “.” If it applied in the past, mark as “☐.”

Note 3: If the item currently applies or recently applied to a close relative to the referenced person mark as “l.” If it applied in the past, mark as “∎.”

a An executive of the listed company or its subsidiary

b An non-executive director or an executive of the parent company of the listed company

c An executive of a sister company of the listed company

d A person or an executive of an organization that has the listed company as a major business partner

e A major business partner or an executive of a major business partner of the listing company

f Other than director’s remuneration, an accountant, a legal specialist, or a consultant that obtains a large amount of money or other assets from the listed company

g A major shareholder of the listed company (In the case that the relevant major shareholder is a legal entity, an executive of the relevant legal entity)

h An executive (and only that executive) of a business partner of the listed company (where d, e, and f do not apply)

i An executive (and only that executive) where there is a mutually appointed outside director relationship

j An executive (and only that executive) where the listed company makes a contribution

k Other

Relationship with the Company (2)

Name		Independent Director		Supplementary Information in Regard to Applicable Items		Reason(s) for Electing the Relevant Outside Director (and reason(s) for designation as Independent Director, if applicable)
Kunitaro Saida		Yes		The Company did pay Kunitaro Saida remuneration for advisory services before he assumed the position of director. The amount, however, was less than 12 million yen annually and the contract has already expired.		Kunitaro Saida has been serving as an attorney in corporate legal affairs subsequent to his distinguished career as Superintending Prosecutor of High Public Prosecutors Offices (in Takamatsu, Hiroshima, and Osaka), and also has experience serving as an Outside Director and an Outside Audit & Supervisory Board Member for other companies. The Company elected him as an Outside Director in hopes that he will furnish particularly useful advice, drawing on his wealth of experience and high level of expertise regarding legal affairs when taking part in discussions on internal control mechanisms and corporate governance, including from the perspective of ensuring compliance. In addition, he is designated an independent director/auditor, as the Company judged that a conflict of interest with ordinary investors is unlikely, which is in accordance with the guidelines of the stock exchanges in Japan and the Company.

Yusuke Kawamura Yes ----- Yusuke Kawamura has a wealth of experience as an Outside Director along with capacity as an expert with respect to financial and securities systems as well as strategy for managing financial institutions, given that he worked as a securities company and subsequently served in various positions, including as a university professor, a commissioner of councils of Japan’s Ministry of Finance and Financial Services Agency, and an Executive Counselor of the Japan Securities Dealers Association. The Company elected him as an Outside Director in hopes that he will furnish particularly useful advice, drawing on his wealth of experience and high level of expertise regarding finance and securities, especially when taking part in discussions on M&A and ESG-related topics from a shareholder and investor perspective. In addition, he is designated an independent director/auditor, as the Company judged that a conflict of interest with ordinary investors is unlikely, which is in accordance with the guidelines of the stock exchanges in Japan and the Company.

Voluntary Establishment of Committee(s) corresponding to Nomination Committee or Remuneration Committee Established

Committee’s Name, Composition, and Attributes of Chairperson

	Committee Corresponding toNominating Committee	Committee Corresponding toRemuneration Committee
Committee’s Name	Nomination and Remuneration Advisory Committee	Nomination and Remuneration Advisory Committee
All Committee Members	4	4
Full-time Members	0	0
Inside Directors	1	1
Outside Directors	2	2
Outside Experts	0	0
Other	1	1
Chairperson	Inside Director	Inside Director

Supplementary Explanation (Revised)

The Company established the Nomination and Remuneration Advisory Committee, a non-statutory committee, which consists of the CFO, two Independent Outside Directors and one Independent Outside Audit & Supervisory Board Member. The committee ensures fairness and validity in the selection of each Director, Audit & Supervisory Board Member, and Executive Officer, and deliberates the necessity to dismiss Representative Directors and Executive Directors, including the CEO. It also aims to ensure validity of the remuneration system of Directors and Executive Officers. Recent activities of the Nomination and Remuneration Advisory Committee are shown below. For other details, please refer to “iii) Board Policies and Procedures in Determining the Remuneration of Senior Management and Directors,” “iv) Board Policies and Procedures in the Appointment and Dismissal of Senior Management and the Nomination of Director and Audit & Supervisory Board Member candidates” of “Principle 3.1 Full Disclosure” under “I 1 Disclosure Based on the Principles of the Corporate Governance Code” as well as “Supplementary Principle 4.10.1 Stance, authority, duty etc. regarding independence of Nomination Committee and the Remuneration Committee and its Makeup.”

• January 18, 2022		Confirmation and deliberation regarding the election of directors, audit & supervisory board members and executive officers as well as confirmation and deliberation regarding the individual remuneration amounts of directors, audit & supervisory board members, and executive officers (Bonus) and the appropriateness of remuneration system operation
• March 23, 2022		Confirmation and deliberation regarding the individual remuneration amounts of directors, audit & supervisory board members, and executive officers (Basic remuneration and stock-type compensation stock options) and the appropriateness of remuneration system operation
• January 18, 2023		Confirmation and deliberation regarding the election of directors, audit & supervisory board members and executive officers as well as confirmation and deliberation regarding the individual remuneration amounts of directors, audit & supervisory board members, and executive officers (Bonus) and the appropriateness of remuneration system operation
• March 23, 2023		Confirmation and deliberation regarding the individual remuneration amounts of directors, audit & supervisory board members, and executive officers (Basic remuneration and stock-type compensation stock options) and the appropriateness of remuneration system operation

The three Outside Directors/Audit & Supervisory Board Members serving as committee members are Outside Directors Kunitaro Saida and Yusuke Kawamura and Outside Audit & Supervisory Board Member Yutaka Tanaka, all of whom have attended all of the above meetings of the committee.

On September 1, 2023, the CFO, Toshizo Tanaka, was appointed as a member of the Committee in place of the CEO, Fujio Mitarai, who had served as Chairperson of the Committee. On the 4th of the same month, the first meeting after the change of members of the committee was held to confirm and discuss the selection of Directors (Director Saida was absent).

The secretariat of this committee is the Secretarial Office which is involved in supporting the work of this committee, including the preparation of deliberation material and the keeping of meeting minutes.

Audit & Supervisory Board Members

Cooperation between Audit & Supervisory Board Members and Accounting Auditors

Audit & Supervisory Board Members and the Audit and Supervisory Board, prior to the start of an audit, receive briefs from the Accounting Auditors which include an overview of the audit plan and an explanation of important audit matters, and confirms validity. Additionally, the Audit & Supervisory Board Members and the Audit & Supervisory Board, at least once a month, receive reports from the Accounting Auditors on such matters as the implementation of accounting audits, quarterly reviews, and internal control audits, as well as briefs on the results of audits prior to expressing their opinion. With regard to key audit matters, Audit & Supervisory Board Members and the Audit and Supervisory Board receive reports and exchange opinions on the implementation status of risk assessment procedures on a regular basis.

In addition to accompanying the Accounting Auditors to be present during actual inventory audits, Audit & Supervisory Board Members also hold meetings with the Accounting Auditors in charge of auditing major affiliated companies in an effort to keep track of the status of audits being conducted. As for the Accounting Auditors’ system for managing the quality of the audit, detailed explanations are received and information is requested as necessary to confirm the appropriateness of such.

For the purpose of monitoring the independence of the Accounting Auditors, the Company has introduced a system in which the Audit & Supervisory Board pre-approves the contents of audit and non-audit service contracts and the amount of remuneration, including those of subsidiaries.

Cooperation between Audit & Supervisory Board Members and Internal Auditing

The Audit & Supervisory Board Members and the Audit & Supervisory Board receive from the internal auditing division outlines of their internal audit plan before conducting each audit as well as reports about important auditing items. After the internal audit is conducted, the Audit & Supervisory Board Members and the Audit & Supervisory Board hear reports on all audit results and evaluations. Furthermore, close cooperation is being worked for through, for example, the exchanging of opinions and information as necessary.

Name

Occupation

Relationship with the Company (Notes 1, 2, and 3)

Yutaka Tanaka

Attorney

Hiroshi Yoshida

Certified Public Accountant

☐

Koichi Kashimoto

Former employee of another company

☐

Note 1: Items of selection regarding “Relationship with the Company”

Note 2: If the item currently applies or recently applied to the referenced person mark as “.” If it applied in the past, mark as “☐.”

Note 3: If the item currently applies or recently applied to a close relative to the referenced person mark as “l.” If it applied in the past, mark as “∎.”

A An executive of the listed company or its subsidiary

b An non-executive director or an accounting advisor of the listed company or its subsidiary

c An executive or a non-executive director of the parent company of the listed company

d An audit & supervisory board member of the parent company of the listed company

e An executive of a sister company of the listed company

f A person or an executive of an organization that has the listed company as a major business partner

g A major business partner or an executive of a major business partner of the listed company

h Other than director’s remuneration, an accountant, a legal specialist, or a consultant that obtains a large amount of money or other assets from the listed company

i A major shareholder of the listed company (In the case that the relevant major shareholder is a legal entity, an executive of the relevant legal entity)

j An executive (and only that executive) of a business partner of the listed company (where f, g, and h do not apply)

k An executive (and only that executive) where there is a mutually appointed outside director relationship

l An executive (and only that executive) where the listed company makes a contribution

m Other

Relation with the Company (2) (Revised)

Name	IndependentAudit &SupervisoryBoard Member	Supplementary Information in Regard to Applicable Items	Reason(s) for Appointing the Relevant Outside Audit & Supervisory Board Member
Yutaka Tanaka	Yes	-----	Yutaka Tanaka had for many years served as a judge in charge of civil cases, and subsequently has been engaging in corporate legal affairs as an attorney and as a law school professor. The Company has elected him as an Outside Audit & Supervisory Board Member as it desires to leverage his considerable experience and high level of expert knowledge about legal affairs to further enhance the Company’s auditing system. In addition, he is designated an independent director/audit & supervisory board member, as the Company judged that a conflict of interest with ordinary investors is unlikely, which is in accordance with the guidelines of the stock exchanges in Japan and the Company.
Hiroshi Yoshida	Yes	Although Hiroshi Yoshida was affiliated with the Company’s auditing firm, Deloitte Touche Tohmatsu LLC, three business years have passed since his retirement (Retired from the auditing firm in March 2017). Moreover, although there are transactions between the aforesaid auditing firm and the Company based on outsourcing contracts, etc., the annual transaction amounts are less than 1% of the Company’s consolidated sales and the auditing firm’s business income.	Hiroshi Yoshida has engaged in the practice of corporate accounting as a certified public accountant for many years. The Company has elected him as an Outside Audit & Supervisory Board Member so that the Company’s management may utilize his wealth of experience and advanced expert knowledge related to corporate accounting in improving the appropriateness of audits. In addition, he is designated an independent director/audit & supervisory board member, as the Company judged that a conflict of interest with ordinary investors is unlikely, which is in accordance with the guidelines of the stock exchanges in Japan and the Company.

Koichi Kashimoto Yes Koichi Kashimoto used to work for The Dai-ichi Life Insurance Company, Limited. The aforesaid company is a shareholder of the Company but its shareholding ratio is approximately 1.7% (shareholding ratio is calculated by deducting the number of treasury shares from total shares issued.) Moreover, although there are transactions between the aforesaid company and the Company based on insurance contracts, etc., the annual transaction amounts are less than 1% of both the Company’s and the aforesaid company’s consolidated net sales. Koichi Kashimoto has, over many years, been involved in business management of a major life insurance company, has served as a supervisor of general affairs including legal affairs, and furthermore has extensive international experience. The Company elected him as an Outside Audit & Supervisory Board Member given expectations that he will utilize such knowledge and experience in performing audits encompassing the entire Group, including its overseas operations. In addition, he is designated an independent director/audit & supervisory board member, as the Company judged that a conflict of interest with ordinary investors is unlikely, which is in accordance with the guidelines of the stock exchanges in Japan and the Company.

Independent Directors/Audit & Supervisory Board Members

Number of Independent Directors/Audit & Supervisory Board Members 5

Other Independent Director/Audit & Supervisory Board Members Related Items

All Outside Directors/Audit & Supervisory Board Members that qualify as Independent Directors/Audit & Supervisory Board Members have been designated as Independent Directors/Audit & Supervisory Board Members.

Incentives

Implementation of Measures to Grant Incentives to Directors Introduction of a remuneration system tied to performance, introduction of a stock option system

Supplementary Information Regarding Applicable Items

Introduction of remuneration system tied to performance

As a reward for director service over a one-year term, directors receive a bonus once a year for which consolidated income before income taxes is used as a financial indicator to measure the results of annual group-wide corporate activities. The total amount of the director’s bonus is determined by multiplying such consolidated income with a given predetermined coefficient that corresponds with the director’s position. It is also determined through individual assessment based on the degree to which the director has contributed in this role.

Bonuses along with dividend and internal reserves are essentially subjects of corporate profit distribution. As such, matters including whether a payment is allowed or the total amount of bonus as calculated above, are deliberated during the general meeting of shareholders every year.

Introduction of Stock Option System

Once a year, stock acquisition rights on the Company’s shares are granted in the form of stock-type compensation stock options. The intent is to provide an incentive for Directors to further contribute to the improvement of medium- and long- term performance and raise corporate value through sharing the benefits and risks of share price fluctuations with the Company’s shareholders.

The total amount of the stock acquisition rights of not more than 300 million yen a year, was approved at the Company’s Ordinary General Meeting of Shareholders for the 117th Business Term held on March 29, 2018. The number of stock acquisition rights granted is calculated based on the amount determined by the director’s position, the consolidated income before income taxes in the previous year as well as the degree to which the director has contributed in this role (The amount of monetary compensation claims granted to directors for the payment in exchange for the stock acquisition rights), and the stock price level at the time of grant. As remuneration is linked to the achievements throughout one’s term in office, the Company has a system in place that allows the exercising of acquisition rights at the time of retirement. As for the grantee, if the Company recognizes any misconduct of duty, act conflicting with the duty of due care, etc., the Company may limit the exercise of all or a portion of the stock acquisition rights.

The payment ratio etc. between remuneration linked to performance and other remuneration

As for the breakdown between basic remuneration, bonus and stock-type compensation stock options, in view of the importance of addressing management from a medium- to long-term perspective, the Company’s basic stand is to emphasize the level and stability of basic remuneration. In addition to this, consideration is also given to improved performance in a single year and the pursuit of shareholder interest. As a result, the maximum amount of director remuneration accounted for by the bonus and stock-type compensation stock options on average by position is set around 50% and 30% of the basic remuneration, respectively.

The Grantees of Stock Options Internal Directors and Others

Supplementary Information Related to the Relevant Item

“Others” mean Executive Officers. Directors, excluding Outside Directors, as well as Executive Officers are in positions where they play a central role in improving corporate performance and raising corporate value. As such we designed them to be grantees.

The total amount of stock acquisition rights allocated to Directors and Executive Officers each period are as follows:

The 118th Business Term: Approximately 218 million yen (33 grantees)

The 119th Business Term: Approximately 265 million yen (35 grantees)

The 120th Business Term: Approximately 147 million yen (35 grantees)

The 121st Business Term: Approximately 97 million yen (35 grantees)

The 122nd Business Term: Approximately 175 million yen (36 grantees)

Director Remuneration

Disclosure of Individual Director Remuneration Partial disclosure of individual director remuneration

Supplementary Information Related to the Relevant Item

Individual disclosure information for those whose total remuneration is 100 million yen or above is contained in the Company’s annual securities report (Yuukashouken houkokusho).

Existence or Nonexistence of Policies that Determine the Amount or Calculation Method of Remuneration Exists

Disclosure of Policies that Determine the Amount or Calculation Method of Remuneration

The policy on determining the remuneration of Directors is described in “iii) Board Policies and Procedures in Determining the Remuneration of Senior Management and Directors,” which is a part of “Disclosure Based on the Principles of the Corporate Governance Code of “3.1 Full Disclosure” under “I 1. Fundamental Policy,” and “Incentives” within “1. Items Concerning Institutional Structure, Organizational Operation, etc.,” under “II. Overview of Corporate Governance Structure in terms of the Organization of Management regarding Managerial Decision-Making, Execution of Duty, Oversight and other matters.”

The Support System for Outside Directors (Outside Audit & Supervisory Board Members)

System to Support Outside Directors

Outside Directors are given prior explanations of the Board of Directors meeting agendas, provided by departments that are in charge.

System to Support Outside Audit & Supervisory Board Members

The Company supports the five Audit & Supervisory Board Members, which include Outside Audit & Supervisory Board Members, by staffing full-time workers at the Office of Audit & Supervisory Board Members. Prior explanations of the Board of Directors meeting agendas are provided by a Non-outside Audit & Supervisory Board Member or the person in charge of the relevant division. In addition, although all Outside Audit & Supervisory Board Members are charged with attending all meetings to receive reports and explanations regarding conducted audits from the Accounting Auditors and Corporate Audit Center, when an Outside Audit & Supervisory Board Member is not able to attend such meetings, we enable the Outside Audit & Supervisory Board Members to grasp the situation by reviewing audit results and other documents. Furthermore, in addition to meetings of the Audit & Supervisory Board that are held at least once a month, liaison and other meetings are held when needed, for the purpose of sharing information and supplementing the Audit & Supervisory Board Meetings, and exchanging information on important items and various audit details among themselves.

The Situation Surrounding People who have Retired from Representative Director and President, etc.

Full Name etc. of Former Representative Director and President, etc. who acts as Consultant, Adviser etc.

Name
Title or Position
Responsibilities
Working Arrangement/Conditions (Full-time, Part-time, remuneration etc.)
Date of the Retirement (President etc.)
Term of Office
No. of Former Representative Director and President etc. who acts as Consultant, Adviser etc.		0

Other Items

The Company has no system that retired president & representative director or CEO automatically takes a post as an advisor of the Company. There are cases when the Company requests a retired director or officer (not limited to president & representative director or CEO) whose advice or support is found particularly necessary, to serve as an advisor of the Company, through deliberation of the Nomination and Remuneration Advisory Committee and resolutions of the Board of Directors.

2. Items Concerning Functions such as Execution of Duties, Audit and Supervision, Designation, and Remuneration Determination (Overview of the current state of Corporate Governance Structure) (Revised)

Board of Directors, Representative Directors, Executive Officers

The Board of Directors consists of five members, three Representative Directors from inside the Company and two Outside Directors that qualify as Independent Directors. Additionally, there are 40 Executive Officers as of April 1, 2023, including two females and one non-Japanese.*

Our aim under this kind of structure is described in “ii) Basic Views and Guidelines on Corporate Governance” within “Principle 3.1 Full Disclosure,” under “Disclosure Based on the Principles of the Corporate Governance Code,” Under “I 1. Fundamental Policy.” In the 122nd Business Term (2022), 10 meetings of the Board of Directors were held. In addition to receiving reports on the execution of Director duties, the Board of Directors also deliberated and passed resolutions surrounding ordinary matters such as book closings and changes in director, audit & supervisory board members, and executive officers as well as important matter, which are specifically stipulated in laws and regulations and rules of the Board of Directors. Each director and audit & supervisory board member attended all of the Board of Director meetings held in the period (Directors and audit & supervisory board members that were appointed during the period attended all of the Board of Director meetings after being appointed).

*The Company plans to newly appoint six Directors (including 3 Outside Directors) as follows with the retirement of one Outside Director. This matter will be officially decided at the Ordinary General Meeting of Shareholders for the 123rd Business Term to be held in March 2024.

Retiring Director: Kunitaro Saida Newly Appointed Director Candidates: Kazuto Ogawa Hiroaki Takeishi Minoru Asada Masayuki Ikegami (Outside Director) Masaki Suzuki (Outside Director) Akiko Ito (Outside Director)

The Company’s investor information (IR News) site:

https://global.canon/en/ir/release/2023/p2023sep07e.pdf

Corporate Strategy Committee, Risk Management Committee, and Disclosure Committee

The Company established the Corporate Strategy Committee, consisting of Representative Directors and some Executive Officers. Among items to be decided by the CEO, the Committee undertakes prior deliberations on important matters pertaining to Canon Group strategies. Outside Directors and Audit & Supervisory Board members attend Corporate Strategy Committee meetings and are able to express their own opinions.

Based on a resolution passed by the Board of Directors, Canon set up the Risk Management Committee, which formulates policy and action proposals regarding improvement of the Canon Group risk management system. The Risk Management Committee consists of three entities: the Financial Risk Management Subcommittee, which is tasked with improving systems to ensure reliability of financial reporting; the Compliance Subcommittee, which is tasked with promoting corporate ethics and improving legal compliance systems; and the Business Risk Management Subcommittee, which is charged with improving systems to manage overall business risks, including risks related to product quality and information leak. The Risk Management Committee verifies the risk management system’s improvement and implementation and reports the status to the CEO and the Board of Directors.

In addition, the Disclosure Committee was established to undertake deliberations pertaining to information disclosure, including content and timing, to ensure important corporate information will be disclosed in a timely and accurate manner.

Audit & Supervisory Board Members, Audit & Supervisory Board

The Company is a “Company with an Audit & Supervisory Board.” There are five Audit & Supervisory Board Members of which three are Outside Audit & Supervisory Board Members, designated as Independent Directors and Audit & Supervisory Board Members.

In accordance with auditing policies and plans decided at Audit & Supervisory Board meetings, the Audit & Supervisory Board Members attend Board of Directors’ meetings and other important gatherings such as Corporate Strategy Committee meetings. They are also able to listen to reports from directors and employees, review documents related to important decisions, and conduct audits by investigating etc. the situation of businesses and property of the Company and its subsidiaries. Additionally, the Office of Audit & Supervisory Board Members is independent from the control of the Directors etc., and it has a dedicated staff. The Audit & Supervisory Board Members can order headquarter management and other operations to conduct investigations in cases of necessity. In this way, the Audit & Supervisory Board plays a role in monitoring management, conducting strict audits of directors’ execution of duty, including the status of development of the internal control system. Furthermore, the Audit & Supervisory Board Members cooperate closely with the accounting auditors and the Company’s internal auditing arm, and such cooperation services to improve each monitoring function.

Function, Role, and Appointment of Outside Directors and Outside Audit & Supervisory Board Members

The Company establishes the “Independence Standards for Independent Directors/Audit and Supervisory Board Members” resolved by the Board of Directors with the consent of all Audit and Supervisory Board Members, in order to clarify the standards for ensuring independence of Independent Directors/Audit and Supervisory Board Members of the Company, taking into consideration Japan’s Corporate Governance Code (Principle 4.9) and the independence criteria set by securities exchanges in Japan. The standards are posted on the Company’s website at (https://global.canon/en/ir/strategies/governance.html). All of the Company’s Outside Directors and Outside Audit & Supervisory Board Members satisfy the standards for independence, and assume roles that contribute to the maintenance and improvement of Board of Directors’ transparency and accountability.

Internal Audit Division

The Company has established the Corporate Audit Center as its internal auditing division, which audits, evaluates, and makes recommendations on compliance and internal control systems etc. The Corporate Audit Center also conducts audits on topics such as quality, the environment, and safety & health. Audit results are reported not only to the CEO and CFO, but also to the Audit & Supervisory Board Members and the Audit & Supervisory Board as described in “Cooperation between Audit & Supervisory Board Members and Internal Auditing,” above. In addition, the Company has established a system in which reports are also regularly given to outside directors and those outside directors can request submission of proposals to the Board of Directors, as necessary.

Accounting Auditors

The Company has an auditing service contract with Deloitte Touche Tohmatsu LLC to audit its financial statements.

The names and other details of the certified public accountants that carried out accounting audit work for the Company for the 121st Business Term (2021).

Certified Public Accountant			Auditing Firm	Number of years of consecutive audit
Designated Partner	Engagement Partner	Masayuki Yamada	Deloitte ToucheTohmatsu LLC	3 years
Designated Partner	Engagement Partner	Kenichi Takai	Deloitte ToucheTohmatsu LLC	3 years
Designated Partner	Engagement Partner	Susumu Nakamura	Deloitte ToucheTohmatsu LLC	3 years
Designated Partner	Engagement Partner	Hideaki Takagi	Deloitte ToucheTohmatsu LLC	2 years

Auditing assistants that carried out audit work for the Company: (Certified Public Accountants: 46; Others: 128)

The Policy and Process of Nominating Director and Audit & Supervisory Board Member Candidates and Determining the Remuneration of Senior Officers

I. Encapsulated in “(iii) Board Policies and Procedures in Determining the Remuneration of the Senior Management and Directors,” and “(iv) Board Policies and Procedures in the Appointment and Dismissal of Senior Management and the Nomination of Director and Audit & Supervisory Board Member Candidates,” under “Principle 3.1 Full Disclosure,” a part of “Disclosure based on the Principles of the Corporate Governance Code,” which is included in sub-segment “1. Fundamental Policy in segment,” of segment “I. Fundamental Policy Concerning Corporate Governance and Basic Information about Capital Structure, Corporate Attributes, etc.” and “Directors,” and “Incentives,” of sub-segment ”1. Items Concerning Institutional Structure, Organizational Operation, etc.” of segment “II. Overview of Corporate Governance Structure in terms of the Organization of Management regarding Managerial Decision-Making, Execution of Duty, Oversight and other matters.”

Contracts for Limitation of Liability with Directors and Audit & Supervisory Board members

Pursuant to the provision of Paragraph 1, Article 427 of the Corporation Law, the Company entered into contracts with outside Directors and outside Audit & Supervisory Board members which sets forth the limitation on their damage compensation liabilities resulting from negligence of their respective duties, provided that the amount of the limitation on the damage compensation liabilities under the said contracts shall be the amount provided by laws or ordinances.

3. Reasons for Operating Under the Current Corporate Governance Structure

It is described in “Disclosure Based on the Principles of the Corporate Governance Code” under “I 1. Fundamental Policy,” and “II 2. Items Concerning Functions such as Execution of Duties, Audit and Supervision, Designation, and Remuneration Determination (Overview of the current state of Corporate Governance Structure).”

III. Implementation of Measures Related to Shareholders and Other Stakeholders

1. Measures to Revitalize the General Meeting of Shareholders and Facilitate the Exercise of Voting Rights

				Supplementary Information
		Early Distribution of Notice of Convocation of the General Meeting of Shareholders		The Company sent its Notice of Convocation of the Ordinary General Meeting of Shareholders on March 6, 2023, 24 days prior to its latest Ordinary General Meeting of Shareholders, which was held on March 30, 2023.
		Exercise of Voting Rights through Electronic Means		Exercise of voting rights through the internet is possible.
		Adoption of a Platform for Electronic Exercising of Voting Rights and Other Measures to Improve the Environment for Exercising Voting Rights for Institutional Investors		A platform for the electronic exercising of voting rights has been adopted.
		Providing Notice of Convocation (Summary) an English		The Company prepares English translations of its Notice of Convocation of the Ordinary General Meeting of Shareholders and makes this information available to the Tokyo Stock Exchange and on its website.
		Other		For the Company’s latest Ordinary General Meeting of Shareholders, the Company started to take Measures for Electronic Provision of the information that includes the contents of Reference Documents for the General Meeting of Shareholders. The information was posted on the Company’s website and the website of the Tokyo Stock Exchange on February 27, 2023, seven days prior to sending out its Notice of Convocation of the Ordinary General Meeting of Shareholders, which was mailed on March 6, 2023.

2. IR (Revised)

				Supplementary Information		Existence or Nonexistence of explanations by a company representative
		Development and Publication of Disclosure Policy		In line with related laws and regulations as well as disclosure rules of related stock exchanges, in order to enhance the system for disclosing accurate and comprehensive information for shareholders and capital markets, the Company established the Disclosure Committee in April 2005. For important company information, this committee is charged with investigating and determining the necessity, content, and timing of timely disclosure. At the same time, the Company has constructed a system for the prompt and comprehensive gathering of information from each operation where important company information is generated. For shareholders and investors, the Company continues to promptly and accurately disclose information about business conditions, holding corporate strategy conferences and conferences on results, and enhancing the Company’s IR website, setting put, among others, a special section for individual investors.

Holding of Periodic Conferences for Analysts and Institutional Investors	The Chairman & CEO hosts the Company’s Corporate Strategy Conference every year on a regular basis. Additionally, on the day quarterly financial results are announced the Executive Vice President & CFO hosts conferences for analysts and institutional investors in Japan.	Exists
Holding of Periodic Conferences for Overseas Investors	Along with the Chairman & CEO or the Executive Vice President & CFO holding meetings with overseas investors to explain the Company’s management and business strategies, the Company posts English language documents from explanatory meetings held by these people to its website for overseas investors.	Exists
Posting of IR Materials on Website	In addition to posting mandatory disclosure material such as annual securities reports (Yuukashouken houkokusho) and financial reports, we also present information that is considered useful to shareholders, investors and analysts such as presentation materials from explanatory meetings and integrated reports, including both financial and non-financial information. Additionally, the Company is working to provide disclosure in an easily understood manner, including pages on basic business strategies, ESG initiatives, and company introductions for individual investors. (Japanese) https://global.canon/ja/ir/ (English) https://global.canon/en/ir/ Canon Integrated Report 2023: https://global.canon/en/ir/library/integrated.html
Establishment of a Post for IR	The IR Promotion Division, which is a part of the Public Relations and IR Center within the Public Affairs Headquarters, is in charge of investor relations. The Director in charge of investor relations is the Executive Vice President & CFO. The person in charge of the investor relations program on a day-to-day basis is the general manager.
Other	-

3. Measures Concerning Respecting the Position of Stakeholders (Revised)

Supplementary Information Internal Rules, etc. Regarding Respecting the Position of Stakeholders In line with Canon’s corporate philosophy of Kyosei—living and working together for the common good—the Company works to fulfill its social responsibilities, fostering good relations, not only with its customers, the communities in which the Company operates, and shareholders, but also with nations and the environment. These objectives are outlined in the Canon Group Code of Conduct, which Canon Directors and employees adhere to when conducting business activities.

		Implementation of Environmental Conservation Activities, CSR Activities, etc.		Canon is promoting measures to support a sustainable society based on Approach to Sustainability as described in “Supplementary Principle 3.1.3 Measures etc. regarding Sustainability.” By creating new value, Canon is contributing to the resolution of social issues and seriously addressing the social responsibilities associated with its corporate activities. Responding to environmental issues is one very important management issue. Based on the Company’s environmental assurance philosophy of “maximizing resource efficiency,” we are working to reduce CO2 emissions to net-zero by 2050 throughout the product life cycle. In addition, the Canon Group Human Rights Policy was established to express our stance and the entire Canon Group is conducting due diligence on human rights. Moreover, as a member of the Responsible Business Alliance (RBA), an industry group that promotes social responsibility in global supply chains, we respect the RBA Code of Conduct and work to fulfill our social responsibility in the supply chain. Specific initiatives are reported annually in the Company’s Sustainability Report and updated information is disclosed on the Company’s website as appropriate. Sustainability site: https://global.canon/en/sustainability/ Canon Sustainability Report 2023: http://global.canon/en/sustainability/report/pdf/canon-sus-2023-e.pdf
		Establishment of Policies, etc. Concerning Supplying Information for Stakeholders		As for information-disclosure policies, the Company has drawn up its own guidelines, which it adheres to when disclosing information. In addition, the Company established the Disclosure Committee in 2005 to ensure that important management information is disclosed in an accurate, comprehensive, and fair manner.
		Other		Status of employee related measures The current status and measures regarding the appointment of women, non-Japanese, and mid-career employees etc. as well as stance that deals with investing in human capital, are described in “Supplementary Principle 3.1.3 Measures etc. regarding Sustainability” and “2. (1) Investing in Human Capital” of “Supplementary Principle 3.1.3 Measures etc. regarding Sustainability,” in the above “Disclosure Based on the Principles of the Corporate Governance Code.” For other employee measures, please refer to the following as well as Canon’s Sustainability Report. https://global.canon/en/csr/report/index.html

Work style reform policies and measures In 2012, Canon launched a work style reform initiative which aimed to create a virtuous cycle between productivity improvement and work-life balance. As a result, the average annual working hours per person in 2022 was 1,740, far below the prescribed working hours of 1,800. And since 2020, Canon has promoted a flexible work style that makes effective use of time and place, introducing a telework system that aims to improve productivity. Additionally, from July to September, which is designated the period for promoting work-life balance, the start and end of each working day is brought forward. During this period, Canon provides support to improve the work-life balance of its employees through a variety of initiatives such as providing self-development programs, holding various seminars and workplace exchange events. Furthermore, in order to support the career development of employees, we hold training sessions that can be taken after work or on weekends, and are taking steps to enhance e-learning. In addition, as part of work style reform efforts, Canon is promoting the use of RPA to further improve productivity through Kyosei between humans and robots. Health support Canon promotes systematic health support measures based on the principle of health first, which is been a guiding principle since the Company’s foundation. In recent years, we have focused on measures for mental health, lifestyle-related diseases, cancer, and overwork, and have been selected as a “Health and Productivity Management Brand” by the Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange for 5 consecutive years since 2019. Promotion of activities for people with disabilities Canon has been actively recruiting people with disabilities for many years. Canon is focused on creating a work environment that is easy for people with disabilities to work in. And are working to promote communication with people with disabilities through training and workshops as well as improve our facilities by making them barrier free. Additionally, Canon has set up a specialized organization and consultation desks within the company to ensure that discrimination is strictly prohibited. Canon also supports the activities and works to provide to provide reasonable consideration to person with disabilities (As of June 1, 2023, the employment of people with disabilities was 2.55%)

IV. Items Related to Internal Control Systems

1. Basic Policy Concerning Internal Control Systems and Overview of their Implementation

The content of the resolution of the Board of Directors regarding the systems necessary to ensure the properness of the Company’s operations (basic policy) as well as the outline of activities for the aforementioned systems, are as follows:

Basic Policy Regarding Systems Necessary to Ensure the Properness of Operations (the “Internal Control System”)

Content of Basic Policy Resolution

To ensure the properness of operations and to work for continuous improvement in corporate value, Canon Inc. (the “Company”) and the enterprises consisting of the Company and its subsidiaries (the “Canon Group”), shall foster a sound corporate culture based on the Spirit of “Three Selfs” (Self-motivation, Self-management, and Self-awareness) - guiding principles dating back to the founding of the Company. The Canon Group shall also work to foster a law-abiding awareness through the “Canon Group Code of Conduct.” Furthermore, the Canon Group shall firmly strive to ensure management transparency through clearly defined approval processes and authorities of the CEO and Chief/Group Executives of the Company as well as executive officers of each subsidiary of the Company.

(1). System for Compliance (Item 6, Paragraph 4, Article 362 of the Corporate Law, and Item 4, Paragraph 1, Article 100 of the Enforcement Regulations of the Corporation Law)

Content of Basic Policy Resolution

(1). The Board of Directors, in accordance with regulations prescribed by the Board of Directors (the “Regulations of the Board of Directors”), shall make decisions on important Canon Group managerial matters after careful deliberation. Additionally, the Board of Directors shall have representative directors, executive directors and executive officers (collectively the “Officers”) give reports regarding their execution of duties.

(2). The Board of Directors shall thoroughly instill compliance awareness through training and other programs geared towards new employees, managers, and newly-appointed board members and executive officers, utilizing the “Canon Group Code of Conduct,” prescribed by the Board of Directors as a standard to be adhered to in the execution of duties.

(3). As a part of the Company’s risk management system, the Company shall put in place business procedures/checking systems that prevent violation of laws and regulations and the Company’s articles of incorporation in the course of daily business. It shall also maintain a compliance education system.

(4). The internal audit division of the Company, which has the authority to audit the execution of duties by Officers and employees, shall also conduct audits regarding the status of compliance with laws and regulations and the Company’s articles of incorporation.

(5). If an act that violates laws and regulations, or the Company’s articles of incorporation is discovered in the Canon Group, employees have the ability to anonymously report such fact to any director or officer, including outside directors and outside Audit & Supervisory Board Members by means of a whistleblowing system. Additionally, the Company shall prohibit any disadvantageous treatment of any whistleblower.

Outline of Activities

(1). During the current business term (the 122nd Business Term), 10 Board of Directors meetings were held. At these meetings, in addition to deliberating and deciding on important matters, the Board of Directors received reports from Officers in charge of major divisions concerning the execution of business.

(2). In addition to implementing compliance training that follows the Canon Group Code of Conduct, the Company established “Compliance Week”, an event to provide an opportunity for discussion on familiar risks of law-and-regulation violations by each respective workplace.

(3). The activity is described in (1), Outline of Activities, (2) below.

(4). Supported by about 60 personnel, the internal audit division conducts audits of each division and subsidiary, including in its scope of inquiry not only compliance but also the usefulness and efficiency of operations. The results of these audits are then reported to the CEO and CFO, and when necessary, proposals for improvement are given. In addition, a summary of audit results is also periodically reported to the Outside Directors, Audit & Supervisory Board Members and Audit & Supervisory Board.

(5). The rules on use of the whistleblowing system, including the explicit prohibition of the disadvantageous treatment of whistleblowers, are disseminated via the intranets of the Company, along with information on the contact counter for reporting internal problems. In the current business term, there were no whistleblower reports relating to serious violations of laws and regulations, or the like.

(2). System of Risk Management (Item 2, Paragraph 1, Article 100 of the Enforcement Regulations of the Corporation Law)

Content of Basic Policy Resolution

(1). The Company established the Risk Management Committee as deliberative body that is in direct control of the CEO, in accordance with the “Regulations of Risk Management” prescribed by the Board of Directors. This Committee shall develop various measures with regard to improving the risk management system. These measures include the system for grasping any significant risks (violation of laws and regulations, inappropriate financial reporting, quality issues, work related injuries, disasters etc.) that the Canon Group may face in the course of business, and all measures shall be approved by the CEO and the Board of Directors. Additionally, this Committee shall evaluate the status of improvement and implementation of the risk management system that are autonomously carried out by each organization such as business divisions and subsidiaries, and report its findings to the CEO and the Board of Directors.

(2). The Company established the Corporate Strategy Committee in accordance with the “Regulations of the Corporate Strategy Committee” prescribed by the Board of Directors. Even if the authority to decide certain items is delegated from the Board of the Directors to the CEO, the Committee shall carefully deliberate those items in cases that are considered particularly important.

Outline of Activities

(1). Established under the Risk Management Committee are the following three subcommittees: the Financial Risk Management Subcommittee, which is in charge of improving systems to ensure the reliability of financial reporting, the Compliance Subcommittee, which is in charge of improving systems to ensure compliance of corporate ethics and major laws and regulations, and the Business Risk Management Subcommittee, which is in charge of improving systems to manage quality risks, information leakage risks and other significant business risks. These subcommittees carried out evaluation based on their respective roles of the status of improvement and implementation of risk management system by each organization in 2022. The result of such evaluation did not discover any major flaws in the system and the Risk Management Committee reported this to the CEO and the Board of Directors.

(2). The Corporate Strategy Committee held 6 times in the current business term. In addition to the Officers in charge of executing business operations, the Outside Directors and full-time Audit & Supervisory Board Members also attended, as necessary, and provided opinions.

(3). System for Efficient Execution of Duties (Item 3, Paragraph 1, Article 100 of the Enforcement Regulations of the Corporation Law)

Content of Basic Policy Resolution

(1). Based on regulations regarding the division of duties and administrative authorities prescribed by the Board of Directors, the CEO and other Officers shall execute shared duties under the supervision and direction of the CEO.

(2). The CEO shall formulate 5-year management goals (the “Excellent Global Corporation Plan”) and 3-year priority measures, contained in mid-term management plans. Based upon these plans, the CEO shall manage operations from a unified group approach.

Outline of Activities

(1). The CEO and other Officers execute the duties allocated to them in accordance with the related regulations. In 2021, the Company reorganized its business divisions along with its development and production subsidiaries into the four industry-oriented business groups of “Printing,” “Imaging,” “Medical,” and “Industrial,” and also launched a new organization to accelerate the commercialization of operations that include external sales of materials as well as sensors and other components. The Company has established a framework for engaging in business activities whereby the Representative Directors and Executive Officers other than the CEO assume responsibility for these industry-oriented business groups as well as the new organization and sales subsidiaries that engage in oversight of sales in respective major regions worldwide. They are accordingly assigned such duties under the command and supervision of the CEO.

(2). The CEO decides on a mid-term management plan, which is decided based on close discussions with Officers of the Company and the executive officers of the major subsidiaries in Japan and overseas, and ensures the cohesion of the Group’s corporate management.

(4). System for Group Management (Item 5, Paragraph 1, Article 100 of the Enforcement Regulations of the Corporation Law)

Content of Basic Policy Resolution

The Company strengthens the internal control system of the Canon Group by requiring subsidiaries to follow the respective items:

(a). to obtain prior approval from the Company or report to the Company important decisions in accordance with the “Regulations of Group Companies Management,” prescribed by the Board of Directors of the Company,

(b). to grasp significant risks that the subsidiary may face in the course of business and to verify and evaluate the status of improvement and implementation of the risk management system and report their findings to the Company in accordance with the “Regulations of Risk Management”,

(c). to design an appropriate organization under the governing law of incorporation and to clearly define approval processes and authorities of executive officers,

(d). in addition to thoroughly instilling compliance awareness through the Canon Group Code of Conduct, to put in place business procedures/checking systems that prevent violation of laws and regulations and subsidiaries’ articles of incorporation in the course of daily business and prepare a compliance education system as a part of the subsidiary’s risk management system, and

(e). to establish a whistleblowing system and prohibit any disadvantageous treatment of any whistleblower.

Outline of Activities

(a). The Company received reports from subsidiaries and provided prior approval to subsidiaries in accordance with the “Regulations of Group Companies Management”.

(b). In order to conduct evaluation of the status of improvement and implementation of the risk management system described in (1), Content of Basic Policy Resolution, 2 above, the subsidiaries being evaluated implemented evaluation of the respective targeted risks.

(c). Each subsidiary performs, as appropriate, a review of the appropriateness of organizational design, and approval criteria and processes in accordance with the applicable laws and regulations and the nature of business and other factors.

(d). Each subsidiary performs an inspection of its compliance system in the process of evaluating improvement and implementation of its risk management system (as described in (1), Outline of Activities, 2 above), and furthermore fosters a culture of compliance through training and other such means as necessary.

(e). Each company establishes a whistleblowing system and totally prohibits any disadvantageous treatment of any whistleblower.

(5). System for Storing and Managing Information (Item 1, Paragraph 1, Article 100 of the Enforcement Regulations of the Corporation Law)

Content of Basic Policy Resolution

Information related to the execution of duties of Officers, including meeting minutes of the Board of Directors and settlement documents, shall be maintained and managed by respective divisions in charge of such management in accordance with laws and regulations, the “Regulations of the Board of Directors,” and other related rules. Directors, Audit & Supervisory Board Members, and members of the internal audit division have the ability to inspect this information at any time.

Outline of Activities

Whenever deemed necessary, Directors, Audit & Supervisory Board Members and members of the internal audit division peruse or obtain copies of meeting minutes of the Board of Directors and the Corporate Strategy Committee, and other records such as settlement documents of the CEO.

(6). System for Auditing by Audit & Supervisory Board Members (Paragraph 3, Article 100 of the Enforcement Regulations of the Corporation Law)

Content of Basic Policy Resolution

(1). The Company established and assigns dedicated full-time employees of an appropriate number to the Office of Audit & Supervisory Board Members. The Office of Audit & Supervisory Board Members is established as an independent entity that is outside the control of Officers. Any change in dedicated full-time employee personnel shall require the prior consent of the Audit & Supervisory Board.

(2). Audit & Supervisory Board Members shall grasp the execution of duties by Officers, attending not only meetings of the Board of Directors, but also other important meetings such as meetings of the Corporate Strategy Committee and Risk Management Committee.

(3). The administrative divisions of the headquarters, such as human resources, finance & accounting, and legal affairs, shall hold meetings with Audit & Supervisory Board Members and report on the execution of duties in a timely manner. Additionally, if any material breach of laws and regulations occurs, the relevant division shall immediately report this to Audit & Supervisory Board Members.

(4). Audit & Supervisory Board Members shall have accounting auditors periodically give reports.

(5). Audit & Supervisory Board Members shall hold periodic meetings with counterparts of domestic subsidiaries of the Company and work to improve the auditing system from a unified group perspective by sharing information. Additionally, Audit & Supervisory Board Members shall grasp the execution of duties by Officers of subsidiaries, sharing responsibility for the auditing of major subsidiaries in and outside Japan.

(6). The Company prohibits any disadvantageous treatment of any person that reports to Audit & Supervisory Board Members. The Company also seeks its subsidiaries to prohibit any disadvantageous treatment.

(7). The Audit & Supervisory Board shall draw up an annual audit plan and an annual budget covering the audit of the Company and its subsidiaries. And the Company shall secure necessary funds for the annual budget. When an outlay outside the budget is incurred, due to a special audit etc., the expense shall be reimbursed by the Company.

Outline of Activities

(1). The Company established the Office of Audit & Supervisory Board Members to be independent from the directives and commands of Officers and it assigns dedicated full-time employee(s) of an appropriate number to the Office of Audit & Supervisory Board Members.

(2). Audit & Supervisory Board Members, including Outside Audit & Supervisory Board Members, attend all the Board of Directors meetings, and full-time Audit & Supervisory Board Members attend all meetings of the Corporate Strategy Committee and the Risk Management Committee.

(3). Audit & Supervisory Board Members and the Audit & Supervisory Board periodically receive reports from the internal audit division on the results of audits. In addition, full-time Audit & Supervisory Board Members periodically receive reports from the managers in charge of the administrative divisions of the headquarters on the execution of duties.

(4). Audit & Supervisory Board Members receive reports from the Accounting Auditor on the status of audits at least once a month and receive reports from the Accounting Auditor on the results of the audit of the business term in accordance with laws and regulations.

(5). Audit & Supervisory Board Members periodically hold meetings with audit & supervisory board members of domestic subsidiaries and share information. In addition, at the time of audits at subsidiaries, Audit & Supervisory Board Members receive reports from the Directors of subsidiaries and share information with audit & supervisory board members of the subsidiaries.

(6). Information is disseminated in the Company and its subsidiaries concerning the prohibition of disadvantageous treatment of any person that reports to Audit & Supervisory Board Members.

(7). In the current business term, there were no shortfalls in the budget allocated for the implementation of audits in accordance with the audit plan.

2. Basic Policy Towards the Elimination of Antisocial Forces and Overview of Implementation

1. Basic Policy

The Company has established a basic policy that the Company and all of its Group companies will take a firm attitude against and cut off relation with antisocial forces which bring threats to order and safety of civil society.

2. Overview of Implementation

(1). In the Company’s Employment Regulation, provisions have been made with regard to barring relations with antisocial forces and the Company strives to ensure that these provisions are thoroughly adhered to by relevant employees.

(2). The Company establishes divisions in charge of supervising the countermeasures of the Group against antisocial forces, and such divisions endeavor to prevent transactions, etc. with antisocial forces by sharing information regarding antisocial forces and countermeasures against them.

(3). In the Group department that responds to antisocial forces, individuals charged with preventing undue claims are deployed, and efforts are made to prepare and systematically response to potential threats in line with the Company’s manual.

(4). The Company establishes a cooperation structure with external institutions such as the National Center for the Elimination of Violent Groups, police departments with jurisdiction, neighboring companies, and lawyers etc.

(5). Regarding payments for auspices, the Company reviews them in advance in order to check that there is not any issue based on legal and corporate ethical perspective.

V. Others

1. Implementation of Anti-Takeover Measures

Implementation of Anti-Takeover Measures Not implemented

Supplementary Information Related to the Relevant Item

Not implemented

2. Other Items Concerning Corporate Governance Structure, etc. (Revised)

A schematic diagram of the Company’s corporate governance structure and an overview of the Company’s timely disclosure system are as attached:

Corporate Governance

To strengthen the Company’s corporate governance structure, the Corporate Governance Center, an organization under the direct control of the CEO, was newly established on July 1, 2023.

Overview of Timely Disclosure System

Internal system for timely disclosure of corporate information

In order to disclose necessary information in a fair, equitable, and timely manner for important corporate information considered for timely disclosure, the Company’s Disclosure Committee, which is chaired by top management, receives reports from the division in charge regarding the relevant information, and determines whether disclosure is necessary or not.

For matters that have been reported, the Disclosure Committee which is made up of members from finance & accounting, legal affairs, corporate communications as well as persons in charge of the relevant information, is charged with making prompt necessary decisions on timely disclosure such as the necessity of timely disclosure, the timing of disclosure, disclosure content, disclosure method.

Furthermore, the Disclosure Committee is also charged with constructing and maintaining a disclosure system which includes the assessment of disclosure management of important corporate information.

Regarding information on decisions made by the Company, considered important corporate information, the Company has a system in place whereby information is promptly disclosed after decisions are made by necessary internal organizations.

Existence or Nonexistence of a Audit & Supervisory Board

Number of Audit & Supervisory Board Members in the Company’s Articles of Incorporation

Number of Audit & Supervisory Board Members

Cooperation among Audit & Supervisory Board Members, Accounting Auditors, and Internal Auditing

Filing Compare · CANON INC