Changes in Corporate Governance Structure
Corporate Governance structure
Corporate Form of Organization
Outline of Corporate Governance structure
Board of Directors
The Board of Directors consists of five directors who are not members of the Audit Committee (including two outside directors) and three directors who are members of the Audit Committee (including two outside directors).Regularboardmeetings are held once a month and special meetings are held when necessaryto make important decisions and supervise the executions and operations. In addition, the Company established the Corporate Executive Office on October 2, 2020, with the aim of separating management oversight from business execution anddelegated some of the Board's executive authority to the CorporateExecutive Office.The Board of Directors and the Corporate Executive Office have developed an agile management system and are working to strengthen supervisoryfunctions.
Corporate Executive Office
The Corporate Executive Office consists of eight senior executive officers or higher (including three who also serve concurrently as directors). It holds meetings as necessary to improve the efficiency and speed of management decision-making and business execution. In addition, a director, who is a full-time member of the Audit and Supervisory Committee, attends meetings occasionally and supervises important business execution decisions with the directors.
Audit and Supervisory Committee
The Audit and Supervisory Committee consists of three directors (including two independent outside directors). It generally holds a monthly meeting to audit the business execution by the directors.
Internal Audit Department
The internal audit departmentconducts internal audits of all Group operations accordingtothe audit plan.The results of the audit are reported to the Board of Directors, and the director or a member of the Auditand SupervisoryCommittee instructs theexecutiveofficer in charge to make improvements. The results of the audit are reported to the Board of Directors and improvements are instructed to the executive officer in charge through the director or the director who is a member of the Audit Committee, in order to ensure immediate actionis taken.
Accounting Audit
The Company has appointed Deloitte Touche Tohmatsu LLC as theaccounting auditor. There are no special interests between the audit firm oritsexecutive members and the Company.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee consists of four independent outside directors, one director who is a full-time member of the Audit Committee, and the representative director.In order to strengthen the independency, objectivityand accountability of the Board of Directors' functions in nominating director candidates and determining director compensation, and to further strengthen corporate governance in the Company, the Board of Directors resolved to establish the Committee at its October 30, 2019,meeting.The Nomination and Remuneration Committeeis chaired by an independent director andconsults with the Board of Directors to deliberate on decisions on the nomination and remuneration of directors, and reports to the Board of Directors.
Limitation of Liability Contract
The Company has concluded an agreement with Messrs. Koichi Nakamura, Kozo Takaoka, Masao Horiuchi, Tomomi Nakamura, and Ms. Toko Shiotsuki to limit their liability for damages under Article 423, Paragraph 1 of the Companies Act in accordance with the provisions of Article 427, Paragraph 1 of the same Act. The limit of compensation for damages based on the agreement is the minimum liability limit stipulated by law.
Board Composition
- Number of Directors Stipulated in Articles of Incorporation
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15
- Term of Office of Directors who are not Audit Committee Members under the Articles of Incorporation
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1 year
- Term of Office of Directors who are Audit Committee Members under the Articles of Incorporation
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2 year
- Chairman of the Board of Directors
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President
- Number of Directors
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8
- Number of Female Directors
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1
- Election of Outside Directors
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Elected
- Number of Outside Directors
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4
- Number of Outside Directors Designated as Independent Director
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4
| Name | Executive Director | Outside Director | Independent Director | Audit and Supervisory Committee | Notes |
|---|---|---|---|---|---|
| Susumu Fujita | ○ | President, Chairman of the Board of Directors | |||
| Yusuke Hidaka | ○ | ||||
| Go Nakayama | ○ | ||||
| Koichi Nakamura | ○ | ○ | |||
| Kozo Takaoka | ○ | ○ | |||
| Toko Shiotsuki | ○ | Full-time | |||
| Masao Horiuchi | ○ | ○ | ○ | ||
| Tomomi Nakamura | ○ | ○ | ○ |
Outside Director Selection and Attendance (FY2023)
| Name | Reason of Selection | Attendance |
|---|---|---|
| Koichi Nakamura | Koichi Nakamura has extensive experience, achievements, and broad insight in corporate management, human resource strategy, and M&A, having led the administration of Japan Recruit Center Co., Ltd. (currently Recruit Holdings Co., Ltd.) for a long period as its Director and Executive Vice President. In addition, at the Board of Directors, which consists of eight (8) members (including four (4) Outside Directors), he is committed to decision-making on investment and other essential matters from his standpoint. Also, a voluntary meeting of directors ("Outside Directors' Meeting") is held every month to discuss a wide range of issues, including the enhancement of medium to long-term corporate value, sustainable growth, management supervision, succession plan, and executive compensation. This meeting leads to the discussion and formulation of a framework for the selection, development and structuring of senior executives, including future candidates for the Board of Directors. He participates in the Nomination and Compensation Advisory Committee and provides advice for the current fiscal year. Based on this experience, accomplishments, and insight, the Company believes that he is suited to serve as an independent director and outside director as he can be expected to supervise management, provide advice, and make proposals from a third-party perspective when making decisions at the Board of Directors, to continuously strengthen corporate governance and enhance the corporate value of the Group. The Company has determined that Koichi Nakamura meets the qualifications of an independent director as set by the Tokyo Stock Exchange and poses no risk in terms of conflict of interest with ordinary shareholders and has thereby appointed him as an independent outside director. |
Board Meeting 13/13 |
| Kozo Takaoka | Kozo Takaoka has a wealth of experience and a wide range of insights as a corporate executive and leading expert in the field of marketing in Japan, having driven management and contributed to the development of the business as President and CEO of Nestlé Japan Ltd. and a board member of Nestlé Global.
In addition, at the Board of Directors, which consists of eight (8) members (including four (4) Outside Directors), he is committed to the decision-making of investment and other important matters from his standpoint as an independent and Outside Director. He participates in the Outside Directors' Meeting every month. In this context, the Company is also committed to succession planning for representative directors and directors, including discussions on the qualities, abilities, and processes required of successors, and reviewing the required abilities and training content as necessary. He participates in the Nomination and Compensation Advisory Committee and provides advice for the current fiscal year. Based on his experience, accomplishments, and insight, the Company believes that he is suited to serve as an independent and outside director as he can be expected to supervise management, provide advice, and make proposals from a third-party perspective when making decisions at the Board of Directors meetings to continuously strengthen corporate governance and enhance the corporate value of the Group. The Company has determined that Kozo Takaoka meets the qualifications of an independent director as set by the Tokyo Stock Exchange and poses no risk in terms of conflict of interest with ordinary shareholders and has thereby appointed him as independent and outside director. |
Board Meeting 13/13 |
| Masao Horiuchi | Masao Horiuchi is a certified tax accountant and holds a Master of Business Administration (MBA) degree and has specialized knowledge in finance, accounting and tax. He has extensive experience and wide insight regarding internal control and corporate governance as a director of U-NEXT Co., Ltd. (currently USEN-NEXT HOLDINGS Co., Ltd.)
Since his appointment as an Outside Director of the Company in December 2017, he has contributed to the strengthening of the Company's auditing system and corporate governance by supervising management from an external and independent standpoint, including using his experience and insight to discuss possible risks with management and provide advice that contributes to strengthening internal controls. Based on his experience, achievements, and insight, the Company believes that he is suited to serve as an independent and outside director as he can be expected to continue to provide appropriate advice from an independent standpoint in the decision-making process of the Board of Directors. The Company has determined that Masao Horiuchi meets the qualifications of an independent director as set by the Tokyo Stock Exchange and poses no risk in terms of conflict of interest with ordinary shareholders and has thereby appointed him as independent and outside director. |
Board Meeting 13/13 Audit and Supervisory Committee 13/13 |
| Tomomi Nakamura | Tomomi Nakamura has many years of experience as an attorney in the field of corporate legal affairs, as well as three (3) years of teaching experience as a civil defense instructor at the Legal Training and Research Institute. He also has extensive expertise and deep insight into laws and regulations, including the Companies Act, Civil Code, and Intellectual Property Law. Since his appointment as an Outside Director of the Company in December 2021, he has used his experience and insight to engage in frank discussions with management regarding possible risks and other issues, provide advice that contributes to strengthening internal controls, supervise management from an external and independent standpoint, and contribute to strengthening the Company's auditing system and corporate governance. Based on his experience, achievements, and insight, we believe that he is suited to serve as an independent director and outside director as we can expect him to contribute to strengthening the Company's auditing system and corporate governance and to supervise management from an outside and independent standpoint and provide appropriate suggestions in the decision-making process of the Board of Directors, based on his high expertise and experience. CyberAgent has determined that Tomomi Nakamura meets the qualifications of an independent director as set by the Tokyo Stock Exchange and poses no risk in terms of conflict of interest with ordinary shareholders, and has thereby appointed him as an independent and outside director. |
Board Meeting 13/13 Audit and Supervisory Committee 13/13 |
Summary of Analysis and Evaluation concerning Effectiveness of the Board of Directors
Also, there is no problem in regard to the number of times the Board of Directors being held, the scope and quantity of the proposals being submitted, and the content of materials. Each director is in close communication with the outside directors and is able to make appropriate decisions which will contribute to the company-wide business expansion, concentration and selection, enhancing enterprise value based upon discussions about budget, performance forecast and risk factors which can affect business and management. In response to the results of the survey, we have enhanced the content of the reporting materials to assist further discussions.