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Corporate Governance

Structure

Changes in Corporate Governance Structure

CyberAgent has been reinventing its management structure by utilizing a unique system that is tailored to the company's growth phases and business strategy. To further strengthen corporate governance, in December 2020 CyberAgent transitioned to a new executive officer structure with a clear separation between supervision and execution, and to further enhance supervisory functions, the structure ensures that half of the board members are from outside the company.

Corporate Governance structure

Corporate Form of Organization

Company with an Audit and Supervisory Committee

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, and delegated 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 supervisory functions.

 

Board of Full-time Directors

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 Office

The Internal Audit Office conducts 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 action is 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 fourindependent outside directors, one director who is a full-time member of the Audit Committee, and the representative director.In order to strengthen the independency, objectivity and 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

15

Term of Office of Directors who are not Audit Committee Members under the Articles of Incorporation

1 year

Term of Office of Directors who are Audit Committee Members under the Articles of Incorporation

2 year

Chairman of the Board of Directors

President

Number of Directors

8

Number of Female Directors

1

Election of Outside Directors

Elected

Number of Outside Directors

4

Number of Outside Directors Designated as Independent Director

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 (FY2021)

Name Reason of Selection Attendance
Koichi Nakamura Mr. 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 Outside Directors), he is committed to decision-making 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, executive compensation, and such. As a result of the discussions at the Outside Directors' Meeting, the Company established its "Purpose" and reviewed the policy for the remuneration system for executive directors, etc. 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 judged that he could 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. Therefore, we believe that he is well qualified to serve as an independent and outside director.

The Company has determined that Mr. 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 anindependent outside director.
Board Meeting
13/13
Kozo Takaoka Mr.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. As a result of the discussions at the meeting, the Company established its "Purpose" and reviewed the policy for the remuneration system for executive directors, etc. He has been engaging in the Nomination and Compensation Advisory Committee as an observer and is scheduled to be officially appointed as a member of the Committee from fiscal 2022. Based on his experience, accomplishments, and insight, the Company judged that he could 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. Therefore,we believe that he is well qualified to serve as an independent and outside director.

The Company has determined that Mr. 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 outside director.
Board Meeting
13/13
Masao Horiuchi Mr. Masao Horiuchi is a certified tax accountant 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.)The Company has nominated him as a candidate for a Director serving on the Audit and Supervisory Committee, because since as he took office as an Outside Director of the Company in December 2017. He has raised frank discussions with management regarding possible risks based on his wide experience and insight and offers advice on strengthening internal control and corporate governance. Based on his experience, achievements, and insight, the Company believes that he will continue to provide appropriate advice from an independent standpoint in the decision making process of the Board of Directors. Therefore,we believe that he is well qualified to serve as an independent and outside director.

The Company has determined that Mr. Masao Horiuchimeets 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 outside director.
Board Meeting
13/13

Audit and Supervisory Committee
13/13
Tomomi Nakamura Mr. Tomomi Nakamura has twenty-two (22) years of practice 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. Based on the above, we believe that we can expect him to supervise the management and make appropriate remarks from his high level of expertise and experience and an external and independent standpoint when the Board of Directors makes decisions. Therefore, we believe that he is well qualified to serve as an independent and outside director.

CyberAgent has determined that Mr. Tomomi Nakamurameets 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 a Independent outside director.
Board Meeting
-

Audit and Supervisory Committee
-

Summary of Analysis and Evaluation concerning Effectiveness of the Board of Directors

We conducted a questionnaire survey about the effectiveness of the board of directors targeted at directors include Audit and Supervisory members at the end ofSeptember 2021. The score of the questionnaire was high overall, confirming that the Company's Board of Directors is functioning effectively as a whole.In this fiscal year, the number of outside directors was increased to more than half of the total number of directors, and the roles of supervision and execution were more clearly separated.Itresulted in the conclusion that the effectiveness of the Board of Directors was ensured more than ever.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 are in close communication with the outside directorsand is able to makeappropriate decisions which will contribute to thecompany-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.