Sustainability

Corporate Governance / Matters Related to Directors, Auditors and Independent directors / auditors

Matters related to directors, auditors and independent directors / auditors (summary)

(As of June 29, 2023)

Organizational form Company with the audit & supervisory board

Directors
Number of directors stipulated in articles of incorporation 15 persons
Director's term of office stipulated in articles of incorporation Two years
Chairman of the board of directors President
Number of directors 14 persons
Election of outside directors Appointed
Number of outside directors Five persons
Number of independent directors out of outside directors Five persons
Committee corresponding to nominating committee or compensation committee None

Audit & supervisory board members
Establishment or non-establishment of an audit & supervisory board Established
Number of audit & supervisory board members stipulated in articles of incorporation Four persons
Number of audit & supervisory board members Three persons
Cooperation among audit & supervisory board members, accounting auditors, and internal auditing departments Regarding internal audit, internal audit office which reports directly to President, has been established and is conducted by two peoples, including one general manager. Based on the internal audit plan formulated at the beginning of the fiscal year, they regularly evaluates internal controls and conducts internal audits with respect to the overall business activities of us and our subsidiaries. Based on the results, they provides advice and recommendations for operational improvement.
Audit & supervisory board member attends Board of Directors and other important internal meetings to express its views on audits conducted by audit & supervisory board member, and conducts audits through interviews with various divisions and examinations of approval documents, thereby enabling monitoring of the status of director's business execution.
Regarding cooperation between audit & supervisory board and the internal audit office, the internal audit office attends monthly meetings of audit & supervisory board and mutually evaluates internal controls and reports and exchanges views on the results of audits. In addition, audit & supervisory board and the internal audit office hold quarterly meetings to exchange views with the accounting auditors, and the accounting auditors attend mid-term and year-end audits. In this way, the three parties cooperate with each other to conduct audits.
Election or non-election of outside corporate auditors Appointed
Number of outside audit & supervisory board members Two persons
Number of independent officers out of outside audit & supervisory board members Two persons

Independent officers
Number of independent officers Seven persons
Other notes regarding independent officers We have designated Five directors and Two audit & supervisory board members who are outside directors / audit & supervisory board members as independent officers.

Incentives
Implementation of measures on incentive allotment to directors Stock option plan
Supplementary information The Company has introduced a stock acquisition rights plan (hereinafter, “Plan”) under which stock acquisition rights as stock options can be allotted to directors. The total amount of remuneration claims under this plan will be allocated within the range of the already approved annual remuneration for directors of 1,100 million yen (including 50 million yen for outside directors). Under the Plan, the upper limit of the total number of stock acquisition rights to be allotted is 1,160 (of which 52 are for outside directors) for each fiscal year. The number of shares to be issued for each stock acquisition right is 100 shares.
Grantees of stock options Directors, outside directors, employees, directors and employees of subsidiaries
Supplementary information In order for the entire company to pursue the realization of the our shared group philosophy of “The Greatest Leisure For All People” and for the Group to work together to promote business, we grant stock options with the aim of sharing a common awareness with the Company's employees, officers and employees of Group companies and shareholders and fostering a desire to contribute to maximizing the corporate value of the Group.
For directors of the Company, we have introduced a share acquisition rights plan under which share acquisition rights can be allotted as stock options.

Director's compensation
Disclosure of directors' compensation Indivisual compensation is not disclosed.
Supplementary information Our director compensation consists of monetary remuneration paid monthly as base remuneration, and bonuses that are linked to performance and non-monetary remuneration granted stock acquisition rights as stock options.
The percentage of these remuneration is based on a comprehensive ratio setting that takes into account positions, responsibilities, performance and contributions.
<Total amount of remuneration, etc. by director category of the submitting company, total amount of remuneration, etc. by type, and the number of directors subject to the remuneration (FY2022)>
Amount of Compensation by Type (millions of yen)
Director category
Total amount of remuneration, etc. (millions of yen)
Monetary remuneration
Performance-linked remuneration, etc.
Non-monetary Remuneration, etc.
Number of Directors covered (people)
Director
210
179
31
-
7
Outside director
35
35
-
-
6
(Note) 1. Above, number of recipient directors does not include three non-compensated directors.
(Note) 2. For one person who was transferred from outside director to director during the current fiscal year, the term of office for outside director is shown as an outside director and the term of office for director is shown as director.
Existence of methods to determine compensation or compensation policies Yes
Disclosure of methods to determine compensation or compensation policies Monetary remuneration (fixed remuneration) out of the remuneration of director is, in principle, revised in June of each year, and determined remuneration is paid every month for 12 equal amounts. In addition, the Company has adopted bonuses as performance-linked remuneration, which is a monetary remuneration, and share acquisition rights plan (stock remuneration) as non-monetary remuneration.

(Decision process)
Our director’s remuneration is based on a remuneration system that takes into results in relation to the Group’s sustainable growth and medium-to-long-term objectives for enhancing corporate value and shareholder interests. Our policy is to ensure that the amount of individual remuneration, etc. is appropriate in light of other companies in the same industry, economic and social conditions, and in light of the duties and roles in charge, the performance of each fiscal year, the degree of contribution, and responsibilities, etc. comprehensively. Specifically, it consists of fixed compensation which pays a certain amount of money each month, bonuses which pays money linked to short-term performance, and stock-based compensation that allows us to allocate stock options which enhances medium-to-long-term performance, motivates sustained improvement in corporate value and secure highly talented human resources. Decision-making policies are determined by resolution of board of directors after consultation with directors.

(Performance-linked remuneration, etc.)
As a performance-linked remuneration for our directors, we set consolidated operating profit as a performance indicator for a single fiscal year in order to raise awareness of improved performance for each fiscal year, and pay bonuses in an amount calculated according to the degree of achievement of that target. The reason for choosing operating profit as a performance indicator is because it shows the results of a company’s operating activities and we consider that the profit that the management’s ability has the most influence.

(Non-monetary remuneration, etc.)
In order to provide directors with incentives to further motivate them to contribute to the enhancement of corporate value and share the benefits and risks of share price fluctuations with shareholders, and in order to secure highly experienced and talented human resources as outside directors, this plan is introduced a share acquisition rights plan that allows us to allocate stock options.

(Maximum remuneration)
At our 26th Annual General Meeting of Shareholders held on June 18, 2014, the amount of monetary remuneration for our director was resolved to be within ¥1,100 million per annum (of which ¥50 million for outside directors). At the conclusion of the meeting, director had 12 members (including one outside director).
In addition, at our 35th Annual General Meeting of Shareholders held on June 21, 2023, a resolution was passed to introduce share acquisition rights plan, under which share acquisition rights may be allocated as stock remuneration within the amount of the above-mentioned director monetary remuneration. The maximum number of shares of share acquisition rights to be allocated in a given fiscal year is 116,000 (including 5,200 shares for outside directors). At the conclusion of the meeting, there are 14 directors (including five outside directors) eligible for awards related to share acquisition rights plan.

Support system for outside directors (outside audit & supervisory board members)
(i) Outside directors
General Affairs Department carries out assistance to the Outside directors.
The department makes Board of Directors convening and advance notification of agenda.
(ii) Audit & supervisory board members
The audit staff assists the work of the audit & supervisory board members.
Information required by the audit & supervisory board is collected by the audit & supervisory board members themselves, or by the staff at the direction of the audit & supervisory board members.
The audit & supervisory board arbitrarily shares information with the audit office.
The General Affairs Department conducts advance briefings regarding matters to be reported and resolved in Board of Directors as needed.

Retired presidents/CEOs holding advisory positions (sodanyaku, komon, etc.)
Information on retired presidents/CEOs holding advisory positions (sodanyaku, komon, etc.)
Names
Job title/position
Responsibilities
Employment terms (Full/part time, with/without compensation, etc.)
Date when former role as president/CEO ended
Term
-
-
-
-
-
-
Number of retired presidents/CEOs holding advisory positions (sodanyaku, komon, etc.) 0 persons
Others The Company does not have a system or internal rules for the appointment of advisors, etc. after the retirement of the President/CEO, etc.

Reasons for Appointing an Outside Director and Outside audit & supervisory board members
Outside director
Status of Attendance at Meetings of Board of Directors (FY2022)
Shigesato Itoi Outside director, Mr. Shigesato Itoi has a diverse track record of activities, including corporate managers, copywriters and essayist, as well as a wealth of experience and unique ideas. Based on these experiences and ideas, we receive important and useful advice on our creative and management indicators. We have determined him as an outside director that he is an appropriate coaching and supervision of our management and business.
In addition, he satisfies the independence requirements stipulated by the Tokyo Stock Exchange and the Company's independence criteria, and was designated as an independent officer after judging his appointment would not give rise to conflict of interest with the general shareholders of the Company.

Board of Directors
8/8

Katsuya Shirai Outside director, Mr. Katsuya Shirai has a wealth of experience in corporate management, as well as long experience, knowledge, and networks in the content business. Based on his outstanding insight and abundant experience, we have determined him as an outside director that he is a person who can provide coaching and supervision to evolve “content and digital business,” which is a pillar of our growth strategy from an independent and diversified perspective.
In addition, he satisfies the independence requirements stipulated by the Tokyo Stock Exchange and the Company's independence criteria, and was designated as an independent officer after judging his appointment would not give rise to conflict of interest with the general shareholders of the Company.
Board of Directors
7/7
Tetsuo Komori Outside director, Mr. Tetsuo Komori has long been involved in corporate management and possesses advanced knowledge and expertise based on outstanding insight and abundant experience. The board of directors has determined him as an outside director that he is a person who can properly coach and supervise the Company’s management from an independent and diversified perspective based on his diverse corporate management experience.
In addition, he satisfies the independence requirements stipulated by the Tokyo Stock Exchange and the Company's independence criteria, and was designated as an independent officer after judging his appointment would not give rise to conflict of interest with the general shareholders of the Company.
Board of Directors
7/7
Keiichi Maeda Outside director, Mr. Keiichi Maeda, in addition to his experience in corporate management, is familiar with promotional and digital areas and possesses advanced knowledge and expertise based on outstanding insight and abundant experience. Based on his experience, we have determined him as an outside director that he is a person who can provide coaching and supervision to evolve “content and digital business,” which is a pillar of our growth strategy, from an independent and professional perspective.
In addition, he satisfies the independence requirements stipulated by the Tokyo Stock Exchange and the Company's independence criteria, and was designated as an independent officer after judging his appointment would not give rise to conflict of interest with the general shareholders of the Company.
Board of Directors
7/7
Goeun Kim Outside director, Ms. Goeun Kim possesses diverse experience, achievements and values in the digital business. We have determined that she is a person who can provide coaching and supervision to evolve “Content and digital business,” which is the pillar of our growth strategy, from an independent and diversified perspective backed by her abundant experience and innovative ideas.
In addition, she satisfies the independence requirements stipulated by the Tokyo Stock Exchange and the Company's independence criteria, and was designated as an independent officer after judging her appointment would not give rise to conflict of interest with the general shareholders of the Company.
Board of Directors
5/7
Outside audit & supervisory board members
Status of Attendance at Meetings of Board of Directors / Audit & supervisory board (FY2022)
Kenichi Ikezawa Outside audit & supervisory board member, Mr. Kenichi Ikezawa has been involved in accounting and finance operations for many years and possesses sufficient insight into Group internal controls that draws on the knowledge accumulated through his career. He was appointed based on the judgment that he will be able to provide advice from an independent standpoint.
In addition, he satisfies the independence requirements stipulated by the Tokyo Stock Exchange and the Company's independence criteria, and was designated as an independent officer after judging his appointment would not give rise to conflict of interest with the general shareholders of the Company.
Board of Directors
8/8
Audit & supervisory board
11/11
Yoshika Furuta Outside audit & supervisory board member, Mr. Yoshika Furuta has deep experience in charge of national tax affairs, and was appointed based on the Company’s judgment that he would be able to provide advice from an independent standpoint.
He concurrently holds the post of chief, Yoshika Furuta certified public tax accountant office, but there is no transaction or other special relationship between us and the company in which he was concurrently appointed.
In addition, he satisfies the independence requirements stipulated by the Tokyo Stock Exchange and the Company's independence criteria, and was designated as an independent officer after judging his appointment would not give rise to conflict of interest with the general shareholders of the Company.
Board of Directors
8/8
Audit & supervisory board
11/11

* Mr. Katsuya Shirai, Mr. Tetsuo Komori and Mr. Keiichi Maeda were elected and appointed as outside director at the 34th Annual General Meeting of Shareholders held on June 22, 2022.
* Ms. Goeun Kim was elected as outside director at the 34th Annual General Meeting of Shareholders held on June 22, 2022 and was appointed on July 1, 2022.
* For details of the officers, please refer to “Executives.”