June 30, 2017
Yahoo Japan Corporation (the Company) and its consolidated subsidiaries and affiliates (the Yahoo Japan Group) consider good corporate governance to be essential to enhancing corporate value over the medium to long term. In clarifying the roles and responsibilities of directors, corporate officers, and employees within the corporate governance system, the Company aims to conduct appropriate and effective business operations. By maintaining appropriate corporate governance and conducting effective corporate activities, the Company intends to retain the trust and understanding of all stakeholders.
Corporate governance system
Japan’s new corporate governance code, which took effect on June 1, 2015, establishes fundamental principles of good corporate governance, including transparent, fair, timely, and decisive decision-making as well as proactive management.
Given that timely and decisive decision-making is a key governance principle among companies in the Internet industry, management believes that the Company’s basic stance on corporate governance is in broad alignment with that outlined in the new corporate governance code. Bearing in mind the intent of the new code, the Company converted to a company with an Audit and Supervisory Committee as its corporate governance structure after approval at the general shareholders meeting on June 18, 2015. In further compliance with the new corporate governance code, we also appointed two independent outside directors in order to ensure independent perspectives and to enhance transparent and fair decision- making. In addition, we have clearly separated the decision- making and supervisory functions of the Board of Directors from the business execution functions of corporate officers, in addition to granting the Board of Directors an additional role as a discussion forum for the Company’s medium- to long-term business trajectory. Moreover, by delegating broad authority to corporate officers we have reinforced the Company’s proactive management stance.
Board of Directors
The Board of Directors is responsible for corporate management policies, management strategy, business planning, the acquisition or disposal of important assets, decision-making regarding important organizational or personnel matters, and the supervision of business execution throughout the Yahoo Japan Group. The Company’s corporate governance structure, which clearly separates the decision- making and supervisory functions of the Board of Directors from the business execution functions of corporate officers and autonomous business units within the Company, is designed specifically to promote swift, strategic managerial operations with the goal of enhancing competitiveness.
Audit and Supervisory Committee
The Audit and Supervisory Committee is composed of three members, two of whom are independent outside directors.
The Audit and Supervisory Committee is responsible for auditing and supervising all aspects of the Company’s business activities, including the appropriateness of policy, planning, and procedures; the effectiveness of business implementation; and compliance with laws and regulations, carried out by means of, for example, perusing important documents and inspecting subsidiary companies. Furthermore, the Audit and Supervisory Committee receives reports on auditing methods and results from account auditors and the Internal Audit Office. Based on these activities and reports, the Audit and Supervisory Committee regularly presents opinions to the full-time directors who are not Audit and Supervisory Committee members.
In accordance with the Regulation of Remunerations for Directors formulated by the Board of Directors, remuneration of directors and senior management is determined after deliberations by the Remuneration Committee based on the Company’s business performance and respective individual contributions thereto for the fiscal period under review. The Remuneration Committee comprises three persons, namely, the president, a non-executive director who is not also an independent outside director, and an independent outside director.
Important issues requiring deliberation and judgment by the Board of Directors are reviewed in advance by the President’s Committee. Important issues on which the president independently makes judgments are reviewed by the President’s Committee in accordance with internal Company regulations.
Internal Audit Office
Reporting directly to the president, the Internal Audit Office oversees the development and implementation of internal audit systems throughout the Yahoo Japan Group in addition to providing Groupwide systems evaluations and improvement guidance with the goal of ensuring that business operations are appropriate and executed effectively and efficiently. The Internal Audit Office carries out its various audit-related activities in cooperation with audited departments and subsidiaries.
When the need for broad-based deliberation arises with regard to issues such as implementing a new business, launching a new service, or other issue of strategic significance, the Company convenes an Advisory Board composed of highly respected outside experts from the academic, legal, and business communities. This enables the Company to incorporate a diverse range of views and opinions into important management decision-making.
Management team (corporate officers) remit
In addition to formulating business strategies and management plans, the Company’s Board of Directors shall make decisions on important business execution matters. Specifically, M&A and the acquisition or disposal of large amounts of assets shall be deemed matters to be resolved by decision of the Board of Directors, but in the case of other business execution matters responsibility for decisions shall in principle rest with the management team, in accordance with the Regulations of the Board of Directors Meetings.
Effectiveness of Board of Directors
An evaluation undertaken jointly by the outside directors and the Audit and Supervisory Committee concluded that the overall effectiveness of the Board of Directors is generally excellent, with the exception of certain Board materials that fail to adequately clarify focal issues. Moving forward, the Board is committed to constantly enhancing its overall effectiveness.
Committee meetings held
|Number of meetings|
|Board of Directors||10|
|Audit and Supervisory Committee||7|
Committee member composition
|Board of Directors||Audit and Supervisory Committee||Remuneration Committee|
|Ronald S. Bell||◯|
Nomination of candidates for director and appointment of senior management
When nominating candidates for director or appointing senior management, such factors as performance experience, knowledge, and popularity at the Company or other companies shall be considered, and appropriate personnel appointed at a meeting of the Board of Directors on the basis of the Regulations of the Board of Directors Meeting. When nominating candidates for director, the Company shall give consideration to maintaining diversity on the Board of Directors so that no bias is shown toward personal characteristics, and listen to the opinions of independent outside directors prior to a decision being taken at a meeting of the Board of Directors.
Nomination of directors and Audit and Supervisory Committee members
|Manabu Miyasaka||Since assuming the role of President and Representative Director of the Company in 2012, Mr. Miyasaka has focused on the rapid deployment of smartphone-based services and shown strong leadership of the Yahoo Japan Group. In recognition of his performance, he has been renominated as representative director of the Company in order to achieve further growth of the Yahoo Japan Group as a multi-big data enterprise.|
|Masayoshi Son||Mr. Son has a great deal of executive management experience and extensive knowledge. To take advantage of his suggestions and advice about the management of the Yahoo Japan Group as a pioneer, he has been renominated as a director of the Company.|
|Ken Miyauchi||Mr. Miyauchi has a wealth of management experience in the mobile phone business as the President and CEO of SoftBank Corp., whose business operations are closely related to those of the Company. Since becoming a director in June 2012, he has offered helpful advice about the business operations of the Yahoo Japan Group. Therefore, he has been renominated as a director of the Company.|
|Jonathan Bullock||Mr. Bullock has a global knowledge of and deep insight into the Internet business, including a wealth of experience in building and expanding businesses. In order to continue receiving his valuable advice based on such knowledge and experience, he has been renominated as a director of the Company.|
|Arthur Chong||Mr. Chong possesses an abundance of knowledge and experience regarding laws and corporate governance. To take advantage of his valuable advice based on such knowledge and experience, he has been nominated as an outside director of the Company.|
|Alexi A. Wellman||Ms. Wellman possesses an abundance of knowledge and experience regarding finance and accounting. To take advantage of her valuable advice based on such knowledge and experience, she has been nominated as an outside director of the Company.|
|Shingo Yoshii||Mr. Yoshii has extensive knowledge and experience regarding corporate management and possesses deep insight into corporate governance. From June 2008, he served for seven years as an Audit and Supervisory Board member (full-time) and since June 2015 has been an independent outside director (full-time Audit and Supervisory Committee member), helping to fortify the Company’s corporate governance and auditing framework. Therefore, he has been renominated as an independent outside director of the Company.|
|Hiromi Onitsuka-Baur||As a Vice President and Chief Marketing Executive at Toshiba Medical Systems Corporation, Ms. Onitsuka-Baur gained a tremendous amount of experience and a wide breadth of knowledge. From June 2012, she served for three years as an Audit and Supervisory Board member (full- time) and since June 2015 has been an independent outside director (full-time Audit and Supervisory Committee member), helping to fortify the Company’s corporate governance and auditing framework. Therefore, she has been renominated as an independent outside director of the Company.|
|Kazuhiko Fujihara||Mr. Fujihara is the Executive Vice President and CFO of SoftBank Corp., a subsidiary of our parent company, SoftBank Group Corp. He has extensive work experience in and considerable knowledge of finance and accounting. Since June 2015, he has been a director of the Company and served as an Audit and Supervisory Committee member. Therefore, he has been renominated as a director of the Company.|
Director and senior management remuneration
Based on the Regulation of Remunerations for Directors formulated by the Board of Directors, the Company decides on the remuneration and bonuses of its directors and senior management following deliberations by the Remuneration Committee, which comprises three persons, namely, the president, a non-executive director who is not also an independent outside director, and an independent outside director, based on each fiscal period’s business performance and each director’s contribution to business performance.
Director remuneration for fiscal 2016
- *1 The amount of stock options is the cost posted for the fiscal year under review with regard to share subscription rights granted as stock options.
- *2 For fiscal 2016, outside directors received no remuneration from either SoftBank Group Corp. or any of its consolidated subsidiaries, excluding above.
(millions of yen)
|Breakdown of total remuneration(millions of yen)|
|Base salary||Stock options*1||Bonuses|
|Directors (excluding Audit and Supervisory Committee members)||7||105||55||－||50|
|(Of which for outside directors*2)||(2)||(－)||(－)||(－)||(－)|
|Directors (Audit and Supervisory Committee members)||3||57||47||－||10|
|(Of which for outside directors*2)||(2)||(57)||(47)||(－)||(10)|
|(Of which for outside directors*2)||(4)||(57)||(47)||(－)||(10)|
Fortifying internal control
In accordance with the Basic Policy for Internal Control established by the Board of Directors, the Company strives to ensure the appropriateness of all business activities and continuously makes improvements with the goal of creating a more effective system of internal control. One of the key objectives of internal control is to enhance the effectiveness and efficiency of business operations, and the Company therefore prioritizes operational systematization, automation, and integration in support of ongoing improvements.
Please refer to our website for detailed information about the Company’s internal control efforts.
Policy on measures to protect minority shareholders in conducting transactions with controlling shareholder
Yahoo Japan Corporation’s parent company is SoftBank Group Corp., which nominates five of the Company’s nine directors. While one of the roles of the Board of Directors is to oversee business execution with a view to further enhancing corporate value, with respect to determining specific matters and business execution the Company acts independently based on determinations made by corporate officers. The Company is not overly dependent on either the parent company or any of the other associated companies with respect to sales and marketing transactions. The vast majority of the Company’s business transactions are conducted with individual consumers and companies having no capital-based relationship with the Company.
Moreover, the Company’s Regulations for Appropriate Business Transactions and Practices by Yahoo Japan Corporation, its Parent Company, Subsidiaries, and Affiliates prohibit transactions with the parent company and/or other associated companies that give rise to either an unfair advantage or disadvantage with respect to similar transactions with other third parties, as well as transactions that seek to transfer profits, losses, or risk. Based on these and other initiatives, the Company maintains ample business and operational independence from associated companies and endeavors to maintain fair and appropriate transactions. Utilizing a raft of such measures, the Company is judged to be maintaining its independence from the business operations of its parent company to a sufficient degree.
Measures concerning shareholders and other stakeholders
The Company makes various efforts to vitalize shareholders meetings and to facilitate shareholders’ exercise of voting rights. For example, the Company has since its founding held its annual general meeting of shareholders on a day when other major companies are not holding meetings. In addition, we promptly post notices of our annual general meeting of shareholders on the Company’s Investor Relations website in both Japanese and English before mailing out notices to all shareholders. Appealingly designed and printed in full color, the notices in addition contain supplementary non-financial information to broaden shareholders’ knowledge of our business operations. Moreover, to ensure that a maximum number of shareholders are able to exercise their voting rights, we permit individual investors to vote online and also offer a dedicated Internet voting platform for institutional investors.
Investor relations activities
The Company’s investor relations (IR) activities aim to provide timely, accurate, and fair information disclosure in accordance with rules prescribed by the Financial Instruments and Exchange Law and the Tokyo Stock Exchange, Inc. In principle, the president is charged with supervising the dialogue with shareholders and other investors, while the chief financial officer (CFO) is responsible for information disclosure.
To support the ongoing dialogue with shareholders and other investors, the Company has established an internal IR division. By coordinating with the financial affairs, accounting, and legal affairs divisions as well as with various business divisions to create IR-related documents suitable for release, the IR division helps to ensure constructive dialogue with shareholders and other investors.
For individual investors, we provide updates on the Company’s business status at general meetings of shareholders. Using various visual presentation tools, we explain medium- to long-term strategies and provide updates on the Company’s business status, financial results, and other relevant information in order to deepen investors’ understanding of the Company. Furthermore, for individual investors unable to attend general meetings of shareholders we provide live-streaming services and on-demand video services for viewing at a later date.
For analysts and institutional investors, we provide detailed explanations of the Company’s financial results and business status at quarterly results briefings. We also provide a public-access live- streaming service of these briefings. Moreover, in order to promote greater understanding of the Company among a growing number of persons, we also carry out proactive disclosure activities, including the provision of on-demand video services later on the same day of the earnings announcement. At many of the approximately 500 separate meetings conducted each year with analysts and institutional investors either in person or by telephone, members of senior management, including the president, proactively discuss current growth strategies and business status updates.
For overseas institutional investors, we prepare English- language versions of nearly all of the Company’s disclosure materials, in addition to publishing an English-language annual report. In addition, we have opportunities to directly engage in dialogue with overseas investors during periodic overseas roadshows, primarily in North America, the United Kingdom, and Asia.
Since the Company’s initial public offering (IPO) in 1997, we have continually provided timely disclosure in the form of quarterly reports detailing our financial and business conditions as well as risk-related information of potential concern to the Company. A complete archive of all disclosure materials published to date is publicly accessible via the Company’s Investor Relations website.
Opinions and proposals from shareholders and other investors are compiled in a quarterly report that is submitted to directors, corporate officers, and relevant divisions within the Company. In urgent cases, such opinions and proposals are communicated immediately to relevant Company divisions.
Regarding the potential misuse of insider information, sensitive information that has not yet been disclosed to the public is thoroughly controlled and appropriately handled in accordance with Insider Trading Prevention Regulations. In the case of financial results information, a quiet period is observed prior to the disclosure date in order to prevent information leaks. During the quiet period, the Company flatly refuses to comment upon or reply to inquiries about undisclosed financial results.
A small group of major shareholders account for a significant portion of the Company’s ownership. Because the risk of a hostile takeover bid is considered to be low, the Company has not formulated takeover-related measures. Recognizing this matter as a potentially significant management issue, however, the Company intends to consider the necessity for and content of effective measures.