Corporate Governance

Basic Views

Basic Views
Z Holdings Corporation (the Company) and its consolidated subsidiaries and affiliates (the Z Holdings Group or the Group) consider good corporate governance to be essential to enhancing corporate value over the medium to long term. For this, as stated in our Charter of Corporate Behavior, the directors, corporate officers, and employees fully understand their required roles, will maintain sound corporate governance and will practice efficient corporate activities in order to retain the trust and understanding of all stakeholders.

Corporate governance system

Z Holdings Corporation regards corporate governance as a vital function in order to “enhance medium- to long-term corporate value” and conducts appropriate and effective corporate management.

Meanwhile, Z Holdings Corporation has converted to a company with an Audit and Supervisory Committee from June 2015, in order to establish both: a structure that encourages “aggressive governance” so that timely business decisions can be made in the Internet industry; and a structure that promotes the aim of the corporate governance code, namely “transparent, fair, timely, and decisive decision making”. Z Holdings Corporation judges the current system to be the best whereby: all of the three Audit and Supervisory Committee members are independent outside directors; and the speedy decision-making and monitoring of management is secured by dividing the roles of decision-making of management matters and supervision of business execution (Board of Directors) from the actual business execution (corporate officers).

Board of Directors

The Board of Directors is responsible for corporate management policies, management strategy, business planning, the acquisition and liquidation of important assets, decision making regarding important organization or personnel matters, and the supervision of the execution of business of Z Holdings Corporation and its subsidiary companies. By having seven non-executive directors out of the nine directors, Z Holdings Corporation aims to clearly divide the role of the decision-making of management matters and supervision of business execution (the role of the Board of Directors) from the actual business execution (the role of corporate officers).

Important items that require decisions to be made by the Board of Directors are reviewed in advance at the CEO Committee and at other meetings. Important items related to the Z Holdings Corporation and to group companies are reviewed in the CEO Committee based on internal company regulations.

Audit and Supervisory Committee

The Audit and Supervisory Committee is composed of three members and all members are independent outside directors. Two members, the Committee chairperson Shingo Yoshii, and Hiromi Onitsuka-Baur are full-time directors.

The Audit and Supervisory Committee is responsible for auditing and supervising the entirety of the company’s business activities, including the appropriateness of policy, planning, and procedures; effective business implementation; and compliance to laws and regulations through the perusal of important documents, the inspection of subsidiary companies, and so on. Furthermore, the Audit and Supervisory Committee receives reports on the auditing methods and results from the account auditors and internal audit methods and results from the Internal Audit Office. Based on these activities, the Audit and Supervisory Committee will regularly present their opinions as an Audit and Supervisory Committee to the full-time directors who are not Audit and Supervisory Committee members.

Nomination Committee

Based on the Regulation for Nomination Committee determined by the Board of Directors, thee Nomination Committee expresses its opinion to the Board of Directors on all matters related to the agenda of the shareholders meeting on the election and dismissal of directors; election and dismissal of the President, CEO, Representative Director, and Chairman of the Board of Directors; succession plan of President/CEO.

Remuneration Committee

The Remuneration Committee of Z Holdings Corporation which consists of the President and Representative Director; a non-executive director who is not an independent outside director; and an independent outside director, based on the Regulation of Remunerations for Directors as determined by the Board of Directors, determines the amounts of the bonus and remunerations of the directors and senior management after careful deliberation, based on the business performance in each quarter, the contributions to the business performance, and other factors.

CEO Committee

Important issues requiring deliberation and judgment by the Board of Directors are reviewed in advance by the CEO Committee. Important items related to the Z Holdings Corporation and to group companies are reviewed in the CEO Committee based on 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 Z Holdings 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.

Advisory Board

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

The Board of Directors of Z Holdings Corporation determines company group business management strategies and planning, and makes all final decisions regarding important business matters. Specifically, items such as mergers and acquisitions, or the acquisition or liquidation of high value assets are within the purview of items to be resolved during Board of Directors meetings. Decisions regarding other individual business matters are, as a rule, to be handled by the management staff in accordance with the Regulations of the Board of Directors Meetings.

Effectiveness of Board of Directors

Z Holdings Corporation conducts interviews with Audit and Supervisory Board members, etc. once a year on a regular basis, in order to analyze and evaluate the effectiveness of the Board of Directors. The effectiveness of the Board of Directors was referred to the Board of Directors again this year. As a result, it was confirmed that effectiveness of the Board is generally secured. Although some improvements were seen in issues pointed out in the previous year such as discussions on mid-long business plans, it was confirmed that there still remain some issues in the content of the materials for Board of Directors meetings and their distribution timing. We would like to leverage this result and continue to make improvements.

Nomination of directors and Audit and Supervisory Committee members

Kentaro Kawabe
Since joining the Company in 2000, Kentaro Kawabe served with distinction for 18 years in important positions of the Company including manager of the Company’s core services such as Yahoo! News and Chief Operating Officer (COO), contributing to the growth of the Company. He was appointed Chief Executive Officer (CEO) in April 2018, and President and Representative Director in June 2018. The Company has elected him for appointment as a director candidate so that he can lead the growth of the Company even further.

Takao Ozawa
Since joining the Company in 2012, Takao Ozawa has grown the commerce business of the Z Holdings Group with strong leadership, such as in promoting the “e-commerce revolution”. The Company has elected him for appointment as a director candidate so that he can lead the growth of the Company even further, based on his expertise in the Internet business and commerce fields as well as abundant experience in corporate management and broad knowledge of the creation of new businesses as an entrepreneur.

Masayoshi Son
Masayoshi Son has a great deal of experience and extensive knowledge as an executive manager. The Company has elected him as a director candidate of the Company so that his suggestions and advice as a pioneer can be utilized for the management of the Group.

Ken Miyauchi
Ken Miyauchi is the Chief Executive Officer of SoftBank Corp., which is closely involved in the business operations of the Company, and has a wealth of management experience in the mobile phone business. In order to receive his valuable advice about the business operations of the Group, the Company has elected him as a director candidate of the Company.

Kazuhiko Fujihara
Kazuhiko Fujihara is Board Director, Executive Vice President & CFO of SoftBank Corp., which is closely involved in the business operations of the Company. The Company has elected him as a director candidate to receive management consultation and valuable advice on finance and accounting as well as on business operation in general, based on his years of experience in the corporate planning and finance divisions at SoftBank Corp.

Taku Oketani
Taku Oketani is Senior Vice President of SoftBank Corp., which is closely involved in the business operations of the Company, and has deep insight and broad knowledge in the commerce and marketing fields. Amid intensified competition in the commerce and payment service areas, the Company has elected him as a director candidate to obtain valuable advice on business operation so as to further strengthen business synergies with SoftBank Corp.

Shingo Yoshii
Shingo Yoshii has a wealth of knowledge and experience in business management. He has a great deal of insight regarding corporate governance, and has served with distinction for seven years since his assumption of office as an outside auditor of the Company in June 2008 and four years as an outside director (independent director) and full time Audit and Supervisory Committee member since his assumption of office in June 2015. The Company has elected him as a director candidate serving on the Audit and Supervisory Committee because he has contributed to the strengthening of corporate governance and to the improvement of the corporate auditing system.

Hiromi Onitsuka-Baur
Hiromi Onitsuka-Baur has a wealth of knowledge and experience in business management, and has served with distinction for three years since her assumption of office as an outside auditor of the Company in June 2012 and four years as an outside director (independent director) and full time Audit and Supervisory Committee member since her assumption of office in June 2015. The company has elected her as a director candidate of the Company serving on the Audit and Supervisory Committee because she has contributed to the strengthening of corporate governance and to the improvement of the corporate auditing system.

Yoshio Usumi
Yoshio Usumi has many years of business execution experience and track record in corporate administration. The Company has elected him for director candidate serving on the Audit and Supervisory Committee of the Company, based on his abundant knowledge and track record in corporate management and corporate governance as well as deep insight in the IT business.

Director and senior management remuneration

The Remuneration Committee of Z Holdings Corporation which consists of the President and Representative Director; a non-executive director who is not an independent outside director; and an independent outside director, based on the Regulation of Remunerations for Directors as determined by the Board of Directors, determines the amounts of the bonus and remunerations of the directors and senior management after careful deliberation, based on the business performance in each quarter, the contributions to the business performance, and other factors.

Director remuneration for fiscal 2018

Number Total remuneration

(millions of yen)

Breakdown of total
remuneration(millions of yen)
Base

salary

Stock

options

Bonuses Restricted

stocks

Directors (excluding Audit and Supervisory Committee members) 2 272 106 130 36
(Of which for outside directors) (-) (-) (-) (-) (-) (-)
Directors (Audit and Supervisory Committee members) 2 60 50 10
(Of which for outside directors) (2) (60) (50) (-) (10) (-)
Total 4 332 156 140 36
(Of which for outside directors) (2) (60) (50) (-) (10) (-)

  • Directors (excluding Audit and Supervisory Committee members)
    • Number : 2
    • Total remuneration : 272
    • Base salary : 106
    • Stock options : -
    • Bonuses : 130
    • Restricted stocks : 36
  • (Of which for outside directors)
    • Number : (-)
    • Total remuneration : (-)
    • Base salary : (-)
    • Stock options : (-)
    • Bonuses : (-)
    • Restricted stocks : (-)
  • Directors (Audit and Supervisory Committee members)
    • Number : 2
    • Total remuneration : 60
    • Base salary : 50
    • Stock options : -
    • Bonuses : 10
    • Restricted stocks : -
  • (Of which for outside directors)
    • Number : (2)
    • Total remuneration : (60)
    • Base salary : (50)
    • Stock options : (-)
    • Bonuses : (10)
    • Restricted stocks : (-)
  • Total
    • Number : 4
    • Total remuneration : 332
    • Base salary : 156
    • Stock options : -
    • Bonuses : 140
    • Restricted stocks : 36
  • (Of which for outside directors)
    • Number : (2)
    • Total remuneration : (60)
    • Base salary : (50)
    • Stock options : (-)
    • Bonuses : (10)
    • Restricted stocks : (-)

*1 The amount of restricted stocks remuneration is the amount of restricted stock remuneration recorded in this fiscal year.
*2 There are no director remunerations, etc. received by the outside directors from the Company’s parent company or the subsidiaries of the said parent company other than those prescribed above in this fiscal year.
*3 Out of the directors, no director remuneration, etc. is paid to Masayoshi Son, Ken Miyauchi, Arthur Chong, Alexi. A. Wellman, Kazuhiko Fujihara and Kazuko Kimiwada.

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

The parent company of the Z Holdings Group is the SoftBank Group Corp., SoftBank Group Japan Corporation and SoftBank Corp. Z Holdings Corporation has enacted “Regulations for Appropriate Business Transactions and Practices by Z Holdings Corporation, its Parent Company, Subsidiaries, and Affiliates”. In accordance with these regulations, Z Holdings Corporation strives to maintain its commitment to fair and proper transactions by expressly forbidding clearly advantageous or disadvantageous transactions with its parent company, etc. which are judged by comparing transactions with a third party or with other similar transactions, and performing of transactions for the purpose of shifting profits, losses, or risks.

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 securities companies and investors, Z Holdings Corporationholds Investors Meetings, in which details of financial statements and business activities are explained. Leveraging live streaming, on-demand videos and teleconference systems, etc., we proactively share information about our business. Individual interviews and teleconferences are also held for securities companies and institutional investors, in which the President and Representative Director or other management staff speak proactively about the growth strategies and share operational information about the Z Holdings Group.

For IR targeting foreign investors, Z Holdings Corporation creates the majority of the above disclosure publications in English. In addition, we visit our overseas investors hosting “Overseas Roadshows”, primarily in North America, the UK, and Asia, in which we gain the opportunity to directly engage in dialogues with our foreign investors. In regards to IR publications, from immediately after our initial public offering in 1997, we have continued to publish a detailed overview of our financial and business operations as a quarterly financial report to ensure timely disclosure. In addition, along with these reports, we summarize and disclose information on potential risks to the Company. Current publications, as well as an archive of all past ones, are published on the Company website.

Opinions and proposals from shareholders and investors comprehended through dialogues with them are summarized in a report and submitted to the directors, management staff and related internal divisions as feedback, or, in urgent cases, are communicated to the related parties immediately.

In keeping with the company’s “Regulations on the Prevention of Insider Trading”, material facts which have not yet been officially announced are thoroughly managed and appropriately handled. Regarding information on our business results, in order to prevent leaks in information and - 6 - preserve impartiality, we have instated a quiet period. During this period, company representatives will refrain from answering any questions or providing any comments related to the business results.

Anti-takeover measures

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.