Corporate Governance

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".

In October 2019, Z Holdings Corporation moved to a holding company structure, with a view to promoting its business strategy more swiftly by enabling flexible and expeditious decision-making and optimum allocation of its management resources. Under this structure, the Company undertakes integrated management of the Group companies as its main responsibility, and each group company executes business. Z Holdings Corporation judges the current system to be the best whereby the speedy decision-making and monitoring of management is secured by dividing the basic roles of supervision of business management from the actual business execution, within the Group.

As part of its ongoing effort to strengthen supervision and enhance the quality of decision-making, Z Holdings Corporation appointed four of the ten directors from independent outside director candidates upon the Business Integration in March 2021, with a view to ensuring supervision and decision-making from objective and diverse points of view.

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 and personnel matters, and the supervision of the business execution of the Representative Director.

The composition of the Board of Directors, chaired by the President and Representative Director, is as shown in the table below.

In order to ensure supervision and decision-making from objective and diverse points of view, four out of the 10 directors are independent outside directors. In nominating the director candidates, the Board of Directors receives the proposals from the Nominating and Remuneration Committee of which two thirds is constituted by independent outside directors, takes the performance, experience, knowledge, popularity, etc. in and out of this Company of the candidates into account to resolve the appropriate candidates, and proposes the candidates to the shareholders meeting.

In addition, in order to ensure the effectiveness and efficacy of decision-making, the Board of Directors analyzes and evaluates the efficiency of meeting operations and the effectiveness and efficacy of resolutions every year, and discloses a summary of the results.

Titles/names

President and Representative Director, Co-CEO (Co-Chief Executive Officer): Kentaro Kawabe

Representative Director, Co-CEO (Co-Chief Executive Officer), Marketing & Sales CPO: Takeshi Idezawa

Director, GCPO (Group Chief Product Officer): Jungho Shin

Director, Senior Managing Corporate Officer, E-commerce CPO: Takao Ozawa

Director, Senior Managing Corporate Officer, Entertainment CPO: Jun Masuda

Director, Senior Managing Corporate Officer, GCSO (Group Chief Synergy Officer): Taku Oketani

Outside Director (Independent Director), Full-time Audit and Supervisory Committee Member: Yoshio Usumi

Outside Director (Independent Director), Audit and Supervisory Committee Member: Maiko Hasumi

Outside Director (Independent Director), Audit and Supervisory Committee Member: Tadashi Kunihiro

Outside Director (Independent Director), Audit and Supervisory Committee Member: Rehito Hatoyama

Audit and Supervisory Committee

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 final decision documents, etc., 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 division in charge of internal audit. Based on these activities, the Audit and Supervisory Committee regularly presents its opinions as an Audit and Supervisory Committee to the directors who are not Audit and Supervisory Committee members.
The Audit and Supervisory Committee is composed of four members, Yoshio Usumi, Maiko Hasumi, Tadashi Kunihiro, and Rehito Hatoyama, who are all independent outside directors, and is chaired by Yoshio Usumi.
The Company's nomination criteria for outside directors are that they must be able to fulfill their social responsibilities in accordance with the Company's Charter of Corporate Behavior, and that they must have sufficient social credibility. In addition, the independent standards set by Tokyo Stock Exchange, Inc. are used as the Company's independence standards.
Furthermore, in light of the Group's situation, Audit and Supervisory Committee members include persons with broad management experience such as management, corporate planning, finance, etc., as well as a lawyer with a high level of expertise in governance and other areas. The Audit and Supervisory Committee members and the accounting auditors hold meetings, periodically and when necessary, to collaborate on the proper execution of audits.

Nominating and Remuneration Committee

The Company establishes a Nominating and Remuneration Committee as a voluntary committee for the purposes of proposing to the Board of Directors, the nomination of Representative Director, directors and others, and deciding and proposing to the Board of Directors, the remunerations, etc. of directors (excluding those serving on the Audit and Supervisory Committee).

The Nominating and Remuneration Committee consists of six members, and is chaired by Yoshio Usumi, who is an independent outside director and a full-time member of the Audit and Supervisory Committee. The Nominating and Remuneration Committee also consists of: Rehito Hatoyama, Maiko Hasumi, and Tadashi Kunihiro, who are independent outside directors serving on the Audit and Supervisory Committee; Kentaro Kawabe, President and Representative Director, Co-CEO; and Takeshi Idezawa, Representative Director, Co-CEO. In addition, decisions are made by a majority of all Committee members, ensuring independence in the decision-making process.

More specifically, based on the Regulation for the Nominating and Remuneration Committee determined by the Board of Directors, the Nominating and Remuneration Committee makes proposals, etc. to the Board of Directors on all matters related to the agenda of the shareholders meeting on the election and dismissal of the representative director and directors. The Committee will also consider establishing and implementing the succession plan of the representative director and other matters. Furthermore, based on the Regulations of Remunerations for Directors, the Committee determines the amount of remunerations, etc. of the directors (excluding those serving on the Audit and Supervisory Committee) after careful deliberation, taking into consideration the business performance in each quarter, contributions to the business performance, and other factors. With respect to stock-based remuneration, proposals, etc., are made to the Board of Directors, based on the Committee's resolutions.

Governance Committee

The Company establishes a Governance Committee, composed of four independent outside directors, Tadashi Kunihiro, Yoshio Usumi, Maiko Hasumi, and Rehito Hatoyama and is chaired by Tadashi Kunihiro.
For transactions that involve parent companies, etc., the Governance Committee deliberates from the perspective of fairness, economic rationality, and legality, prior to the submission of proposals to the Board of Directors. In addition, for matters that are not subject to be proposed to the Board of Directors, in principle, the Governance Committee conducts a preliminary review based on the same perspective. Furthermore, by discussing important matters related to corporate governance, the supervisory function of the Board of Directors is strengthened to further improve corporate governance and protect the Company's minority shareholders. 

Scope of the delegation of tasks to the management staff

The Board of Directors makes decisions regarding the Company's management policies, management strategies, business plans, acquisition and disposal of important assets, and important organizational and personnel matters, and supervises the execution of duties by the Representative Director. Specifically, items such as high value investments and loans, and the acquisition or liquidation of high value assets are within the purview of items to be resolved by the Board of Directors. 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

The Company conducted an evaluation of the effectiveness of the Board of Directors with the aim of further improving the governance of the Company and the Group. The method and results of the evaluation, as well as issues to be addressed in the future, are described below.


<Method of evaluation>

Feedback interviews were conducted with outside directors serving on the Audit and Supervisory Committee immediately after the Board of Directors meetings (11 times in total), and interviews were also conducted at the Governance Committee and other meetings regarding the effectiveness of the Board of Directors. In addition, a questionnaire was sent to all directors at the end of the fiscal year, and all the results were analyzed and evaluated by the Board of Directors.

<Results of the evaluation and future issues to be addressed>

Based on the content of the feedback interview conducted immediately after the Board of Directors meeting, measures such as increasing the time for discussion on strategies were flexibly implemented during the term. As a result, the results of the abovementioned interviews, etc., confirmed that the agenda and time allocated for Board of Directors meetings are appropriate, and that board meeting materials are distributed and explained appropriately in advance. In addition, steady improvement was confirmed in the review of the scope of agenda items for the Board of Directors meetings, which was an issue in the previous fiscal year.

Furthermore, a questionnaire conducted with all directors indicated that the Company's Board of Directors is generally effective in all of the following evaluation items. Based on the results of these interviews and questionnaires, the Board of Directors analyzed the results and concluded that the Company's Board of Directors is effective as a whole.

On the other hand, the results of this analysis and evaluation identified the following issues as challenges: providing information to the Board of Directors to deepen discussions on strategy, further enhancing feedback from stakeholders as identified through dialogue with shareholders, and operating the Board of Directors meetings in a manner that takes into account the Company's governance characteristics.

In fiscal 2022, the Company will strive to recognize and improve the abovementioned issues, and will also continue to proactively address other issues to further enhance the effectiveness of the Board of Directors and improve the corporate value of the Group.

<Reference: Major evaluation items in the questionnaire>

Composition and operation of the Board of Directors

Management strategies and business strategies

Corporate ethics and risk management

Performance monitoring

Evaluation and remuneration of the management team

Dialogue with shareholders

Board policies and procedures in the appointment and dismissal of the senior management and the nomination of director candidates

The suitable person for director candidate is nominated by the Board of Directors. The criteria which are taken into consideration include performance, experience, knowledge, popularity, etc. in the Company or in other companies. If a director, etc. falls under the reasons for dismissal as prescribed in the internal regulations, the Board of Directors can resolve the dismissal of the director, etc. in question. A voluntary Nominating and Remuneration Committee comprised of the four independent outside directors serving on the Audit and Supervisory Committee and two internal directors, chaired by an independent outside director serving as a full-time Audit and Supervisory Committee member, will discuss and propose the nomination of director candidates and dismissal of directors, etc. to the Board of Directors. Especially in the nomination process, the Nominating and Remuneration Committee pays heed to prevent membership from gravitating towards all members having similar characteristics, in order to preserve diversity within the Board of Directors.

Nomination of directors and Audit and Supervisory Committee members

Kentaro Kawabe
Since joining the Company in 2000, Kentaro Kawabe has served with distinction for 20 years in important positions in the Company including manager of the Company's core services such as Yahoo! JAPAN News and Chief Operating Officer (COO), contributing to the growth of the Company. In addition, he has achieved the business integration with LINE Corporation, and has built a structure that enables the creation of a great future. The Company has renominated him as a director candidate so that he can lead the growth of the Company even further, continue to strengthen the governance structure of the overall Z Holdings Group including that of Yahoo Japan Corporation, and lead the rapid creation of synergies for the Z Holdings Group.

Takeshi Idezawa
Takeshi Idezawa achieved the successful rehabilitation of the management of the company formerly known as livedoor Co., Ltd., has demonstrated strong organizational control and leadership in supervising the overall management of the LINE Group, and has greatly contributed to the realization of the integration between the Company and LINE Corporation. The Company has renominated him as a director candidate so that, drawing from his expertise and experience, he can continue to strengthen the governance structure of the overall Z Holdings Group including that of LINE Corporation, and lead the rapid creation of synergies for the Z Holdings Group.

Jungho Shin
Being responsible for product strategy and overseas business for the LINE Group, Jungho Shin has assumed a leading role in the creation of innovative products, thereby driving the growth of the LINE Group. The Company has renominated him as a director candidate so that Shin, with his strong track record, can lead the product strategy of the Z Holdings Group as the Company's Group Chief Product Officer, with the goal of propelling the dramatic growth of the Z Holdings Group.

Takao Ozawa
Since joining the Company in 2012, Takao Ozawa has grown the business of the Z Holdings Group with strong leadership, such as in promoting the "e-commerce revolution." The Company has renominated him as a director candidate while he concurrently serves as the President and Representative Director, CEO of Yahoo Japan Corporation, so that he can lead the further growth of the Z Holdings Group, whose business is increasingly diversifying due to the integration between the Company and LINE Corporation, based on his expertise in the Internet business and commerce fields as well as abundant experience in corporate management and broad knowledge in creating new businesses as an entrepreneur.

Jun Masuda
Being responsible for the LINE Group's overall domestic product strategy and domestic marketing strategy in Japan, Jun Masuda has promoted efforts to improve the brand value of the LINE Group and promoted swift, innovative business development. The Company has renominated him as a director candidate, while he concurrently serves as the President and Representative Director, CPO of Z Entertainment Corporation, based on its assessment that his substantial experience will be critical in propelling the growth of the Z Holdings Group whose business is increasingly diversifying due to the integration between the Company and LINE Corporation, and improving the Group's overall brand value.

Taku Oketani
Taku Oketani has deep insight and broad knowledge in the commerce and marketing fields of SoftBank Corp., which is closely involved in the business operations of the Z Holdings Group. The Company has renominated him as a director candidate so that he can strongly lead the generation of synergies within the Z Holdings Group and play an important role in the collaborations with Group companies including SoftBank Corp.

Yoshio Usumi
Yoshio Usumi has many years of business execution experience and track record in corporate administration. He also has abundant knowledge and track record in corporate management and corporate governance as well as deep insight in the IT business. He has served as the Company's outside director (independent director) and Audit and Supervisory Committee member for three years since June 2019 (full-time Audit and Supervisory Committee member since June 2020), and has provided appropriate advice on the Company's overall management and corporate functions. The Company expects that he will continue to contribute to the Company as a full-time member of the Audit and Supervisory Committee, and contribute to the improvement of the Company's corporate governance as the Chairperson of the Audit and Supervisory Committee and the Nominating and Remuneration Committee. The Company has renominated him as an outside director candidate serving on the Audit and Supervisory Committee for these reasons.

Maiko Hasumi
Maiko Hasumi received an MBA from Stanford Graduate School of Business, and has substantial knowledge and experience in corporate management, as well as deep insight as a financial analyst, which she has accumulated from her career as a fund manager. She has served as an outside director (independent director) on the Audit and Supervisory Committee of the Company since March 2021 and has provided useful advice and supervision concerning the Company's management in the Board of Directors meetings, etc., from an investor's perspective. The Company has therefore renominated her as an outside director candidate serving on the Audit and Supervisory Committee.

Tadashi Kunihiro

As a lawyer, Tadashi Kunihiro has a broad range of insight in corporate crisis management and compliance systems. Based on his expertise, he has a track record of providing appropriate and valuable advice/recommendations at various board of directors meetings, etc., as an outside director and outside corporate auditor for many listed companies, including the Company. In his capacity as Chairperson of the Governance Committee of the Company, he has established a strong governance structure for the Company. In light of this record, the Company judges him suitable to continue performing duties as an outside director and has renominated him as an outside director candidate serving on the Audit and Supervisory Committee.

Rehito Hatoyama
Rehito Hatoyama received his MBA from Harvard Business School, and is highly experienced in corporate strategy for globalization, corporate governance and innovation in the IT and entertainment industries. He has substantial insight on business expansion and business management overseas, mainly in the content and character license businesses. In light of his track record of providing appropriate and valuable advice/recommendations from a practical viewpoint in the Company's Board of Directors Meetings, cultivated through his corporate management experience, the Company has renominated him as an outside director candidate serving on the Audit and Supervisory Committee.

Director and senior management remuneration

The Company has positioned executive remuneration as one of the key management strategies to encourage the management team to exercise their leadership. In the Board of Directors meeting held on May 17, 2022, the Company has made significant review to its executive remuneration plan to encourage bold risk-taking by the management team through executive remuneration and to enable the Company to achieve sustainable growth. As a result of the review, a new "Policy for Determining the New Remuneration, Etc., for Individual Directors" has been established subject to approval of each proposal for the revision of executive remuneration at the Company's 27th ordinary general meeting of shareholders held on June 17, 2022.

The review of the executive remuneration system, changes to the Regulations of Remunerations for Directors, etc., and the framework for the executive remuneration plan (the Remuneration Policy) have been deliberated by the Nominating and Remuneration Committee. For details, please refer to the following announcement.

<Establishment of a New Remuneration Policy and Revision of Executive Remuneration Plan>

https://www.z-holdings.co.jp/en/ir/news/auto_20220517549742/pdfFile.pdf

Director remuneration for fiscal 2021

Number Total remuneration

(millions of yen)

Breakdown of total
remuneration(millions of yen)
Base

remuneration

Bonus

(Performance-based)

Bonus

(Non-performance-based)

Restricted

stocks

(Performance-based)

Directors (excl. Audit and Supervisory Committee members) 6 874 315 224 201 133
(Of which for outside directors) (-) (-) (-) (-) (-) (-)
Directors (Audit and Supervisory Committee members) 4 95 95
(Of which for outside directors) (4) (95) (95) (-) (-) (-)
Total 10 969 410 224 201 133
(Of which for outside directors) (4) (95) (95) (-) (-) (-)

  • Directors (excluding Audit and Supervisory Committee members)
    • Number : 6
    • Total remuneration : 874
    • Base salary : 315
    • Stock options : 224
    • Bonuses : 201
    • Restricted stocks : 133
  • (Of which for outside directors)
    • Number : (-)
    • Total remuneration : (-)
    • Base salary : (-)
    • Stock options : (-)
    • Bonuses : (-)
    • Restricted stocks : (-)
  • Directors (Audit and Supervisory Committee members)
    • Number : 4
    • Total remuneration : 95
    • Base salary : 95
    • Stock options : -
    • Bonuses : -
    • Restricted stocks : -
  • (Of which for outside directors)
    • Number : (4)
    • Total remuneration : (95)
    • Base salary : (95)
    • Stock options : (-)
    • Bonuses : (-)
    • Restricted stocks : (-)
  • Total
    • Number : 10
    • Total remuneration : 969
    • Base salary : 410
    • Stock options : 224
    • Bonuses : 201
    • Restricted stocks : 133
  • (Of which for outside directors)
    • Number : (4)
    • Total remuneration : (95)
    • Base salary : (95)
    • Stock options : (-)
    • Bonuses : (-)
    • Restricted stocks : (-)

  • 1. The amount of restricted stock remuneration is the amount of restricted stock remuneration recorded in this fiscal year.
  • 2. There are no remunerations, etc. received by the outside directors from the Company's parent company or the subsidiaries of the said parent company other than those noted above in this fiscal year.
  • 3. Bonus (non-performance based) includes special bonus.

Fortifying internal control

For information on Fortifying internal control, please click here.

Policy on measures to protect minority shareholders in conducting transactions with controlling shareholder

The parent company of Z Holdings Corporation is SoftBank Group Corp., SoftBank Group Japan Corporation, SoftBank Corp., and A Holdings Corporation. 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. In addition, the Company mandates that certain transactions and actions with the parent company be discussed by the Governance Committee.

Measures to Vitalize the General Meeting of the Shareholders and Facilitate Exercise of Voting Rights

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.
In addition, the Company holds the General Meeting of the Shareholders via the Internet in order to hold constructive dialogues with shareholders and investors, as well as for shareholders who are unable to attend the General Meeting of the Shareholders on the day of the meeting or those who live far from the Company. The General Meeting of the Shareholders is also broadcast live on the Internet and archived videos are available at a later date not only for shareholders, but also for all investors, whether individual or institutional, who are considering investing in the Company, so that they can watch the meeting without having to log in.

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.

Directors' skills matrix

■The Company's criteria for selecting directors are as follows.

【For all directors】
The director candidate must be a person who recognizes that it is his or her role to fulfill social responsibility by respecting the spirit of the Charter of Corporate Behavior established by the Company and is capable of putting it into practice. In addition, the candidate must have excellent character and insight, and be healthy in mind and body.
【Executive directors】
The candidate must be familiar with the business of the Company's group and be able to contribute to the enhancement of the corporate value of the Company with strong leadership.
【Non-executive directors】
The candidate must be able to engage in the corporate management of the Company based on the individual backgrounds of each candidate.
【Outside directors】
The candidate must have sufficient social credibility.
In addition, a candidate for independent outside director shall be selected in accordance with the independence standards established by Tokyo Stock Exchange, Inc.

■Directors' skills matrix (expertise/experiences of the directors)
  • ※Please scroll horizontally for more information.
 

Kentaro Kawabe
(Age: 47)

Takeshi Idezawa
(Age: 48)

Jungho Shin
(Age: 50)

Takao Ozawa
(Age: 50)

Jun Masuda
(Age: 45)

Taku Oketani
(Age: 51)

Yoshio Usumi
(Age: 63)

Maiko Hasumi
(Age: 47)

Tadashi Kunihiro
(Age: 66)

Rehito Hatoyama
(Age: 48)

Position Director Director Director Director Director Director Outside Director Outside Director Outside Director Outside Director
Years of office 4 year 1 year 1 year 3 year 1 year 3 year 3 year 1 year 1 year 1 year
Corporate management    
Industry experience    
Global management
/ Internationality
             
Technology                  
Investment
/ Market
               
Management
/ Corporate Planning
/ Treasury
               
Risk Management
/ Law
                 
ESG              

  • Age: as of June 2, 2022 the notice of the 27th Ordinary General Meeting of the Shareholders was sent
  • Years in office: as of the close of the 27th Ordinary General Meeting of the Shareholders
■Details of expertise/experience

Corporate management: Experience in corporate management
Experience in industry: Expertise in IT industry and digital transformation (e.g. advertising, media, e-commerce, fintech)
Global management/internationality: Experience in overseas business development, etc.
Technology: Experience in technology strategy/R&D in IT industry
Investment/market: Expertise such as knowledge of financial markets (analyst)
Administration/corporate planning/finance: Expertise in corporate operations (e.g. management accounting, corporate planning, financial accounting, human resources)
Risk management/law: Expertise in risk management/law
ESG: Expertise in ESG represented by environment, society (human capital development, social contribution), governance (corporate governance, security, privacy)