Initiatives on Governance

The Group strives to enhance and strengthen its corporate governance to realize transparent, fair, agile and definitive decision-making to live up to the trust of its shareholders and other stakeholders as well as to achieve sustainable growth and enhancement of its corporate value over the medium- to long-term. Please refer here for the details.

Corporate Governance System

Function of Each Organization

(1) General Meeting of Shareholders

The Company recognizes the General Meeting of Shareholders as the highest decision-making body of the Company, the place for shareholders to receive and exchange information, and the place for exercising of voting rights.

(2) Board of Directors

In addition to regular monthly meetings, extraordinary meetings of the Board of Directors are held flexibly when necessary to execute its operation and mutually supervise the directors’ performance of their duties. Also, the outside directors are responsible for monitoring management from their objective standpoints by utilizing their abundant management experiences and broad expertise.
The agendas at the Board of Directors Meetings would be management strategies including the Medium-term Plan, governance, organizational personnel, internal audit & compliance, financial performance and report on the business progresses and forecasts.

(3) Audit and Supervisory Committee

Audit and Supervisory Committee meets once a month after the regular Board of Directors meetings, and attends meetings of the Board of Directors and other important meetings to express opinions to enhance the effectiveness of Corporate Governance.

(4) Management Committee

Management Committee, which consists of President Executive Officer, directors and corporate officers, etc. appointed by President Executive Officer, meets weekly. Through these meetings, the committee aims to check day-to-day executions of business operations, expedite decision-making, and enhance its corporate value.

(5) Independent (Accounting) Auditors

The Company has entered into an audit contract with Ernst & Young ShinNihon LLC and has been audited appropriately as necessary in accordance with the Financial Instruments and Exchange Act and the Companies Act.

Board of Directors and Audit and Supervisory Committee

1. Overview of Board of Directors and Audit and Supervisory Committee

2. Skill Matrix of Outside Directors

Please refer to the “Board of Directors” page for information on each director composed of the Board of Directors.

Determination Policy for Remuneration Amounts for the Company’s directors

1. Remuneration Amount for the Company’s Directors

The maximum amount of remuneration, etc. for the Company’s directors as resolved at the 21st Annual General Meeting of Shareholders held on September 29, 2016, shall be not more than 500 million yen per year (of which 50 million yen for outside directors, excluding the employees’ salaries.) Apart from this amount of remuneration, the amount of remuneration for stock acquisition rights allocated to directors (excluding directors of Audit and Supervisory Committee members, and outside directors) as stock options for stock-linked compensation shall be not more than 250 million yen per year, and the amount of remuneration for granting restricted stock allocated to directors shall be not more than 100 million yen per fiscal year in effect.
The maximum amount of remuneration for the directors (Audit and Supervisory Committee members) as resolved at the 21st Annual General Meeting of Shareholders held on September 29, 2016, shall be not more than 100 million yen per year.

2. Calculation methods and Determination Policy of Remuneration

The Company resolved its determination policy for the details of each director’s (excluding Audit and Supervisory Committee members) remuneration, etc. at the Board of Directors Meeting based on the Company’s past operation of remuneration, etc. The amounts and details of the directors’ who are Audit and Supervisory Committee members‘ remuneration shall be determined by the Audit and Supervisory Committee through consultation, within the limits of the total amount resolved at the General Meeting of Shareholders. The following is an overview of the Company’s Remuneration Regulations regarding the amount of each director’s remuneration, etc.

(1) Significant Matters Regarding the Determination of Details of Remuneration, etc. for Each Director

The basic determination policy of the remuneration, etc. for each director is to set the ratio of stock-based compensation relatively higher to increase the linkage between directors’ compensation and the Company’s stock price, and to share with shareholders not only the benefits of a rise in the stock price but also the risks of a decline in the stock price, thereby encouraging them to contribute to enhancement of business performance and its corporate value over the short-, medium-, and long-term.

(2) Matters Regarding the Determination of Remuneration, etc. for Each Director

①Base Remuneration (Excluding Performance-linked Compensation, etc., and Non-monetary Compensation, etc.)
The following is a determination policy of the Company’s base remuneration excluding performance-linked compensation and non-monetary compensation, etc. (hereinafter referred to as “base remuneration”).

1. The total amount of base remuneration shall be resolved at the General Meeting of Shareholders and decided within the limits of the settled amount.
2. The base remuneration of the Company’s directors shall be monetary compensation, which amounts shall be decided based on the compositions of the ranks and the amounts determined and within the limits of the compensation amounts.

②Performance-linked compensation, etc.

The Company does not grant performance-linked compensation, etc.

③Non-monetary compensation, etc.

The following is a determination policy of the Company’s non-monetary compensation, etc. (hereinafter referred to as “stock compensation”).

1. Stock compensation is composed of stock options (hereinafter referred to as “SO”) with the same value as the monetary claim of remuneration-type stock options (stock acquisition rights), in which the exercise price per share is set at 1 yen, and restricted stock (hereinafter referred to as “RS”) with the same value as the monetary claim of restricted stock. Directors receive the stock acquisition rights and restricted stock by compensating with the monetary claim of SO or RO. The gross amount of each SO and RS shall be resolved at the General Meeting of Shareholders and decided within the limits of the compensation amount and its composition established for each rank of directors determined at the Company’s Board of Directors meeting.
2. The remuneration amount of SO for each director shall be calculated by multiplying the fair value of 1 stock acquisition right calculated based on the stock price, the exercise price on the allotment date, and other conditions by the total number of allotted stock acquisition rights.
3. The remuneration amount of RS for each director shall be calculated by multiplying the monetary claim for 1 stock that is not too advantageous to directors who receive RS, resolved by the Company’s Board of Directors, by the number of allotted RS shares. The monetary claim for 1 stock is to be based on the closing price of the Company’s common stock on the Tokyo Stock Exchange on the previous business day of the resolution of RS grants by the Company’s Board of Directors (apply the last closing price if not decided on the market on the same day).
4. RS owes transfer restrictions for the fixed period of 1 to 5 years decided by the Company’s Board of Directors, and directors shall not transfer, set up a guarantee, or execute other dispositions of RS during the period.

(3) Determination Policy of the Ratio of Base Remuneration and Non-monetary Remuneration, etc.

①Directors excluding Outside Directors

The ratio of the base remuneration and stock compensation shall be largely 60% for the base remuneration and 40% for the stock compensation (of which, 30% for SO and 10% RS)

②Outside Directors

Only base remuneration shall be provided.

(4) Determination Policy for the Timing to Grant Remunerations, etc. or the Terms and Condition

①Base Remuneration

The compensation amount and the number of grant stocks for each director shall be resolved at the Company’s Board of Directors right after the resolution of the election of directors at the General Meeting of Shareholders, and the remuneration amount divided by the annual Remuneration by 12 shall be paid monthly from the next month of their appointment or reappointment.

②Stock Compensation

The compensation amount and number of grant stocks for each director shall be resolved at the Company’s Board of Directors right after the resolution of the election of directors at the General Meeting of Shareholders.

(5) When the Determination of Remuneration, etc., for Each Director is Entrusted to a Third Party (including re-entrusting to the Representative Director)

①Name or position entrusted to determine remuneration, etc.: President Executive Officer

②Rights to be entrusted: Regarding the decision of remuneration, etc., for each director, the President Executive Officer shall draft and submit a proposal, within the limits of the total amount of remuneration, etc. resolved at the General Meeting of Shareholders, to the Nomination and Remuneration Advisory Committee. Suppose it is resolved by the Company’s Board of Directors to entrust the determination of remuneration to the President Executive Officer with the proposal based on the advice given by the Nomination and Remuneration Advisory Committee. In that case, the President Executive Officer shall decide the remuneration, etc., for each director.

③If measures for the exercise of authority by the person in charge are to be taken, the contents shall be as follows.

1. President Executive Officer shall draft and submit a proposal of remuneration, etc., for each director within the limits of the total remuneration, etc. resolved at the General Meeting of Shareholders, to the Nomination and Remuneration Advisory Committee, and shall receive the report from the Remuneration Advisory Committee.
2. The Nomination and Remuneration Advisory Committee shall comprise three or more committee members, of which outside directors shall take the majority. The chairperson of the Committee shall be selected from those outside directors by the resolution of the Nomination and Remuneration Advisory Committee.

(6) Determination Method of Remuneration, etc. for Each Director

President Executive Officer shall draft and submit a remuneration proposal for each director to the Nomination and Remuneration Advisory Committee within the limits of the total remuneration, etc. resolved at the General Meeting of Shareholders, utilizing the external data, etc. President Executive Officer shall decide the remunerations, etc., based on the report received from the Nomination and Remuneration Advisory Committee.

The Group has determined its purpose as “Designing ‘New Context’ for a sustainable society with technology.”
Based on the purpose, the Group has established the guidelines appropriate for sensible and reasonable business persons to execute business operations. Please refer to these pages for details.

Promotion of Compliance Program

The executive officers and employees of the Group are required to act with integrity based on the ethics and values appropriate for business persons as members of the society.
Based on the recognition, the Group has established “Compliance Program” as a specific code of conduct applicable to the executive officers and employees of the Group with the code of conduct to realize a fair and proper management and harmonize with civil society through strict adherence to social norms, ethics and regulations.
The Company classifies business segments and others (hereafter referred to as “business classification”) as an operating holding company for its thorough enforcement, and the Head of Corporate shall oversee the initiatives on Compliance in a cross-segmental manner. Then, the persons in charge in Corporate Division shall provide education and awareness building to the executive officers and employees of the Group.
Based on the business classification, the Board of Directors shall oversee the Group and the Corporate Division shall supervise and grasp overall compliance-related situations in the Group. Besides, both the directors of the Board of Directors and the Corporate Division periodically report these activities to the Board of Directors and Audit and Supervisory Committee.

Responses in Case of Compliance Violations

In addition to legally regulated matters when reporting of suspected as compliance violations, the Group has established a system whereby any directors, officers, or employees of the Group, or any persons who have been engaged in their duties up to one year prior to the reporting act can directly report to the law firms served as internal or external contact points for the matters that may have a material impact on the Group and the status of compliance. Besides, the Group strives to ensure that the report shall be kept as confidential and protected, and the reporter shall be protected and free from any disadvantageous treatment.

Risk Management

The Group has established Risk Management Committee and Risk Management Office, its management office, with the purpose of enhancement of its risk management system. Strengthening the overall risk management system, the Group has established and implemented the cycle of assumption of potential risks, assessment of risks, development of risk management flows and monitoring. (executed twice or more per year)
Risk Management Committee mutually collaborates with Sustainability Committee and the Company has established a system to reflect the results deliberated at Management Committee and Board of Directors on formulation of management strategies, risk management and its assessment.
The President Executive Officer supervises both committees, chaired by the Head of Corporate Division with the members who are appropriately selected for accelerating Group-wide initiatives. With the participation of the experts of outside directors in a suitable and timely manner, the Committee holds deliberations benefited from global and external expertise, and cutting-edge information.
For the system, please refer to Sustainability Basic “Promotion Policy”.

The Group regards the information and the information systems such as computers and networks possessed to execute business operations as its information assets and addresses the initiatives for information security to handle them safely.
For the details, please refer to “Basic Information Security Policy” and “Certifications.”

About Security

The Group largely classifies Security into two aspects: Information Security and System Security and the potential risks and the countermeasures for each aspect are as follows:

１. Information security

(1) Information Security Promotion System

The President Executive Officer, and directors in charge of information security shall appoint a chief information security officer (CISO), who serves as a central information hub for the Group-wide security management. Since the Group has different business models in each segment with varying risks of security to be addressed, each group company implements the required security measures and has received external certifications. In addition, the CISO conducts reviews for multifaceted checks of the security system. And the Group has established the system in CISO serve a central role in promptly collaborating with the company’s management and appropriately responding to major security incidents when they occur in the Group. To promote information security in daily business operations, the Information Security Promotion Committee, composed of Information Security Promotion Committee members who are selected from each segment, plays a central role based on the framework of ISMS（JIS Q 27001: ISO/IEC 27001,）an information security certification standard. The committee also conducts awareness-building and educational activities based on the information security threat trends, thereby enabling the maintenance of information security in an ever-changing threat environment. Besides, with the establishment of the Information Security Office in April 2022 as a specialized structure of information security, the Group organizes the system for planning and executing the responses to the overall information-related challenges of the Group.

(2) Personal Information Management

The Group has established a system to ensure safe personal information management with certification of Privacy Mark (JIS Q 15001) in each company.
The Group posts the personal information protection policies of each Group company on its website and discloses the response policies regarding the purposes of use of personal information, provision of personal information to third parties, outsourcing to handle personal information, complaints and consultations about personal information, and various safety control measures.

(3) Awareness building for the employees

The company conducts employee training about information security based on the operation of ISMS (ISO27001) for all employees of the Group as needed.

2. System Security

(1) About the Internal IT environment

Regarding the IT environment used for business operations, the company has been strengthening the countermeasures against malware or ransomware, reflecting the recent trends of cyberattacks. The company has installed endpoint security products powered by AI engines and expedites organizing the security operation center where unknown malware can be detected and eliminated. For storing critical information, the company regularly takes several generation backups against potential infection by ransomware and implements countermeasures to prevent the information required for business operations from deletion or disappearance.

(2) Payment System

The payment business of the Group is designated by the government as a designated company with critical infrastructure. Aiming for non-disruptive system operations (excluding downtime for maintenance,) the Group implements a redundant database configuration with real-time replication between multiple geographically distant center areas, a disaster recovery system, and thorough BCP measures by decentralization of data center operating bases and expansion of the system.
These initiatives include viewpoints of sustainability as well as risk management to continuously provide a safe and secured system with non-storage of credit card information at EC merchants when using the payment services by building a highly secured environment and management system. Information management in the Group complies with PCI-DSS, the credit card industry’s security standard. Besides, the Group has a dedicated operations room for handling credit card information and executes strict security management.
To ensure that all executive directors and employees are aware of the importance and that information security is continuously maintained, the Group regularly provides training on information security to all employees as required by their duties.

(3) About the Crypto asset exchange system

The Group implements and operates the safety measures for crypto asset management based on the checklist for crypto asset safety management formulated by Japan Virtual and Crypto Assets Exchange Association. As for the risk management of the system handling crypto assets, the company discloses the system risks management policy on the subsidiary’s website, which the company is dealing with crypto assets and executing the business operations based on the policy.
Regarding crypto assets management as a crypto asset exchange dealer, all assets are managed in a cold wallet. Other security management systems related to crypto asset management comply with the security standards for crypto asset management, and the Group has established its in-house operations upon risk assessment of crypto asset management system.