Corporate Governance System

SoftBank Group Corp. (“SBG”)'s Board of Directors consists of 9 Board Directors, including five External Board Directors. The Representative Director, Corporate Officer, Chairman & CEO serves as the chairman of the Board. The Board's purpose is to make important decisions on execution of duties and oversee Board Directors' execution of duties. SBG ensures adequate independence of each of the External Board Directors, who bring a wealth of knowledge and experience to the Board related to business management and other matters. Each of the External Board Directors participates actively in the discussions at the Board meetings and SBG makes management judgments and decisions based on these discussions.

Agenda items for discussion at the Board of Directors meetings are set forth in the Board of Directors Regulations. The Board discusses the following:

Furthermore, Special Directors are put in place in accordance with Paragraph 1, Article 373 of the Companies Act, and matters related to “disposal and acceptance of important assets” and “borrowing in a significant amount” are resolved by the Board of Special Directors meeting for the purpose of prompt decision-making.

Authority to decide matters other than these agenda items discussed by the Board of Directors is delegated to committees, Board Directors, Heads, and department managers to enable speed and flexibility in corporate activities.

To elect Board Directors, the Board of Directors selects candidates in accordance with SBG's Articles of Incorporation and the Board of Directors Regulations, based on deliberations by the Nominating & Compensation Committee, which is a voluntary advisory body to the Board of Directors, and these candidates are proposed at the General Meeting of Shareholders.

SBG and each of its non-executive Board Directors Masami Iijima, Yutaka Matsuo, Keiko Erikawa, Kenneth A. Siegel and David Chao have concluded a contract to limit liability for damage stipulated in Paragraph 1, Article 423 of the Companies Act in accordance with Paragraph 1, Article 427 of the Companies Act. The amount of limit of liability for damage is stipulated in the relevant contract as ¥10 million or the minimum amount of limit of liability that the relevant laws and regulations stipulate, whichever is higher.

The contents of the matters deliberated by the Board Directors in fiscal 2022 were as follows.

SBG conducts evaluations of the effectiveness of the Board every year. Most recently, from December 2022 to April 2023, SBG had an independent organization conduct a questionnaire and interviews with its Representative Director, Corporate Officer, Chairman & CEO, and all of the Board Directors and External Board Directors and Audit & Supervisory Board Members from the perspective of the composition, operation, and support systems of the Board of Directors, and conducted an evaluation of the effectiveness of the Board based on the results of the questionnaire and interviews.

As a result of the evaluation, it was confirmed that, among the issues pointed out in the previous year’s evaluation, the functions of the Nominating & Compensation Committee, in particular, have been strengthened by organizing the roles of the Committee and the contents of its annual activities.

Also, SBG was positively evaluated for its speedy and bold decision-making regarding risk management, with the supervision of the Board of Directors, in response to the changes in the management environment that SBG faced during this fiscal year.

Relationships of trust and sound checks and balances were maintained between the Representative Director, Corporate Officer, Chairman & CEO and the Board of Directors to underpin such effectiveness of the Board. The highly diverse Board of Directors engages in free and unfettered discussions, and the evaluation confirmed the importance of maintaining this Board of Directors culture.

The results of the evaluation were reported at the Board of Directors meeting held in April 2023, and the Board has confirmed that it will make ongoing operational improvements in order to further improve the effectiveness of the Board.

SBG believes it is important for Board Directors and Audit & Supervisory Board members who participate in the Board of Directors to have a wide range of viewpoints and experience, as well as a high level of expertise, to ensure the Board maintains diversity and engages in active discussions and decision-making. As of June 21, 2023, the skill matrix (skill set desired by SBG) of the Board Directors and Audit & Supervisory Board members was as follows.

The Nominating & Compensation Committee, which is a voluntary advisory body to the Board of Directors, was established to deliberate regarding matters related to nominations and compensation and to report the results of the deliberation to the Board of Directors and other appropriate approval organizations.

The Nominating & Compensation Committee members are elected by the Board of Directors from among Board Directors, and a majority of the Committee members are Independent External Board Directors, thereby enhancing independence and objectivity.

The Committee currently comprises three Board Directors Masami Iijima (Chairman/Independent External Board Director), Yutaka Matsuo (Independent External Board Director), and Masayoshi Son (Representative Director, Corporate Officer, Chairman & CEO).

The agenda items for discussion in the Nominating & Compensation Committee are set forth in the Nominating & Compensation Committee Regulations, and the Committee deliberates regarding (i) appointment and dismissal standards and proposals for candidates for Board Directors and Important Officers and Employees as defined by the Nominating & Compensation Committee, (ii) compensation policy and individual compensation proposals for Board Directors and Important Officers and Employees as defined by the Nominating & Compensation Committee, and (iii) other matters deemed necessary by the Nominating & Compensation Committee. It also conducts discussions on successors on an ongoing basis.

Meetings of the Nominating & Compensation Committee are comprised of regular meetings and special meetings. In principle, regular meetings are held in April and special meetings are held as necessary. During this fiscal year, the Nominating & Compensation Committee met a total of three times, and each meeting was attended by all Committee members.

The Investment Committee has the purpose of making decisions on matters for which it has been delegated authority by the Board of Directors, in order to carry out corporate activities flexibly. The Committee comprises four Board Directors or corporate officers elected by the Board (Masayoshi Son, Yoshimitsu Goto, Kazuko Kimiwada, and Tim Mackey).

The agenda items for discussion by the Investment Committee are set forth in the Regulations of the Investment Committee. The committee resolves the following matters:

Resolutions of the Committee are only approved by majority agreement. If a proposal is rejected, it is brought to the Board of Directors. All resolutions of the committee are reported to the Board of Directors.

The Brand Committee is a committee that has been delegated authority by the Board of Directors to make decisions on and properly manage matters related to the SoftBank brand. The Committee comprises five members including the chairman (Board Director, Corporate Officer, Senior Vice President Yoshimitsu Goto), who has been selected by the Board of Directors, and four members (Corporate Officer, Senior Vice President Kazuko Kimiwada, the head of CLO Office Natsuko Oga, the head of the Corporate Communications Office Takeaki Nukii, and the head of the General Administration Department Tatsuya Iida), who have been appointed by the chairman.

The agenda items for discussion at the Brand Committee are set forth in the Regulations of the Brand Committee. The Committee resolves the following:

Resolutions of the Committee are only approved by unanimous agreement from all members. All decisions made by the Committee are reported to the Board of Directors.

The Group Risk and Compliance Committee was established by the Board of Directors for the purpose of supervising the risk management and compliance program of the Group, and continuously discussing their material issues, promotion policies, and the like. The Committee comprises three members including the chairperson (Corporate Officer, Chief Legal Officer (CLO)Tim Mackey), who has been appointed as Group Compliance Officer (GCO) by the Board of Directors, and two members (Board Director, Corporate Officer, Senior Vice President Yoshimitsu Goto, and Corporate Officer, Senior Vice President Kazuko Kimiwada).

The matters to be discussed by the Group Risk and Compliance Committee are set forth in the Group Risk and Compliance Committee Operation Regulations. The Committee discusses matters related to the Group’s risk management and compliance activities: (i) overall policies such as basic policy and activity themes, (ii) policies, systems and status of promotion of individual activities related to material issues, and (iii) any other matter deemed necessary by the chairperson or a member.

The Group Risk and Compliance Committee’s decisions are only approved by majority agreement. The Committee reports to the Board of Directors periodically (at least once a year) on the matters to be discussed by the Committee, the results of the discussions, and the like, in accordance with the provisions of the Board of Directors Regulations.

The Sustainability Committee was established by the Board of Directors for the purpose of continuously discussing sustainability-related material issues, promotion policies, and the like of the Group. The Committee comprises four members including the chairperson (the head of the Investor Relations Department and the Sustainability Department, Yotaro Agari), who has been appointed as Chief Sustainability Officer by the Board of Directors, and three members (Board Director, Corporate Officer, Senior Vice President and CFO & CISO^*, Yoshimitsu Goto, Corporate Officer, Senior Vice President Kazuko Kimiwada and Corporate Officer and CLO & GCO Tim Mackey).

The matters to be discussed by the Sustainability Committee are set forth in the Sustainability Committee Operation Regulations. The Committee discusses: (i) overall policies such as the sustainability vision, basic policy, and activity themes, (ii) material issues, target setting, and policies of individual activities such as information disclosure policy, (iii) promotion systems for and operation policy of the sustainability activities, and (iv) any other matter deemed necessary by the chairperson or a member in connection with the items above.

The Sustainability Committee reports to the Board of Directors as necessary on the matters to be discussed by the Committee, the results of the discussions, and the like, in accordance with the provisions of the Board of Directors Regulations.

The Audit & Supervisory Board Members attend the Board of Directors meetings, allowing them to monitor and verify the decision-making of the Board and fulfillment of the Board's obligation to supervise the execution of duties by each Board Director. Moreover, the Audit & Supervisory Board Members receive regular reports from Board Directors, employees, Audit & Supervisory Board Members, and other personnel of major subsidiaries and conduct hearings, as necessary, to audit the execution of duties by the Board Directors of SBG.

The Audit & Supervisory Board has been established to receive reports on, deliberate and resolve important matters related to audits. The Audit & Supervisory Board consists of four External Audit & Supervisory Board Members (two full-time members and two part-time members), and is chaired by Maurice Atsushi Toyama, who has served as full-time Audit & Supervisory Board Member since June 2015. SBG ensures adequate independence of each of the External Audit & Supervisory Board Members, who possess a wealth of knowledge and experience in their professional roles as a lawyer accountants, certified tax accountants public accountant,or Representative Executive Officer and a risk management manager at financial institutions.

The Audit & Supervisory Board meets once a month, in principle. At these meetings, in addition to formulating the audit policy and plan, details of various internal and external meetings attended only by full-time members are reported to part-time members. The Audit & Supervisory Board also explains details of the audit plan for each fiscal year, interim audit status, and audit results to the Board of Directors.

Furthermore, as described in “2. Audit by the Independent Auditor, (1) Status of audit by the Independent Auditor, iv. Policy for selection of audit corporation and evaluation of audit corporation by the Audit & Supervisory Board,” the Audit & Supervisory Board determines whether or not the reappointment of the Independent Auditor is appropriate, each term.

The Audit & Supervisory Board Office is established to support the duties of all the Audit & Supervisory Board Members and the office comprises four dedicated personnel who act under the directions of the Audit & Supervisory Board Members to gather information, investigate financial statements, requests for approval, treasury stock and matters related to the General Meeting of Shareholders, among other matters, and give other assistance.

SBG and each of its Audit & Supervisory Board Members have concluded a contract to limit liability for damage stipulated in Paragraph 1, Article 423 of the Companies Act in accordance with Paragraph 1, Article 427 of the Companies Act. The amount of limit of liability for damage is stipulated in the relevant contract as ¥10 million or the minimum amount of limit of liability that the relevant laws and regulations stipulate, whichever is higher.

The Internal Audit Office, which comprises seven staff members, conducts internal audits of the Company's internal departments and subsidiaries to check that duties are carried out legally and correctly based on laws and regulations, the Articles of Incorporation, and internal regulations, while maintaining its independence within the Company. The results of these internal audits are reported to the CEO, and briefings are also given to the Board of Directors and the Audit & Supervisory Board.

SBG seeks to ensure that all officers including the External Board Directors and External Audit & Supervisory Board Members can participate fully in the Board of Directors meetings having fully grasped the specific details of the agenda for discussion. The secretariat to the Board of Directors therefore provides them with materials for the Board of Directors meeting beforehand, including supplemental briefings and other information as required.

The Audit & Supervisory Board Office has been established to support the duties of all the Audit & Supervisory Board Members. The office comprises dedicated personnel who act under the directions of the Audit & Supervisory Board Members to gather information, investigate matters, and give other assistance.

The Audit & Supervisory Board Members receive regular briefings from the Independent Auditor (Deloitte Touche Tohmatsu LLC) on the audit plan, main items to be audited, the audit results and other matters. The Audit & Supervisory Board Members and the Independent Auditor also cooperate as necessary by exchanging information and opinions, among other measures.

The Audit & Supervisory Board Members receive regular briefings from the Internal Audit Office, which is responsible for SBG's internal audits. The briefings include the audit plan and the results of internal audits performed on each department of SBG and its major subsidiaries. The Audit & Supervisory Board Members and the Internal Audit Office also cooperate as necessary by exchanging information and opinions, among other measures.

The Independent Auditor receives briefings from the Internal Audit Office on the audit plan and, when necessary, on the results of internal audits and other matters. The Internal Audit Office receives regular briefings from the Independent Auditor regarding audit results and other matters. Moreover, both parties cooperate with each other as necessary by exchanging information and opinions, among other measures.

SBG adopts the company with Audit & Supervisory Board system. As explained in “Governance system,” its corporate governance system is built around the Board of Directors, the Audit & Supervisory Board Members, and the Audit & Supervisory Board.

The Board Directors carry out lively discussions at each Board of Directors meetings. Moreover, since five of the nine Board Directors are External Board Directors (four of whom are Independent External Board Directors), management benefits from diverse perspectives, and the function for mutual monitoring between Board Directors are enhanced.

The Audit & Supervisory Board Members conduct strict audits of Board Directors' execution of duties from their specialist perspectives as a certified public accountant, a lawyer, or other professional. Moreover, since all of the four Audit & Supervisory Board Members are External Audit & Supervisory Board Members (three of whom are Independent External Audit & Supervisory Board Members), SBG's audit function is enhanced by ensuring more independent perspectives.

The current system is thus selected because SBG judges that it can ensure effective corporate governance.

SBG concluded an independent audit agreement with Deloitte Touche Tohmatsu LLC based on the Financial Instruments and Exchange Act. The names of the certified public accountants who executed audit duties in fiscal 2022, the number of assistants for the audit duties, the policy for selection of audit corporation and evaluation of audit corporation by the Audit & Supervisory Board for fiscal year are as follows:

Designated Limited Liability Partner and Engagement Partners:
Nozomu Kunimoto, Ayato Hirano, Yusuke Masuda

17 years

Certified public accountants: 33, Others: 51

The Audit & Supervisory Board sets criteria for appropriately selecting an Independent Auditor and appropriately evaluating the Independent Auditor in the Audit & Supervisory Board Members Audit Regulations. In accordance with such criteria, the Audit & Supervisory Board takes into account the system to ensure the proper execution of duties by the Independent Auditor, the independency required by the Independent Auditor, and its expertise including the possession of worldwide network resources, and determines whether the reappointment of the Independent Auditor is appropriate each year. The Audit & Supervisory Board has determined that reappointment was appropriate for this fiscal year. In the event that the Audit & Supervisory Board determines that reappointment is inappropriate, it considers other candidates for Independent Auditor in accordance with such criteria, upon taking into account factors such as audits at other companies.

The Audit & Supervisory Board has resolved, as its decision-making policy of dismissal or not reappointing of the Independent Auditor, that the Independent Auditor may be dismissed by the Audit & Supervisory Board with unanimity of Audit & Supervisory Board Members when the Independent Auditor corresponds to any of Paragraph 1, Article 340 of the Companies Act, and that, other than those cases above, the Audit & Supervisory Board shall submit a proposal on dismissal or not reappointing of the Independent Auditor to the Annual General Meeting of Shareholders when it is acknowledged that the execution of appropriate audit is difficult due to the occurrence of an event which impairs the qualification or independency of the Independent Auditor.

The non-audit duties for SBG consist of the preparation of comfort letters when issuing corporate bonds. The non-audit duties for the consolidated subsidiaries of SBG mainly consist of business strategy formulation support operations.

The non-audit duties for SBG consist of advisory services for taxation. The non-audit duties for the consolidated subsidiaries of SBG mainly consist of support services related to the acquisition of certifications and qualifications.

Not applicable.

The Audit & Supervisory Board, based on the “Practical Guidelines for Cooperation with Accounting Auditors“ published by the Japan Audit & Supervisory Board Members Association, reviewed and examined the plan details of the audit conducted by the Independent Auditor, the performance status of accounting audit duties, and the basis for calculating compensation estimates, and from the results, has given consent prescribed in Paragraph 1, Article 399 of the Companies Act for the compensation paid to the Independent Auditor.