Corporate Governance System

Chart of corporate governance system

Governance system

Board of Directors

SoftBank Group Corp. (“SBG”)'s Board of Directors consists of 12 directors, including three external directors. The Chairman and CEO serves as the chairman of the Board. SBG ensures adequate independence of the three external directors, who bring a wealth of knowledge and experience to the Board related to business management and other matters. Each of the external 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 at regular Board meetings and at extraordinary meetings that are convened when necessary:

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

To elect directors, the Board of Directors selects candidates in accordance with SBG's Articles of Incorporation and the Board of Directors Regulations, and these candidates are proposed at the General Meeting of Shareholders.

SBG and each of its non-executive directors Yun Ma, Yasir O. Al-Rumayyan, Tadashi Yanai, Mark Schwartz and Masami Iijima 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.

SBG stipulates the maximum number of directors at 15 in its Articles of Incorporation. The Board of Directors elects director candidates who are considered most suitable for the position, regardless of their nationality, ethnicity, gender, or age. There are 12 directors serving, all of whom have a wealth of knowledge and experience regarding business management and a global perspective. Three of the 12 directors are independent external directors, and seven are non-Japanese, thereby ensuring constructive and lively discussion at the Board of Directors meetings from diverse perspectives.

Investment Committee

The Investment Committee is a decision-making body that has been delegated decision-making authority by the Board of Directors. The committee has been delegated authority on investments, financing, and related matters and is comprised of directors elected by the Board.

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

The committee requires unanimous agreement from all members to make a decision. If one or more members is against a proposal, it is brought to the Board of Directors. All final decisions results of the committee are reported to the Board of Directors.

Audit & Supervisory Board members and the Audit & Supervisory Board

The Audit & Supervisory Board consists of four members, three of whom are external members. Two of the members are full-time members and two are part-time members. Among the four Audit & Supervisory Board members, one member has extensive experience working as the manager of SBG's Legal Department and its Chief Compliance Officer, and therefore has a deep understanding of the Company's management and operations. SBG ensures adequate independence of the three external Audit & Supervisory Board members, who possess a wealth of knowledge and experience in their professional roles as a lawyer, certified public accountants, or certified tax accountants.

The Audit & Supervisory Board members, including the external 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 director. Moreover, the Audit & Supervisory Board members conduct regular hearings with directors, employees, Audit & Supervisory Board members, and other personnel of major subsidiaries to audit the execution of duties by the directors of SBG.

The Audit & Supervisory Board meets once a month, in principle. At the meeting, the Audit & Supervisory Board members decide on the audit policy, plan, and other matters, receive quarterly briefings and reports related to the earnings results from the independent auditor, and exchange information and opinions with the independent auditor as necessary. The Audit & Supervisory Board members also receive briefings on individual matters from the directors as necessary.

The Audit & Supervisory Board Office is established to support the duties of all the Audit & Supervisory Board members and 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.

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.

Internal audits

The Internal Audit Department 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. The results of these internal audits are reported to the CEO, and briefings are also given to the Audit & Supervisory Board members.

Support system for external directors and/or external Audit & Supervisory Board members

SBG seeks to ensure that all officers including the external 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, including the external 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.

Cooperation between the Audit & Supervisory Board members, independent auditor, and the Internal Audit Department

Cooperation between the Audit & Supervisory Board members and the independent auditor

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.

Cooperation between the Audit & Supervisory Board members and the Internal Audit Department

The Audit & Supervisory Board members receive briefings from the Internal Audit Department, 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 Department also cooperate as necessary by exchanging information and opinions, among other measures.

Cooperation between the independent auditor and the Internal Audit Department

The independent auditor receives briefings from the Internal Audit Department on the audit plan and, when necessary, on the results of internal audits and other matters. The Internal Audit Department 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.

Reasons for adoption of current corporate governance system

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 directors carry out lively discussions at each Board of Directors meetings. Moreover, since three of the 12 directors are external directors, management benefits from diverse perspectives, and the function for mutual monitoring between directors are enhanced.

The Audit & Supervisory Board members conduct strict audits of directors' execution of duties from their specialist perspectives as a certified public accountant, a lawyer, or other professional. Moreover, since three of the four Audit & Supervisory Board members, a majority, are external 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.

Audit by the independent auditor

(1) Status of audit by the independent auditor

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 2017 and the number of assistants for the audit duties for fiscal year are as follows:

(a) Names of certified public accountants who executed audit duties

Designated Limited Liability Partner and Engagement Partners:

Masayuki Nakagawa, Masayuki Yamada, Ryo Sakai, Ayato Hirano

(b) Composition of assistants who supported audit duties

Certified public accountants: 24, Others: 35

(2) Remuneration for audits and other duties

(a) Remuneration for auditing certified public accountants and other assistants

  • Remuneration for audit certification duties

    SBG: 541 million yen
    Consolidated subsidiaries: 1,191 million yen

  • Remuneration for non-audit duties

    SBG: 193 million yen
    Consolidated subsidiaries: 86 million yen

(b) Other material remuneration

Certain SBG subsidiaries pay remuneration for audit certification duties and non-audit duties to members of Deloitte Touche Tohmatsu Limited, which belongs to the same network as SBG's auditing certified public accountants and assistants. Sprint Corporation, Brightstar Corp. and other subsidiaries paid 2,904 million yen as remuneration for audit certification duties. Arm Limited, Softbank Corp., and other subsidiaries paid 993 million yen as remuneration for non-audit duties.

(c) Non-audit duties provided for SBG by the auditing certified public accountants and assistants

The non-audit duties for which SBG pays remuneration to the auditing certified public accountants and assistants mainly consist of preparation of comfort letters when issuing corporate bonds.

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