DENA CO., LTD. DeNA Co., Ltd.
Corporate Governance Report
The following is an unofficial English translation of the Japanese original text of the Corporate Governance Report of DeNA Co., Ltd., which has been submitted to the Tokyo Stock Exchange. DeNA Co., Ltd. provides this translation for reference and convenience purposes only and without any warranty as to its accuracy or otherwise. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail.Last Update: June 30, 2016
DeNA Co., Ltd.
Isao Moriyasu, President & CEO Contact: IR Dept., Planning Div., Corporate Planning Unit
Securities Code: 2432 http://dena.com/intl/
The following is an overview of corporate governance at DeNA Co., Ltd. (the "Company" or "DeNA").
- Basic Approach to Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information
-
Basic Approach
Through its products and services, DeNA is committed to bringing delight and enjoyment to people all over the world, thereby making a positive impact on their lives globally. This commitment is embodied in the Company's corporate identity, "Delight and Impact the World" (http://dena.com/intl/company/brand/). In order to realize this corporate identity, since its founding DeNA has sought always to think from the users' point of view and has continued to launch pioneering internet services in multiple business domains. As a result, the Company has accumulated abundant expertise in how flexibly to adapt its internet businesses to market changes.
In today's world, the use of the internet is becoming essential to a wide range of businesses and industries. Such widespread use of the internet is no longer limited to the single category of the "internet industry" and brings digitization to multiple industries. For a company like DeNA, which has been embracing new challenges, seeking to continue to create new businesses that delight our users and customers and making a positive impact on their lives globally, such digitization is recognized as the perfect opportunity to build on its expertise and to expand its new businesses in a variety of areas. By taking advantage of this opportunity with appropriate and timely effort to create and scale new businesses while simultaneously continuing to strengthen its core businesses, the Company intends to continue to increase its corporate value and meet the expectations of the Company's shareholders and other stakeholders.
DeNA's basic approach to corporate governance involves the implementation of management systems that (i) enable more prompt decision-making in relation to company management and whether to create, continue, strengthen or close a variety of businesses while taking reasonable business risks in order to enhance the Company's corporate value; and (ii) ensure fairness and transparency in management to fulfill the Company's accountability to its stakeholders. In addition, in order to ensure that the Company's corporate governance system is functioning in practice, the Company believes that it is not sufficient simply to design systems, organizations and rules, but that in their implementation and operation, its executives and employees conducts business with a strong sense of ethics and commitment to the Company's corporate identity.
DeNA will continue to review its corporate governance system in accordance with its management
environment and aim at continuously maximizing its corporate value.
[Reasons for Not Implementing Certain Principles of Corporate Governance Code][Updated](Principle 5.2)
Establishing and Disclosing Business Strategy and Business Plan
The Company's primary focus is to continue to increase its corporate value through business growth. The following two factors are important indicators for the Company in ensuring that it is fulfilling the expectations of its shareholders through continued increase in profits:
year-over-year growth rate of sales revenue and operating profit; and
EPS (earnings per share) and year-over-year growth rate of EPS.
At present, the Company's business is focused on mobile games and a range of other internet services. As the market conditions and business environment for these services change extremely rapidly, forecasting market changes in the medium-to-long term is difficult. The Company therefore does not set specific target dates or numerical targets for the above indicators, but instead provides updates on material business matters and developments at its annual shareholders' meetings and in its quarterly financial announcement. In addition, with respect to matters that affect growth in the Company's corporate value over the medium term, it provides details and disclosure in explanatory meetings and related materials as necessary. For more details, please refer to the Company's website for investor relations (http://dena.com/intl/investors/).
[Disclosure Based on Principles of Corporate Governance Code][Updated](Principle 1.4)
Shareholdings for Policy Purposes
The Company's internal rules require Board of Directors approval or report to the Board in the event the Company acquires shares or other equity interests in another company in excess of a specified amount or voting percentage. In addition, when the Company invests in the share or other equity interests of another company for policy purposes (to build, strengthen or maintain business relations), it considers the following factors:
business synergy with such other company (the "investment target") and whether the investment will lead to an increase in the Company's corporate value over the medium term;
whether the investment would adversely affect the financial health of the Company; and
whether the amount of the investment and its shareholding percentage exceed a level that is reasonably necessary.
In the case of any such investment that is material, the Board of Directors reviews the economic rationale and future prospects of such investment at least annually.
With respect to exercising voting rights arising from such investment, the Company's internal rules require approval of the corporate planning department and comprehensive review (in light of the above factors) of the business and financial condition of the investment target from the standpoint of increasing the Company's corporate value over the medium term.
(Principle 1.7)
Related Party Transactions
Pursuant to applicable law and the Company's internal rules, the Company requires approval of its Board of Directors in the case of transactions involving conflict of interest of any director. Transactions with major shareholders must be reported to the Board.
Transactions with related parties require review by corporate planning department on the appropriateness of each transaction (including from a legal and tax standpoint) and depending on the amount and nature of such transactions, approval from the appropriate authorized persons. Related party transactions that are material require approval of the Board of Directors. The corporate planning department reviews the status of each related party transaction at least annually and provides a report to the Company's corporate auditors and external auditor.
(Principle 3.1)
Full Disclosure
Corporate Mission, Corporate Strategy and Management Plan
Through its products and services, DeNA is committed to bringing delight and enjoyment to people all over the world, thereby making a positive impact on their lives globally. This commitment is embodied in the
Company's corporate identity, "Delight and Impact the World". For further details, please refer to the Company's website on corporate identity (http://dena.com/intl/company/brand/).
At present, the Company's business is focused on mobile games and a range of other internet services. As the markets conditions and business environment for these services change extremely rapidly, DeNA is required flexibly to adapt itself to such changes. The Company provides updates on material business matters and developments at its annual shareholders' meetings, quarterly financial announcement and other relevant occasions. In addition, with respect to matters that affect growth in the Company's corporate value over the medium term, it provides details and disclosure in explanatory meetings and related materials as necessary. For more details, please refer to the Company's website for investor relations (http://dena.com/intl/investors/).
Basic Approach and Guidelines on Corporate Governance
Basic Approach
Please see Paragraph I-1 (Basic Approach) above.
Basic Guidelines
Based on its basic approach to corporate governance described above, the Company has implemented the following measures:
in order to promote fairness in management, the Company's Board of Directors takes into account a range of views provided by several independent outside directors;
in order to facilitate timely decision-making by each business unit, the Company has proactively transferred appropriate decision-making authority to executive officers and heads of business units;
in order to promote transparency, the Company proactively provides appropriate disclosure of information; and
in order to ensure high ethical standards and to instill a sense of the Company's corporate identity in its executives and employees, the Company has taken the following steps:
adoption of an Ethics Charter and Group Code of Conduct that set forth how its executives and employees should deal with various stakeholders, of which Charter and Code each executive and employee is required to be fully aware; and
establishment of standards of conduct under "DeNA Quality", which sets forth certain principles and attitudes to be shared and fully understood by all executives and employees (whether each executive or employee meets such standards is taken in to account in his or her performance evaluation):
DeNA Quality
Delight: I always understand my customers' expectations and strive to exceed them;
Surface of sphere: I represent DeNA and always act with a sense of responsibility;
Be the best I can be: I do my best at all times with the same mindset that I expect from my boss's boss;
Transparency and honesty: At all times I communicate transparently and honestly, fulfilling my responsibility to the team; and
Speak up: I fearlessly and respectfully communicate.
DeNA will continue to pursue the full implementation of the above measures in order to ensure the effectiveness and enhancement of the Company's corporate governance system.
Policies and Procedures in Determining the Remuneration of Senior Management and Directors
The Company compensates its directors (other than outside directors) in part on the basis of the Company's performance, so that each director is appropriately motivated to contribute to the overall performance of the Company and increase in its corporate value. This system also helps to raise each such director's awareness of shareholder-oriented management. For details of such compensation system, please refer to "II. Overview of Business Management Organization and Other Corporate Governance Systems Related to Managerial Decision-Making, Business Execution and Management Supervision - 1. Items Related to Organizational Structure and Operations, etc. - [Incentives] and [Director's Compensation]" in this Report.
In order to ensure objectivity and transparency in the compensation of individual directors (other than outside directors), compensation of each such director is determined based on discussions with and proposals from the Compensation Committee (comprised of outside directors and corporate auditors) based on the
Company's performance on a consolidated basis and on such director's contribution.
The Company compensates senior management (including executive officers) also in part on the basis of the Company's performance. Executive compensation is determined pursuant to applicable rules and regulations pertaining to personnel as well as internal rules approved by the Board of Directors.
Board Policies and Procedures in the Appointment of the Senior Management and the Nomination of Director and Corporate Auditor Candidates
Policies
The Company believes that candidates for director and corporate auditor at a minimum must have the sophistication and qualification to satisfy and promote the following objectives:
continuous increase in the Company's corporate value;
ensuring transparency and fairness in the Company's management; and
establishing and maintaining a system of compliance.
In addition to the above, and consistent with the criteria below for the composition of the Board of Directors and Board of Corporate Auditors, candidates for director and corporate auditor must be persons of excellence with sound judgment and insight.
[Board of Directors]
in order to ensure transparency and fairness, the Board must include outside directors with a high level of independence;
in order to allow for active discussion and prompt decision-making, the Board should consist of an appropriate number of members; and
there should be an appropriate balance in the experience and background of outside directors, who should include persons with a wide range of considerable management experience and insight.
[Board of Corporate Auditors]
in addition to persons with a wide range of considerable management experience, corporate auditors should include persons with background and insight in legal, finance and labor matters; and
at least one corporate auditor should have considerable experience in finance and accounting.
With respect to executive officers, appointment is made taking into account a candidate's ability for strategic thinking, management skills, innovation skills, ability to manage product and service development and leadership skills.
Procedures
The Board of Directors nominates candidates for director, who are then discussed and approved at the Company's shareholders' meeting. The Board of Directors also appoints executive officers, candidates for whom are selected by a personnel committee established pursuant to rule and regulations relating to personnel matters established by the Board.
The Board of Directors nominates candidates for corporate auditor (who must be approved by the Board of Corporate Auditors), who are then discussed and approved at the Company's shareholders' meeting.
Explanations with respect to the Individual Nominations of Director and Corporate Auditor Candidates
The Company nominated each of Isao Moriyasu, Tomoko Namba and Shuhei Kawasaki as candidates for director after concluding that each of them possesses the requisite experience and knowledge to serve on the Board of Directors, based on his/her management experience at the Company and his/her considerable business experience, insight, leadership skills and expertise. Furthermore, the Company's nomination of
candidates for outside director (excluding Nobuo Domae) and outside corporate auditor is discussed in "Notice of the Convocation of the 18th Ordinary General Meeting of Shareholders" (page6, Japanese version) on the Company's website.
Pursuant to the policies and procedures described under (4) above, the Board of Directors appoints the Company's executive officers whose names are disclosed on the Company's website.
(Supplementary Principle 4.1.1)
Scope of Matters Delegated to Management
The Company's internal rules set forth the administrative and approval authority of each of the Board of Directors, management committees, full-time directors and executive and other officers. Other than in respect
of any matter that requires Board approval due to legal requirements, requirements of the Company's Articles of Incorporation or its materiality from the standpoint of monetary amount or business strategy, the Company's internal rules generally give management committees, full-time directors and executive and other officers substantial discretion and authority in order to ensure flexibility and speed in business management. In addition, as appropriate checks on such authority, the Company intends to implement monitoring by the relevant authorized persons/committees of whether the decision-making authority granted by the Company's internal rules is being appropriately exercised.
(Principle 4.9)
Independence Standards and Qualification for Independent Directors
With respect to the independence of outside directors and outside corporate auditors, in addition to the standards for independence set forth by the Tokyo Stock Exchange, the Company considers the following factors:
the candidate is not, and has not been for the past three (3) years, an executive officer of a business counterparty that is either:
a business counterparty the aggregate amount of whose business transactions with the Company in the immediately preceding fiscal year exceeded 2% of the Company's consolidated sales; or
a business counterparty the aggregate amount of whose business transactions with the Company in the immediately preceding fiscal year exceeded 2% of the consolidated sales of such business counterparty;
if the candidate provides legal, accounting, consulting or other professional services to the Company, he/she does not receive remuneration from the Company (other than in the form of executive compensation) in excess of ¥10 million (or its equivalent) per year; and
the candidate is not a representative or employee of the Company's outside auditor.
(Supplementary Principle 4.11.1)
Balance between Knowledge, Experience and Skills of the Board of Directors; Diversity and Appropriate Board Size
The Company's policy and procedures for the appointment of candidates for the Board of Directors is set forth under Principle 3-1(4) discussed above. At present, pursuant to such policy, the Board of Directors consists of five (5) directors (out of a maximum of ten (10) directors provided in the Articles of Incorporation), of whom two (2) are outside directors, making the ratio of outside directors relatively high. In addition, the total number of attendees of a Board of Directors meeting is nine (9) (including four (4) corporate auditors), of whom five (5) (two (2) outside directors and three (3) outside corporate auditors) are independent outside officers. The Company believes that this composition facilitates substantive discussion and prompt decision-making by the Board of Directors, while at the same time ensuring transparency and fairness in the process. In the case of outside directors, the Company selects candidates on the basis of their considerable management experience and expertise in a wide range of areas.
(Supplementary Principle 4.11.2)
Directors' and Corporate Auditors' Concurrent Positions Held at Other Companies
The Company discloses material concurrent positions held at other companies by its directors and corporate auditors (including candidates therefor) in supplementary materials and business reports provided in connection with the notice of convocation of the general shareholders' meeting each year.
(Supplementary Principle 4.11.3)
Analysis and Evaluation of the Board's Effectiveness as a Whole
The Company analyzed and evaluated the Board's effectiveness as a whole by providing a questionnaire to its directors and corporate auditors and discussing the results of such questionnaire at board meetings during April and May of 2016. The following is a summary of the analysis and evaluation resulting from such discussion:
with respect to the administration of the Board, the directors and corporate auditors noted that Board meetings generally involve active discussion in addition to reporting and decision-making and provide opportunities to speak with business leaders. In addition, before any important matters for the Company are resolved, board members engage in active discussion. It was also noted that there has been continuous improvement in the administration of the Board. The directors and corporate auditors therefore concluded that an effective management monitoring system was in place for the
Board as a whole;
The directors and corporate auditors concluded that the current Board composition (three (3) managing directors and two (2) outside directors) is appropriate for timely and proper decision-making. In addition, by involving multiple outside directors, the Board is able to foster more active discussion and analysis and the consideration of new perspectives that are not available from internal discussion in the course of decision-making; and
The collective views of the directors and corporate auditors with respect to the matters to be discussed by the Board and whether such matters are adequately discussed were confirmed.
Based on the above analysis and evaluation, the directors and corporate auditors discussed the ways further to strengthen the effectiveness of the Board. As a result, the Company decided to consider such measures as providing opportunities for intensive discussion on matters that are deemed to benefit from further discussion so as to contribute to better management of the Company.
The Company will continue to consider a more appropriate framework and specific methods to evaluate the effectiveness of the Board in order to improve the system and administration of the Board.
(Supplementary Principle 4.14.2)
Training Policy for Directors and Corporate Auditors
The Company strives to ensure that each of its outside officers understands the Company's business environment and challenges through explanatory sessions on the Company's business and management strategy at the time of his/her election. The Company also provides its directors and corporate auditors with various opportunities to attend third-party training sessions at the Company's expense. The Company evaluates ways to strengthen training for its directors and corporate auditors from time to time as necessary.
(Principle 5.1)
Policy for Constructive Dialogue with Shareholders
The Company strives to promote constructive dialogue with its shareholders and investors through the following measures:
the executive officer in charge of the corporate planning department has overall responsibility for dialogue with the Company's shareholders and investors. Any request for dialogue with the Company from a shareholder or investor is handled primarily through such executive officer and the investor relations department. The Company's representative director also strives to engage proactively in dialogue with investors;
the executive officer in charge of the corporate planning department and each division head of such department meet every other week to share information and to exchange views, and provide support on any dialogue with shareholders and investors as necessary;
with respect to any views and concerns expressed by shareholders and investors, the Investor Relations Department provides feedback to the relevant departments, the relevant management executives and the Board of Directors as necessary. Analysis of such views and concerns, and consideration of measure that the Company should take to address them, are handled primarily by the executive officer in charge of the corporate planning department and the investor relations department and discussed at the Board of Directors meetings as necessary; and
in relation to any dialogue with shareholders and investors, the Company takes care to prevent disclosure of insider information and to ensure that there are no disparities among shareholders and investors in terms of access to information. During any so-called "quiet period", the Company does not accept requests for dialogue with shareholders or investors and seeks thoroughly to manage disclosure of information.
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Capital Structure
Foreign Shareholding Ratio [Updated] More than 20% and less than 30%
[Status of Major Shareholders][Updated]Name / Company Name
Number of Shares Owned
Percentage (%)
Tomoko Namba
19,762,416
13.10
Japan Trustee Services Bank, Ltd.
19,689,200
13.06
Nintendo Co., Ltd.
15,081,000
10.00
The Master Trust Bank of Japan, Ltd.
10,173,900
6.75
STATE STREET BANK AND TRUST COMPANY
6,906,213
4.58
Shogo Kawada
4,034,861
2.68
BBH FOR VANGUARD INTERNATIONAL VALUE FUND -ARGA
2,963,900
1.97
Trust & Custody Services Bank, Ltd.
2,949,400
1.96
Bank of Tokyo-Mitsubishi UFJ
2,940,000
1.95
CHASE MANHATTAN BANK GTS CLIENTS ACCOUNT ESCROW
1,659,957
1.10
Controlling Shareholder (except for Parent Company)
-
Parent Company
None
Supplementary Explanation [Updated]
1. The Company owns 5,790,665 shares (3.84%) (including 495,077 shares of Company stock held through the trust for the Company's employee stock option plan (ESOP)) of treasury stock, but this has been omitted from the major shareholders list above.
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Corporate Attributes
Listed Stock Market and Market Section
Tokyo Stock Exchange First Section
Fiscal Year-End
March
Type of Business
Service Business
Number of Employees (consolidated) as of the
End of the Previous Fiscal Year
More than 1000
Sales (consolidated) as of the End of the
Previous Fiscal Year
More than ¥100 billion and less than ¥1 trillion
Number of Consolidated Subsidiaries as of the
End of the Previous Fiscal Year [Updated]
More than 50 and less than 100
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- Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder
- Other Special Circumstances that May Have a Material Impact on Corporate Governance
-
- Business Management Organization and Other Corporate Governance Systems Regarding Decision-making, Execution of Business, and Oversight in Management
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Organizational Composition and Operation
Organization Form Company with Corporate Auditors (Kansayaku)
[Directors]Maximum Number of Directors Stipulated in
Articles of Incorporation
Ten (10)
Term of Office Stipulated in Articles of
Incorporation
Two (2) years
Chairperson of the Board
President
Number of Directors
Five (5)
Election of Outside Directors
Elected
Number of Outside Directors
Two (2)
Number of Independent Directors
Two (2)
Outside Directors' Relationship with the Company (1) [Updated]
Name
Attribute
Relationship with the Company*
a
b
c
d
e
f
g
h
i
j
k
Hiroyuki Otsuka
From another company
Nobuo Domae
From another company
Relationship with the Company
indicates that the item is/became applicable to the outside director either at present or recently
△ indicates that the item was applicable to the outside director in the past
indicates that the item is/became applicable to a close relative of the outside director at present or recently
▲ indicates that the item was applicable to a close relative of the outside director in the past
Executive of the Company or any of its subsidiaries
Non-executive director or executive of a parent company of the Company
Executive of an affiliate (subsidiary of the Company's parent company) of the Company
A party whose major client or supplier is the Company or an executive thereof
A major client or supplier of the Company or an executive thereof
A consultant, accountant or legal professional who receives significant remuneration or other assets from the Company other than remuneration as a director/corporate auditor
Major shareholder of the Company (or an executive of such major shareholder if the shareholder is a legal entity)
Executive of a client or supplier company of the Company (does not fall under any of d, e, or f) (the director himself/herself only)
Executive of a company that has an outside director or corporate auditor who is also an outside director or corporate auditor of the Company (the director himself/herself only)
Executive of a company or organization that receives a donation from the Company (the director himself/herself only)
Others
Outside Directors' Relationship with the Company (2) [Updated]
Name
Independent Director
Supplementary Information on the Relationship
Reasons of Appointment
Hiroyuki Otsuka
○
-
The Company believes that Mr. Hiroyuki Otsuka will perform his duties as an outside director properly, considering his extensive experience in corporate management as an executive at a major international private equity fund, as well as experience in serving as an outside director of a number of companies.
Nobuo Domae
○
-
The Company believes that Mr. Nobuo Domae will perform his duties as an outside director properly, considering his extensive management experience in overseas business development, e-commerce, marketing etc. at a major clothing retailer.
Voluntary Establishment of Committee(s) Corresponding to Nomination Committee or Remuneration Committee
[Corporate Auditors]Not Established
Establishment
Auditors
of
the
Board
of
Corporate
Established
Maximum Number of Corporate Auditors
Stipulated in Articles of Incorporation
Five (5)
Number of Corporate Auditors
Four (4)
Cooperation between Corporate Auditors, Independent Outside Auditor and the Internal Audit Department
The Company's corporate auditors hold meetings, quarterly and at other times as necessary, with the Company's independent outside auditor, Ernst & Young ShinNihon LLC ("ShinNihon"), to exchange views and information on the Company's audit system, audit plan and status of audits, in order to maintain a mutually collaborative relationship. In addition, the Company's corporate auditors hold meetings, periodically and at other times as necessary, with the Company's internal audit department to exchange views and information on the Company's audit system, audit plan and status of audits, in order to maintain a mutually collaborative relationship.
The Company's corporate auditors monitor and verify the status of the Company's internal control system and provide advice and guidance to the corporate planning department as necessary. The internal audit department verifies the Company's internal control system and reports its findings to the corporate planning department, which then takes steps to make improvements in the internal control system. The internal audit department also works with ShinNihon as appropriate to further strengthen the Company's internal control system.
Election of Outside Corporate Auditor
Elected
Number of Outside Corporate Auditor
Three (3)
Number of Independent Corporate Auditor Three (3)
Outside Corporate Auditor's Relationship with the Company (1)
Name
Attributes
Relationship with the Company*
a
b
c
d
e
f
g
h
i
j
k
l
m
Taketsune Watanabe
From another company
Masaru Iida
Attorney-at-Law
Hisaaki Fujikawa
Academic
Relationship with the Company
indicates that the item is/became applicable to the outside corporate auditor either at present or recently
△ indicates that the item was applicable to the outside corporate auditor in the past
indicates that the item is/became applicable to a close relative of the outside corporate auditor at present or recently
▲ indicates that the item was applicable to a close relative of the outside corporate auditor in the past
Executive of the Company or any of its subsidiaries
Non-executive director or accounting advisor of the Company or its subsidiaries
Non-executive director or executive of a parent company of the Company
Corporate auditor of a parent company of the Company
Executive of an affiliate (subsidiary of the Company's parent company) of the Company
A party whose major client or supplier is the Company or an executive thereof
A major client or supplier of the Company or an executive thereof
A consultant, accountant or legal professional who receives significant remuneration or other assets from the Company other than remuneration as a corporate auditor
Major shareholder of the Company (or an executive of such major shareholder if the shareholder is a legal entity)
Executive of a client or supplier company of the Company (does not fall under any of d, e, or f) (the corporate auditor himself/herself only)
Executive of a company that has an outside director or corporate auditor who is also an outside director or corporate auditor of the Company (the corporate himself/herself only)
Executive of a company or organization that receives a donation from the Company (the corporate auditor himself/herself only)
Others
Outside Corporate Auditor's Relationship with the Company (2) [Updated]
Name
Independent Corporate Auditor
Supplementary Information on the Relationship
Reasons of Appointment
Taketsune Watanabe
○
-
The Company believes that Mr. Taketsune Watanabe will perform his duties as an outside auditor properly, considering his extensive management experience in internet-based services..
Masaru Iida
○
-
The Company believes that Mr. Masaharu Iida will perform his duties as an outside auditor properly, considering his considerable knowledge of finance and accounting from his long tenure at a financial institution, as well as extensive knowledge of the law from his experience as an attorney.
[Independent Directors/Corporate Auditors] Number of Independent Directors/Corporate AuditorsHisaaki Fujikawa
○
-
The Company believes that Mr. Hisaaki Fujikawa will perform his duties as an outside auditor, considering his abundant experience in and profound knowledge of the field of employment and labor, as well as extensive knowledge of the law from his experience as an attorney.
Five (5)
Matters relating to Independent Directors/Corporate Auditors
All of the Company's outside directors and outside corporate auditors who qualify as an independent director/corporate auditor are designated as independent directors/corporate auditors.
[Incentives]Status of Implementation of Measures to Grant Incentives to Directors
Stock Options / Other
Supplementary Explanation
The compensation of the Company's directors consists of cash compensation and compensation in the form of stock options. Cash compensation for directors other than outside directors includes a fixed portion and a variable portion based on the Company's performance in the previous fiscal year. Cash compensation for outside directors consists of a fixed portion only. The upper limit on stock option compensation for
directors, which is separate from cash compensation, was approved by the resolution of the 15th Ordinary
General Meeting of shareholders held on June 22, 2013. For directors other than outside directors, this was set at an amount equal to 1.0% of the amount of the Company's profit for the year attributable to owners of the parent as set forth in the consolidated income statement for the previous fiscal year. However, such amount may not exceed 1.0% of such profit when added to the cash compensation (for the year) for such directors. In addition, the upper limit for the number of stock acquisition rights to be issued as stock options per year was set at 160,000 units. For outside directors, in consideration of the nature of their duties and services, the amount of stock option compensation is limited to ¥20 million per year and the upper limit for stock acquisition rights to be issued as stock option was set at 15,000 units per year.
Recipientsof Stock Options Inside Directors / Outside Directors / Employees of the Company's Subsidiaries
Supplementary Explanation
The stock option incentive system ensures that directors share with the Company's shareholders the benefits of rising stock prices as well as the risks of falling stock prices, giving the directors an incentive to contribute to the overall performance of the Company and increase its corporate value. This system also helps to raise the directors' awareness of shareholder-oriented management.
With respect to employees of the Company's overseas subsidiaries that are the core of the Company's overseas business, the Company has adopted a stock option incentive system that is designed to link the benefits granted to such employees and the Company's overall performance, thereby strengthening such employees' commitment and morale.
[Directors' Compensation]Disclosure of Compensation of Individual Directors
Disclosure of Compensation of Certain Directors
Supplementary Explanation [Updated]
Compensation paid to the Company's directors for the fiscal year ended March 2016 has been disclosed in the Company's 18th Business Report and Securities Report. In addition, there is no director whose aggregate amount of annual compensation was ¥100 million or more in the fiscal year ended March 2016. This
information is also disclosed on the Company's website. For details, please refer to the Company's Securities Report (in Japanese) at http://dena.com/jp/ir/library/report.html.
Policy for Determining Amounts and Calculation Method of Compensation
Established
Disclosure of Policy for Determining Amounts and Calculation Method of Compensation
The compensation of the Company's directors consists of cash compensation and compensation in the form of stock options. Cash compensation for directors other than outside directors includes a fixed portion and a variable portion based on the Company's performance in the previous fiscal year. Cash compensation for outside directors consists of a fixed portion only.
The stock option incentive system ensures that directors share with the Company's shareholders the benefits of rising stock prices as well as the risks of falling stock prices, giving the directors an incentive to contribute to the overall performance of the Company and increase its corporate value. This system also helps to raise the directors' awareness of shareholder-oriented management.
The upper limit on cash compensation for directors was set at the 15th Ordinary General Meeting of
Shareholders held on June 22, 2013. For the fixed portion, the upper limit was set at ¥320 million per year (of which the amount allocable to outside directors was ¥20 million per year), while the limit for the performance-linked portion was set at an amount equal to 1.0% of the amount of the Company's profit for the year attributable to owners of the parent as set forth in the consolidated income statement for the previous fiscal year. Such amount may not exceed 1.0% of such profit when such performance-liked portion is added to the compensation derived from stock options (for the year). Outside directors are not eligible for performance-linked compensation due to the nature of their duties and services.
The upper limit on stock option compensation for directors, which is separate from cash compensation, was approved by the resolution of the 15th Ordinary General Meeting of shareholders held on June 22, 2013. For directors other than outside directors, this was set at an amount equal to 1.0% of the amount of the Company's
profit for the year attributable to owners of the parent as set forth in the consolidated income statement for the previous fiscal year. However, such amount may not exceed 1.0% of such profit when added to the cash compensation (for the year) for such directors. In addition, the upper limit for the number of stock acquisition rights to be issued as stock options per year was set at 160,000 units. For outside directors, in consideration of the nature of their duties and services, the amount of stock option compensation is limited to
¥20 million per year and the upper limit for stock acquisition rights to be issued as stock option was set at 15,000 units per year.
The Company determines the compensation of individual directors (subject to the limitations described above) following discussion with and proposals by the Compensation Committee, on the basis of the Company's performance on a consolidated basis and the contribution by individual directors.
[Support System for Outside Directors and/or Outside Corporate Auditors]The Company provides its outside directors and outside corporate auditors with materials and prior briefings on items on the agenda of the meetings of the Board of Directors as necessary. In addition, members of the corporate planning department (in the case of outside directors) and members of the internal audit department (in the case of outside corporate auditors) have primary responsibility for sharing information and providing other necessary support to outside directors/outside corporate auditors in fulfilling their duties.
- Matters Related to Functions of Business Execution, Audit and Supervision, Nomination and Decisions on Compensation (Overview of Current Corporate Governance System) [Updated]
The following is a summary of the Company's corporate governance system as of the date of this Report:
Board of Directors
The Board of Directors is composed of five (5) directors, three (3) of whom are full-time and two (2) of whom are outside directors. In addition to regular monthly Board meetings, the Board convenes special meetings when necessary. The Board of Directors makes important management decisions, taking in to account discussions held in meetings of the Executive Committee (discussed below), and performs an oversight function for the execution of business by individual directors. In addition, the Company has established an advisory board consisting of outside specialists to serve as an advisory body to the representative director. In order to ensure the appropriateness of the compensation paid to the Company's directors (other than outside directors), the Company has established a Compensation Committee consisting of outside directors and outside corporate auditors. The Compensation Committee prepares a compensation proposal for each director (other than outside directors) each year within the limits of the total amount of compensation for directors resolved at the general meeting of shareholders, and submits such proposal to the Company's representative director.
Executive Committee
Meetings of the Executive Committee, which in principle the Company's full-time directors, full-time corporate auditors and executive officers attend, are held weekly. The Executive Committee assesses the progress made by each of the Company's businesses, analyzes risks and formulates countermeasures to such risks, and makes decisions on important matters related to the Company's business operations. The Executive Committee shares information based on reports from each department, which is given due consideration in the Company's business activities.
Executive Officer System
The Company has introduced an executive officer system in order to facilitate prompt decision-making and to increase management efficiency through the delegation of appropriate authority. There are presently 15 executive officers (three (3) of whom concurrently serve as directors), and they are responsible for making decisions and conducting business within the scope of their authority and pursuant to policies and decisions made by the Board of Directors and the Executive Committee.
Board of Corporate Auditors
The Board of Corporate Auditors consists of four (4) corporate auditors (three (3) of whom are outside corporate auditors), including one (1) internal corporate auditor. One of the outside corporate auditors worked for a financial institution for many years and has considerable expertise in finance and accounting. Under the guidelines issued by the Japan Audit & Supervisory Board Member Association regarding standards for auditing by corporate auditors, the corporate auditors attend meetings of the Board of Directors and the Executive Committee, review materials relating to important decisions and authorizations and broadly monitor the management of the Company in general. Each corporate auditor conducts appropriate monitoring of management from an independent standpoint while also sharing information with the other corporate auditors at meetings of the Board of Corporate Auditors, and strives to perform his/her audit duties efficiently and with a high degree of effectiveness.
Internal Audit Department
Members of the internal audit department (there are six (6) members as of the date of this Report) conduct internal audit of the Company. Based on the Company's rules for internal audit and an audit plan approved by the Company's representative director, the internal audit department conducts audits of each relevant department or division (including subsidiaries of the Company). The internal audit department reports on the results of each audit to the Company's representative director. The department/division subject to such audit also receives notice of the results of such audit and thereafter, the internal audit department follows up on improvements made based on recommendations from such audit.
Outside Auditor
- Implementation of Measures Related to Shareholders and Other Stakeholders
-
Measures to Revitalize the General Meeting of Shareholder and Facilitate Exercise of Voting Rights
Supplementary Explanations
Setting Date of General Meeting of Shareholders to Avoid Being Held on the Same Day as That of Many Other Companies
The Company seeks to set the date of its General Meeting of Shareholders on a day other than the day on which a large number of other companies hold their meetings.
Allowing Electronic Exercise of Voting Rights
In order to promote the exercise of voting rights by its shareholders, the Company allows the exercise of voting rights by electronic means (including personal computers and mobile phones).
Participation in Electronic Voting Platform
The Company participates in the "Voting Rights Electronic Exercise Platform" operated by ICJ Co., Ltd. The resulting convenience provides institutional investors sufficient time to consider proposals from the date of the convocation notice.
Providing Convocation Notice in English
The Company prepares and posts on its website an English version of the convocation notice as of the date of such notice, as a convenience to our non-Japanese shareholders in exercising their voting rights.
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Investor Relations Activities [Updated]
Supplementary Explanations
Explanation by
Representative
Regular Investor Briefings for Analysts and Institutional Investors
The Company holds meetings with analysts and institutional investors on a quarterly basis.
Yes
Regular Investor Briefings for Overseas Investors
The Company holds meetings by telephone with overseas investors on a quarterly basis.
In addition, the Company meets with various overseas investors several times a year to explain the Company's business condition generally. The Company also participates in conferences hosted by various securities companies for the benefit of overseas investors.
Yes
Posting of Investor Relations Materials on Website
The Company posts on its website (under "Investor Relations and Investor Information") financial statements, materials used in explanatory meetings, convocation
notices for the General Meeting of Shareholders, notices of resolution of the General Meeting of Shareholders, other periodic reports and disclosure materials and annual securities reports. In addition, the Company posts English versions of various reports and disclosure materials on its English language website for the benefit of overseas investors.
http://dena.com/intl/investors/
Establishment of Department and/or Manager in Charge of Investor Relations
The Company has established the Investor Relations Department as a department specializing in investor relations with a full-time person in charge. In addition, the Company has appointed a full-time person in charge of investor relations in San Francisco.
Other
The Company sends the "IR news mail" that provides periodic reports and notices to registered users.
- Measures that Consider the Interests of Stakeholders
Supplementary Explanations
Internal Rules and Other
In order to ensure the trust of its stakeholders in the conduct of its business,
Provisions Made in
the Company strives to promote social responsibility and ethical conduct by
Consideration of Stakeholders'
adopting and implementing its Ethics Charter and Group Code of Conduct,
Interests
promoting awareness of its corporate social responsibility and requiring
compliance with laws and regulations in its daily business activities.
Promotion of Environmental
The Company strongly supports and participates in activities that promote
Protection, Corporate Social
the social good through its services and efforts of its employees and staff.
Responsibility (CSR) and
For details of the Company's CSR activities, please refer to our website (in
Other Activities
Japanese): http://dena.com/jp/csr/
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Matters Related to the Internal Control System
1. Basic Approach to and Status of Development and Operation of Internal Control System [Updated]
The Board of Directors has adopted the "Basic Policy Regarding the Internal Control System" described below, on the basis of which the Company has implemented the following internal control/risk control system.
A. System Necessary to Ensure Proper Operation of the Company
In accordance with the Companies Act and Order for Enforcement of the Companies Act, the Company has adopted the following basic policy for the establishment of internal control system:
1. System to Ensure Compliance by Directors and Employees of the Company and its Subsidiaries with Laws, Regulations and the Articles of Incorporation
Pursuant to the Ethics Charter and the Group Code of Conduct for the Company and its subsidiaries (collectively, the "DeNA Group"), the Company shall ensure that directors and employees are fully aware of their content and instill in them a sense of high ethical standards necessary for the conduct of the DeNA Group's business.
Accordingly, the DeNA Group's directors and employees shall be required to be cognizant of the Company's corporate social responsibility and to strive to engage in their daily business activities in full compliance with applicable laws and regulations and in a manner that promotes social responsibility and ethical conduct.
Corporate planning department is the department responsible for the DeNA Group's compliance system. The Company shall adopt a policy for implementing internal rules that reflect the organizational structure, size and business condition of each DeNA Group company and organize training sessions focusing on corporate social responsibility and compliance with laws and regulations.
The protection and preservation of information (including personal information) and compliance with applicable law relating thereto are critical to the conduct of the DeNA Group's business. As such, a committee headed by the Company' representative director shall be responsible for managing risks relating to information security and management of personal information.
The Company shall establish an internal audit department with responsibility for verifying that the DeNA Group's employees are conducting business in compliance with applicable laws and regulations, the Articles of Incorporation and internal rules and regulations and implementing regular internal audits of all aspects of the DeNA Group's business operations.
With respect to the DeNA Group, the Company shall implement an appropriate internal reporting/whistle-blowing system that facilitates reporting to and consultation with an internal responsible person or outside legal advisors of matters that may involve non-compliance with laws and regulations.
The DeNA Group shall systematically reject all transactions with anti-social groups and organizations that threaten the order and safety of society.
System for the Storage and Preservation of Information Related to Director Duties
With respect to the storage and preservation of information relating to the performance by the Company's directors of their duties, the director overseeing the corporate planning department shall have overall responsibility and, depending on the nature of the information, establish internal rules and regulations on the departments responsible for its storage and preservation. These responsible departments shall appropriately record such information and store and preserve such information for the requisite period of time provided by applicable law and the Company's internal rules relating to document management. Depending on the medium of storage, these responsible departments shall ensure the safe and efficient management of such information and respond promptly to requests from directors and corporate auditors to access such information.
Regulations Relating to the Management of Risk of Loss and Other Relevant Risk Management System of the DeNA Group
The Executive Committee, chaired by the representative director and including as its members each full-time director, each full-time corporate auditor and executive officers, shall be responsible for the analysis and formulation of countermeasure relating to risks associated with the DeNA Group's business operations.
The Company shall adopt risk management regulations and prepare an emergency crisis manual for the DeNA Group. The director in charge of the corporate planning department shall have overall responsibility for the DeNA Group's risk management system and the corporate planning department shall be in charge of its implementation. However, responsibility for risks related to information security and management of personal information shall reside in the committee responsible for such risks chaired by the representative director. In the event of an unexpected development, the Company shall form a centralized emergency unit headed by the representative director in order to act swiftly and to prevent and/or minimize any loss or damage resulting from such development.
System to Ensure Efficient Performance of Duties by Directors of the DeNA Group
Each DeNA Group company shall hold board of directors meetings pursuant to such company's rules and regulations on board of directors meetings, ensure appropriate decision-making on important matters relating to its business operations and supervise the performance of each director's duties.
Each DeNA Group company shall stipulate, and periodically review as appropriate, the scope of authority and responsibilities of its directors in the performance of their duties, in such company's rules and regulations relating to board of directors meetings, allocation of duties and administrative authority.
With respect to managing the performance of its business operations, each DeNA Group company shall prepare an annual budget and business plan and in measuring such company's performance thereunder, manage its budget on a monthly basis and monitor on a weekly or daily basis any important operating ratios or figures.
System to Ensure Adequacy of Operations
The Company shall send one or more director(s) and corporate auditor(s) to its major subsidiaries to monitor,
supervise and direct the performance of duties by the directors of such subsidiaries.
With respect to each business operation of its subsidiaries, the business division of the Company in charge of such operation shall have overall responsibility. With respect to the business administration of its subsidiaries, the corporate planning department shall have overall responsibility.
With respect to the management of its subsidiaries, with due regard to the autonomy of each such subsidiary, the Company shall receive periodic reports of the business activities of such subsidiary and require prior consultation on important business matters affecting such subsidiary.
The internal audit department shall perform audits of the management and business operations of the Company's subsidiaries and verify the effectiveness of the DeNA Group's internal control system.
Matters Relating to Providing Personnel Support to Corporate Auditors
Members of the internal audit department shall provide support and assistance to corporate auditors in accordance with the Company's internal rules and regulations.
Matters Relating to Independence of Personnel Providing Support to Corporate Auditors and Ensuring Effective Instruction to Such Personnel
No member of the internal audit department responding to a request for support and assistance from a corporate auditor shall receive any orders or instructions from any director or his/her superior relating to such request. In addition, any appointment, transfer or evaluation of such member shall be subject to the approval of such corporate auditor.
System of Reporting by Directors and Employees of the DeNA Group to Corporate Auditors
Corporate auditors shall participate in Board of Directors meetings, management meetings and other important meetings of the Company and shall review documents and materials relating to important resolutions. At important meetings such as the Board of Directors and other related meetings, the representative director and the director responsible for business operations shall report on the operating status of the business(es) for which he/she is responsible.
Directors and employees of the DeNA Group, promptly upon becoming aware thereof, must notify the corporate auditors of any violation of material laws and regulations or the Articles of Incorporation, any fraudulent activity or any matter that may result in significant loss or damage to the DeNA Group. In turn, the corporate auditors shall be entitled at any time as necessary to seek reports from directors and employees of the DeNA Group.
In the event that a whistleblower makes a report under the DeNA Group's internal reporting/whistle-blowing system and the general manager of the internal audit department determines that the nature thereof relates to a violation of material laws and regulations or the Articles of Incorporation, any fraudulent activity or any matter that may result in significant loss or damage to the DeNA Group, such General Manager shall promptly notify the corporate auditors.
The DeNA Group shall ensure that a person who reports to a corporate auditor or makes a report under the internal reporting/whistle-blowing system is not treated disadvantageously by virtue of having made such report.
System to Ensure Efficient Oversight by Corporate Auditors
The corporate auditors shall maintain a close working relationship with the internal audit department and request investigations by the internal audit department as necessary. In addition, the corporate auditors shall meet periodically with the Company's outside auditor to exchange views and information, and seek reports from such outside auditor as necessary.
A corporate auditor in his/her discretion may consult legal advisors other than the Company's regular legal advisors and other outside professionals on matters that he/she deems such consultation to be necessary in the performance of his/her oversight duties.
In the event a corporate auditor seeks up-front payment or reimbursement of any costs relating to the performance of his/her duties, the Company shall promptly make such payment or reimbursement unless it is determined that such payment or reimbursement is not necessary for such corporate auditor's performance of his/her duties.
System for Ensuring Accuracy of Financial Reports
Pursuant to this Basic Policy and the "Basic Policy Regarding Internal Controls Relating to Financial Reporting", the representative director shall implement and oversee the Company's internal control system relating to financial reporting, which shall be supervised by the Board of Directors as appropriate.
Summary of Operation of the System Necessary to Ensure Proper Operation of the Company
The following is a summary of the operation of the system necessary to ensure proper operation of the Company during the fiscal year ended March 2016:
Operation of System to Ensure Compliance with Laws and Regulations
The Company has adopted, for all executives and employees of the DeNA Group, the Ethics Charter and the Group Code of Conduct to provide how we should face our stakeholders while maintaining high ethical standards and the principles of behavior called "DeNA Quality" that embodies common attitude and mindset to be shared by all executives and employees of the DeNA Group. The Company ensured that its executives and employees are fully aware of the contents of these standards and principles through training sessions and strengthened their general awareness by incorporating them into personnel evaluation system.
In order to promote better understanding of major laws and regulations relating to the DeNA Group's business as well as its internal rules and regulations, the Company provided introductory and periodical training sessions for all employees.
The internal audit department set the prioritized audit items and performed annual internal audit of the DeNA Group. The internal audit department reported the results of such audit directly to the representative director and followed up by providing improvement suggestion and confirming the results of improvement as necessary.
The Company has established the contact for its internal reporting/whistle-blowing system in the internal audit department. The internal audit department ensures the anonymity of the reporting/whistle-blowing person pursuant to the Group Code of Conduct and internal rules and regulations. In addition, the Company has established an appropriate system, including prohibition of disadvantageous treatment of reporting/whistle-blowing person under the Group Code of Conduct and internal rules and regulations. The operation of the internal reporting/whistle-blowing system is reported to the Board.
The Company conducts background checks of business partners before starting business and annually to eliminate any relationship with anti-social groups and organizations thoroughly.
Operation of System to Manage Risk of Loss
The Company holds meetings of the "Information Security Committee" and the "Personal Information Management Committee" periodically to discuss the issues relating to information security and personal information protection of the DeNA Group and to monitor the management of information. In addition, the former committee has established the "Group Information Security Policy" as a basic policy for information protection and management and promotes the selection and concentration of security measures to be taken by the DeNA Group.
Under the risk management guidelines adopted by the Management Committee, the Company has adopted policies and measures to respond to each risk event in a manner appropriate for the applicable risk level and reporting lines based on the source of such risk event, and has promoted the awareness of these policies and measures through training sessions. As such, the Company addresses each risk event commensurately with its risk level.
The Company has strengthen its disaster control and prepared the business continuation plan for major businesses and departments in case of eventuality.
Operation of System Relating to Director Duties
The DeNA Group promotes efficiency of director duties by reviewing the board of directors and other arbitrary bodies of each subsidiary and internal rules and regulation for manager's authority as necessary. In addition, the Company timely and properly prepares, storages and maintains the minutes of the board meetings and documents and electronic records relating to director duties.
The Company has adopted the executive officer system and promoted the delegation of authorities
from directors in order to increase the efficiency of performance of director duties. The Company flexibly operates its Management Committee consist of full-time directors by holding weekly meeting basically.
Operation of System Necessary to Ensure Proper Operation of the DeNA Group
The Company monitors the operation of its subsidiaries by receiving a report relating to business operation of the subsidiaries and requests for prior approval for important management matters. In addition, the Company seconds its executives and employees to major subsidiaries as directors and corporate auditors and monitors and audits the director duties of such subsidiaries at the board meetings and other occasions.
The Company controls the business operation of its subsidiaries through daily management by the business department responsible for such subsidiaries and management administration by the corporate planning department.
Operation of System relating to Corporate Auditor Duties
With respect to performance of duties by corporate auditors, the employees of the internal audit department appropriately coordinate with and support corporate auditors.
All corporate auditors attended all of the board meetings and the meetings for board of corporate auditors held during the fiscal year ended March 2016 and audited performance of duties by directors. In addition, the full-time corporate auditor attends the Management Committee and reports the contents to the other corporate auditors.
The corporate auditors receive a report from the accounting auditor and regularly exchange views and information with the accounting auditor. In addition, the board of corporate auditors discussed evaluation and appointment of the accounting auditor.
The full-time corporate auditor conducts hearings of performance of duties from the directors and corporate auditors of the Company and major subsidiaries and information gathering by having meetings with employees of various departments.
-
2. Basic Policy and Efforts to Counteract Anti-Social Groups and Organizations
Basic Policy
From the standpoint of social responsibility and corporate protection, the Company shall forcefully respond to contacts and demands from anti-social groups and organizations that threaten the order and safety of society and resolutely eliminate any relationship or transaction with such anti-social groups and organizations.
Internal System to Handle Anti-Social Groups and Organizations
The Company's general affairs department has overall responsibility for the Company's internal system to handle and eradicate any relationship with anti-social groups and organizations. When the Company considers transacting with a new business partner or counterparty, it conducts background checks pursuant to prescribed internal rules.
Cooperation with Outside Specialized Agencies
- Other
-
Adoption of Anti-Takeover Measures
Adoption of Anti-Takeover Measures Not Adopted
Supplementary Explanation
The Company's Basic Policy Regarding Control of the Financial and Business Policies of the Company (matters set forth in Article 118, Item 3 the Ordinance for Enforcement of the Companies Act) is as follows: The Company believes that the "person who controls the financial and business policies of the Company" must have broad knowledge and considerable experience in the DeNA Group's business (including internet service for mobile phones and personal computers), as well as profound understanding of the Company's relationship of trust with its shareholders, employees, users, business counterparties and various stakeholders. Through such knowledge, experience and understanding, such person should have the ability to maximize the Company's corporate value and profit over the medium- and long-term.
As a listed company, the Company believes that the decision to allow a party to seek ownership of a large number of Company shares should ultimately be left to the Company's shareholders, assuming that such acquisition will be made through free market transactions. At the same time, attempts to take over a company may in some cases clearly damage the target company's corporate value or the common benefit of its shareholders, or may not provide appropriate time or information necessary for proper consideration of the takeover proposal, and such cases cannot always be said to further the corporate value or the common benefit of the shareholders of the target company.
The Company believes that in such case, the party who seeks to acquire a large amount of Company shares is not suited to control the financial and business policies of the Company. Accordingly, in such case, to the extent permitted by applicable law and the Articles of Incorporation, the Company intends to take measures to protect and increase the DeNA Group's corporate value and common benefit with shareholders.
-
Other Matters Concerning Corporate Governance System [Updated]
The Company's internal system for periodic disclosure of information is as follows:
Policy on Periodic Disclosure
The Company has implemented a system to facilitate the appropriate disclosure of information relating to the Company and its affiliated companies. This system is intended to satisfy the Company's responsibilities to its shareholders and investors promptly to disclose appropriate information in accordance with applicable law and the listing requirements of the Tokyo Stock Exchange.
Internal System Relating to Timely Disclosure by the DeNA Group
In order to prevent insider trading, the Company has implemented the "Rules and Regulations for the Prevention of Insider Trading". Pursuant to these rules and regulations, the Head of the Corporate Planning Unit has overall responsibility to manage information relating to the Company and to be aware of any information that requires timely disclosure. In addition, the responsible person for each department, in his/her capacity as the person with overall responsibility to manage information in such department, coordinates with the Head of the Corporate Planning Unit in the management of such information. Such responsible person is also charged with instilling awareness in the Company' employees of the importance of information management and to be well versed in the Company's rules and regulations relating thereto. In the case of affiliated companies, pursuant to the "Rules and Regulations for the Management of Subsidiaries" the responsible business unit or the responsible executive officer manages information relating to business operation. Any other information relating to business operation is handled by the Corporate Planning Unit. With respect to important matters, the Head of the Corporate Planning Unit coordinates with the person responsible for information management of the department involved and the department responsible for investor relations, and consults with relevant departments and outside legal advisors as necessary, and determines the need for disclosure as well as the timing and content of disclosure. A decision or financial information that is deemed to warrant disclosure in principle is determined at a management meeting or Board of Directors meeting attended by the full-time directors, full-time corporate auditors and executive officers. After obtaining final approval of the Head of the Corporate Planning Unit, the department responsible for
investor relations will proceed promptly to disclose relevant information.
3. Audit of the Internal System Relating to Timely Disclosure
From the standpoint of compliance with law and efficient conduct of business that reflects the Company's business strategy, the Company's representative director and the department in charge of internal audit conduct internal audits pursuant to the annual audit plan. The purpose of such audits is to examine, evaluate and improve the system of management and operation relating to the Company's business. With respect to timely disclosure of financial information, the Company has implemented a system of timely disclosure pursuant to an internal reporting system based on the Financial Instruments and Exchange Law.
The Board of Corporate Auditors lead by the full-time corporate auditors also provide an oversight function in relation to the Company's timely disclosure system by attending Board of Directors meetings and seeking information and reports from each relevant department and related company.
[Diagram of Corporate Governance Structure]
Shareholders' Meeting
Election/Dismissal
Election/Dismissal Election/Dismissal
Liaise
Board of Corporate
Audit
Auditors Board of Directors
Liaise
Internal Auditing
Appointment/Dismissal
Representative Director,
Advisory Board
Accounting Auditor
Liaise
Accounting Audit
Department
Internal Audit
Executive Committee
President and CEO
Advice
Proposal
Executive Officers
Compensation Committee
Election/ Dismissal
Departments and Group Companies
[Overview of System for Timely Disclosure (Diagram)]
Each Department / Affiliated Company
Decision
Development
Financial information
Collection of Information
Relevant Department Investor Relations Department
Public Relations Department / Legal Department
Head of Corporate Planning Unit
Accounting Auditor / Legal Advisors
Determination of Timely Disclosure
Representative Director, President and CEO
Board of Directors Executive Committee
Disclosure
Investor Relations Department
Disclosure of Information (TDnet, Company website )
Investors
The Company has engaged ShinNihon as its outside auditor. Three (3) certified public accountants of Shin Nihon have overall responsibility for the Company's audit and they are supported by 42 assistants (24 certified public accountants and 18 others).
3. Reasons for Adoption of Current Corporate Governance SystemThe Company is a company with corporate auditors. In light of the need to respond to rapid changes in the business environment and quickly to develop and grow its business, the Company believes that it can vigorously pursue its business strategy through prompt and effective decision-making regarding important management issues by the Board of Directors consisting of directors who are familiar with the Company's business and outside directors with experience in a range of areas. At the same time, through the oversight and supervision by two outside directors with a high degree of independence and the Board of Corporate Auditors consisting of three outside corporate auditors and one internal corporate auditor, the Company ensures the continued and enhanced soundness and transparency of management and the objectivity and neutrality of management oversight.
The Company participates in the "Tokubouren" (an association established by the National Policy Agency to combat anti-social groups and organizations) and members of the relevant departments attend workshops organized by the association. The Company has established a collaborative relationship and maintains close communication with the association, the police, outside legal advisors and other professional organizations. The general manager of the general affairs department has overall responsibility for the actual handling of anti-social groups and organizations in close coordination with the police, outside legal advisors and outside professional organizations, so as to enable the Company to address any issues promptly.
DeNA Co. Ltd. published this content on 15 August 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 16 August 2016 02:55:01 UTC.
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