Kyoko Uemura

60% of shareholders

External Director (Independent Officer)
Member of Nominating Committee,
Remuneration Committee,
and Special Committee

Kyoko Uemura

Q. What role are you expected to play as an independent external director?

My most important role is monitoring and checking. Given that both the Company and its parent, SoftBank Group Corp., are publicly listed, accountability and transparency of transactions between the two entities must be ensured. I also think I am expected to provide opinions from an objective standpoint and contribute to the enhancement of corporate value. Considering that the parent company holds roughly 40% of the Company's shares, I believe that I am in a position to represent the other 60% of our shareholders, who are by no means a minority. In addition, as we are a speedy company that moves quickly once we have made a decision, I purposely raise opinions that differ from internal views and encourage discussion from various angles, including risks. I closely scrutinize the risks and profitability of new businesses, particularly those not in the telecommunications industry, and check that the Company is not disadvantaged in transactions with the parent company and the subsidiary.

Q. What is your view of the parent-subsidiary listing?

As the parent company, SoftBank Group Corp. is a strategic investment company that oversees the Group companies in its investment portfolio. SoftBank Corp., on the other hand, is an operating company that aims to sustain growth in its mainstay telecommunications business whilst also expanding into domains outside of telecommunications. As long as this distinction is maintained, I believe it makes sense for both companies to be listed and evaluated separately by the market. In the US, case law recognizes that controlling shareholders have a fiduciary duty to act in the best interests of minority shareholders. They also bear the risk of liability for damages. In contrast, Japan does not have such provisions or judicial precedents, and legally, controlling shareholders are under no obligation to be liable for the shareholders of a listed subsidiary. The difference is that there is enhanced disclosure of information about parent-subsidiary transactions. Therefore, external directors need to strictly check whether transparency is ensured with regard to transactions between parents and subsidiaries.

Q. The Special Committee was established in February 2022 to mainly check parent-subsidiary transactions. What has it been discussing?

At the meetings of the Special Committee held in FY2022, we discussed the transactions (executed in October 2022) that made PayPay a subsidiary. Voting rights in PayPay are now held by the Company, Z Holdings, and SVF II Piranha (DE) LLC (SVF2), a subsidiary of SoftBank Group Corp. The conversion of preferred shares in PayPay was expected to change the voting rights ratios of each company, so we made it a priority to confirm the background and reasons for the change especially in terms of whether it would disadvantage the Company. This matter was complicated and some aspects of it were hard to follow, but we were allocated plenty of time for briefings prior to the meetings of the Board of Directors. I understand each shareholder had different views, but I voted to approve the transactions based on the perspective of maximizing the Company's own interests and corporate value, rather than the interests of SoftBank Group Corp., the parent company or Z Holdings.

Q. As the parent company of Z Holdings, do you think SoftBank should be more involved in its management?

Being a publicly traded company, I believe we should principally respect management independence. It is certainly obvious that the user ID integration between “Yahoo! JAPAN” and “LINE” has been delayed, which probably caused some disappointment among investors. However, both Yahoo Japan and LINE have hitherto expanded their businesses with freewheeling thinking, and each has a sizeable user base. They have both grown into big companies with a user-first approach. Based on such a history, only these two companies can break down what has been built up if necessary and rebuild it so that a chemical reaction can occur between the two companies. It is my opinion that both companies should identify the nature of the problem on their own and transform themselves with the consent of both parties. Even though rebuilding something that already exists takes time, I believe it to be a phase that requires a non-transient, lasting transformation, even if it comes at the expense of losing opportunity gains in the meantime. It may be tempting to intervene given the Company's corporate culture of emphasizing speed, but the platform businesses of Yahoo Japan and LINE have been built on user trust. Although there may be some differences of opinion with our internal directors, we cannot afford to lose users by placing too much emphasis on speed, so I believe we should not demand anything too hasty.

Q. What has the Board been discussing in regard to the recently announced medium-term management plan?

I am all for the direction of focusing on DX and AI toward the long-term vision of becoming “a company that provides next-generation social infrastructure essential for development of a digital society.” I personally even wonder if it could be brought forward a little more. On the other hand, there was a lot of discussion about future financial strategies, given that there is such a large growth opportunity and that a good amount of funds will be needed. We fund our dividends with free cash flow generated from our core telecommunications business, and since going public we have been focused on achieving both growth and a high level of shareholder returns. From the perspective of seizing greater growth opportunities and maximizing corporate value, I think the Company needs to consider an optimal capital structure and how it can best balance growth investments with shareholder returns. We will continue to seek discussion and consideration.

Q. What are the challenges to further strengthening governance?

I truly admire SoftBank's ability to gather cutting-edge information from around the world and formulate business strategies with a forward-looking approach. However, if the parent-subsidiary listing situation is to be maintained, I believe the number of external directors needs to be increased. I do not believe that the views of the external directors are necessarily all correct, but with the current composition of the Board of Directors, if there is a difference of opinion between the external and internal directors, the external directors would still lose in the final verdict. The Company is required to uphold stricter-than-usual corporate governance, which is why I believe it would be best to have most external directors on the Board to present a broad range of views. External directors cannot match the expertise of the people within the Company, nor can we create management strategies. However, I believe that it is important to build consensus among external directors, who have diverse views, by asking them why the Company is doing what they are doing, rather than which of the proposed management strategies is right or wrong, until they are convinced of the reasons for doing so.

External Director (Independent Officer) Kyoko Uemura

Q. Lastly, what message do you have for shareholders?

From what I have seen over the past five years, we are a very forward-looking company to drive to change. Also, it does not always adhere to a top-down approach, but rather allows people to make individual decisions. I think it is quite rare in Japan to find a company with such a vigorous spirit of taking on new challenges. I strongly feel that the entire organization values speed and is determined to take some risks and continue to evolve. And I believe that this is the very source of the Company's strength, and that people and funds are attracted to a place that is always looking forward to new and exciting things. We are now taking a more aggressive approach in the face of enormous growth opportunities in generative AI and the like. I hope that you will continue to have high expectations for our business, and we would like to ask for your unwavering support.