To achieve an appropriate and
stable management structure,
we will promote reforms of
the Board of Directors in both
form and substance

The Nominating Committee is continuously discussing the importance of ensuring an appropriate and stable corporate governance system and the corresponding composition of the Board of Directors. In the course of this process, we consider the balance of knowledge, experience, and abilities of each director, and take into consideration the Corporate Governance Code stipulated by the Tokyo Stock Exchange, as well as the requirements of proxy advisory firms and ESG rating agencies.

In December 2020, the Nominating Committee recommended to the Board of Directors that Mr. Miyakawa, who was CTO at the time, should be appointed as the new CEO as SoftBank focused on new areas such as Al and 5G going forward. Subsequently, in April 2021, Mr. Miyakawa replaced Mr. Miyauchi as CEO. We felt it was necessary to preserve the strengths of the management structure that had existed at that time, so we asked Mr. Miyauchi to continue overseeing the entire Group as Director & Chairman. I believe it is important for a smooth management transition to have this kind of support structure in place, rather than the sudden departure of a leader who had previously held decision-making authority. In June 2024, three years after the Miyakawa regime took over, Mr. Miyauchi stepped down as Director & Chairman completing the transition of the management structure.

As discussions continued on the Board of Directors structure, including the appointment of additional external directors, at our December 2023 meeting, the Nominating Committee reaffirmed our policy of increasing the ratio of external directors to a majority. At the shareholders' meeting held in June 2024, a proposal to appoint six out of 11 directors as independent external directors^* was approved, resulting in 54.5% of all directors being independent. In addition, three of the six external directors are women, ensuring a good balance in terms of diversity. To implement this change in the Board of Directors structure, we conducted vigorous and thorough discussions to identify requisite abilities and skills for the Company's directors and the type of talents necessary for enhancing the corporate value of the Company.

To achieve a stable corporate government system it is necessary to avoid losing all of your external directors at once, so the interval at which external directors are replaced is an important point. And with regard to the selection of external directors, I believe it is important not only to focus on reinforcing skills not found within the Company, but also to select those who can express their opinions as an advisor with a third-party perspective based on their area of expertise and experience, thereby broadening the perspective of the entire Board of Directors.
Furthermore, with regard to governance, recognizing that there are concerns about the listing of the parent company and its subsidiary in particular, we have been expressing our opinions at meetings of the Board of Directors and committees from the perspective of avoiding any suspicion of a conflict of interest. Going forward, as SoftBank builds the next-generation of social infrastructure to support a digital society, our social responsibilities will become even greater. For that reason, I think it is important to go back to the basics of governance by ensuring that each and every employee has a strong awareness of the responsibilities.

While shareholder returns are extremely important for us as a publicly listed company, I believe that growth investments in Al and 5G, which we are focusing on, are equally important, and an appropriate balance between shareholder returns and growth investments is the key to enhancing corporate value. With regard to Al, all employees, not just those in the R&D Department, should be aware of “what Al means to SoftBank,” and the entire Company should work together to keep pace with the world's needs.