Corporate Governance System

Chart of corporate governance system

Governance system

Board of Directors

SoftBank Group Corp. (“SBG”)'s Board of Directors consists of 10 directors, including three external directors. The chairman and CEO serves as the chairman of the Board. SBG ensures adequate independence of the 3 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 of the Board meetings and SBG makes management judgments and decisions based on these discussions.

Agenda matters for discussion in the Board of Directors 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 matters 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 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 aspects such as nationality, ethnicity, gender, or age. Currently, there are 10 directors serving, all of whom have a wealth of knowledge and experience regarding business management and a global perspective. Three of the 10 directors are independent external directors, and seven are non-Japanese, thereby ensuring constructive and lively discussion in 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 matters 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 decision results of the Committee are reported to the Board of Directors.

Audit & Supervisory Board members and Audit & Supervisory Board

The Audit & Supervisory Board consists of four members including three 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 meeting is held 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 relating 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 staff who act under the directions of the Audit & Supervisory Board members to gather information, investigate matters, and give other assistance.

Internal audits

The Internal Audit Department operates as a single organization together with the Internal Audit Office of the subsidiary SoftBank Corp. All 33 staff including the department head (as of June 1, 2017) are assigned concurrently to both companies to carry out internal audits. The 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 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 staff who act under the directions of the Audit & Supervisory Board members to gather information, investigate matters, and give other assistance.

Cooperation among Audit & Supervisory Board members, independent auditor and internal audit function

Cooperation between Audit & Supervisory Board members and 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.

Reason 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 each time at the Board of Directors meetings. Moreover, since 3 of the 10 directors are external directors, management benefits from diverse perspectives, and the function for mutual monitoring between directors is 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 independent auditor

(1) Status of audit by independent auditor

SBG concludes 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 the audit duties in fiscal 2016 and the number of assistants for the audit duties for the fiscal year are as follows:

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

Designated Limited Liability Partner and Engagement Partners:

Masayuki Nakagawa, Masayuki Yamada, Ryo Sakai

(b) Structure of assistants who supported the audit duties

Certified Public Accountants: 26, Others: 41

(2) Remuneration for audits and other duties

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

  • Remuneration for audit certification duties

    SBG: 441 million yen
    Consolidated subsidiaries: 1,005 million yen

  • Remuneration for non-audit duties

    SBG: 82 million yen
    Consolidated subsidiaries: 32 million yen

(b) Other material remuneration

Certain of SBG's 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 2,694 million yen as remuneration for audit certification duties, ARM Holdings plc, Sprint Corporation, and other subsidiaries paid 179 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 financial investigation services related to M&As.

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