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Corporate Governance Initiatives 

Basic Concept of Corporate Governance

A company's stakeholders include consumers, business partners, and the community at large, in addition to customers, shareholders and investors. The SBI Group keenly recognizes the social nature of companies, therefore contributes the preservation and development of society and uncompromisingly engages in customer-oriented businesses in accordance with the "Customer-centric Principle," which is the Group's core management principle. The Group also considers it essential to obtain public trust during the course of business activities and is working to ensure transparency and fairness in its decision-making, and to establish an organizational structure capable of promptly responding to changes in the business environment, as well as to enhance appropriate corporate governance to increase corporate value.

Overview of the Governance System (As of June 29, 2021)

SBI Holdings has selected an organizational structure with a board of statutory auditors and consequently established the Board of Directors and the Board of Statutory Auditors. The Company's Board of Directors, consisting of 15 Directors, with seven Independent Outside Directors (as of June 29, 2021), is strengthening its oversight of the appropriateness of the company's management. The Board of Directors meets once a month, in principle, to decide important matters and to oversee the status of business execution. In addition to Executive Directors including the President, Senior Executive Vice Presidents, and Senior Managing Directors, 11 Executive Officers with expertise and insight aligned with the Directors are in charge of business execution. The Company clearly defines the functions and responsibilities of the Executive Directors, Executive Officers, and the Board of Directors, and has put in place an organizational structure capable of promptly and flexibly responding to sudden changes in the business environment.
The Statutory Auditors are responsible for establishing a solid corporate governance system worthy of public trust, by means including auditing the Directors' performance of duties. The Statutory Auditors ensure collaboration with Outside Directors and Accounting Auditors and endeavor to realize a more effective corporate governance system.
The Company believes that, through this structure as it now stands, the Company is able to uphold the basic principles of corporate governance, which are to ensure the rights and the equality of all shareholders, collaborate properly with other stakeholders besides shareholders, ensure appropriate information disclosures and transparency, execute the responsibilities of the Board of Directors, etc. and maintain dialogue with shareholders.

Configuration Company with Board of Statutory Auditors
Number of Directors 15
of which are Independent Outside Directors
7 (Independent Outside Directors ratio: 46.6%)
Term of office of Directors 1 year
Number of Statutory Auditors 4
of which are Outside Statutory Auditors
2
Number of Board of Statutory Auditors’ meetings 15
Number of Directors registered as Independent Executives 7
Number of Executive Officers 11

Independent Outside Directors and Outside Statutory Auditors

SBI Holdings has seven Independent Outside Directors and two Outside Statutory Auditors.
Independent Outside Directors and Outside Statutory Auditors provide supervision, audit, advice, and recommendations for the Company from an objective and neutral standpoint that does not pose a risk of interest conflict with general shareholders, and from an outside perspective by utilizing their expertise, broad and sophisticated management experience, and insight, to ensure the adequacy and appropriateness of the decision-making and business execution of the Board of Directors.

Reasons for appointment as Independent Outside Director and attendance at Board of Directors' meetings

Name Reasons of appointment Number of times (ratio)
Independent Outside Director Teruhide Sato Mr. Teruhide Sato participated in launching CyberCash K.K. (currently, DG Financial Technology, Inc.) in Japan and has served as Representative Director, President and CEO of netprice, Ltd. (currently, BEENOS Inc.). He has a wealth of experience and extensive knowledge, particularly in relation to Internet businesses in Asia. 12 (100%)
Heizo Takenaka Mr. Heizo Takenaka successively served as the Minister of State for Economic and Fiscal Policy, the Minister of State for Financial Services, the Minister of State for Internal Affairs and Communications, and in other posts, and is teaching at Keio University while also serving as an outside director in private companies. 12 (100%)
Yasuhiro Suzuki Mr. Yasuhiro Suzuki successively served as Representative Director and President of Seven & i Netmedia Co., Ltd., Director & Executive Officer, CIO of Seven & i Holdings Co., Ltd., and in other posts, and has a wealth of experience in a wide range of fields, including Internet businesses. 12 (100%)
Hiroshi Ito *1 Mr. Hiroshi Ito successively served in important positions such as Representative Director of Marsh Japan, Inc., which is a global leading company that provides services related to insurance and risk management and is a subject matter expert in insurance fields, which the SBI Group focuses on. 10 (100%)
Kanae Takeuchi *1 One of the Company's most important challenges is to ensure that the Board of Directors heeds women's perspectives and strengthens its approach in this regard. Ms. Kanae Takeuchi has played active roles both in the past and presently and is well-suited particularly in the area of media to reflect the opinions of stakeholders of the Company, including individual shareholders, at meetings of the Board of Directors. 10 (100%)
Junichi Fukuda *2 Mr. Junichi Fukuda successively served as Vice Minister of Finance and has extensive experience in the field of finance. He can be expected to bring constructive opinions to the SBI Group's financial business in general, especially in the fields of regional revitalization and expanding cooperation with regional financial institutions. -
Hiroyuki Suematsu *2 Mr. Hiroyuki Suematsu successively served as Vice Minister of Agriculture, Forestry and Fisheries and has extensive experience in agriculture, forestry and fisheries industry, and the food industries. He can be expected to bring constructive opinions to the SBI Group in many fields including the use of supply chain management with blockchains and operating the Osaka Dojima Exchange, Inc., which handles commodities futures. -
*1 Appointed and assumed office at the Ordinary General Meeting of Shareholders held on 26 June 2020.
*2 Appointed and assumed office at the Ordinary General Meeting of Shareholders held on 29 June 2021.

Improving the effectiveness of the Board of Directors

1. Method of Analysis and Evaluation
From February to March 2021, the Company conducted a self-assessment for all Directors and Statutory Auditors regarding the effectiveness of the Board of Directors. The Company analyzed and evaluated the effectiveness of the Board of Directors, based on the results of the self-assessment, as well as the discussions at the Board of Directors meeting held in March 2021.

Items included in evaluation of effectiveness
・Structure and composition of organizations such as the Board of Directors
・Operation of the Board of Directors
・Agenda, deliberation, and decision-making of the Board of Directors
・Supervisory system of the Board of Directors
・Relationships with shareholders and other stakeholders
・Self-evaluation
・Other

2. Overview of Results of the Analysis/Evaluation
The evaluation found the Board of Directors to be sufficiently effective and to be effectively carrying out its function as a business execution and monitoring organization. On the other hand, the evaluation noted that in order to further improve the effectiveness of the Board of Directors, it is critical to prepare a robust compliance and risk management system across the Group, owing to the Company's speed of growth and business diversification. In addition, there was a meaningful exchange of views regarding the necessity of considering ESG and the SDGs in management. The Board of Directors is continuing to strengthen its effectiveness based on the above results of this analysis and evaluation and will ensure that it contributes to the increase of sustainable corporate value.

Management Advisory Committee

In order to further strengthen supervision of the appropriateness of management and improve the transparency of management, SBI Holdings has established the Management Advisory Committee, an individual advisory organization under the Board of Directors, in which more than two-thirds of the members are Independent Outside Directors. This ensures information and opinions sharing from an objective perspective, while also maintaining an environment in which Independent Outside Directors may engage appropriately and actively in discussions of the Board of Directors.
The Committee is operated for the purpose of being properly involved with the function of the Board of Directors and the deliberation processes thereof related to the designation of candidates for Directors and Statutory Auditors, the appointment/dismissal of management executives, compensation for Directors, as well as the development of the next generation of management executives. In doing so, the Committee increases the objectivity and transparency of the decisions the Board of Directors makes, and contribute to the further enhancement the Company's corporate governance system.

The Members of the Management Advisory Committee (As of June 29, 2021)
Chairman of the Management Advisory Committee Heizo Takenaka*
Member of the Management Advisory Committee Teruhide Sato*
Member of the Management Advisory Committee Hirofumi Gomi
Member of the Management Advisory Committee Yoshitaka Asaeda
Member of the Management Advisory Committee Yasuhiro Suzuki*
Member of the Management Advisory Committee Hiroshi Ito*
Member of the Management Advisory Committee Kanae Takeuchi*
Member of the Management Advisory Committee Junichi Fukuda*
Member of the Management Advisory Committee Hiroyuki Suematsu*
* Independent Outside Directors of the Company

Compensation (FY2020)

Executive classification Total compensation
(Millions of yen)
Total compensation by type (Millions of yen) Number of corresponding executives
Basic compensation Bonuses Restricted stock units
Directors
(excluding Outside Directors)
584 191 393 - 8
Statutory Auditors (excluding Outside Statutory Auditors) 13 13 - - 1
Outside Directors and Outside Statutory Auditors 83 75 8 - 8

Basic policy on parent and subsidiary listings, and protection of minority shareholders

Since the SBI Group has a wide range of business areas, some investors have voiced that it is difficult to attain an understanding of the full picture. In response to this, we work to make the corporate value of the Group as a whole more visible by promoting initial public offerings for our subsidiaries so that the business value of each operational unit becomes clear. While increasing the capital procurement capability of each Group company, these public stock offerings enable them to strengthen their financial standing and to be self-reliant. At the same time, in order to protect minority shareholders, we adhere to the arm's length principle to ensure the fairness and rationality of transactions with each company in the Group and respect the independence of their management.
For Morningstar Japan, which is listed on the Prime Market, we maintain a basic policy of ensuring that transactions with the SBI Group are objective and apply the same conditions as to transactions with other business associates, using fair market prices, and ensuring that transactions are appropriate, as determined by the Board of Directors. We also endeavor to make it a priority of internal auditing and audits by Statutory Auditors to ensure that the conditions of transactions within the Group are determined comparably to general transaction conditions.
In addition, for SBI Insurance Group, which is listed on the Growth Market, we maintain a basic policy of ensuring that transactions with the SBI Group are the same appropriate terms and conditions as those for general transactions. When a transaction with the SBI Group is expected, the appropriateness of the conditions of the transaction is discussed at the Board of Directors meetings in advance, to protect the profits of shareholders other than the controlling shareholder.

Corporate Governance Principles
Annual Report 2021: Corporate Governanc (534.8KB/6pages)
Corporate Governance Report
Internal Control
Risk Management