will relocate to each operating company's site.コーポレート・ガバナンスCorporate Governance
Our Corporate Governance status is as follows:
Ⅰコーポレート・ガバナンスに関する基本的な考え方及び資本構成、企業属性その他の基本情報
1. Basic Concept
The Group has set the management principles of "Pursuing the spiritual and physical enrichment of like-minded people by contributing to the progress and development of society," and will build a governance system that can effectively and efficiently achieve this goal. The Company's basic approach to Corporate Governance is to develop a management governance system and implement measures necessary for sound development while simultaneously ensuring management efficiency and legality, and we regard this as one of the most important management issues. In addition, the Company has established the "Code of Conduct for Officers and Employees" to share the Group's philosophy and basic approach to compliance, the "Affiliated Company Regulations" to stipulate management policies and management systems for Group companies, and has established various rules and regulations to be observed by Group companies and their officers and employees, thereby strengthening the governance of the Group as a whole.
[Reasons for not implementing the principles of the Corporate Governance Code]
[Supplementary Principle 2.4.1 Ensuring Diversity in the Appointment of Core Human Resources]
The Group believes that the source of a company's comprehensive strength and competitiveness is a wide variety of human resources and their utilization, and aims to achieve sustainable growth through a training system that contributes to the recruitment of excellent human resources and the improvement of the capabilities of all partners (employees) in order to create corporate value and solve social issues in order to create innovation and realize its mission. In addition, the "Spirit Venture Declaration," which serves as a guideline for action as a member of the GMO Internet Group, states that "we will eliminate all discrimination in terms of race, nationality, gender, educational background, language, and religion. We respect diversity and strive to achieve equal opportunity. Furthermore, based on the idea that a company is a place to nurture people, we provide a place where people can maximize their abilities, share a vision for the organizational growth of our business and company, and continue to work on work style reforms, including the development of our own human resource development system and welfare programs. In hiring, regardless of gender, educational background, humanities, sciences, or nationality, we comprehensively evaluate "way of thinking," "enthusiasm," and "ability" based on personal aspects. Regardless of attributes, we provide equal evaluation and promotion opportunities for all partners, so we do not set target figures for each attribute to ensure diversity.
For details on the status of initiatives to ensure diversity, please refer to "III. Status of Implementation of Measures for Shareholders and Other Stakeholders 3. Status of Initiatives for Respect for the Positions of Stakeholders and Others" and "Annual Securities Report "Part 2 [Approach and Initiatives on Sustainability] (5) Strategies, Indicators, and Targets Related to Human Capital" in this report.
[Principle 2.6 Exercise of Functions as an Asset Owner of Corporate Pension Plans]
The Group does not have a defined contribution pension plan, so it is not eligible.
[Supplementary Principle 4.1.2 Medium-Term Management Plan] [Principle 5.2 Formulation and publication of Management Strategy and management plans]
The Group strives to maximize the Group's corporate value by comprehensively assessing the strategy, revenue, risks, etc. of its business from a medium- to long-term perspective, formulating medium-term Management Strategy and management plans, making decisions and approving them by the Board of Directors, and conducting regular monitoring based on changes in the business environment and other factors. The Company's Board of Directors conducts appropriate business operations by reviewing the achievement of monthly and annual plan targets and providing feedback on the results every month.
However, the Group does not disclose its medium-term management plan because it believes that even if it announces a multi-year medium-term management plan, it is likely to mislead shareholders and investors even if it publishes a multi-year medium-term management plan, as it belongs to the rapidly changing Internet industry and continues to grow at a high rate every year while promoting business strategies flexibly and quickly.
We are working to promote understanding of the plans for the current fiscal year and the business strategies to achieve them through detailed explanations at quarterly financial results briefings and other means.
[Supplementary Principle 4.11.3 Analysis and Evaluation of the Effectiveness of the Board of Directors as a Whole]
The Group analyzes and evaluates the effectiveness of the Board of Directors once a year and strives to improve the functions of the Board of Directors.
Specifically, the Board of Directors is working to evaluate the effectiveness of the Board of Directors, incorporating objective and quantitative methods such as questionnaires to all directors inside and outside the company, and strives to ensure that the effectiveness of the Board of Directors is appropriately ensured from a wide range of perspectives, including organizational design and the nomination and remuneration of each director, as well as the composition and operation of the Board of Directors.
At the same time, with the aim of further strengthening functions, we are continuously formulating and implementing improvement measures for issues related to the Board of Directors, which were highlighted in the evaluation process.
Regarding the disclosure of the summary of the results of analysis and evaluation, we will consider the method of disclosure in the future.
[Disclosure based on the principles of the Corporate Governance Code]
[Principle 1.4 Cross-shareholdings]
The Company holds cross-shareholdings when they contribute to the enhancement of corporate value over the medium to long term, such as business alliances and business synergies. Every year, we verify the rationality of holding each individual stock after verifying the significance of holding it in terms of business strategy and the benefits associated with holding it (dividend as well as returns obtained from commercial transactions and business synergies) in relation to the cost of capital. The decision on whether or not to invest is made after careful deliberation by the Board of Directors or the Management Committee, depending on the importance of the project and its qualitative and financial importance, based on the scrutiny of each department.
In addition, with regard to the exercise of voting rights for cross-shareholdings, the Company will exercise its voting rights based on a comprehensive judgment of whether the proposal is beneficial to the enhancement of the corporate value of the issuing company and the impact on the Group as a shareholder. Depending on the content of the proposal, we will consult with the issuing company and make a decision with a high degree of satisfaction on both sides.
[Principle 1.7 Related Party Transactions]
When conducting transactions with officers or major shareholders ("Related Party Transactions"), the Group comprehensively compares the terms and conditions of transactions with third parties so as not to harm the common interests of the Company and shareholders, and approves the appropriate terms and conditions after deliberation by the Board of Directors, including multiple External Director.
When the Board of Directors passes a resolution approving a related party transaction, the directors involved in the transaction do not participate in the resolution as special interested parties and are not included in the quorum. Transactions with the parent company are deliberated by a special committee comprised of External Director, who are independent officers, as necessary.
[Principle 2.6 Exercise of Functions as an Asset Owner of Corporate Pension Plans]
The Group does not adopt a defined contribution pension plan, so it does not fall under these principles.
[Principle 3.1 Enhancement of Information Disclosure]
(1) management principles, etc.
The Group's management principles is to "contribute to the progress and development of society and pursue the spiritual and physical enrichment of like-minded people." For details, please refer to the Annual Securities Report "2 [Business Status] 1 [Management Policy, Business Environment and Issues to be Addressed] (1) Basic Management Policy of the Company."
The Group's management principles is based on the Spirit Venture Declaration. GMO Internet Group, Inc., the parent company of GMO Internet, Inc., is engaged in the Internet infrastructure business, Internet advertising and media business, Internet finance business, crypto assets business, and incubation business under the corporate slogan of "Internet for all." In addition, the Spirit Venture Declaration, which expresses the spirit that the company has cultivated since its founding, is disseminated and shared with GMO Internet Group executives and employees in various ways.
For more information on the Spirit Venture Declaration, please refer to the company's website.
（https://www.gmo.jp/brand/sv/）
(2) Basic Approach and Basic Policy on Corporate Governance
For the basic approach to Corporate Governance, see "I. Basic Approach to Corporate Governance and Capital Structure in this Report.
Corporate Attributes and Other Basic Information 1. Basic Approach" in Refer to "Basic Approach".
(3) Policies and procedures for the Board of Directors to determine the remuneration of senior management and directors
The Company has established the following basic policy on the remuneration of officers, etc.
(1) Functions as an appropriate incentive to enable sustainable growth and medium- to long-term enhancement of corporate value, (2) The remuneration system reflects the Group's business environment and short-, medium- and long-term performance, as well as the degree of contribution to the enhancement of value of stakeholders, and (3) reflects the roles, responsibilities, and results of each officer and other officer while curbing excessive risk-taking. (4) Establish an appropriate level based on economic and social conditions and industry trends, as well as surveys conducted by a third party on management compensation, (5) take into account the performance status and financial soundness of each Group company, as well as regulations related to executive remuneration in Japan and overseas, and (6) Make decisions based on appropriate governance and review them in a timely and appropriate manner in light of economic and social conditions and the business environment.
The remuneration of directors is designed to increase the motivation to contribute to the improvement of performance not only in the short term but also in the medium to long term so that it is possible to continuously improve corporate value, and consists of fixed remuneration in which a fixed amount is paid monthly as compensation for the execution of duties, bonuses for directors linked to the performance of the relevant fiscal year, and stock-based remuneration linked to medium- to long-term performance. In addition, it is our policy to pay only fixed remuneration to External Director, which is independent of business execution.
In order to ensure the appropriateness of executive remuneration and the transparency of the decision-making process, the Company has established the Nomination and Remuneration Committee, chaired by External Director, as an advisory body to the Board of Directors. Remuneration (including bonuses, etc.) for directors is determined by the Board of Directors after deliberation by the Nomination and Remuneration Committee.
Since the Nomination and Remuneration Committee conducts a multifaceted examination of the details of remuneration for individual directors, including consistency with the decision policy, the Board of Directors basically respects the report and determines that it is in line with the decision policy.
As a general rule, the Group's payment policy is to pay the remuneration of directors who concurrently serve as officers of group companies from the principal company.
(4) Policies and procedures for the Board of Directors in appointing senior management and nominating candidates for directors
For the policies and procedures for the appointment of senior management and the nomination of candidates for directors, see "I. Basic Approach to Corporate Governance and Basic Information on Capital Structure, Corporate Attributes, and Other Basic Information in this Report. [Disclosure based on the principles of the Corporate Governance Code] [Supplementary Principle 4.11.1 Approach to the balance, diversity, and size of knowledge, experience, and abilities of the Board of Directors]" and " II. Status of the business management organization and other Corporate Governance systems related to management decision-making, execution, and supervision 2. Matters related to functions such as business execution, auditing and supervision, nomination, and remuneration determination (Overview of the current Corporate Governance system)".
(5) Explanation of individual appointments and nominations when nominating directors
External Director For the reasons for the appointment of candidates, please refer to "II. Status of the Management Organization and Other Corporate Governance Systems Related to Management Decision-Making, Execution, and Supervision, 1. Matters Related to Organizational Structure, Organizational Management, etc. [Directors]" in this report.
Other reasons for the appointment of director candidates are described in the reference documents in the regular Annual Meeting of Shareholders convocation notice.
[Supplementary Principle 3.1.3 Sustainability Initiatives, etc.]
(1) Sustainability Initiatives
Based on the "GMO-ism" shared by the GMO Internet Group, management principles "Pursue the spiritual and physical enrichment of like-minded people by contributing to the progress and development of society", and as a leading company in the payment industry, we provide various payment and finance related solutions and platforms, infrastructure of payments We are promoting business activities that support online, cashless, paperless, DX, finance inclusion, etc.
Through such payment-based innovations, we are working to solve a wide range of social issues, such as improving corporate competitiveness and revitalizing socioeconomic activities, through the promotion of our business that supports diverse corporate activities.
Together with the stakeholders who support our business activities, we will contribute to the growth of our customers and the realization of a sustainable society while working to solve social issues, and realize sustainable high growth and enhancement of our corporate value.
(2) Investment in human capital
企業は人を育てる場所である、という考えのもと、能力を最大限発揮できる場の提供と、事業・会社の組織成長に向けてパートナー全員でビジョンを共有し、独自の人材育成制度や福利厚生等の整備を含む働き方改革に継続して取り組んでおります。詳細については、「有価証券報告書「第２【サステナビリティに関する考え方及び取組】（５）人的資本に関する戦略並びに指標及び目標」及び当社ホームページをご参照ください。
有価証券報告書（https://www.gmo-pg.com/news/pdf/20231218_gmo_pg_ir_yuho.pdf）
当社ホームページ-社会（https://www.gmo-pg.com/sustainability/social/）
(3) Risks and revenue Opportunities Related to Climate Change
当社は、従来の決済サービスに比べ環境負荷の低いオンライン化やキャッシュレス化、ペーパーレス化を推進し、また金融関連サービスにおいては、当社と同様に環境負荷の低いオンラインビジネスやFinTechサービスを提供する国内外の事業者の成長に資するべく融資サービス等を提供しております。これらの当社サービスを通じてお客様及び社会の環境負荷低減に取り組み、脱炭素社会への転換、持続可能な社会の実現を目指します。
また、2023年1月に、TCFD（気候関連財務情報開示タスクフォース）提言への賛同を表明いたしました。今後も、TCFD提言に基づき、気候変動に関する情報開示の拡充を図ってまいります。詳細については、「有価証券報告書「第２【サステナビリティに関する考え方及び取組】（４）気候変動に関する戦略並びに指標及び目標」及び当社ホームページをご参照ください。
有価証券報告書（https://www.gmo-pg.com/news/pdf/20231218_gmo_pg_ir_yuho.pdf）
当社ホームページ-環境（https://www.gmo-pg.com/sustainability/environment/）
[Supplementary Principle 4.1.1 Summary of the scope of delegation to management]
The Board of Directors makes decisions on statutory matters and important management matters, and supervises the execution of duties by directors.
In addition, decision-making other than matters decided by the Board of Directors is delegated to the Executive Committee, Representative Directors, etc., in accordance with the standards set forth in the Regulations of the Management Committee and other internal regulations.
[Principle 4.9 Independence External Director Independence Criteria and Qualifications]
The Company has stipulated the independence requirements for Outside Officers in the "Detailed Regulations on Independence Standards for Outside Officers." For the details of the independence requirements, please refer to the Annual Securities Report "4 [Status of Submitting Companies], 4 [Status of Corporate Governance, etc.], (2) [Status of Officers], and (2) Status of Outside Officers."
[Supplementary Principle 4.10.1 Independence, Authority and Role of the Committee on Nomination and Remuneration]
The Company has directors (excluding those who are members of the Audit and Supervisory Committee). The Nomination and Remuneration Committee has been established as a voluntary committee related to nomination and remuneration, and the committee is responsible for the functions of both the Nomination Committee and the Remuneration Committee. For details, please refer to this report, "II. Status of the Management Organization and Other Corporate Governance Systems Related to Management Decision-Making, Execution, and Supervision 1. Matters Related to Organizational Structure and Organizational Management [Voluntary Committees] Status of Establishment of Voluntary Committees, Composition of Members, and Attributes of the Chairperson (Chairperson)."
The chairman and majority of the members of the Company's Nomination and Remuneration Committee are independent External Director.
[Supplementary Principle 4.11.1 Approach to the balance, diversity, and size of knowledge, experience, and abilities of the Board of Directors]
当社は、取締役候補の選任については、取締役がその役割・責務を実効的に果たすための知識・経験・能力を備え、各取締役相互及び管理職による360度評価制度の結果も総合判断し、取締役会の多様性（国籍・性別・年齢）と適正規模を両立させる形で構成されるよう留意しております。取締役候補者は、この考え方を踏まえて選定し、指名報酬委員会の審議を経た上で、取締役会に上申され、決定されます。
なお、各取締役のスキルマトリックスについては、当社ホームページの「第30期定時株主総会招集ご通知」の「コーポレート・ガバナンスに関する基本的な考え方」に記載しております。
（https://www.gmo-pg.com/ir/pdf/20231125_gmo_pg_ir_shosyu01.pdf）
[Supplementary Principle 4.11.2 Concurrent Positions of Directors of Other Listed Companies]
External Director discloses the status of concurrent positions at other companies annually through reference documents for Annual Meeting of Shareholders convocation notices, business reports, and securities reports.
[Supplementary Principle 4.14.2 Training Policy for Directors]
With regard to the training policy for directors of the Company, as a general rule, each officer who is a management professional strives to acquire the necessary knowledge and improve his or her abilities at his or her own discretion, and is working to deepen and share knowledge and skills through detailed discussions at the Board of Directors meetings and briefings in advance for External Director.
In addition, external seminars on the Companies Act, Corporate Governance, etc. are held at the request of each director, and external seminars are used as appropriate for newly appointed officers to acquire the knowledge necessary for officers.
[Principle 5.1 Policy on Constructive Conversations with Shareholders]
(1) Basic Concept
In order to achieve sustainable growth and increase corporate value over the medium to long term, the Company believes that it is important to engage in continuous and constructive dialogue with shareholders and investors, and to avoid any discrepancies between the understanding of top management and the understanding of the capital markets regarding the Company's situation.
In order to realize such dialogue, we have established an IR system led by the director in charge of IR and have established a forum for dialogue with shareholders and investors. In addition, when engaging in dialogue with shareholders and investors, the basic policy is for top management to provide explanations in their own words, and for top management to answer questions and answers.
(2) Designation of directors to oversee overall dialogue with shareholders and measures for organic cooperation among internal departments to assist in dialogue
Dialogue with shareholders and investors is supervised by the Director in charge of IR, and the Corporate Value Creation Strategy Headquarters Investor Relations Department, which is the department in charge of investor relations, is in charge of day-to-day coordination among departments.
Meetings with domestic and overseas investors are attended by senior management, including top management, to a reasonable extent and explanations are given.
(3) Means of dialogue other than individual interviews
Our basic policy is to hold quarterly financial results briefings for analysts and institutional investors, and the top management themselves provide explanations and answer questions and answers. In addition, for analysts, shareholders, and investors who are unable to attend on the day of the meeting, a video of the financial results briefing is posted on the website. In addition, we have a policy of holding briefings for individual investors every six months in principle.
(4) Measures for feedback
The director in charge of IR regularly reports opinions and concerns grasped through dialogue with shareholders to management and related parties, and takes necessary measures as appropriate.
In addition, through participation in financial results briefings and regular internal briefings, we share the opinions of shareholders with our partners, including managers.
(5) Measures for the management of insider information
株主との対話の際には、当社の情報開示方針に基づき、情報の管理を適切に行い、インサイダー情報を伝達しないよう配慮しております。
情報開示方針は、当社ホームページに掲載しております。
（https://www.gmo-pg.com/ir/policy-releasepolicy/）
[Measures to realize management that is conscious of the cost of capital and stock price] [English disclosure available]
The Company strongly recognizes its responsibility to shareholders to place emphasis on capital efficiency and strive to improve shareholder value.
The weighted average cost of capital (WACC) for the entire Group is estimated as a capital cost, and WACC is used to make management decisions when evaluating the revenue of existing and new businesses at regular management meetings. In particular, as the finance-related business expands steadily, we revenue will examine the revenue of finance services such as lending that involve credit risk, and determine whether they will contribute to the management target of "maintaining an operating profit growth of 25%" in order to optimize our business portfolio. We are working to realize management that emphasizes sex and growth potential.
In addition, in order to alleviate the information asymmetry between the stock market and the Company and contribute to the reduction of capital costs, management strongly recognizes the importance of appropriate information disclosure and IR activities, and strives to ensure that the Company's growth potential is appropriately and fully evaluated by the market through the improvement of the quality and quantity of such information.
[Status of Dialogue with Shareholders, etc.]
上記株主との建設的な会話に関する方針に基づき、株主・投資家との積極的な対話を継続的に行っております。実施状況については、当社ホームページ「IR活動によるエンゲージメントの推進」に記載しております。
（https://www.gmo-pg.com/sustainability/governance/）
2. Capital Structure
|
Percentage of foreign shareholders |
20% or more and less than 30% |
|---|
[Status of Major Shareholders]
|
Name or designation |
Number of Shares Held (Shares) |
Percentage (%) |
|---|---|---|
|
GMO Internet Group, Inc. |
31,172,200 |
40.72 |
|
Japan Master Trust Bank, Ltd. (Trust Account) |
7,237,200 |
9.45 |
|
Japan Custody Bank, Ltd. (Trust Account) |
6,303,900 |
8.23 |
|
Sumitomo Mitsui Banking Corporation |
2,501,600 |
3.26 |
|
STATE STREET BANK WEST CLIENT - TREATY 505234 |
969,848 |
1.26 |
|
SSBTC CLIENT OMNIBUS ACCOUNT |
957,822 |
1.25 |
|
STATE STREET BANK AND TRUST COMPANY 505001 |
878,798 |
1.14 |
|
GOVERNMENT OF NORWAY |
816,224 |
1.06 |
|
Issei Ainoura |
800,000 |
1.04 |
|
THE BANK OF NEW YORK 134088 |
767,400 |
1.00 |
|
Presence or absence of a controlling shareholder (excluding the parent company) |
――― |
|---|---|
|
Presence or absence of a parent company |
GMO Internet Group, Inc. (Listing: Tokyo) |
Supplementary explanation
The above "Status of Major Shareholders" is the status of the shareholder registry as of September 30, 2023.
3. Corporate Attributes
|
Listed Exchanges and Market Segmentation |
Tokyo Prime |
|---|---|
|
Fiscal year end |
September |
|
Industry |
Information & Communications |
|
Number of employees (consolidated) at the end of the immediately preceding fiscal year |
More than 500 and less than 1000 |
|
(Consolidated) sales in the immediately preceding fiscal year |
10 billion yen to less than 100 billion yen |
|
Number of consolidated subsidiary at the end of the previous fiscal year |
10 to 50 |
4. Guidelines for Measures to Protect Minority Shareholders in Transactions with Controlling Shareholders
When the Group conducts transactions with corporate groups such as the parent company, the Group carefully examines the appropriateness of the terms and conditions of transactions, including when initiating new transactions and continuing existing transactions, from the perspective of protecting minority shareholders, and by comparing them with the terms and conditions of transactions with other third parties. Specifically, the Company regularly comprehensively compares the terms and conditions of transactions with third parties and reports to the Board of Directors, which also participates in External Director, which is independent of the parent company, etc., that the terms are appropriate.
Important transactions and actions that conflict with the interests of the controlling shareholder and minority shareholders are discussed and examined by a special committee composed of independent persons, including independent External Director, and then reported to the Board of Directors for decision.
5. Other special circumstances that may have a significant impact on Corporate Governance
(1) Ensuring independence from the parent company
In conducting our business activities, we are required to notify our parent company, GMO Internet Group, Inc., in advance only for "important resolutions," but we make our own decisions on all operations, including sales activities in each business, and develop our business. In addition, we recognize that the concurrent duties of directors from the GMO Internet Group do not interfere with our own management decisions, and that the independence of management is ensured.
(2) Approach and Policy on Group Management
The Group achieves stable management and the achievement of performance by conducting sound business operations in which each Group company conducts business operations in a relaxed manner according to the business environment of each Group.
While ensuring the autonomous organizational management of each company, we aim to accelerate business growth by maintaining unity and maximizing synergies, and to maximize the corporate value of the Group.
(3) Significance of having a listed subsidiary
As a listed subsidiary of our company, GMO Financial Gate, Inc. provides payment processing services such as Credit card payment and debit card payment in the Card Present Transactions field.
In the Card Present Transactions field on which GMO Financial Gate, Inc. is based, business opportunities are increasing against the backdrop of the expansion of cashless payments and the strengthening of security in cashless payment as national issues become issues.
By improving the social credibility and name recognition associated with the listing and strengthening the development of systems and services by utilizing the funds raised, we can expect to play a role in social infrastructure as a Card Present Transactions service provider, fulfill our social mission, and continuously expand our business over the medium to long term.
With the progress of cashless and online payment, the payment business in which the Group is involved is undergoing major changes while merging Card Present Transactions and non-Card Present Transactions fields, and business opportunities for the Company and GMO Financial Gate, Inc. are increasing accordingly.
In addition to demonstrating our strengths in the areas in which we are based and aiming for business growth, we believe that making maximum efforts to realize group synergies will accelerate the growth of the entire group and the growth of GMO Financial Gate, Inc..
In such an environment, we believe that maintaining a majority of our shareholding ratio and pursuing group synergies and promoting our business will contribute to the enhancement of our corporate value.
(4) Measures to ensure the effectiveness of the governance system of listed subsidiary
We will continue to maintain GMO Financial Gate, Inc. as a consolidated subsidiary, but we will respect the independence of the company and support a more autonomous operation. In addition, GMO Financial Gate, Inc. 's business development is not based on the approval or instructions of the Company, but is independently decided and executed by GMO Financial Gate, Inc. based on the judgment of the management team, which is led by independent directors who are not at risk of conflicts of interest with general shareholders and full-time directors who make up the majority.
(Quoted from the Corporate Governance report on December 18, 2023)
2023/12/18 Corporate Governance ReportThe corporate governance of GMO Payment Gateway, Inc. ("Company") is described below.
I. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information
1. Basic Views
The GMO Payment Gateway and the consolidated companies (the "Group") upholds the management principle of "Pursue both material and spiritual prosperity through our contributions to the progress and development of society;" and we implement governance systems that can effectively and efficiently realize this principle. The basic view on corporate governance is to securely both management efficiency and legal compliance by implementing measures and structures necessary for management governance in the interest of achieving sound progress, and considers corporate governance as one of the management's highest priorities. We have strengthened the corporate-wide governance structure by establishing rules to be adhered to by all of the group companies and employees in managerial positions which include the Employee's Code of Conduct that stipulates the principles and the basic views on compliance, and the Group Company Rules that stipulates the administrative and managerial policies and structure for group companies.
Reasons for Non-compliance with the Principles of the Corporate Governance Code
Supplementary principle 2.4.1: Ensuring Diversity in the Promotion of Core Human Resources
The Group strives to realize sustainable growth by recruiting of talented human resources as well as the talent development systems to enhance the capability of all our employees. This is based on the belief that the source of the Group's competitiveness and comprehensive capability originates from the diversity of the human resources and its utilization that will help in realizing the corporate mission and creating innovation that leads to resolving social challenges and corporate value creation. Additionally, we uphold equal opportunity and respect for diversity in accordance with the Spirit Venture Declaration as a member of GMO Internet Group, which states that "we do not tolerate prejudice on the grounds of race, nationality, gender, educational background, language, religion, or any other factors. We value people for their ability and merits." Based on our view that "workplace is where people can grow," the Group continuously works on workstyle reforms that includes the development of proprietary talent development programs and employee welfare and benefits, as well as to share the vision of business and corporate organization growth among all partners by providing the environment to fully exercise each person's potential. Recruitment activities are based on that individual's comprehensive abilities of views/opinions, passion and capability and does not consider gender, education, science-oriented or humanities/arts-oriented nor the nationality. There are no numerical targets based on personal attributes in order to secure equitable evaluation to all employees and equitable opportunity that is not based on personal attributes.
For further details on initiatives to secure diversity, please refer to "3 Measures to Ensure Due Respect for Stakeholder," found under "III Implementation of Measures for Shareholder's and Other Stakeholders." Information is also available in the Annual Securities Report, under "5 Strategies, Indicators and Targets Related to Human Capital" found under "2. Approach to Sustainability and Related Initiatives."(available in Japanese language only)
Principle 2.6: Roles of Corporate Pension Funds as Asset Owners
This principle does not apply as the Group does not adopt the Defined Contribution Pension plan.
Supplementary principle 4.1.2: Mid-Term Business Plan
Principle 5.2: Establishing and Disclosing Business Strategies and Business Plans
The Group works to maximize the group's corporate value by formulating mid-term management strategy and management plants based on a comprehensive assessment of the business' medium-term strategic value, profitability and risk, which is then decided and approved at the Board of Directors meeting and regularly monitored given the changes in the business environment. The monthly Board of Directors meeting discusses feedback and results to review the achievements of the monthly and annual targets in order to ensure an optimal business execution.
The Group is positioned in the drastically changing Internet industry and it is the agile and prompt responses of business strategies that has resulted in achieving a high growth every year. Hence, releasing a mid-term management plan spanning multiple years may result in misleading shareholders and investors and for this reason, a mid-term management plan is not disclosed.
Moreover, the plans for the current year and the relevant business strategy to achieve them are explained in detail at every quarterly financial results meeting in order to further the understanding of our businesses.
Supplementary principle 4.11.3: Analyzing and evaluating the overall effectiveness of the Board
The Group undertakes an annual analysis and evaluation of the effectiveness of the Board of Directors and strives to improve the functioning of the Board.
Specifically, the Group works to ensure that the Board's effectiveness is appropriately undertaken based on a wide perspective including, but not limited to, its organizational design, nomination and remuneration of each Board member, as well as the Board's composition and its operation and by incorporating objective and quantifiable methods such as questionnaires conducted to all Directors. Concurrently, the issues and problems revealed in the evaluation process is continuously addressed through improvement measures and implementation in order to further enhance the Board's functions.
The disclosure method of the overview of the results of these analyses and evaluations are under consideration.
Disclosure Based on the Principles of the Corporate Governance Code
Principle 1.4: Cross-Shareholdings
The Company may own so-called cross-shareholding shares if it is deemed to improve the medium-to-long-term enterprise value such as through potential business alliances and business synergies. The Company verifies the economic rationality of each of the cross-shareholding share by weighing the business rationale and the benefits of ownership (be it dividends, commercial deals and/or benefits from business synergies) against the capital cost of ownership. Investment decision is authorized by the Board or Executive Committee through careful consideration of the qualitative and monetary implication, depending on the importance of each transaction that are screened by the relevant department.
The exercise of voting rights of these cross-shareholdings is determined by comprehensively evaluating whether the proposal positively contributes to the issuer's enterprise value as well as its potential effect to the shareholder, i.e., the Group. Depending on the proposal, we will endeavor to reach a decision conducive to both the issuer and shareholder by holding discussions with the issuer where necessary.
Principle 1.7: Related Party Transaction
Transactions conducted between the Group and its Directors and/or major shareholders ('related party transactions') must be approved by the Board that includes several External Directors, following due discussion on the appropriateness of the terms and conditions and comparison with other third-party transactions, in order to ensure that such transactions do not harm the interests of the company nor the common interests of shareholders.
When the Board is deciding on such related party transaction, the Director related to the transaction will be excluded from the vote and will not be counted in the quorum of the Board.
Note that for transactions with the parent company will be considered and undergo deliberations by the Special Committee comprised of External Directors, an independent Director, whenever necessary.
Principle 2.6: Roles of Corporate Pension Funds as Asset Owners
The Group does not adopt the defined contribution corporate pension plan and, therefore, this principle is not applicable.
Principle 3.1: Full Disclosure
(1) Company Objectives, etc.
The Group's management principle is "Pursue both material and spiritual prosperity through our contributions to the progress and development of society." This management principle is founded on the Spirit Venture Declaration. Under our parent company GMO Internet Group, Inc.'s corporate slogan of "Internet for Everyone," GMO Internet, Inc. is engaged in the Internet Infrastructure Business, Online Advertising & Media Business, Internet Finance Business, Cryptoasset Business and the Incubation Business. The Spirit Venture Declaration embodies the spirit held since the founding of the company and is made aware and shared through various means to/with all GMO Internet, Inc. group companies and employees.
For further information on the Spirit Venture Declaration, please refer to GMO Internet Inc. website.
（https://www.gmo.jp/en/brand/#philosophy）
(2) Basic views and guidelines on corporate governance
For our basic views on corporate governance, please refer to this document's 1. Basic Views, found under the "I. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information."
(3) Board policies and procedures in determining the remuneration of the senior management and directors
The basic policies and procedures in determining the remuneration of senior management and Directors are as follows:
1 Functions as an appropriate incentive to enable the medium-to-long-term improvement in enterprise value and sustainable growth.
2 Remuneration structure that reflects the level of contribution in value creation to stakeholders and reflects the Group's business environment and short-and-medium-term financial performance.
3 Reflects the performance results, roles and responsibilities of each individual Director and does not overly encourage risk-taking.
4 Remuneration must be deemed appropriate based on third party surveys of executive compensation levels in addition to reflecting the prevailing socioeconomic conditions and industry trends.
5 Must consider the regulations over director remuneration in both Japan and overseas as well as the group companies' financial results and financial soundness.
6 Must be determined in accordance with sound corporate governance and revised appropriately and in a timely manner to reflect socioeconomic conditions and the business environment in order to enable a sustainable improvement in corporate value.
Hence, the Director's remuneration is designed not only based on the short-term but to incentivize achievement of medium-to-long term improvement of financial performance. The Director's remuneration is composed of fixed remuneration consisting of fixed monthly amount paid to compensate the execution of duties, Director's bonus which is correlated to the financial performance of a business year and, stock compensation that is correlated to medium-to-long term financial performance. The External Directors, which are in an independent from executing on business operations are only paid a fixed remuneration.
In order to secure the transparency of the remuneration determination process and the appropriateness of the remuneration amount, the company has instituted the Nomination and Remuneration Committee that is chaired by an External Director, to act as the advisory body to the Board etc. The remuneration amount (including the bonus payments) for Directors is determined by the Board after due deliberations conducted at the Nomination and Remuneration Committee.
It is determined that the remuneration amount for each individual Director decided by the Board basically aligns with the Nomination and Remuneration Committee's report following the Committee's multi-faceted considerations to ensure consistency with the policies in determining the remuneration.
The Group's payment policy for Director's that hold concurrent positions at group companies is for the main company to be the payer of remuneration to that Director.
(4) Board policies and procedures in the appointment of the senior management and the nomination of Directors
For the policies and procedures in the appointment of the senior management and the nomination of Directors, please refer to this document's "Disclosure Based on Each Principle of the Corporate Governance Code and Views on Size, Diversity and Balance of Knowledge, Experience and Skills of the Board of Directors under the Supplementary Principle 4-11-1, found under 'I. Basic Information on Company's Characteristics and Capital Composition and Basic Views on Corporate Governance'" as well as "2. Matters on Functions of Business Execution, Audit and Supervision, Nomination, and Remuneration Decisions (Overview of Current Corporate Governance System) under 'II. Business Management Organization and Other Governance Systems regarding Decision-making, Execution of Business and, Supervision in Management.'"
(5) Explanations with respect to the individual appointments and nominations
For the explanation of the reasons for nominations of External Directors, please refer to 1. Organizational Composition and Operation under "II. Business Management Organization and Other Governance Systems regarding Decision-making, Execution of Business and, Supervision in Management."
The reasons for appointment of Director candidates are disclosed in the reference material of the Notice of General Meeting of Shareholders.
Supplementary Principle 3.1.3: Initiatives on Sustainability
(1) Initiatives on Sustainability
As a leading company in the payment industry, the Company promotes business activities that support online and cashless migration, paperless operations, digital transformation (DX) and financial inclusion by building payment infrastructures as well as providing payment and financial-related solutions and platform. These are based on the "GMO-ism" shared with GMO Internet Group, under which the Company upholds the management principle of "contributing to society to pursue both spiritual and material prosperity for our partners."
The Company is engaged in resolving a wide array of societal issues such as socioeconomic revitalization and enhancement of corporate competitiveness through the Company's businesses that leverage innovations centered on payment to support a diverse range of corporate activities.
Together with our stakeholders who support the Company's business activities, we strive to contribute to the realization of a sustainable society and our customers' growth that in turn enhances the Company's corporate value and a sustainable high growth rate.
(2) Investment into human capital
Based on the idea that "Corporation is a place to foster personal growth," the Company continuously undertakes workstyle reforms to develop proprietary talent development programs and employee benefit, etc., sharing the vision among all employees towards organizational growth of the business and company, and the provision of the workplace that enables full realization of one's potential.
For details, please refer to the Annual Securities Report under "(5) Strategies, Indicators and Targets Related to Human Capital" found under "2. Approach to Sustainability and Related Initiatives." Additional information is also available on our website.
Annual Securities Report(https://www.gmo-pg.com/news/pdf/20231218_gmo_pg_ir_yuho.pdf) (available in Japanese language only)
Website on "Social"(https://www.gmo-pg.com/sustainability/social/)
(3) Opportunity and risks associated with climate change
The Company promotes online, cashless and paperless migration, which has a low environmental footprint compared to conventional payment services. In addition, financial-related services such as lending, is offered to domestic and overseas operators involved in online and FinTech services that have a similarly low environmental footprint as the Company. Through such services, we aim to achieve the decarbonization of society and our customers and the transition to a carbon-free sustainable society.
In January 2023, the company endorsed the TCFD (Task Force on Climate-Related Financial Disclosures) recommendations.
The company will continue to work to expand climate change-related information disclosure as per TCFD recommendations.
For details, please refer to the Annual Securities Report under "(4) Strategy, Indicators and Targets Regarding Climate Change" found under "2. Approach to Sustainability and Related Initiatives." Additional information is also available on our website.
Annual Securities Report (https://www.gmo-pg.com/news/pdf/20231218_gmo_pg_ir_yuho.pdf) (available in Japanese language only)
Website on "Environment"（https://www.gmo-pg.com/sustainability/environment/）
Supplementary Principle 4.1.1: Scope and Content of the Matters Delegated to the Management
The Board makes decisions on matters of important management issues and on legal issues. The Board also oversees the execution of business responsibilities by the Directors.
The Executive Committee and Representative Director etc. are delegated to make decisions on matters other than the Board decisions and must comply to the standards set in internal rules and Executive Committee Rules.
Principle 4.9: Independence Standards and Qualification for External Directors
The Company stipulates the independence standards for External Directors in the Independence Standards and Rules for External Directors. (Japanese Language Only)
Supplementary Principle 4.10.1: Independence, Authorization and Roles of Committees on Matters Concerning Nomination and Remuneration
The Company has established the Nomination and Remuneration Committee as the voluntary committee for matters concerning nomination and remuneration of directors, etc. (excluding members of the Audit and Supervisory Committee) and is entrusted to function as both as a nomination committee and as a remuneration committee. For details, please refer to this document's "Advisory Committee, Overview of establishment, composition and chairperson of advisory committees" found under 1. Organizational Composition and Operation of "II. Business Management Organization and Other Governance Systems regarding Decision-making, Execution of Business and, Supervision in Management."
The majority of the members and the chairperson of the Nomination and Remuneration Committee is composed of independent External Directors at the Company.
Supplementary Principle 4.11.1: Views on the Appropriate Balance of Knowledge, Experience and Skill of the Board and its Diversity and Appropriate Board Size
The Board elects the candidates for Directors who are equipped with the knowledge, experience and skill to effectively carry out their role and responsibility and also holistically consider the results of the 360-degree evaluation by management and peer reviews. The Board will be mindful to achieve the appropriate size and diversity (nationality, gender and age) of the Board.
Candidate for Directors and Auditors will be selected on these policies and following the deliberations at the Nomination and Remuneration Committee, and will be formally proposed to the Board for the decision.
The skill matrix of each Director is shown in the "Basic Views on Corporate Governance" of the "Notice of the 30th Annual Meeting of Shareholders" available on the company website.
（https://www.gmo-pg.com/ir/pdf/20231125_gmo_pg_ir_shosyu01.pdf）
Supplementary Principle 4.11.2: Status of Concurrent Positions of Directors and Auditors at Other Listed Companies
The concurrent positions held by External Directors are disclosed yearly in the reference material of the Notice of General Meeting of Shareholders, Business Report and the Annual Securities Report.
Supplementary Principle 4.14.2: Training policy for Directors
In principle, our training policy for Directors is predicated on each individual Director's decision as a management professional to acquire the necessary knowledge and to endeavor to refine their skills. Through thorough discussions held at the Board meetings and by conducting prior explanatory sessions for External Directors, we strive to deepen and share the knowledge and skills base among Directors.
Additionally, external seminars on Corporate Law, Corporate Governance and other topics may be provided based on the requests of Directors, as well as appropriate external seminars for newly appointed Directors, to acquire the requisite knowledge for their role.
Principle 5.1: Policy for Constructive Dialogue with Shareholders.
(1) Basic Views
The Company considers it important not to create inconsistencies or distortions between the capital markets' understanding towards the Company and the top management's understanding of the capital markets' views of the Company, through constructive and continuous dialogue with shareholders and investors, for the purpose of improving the medium and long term enterprise value and for sustainable growth.
The Investor Relations ("IR") headed by the Director in charge of IR is established to conduct such dialogues and hold several venues to communicate with shareholders and investors. In addition, it is the Company's policy that that the top management must directly explain, in their own words, and also directly answer the questions posed to them.
(2) Appointing a member of the management or a director who is responsible for overseeing and ensuring that constructive dialogue takes place and, measures to ensure positive cooperation between internal departments
The Director in charge of IR manages the shareholder and investor dialogues, as well as the oversees the IR Department under the Corporate Value Creation Strategy Division, and also liaises with other internal divisions and departments on a daily basis. Where it is feasible, the management staff including management executive will also attend such meetings with investors in Japan and overseas to conduct the explanations.
(3) Measures to promote opportunities for dialogue aside from individual meetings
The Company's basic policy is to convene results briefing on a quarterly basis for analysts and institutional investors, with the top management as the speaker including for the question-and-answer session. In addition, the Company adopts a policy to carry out semi-annual meetings with individual investors, in principle.
(4) Measures to appropriately and effectively relay feedback from shareholders
The Director in charge of IR regularly reports to the senior management and related parties on the opinions and concerns expressed by shareholders gathered through the dialogues and respond as appropriate. Additionally, periodic internal meetings as well as participation in results briefing by employees including managers also foster sharing of views and opinions expressed by shareholders.
(5) Measures to control insider information when engaging in dialogue
Close attention is paid not to relay insider information in the dialogues with shareholders through appropriate information management based on the information disclosure policy. Information disclosure policies are stated in the following company website.
（https://www.gmo-pg.com/ir/policy-releasepolicy/）
【Action to Implement Management That is Conscious of Cost of Capital and Stock Price】【English disclosure】
The Company is strongly aware of its responsibility towards shareholders to "strive to improve shareholder value by emphasizing capital efficiency."
The weighted average cost of capital (WACC) is estimated for the Group as a whole to ascertain the capital cost, and WACC is utilized to reach management decisions when evaluating profitability of existing and new businesses at the regular Management Committee. In particular, this is used to verify the profitability of financial services such as lending that entail credit risks, given the steady expansion of the Money Service Business. Based on this and in addition to decision on whether the business aligns with the management target of "achieving a continuous 25% growth in operating profit," the Company strives to optimize its businesses and enable the management of both profitability and growth.
In addition, the management is strongly aware of the importance of appropriate information disclosure and investor relations (IR) activities in order to contribute to reduce any asymmetry and discrepancy in information between the equity market and the Company. As such, the Company will work towards improving both the volume and quality of such information disclosure in the effort that the Company's growth is appropriately and sufficiently evaluated by the market.
【Status on Better Dialogue with Shareholders】
The Company is engaged on proactive and continuous dialogue with shareholders and investors, based on the aforementioned policy regarding conducting constructive dialogue with shareholders. For details on the status please refer to the website's.
(https://www.gmo-pg.com/sustainability/governance/)
2. Capital Structure
|
Foreign Shareholding Ratio |
More than 20% but less than 30% |
|---|
Status of Major Shareholders
| Name/Company Name | Number of shares owned | Percentage (%) |
|---|---|---|
| GMO Internet Group, Inc. | 31,172,200 | 40.72 |
| The Master Trust Bank of Japan, Ltd. (Trust account) | 7,237,200 | 9.45 |
| Custody Bank of Japan, Ltd. (Trust account) | 6,303,900 | 8.23 |
| Sumitomo Mitsui Banking Corporation | 2,501,600 | 3.26 |
| STATE STREET BANK WEST CLIENT - TREATY 505234 | 969,848 | 1.26 |
| SSBTC CLIENT OMNIBUS ACCOUNT | 957,822 | 1.25 |
| STATE STREET BANK AND TRUST COMPANY 505001 | 878,798 | 1.14 |
| GOVERNMEBT OF NORWAY | 816,224 | 1.06 |
| Issei Ainoura | 800,000 | 1.04 |
| The BANK OF NEW YORK 134088 | 767,400 | 1.00 |
|
Controlling Shareholder (except for Parent Company) |
――― |
|---|---|
|
Parent Company |
GMO Internet Group, Inc. (Listed on Tokyo Stock Exchange, Prime Section), Securities code: 9449 |
Supplementary Explanation
The above Status of Major Shareholders is based on the information in the Shareholder Register as of September 30, 2023.
3. Corporate Attributes
| Listed Stock Market and Market Section | Tokyo Stock Exchange, Prime Section |
|---|---|
| Fiscal Year-End | September |
| Type of Business | Information & Communication |
| Number of Employees (consolidated) as of the End of the Previous Fiscal Year |
From 500 to less than 1,000 |
| Sales (consolidated) as of the End of the Previous Fiscal Year |
From ¥10 billion to less than ¥100 billion |
| Number of Consolidated Subsidiaries as of the End of the Previous Fiscal Year |
From 10 to less than 50 companies |
4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder
In the event that transactions engaged in with the parent and the parent company group occurs, including new and recurring transactions, particular attention is paid on the rationality of the terms and conditions of the transaction and on comparing the terms and conditions of the transactions with external transactions from the perspective of protecting non-controlling interest. Specifically, the suitability of the conditions of the transactions and comprehensive comparisons with third-party transactions are conducted regularly and reported to the Board that must be participated by an External Director who is independent from the parent and parent company group.
Transactions and actions that entail a conflict of interest between the controlling shareholder and non-controlling shareholders are evaluated and deliberated at the Special Committee that includes independent participants such as independent External Director and reported to the Board which is vested to reach a decision.
5. Other Special Circumstances which may have Material Impact on Corporate Governance
(1) Independence from parent company
In conducting business activities, matters regarding business expansion, all aspects of operations, marketing and sales activities of each business is decided independently by the Company, excepting for those matters classified as "Material Items to be Resolved" that must be notified beforehand to the parent company, GMO Internet Group, Inc. The independence of management is acknowledged to be secured and that concurrent positions held by Directors from GMO Internet Group do not impede the indigenous decisions of the management.
(2) Basic view and policy underlying group management
The Group strives to achieve stable management and achievement of business performance through the sound and flexible business operations of each company in the Group based on their respective business environments.
The group seeks to accelerate the business growth through increasing synergy and maintaining cohesion, while also securing the self-sufficiency and independence of each company's operations for the aim of maximizing the corporate value of the entire Group.
(3) Significance of having listed subsidiaries
GMO Financial Gate, Inc. is a listed consolidated subsidiary, that provides payment processing service in the offline markets such as credit card and debit card payments. Business opportunity in the offline market that GMO Financial Gate, Inc. addresses is expanding, given the backdrop of increasing cashless adoption and the need to tighten security as a national issue.
Through the improvement in recognition and social reliability achieved through listing and by strengthening its systems and business development through the use of proceeds from listing, GMO Financial Gate, Inc. expects sustainable medium-to-long term business opportunities that would enable it to fulfill its social mission in providing a social infrastructure as an offline payment services company.
In addition to striving to grow businesses in each of the respective domains, making efforts to maximize synergies will also contribute to growth throughout the Group as well as to accelerate the growth at GMO Financial Gate, Inc.
Given these considerations, maintaining majority ownership of GMO Financial Gate, Ltd and promoting businesses through the synergies will contribute to the enhancement of the corporate value.
(4) Measures to secure effective governance of listed subsidiaries
The Company intends to maintain GMO Financial Gate, Inc. as a listed subsidiary, while supporting its self-sufficient management and respecting its independence. In matters pertaining to business development and expansion, GMO Financial Gate, Inc. exercises an independent decision-making according to the decisions of its own management staff composed of a majority of dedicated Directors and independent Directors that do not pose a conflict of interest with the general shareholders and is not subject to approvals or instructions from the Company.
(Cited from Corporate Governance Report, December 18, 2023)
2023/12/18 Corporate Governance Report (Japanese language only)VIEW
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