CORPORATE INFORMATION

Basic Philosophy and Basic Policy

1-1 Basic Philosophy

The Company is working to expand business and enhance corporate value, with a basic stance on corporate management of aiming to continue developing as a company that is trusted and respected by society by conducting fair and appropriate corporate management while recognizing our social responsibility to contribute to the happiness of people and the creation of rich culture, as stated in our corporate philosophy and code of conduct, in order to honor our public mission as a broadcaster. To that end, enhancing corporate governance not only serves to achieve fair and appropriate corporate management but is also indispensable for building relationships of trust between the Company and shareholders, viewers, employees, business partners and other stakeholders supporting the Company and thereby making it a company that is trusted and respected by society. The Company positions the enhancement of corporate governance as one of the key management tasks, and believes that the enhancement of corporate governance through ensuring appropriate functions of the Board of Directors, the Audit & Supervisory Board (the Company's kansayaku-kai) and other organizational units and further strengthening the management monitoring structure serve to secure and enhance both the Company's corporate value and the common interests of shareholders. Furthermore, the Company will strive to strengthen corporate governance in due respect of Japan's Corporate Governance Code as prescribed by the financial instruments exchange.

1-2 Basic Policy

The Company's basic policy on corporate governance is as follows:

1.Securing the Rights and Equal Treatment of Shareholders
The Company takes appropriate measures and provides prompt information disclosure as appropriate in accordance with laws and regulations to serve to fully secure the rights and equal treatment of shareholders and appropriate exercise of shareholder rights.
2.Appropriate Cooperation with Stakeholders Other Than Shareholders
The Company recognizes that efforts should be made to appropriately cooperate with the various stakeholders for sustainable corporate growth and creation of mid-to long-term corporate value. In addition, led by the management team, efforts are being made to foster a corporate culture that respects the rights and positions of stakeholders as well as corporate ethics so that cooperation with stakeholders is put into practice. Such efforts include setting the corporate philosophy and code of conduct, and holding a management policy briefing once every six months as an opportunity for these to be explained to all employees directly by the president and other management in their own words.
3.Ensuring Appropriate Information Disclosure and Transparency
The Company recognizes information disclosure as one of the key management tasks and that appropriate information disclosure is also essential for gaining the understanding of shareholders and other stakeholders. To put such recognition into practice, the Company strives for proactive disclosure of information (including non-financial information) that is deemed to be important to shareholders and other stakeholders, beyond the requirement of laws and regulations, through the Company's website and voluntary timely disclosure.
4.Responsibilities of the Board of Directors, etc.
The Company not only separates the structure for corporate management decision-making and oversight and the structure for execution of business operations in an effort to establish efficient corporate management and execution structures, but also appoints five outside directors (of which two are independent outside directors) in an effort to realize highly-transparent corporate management. Along with appointing outside directors to develop a structure for highly-effective oversight over members of the Board of Directors, three out of the four members of the Audit & Supervisory Board are appointed as independent outside auditors to develop a structure for highly-independent audit of the execution of duties of members of the Board of Directors. In addition, an environment is in place for outside directors to coordinate with members of the Audit & Supervisory Board to play a central role in evaluating members of the Board of Directors so that members of the Board of Directors appropriately fulfill their roles and responsibilities.
5.Dialogue with Shareholders
The Company recognizes that continuing to grow together with shareholders by proactively engaging in constructive dialogue with shareholders in day-to-day operations and reflecting the opinions and requests of shareholders in corporate management is important for sustainable growth and mid-to long-term corporate value enhancement. From such point of view, the Company develops the IR structure around a member of Board of Directors in charge of IR and strives to hold a constructive dialogue with the shareholders and investors by proactively responding to interview requests in order to gain understanding against the Company's corporate strategy and business plan.

1-3 Cross-Shareholdings

When shares in other listed companies are to be held for purposes other than pure investment, the rationality behind the cross-shareholdings is determined based on a careful examination of not only dividends and share price trends but also the risks and benefits such as whether or not the cross-shareholdings maintain/foster collaborative business ties, etc. with the invested companies, whether or not synergistic effects with the Company's business are anticipated and whether or not the cross-shareholdings serve to enhance the Company's mid- to long-term corporate value.
Selling will be considered for shares that have lost their holding rationality. The rationality of continued holding is considered based on capital costs by the Board of Directors every year, and regarding the currently-held shares in eight listed companies (2,294 million yen at the end of March 2018), the Board has decided to continue holding them as their purpose has been deemed appropriate and rational as even in light of the risks, the benefits are sufficient. In addition, concerning exercise of the voting rights to the cross-shareholdings, the general rule shall be to exercise the voting rights to all cross-shareholdings, and whether to vote in favor or against the proposals shall be determined in light of such factors as whether it contributes to the sustainable growth of the invested company by enhancing its mid- to long-term corporate value, or the realization of the purposes for holding as well as whether it enhances the Company's mid- to long-term corporate value and contributes to its sustainable growth, while dialoguing with the invested companies as necessary and respecting their management policies.

Overview of Corporate Governance Structure

2-1 Chart of Corporate Governance Structure

2-2 Corporate Governance Structure

The Company takes the form of a company with a kansayaku-kai (a company with a board of company auditors as defined in the Companies Act). The Board of Directors and the Audit & Supervisory Board each include outside directors who have been appointed for possessing knowledges and experiences in corporate management overall and for also being well-versed in the Group's business operations. The Company appoints these outside directors under expectation of gaining their opinion and advice on the Company's corporate management from an objective and neutral standpoint based on their knowledges and experiences in corporate management overall and therefore strengthen the Company's management monitoring structure, including oversight of the adequacy of the execution of duties of members of the Board of Directors.

1.Board of Directors
The Company's Board of Directors consists of twelve members (of which, five members are outside directors) with a term of office of one year. Holding ordinary meetings once every month in principle and extraordinary meetings as needed, the Board of Directors decides on the basic policy on corporate management and important matters concerning execution of business operations, and oversees the execution of duties of members of the Board of Directors. In addition, the Company has set up the Board of Full-Time Directors, consists of seven members all of whom are full-time members of the Board of Directors, from the perspective of securing timely and efficient decision-making and execution of business operations. Holding a meeting every week in principle, the Board of Full-Time Directors sets concrete policies on corporate management, considers and discusses such matters as concrete tasks of corporate management and important matters to be brought up for discussion at meetings of the Board of Directors, and oversees the execution of business operations of each department through sharing of the status of execution of business operations of each department, including Group companies.
2.Audit & Supervisory Board
The Company's Audit & Supervisory Board consists of four members (of which, one member is full-time and three members are outside auditors). Holding ordinary meetings once every month in principle and extraordinary meetings as needed, the Audit & Supervisory Board forms audit plans, and reports and discusses matters required for audits. Each member of the Audit & Supervisory Board audits the execution of duties of members of the Board of Directors in accordance with the audit plans formed by the Audit & Supervisory Board.
3.Financial Auditor
The Company appoints a Financial Auditor and is thus subject to the financial audits of Ernst & Young ShinNihon LLC. In addition, the Company has set up the Audit Department (five members) as an independent unit reporting directly to the president to conduct internal audits of the Company and its subsidiaries. Members of the Audit & Supervisory Board, the Financial Auditor and the Audit Department engage in necessary information sharing, etc. by consistently maintaining coordination.
4.Risk Management & Compliance Committee
The Company has set up the Risk Management & Compliance Committee, consists of the president as committee chairperson and members of the Board of Full-Time Directors and presidents of Group companies as committee members, from the perspective of ensuring that a risk management structure and compliance structure for the Group are in place. The Risk Management & Compliance Committee considers, discusses and approves policies, directions, action plans, corrective measures and other matters concerning corporate-wide risk management and compliance.
5.Information Security Committee
In order to protect important information assets including the Group's personal information, the Company has set up an Information Security Committee with the President as its chair and members of the Board of Full-Time Directors and Group company presidents as its committee members to consider, discuss and approve company-wide information security policy, direction, action plans, corrective measures, etc.

2-3 Status of Coordination Among Members of the Audit & Supervisory Board, the Financial Auditor and the Internal Audit Department

The Company's outside directors and outside auditors receive reports of the internal control, risk management and compliance and other status pertaining to financial reporting periodically and as needed from the respective members of the Board of Directors in charge. The outside auditors receive reports of the status and audit results of internal audits as needed from the Audit Department, and they are consistently maintaining coordination, In addition, the outside auditors receive reports of audit results periodically and as needed from the Financial Auditor, and they are consistently maintaining coordination.

2-4 Supporting System for Outside Directors (Outside Auditors)

Outside directors and part-time outside auditors are briefed in advance on the purpose and content of the proposed agenda of meetings of the Board of Directors by full-time members of the Board of Directors and full-time members of the Audit & Supervisory Board to facilitate productive discussion at the time of meetings of the Board of Directors.

2-5 Reasons for Selecting Current Corporate Governance Structure

The Company selects and takes the form of a company with a kansayaku-kai (a company with a board of company auditors as defined in the Companies Act) as opposed to a company with committees. This decision is based on the view that (a) having members of the Board of Directors, who have been appointed at a general meeting of shareholders, involved in the decision-making on important matters concerning corporate management and also taking charge of the oversight functions themselves would be desirable from the perspective of clarifying management responsibilities and ensuring proper business operations, and (b) having members of the Audit & Supervisory Board, who are not involved in the corporate management, audit the execution of duties of members of the Board of Directors from a neutral standpoint would be desirable from the perspective of securing soundness of corporate management.
On that basis, the Company has set up the Board of Full-Time Directors from the perspective of securing timely and efficient decision-making and execution of business operations. On the other hand, the Company has appointed outside directors who are well-versed in the Group's business operations to be five out of the twelve members of the Board of Directors from the perspective of strengthening the management monitoring structure, including oversight of the adequacy of the execution of duties of members of the Board of Directors. In addition, from the perspective of securing effectiveness of audits, the Company has not only appointed three outside auditors but also members of the Audit & Supervisory Board are working consistently under mutual coordination with the Financial Auditor and Audit Department. Furthermore, the Company has set up the Risk Management & Compliance Committee from the perspective of ensuring that a risk management structure and compliance structure for the Group are in place.
Furthermore, the Company has set up the Risk Management & Compliance Committee from the perspective of ensuring that a risk management structure and compliance structure for the Group are in place, and has set up an Information Security Committee from the perspective of protecting important information assets including the Group's personal information.

Directors

3-1 List of Directors

The Company has appointed five out of the twelve members of the Board of Directors as outside directors and three out of the four members of the Audit & Supervisory Board as outside auditors.
Directors

3-2 Reason for Appointment and Status of Attendance as Outside Directors

NameIndependent directorReason for appointmentStatus of attendance at meetings of the Board of Directors in fiscal year 2017
(Attendance / Holdings (attendance rate))
Kazunobu Iijima Judged to be qualified for the position of outside director in view of leveraging extensive experience and expertise as an executive of a broadcasting company in strengthening the Company's corporate management 9 attendances / 12 meetings (75.0%)
Kimio Maruyama Judged to be qualified for the position of outside director in view of leveraging extensive experience and expertise as an executive of a broadcasting company in strengthening the Company's corporate management 12 attendances / 12 meetings (100.0%)
Hiroshi Kanno Judged to be qualified for the position of outside director in view of leveraging extensive experience and expertise accumulated through corporate management strategy and other research activities in strengthening the Company's corporate management 11 attendances / 12 meetings (91.7%)
Yutaka Ishikawa (*) Judged to be qualified for the position of outside director in view of leveraging extensive experience and expertise as an executive of an advertising company in strengthening the Company's corporate management 8 attendances / 10 meetings (80.0%)
Masashi Nakao(*) Judged to be qualified for the position of outside director in view of leveraging extensive experience and expertise as an executive of a broadcasting company in strengthening the Company's corporate management 9 attendances / 10 meetings (90.0%)
* The difference in numbers of meetings held indicated above is due to the difference in date of accepting their appointment to their positions.

3-3 Reason for Appointment and Status of Attendance as Outside Auditors

NameIndependent auditorReason for appointmentStatus of attendance at meetings of the Board of Directors and meetings of the Audit & Supervisory Board in fiscal year 2017
(Attendance / Holdings (attendance rate))
Takashi Kusama(*) Judged to be qualified for the position of outside auditor in view of leveraging experience and extensive expertise as an executive in enhancing the Company's audit functions Board of Directors
11 attendances / 12 meetings (91.7%)
Audit & Supervisory Board
13 attendances / 13 meetings (100.0%)
Tomohiro Tohyama(*) Judged to be qualified for the position of outside auditor in view of leveraging experience and extensive expertise as an attorney in enhancing the Company's audit functions Board of Directors
12 attendances / 12 meetings (100.0%)
Audit & Supervisory Board
13 attendances / 13 meetings (100.0%)
Masayuki Umeda(*) Judged to be qualified for the position of outside auditor in view of leveraging experience and extensive expertise as an executive in enhancing the Company's audit functions Board of Directors
11 attendances / 12 meetings (91.7%)
Audit & Supervisory Board
12 attendances / 13 meetings (92.3%)

3-4 Director's Compensation

1.Policy on and Method of Determining Director's Compensation and its Calculation Method
The maximum amount of the total amount of compensation payable to members of the Board of Directors and that to members of the Audit & Supervisory Board shall be determined by resolution at a general meeting of shareholders.
The amount to be paid to members of the Board of Directors and members of the Audit & Supervisory Board shall be at a level that can sustain their motivation to improve business performance and secure exceptional human resources from within and outside the Company, and also at a level that takes into account the level at other companies in the same industry, the Company's corporate management status and the balance with the Company's employee salary.
The amount of compensation payable to each member of the Board of Directors shall be determined by comprehensively taking into account each member's positions and responsibilities, company business performance and degree of contribution to such business performance, etc., and the representative director shall be delegated by the Board of Directors to determine the specific amount. In addition, the amount of compensation payable to each member of the Audit & Supervisory Board shall be a fixed amount of compensation not linked to the Company business performance, and determined by discussion with the members of the Audit & Supervisory Board.

2.Total Amount of Compensation, Total Amount by Type of Compensation and Number of Applicable Directors by Director Classification (fiscal year 2017)

Director classificationTotal amount
of pay
(million yen)
Number of applicable directors
(persons)
Members of the
Board of Directors
[of which Outside Directors]
373
(48)
15
(7)
Members of the
Audit & Supervisory Board
[of which Outside Auditors
57
(28)
4
(3)
Total
[of which Outside Directors]
430
(76)
19
(10)

(Notes) 1. Persons who are concurrently an employee and member of the Board of Directors are not paid a salary as an employee.
2. By resolution at the 31st annual general meeting of shareholders held on June 23, 2015, the maximum compensation payable to members of the Board of Directors shall be an yearly amount that is not more than 490 million yen (provided, however, this shall not include the salary as an employee).
3. By resolution at the 31st annual general meeting of shareholders held on June 23, 2015, the maximum compensation payable to members of the Audit & Supervisory Board shall be an yearly amount that is not more than 69 million yen.

3-5 Incentives

The current compensation payable to directors is one approved at a general meeting of shareholders as the consideration for execution of duties with an upper limit for such compensation and is, at present, set as a monetary compensation within this limit.

Basic Philosophy on and Status of Development of Structure for Exclusion of Anti-Social Forces

4-1 Basic Philosophy on Exclusion of Anti-Social Forces

The Company, which has set an Anti-Social Forces Exclusion Policy based on the WOWOW Code of Conduct, shall exclude anti-social forces in any case under the following policy:

  • (1) Take action as an entire organization
  • (2) Closely cooperate with external expert organizations
  • (3) Secure the safety of directors, employees and other relevant persons from anti-social forces
  • (4) Ban any business or other ties, and reject unjust demands
  • (5) Take legal action, both civil and criminal
  • (6) Eliminate backroom deals for covering up anti-social forces incidents
  • (7) Strictly prohibit provision of funds to anti-social forces
  • (8) Be aware that accepting demands from anti-social forces is a violation of laws and regulations
  • (9) Do not engage anti-social forces
  • (10) Do not act in a way that facilitates or assists the activities of anti-social forces

4-2 Status of Development of Structure for Exclusion of Anti-Social Forces

The Company has set an "Anti-Social Forces Exclusion Policy", "Rules on Dealing with Anti-Social Forces" and a "Manual on Dealing with Anti-Social Forces" based on the WOWOW Code of Conduct to exclude anti-social forces. The unit dealing with anti-social forces is General Affairs Department and the person responsible is the director of the General Affairs Department. Directors and employees shall report immediately to their superior and the director of the General Affairs Department when an anti-social forces incident is suspected to take place or found to have taken place.
Dealing with anti-social forces incidents is a risk that shall be addressed by the Risk Management & Compliance Committee, and the Risk Management & Compliance Committee shall be convened to consider and decide on how to deal with such incidents as needed.