mixi, Inc.

GOVERNANCE

Our Officers

Appointment policy and nomination procedure for directors

The following is our policy regarding the appointment of director candidates (except outside directors).

Proposals for the position of director (except outside directors) are given considering both the diversity and appropriate size of the Board of Directors, with directors possessing a good overall balance of the knowledge, experience, and abilities to efficiently fulfill their roles and responsibilities.

Proposals for the positions of director (except outside directors) who are to be in charge of business executions are given for the persons who can make forward-looking, accurate, appropriate, and swift business decisions and executions to help the Company achieve continual growth and higher corporate value over the medium to long term.
Director candidates (except outside director candidates) are selected in accordance with this policy, and final decisions are made by a resolution of the Board of Directors after deliberation by the Nomination and Compensation Committee.
Nominations for outside directors are given considering both the diversity and appropriate size of the Board of Directors, with directors possessing a good overall balance of knowledge, experience, and abilities.

Reasons for candidate nomination / meeting attendance

Three of the seven members of the Board of Directors and all three members of the Audit and Supervisory Board are outside members. Outside directors are expected to provide advice and supervision from an independent perspective, while outside ASB members are expected to provide objective auditing of job performance without being influenced by directors. Outside directors and outside Audit and Supervisory Board members thus ensure the effectiveness of management monitoring systems.

Title Officer Reason for Appointment Board of Directors’ Meeting Attendance
(FY 2022)
Audit & Supervisory Board Meeting Attendance
(FY 2022)
Director Koki Kimura     Koki Kimura has demonstrated strong leadership since becoming a corporate officer in 2014 and has made a great contribution to the Group’s improved performance, while also leading efforts to improve the corporate value of the Group after assuming the office of President and Representative Director in June 2018.
The Company’s Board of Directors selected Koki Kimura to continue as a director specifically for outstanding leadership, especially in management strategy skill, insights into marketing strategy, and ability to promote corporate governance. These qualities stand to strengthen the Board of Directors and promote further growth of the Group.
20/20 meetings (100%)
Hiroyuki Osawa     Hiroyuki Osawa has held a number of posts in administration and management divisions of the Company, including accounting and finance divisions, and thus has an abundance of knowledge and experience in relation to the overall administration and management of the Group.
The Company’s Board of Directors selected Hiroyuki Osawa to continue as a director specifically for their knowledge and experience in the areas of management strategy formulation, M&A and post-merger integration, promotion of the financial and accounting aspects of risk management, and promotion of corporate governance. These qualities stand to strengthen the Board of Directors and promote further growth of the Group.
20/20 meetings (100%)
Tatsuma Murase     Tatsuma Murase has held a number of posts within technical divisions of the Company, including development divisions, making them able to give a technical perspective through their abundance of knowledge and experience.
The Company’s Board of Directors selected Tatsuma Murase to continue as a director specifically for their knowledge and experience in the areas of management strategy formulation, management promotion (in the areas of business strategy, marketing strategy, and technology and research), and promotion of the technological aspects of risk management. These qualities stand to strengthen the Board of Directors and promote further growth of the Group.
20/20 meetings (100%)
Kenji Kasahara     As founder of the Company, Kenji Kasahara served as the President and Representative Director for many years in the past and has extensive knowledge and experience in relation to the management and overall business of the Group. Even after stepping down from the office of the President and Representative Director, they lead the development of new businesses for the Company based on the knowledge and experience they have accumulated.
The Company’s Board of Directors selected Kenji Kasahara to continue as a director specifically for their knowledge and experience in the areas of management strategy formulation, as well as management promotion in the areas of business strategy, marketing strategy, and technology and research. These qualities stand to strengthen the Board of Directors and promote further growth of the Group.
18/20 meetings (100%)
Satoshi Shima Outside Independent In addition to experience as a member of the House of Representatives, Satoshi Shima possesses an abundance of experience and extensive expertise related to corporate activities. With this in mind, we deem them to have played an appropriate role in areas including managerial decision-making and the supervision of business executions.
The Company’s Board of Directors has selected Satoshi Shima to continue as an outside director in anticipation that they will utilize past experience and expertise to strengthen the functions of the Board of Directors, namely by formulating management strategies, providing recommendations regarding M&A and post-merger integration, promoting corporate governance, and supervising managerial matters to further the growth of the Group.
20/20 meetings (100%)
Akihisa
Fujita
Outside Independent With business management experience, including advertising and digital media business and tourism-related business, Akihisa Fujita possesses an abundance of experience and extensive expertise related to corporate activities. With this in mind, we deem them to have made appropriate contributions in areas including managerial decision-making and the supervision of business executions.
The Company’s Board of Directors has selected Akihisa Fujita to continue as an outside director in the anticipation that they will utilize past experience and expertise to strengthen the functions of the Board of Directors, namely by formulating management strategies, promoting management from the perspective of business and marketing strategies, providing recommendations regarding M&A and post-merger integration, promoting corporate governance, and supervising managerial matters to further growth of the Group.
N/A
Yuki
Nagata
Outside Independent Yuki Nagata possesses an abundance of experience and extensive expertise related to corporate branding as well as global business and marketing. With this in mind, we deem them to be adept in areas including managerial decision-making and the supervision of business executions.
The Company’s Board of Directors has selected Yuki Nagata as an outside director in anticipation that they will utilize past experience and expertise to strengthen the functions of the Board of Directors, namely by promoting management from the perspective of business and marketing strategies, promoting risk management from the perspective of PR, promoting Corporate Governance, and supervising managerial matters to promote further growth of the Group.
N/A N/A
Audit & Supervisory Board member Yuichiro Nishimura Outside Independent Yuichiro Nishimura has knowledge and experience in the areas of human resources and general affairs through their work at automobile and automobile parts manufacturers, and has been selected as an outside ASB member to strengthen the Company’s auditing system. 20/20 meetings (100%) 20/20 meetings (100%)
Hiroyuki Wakamatsu Outside Independent Hiroyuki Wakamatsu has been selected as an outside ASB member because the Company trusts them to perform audits due to their specialized knowledge and experience as a certified public accountant and tax accountant. 20/20 meetings (100%) 20/20 meetings (100%)
Nozomi Ueda Outside Independent Nozomi Ueda has been selected as an outside ASB member because they possess specialized knowledge and experience as an attorney, which they will use to strengthen the Company’s auditing system. 20/20 meetings (100%) 20/20 meetings (100%)

Criteria for judging independence of outside officers

Based on a reasonable amount of research by mixi and the criteria for judging independence prescribed by the Tokyo Stock Exchange, mixi deems its outside officers and outside officer candidates to have sufficient independence as long as they do not fall into any of the following categories.

  1. Business executives of mixi or one of mixi’s subsidiaries
  2. Business executives of counterparties of mixi that exceed the transaction standard set by mixi (Note 1)
  3. Consultants, accountants, or jurists that receive large amounts of cash or other assets aside from officer compensation (Note 2)
  4. If the recipient is a corporate body or organization, then this refers to members of that corporate body or organization
  5. Principal shareholders of mixi (Note 3) and their business executives
  6. Business executives of major lenders and banks that work with mixi
  7. Business executives of mixi’s book runners
  8. Business executives of auditing firms that work with mixi
  9. Close relatives of individuals that fall into categories 1-3 (Note 4)
  10. Individuals that fell into categories 1-7 within the past 3 years

Note 1: “Counterparties of mixi that exceed the transaction standard set by mixi” means counterparties whose transactions with mixi exceed 2% of mixi’s consolidated net sales.
Note 2: The value of “large amounts of cash or other assets aside from officer compensation” is an amount more than or equal to 10 million JPY for individuals, or an amount more than or equal to 2% of their consolidated net sales for corporate bodies or organizations.
Note 3: In accordance to Article 163, Paragraph 1 of the Financial Instruments and Exchange Act, “principal shareholders of mixi” means any shareholder that holds voting rights (excluding those specified by a Cabinet Office Ordinance in consideration of the manner of acquisition, holding thereof, or other circumstances) exceeding 10 percent of the voting rights held by all shareholders, whether held in their own name or that of another person, or under a fictitious name.
Note 4: “Close relative” means any relative up to the second degree.

Composition of officers

Skill Matrix of Directors and ASB members after this Ordinary General Meeting of Shareholders

To reflect mixi’s materialities, the following is a list of items that mixi expects from each director candidate and ASB member. The following list is not intended to represent all of the knowledge and experience possessed by each person.

*The above list includes current ASB members.

Policy and procedure for deciding officers’ compensation

The following is our policy regarding compensation for directors.

Basic policy:

Our basic policy for director compensation is to provide a sound incentive for continuous growth by establishing an appropriate ratio between cash compensation and stock compensation.

Compensation system:

Based on this policy, compensation for directors (excluding outside directors) consists of two components: monthly cash compensation and stock compensation (stock options) issued annually after an Ordinary General Meeting of Shareholders.

More specifically, compensation can be categorized as base compensation, stock-based compensation, or performance-based compensation. Base compensation consists of cash compensation; stock-based compensation consists of stock options; performance-based compensation gives the recipient the choice of either monthly cash compensation or stock compensation (stock options) issued annually after the Ordinary General Meeting of Shareholders. The ratio between base compensation and stock-based compensation favors stock-based compensation. Compensation proposals are determined by the company’s past results and shared compensation data of companies listed on the Tokyo Stock Exchange compiled by specialist companies, discussed by the Nomination and Compensation Committee, then voted on by the Board of Directors.
To maintain their independent status, compensation for outside directors consists of monthly cash compensation only.
Furthermore, there is no retirement benefits system for directors.

Calculating compensation:

Methodology for determining director compensation is as follows:

Compensation for directors (excluding outside directors)

The level of base compensation and stock-based compensation is determined by factors including representation authority and the director’s position. Stock options that can only be used after a set period or retirement are issued as a form of stock-based compensation for the purpose of improving medium- to long-term corporate value and sharing value with shareholders. Performance-based compensation is determined by first considering the director’s position, a comprehensive evaluation of their department’s performance in the previous period and their personal contribution to their department’s performance, as well as the company’s performance as a whole. The base amount for performance compensation (based on the director’s base compensation) is multiplied by a performance coefficient to determine the final amount of performance compensation.

Performance evaluations are based on both company and department sales and operating income, comparing actual results against forecasts, and YoY change.

Compensation for outside directors

The amount of cash compensation awarded is determined by the director’s position using compensation data of companies listed on the Tokyo Stock Exchange compiled by specialist companies.

Decision process:

In order to protect objectivity and transparency, the compensation system and decision process for directors (excluding outside directors) is discussed by the Nomination and Compensation Committee (consisting of all outside directors, the Representative Director, and one internal director) and voted on by the Board of Directors.
The decision on compensation for individual directors is made by resolution of the Board of Directors. For directors other than outside directors, the Nomination and Compensation Committee must deliberate before a resolution is adopted by the Board of Directors.
At the Ordinary General Meeting of Shareholders held on June 28, 2016, it was decided that compensation for directors, including monthly remuneration and stock options, shall not exceed 1 billion JPY per year (and no more than 100 million JPY for outside directors).

As their role as ASB members is to audit for compliance with laws and regulations, compensation for ASB members consists of cash compensation only.