English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

Corporate Governance Report

CyberAgent, Inc.

Latest Revision: December 20, 2019

Company:

CyberAgent, Inc.

Representative:

Susumu Fujita,

Representative Director and

President

Inquiries:

IR&SR Division

Securities Code:

4751

URL:

https://www.cyberagent.co.jp/en/

The following is an overview of corporate governance at CyberAgent, Inc.

  1. Basic Policy, Capital Structure, Corporate Attributes and Other Basic Information

1. Basic Policy

The CyberAgent Group makes efforts to improve its corporate value under our vision of "To create the 21st century's leading company."

While recognizing that thoroughgoing corporate governance is essential for expanding business, the Group takes measures so that its corporate activities comply with laws, regulations, social norms, ethics.

In order to respect the positions of stakeholders and fulfill corporate social responsibility, the Group produced the "CyberAgent Mission Statement" for the purposes of not only following laws and regulations, but also establishing corporate ethics, and strives to improve the morals of executives and employees.

[Reasons for Not Implementing Principles of Corporate Governance Code] Updated

<> management plan>

Principle 4-1-2: CyberAgent (the Company) operate businesses in the Internet industry, which the business environment and technologies are changing rapidly. Therefore, instead of producing medium to long-term management plans, we explain our medium to long-term management strategies continuously through IR activities to promote the understanding of shareholders and investors.

[Disclosure Based on the Principles of the Corporate Governance Code] Updated

Principle 1-4: If business tie-ups are expected to be cemented, the Company may hold the Strategic- Shareholdings. As for the exercise of voting rights of such strategically held shares, we will examine the content of each bill and deal with it properly.

Principle 1-7: With regard to all transactions, including the ones between related parties, our "regulations for the board of directors," "rules for authority," etc. set forth appropriate systems and procedures according to the scale and importance of each transaction. Each conflicting interest transaction of directors requires the approval of the board of directors pursuant to law, and the results of the transaction are reported at a meeting of the board of directors.

Principle 2-6: The Company does not adopt the corporate pension funds.

- 1 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

Principle 3-1:

  1. Our vision, management strategies, etc. are disclosed in the financial reports and the Company's website.
  2. Our basic policy for corporate governance is written on our website, corporate governance reports, and securities reports.
  3. Regarding the amount of remuneration of each director (excluding a member of the Audit and Supervisory Committee), the Board of Directors consults the Remuneration Advisory Committee as needed. Based on the report, it will be determined by the Representative Director, who is entrusted from the Board of Directors within the limit of remuneration, which is approved at the general meeting of shareholders.

The amount of remuneration of each director who is a member of the Audit and Supervisory Committee are determined through consultation by directors who are members of the Audit and Supervisory Committee.

4. As per the company's Articles of Incorporation, the company's Board of Directors comprises no more than 15 members. CyberAgent's fundamental approach is for the Board of Directors to have the necessary and appropriate number of persons to ensure constructive discussion at Board of Director meetings, while also giving due consideration to a proper balance of knowledge, experience, and ability concerning each business.

When determining the candidates for Directors, the Board of Directors consults the Nomination Advisory Committee as needed. Based on the report, we appoint capable persons who possess broad perspectives and experience, demonstrate management strengths in their respective fields, have outstanding leadership and management skills, and bring a keen business sense and ambition to improve the corporate value of the Group.

As for the candidates for Directors who will also serve as Audit and Supervisory Committee members, under the consent of the Audit and Supervisory Committee, we select those who have sufficient expertise, experience, insight, and independence to carry out audits and supervisory duties appropriately.

With regard to outside directors, in addition to meeting external requirements under Japan's Companies Act, our selections are based on the candidate who also has the qualifications of an independent director as set by the Tokyo Stock Exchange, and meets criteria that deem them as posing no risk in terms of conflict of interest with ordinary shareholders. If a director violates the law or the articles of incorporation or has difficulty in accomplishing the job, the company's Board of Directors will make a comprehensive judgment with considering the outside directors' opinion about his/her removal.

5. The reasons for nominating each director candidate are disclosed through the convocation notice of a general meeting of shareholders.

Principle 4-1-1: The board of directors decides the execution of each business specified as items to be decided by the board of directors in the "regulations for the board of directors," "rules for authority," etc. For the execution of other businesses, the management is entrusted with decision making for them in accordance with the "rules for authority."

Principle 4-9: the Company selects independent external directors in accordance with the independence criteria specified by Tokyo Stock Exchange. The board of directors select those who understand the business administration and corporate value of our company, are independent of the management of our company, and are expected to contribute to constructive discussions in the board of directors, as candidate external directors.

- 2 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

Principle 4-11-1: The number of members of the board of directors of our company shall be up to 15 (of which members of the Audit and Supervisory Committee are limited to three), as set forth in the Articles of Incorporation. We nominate candidates with full attention to the balance between knowledge and experience in our business and capability of each member, as well as diversity. The Company appointed 15 directors (in which 14 directors are male, 1 director is female).

Principle 4-11-2: Concurrent positions of Directors (include Audit and Supervisory Committee members) are disclosed in the Notice of annual general shareholders' meetings, Securities Reports, and Corporate Governance Reports.

Principle 4-11-3: We conducted a questionnaire survey about the effectiveness of the board of directors targeted at directors include Audit and Supervisory members at the end of September 2019. The results of the survey showed that deliberations are made with sufficient time secured for the Board meeting. Each director are in close communication with the outside directors. They do not only stick to their own responsibilities but make appropriate decisions which will contribute to the company-wide business expansion, concentration and selection, enhancing enterprise value based upon discussions about budget, performance forecast and risk factors which can affect business and management.

Also, there is no problem in regard to the number of times the Board of Directors being held, the scope and quantity of the proposals being submitted, and the content of materials.

Principle 4-14-2: We hold compliance training sessions for all appointed directors to help them acquire the necessary knowledge for fulfilling their roles and duties.

Principle 5-1: We recognize that in order to achieve sustainable growth and improve enterprise value in the medium to long term, it is essential to have active dialogues with investors, including shareholders, and reflect their opinions and requests in our business administration. We developed an IR system, in which the representative director and managing director in charge of corporate function take central roles and the IR&SR Division serves as a contact point, for responding to inquiries from shareholders and other investors.

- 3 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

2. Capital Structure

Ratio of Shares Held by Foreigners

More than 30%

[Major Shareholders]

Updated

Name or Designation

Number of Shares Held

Shareholding Ratio

(Shares)

(%)

Susumu Fujita

25,909,600

20.56

The Master Trust Bank of Japan, Ltd. (trust account)

10,480,800

8.32

Japan Trustee Services Bank, Ltd. (trust account)

7,366,849

5.85

NORTHERN TRUST CO. (AVFC) SUB A/C NON

6,397,126

5.08

TREATY

THE BANK OF NEW YORK MELLON 140051

3,225,400

2.56

Japan Trustees Services Bank, Ltd. (Trust Account 5)

2,201,400

1.75

STATE STREET BANK AND TRUST COMPANY

1,977,937

1.57

505225

SSBTC CLIENT OMNIBUS ACCOUNT

1,947,680

1.55

MSIP CLIENT SECURITIES

1,906,932

1.51

GOLDMAN SACHS INTERNATIONAL

1,875,913

1.49

Controlling Shareholders (excluding parent

-

company)

Parent Company

-

3. Corporate Attributes

Stock Exchange Listings and Market Classification

First Section, Tokyo Stock Exchange

Fiscal Year-end

September

Industry

Service

Number of Employees as of Previous Fiscal

1,000 or more

Year-End (Consolidated)

Total Trading Transactions in Previous Fiscal Year

More than 100 billion yen and less than 1 trillion yen

(Consolidated)

Number of Consolidated Subsidiaries

More than 100 and less than 300

  1. Policy for Measures to Protect Minority Shareholders When Conducting Transactions with Controlling Shareholder
    N.A.
  2. Other Exceptional Circumstances that May Have a Material Impact on Corporate Governance N.A.

- 4 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

Overview of Business Management Organization and Other Corporate

  1. Governance Systems Related to Managerial Decision-Making, Business Execution, and Management Supervision

1. Items Related to Organizational Structure and Operations, etc.

Form of Organization

Company with Audit and Supervisory Committee

[Directors]

Number of Directors Stipulated in Articles of

15

Incorporation

Term of Office for Directors Stipulated in Articles of

1 year

Incorporation

Chairman of the Board of Directors

President

Number of Directors

15

Election of Outside Directors

Elected

Number of Outside Directors

3

Number of Outside Directors Designated as

3

Independent Director

Relationship with the Company (1)

Name

Attributes

Relationship with the Company*

a

b

c

d

e

f

g

h

i

j

k

Koichi Nakamura

Worked at the other company

Masao Horiuchi

Worked at the other company

Isao Numata

Worked at the other company

* Relationship with the Company

○: shows the item is/was applicable to the outside director either currently or until recently

: shows the item was applicable to the outside director in the past

  • : shows the item is/was applicable to a close relative of the outside director either currently or until recently

: shows the item was applicable to a close relative of the outside director in the past

  1. A person performing an executive role at the Company or its subsidiary
  2. A person performing an executive role at or who is a non-executive director of the Company's parent
  3. A person performing an executive role at an affiliate who is another subsidiary of the Company's parent
  4. A person (or its person performing an executive role) whose major customers include the Company
  5. A person (or its person performing an executive role) who is a major customer of the Company
  6. A consultant, accountant or lawyer who receives a large amount of monetary compensation or other property (other than remuneration as the outside director) from the Company
  7. A major shareholder (or its person performing an executive role) of the Company
  8. A person performing an executive role at a customer of the Company (other than those to which item d, e or f applies) (this item applies only to the outside director himself/herself)
  9. A person performing an executive role at an entity who has an outside director or corporate auditor from the Company
  10. A person performing an executive role at an entity to which the Company makes donations (this item applies only to the outside director himself/ herself)
  11. Others

- 5 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

Relationship with the Company (2) Updated

Audit and

Supplementary

Reason for Appointment as Outside

Name

Supervisory

Independent

Information

Director (For Independent Directors,

Committee

Director

Related to the

Including Reason for Designation as an

member

Criteria

Independent Director)

Koichi Nakamura

Until June 2014, he

The Company has appointed Mr. Koichi

was an executive

Nakamura for an outside director because he

officer of Recruit

has provided practical and objective

Holdings Co.,

indications regarding overall management and

Ltd.(The business

supervision of business execution from a third

amount in FY2019

party perspective when making decisions at

account for 4.98% of

the board of directors. He also offers many

our consolidated

useful advice on the use of human assets,

sales) which is the

which we value, and contributes to our

Company's specified

corporate value enhancement. He has

related business

contributed to business development for many

operator (major

years at Japan Recruit Center Co., Ltd.

customer). He had

(currently Recruit Holdings Co., Ltd.). He

received

served as a director and vice president of the

compemsation from

company and has vast experience and broad

July 2014 to June

insight into business promotion and corporate

2016 as an Advisor.

management.

However, he

resigned the role in

CyberAgent has determined that Mr.

June 2016, and there

Nakamura meets the qualifications of an

is no specific

independent director as set by the Tokyo

relationship between

Stock Exchange and poses no risk in terms of

them.

conflict of interest with ordinary shareholders,

and has thereby appointed him as a

Independent outside director.

Masao Horiuchi

Mr. Masao Horiuchi

The Company has appointed Masao Horiuchi

was a director of

for a Director serving on the Audit and

USEN-NEXT

Supervisory Committee. Because since he

HOLDINGS Co.,

took office as an Outside Director of the

Ltd., our regular

Company in December 2017, he has raised

client in the Internet

frank discussions with management regarding

Advertising

possible risks based on his broad experience

Business, from

and insight and offered advice on

strengthening internal control and corporate

December 2010 to

governance. Going forward, we continue to

June 2017, and has

expect him to supervise the Board of

been a full-time

Directors from an independent standpoint

auditor of this

when making decisions.

company since July

2017. In light of the

He has been responsible for corporate

fact that he is not an

management departments and internal

executive officer of

controls for many years. He has extensive

the company and

experience and comprehensive insights

that the scale of

regarding internal control and corporate

transactions between

governance as a director of U-NEXT Co.,

the company and us

Ltd. (currently USEN-NEXT HOLDINGS

(the amount of

Co., Ltd.). He is a certified tax accountant

transactions in

and has specialized knowledge in finance,

FY2019 account for

accounting, and tax.

0.65% to our

consolidated net

CyberAgent has determined that Mr.

sales) is

Horiuchi meets the qualifications of an

insignificant, and the

independent director as set by the Tokyo

nature of the

Stock Exchange and poses no risk in terms of

transaction, we think

conflict of interest with ordinary

- 6 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

there is no risk that shareholders, and has thereby appointed him

the judgment of as Independent outside director. shareholders and

investors will be affected.

Isao Numata

--

The Company has appointed Mr. Isao

Numata for a Director serving on the Audit

and Supervisory Committee. Because since

taking office as an outside director of the

Company, he has exchanged extensive

discussions from various perspectives, and

provided advice based on an abundant

information network. Based on these

contributions, we continue to expect him to

give appropriate supervision from an

independent standpoint when making

decisions at the Board of Directors.

He has run a consulting company for many

years to support public offering and

overseas operations. He has broad

experience and deep insights regarding

corporate management, stock markets, and

foreign markets.

Mr. Numata also worked from April 1988

to June 2000 at Daiwa securities (currently

Daiwa Securities Group headquarters),

which is CyberAgent's lead underwriter. It

should be noted, however, that he has never

held a key position concerning the

administration of Daiwa securities, and

more than 19 years has passed since he left

that company. He also had never had any

special business relationship with the

company after leaving it. Based on this

history, we consider him to have more than

adequate impartiality concerning

CyberAgent.

CyberAgent has determined that Mr.

Numata meets the qualifications of an

independent director as set by the Tokyo

Stock Exchange and poses no risk in terms

of conflict of interest with ordinary

shareholders, and has thereby appointed him

as Independent outside director.

- 7 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

Advisory Committee(s) to the Board, Composition and Attribution of Chairperson

Total

Full-time

Internal

Outside

Chairman

Name of Committee

Number of

Member

Directors

Directors

Members

Audit and Supervisory

3

1

1

2

Internal

Committee

Director

Appointment of Directors

Appointed

and employees who assist

the Audit and Supervisory

Committee with its duties

Matters relating to the Independence of Such Directors and Employees from Executive Directors

Employees who assist Director who is member of Audit and Supervisory Committee with its duties follow his or her leadership.

Cooperation between Audit and Supervisory Committee, Accounting Auditors and the Internal Auditing Division

Director who is a full-time Audit and Supervisory Committee member hold regular meetings with the Internal Audit Office to receive reports on the state of the execution of internal audits and the results of auditing in addition to exchanging opinions regarding such matters as internal audit execution plans, specific internal auditing methods and measures for improving internal auditing operations. She also cooperates with the Internal Audit Office upon the internal audits of the Company's divisions as well as Group companies and has interviews with Directors and employees, check documents, conduct field audits. Additionally, Directors who are Audit and Supervisory Committee members hold periodic meetings with Accounting Auditors to share information about auditing plans and audit results. Exchanges of opinions are also made as needed to increase effectiveness and efficiency of audits and to further strengthen corporate governance.

[Voluntary Establishment of Committees]

Voluntary Establishment of Committees equivalent Yes to Nomination Committee or Compensation Committee Updated

Status of Establishment of Voluntary Committee, Composition of Committee and Attributes of Committee Chair (Chairperson) Updated

Voluntary committee corresponding

Voluntary committee corresponding

to a nominating committee

to a remuneration committee

Name of committee

Nominating Advisory committee

Remuneration Advisory committee

Total number of members

5

5

Number of full-time members

2

2

Number of internal directors

2

2

Number of outside directors

3

3

Number of external experts

0

0

Number of other members

0

0

Committee chair (chairman)

outside director

outside director

- 8 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

Supplementary Explanation Updated

The Company's Board of Directors' meeting held on October 30, 2019, resolved to establish the committee to strengthen the Board of Director's independence, objectivity, and accountability, and further enhancing corporate governance. Based on the Board of Director's consultation request, the committee deliberates on matters regarding the nomination and remuneration of directors and makes recommendations to the Board of Directors.

[Independent Directors]

Number of Independent Directors

3

Matters relating to Independent Directors

N.A.

[Incentive Programs]

Incentive Policies for Directors

The stock option system has been adopted

Supplementary Information

Stock options are granted with the objective of further boosting the motivation and morale of the Company's Directors and employees to contribute to the consolidated performance of the Company as well as enhancing corporate value and further reinforcing the management culture.

Grantees of Stock Options

Executive Directors, Outside Directors, employees,

directors and employees of subsidiaries

Supplementary Information

Updated

Stock options are granted with the objective of further boosting the motivation and morale of the Company's Directors and employees of the Company as well as Directors and employees of the Company's subsidiaries towards raising business performance, etc.

The total value of stock options as of the end of September, 2019 was a balance of 863,700 (0.68% of issued shares including treasury stocks) issued shares and an assumed total paid-up value of 471,942,700 yen.

- 9 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

[Directors' Compensation]

Disclosure of Individual Directors' Compensation The compensation of individual Directors is not disclosed.

Supplementary Information Updated

The compensation of the Company's Directors in the fiscal year ended September 30, 2019 was as stated below.

Category

Number of paid Directors

Value of Compensation

Director who is NOT the Audit

12

457 million yen

and Supervisory committee

members

(Outside)

(1)

(15 million yen)

Director who IS the Audit and

3

18 million yen

Supervisory committee

members

(Outside)

(2)

(7 million yen)

Total

15

476 million yen

(Outside)

(3)

(23 million yen)

* The value of compensation above include cost of stock option granted to the directors (79 million yen).

Policy on Determining Compensation Amounts and None.

Calculation Methods

Disclosure of Policy on Determining Compensation Amounts and Calculation Methods

N.A.

[Support System for Outside Directors]

The Board of Directors Secretariat prepares materials in advance of the holding of a meeting of the Board of Directors and provides detailed briefings as needed to Outside Directors. The Management Headquarters acts as the contact point for inquiries from Outside Directors and carries out timely and appropriate information provision towards Outside Directors.

- 10 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

Matters regarding Decision-making Functions related to the Execution of Duties, Audit and Supervision, Appointments, Compensation, Etc. (Outline of the current corporate governance system) Updated

Regarding the matters related to the execution of duties, careful decision-making is carried out at the meeting of the Board of Directors, which is comprised of fifteen Directors (include three independent outside directors) in attendance on particularly important matters that are established through law, the Company's Articles of Incorporation and internal regulations as matters to be determined by the Board of Directors. Regularly cheduled meetings of the Board of Directors are held once a month, with extraordinary meetings held as needed. A total of 13 meetings of the Board of Directors were held in FY2019 and attendance of all Directors was 99.0%.

Regarding the matters that are not regarded as a matter to be resolved by the Board of Directors, flexible decision-making is practiced at a full-time board meeting consisting of eight full-time executive directors and one full-time Director who is an Audit and Supervisory member on a weekly basis.

Important investments are discussed by the Investment Committee carefully in advance, and the results of the discussion are reported to the Board of Directors and the Board of Full-Time Directors, so as to make more appropriate decisions for investments. The Company has selected the company with the Audit and Supervisory Committee as the institutional design under the Corporate Law, Directors who are members of the Audit and Supervisory Committee attend the meetings of the Board of Directors and other important meetings, to check the legality of business execution. If necessary, they receive reports and explanations from the executives and employees of the Company, and investigate major subsidiaries and offices, etc. The Audit and Supervisory Committee hold monthly and extraordinary meetings.

The Internal Audit Office, which is in charge of carrying out the internal audits of the Company's divisions and subsidiaries in cooperation with the Audit and Supervisory Committee member, report the audit results to the Board of Directors once every quarter.

2. Reasons for adopting the current corporate governance system Updated

The Company recognizes it as one of the important issues of management, that the company improves governance structure and carries out prompt measures.

The Company adopted an organizational structure of the Company with Audit and Supervisory Committee. From the viewpoint of seeking to improve corporate value over the medium to long term, three Independent outside directors provide advice on management policies, supervision of the execution of duties by Directors, oversee of such conflicts of interests between the Company and the Directors based upon their experience and knowledge about management, finance,accounting and stock market.

- 11 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

  1. Status of Implementation of Measures Related to Shareholders and Other Stakeholder

1. Measures to Revitalize the General Meeting of Shareholders and Facilitate of Exercise of Voting Rights Updated

Supplementary Information

Prompt Delivery of

The Company makes efforts to send out proxy materials at an early date in order

Convocation Notice of

to allow shareholders sufficient time to consider resolutions. Proxy materials are

General Meeting of

dispatched more than one week prior to the statutory date (more than three weeks

Shareholders

before the convening of the General Meeting of Shareholders). Materials are also

made available on the Company's website, the Tokyo Stock Exchange's website

and the electric platform of the voting exercise.

Setting Date of General

In order to more shareholders join Annual General Meeting, the date is decided

Meeting of Shareholders

to avoid concentrated days.

to Avoid Being Held on

The 22st Annual General Meeting of Shareholders was held on Friday,

the Same Day as Many

December 13, 2019.

Other Companies

Exercise of Voting

Since the 10th Annual General Meeting of Shareholders (held on December 20,

Rights by

2007), the Company has accepted the execution of voting rights via the Internet

Electromagnetic Means

from personal computers and mobile phones so that more shareholders can

participate in the meeting.

Participation in Platform

The Company adopted electronic voting platforms from the 18th Annual

for Exercise of Voting

General Meeting of Shareholders (held on December 11, 2015), in order to

Rights by

provide institutional investors with sufficient time to consider the content of the

Electromagnetic Means

resolutions.

and Other Measures to

Enhance Environment

for Exercise of Voting

Rights by Institutional

Investors

Providing Convocation

A notice of English convocation and disclosed information at the time of notice

Notice (Summary) in

are published on the corporate website as same as the Japanese version.

English

Other

Notice of Shareholders Meeting: Posted information necessary for investment

judgment without excess or deficiency with photos and graphs.

Briefing: In the first part, we report our business performance with video for a

better understanding. In the second part, the President explains medium to long-

term strategy, business models, and performance to foster better understanding

of CyberAgent in shareholders. Also, to convey non-financial information, our

video content "IR channel" which covers our competitive advantage and new

business is shown on the screen at the venue.

Venue; The Company takes consideration of convenient access and holds the

Shareholders Meeting at a venue close to a train station.

Webcast: Webcast of the shareholders meeting is available on the Company's

investor website in Japanese and English.

- 12 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

2.Investor Relations Activities

Updated

Explanation by

Supplementary Information

Representative

Adoption of Disclosure

The Company's disclosure policy include basic policy,

Policy

-

disclosing method and quiet period is posted on our website.

Please refer to the following URL:

https://www.cyberagent.co.jp/en/way/info/detail/id=20537

Holding Regular

A briefing for shareholders is held after the shareholders'

Meetings for Individual

Yes

meeting where Representatives Director gives the

Investors

presentation in regard to the results and business strategies.

We have updated our website content for individual

investors, including FAQs about management goals and

shareholder returns in August 2018. It incorporates various

features such as short video content "IR Channel" features

interviews with representatives, a generator function, which

enables comparing financial statements.

Holding Regular

The President reports on the details of the financial

Meetings for Analysts

performance as well as the corporate strategy at a briefing

and Institutional

Yes

session for analysts and institutional investors that are

Investors

held on the day of the second and fourth quarter (half and

full-year) earnings announcement. In the first and third

quarter, we offer a live webcast of the briefing.

The live webcast of the results briefing sessions are

provided for overseas invesors in English and individual

investors on our investor website. We will make efforts to

disclose timely, unbiased information by not only

offering recorded footages, but also streaming briefing

sessions live to individual investors and overseas

investors.

Small meetings for institutional investors attended by the

President, Directors and others are held more than 10

times a year.In addition, we hold office tours, video

studio visits and special small meetings which feature

new business or services etc.

Holding Regular

Live webcast of results briefing session with simultaneous

Meetings for Foreign

Yes

interpretation is provided to strive for equal information

Investors

disclosure. We hold telephone or TV conference with overseas

investors regularly in every quarter, and visit to foreign

countries to meet investors face to face several times a year.

Posting Investor

We focus on using the Internet actively for IR activities, the

Relations Materials on

Company posts results information (including Annual

the Company Web Site

Reports), timely disclosure documents, presentation

-

materials, video of results briefings, Q&A summaries, and

video content, "IR Channel" on our website

(https://www.cyberagent.co.jp/ir/) and its English website

(https://www.cyberagent.co.jp/en/ir/). "IR channel" offers

short videos which feature non-financial information: an

interview to the Outside Director, our core business and

technology etc. Also, a special material and information

about our competitive advantages are provided online for

new, individual investors.

Since 2018, the Company releases its integrated report

"CyberAgent Way" to provide information regarding our

framework for sustainable growth, corporate governance,

and CSR activities.

- 13 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

Establishment of

Division in charge: IR&SR Division

Investor Relations

-

Officer in charge: Susumu Fujita, President

Department

Person in charge of information handling:

Go Nakayama, Managing Director

Person in charge of clerical communication:

Sonoko Miyakawa, Head of IR&SR Division

Other

Our website has renewed in October 2017. We adopted

new design and information organization and improved

device compatibility. Also, a new content, "CyberAgent

Way" which focuses on ESG items is released.

"CyberAgent Way" : Provide information of our

unique activities from governance, compliance,

programming education for elementary school kids to

crowdfunding service for promoting local economy.

"FEATUReS"(owned media) : Introduce our services

and core competences.

"IR channel" (Video content for investors): Provide

interviews with Outside Directors and the introduction

of our services by short videos.

Utilizing social media

Timely and real-time information sharing via

Facebook, Twitter, Instagram, and LINE.

IR BBS

Interactive communication through BBS on our IR

website with individual Investors.

- 14 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

3. Measures that Consider the Interests of Stakeholders Updated

Supplementary Information

Provisions Made in

In order to respect the positions of stakeholders and fulfill corporate social

Consideration of

responsibility, the Group established "Ethical Business Guideline," to set a

Stakeholders' Interests

basic rule which is followed by all Directors and employees based on the

(Internal Regulations,

"CyberAgent Mission Statement."

etc.)

Promotion of

In the context of our history which we have been active in the growing Internet

Environmental

industry, we engage in a variety of activities utilizing the accumulated knowledge.

Protection, Corporate

"Education and Cultivation"

Social Responsibility

- Programming for elementary students

(CSR), and Other

With the aim of developing the talent to lead the 21st century with IT, in May

Activities

2013 we established "CA Tech Kids" in a joint venture with "Life is Tech,

Inc." to offer programming education to elementary school students.

Our efforts go beyond just helping kids acquire IT programming knowledge and

skills; we are also fostering the skills to design, realize an idea, and make forward

progress in our aim to encourage the development of "talent capable of using

technology as a tool to realize their own ideas and actively engage in society."

CA Tech Kids, Inc. formed a joint venture company QUREO, Inc.with Sprix,

Inc.on April 1, 2019. The company develops a tool to teach kids programming

and provide it to educational institutions or tutoring schools.

- Certification exam of programming skill for kids

In March 2019, CyberAgent launched a certification exam "Kids Programming

Exam" for elementary school students in order to measure the level of knowledge

of programming and technical skills. The first certification exam is conducted in

August 2019, aimed to become one of the indicators for children to know their

growth.

"Enhancing the Information Infrastructure"

Launched in April 2016, the internet TV station "AbemaTV" allows users to

browse the latest news and information for free on their smartphone. AbemaTV

delivers services to smartphones -- which people carry these days ubiquitously --

and provides notifications 24-hours-a-day in real time in the event of a disaster,

such as early earthquake warnings. By doing this, we are pursuing business

initiatives that recognize the importance of its role in society as new information

infrastructure in the age of the internet.

"Support for Creating Shared Value"

We operate the crowdfunding platform "Makuake" through our subsidiary,

Makuake, Inc. Crowdfunding service is one of the growth strategies the

Japanese government sets and is effective for nurturing venture companies. We

aim to contribute to revitalization of the Japanese economy through "Makuake."

"Contributing to Local Communities"

In 2018 we launched "SHIBUYA BIT VALLEY," a project aimed at making

Shibuya an international hub of technology in the IT field. With the shortage of

IT talent in Japan becoming a social problem, CyberAgent is dedicated to

bolstering Shibuya's IT community and promoting interaction with this tech

conference playing a central role.

"Support for Sports and Culture"

In October 2018, the Japan Professional Football League Club "FC Machida

Zelvia" became part of CyberAgent Group. By taking advantage of the group

synergies, we aim at enhancing the information and services provided to FC

Machida Zelvia supporters and winning new supporter demographics. Also, we

will work towards the goals of growing FC Machida Zelvia into a top club born

in Machida and recognized around the world.

- 15 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

Establishment of Policy

The Company's policy related to the provision of information to stakeholders

Concerning Disclosure

clearly states in its Disclosure Policy. The Company executes information

of Information to

disclosure in accordance with the Tokyo Stock Exchange's timely disclosure

Stakeholders

regulations. Regarding important information that may have an impact on

investment decision-making as well as information that may be useful to

understand the Company, the Company strives to enable equal access by all

stakeholders to such information.

Other

[Policy and actions to be a woman-friendly company]

Female management ratio currently comprises 21.5% of employees on a non-

consolidated basis. The Company, while remaining a venture firm with a

vision to "create the 21st century's leading company," and based on a policy

of offering employees lifetime employment and providing "challenges and

peace of mind as a set," focuses on creating an environment in which

"talented employees continue to actively participate over the long term."

Measures for the active participation of women, along with the systems and

environment that support it, 99.2% of employees come back to work after

maternity and child-care leaves.

*Active participation of women

We support the women's social advancement promoted by the Japanese government, and we are promoting the employment of women. The Company encourages the participation of women, and at every career stage, including recruitment and promotion, conducts its evaluations based on ability and performance, without regard to gender. The Company supports an environment that makes it easy for women to continue working.

The Company has provided childcare assistance to employees, including systems such as reduced working hours and maternity benefits.

*"macalon" package to support women

The package comprises 1) "Pre-pregnancy Leave" that can be taken for such purposes as going to the hospital for fertility treatments; 2) "Pre-pregnancy Concierge" to receive individual counseling by a professional; 3) "Kids at Home" to allow employees to work from home when caring for children, such as due to a sudden illness or when children are unable to attend nursery school; and 4) "Kids Day Leave" to allow employees time off for school events, such as entrance/graduation ceremonies or parent participation days, or other anniversaries.

Additionally, we introduced 3 systems that 1) the company bears part of expensive non-approved nursing fees to promote the return of female employees who can not return to work because they can not enter certified nursery school, 2) "Lunch with your local" which provides a place and opportunity for information exchange among mom employees living in the same city/town/village, 3) a public information magazine for mom employees. These systems are aimed at improving the workplace environment where women can continue working even after childbirth and childcare, and we agree with promoting women's advancement of society promoted by the government. Through these efforts, we are carrying forward to build a company that allows employees to work for long periods while enriching their work and life.

- 16 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

IV Items Related to the Internal Control System

1. A Basic Policy and Development and Operation Status Related to Internal Control System

We are striving to maximize the potential of our internal control system as one of the core functions of our corporate governance. In order to ensure that board members carry out their professional duties according to law and articles of incorporation, and also to ensure that the corporate group composed of our company and its subsidiaries conducts businesses appropriately, we have established the internal control system as follows.

Notes

  1. A system in which information regarding professional duties performed by board members will be stored and maintained.
    The Board of Directors will appoint a delegate to be responsible for overseeing all functions of the company regarding the storage and management of information regarding professional duties performed by board members. This includes abiding by the regulations regarding the handling of documents, confidential information, protection of personal information and management of insider information. They will record any information concerning the board members' business actions in written documents or electronically and keep it in storage.
  2. Regulation and system concerning management of risk of loss.

According to the emergency response regulation, we should expect certain risks and categorize them. In times of emergency, we should be prepared to send information and carry out the emergency protocols promptly and accurately. In addition, the internal auditing department must abide by the internal auditing regulations, understand the cross-departmental risks, carry out inspections and give a report on managing risks at the board meeting on a regular basis.

3. A system to ensure that board members' professional duties are carried out efficiently.

We are established company-wide goals for efficient businesses to be shared by both board members and employees. In order to complete these goals, board members should ensure that they are thoroughly understood and set concrete targets for individual departments to aim towards. Managerial accounting methods should be used on a regular basis to review goal achievements, and through feedback from our results, we will be able to guarantee the efficiency of our work.

  1. A system to ensure that the professional duties of board members and employees are carried out according to law and articles of incorporation.
    The management office will monitor the professional duties of board members and employees, and will carry out company training as deemed necessary. In addition, the internal auditing department will cooperate with the Audit and Supervisory Committee, understand the professional duties of board members and employees, carry out regular inspections, and make reports to the Board of Directors.
  2. A system to ensure that the business carried out in a corporate group composed of a parent company, subsidiaries and our own are suitable.
    The Board of Directors will give the management director a set of goals that the company group (our company and subsidiaries) must achieve. They will also be given responsibilities in which they will be expected to build a system of laws and compliance to assist with risk management. The management office will promote and manage this in a cross-sectional way. In addition, we will set up a regulation concerning the management of affiliated companies in order for them to work towards improving their results and contribute to the overall success of the group. In this regulation, subsidiary companies will be expected to create a system where they will regularly report their results. They are also obligated to report to the Board of Directors in advance on a fixed set of important matters and risks. Among which, some of these will be on the agenda. Furthermore, the internal auditing department will regularly carry out inspections on the subsidiary companies, and report to the Board of Directors.
  3. Matters concerning requests by Director who is the Audit and Supervisory Committee member for assistance from employees.
    The Audit and Supervisory Committee may request assistance from employees in the internal auditing department when deemed necessary.
    • 17 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

  1. Matters concerning the independence of employees from board members and the effectiveness of instructions given to employees in the auditing department.
    Employees that are expected to assist in the affairs of Directors who is an Audit and Supervisory Committee member must follow the orders of their superiors without question. In addition, employees who have been moved due to personnel changes must respect the opinion of the Audit and Supervisory Committee.
  2. System regarding reports made to the auditing department.

Board members, the management office and internal auditing department must report the following matters to Director who is a full-time member of the Audit and Supervisory Committee on a regular basis. A director who is a full-time member of the Audit and Supervisory Committee will then submit the report to the Audit and Supervisory Committee.

  1. Matters relating to important decision making.
  2. Important matters regarding the financial state of the business.
  3. Matters concerning instances that may cause considerable harm to the company.
  4. Important matters relating to the state of the internal auditing department and risk management.
  5. Violations of the articles of incorporation or law.
  6. Other important matters.

People who make reports to the Directors who are members of the Audit and Supervisory Committee must not use the report as a reason for disadvantageous dealings.

9. A system to ensure that the auditing of Directors who are members of the Audit and Supervisory Committee is carried out efficiently.

The Audit and Supervisory Committee may request a hearing regarding the business matters of board members or important employees, and have other privileges including their right to exchange opinions with the CEO, Accounting Auditors and legal advisors. In addition, when Directors who are members of the Audit and Supervisory Committee request prepayments of expenses, the person in charge of the department must make deliberations and promptly deal with the request in question, unless deemed that the request is unnecessary.

2. Basic Policy and Efforts to Eliminate Antisocial Forces

The Group is constantly aware of the need for an awareness of risk management towards antisocial forces, which pose threats against social order and safety. The Group will, as an organization, thoroughly respond with a firm attitude to such antisocial forces. Furthermore, with the objective of eliminating antisocial forces, the Group cooperated for some time with Outside specialized bodies, such as law enforcement organizations and attorneys at law, and promoting the reinforcement of information gathering, management and in-house systems related to antisocial forces.

- 18 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

  1. Others

1. Adoption of Takeover Defense Measures

Adoption of Takeover Defense Measures

-

Supplementary Information

N.A.

2. Other Items Related to Corporate Governance System, etc.

The Company makes proactive and prompt disclosure in order to provide shareholders and investors with timely information in an impartial manner, and to ensure transparent management.

In terms of specific measures, the Board of Directors meets regularly once a month, with extraordinary sessions held as necessary. Three Independent outside directors attend these meetings, and proactively offer opinions to supervise the management, ensuring fair decision-making regarding execution of significant business matters. In addition, the Company has adopted the Audit and Supervisory Committee system. The Audit and Supervisory Committee in principle holds regular meetings once a month, strengthening the functions for assessing relevant facts, and monitoring the status of business execution by the Board of Directors, as well as disclosure. Further, the Internal Audit Office conducts internal audits in cooperation with the Audit and Supervisory Committee. Specifically, the office reviews documents and conducts on-site investigations to confirm that internal projects and Group companies execute proper corporate activities in accordance with guidelines prescribed by the laws and regulations, the Articles of Incorporation, social norms, and internal company rules, providing a system of appropriate checks on operational flow.

For financial auditing, the Company strives for accurate information disclosure, including having audits and quarterly reviews conducted by an audit corporation, and receiving suitable advice regarding important accounting treatment.

In accordance with these measures, the Company's internal structures relating to timely disclosure of corporate information are as follows.

  1. Person in charge of handling information and responsible department
    The person in charge of handling information for timely disclosure is the managing director. In the disclosure work process, the management headquarters and IR&SR Division create disclosure documents and execute disclosure under the direction of the person in charge of handling information. The management headquarters and IR&SR Division, in order to disclose corporate information to investors and other parties in a timely and appropriate manner, works to compile information in cooperation with the Company's Board of Directors and departments, as well as with managers of Group companies, and related departments and divisions.
  2. Decisions
    Major decisions are made at regular or extraordinary meetings of the Board of Directors. Decisions are reported promptly to the management headquarters and IR&SR Division by the person in charge of handling information, with timely disclosure made as necessary.
  3. Structure for assessing material facts
    When the material facts arise, they are compiled by the various divisions and interdepartmental committees, summarized by the person in charge of handling information, and immediately discussed by the Board of Directors. Material facts that arise are reported promptly to the management headquarters and IR&SR Division by the person in charge of handling information, with timely disclosure made as necessary.
  4. Timely disclosure
    For major decisions, facts that have arisen, and results information, the Company, under the direction of the person in charge of handling information, determines the necessity of timely disclosure, the timing of disclosure, and the content of the disclosure, in accordance with rules for timely disclosure, while holding proper prior consultation with external financial auditors, legal counsel, the Tokyo Stock Exchange, the Kanto Finance Bureau, and other experts. Where disclosure is deemed necessary, timely disclosure is made immediately.
  5. Management of disclosure information
    Disclosure information is centrally managed by the person in charge of handling information.

- 19 -

English Translation

This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail.

CORPORATE GOVERNANCE

[Chart 1] Corporate Governance Structure

Shareholders' Meeting

Appointment and removal

Appointment

and removal

Nomination and Remuneration

Consultation

Board of Directors

Accounting audit

Advisory Committie

Report

Directors

Audit and Supervisory Committee

12 Directors who are not Audit and

Direct and supervise

3 Directors who are Audit and

Accounting Auditor

Supervisory Committee members,

Audit,

Supervisory Committee members,

Board of Full-time Directors'

Delegation

of which 1 is Outside Director

super

of which 2 are Outside Director

meeting

Audit of internal control

of authority

vision

11 Executive Directors,

1 Audit and Supervisory

Report

Instruction and

Committee member

supervision

Internal Audit Office

Instruction and supervision

Appointment, instruction and supervision

President / CEO

Company Attorney etc.

Instruction and

Instruction and

Instruction and

Advice

supervision

supervision

supervision

Business Division, Subsidiaries

Business Division, Subsidiaries

Business Division, Subsidiaries

[Chart 2] Timely Disclosure system

Responsible personnel in each division, Subsidiary information gathering department

Gather related

Confirmation

information

Instruction to produce a disclosure document

Head Office

IR&SR Division

Report

produce a disclosure document

Person in charge of administering

Put the matters to be discussed

Board of Full-time Directors' meeting

Board meeting

Approval, decision of disclosure and instruction for timely disclosure

Head Office

IR&SR Division

Instruction for timely disclosure

Information Disclosure

- 20 -

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CyberAgent Inc. published this content on 20 December 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 December 2019 06:35:04 UTC