CyberAgent : Corporate Governance Report December

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 11, 2020

Company:	CyberAgent, Inc.
Representative:	Susumu Fujita,
	Representative Director
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]

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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.

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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 Nomination and Remuneration Advisory Committee as needed. Based on the report, the Representative Director who is entrusted from the Board of Directors will take into account the role, the level of contribution, and the performance of each director and determine the amount 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. CyberAgent's fundamental approach for the Board of Directors is 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 and Remuneration Advisory Committee as needed. Then we appoint capable persons based on the report.

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 the appointment of the each director candidate are disclosed on the notice of convocation of the annual general meeting of shareholders.

Principle 4-1-1: The Board of Directors decides on the execution of the business defined as a matter for decision by the Board of Directors in the "Regulations of the Board of Directors" and the "Regulations for Authority of Management." Other individual business decisions are delegated to the Corporate Executive Office and the executive officer in charge, in accordance with the "Regulations for Authority of Management."

Principle 4-9: The Company selects independent external directors in accordance with the requirements for Outside Directors under the Companies Act and the independence criteria specified by Tokyo Stock Exchange. The Board of Directors selects those who understand the business administration and corporate value of the Company, are independent of management and are expected to contribute to constructive discussions in the Board of Directors as outside directors.

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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: In selecting director candidates, the Company takes into account the balance of knowledge, experience and competence related to the Company and its businesses, as well as the diversity of the Board of Directors, and considers the number of directors necessary and appropriate to ensure constructive discussion in the Board of Directors. The Board of Directors consists of eight directors (in which four directors are independent outsise directors.)

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 on September 30, 2020. 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 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.

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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	24,639,600	19.54
	The Master Trust Bank of Japan, Ltd. (trust account)	13,405,300	10.63
	Custody Bank of Japan, Ltd. (Trust account)	7,935,200	6.29
	NORTHERN TRUST CO. (AVFC) SUB A/C NON	5,082,054	4.03
	TREATY
	THE BANK OF NEW YORK MELLON 140051	3,111,500	2.47
	SSBTC CLIENT OMNIBUS ACCOUNT	2,708,399	2.15
	JP MORGAN CHASE BANK 385632	2,517,120	2.00
	Custody Bank of Japan, Ltd. (Trust account 5)	2,455,100	1.95
	RBC ISB S/A DUB NON RESIDENT/TREATY	1,861,600	1.48
	RATE UCITS CLIENTS-ACCOUNT
	STATE STREET BANK AND TRUST COMPANY	1,741,481	1.38
	505225
	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
   Updated
   A subsidiary of the Company Makuake, Inc. is listed on the Mothers. We believe that it is desirable from the perspective of group management to enhance the corporate value of Makuake, Inc. through their own growth strategies. We respect the management decisions of them and emphasize that they should develop their business activities with independence and self-reliance.

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