(Translation)

This document has been translated for reference purposes only from the original document submitted to the Tokyo Stock Exchange in Japanese. The Japanese original shall prevail in the event of any discrepancy between this translation and the Japanese original.

Corporate Governance

KONAMI HOLDINGS CORPORATION

Last Updated: July 8, 2021

KONAMI HOLDINGS CORPORATION

Kimihiko Higashio

Representative Director, President

Contact: +81-3-6636-0573

Securities Code: 9766

https://www.konami.com

The corporate governance of KONAMI HOLDINGS CORPORATION (the "Company") is described below.

  1. Basic Views on Corporate Governance, Capital Structure, Corporate Attributes and Other Basic Information

1. Basic Views

Konami Group's corporate goal is to be an enterprise that keeps our stakeholders always looking forward with anticipation as we create and provide our current and future customers with products and services that offer "Valuable Time." Our fundamental management policy is maintaining a shareholder-focused approach, and sound relationship with involved stakeholders and contributing to the development of a sustainable society as a good corporate citizen. In order to realize open and transparent management, which is essential for holding fast to these fundamental management policies, we promote the management that keeps in mind at all times enhancement of the corporate governance system.

[Reasons for Non-compliance with the Principles of Japan's Corporate Governance Code] Updated

[Supplementary Principle 4-2-1 Setting Appropriate Proportions of Compensation Linked to Mid- to Long-term Financial Performance and Proportions of Cash and Stock Compensation]

The Company makes decisions regarding compensation of its Directors upon having evaluated the extent to which they have contributed in terms of their accomplishments and management, taking into account their presence or absence of representative authority, position, scope of roles and responsibilities, and full-time or part-time status, and in view of financial performance trends and other such factors. The Company will continue to review matters regarding the linkage of such compensation to mid- to long-term financial performance.

[Supplementary Principle 4-10-1 Establishment of Optional Advisory Committee]

The Company's Board of Directors consists of eight members, including three Outside Directors serving on the Audit & Supervisory Committee who have been designated as Independent Officers as provided for in the regulations of the Tokyo Stock Exchange.

Independent Outside Directors convey their views to the Board of Directors and the respective Directors, and otherwise furnish advice where appropriate, drawing on their ample experience and expertise.

Meanwhile, respective Audit & Supervisory Committee Members engage in audits regarding the Directors and their business execution, which largely involves attending meetings of the Board of Directors and interviewing the Company's executives.

Given the involvement and advice appropriately furnished as necessary by the Independent Officers, as detailed above, the Company has not established an optional nomination committee.

The Compensation Advisory Committee, consisted majority by Independent Officers, makes decisions on matters delegated to it by the Board of Directors regarding amounts of compensation for the Directors (excluding Directors who are Audit & Supervisory Committee Members), within compensation limits as approved by a General Meeting of Shareholders.

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

[Principle 1-4Cross-Shareholdings]

As a matter of basic policy, the Company considers the prospect of holding shares of a business partner upon having deemed that doing so will contribute to increasing mid- to long-term corporate value, particularly with respect to business strategy, and as a consequence of maintaining and strengthening business ties.

In assessing whether or not to hold individual cross-shareholdings, the Board of Directors annually scrutinizes factors that include benefits gained with respect to mid- to long-term economic rationale and business strategies, and as a consequence of maintaining and strengthening business ties.

The Company proceeds to reduce any cross-shareholdings for which it has been deemed that sufficient reason and rationale for maintaining holdings is lacking, upon having considered effects on the market and other such factors.

The Company appropriately determines the advantages and disadvantages of each and every proposal that entails exercising voting rights associated with its shareholdings, from the perspective of whether a proposal will contribute to increasing the mid- to long-term corporate value of the Company and the enterprise concerned, upon having sufficiently paid due regard to factors that include the investee company's business policies and financial performance.

[Principle 1-7 Related Party Transactions]

In accordance with laws and regulations, the Company's Regulations of the Board of Directors stipulate that the Board of Directors is to undertake procedures for gaining approval when business transactions are to be conducted among Directors (including Directors who are Audit & Supervisory Committee Members) of the Company.

Moreover, the Company performs checks to determine if any business transactions have taken place involving the Company and its affiliated companies and related parties, which entails requiring annual submission of questionnaires pertaining to parties related to its Directors (including Directors who are Audit & Supervisory Committee Members).

[Principle 2-6 Roles of Corporate Pension Funds as Asset Owners]

The Company does not have a corporate pension fund. It has adopted a defined contribution-type corporate pension plan to help employees consistently build up assets and has since held annual follow-up seminars on asset management for its employees.

[Principle 3-1 (i) Company Objectives (Business Principles, etc.), Business Strategies and Business Plans] The Konami Group's Corporate Goal is available on the corporate website. https://www.konami.com/corporate/en/philosophy/

The Company also discloses its business strategies in its securities reports and business reports.

The Company will continue looking into the possibility of disclosing mid- to long-term quantitative targets, but does not currently provide such information given the likelihood of investors making poor investment decisions if the Company were to release mid- to long-term targets amid a business environment marked by rapid market shifts and substantial volatility.

[Principle 3-1 (ii) Basic Views and Policies on Corporate Governance]

The Konami Group acts to hasten its sustainable development and mid- to long-term gains in corporate value, and otherwise promotes an approach to management that involves continually striving to achieve effective corporate governance in a manner that improves managerial efficiency and ensures sound business practices.

[Principle 3-1 (iii) Policies and Procedures in Determining the Compensation of Senior Management and Directors]

Please refer to "Policy for Determining Compensation Amounts or Calculation Methods Thereof" within "Director Compensation" under section II.1. of this report.

[Principle 3-1 (iv) Policies and Procedures in Appointing and Dismissing Senior Management and Nominating Directors (including Directors who are Audit & Supervisory Committee Members)]

Matters involving appointment of the Company's senior management and nomination of its Director (including Directors who are Audit & Supervisory Committee Members) are determined by resolution of the Board of Directors, taking into account the notion of striking a balance among factors that include suitable knowledge, experience and proficiencies of the respective candidates.

Moreover, the Company's nomination of Director candidates involves comprehensively evaluating and judging such individuals with respect to factors above and beyond their experience, insights and expertise. For instance, the Company places consideration on whether such individuals meet the requirements of worldwide regulations

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governing the gaming business, particularly those of U.S. state of Nevada where the Company has licenses regarding manufacture of gaming devices.

The Company's Board of Directors makes decisions on matters involving senior management dismissal pursuant to provisions of the Companies Act, upon comprehensive review of the considerations listed below. Accordingly, the Company may move to dismiss a member of senior management under situations involving:

  1. occurrence of a serious scandal, particularly involving violation of laws, regulations or the Articles of Incorporation,
  2. circumstances that significantly impede the senior management member in the performance of his or her duties,
  3. a situation whereby the senior management member is found to be substantially lacking particularly with respect to his or her qualities and managerial competency as stipulated in the policy for appointing senior management,
  4. a situation whereby the senior management member has been deemed to have inflicted substantial damage on the corporate financial performance, or
  5. a situation whereby the senior management member has been deemed to have substantially impeded business execution.

[Principle 3-1 (v) Explanation on Individual Appointments, Dismissals, and Nominations When Appointing or Dismissing Senior Management, or When Nominating Directors (including Directors who are Audit & Supervisory Committee Members)]

For details on rationale for appointing individual Outside Officers, refer to "[Directors], Outside Directors' Relationship with the Company (2)" under section II.1. of this report.

The Company also presents details on personal histories on its corporate website and in its notices of convocation of the General Meeting of Shareholders with respect to appointment and nomination of its Directors (including Directors who are Audit & Supervisory Committee Members).

[Supplementary Principle 4-1-1 Decisions on Scope of Authority to Be Delegated to Management]

The Company has adopted a holding company structure, and distinctly segregates the functions of business management and business execution accordingly, with the Board of Directors taking on the roles of deciding business principles for Group management and supervising business execution. The Company aims to maximize the corporate value of the Group by increasing speed of management and optimally allocating business resources.

The Company has established a framework that enables swift managerial decisions, whereby matters to be resolved by the Board of Directors are governed by Agenda Guidelines of the Board of Director as stipulated in the Regulations of the Board of Directors, and other matters are delegated to the Representative Director and other Executive Directors.

[Principle 4-9 Independence Standards and Qualification for Independent Outside Directors]

The Criteria for Independence of Outside Officers established by the Company is as described in II.1. "Matters relating to Independent Officers" in this report.

[Supplementary Principle 4-11-1 Company's View on the Balance Between Knowledge, Experience and Proficiencies of the Board of Directors as a Whole, and Also on Diversity and Size]

The Company's Board of Directors is to consist of no more than 12 Directors (excluding Directors who are Audit & Supervisory Committee Members) and no more than 5 Directors who are Audit & Supervisory Committee Members, as stipulated in the Articles of Incorporation. The basic approach involves having the Board of Directors made up of members deemed appropriate, taking into account the notion of striking a balance among attributes that include knowledge, experience and proficiencies necessary for managing the Company.

Moreover, the Company's appointment of Directors involves comprehensively evaluating and judging such individuals with respect to factors above and beyond their experience, insights and expertise. For instance, the Company places consideration on whether such individuals meet the requirements of worldwide regulations governing the gaming business, particularly those of U.S. state of Nevada where the Company has licenses regarding manufacture of gaming devices.

In addition to requirements pertaining to outside status stipulated under the Companies Act, Outside Directors must also align with qualifications for Outside Officer as provided for in the regulations of the Tokyo Stock Exchange, and otherwise fulfill the Company's Criteria for Independence of Outside Officers.

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[Supplementary Principle 4-11-2 Positions of Directors Who Also Serve as Officers at Other Listed Companies] The Company's Directors, including its Outside Directors, are to devote the time and effort necessary to appropriately fulfill their roles and responsibilities with respect to Director duties. Meanwhile, assignments to concurrent positions are kept within reason.

The latest information on such concurrent assignments is disclosed annually in the Company's notices of convocation of the General Meeting of Shareholders and its securities reports.

[Supplementary Principle 4-11-3 Analysis and Evaluation Regarding the Overall Effectiveness of the Board of Directors, and Summary of Results Thereof]

The Company analyzes and evaluates the effectiveness of its Board of Directors on the basis of self-evaluations provided by the respective Directors, and accordingly applies such analysis and evaluation to operations of the Board of Directors.

The Company will consider the prospect of making future improvements toward enhancing the effectiveness of its Board of Directors, based on qualitative opinions and other factors.

[Supplementary Principle 4-14-2 Training Policy for Directors (including Directors who are Audit & Supervisory Committee Members)]

The Company aims to ensure that its Directors (including Directors who are Audit & Supervisory Committee Members) are able to appropriately take on roles and responsibilities expected of them in their capacity as a crucial element of a listed company's governance body. To such ends, the Company makes recommendations to its Directors (including Directors who are Audit & Supervisory Committee Members), particularly with respect to their attending seminars outside the Company with the aim of gaining requisite knowledge, joining external organizations, and purchasing relevant books. The Company accordingly covers costs in that regard, upon concluding the appropriate in-house procedures.

The Company also actively provides its Outside Directors with opportunities to further their understanding of the business in which the Konami Group engages. This involves setting up opportunities, as appropriate, for them to visit the Group's business offices and forums such as exhibitions pertaining to related business.

[Principle 5-1 Policy for Constructive Dialogue with Shareholders]

The Company promotes constructive dialogue with its shareholders through efforts spearheaded by the Representative Director, President and the Investor Relations Department. This involves enhancing disclosure of information on the Company's website, holding quarterly earnings results briefings for institutional investors, holding one-on-one meetings and conducting telephone interviews.

Moreover, the Company has established the Investor Relations Policy and disclosed the Policy on the Company's website.

https://www.konami.com/ir/en/policy/

2. Capital Structure

Foreign Shareholding Ratio

30% or more

[Status of Major Shareholders]

Updated

Name

Number of Shares Owned

Shareholding Ratio

(Shares)

(%)

The Master Trust Bank of Japan, Ltd. (Trust

24,615,100

18.48

Account)

Kozuki Foundation

17,100,000

12.84

KOZUKI HOLDING B.V.

15,700,000

11.79

Custody Bank of Japan, Ltd.(Trust Account)

11,706,400

8.79

Kozuki Capital Corporation

7,048,596

5.29

KOREA SECURITIES DEPOSITORY-

3,539,500

2.66

SAMSUNG

Custody Bank of Japan, Ltd. (Securities

2,622,900

1.97

Investment Trust Account)

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STATE STREET BANK AND TRUST

1,562,288

1.17

COMPANY 505001

STATE STREET BANK AND TRUST

1,449,261

1.09

COMPANY 505103

JP MORGAN CHASE BANK 380815

1,394,800

1.05

Controlling Shareholder (except for Parent)

None

Parent (Listed Stock Market)

None

Supplementary Explanation Updated

In a report of possession of large volume (change report pertaining thereto) provided for public inspection on April 19, 2019, it is stated that as of April 15, 2019, Sumitomo Mitsui Trust Asset Management Co., Ltd. and its joint holder own the following shares. However, as the Company cannot confirm the number of such shares substantially owned as of March 31, 2021, the details are not included in the status of major shareholders in the above table.

Details included in the report of possession of large volume are described below.

[Name (number of shares owned and ownership percentage to the total number of issued shares)] Sumitomo Mitsui Trust Asset Management Co., Ltd. (3,505 thousand shares, 2.44%)

Nikko Asset Management Co., Ltd. (7,062 thousand shares, 4.92%)

In a report of possession of large volume (change report pertaining thereto) provided for public inspection on July 21, 2020, it is stated that as of July 15, 2020, Nomura Securities Co., Ltd. and its two joint holders own the following shares. However, as the Company cannot confirm the number of such shares substantially owned as of March 31, 2021, the details are not included in the status of major shareholders in the above table.

Details included in the report of possession of large volume are described below.

[Name (number of shares owned and ownership percentage to the total number of issued shares)] Nomura Securities Co., Ltd. (386 thousand shares, 0.27%)

NOMURA INTERNATIONAL PLC (86 thousand shares, 0.06%) Nomura Asset Management Co., Ltd. (12,844 thousand shares, 8.95%)

3. Corporate Attributes

Listed Stock Market and Market Section

First Section of Tokyo Stock Exchange

Fiscal Year-End

March

Type of Business

Information & Communication

Number of Employees (Consolidated) at End

1,000 or more

of the Previous Fiscal Year

Net Sales (Consolidated) for the Previous

From ¥100 billion to less than ¥1 trillion

Fiscal Year

Number of Consolidated Subsidiaries at End

From 10 to less than 50

of the Previous Fiscal Year

4. Policy for Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder

-

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Konami Holdings Corporation published this content on 16 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 July 2021 03:02:02 UTC.