istyle

Corporate Governance

Basic corporate governance policy

The istyle Group believes that our success fundamentally depends on earning a reputation for the neutrality and reliability of the community websites that make up the core of our business. As such, it is our philosophy that building trust in the Group as a whole is of the highest importance in order to maintain our good reputation among consumers. Of course, the Internet industry is subject to significant changes due to external influences, and the Group maintains a strong awareness that we face particular management challenges as a member of that industry. It is with these challenges in mind that we make every effort to strengthen our corporate governance by improving our flexibility, transparency, objectivity, and the overall soundness of our management.

Corporate governance organizational chart and summary

体制図
Name Position Board of
Directors
Board of
Auditors
Management
meeting
Compliance
Committee
Tetsuro Yoshimatsu Representative
Director and CEO
 
Kei Sugawara Director  
Meyumi Yamada Director (Part-time)    
Michimasa Naka Director (Outside)      
Yasukane Matsumoto Director (Outside)      
Hitoshi Hara Auditor (Outside)
Kenji Miyako Auditor (Outside)    
Akiko Ito Auditor (Outside)    
Head of business
execution function
     
General Managers of
related departments
     

: Chair of the deliberation body : Members of the body

Board of Directors
The Board of Directors comprises five Directors (of which two are Outside Directors), and in addition to regular meetings held every month, extraordinary meetings of the Board of Directors are also held as necessary in a flexible manner. In addition to making decisions on basic policies on management, the Board supervises the execution of Directors' duties. In addition, three Auditors (all of which are Outside Auditors) attend every meeting of the Board of Directors and audit the legality of decision-making and business execution among others.
Auditors and the Board of Auditors
The Company has selected three Auditors (all of which are Outside Auditors), comprising one full-time and two part-time. All three Auditors attend the meetings of the Board of Directors, and the full-time Auditor attends other important meetings including the management meeting to examine the execution status of Directors' duties as well as the development and operation status of the internal control system, expressing opinions as necessary.
Additionally, the Board of Auditors, in principle, meets once a month, to determine the audit policy and to report on and deliberate the audit results of each Auditor.
Management meeting
The management meeting comprises the Directors including the President and Chief Executive Officer (excluding Outside Directors), the full-time Auditor and the heads of each business function, etc., and meets once a week to deliberate important management matters including the business plan and management strategies, and to report on and supervise the execution status of their respective businesses.
Compliance Committee
The Compliance Committee is chaired by the President and Chief Executive Officer with members comprising the full-time Auditor, related officers and general managers, and engages in compliance promotion activities, counters compliance violations, and carries out operations pursuant to whistle-blowing regulations, among others, in an effort to ensure the promotion of compliance-oriented management.

Diversity of Directors and Auditors

The Board of Directors and the Board of Auditors, as well as the expertise of each officer is as follows.
The below table does not express all of the knowledge and experience held by each Director and Auditor.

 
  Present
position
Among the knowledge and experience held by each Director and Auditor,
the Company has particular expectations for the below
Attributes
Corporate management / management strategy IT Cosmetics Marketing Retail / distribution International business Finance Accounting
/ tax affairs
Independence (Outside only)Male (★)
Female (☆)
Tetsuro
Yoshimatsu
Representative
Director
and CEO
     
Kei
Sugawara
Director
and CFO
 
Meyumi
Yamada
Director
(Part-time)
       
Michimasa
Naka
Director
(Outside)
         
Yasukane
Matsumoto
Director
(Outside)
       
Hitoshi
Hara
Auditor
(Outside)
           
Kenji
Miyako
Auditor
(Outside)
             
Akiko
Ito
Auditor
(Outside)
             

Status of Outside Officers

The Company has two Outside Directors and three Outside Auditors.
The Company has not established standards or a policy regarding independence when selecting Outside Directors and Outside Auditors, but when making selections, refers to the assessment standards regarding the independence of Independent Directors/Auditors of Tokyo Stock Exchange, Inc. In addition to the criteria for Outside Directors and Outside Auditors set forth in the Companies Act, the Company comprehensively considers whether candidates can express appropriate opinions regarding the management of the Company, etc., from an objective perspective based on extensive knowledge and experience, and whether there are any issues with independence, taking into consideration such factors as the relationship between the Outside Officer and the Company. The Company has registered Outside Directors Michimasa Naka and Yasukane Matsumoto, Outside Auditors Hitoshi Hara, Kenji Miyako and Akiko Ito as Independent Directors/Auditors with Tokyo Stock Exchange, Inc.
Outside Director Michimasa Naka serves concurrently as Outside Director of Vision Inc., and the Group engages in business transactions with this company, but the Company recognizes that independence is sufficiently ensured owing to the fact that transactions with this company account for less than 1% of the Group's consolidated selling, general and administrative expenses, and the company not being a major trading partner of the Group. Mr. Naka holds 4,735 shares of the Company.
Outside Director Yasukane Matsumoto serves concurrently as Representative Director of RAKSUL INC., and the Group engages in business transactions with this company, but the Company recognizes that independence is sufficiently ensured owing to the fact that transactions with this company account for less than 1% of the Group's consolidated selling, general and administrative expenses, and the company not being a major trading partner of the Group. Mr. Matsumoto holds 1,486 shares of the Company.
Outside Auditor Kenji Miyako serves concurrently as Outside Auditor of GLOBIS Corporation and Outside Director of TeamSpirit Inc., and the Group engages in business transactions with these companies, but the Company recognizes that independence is sufficiently ensured owing to the fact that transactions with these companies account for less than 1% of the Group's consolidated selling, general and administrative expenses, and them not being major trading partners of the Group. Mr. Miyako holds 4,737 shares of the Company.
Aside from the above, there are no other special interests, including personal relationships, capital relationships, or business relationships, between Outside Directors/Outside Auditors and the Company.
We currently have the following five Outside Directors and Auditors.

<Directors> (As of Sep. 30, 2019)
Name
(Date of birth)
Career profile
Michimasa Naka's photo
Michimasa Naka
(August 14, 1964)
[Outside Director]
Number of shares of the Company held:
4,735 shares
  • Joined Salomon Brothers Asia Limited
  • Director, Citigroup Global Markets Japan Inc.
  • Executive Vice President, Citigroup Global Markets Japan Inc.
  • Representative Director and President, StormHarbour Japan Ltd.
  • Auditor, GLM. Co., Ltd. (to present)
  • Director, Asuka Asset Management Co., Ltd.
  • Director, eWell Co., Ltd. (to present)
  • Director, the Company (to present)
  • Director and Chairman, StormHarbour Japan Ltd.
  • Director, GENIEE, Inc. (to present)
  • Director, Prevent Small Amount Short Term Insurance Inc. (to present)
  • Representative Director, Boardwalk Capital Co., Ltd. (to present)
  • Representative Director, Accelerator Inc. (to present)
  • Director, EARCH-YOU, Inc. (to present)
  • Director, Vision Inc. (to present)
Yasukane Matsumoto's photo
Yasukane Matsumoto
(October 10, 1984)
[Outside Director]
Number of shares of the Company held:
1,486 shares
  • Joined A.T. Kearney Tokyo
  • Founded RAKSUL INC.; Representative Director (to present)
  • Director, the Company (to present)
<Auditor (full-time)>
Name
(Date of birth)
Career profile
Hitoshi Hara's photo
Hitoshi Hara
(May 14, 1963)
[Outside Auditor]
Number of shares of the Company held:
0 shares
  • Joined Asahi & Co. (currently KPMG AZSA LLC)
  • Registered Certified Public Accountant
  • Joined Interaset Co., Ltd.; General Manager, President Office
  • Joined TOYO SHINYAKU Co., Ltd.; General Manager, Corporate Planning Department and Head of Administration Division
  • Auditor, the Company (to present)
<Auditors (part-time)>
Name
(Date of birth)
Career profile
Kenji Miyako's photo
Kenji Miyako
(November 14, 1959)
[Outside Auditor]
Number of shares of the Company held:
4,737 shares
  • Joined Arthur Andersen Accounting Firm
  • Founded Miyako Accounting Office; General Manager
  • Founded Altus Co., Ltd.; Representative Director (to present)
  • Director, GLOBIS Corporation
  • Auditor, MACROMILL, INC.
  • Auditor, the Company (to present)
  • Auditor, Trenders, Inc. (to present)
  • Director, Digital Coast Inc. (currently TeamSpirit Inc.) (to present)
  • Auditor, GLIDER associates, INC.
  • Auditor, GLOBIS Corporation (to present)
  • Representative Partner, Altus Tax Accountant Corporation (to present)
  • Auditor, toBe marketing, inc (to present)
  • Director, SATORI, Inc. (to present)
  • Auditor, ASIRO Inc. (to present)
  • Auditor, CyberBuzz, Inc. (to present)
Akiko Ito's photo
Akiko Ito
(December 9, 1979)
[Outside Auditor]
Number of shares of the Company held:
0 shares
  • Joined Shin Nihon & Co. (currently Ernst & Young ShinNihon LLC)
  • Registered Certified Public Accountant
  • Joined Clifix Certified Public Tax Accountants' Corporation
  • Registered Certified Public Tax Accountant
  • Outside Auditor, Petgo Corporation
  • Representative, Akiko Ito Certified Public Accountant Office (to present)
  • Outside Auditor, SuRala Net Co., Ltd.
  • Outside Auditor, Pixie Dust Technologies, Inc. (to present)
  • Audit Committee Member, Petgo Corporation (to present)
  • Auditor, the Company (to present)
(Notes)
The number of shares held by each Director and Auditor represents the effective number of shares held, including equity in the Directors' Shareholding Association of the Company.
The terms of Directors are from the conclusion of the Annual General Meeting of Shareholders for the fiscal year ended June 30, 2019, to the conclusion of the Annual General Meeting of Shareholders for the fiscal year ending June 30, 2020.
The terms of the Auditors are from the conclusion of the Annual General Meeting of Shareholders for the fiscal year ended June 30, 2019, to the conclusion of the Annual General Meeting of Shareholders for the fiscal year ending June 30, 2023.

Cooperation with Outside Directors and Outside Auditors

The two Outside Directors and the three Outside Auditors have experience as corporate management, and possess broad knowledge and experience as certified public accountants and certified public tax accountants, as well as attend meetings of the Board of Directors of the Company, to provide supervision, advice, and audits on decision-making pertaining to the execution of business activities. The two Outside Directors endeavor to enhance the efficiency and effectiveness of business activities by exchanging information with management and administration and internal control functions, while the three Outside Auditors endeavor to enhance the efficiency and effectiveness of audits, through mutual cooperation with the Internal Audit Office and the internal control functions by exchanging information.

Compensation paid to officers

Matters relating to the amount of officer compensation, etc. and policy for the determination of its calculation method

a ) Compensation, etc., for Directors

The amount of compensation, etc., for Directors is determined based on a resolution by the Board of Directors, within the maximum amount of total compensation determined at the General Meeting of Shareholders, taking into consideration the basic amount corresponding to position and responsibilities, as well as operating results of each year.
Compensation for individual Directors is determined by the Representative Director with the authority delegated by resolution of the Board of Directors upon receiving advice from Outside Directors, within the maximum amount of total compensation resolved at the General Meeting of Shareholders based on the Company's operating results, business conditions, and economic conditions as well as interviews with the Representative Director on the individual's annual performance evaluation, taking into consideration the duties and responsibilities to be assumed in the following year. Thus, compensation is managed with emphasis on objectivity and transparency. The design of the compensation system is reviewed by the Board of Directors as necessary. Given that the compensation paid to Directors is determined by deliberation of the Board of Directors, the Company has not established an optional committee for this purpose.
At the Extraordinary General Meeting of Shareholders held on December 15, 2011, the maximum amount of total compensation for Directors was resolved to be within 250 million yen per year (excluding the employee portion of salaries). No more than seven Directors are allowed to serve under the Articles of Incorporation.
Furthermore, in addition to cash compensation, paid stock options for commitments toward achieving performance targets based on EBITDA and other indicators are issued to officers so as to contribute to the demonstration of sound entrepreneurship, with the aim of raising their motivation and morale for better performance and increasing corporate value, by reflecting the Company's medium- to long-term performance as well as potential risks.
EBITDA and other indicators have been adopted because they are broadly used as performance indicators, and frequently utilized as criteria for exercise conditions for subscription rights to shares.

b ) Compensation, etc., for Auditors

Compensation for Auditors is determined through discussions within the Board of Auditors.
At the 5th Annual General Meeting of Shareholders held on September 28, 2004, the maximum amount of total compensation for Auditors was resolved to be within 50 million yen per year. No more than four Auditors are allowed to serve under the Articles of Incorporation.

Total amount of compensation and compensation by type, by number of recipients, and by class of officers

(Fiscal year ended June 30, 2019)
Category Total
compensation
(Millions of yen)
Total compensation by compensation type
(Millions of yen)
Number of
officers
(Persons)
Fixed
compensation
Stock
option
Bonus Retirement
benefits
Directors
(excluding
Outside Directors)
102 96 - 6 - 3
Auditors
(excluding
Outside Auditors)
- - - - - -
Outside Director/
Auditor
28 28 - - - 6
(Notes)
The maximum amount of compensation approved at the General Meeting of Shareholders is within 250 million yen per year for Directors and within 50 million yen per year for Auditors, including respective bonuses for Directors and Auditors.

Total amount of compensation, etc., for each officer of the filing company, etc.

As there are no officers for whom the total amount of compensation, etc., is 100 million yen or more, this information is omitted.

Significant items among employee salaries paid to officers concurrently serving as employees

As there are no officers concurrently serving as employees, there is no relevant information.

Policy on anti-social forces

We explicitly delineate our code of conduct in our Compliance Regulations, stating, "We take resolute action against anti-social forces that would threaten the social order and sound operation of going concerns, taking no part in illegal or anti-social activity, and provide no benefit to anti-social forces, including but not limited to financial support, irrespective of whether in substance or form."

Per this code of conduct, seeking to prevent the incursion of anti-social forces in company management and from causing damages, we obtain information through third-party survey organizations at the start of trade with other parties and once annually thereafter in order to establish that the other party bears and continues to bear no relations with anti-social forces.

We also undertake courses provided by the Tokyo Citizens' Center for Expulsion of Anti-Social Forces on non-engagement with anti-social forces and what to do in the event of an unlawful demand from anti-social forces, using this to better improve our organizational approach to these issues.

We delineate an explicit manual and protocol for response to anti-social forces and what to do to research our transactional partners and handle unlawful requests.

We thoroughly disseminate the above code of conduct and manual to officers and employee and, through the administration departments under their purview, partner with attorneys, law enforcement, and other external organs for the ongoing training and edification of employee and the continued enhancement of an internal system for the expulsion of anti-social forces from society.