Ly Corporation TSE:4689
LY : Corporate Governance Report
Source: MarketScreener
LY Corporation
CORPORATE GOVERNANCE
Corporate Governance Report
Last Update: Dec 26, 2025
LY Corporation Takeshi Idezawa
President and Representative Director, CEO
Contact: +81-3-6779-4900
Securities code: 4689
https://www.lycorp.co.jp/
The corporate governance of LY Corporation (the “Company”) is described below.
- Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information
Basic Views
The LY Corporation Group (the “Group”) regards corporate governance as an indispensable function for enhancing corporate value over the medium to long-term. As stated in the “LY Corporation Group Code of Conduct,” each director and employee fully understands his or her required role, maintains proper corporate governance to earn the trust and understanding of all, and conducts efficient corporate activities.
https://www.lycorp.co.jp/en/company/codeofconduct/
[Reasons for Non-compliance with the Principles of the Corporate Governance Code][Supplementary Principle 4.1.3: Establishment and implementation of a succession plan by the board]
As an advisory body to the Board of Directors, the Company establishes a Nominating and Remuneration Committee, chaired by an independent outside director (including a director serving on the Audit and Supervisory Committee), and the majority of whose members are independent outside directors (including directors serving on the Audit and Supervisory Committee). The succession plan for the Representative Director and directors is discussed as one of the most important issues in this Nominating and Remuneration Committee. From the fiscal year ending March 31, 2025 onward, the Company plans to continue to hold repeated discussions, and work on the formulation of a succession plan.
[Principle 5.2: Establishing and disclosing business strategies and business plans]
The evolution of IT technologies is remarkable, and forecast is hard to make even in a medium term. Therefore, the Company currently does not disclose medium- to long-term management plans. However, when considering the direction of future revenue expansion, the Company takes capital cost into account to consider the revision of business portfolio and distribution of management resources, and explains such deliberations at the earnings results briefings and shareholders meetings.
[Disclosure Based on the Principles of the Corporate Governance Code][Principle 1.4: Cross-shareholdings]
Policy on acquisition/possession and results of assessment
The Company does not have any so-called mutual shareholdings. For all of the shares held by the Company, the Company, in principle, decides the policy of shareholding and its rationale based on the judgement on whether or not the collaboration with the companies to which shareholding investments are made will lead to the development of the Company’s business and the improvement of the corporate value of the Group. More specifically, the shareholding policy and its rationale are examined periodically in the Top Management Committee and the Board of Directors meetings, verifying the profitability of the shareholding from the viewpoints of risks, costs and returns associated and evaluating the business effects derived from business collaborations, etc., with the invested companies. As a result, comprehensive judgements are made on whether or not the shareholding will lead to the development of the Company’s business and the improvement of the corporate value of the Group.
Basis of exercising voting rights
The Company makes individual judgements on the exercise of voting rights of shares of listed companies held by the Company. The Company considers the details of the agenda and based on the invested company’s management policy and business plans, etc., makes a comprehensive judgement on whether the agenda will lead to the increase in the corporate value of the invested company and to the common interest of the shareholders. The Company also considers whether the agenda will create business opportunities between the invested company and the Company, or will have the effect of building, maintaining or strengthening the transaction/collaboration relationship between the two companies to improve the corporate value of the Company.
[Principle 1.7: Framework for appropriate procedures in proportion to the importance and characteristics of the transaction with related parties]
The Company stipulates in its Regulations of the Board of Directors Meetings that a person having a special interest in the resolution of the Board of Directors cannot exercise their voting rights. In judging whether a person’s special interest conflicts or not, the Company endeavors to make the right judgments by seeking the opinion of external experts as necessary and so forth. The Company’s Board of Directors is composed of six directors, four of whom are independent outside directors, ensuring independence. In addition, as an advisory body to the Board of Directors, the Company establishes a Governance Committee composed of said four independent outside directors. The aforementioned Committee conducts deliberations on transactions between the Company and related parties such as SoftBank Group Corp., SoftBank Corp., A Holdings Corporation, NAVER Corporation, and their subsidiaries (the "Related Party Transactions") from the perspectives of fairness, economic rationality, and legality.
Furthermore, the division responsible for governance conducts a review of Related Party Transactions that do not require deliberation by the Governance Committee. For transactions meeting specific criteria, the
independent outside director serving as a full-time Audit and Supervisory Committee member is authorized by the Governance Committee to conduct a prior review from the same perspectives as the Governance Committee.
[Principle 2.4.1: Ensuring diversity, including in the appointment of core human resources]
The competitive advantage of the Group's businesses essentially derives from its ability to create innovative services and products, which is underpinned by its employees. The strength of the Company and the Group companies lies in the presence of numerous employees who have built and driven the diverse range of services that are being offered. Therefore, establishing a cycle in which employees can work more energetically and create outstanding products and services is one of the Group's top priorities. Believing that maximizing the growth and performance of people and organizations enhances the Group's human capital value, the Group works on two main pillars: "reinforcing human capital" and "fostering a unique culture." The first pillar in particular is also positioned as a material issue. It aims to strengthen its talent by supporting employee growth and improving the working environment, while also fostering a unique culture by enhancing communication between management and employees, leading to increased employee engagement.
Furthermore, the Company is committed to promoting diversity as it recognizes that having a diverse workforce is essential to the creation of innovative ideas and strategies.
Permeating DE&I in the organizational culture
The LY Corporation Group has established the "LY Corporation Group Human Rights Policy" and is dedicated to creating an environment that enables peak performance for all employees, regardless of differences or attributes such as political beliefs, ideology, religion, sex, gender identity, sexual orientation, physical characteristics, illness, age, national origin, race, ethnicity, social origin, family or marital status, background, or life stage, while respecting human rights. Additionally, the Company has developed the "The Basic Concept of DE&I at LY Corporation," and is actively engaging in various initiatives based on this concept. Through regular surveys, the Company assesses employees' awareness of diversity promotion and DE&I enhancement, and takes measures for improvement.
The Company recruits and appoints talented individuals who can immediately contribute to the business needs, regardless of age, experience, nationality, or race, taking into consideration future business development, business environment, and optimization of our talent portfolio. The Company ensures optimal placement of employees to maximize their experience, knowledge, and skills, and create an environment where all individuals can demonstrate their abilities regardless of their attributes or life stages. Therefore, while specific numerical targets are not set for foreign nationals or mid-career hires, the Company leverages diversity to drive sustainable growth for both its employees and products.
Furthermore, the Company places importance on sound and transparent management, aiming to connect diversity to the enhancement of corporate value.
For more information, please refer below:
LY Corporation Group Human Rights Policy https://www.lycorp.co.jp/en/company/humanrights/
Human Capital Strategy (Reinforcing Talent and Fostering a Culture) https://www.lycorp.co.jp/en/sustainability/esg/social/human-capital/
DE&I, Work Style, Well-Being https://www.lycorp.co.jp/en/sustainability/esg/social/human-capital2/
Fostering a Unique Culture & Monitoring for Better Performance https://www.lycorp.co.jp/en/sustainability/esg/social/human-capital3/
Facilitating Human Capital Growth https://www.lycorp.co.jp/en/sustainability/esg/social/human-capital1/
Females in managerial positions
The ratio of females in managerial positions in the Company was approximately 19% (as of March 31, 2025). While this exceeds the national average of 12.7%, the Company aims to increase this to the equivalent of the ratio of female employees out of the total workforce (approximately 33% as of October 1, 2023) by 2030.
In light of future changes in the employee gender ratio, the Company plans to regularly review target values and create opportunities for re-confirmation and discussion of policies.
Reference: The proportion of females in managerial positions (equivalent to section chief or higher) according to the Basic Survey of Gender Equality in Employment Management for the fiscal year 2023: 12.7%
[Principle 2.6: Roles of corporate pension funds as asset owners]
Although the Company does not have a corporate pension fund system, it has introduced a corporate defined contribution pension plan for the purpose of providing asset building opportunities for its employees, and the Company contributes a certain amount of premiums to eligible employees and provides education and training on the system and asset management.
[Principle 3.1 i): Company objectives (e.g., business principles), business strategies and business plans]
Fundamental Business Management Policies
The LY Corporation Group strives to achieve its mission to "Create an amazing life platform that brings WOW! to our users."
With the development of the information technology, we are now able to acquire all kinds of knowledge and information through the internet and to disseminate information around the world. Using the power of information technology, the Group believes that mankind will be liberated from various restrictions and that a new future will be created. The Group aims to enhance its corporate value by constantly striving to improve its services, focusing on maintaining a user-first approach and sustainable growth, and by contributing to solving the various issues faced by people and society.
Management Performance Indicators Used for Goals
As its core management performance indicators, the Group gives priority to the revenue and adjusted EBITDA* for the overall Group. The reasons for setting these indicators are as follows:
Revenue: This indicator was chosen because it is the source of all earnings and can also represent growth and profitability, as well as business size.
Adjusted EBITDA: This indicator was chosen as an indicator that can capture recurring profitability by excluding non-recurring and non-cash gains and losses, such as impairment losses and remeasurement gains and losses from business combinations, in addition to depreciation and amortization.
As non-financial key indicators, the Yahoo! JAPAN portal website focuses on the daily unique browsers (DUB), etc., while the LINE communication app focuses on the monthly active users (MAU), DAU/MAU ratio (ratio of daily active users to monthly active users; active ratio), etc.
Other key indicators by business segment are as follows:
Media Business: total advertising revenue, number of paid accounts of LINE Official Account, etc. Commerce Business: e-commerce transaction value, etc.
Strategic Business: PayPay GMV and number of PayPay payments of PayPay Corporation; credit card transaction volume of PayPay Card of PayPay Card Corporation; number of PayPay Bank Accounts of PayPay Bank Corporation, etc.
*Although adjusted EBITDA is not a financial measure as defined in IFRS, the Company has adopted this indicator in order to enhance understanding of the Group's performance and to use it as a key indicator in assessing the current performance. Therefore, it is possible that other companies may use different calculation methods or use the indicator for different purposes from this Group.
Medium- to Long-Term Business Strategies
(a) Business environment
Due to the rapid advancement of AI and other digital technologies in recent years, data is starting to serve as a source of value in every domain of society. In particular, advanced technologies such as generative AI have evolved remarkably, and are growing its significance in our work, learning, daily lives, and other diverse areas. Looking ahead, these technologies are expected to impact not only the internet industry, but also various other industries, including healthcare and education. At the same time, AI will be used for a wide range of purposes, from alleviating traffic congestion and improving energy efficiency to preventing crimes, fundamentally transforming the fabric of society.
The businesses of the Group can be largely classified into Media Business, Commerce Business and Strategic Business.