Mercari : Corporate Governance 2022.06.07

About this update from Mercari, Inc.

コーポレートガバナンス CORPORATE GOVERNANCE June 7, 2022 Mercari, Inc. Chief Executive Officer: Shintaro Yamada Inquiries: Corporate Division 03-6804-6907 Securities Code: 4385 https://about.mercari.com/ The Company's corporate governance situation is as follows. I. Our Basic Policy on Corporate Governance, Capital Structure, Company Attributes, and Other Basic Information 1. Our Principle Under the mission "Create value in a global marketplace where anyone can buy & sell," Mercari, Inc. aims to build a society where finite resources are used sparingly and everyone can create new value. The Company has set forth the mission of improving enterprise value through working to enhance its monitoring management function and its internal control function while practicing strict compliance management as its basic policy of corporate governance. In order to meet the trust of all stakeholders, the Group upholds a policy of working to improve the efficiency and transparency of management, maximize enterprise value, and achieve sustainable growth and development under the aforementioned basic policy. Rationale for Not Implementing Certain Principles of the Corporate Governance Code The Company implements the Fundamental Principles of the Corporate Governance Code. Principle 2.6 The Company has not adopted a corporate pension plan. Therefore, there is no phase in which the Company functions as an asset owner of a corporate pension plan. Supplementary Principle 4.1.2 The Company is in the internet industry, where the environment and technologies change rapidly. Therefore, the Company believes that a detailed and concrete mid- to long-term business plan is not suitable. Instead, the Company explains its mid- to long-term management strategies through efforts such as IR activities to promote shareholder understanding. Disclosure Based on the Principles of the Corporate Governance Code Please refer to the "Basic Corporate Governance Policy" at the end of this report for disclosure under this item. 2. Capital Structure Foreign Stock Ownership Ratio More than 30% Major Shareholders Name or Title Number of Shares Owned Ratio (%) Shintaro Yamada 37,612,530 24.09 Hiroshi Tomishima 8,975,000 5.75 MSIP CLIENT SECURITIES 8,540,859 5.47 suadd K.K. 6,567,000 4.21 UNITED, Inc. 5.250,000 3.36 GOLDMAN, SACHS & CO. REG 4,360,148 2.79 Morgan Stanley & Co. LLC 4,128,704 2.64 MSCO CUSTOMER SECURITIES 3,400,504 2.18 MLI FOR CLIENT GENERAL OMNI NON 2,843,178 1.82 COLLATERAL NON TREATY-PB Japan Trustee Services Bank, Ltd. (trust acct.) 2,479,500 1.59 Controlling Shareholder Name ー Parent Company Name ー Stock Exchange on which Parent Company is Listed ー 1 コーポレートガバナンス CORPORATE GOVERNANCE Supplementary Explanation ー 3. Company Attributes Stock Exchange Section Prime End of Accounting Period June Sector Information and Communication Technology Consolidated Number of Employees as of Preceding 1000 or more employees Year-end Consolidated Revenue as of Preceding Year-end 10-100 billion JPY Consolidated Number of Subsidiary Companies as of Less than 10 companies Preceding Year-end 4. Guidelines for Protection of Minority Shareholders in Transactions with Controlling Shareholders － 5. Other Special Circumstances Significantly Affecting Corporate Governance － II. Business Management Organization and Other Corporate Governance Systems Regarding Decision Making, Execution of Business, and Supervision in Management 1. Organizational Composition and Operation Organizational Form Company with a Supervisory Board Executive Directors Maximum Number of Executive Directors Stipulated No maximum number in Articles of Incorporation Term of Office Stipulated in Articles of 1 year Incorporation Chairperson of the Board President Number of Executive Directors 5 Appointment of Outside Directors Appointed Number of Outside Directors 3 Number of Independent Officers Designated from 3 among Outside Directors Outside Directors' Relationship with the Company (1) Name Attribute Relationship with the Company (*1) a b c d e f g h i j k Ken Takayama From another company △ Masashi Namatame From another company 2 g. h. i. j. k. コーポレートガバナンス CORPORATE GOVERNANCE Makiko Shinoda From another company *1 Categories for "Relationship with the Company" *A hollow circle ( ◯ ) signifies the individual currently or recently having that relationship with the Company, whereas a hollow triangle ( △ ) signifies the individual having that relationship with the Company in the past. *A filled circle (●) signifies an immediate family member currently having that relationship with the Company, whereas a filled triangle (▲) signifies an immediate family member having that relationship with the Company in the past. a. Executive of the Company or its subsidiary b. Non-executive director or executive of a parent company of the Company c. Executive of a fellow subsidiary of the Company d. Party whose major business partner is the Company or an executive thereof e. Major business partner of the Company or an executive thereof f. Consultant, accounting professional, or legal professional who receives a large amount of monetary consideration or other property from the Company besides compensation as a director Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a corporation) Executive of a business partner of the Company (which does not correspond to any of d., e., or f.) (the Director themself only) Executive of a corporation to which outside officers are mutually appointed (the Director themself only) Executive of a corporation that receives donations from the Company (the Director themself only) Other Outside Directors' Relationship with the Company (2) Name Design Supplementary Explanation of the Reasons for Appointment ation Relationship as Indepe ndent Office r Ken Takayama ○ Mr. Takayama was an executor of Mr. Takayama possesses operations at Mizuho Bank, Ltd. expert knowledge and Although the Company does not extensive experience in the have any capital relationship with management of finance- and Mizuho Bank, the Company does Internet-related businesses. have loans with that bank, and that The Company has appointed bank is a major business partner of him as an Outside Director the Company. As Mr. Takayama left for his advice and opinions Mizuho Bank more than 10 years on management and ago in 1999, there is no particular finances from a neutral conflict of interest in the relationship standpoint. between Mr. Takayama and Mizuho Furthermore, the Company Bank, and this meets the has appointed Mr Takayama independence criteria set forth by as an independent officer, Tokyo Stock Exchange, Inc. having determined that his appointment meets the requirements for independent officers set forth by Tokyo Stock Exchange, Inc., and there is no likelihood of any conflicts of interest arising with general shareholders. Masashi Namatame ○ − Mr. Namatame possesses specialized knowledge and extensive experience in the banking, securities, and investment industries. The Company has appointed him as an Outside Director for his advice and opinions on management- and finance-related matters from a neutral standpoint. Furthermore, the Company 3 コーポレートガバナンス CORPORATE GOVERNANCE has appointed Mr. Namatame as an independent officer, having determined that his appointment meets the requirements for independent officers set forth by Tokyo Stock Exchange, Inc., and there is no likelihood of any conflicts of interest arising with general shareholders. Makiko Shinoda ○ Ms. Shinoda possesses extensive experience working in financial institutions and as a CFO, as well as specialized knowledge of governance, stocks, and finance. The Company has appointed her as an Outside Director for the advice and opinions on business management she can provide from a neutral standpoint. Furthermore, the Company has appointed Ms. Shinoda as an independent officer, having determined that her appointment meets the requirements for independent officers set forth by Tokyo Stock Exchange, Inc., and there is no likelihood of any conflicts of interest arising with general shareholders. Voluntary Committee Voluntary Establishment of Committee(s) Established Corresponding to Nomination Committee or Remuneration Committee Committee's Name, Composition, and Attributes of Chairperson Voluntary Establishment of Nomination Committee Committee's Name Nomination and Remuneration Advisory Committee All Full-time Inside Outside Inside Other Chairperson Committee Members Directors Directors Experts Members 3 1 1 2 － － Inside Director Voluntary Establishment of Remuneration Committee Committee's Name Nomination and Remuneration Advisory Committee 4 コーポレートガバナンス CORPORATE GOVERNANCE All Full-time Inside Outside Inside Other Chairperson Committee Members Directors Directors Experts Members 3 1 1 2 － － Inside Director Supplementary Explanation As an advisory body to the Board of Directors, the Nomination and Remuneration Advisory Committee deliberates the following matters to create proposals for the Board. Matters related to the appointment or dismissal of Directors and Senior Vice Presidents (matter requiring resolution at the General Meeting of Shareholders) Matters related to the selection or removal of the Board's Representative Director Matters related to the selection or removal of titled Directors Matters related to remuneration systems/policies and individual remuneration for Directors and Senior Vice Presidents Matters related to Directors' remuneration amounts (matter requiring resolution at the General Meeting of Shareholders) Matters related to succession plans (including development) Other important business matters which the Board recognizes as requiring the Nomination and Remuneration Advisory Committee's advice Supervisory Board Establishment of Supervisory Board Established Maximum Number of Supervisory Board Members No maximum number Number of Supervisory Board Members 4 Cooperation among the Supervisory Board, Accounting Auditors, and Internal Audit Department The Internal Audit Office and Supervisory Board aim to mutually cooperate by holding meetings regularly and as necessary, and exchanging information and opinions regarding the audit structure, audit planning, audit status, etc. Additionally, the Internal Audit Office and Supervisory Board aim to mutually cooperate with the Company's Accounting Auditor, Ernst & Young ShinNihon LLC, by holding meetings regularly (quarterly) and as necessary, and exchanging information and opinions regarding the audit structure, audit planning, audit status, etc. Furthermore, the Internal Audit Office and Supervisory Board aim to organically cooperate with the divisions in charge of establishing and maintaining internal controls by regularly exchanging information, requesting investigations as necessary, etc. Appointment of Outside Supervisory Board Appointed Number of Outside Supervisory Board Members 3 Number of Outside Supervisory Board Members 3 Designated Independent Officers Outside Supervisory Board Members' Relationships with the Company (1) Name Attribute Relationship with the Company (*1) a b c d e f g h i j k l m Fumiyuki Fukushima CPA Toshihiro Igi Attorney Takahiro Shinozaki From another company *1 Categories for "Relationship with the Company" 5 This is an excerpt of the original content. 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