Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Our Sustainability

Sustainability Vision “Help Shape the Next 300 Years for
Our Future Generations and the Planet”
The SoftBank Group’s philosophy, Information Revolution—Happiness for everyone, embodies our determination to bring happiness to everyone, even to future generations 300 years from now.
To create a world where people can live in harmony with the earth, we will fulfill our responsibility as a leader of the Information Revolution to realize a sustainable society.

Sustainability principles

Material issues relating to sustainability

SBG has established The SoftBank Group

Based on our view of double materiality, SBG classifies issues to be addressed from two perspectives: the importance to stakeholders and to the

Sustainability Principles as a guideline for theGroup. Among these issues, we identify material issues relating to sustainability that should be addressed with priority, determined by the Board ofCompany’s sustainability, so as to achieve

Directors.

sustainable growth by meeting the

The eight material issues that we identified in fiscal 2020 have been updated to ten issues in January 2024, in consideration of social andexpectations of shareholders, creditors,

business environmental changes surrounding the Group. As for the importance to the Group, issues in the major business sectors in which thecustomers, business partners, employees,

Group is engaged are analyzed to determine the order of priority.

local communities, and all other stakeholders.

(“Material Issues”) reflecting the businessResponsible AI
Corporate governanceDigital inclusion

Supply chain
sustainability

Human rights

Conservation ofnatural capital

Climate change
Human capital

Privacy protection &information security
Portfolio companies’
sustainability(Important)Group company.

Importance to stakeholders

characteristics and social demands of each(Very important)material issues relating to sustainability(Extremely important)

Based on these principles, we identify(Important)(Very important)(Extremely important)

Importance to the GroupSoftBank Group Report 2024

32

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Our Sustainability

Concept of each Material Issue

Identification and review of Material Issues

Material Issues

Concept

Responsible AI

Stand at the forefront of the Information Revolution, and create
new value through the utilization of responsible AI to build amore connected, empowered and joyful world.

Climate change

Challenge issues of global climate change through businessactivities of a diverse group of companies.

Human capital

Strive for sustainable growth by creating an internal environment
in which employees, who are the source of value creation, canchallenge themselves and play an active role.

Privacy protection &information security

As a leader of the Information Revolution, sincerely deal withprotection of information assets, and lead to realization of a safe
and secure digital society.

Portfolio companies’ sustainability

As a strategic investment holding company, contribute to therealization of a sustainable society through investment, together
with portfolio companies.

Corporate governance

Under the fundamental concept of “free, fair, and innovative,”strengthen governance structure ensuring transparency andeffectiveness.

Digital inclusion

Promote the Information Revolution, strive to eliminate thedigital divide to realize a world in which everyone can benefit
from technology.

Human rights

Respect human rights for everyone in all aspects of our businessactivities, including those who belong to our supply chains.

Conservation of natural capital

As a global citizen, take serious efforts to conserve the global
environment.

Supply chain sustainability

Pursue to build sustainable supply chains by cooperating withstakeholders in all business activities.

The following process is performed to identify our Material Issues. In addition, Material Issues
are reviewed at least once in two years to reflect changes in social environments, theexpectations of stakeholders, and the business operations within each Group company.

STEP 1

STEP 2

Identification ofissuesMateriality
analysis

Identify social issues
in the social andbusiness environments
surrounding theGroup’s main businesssectors by referring toexternal guidelines andexperts’ opinions.

Analyze importancefrom two perspectives
based on our view of
double materiality:“importance tostakeholders” and“importance to theGroup.”STEP 3

STEP 4

STEP 5

Identification ofMaterial Issues

Setting andmonitoringof goals

Periodic
review

Exchange opinions
between relevant
members inside andoutside of the Group,and external experts.
Identify Material Issues
through discussion
at the Sustainability
Committee, andapproval of the Boardof Directors.

Set the goals / actionplans for the MaterialIssues based on theirimportance.
Continuously monitor
the progress of thegoals/action plans.

Review at least
once in two years
to reflect changes insocial environments,
the expectations ofstakeholders, and thebusiness operations
within each Group
company.

Goals or action plans
For the Material Issues that should be addressed with priority, we set the following goals / actionplans and will continuously monitor their progress.
Responsible AI
We aim for the establishment of an appropriate AI governance structure through discussions tobe held in our working group.
For further details on responsible AI initiatives, see page 45.

Climate change
We promote initiatives to achieve our Group target to “Achieve Carbon Neutrality by fiscal 2030.”
For further details on our initiatives related to climate change, see page 38.

Human capital
We regard human resources as a source of value creation and important stakeholders forsupporting our sustainable growth. Accordingly, we will continuously work on creating an internal
environment in which employees can challenge themselves and play an active role while making
the most of their individuality and abilities, as well as attracting autonomous and professional
human resources and supporting their growth and advancement.
For further details on our initiatives related to human capital, see page 42.
SoftBank Group Report 2024

33

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Our Sustainability

Sustainability governance

Sustainability risk management

Sustainability governance structure

At SBG, the Risk Management Office is responsible for the integrated management ofGroup-wide risks in accordance with the Risk Management Policy. As for sustainability-relatedrisks, the Sustainability Department under the CSusO collects information through reports frommajor Group companies and each department of SBG, and identifies risks taking into accountdiscussions in the Sustainability Committee. In addition, the Sustainability Department reports
the identified risks, countermeasures, and their status to the Risk Management Office under theframework of the Group-wide risk management process referenced above.
The Risk Management Office analyzes and assesses various risks including sustainability andtheir countermeasures. For material risks that could have a significant impact on the sustainablegrowth of the Group, the Risk Management Office collaborates with the parties involved in eachrisk in order to consider countermeasures and monitor the effectiveness of suchcountermeasures. Material risks and the status of countermeasures are reported to and discussed
by the Board of Directors and the Group Risk and Compliance Committee (GRCC) that consistsof the Board Director and the Corporate Officers of SBG. Based on the results of discussions, theRisk Management Office strives to strengthen the Group’s risk management system.

SBG’s Board of Directors has appointed the Chief Sustainability Officer (CSusO), who is
responsible for the promotion of Group-wide sustainability, and established the Sustainability
Committee for the purpose of promotion of the sustainability-related activities of the Group.
The Sustainability Committee continuously discusses overall policies such as the sustainability
vision and basic policies, policies of individual activities such as sustainability-related issues, goal
setting, and information disclosure, as well as sustainability promotion systems and operation
policies. The Committee is chaired by the CSusO (head of Investor Relation Department & headof Sustainability Department) and composed of three members including Board Director,
Corporate Officer, Senior Vice President, CFO & CISO (head of Finance Unit & head of
Administration Unit); Corporate Officer, Senior Vice President (head of Accounting Unit); andCorporate Officer, CLO & GCO (head of Legal Unit). The CSusO reports the details of discussionsof the Sustainability Committee to the Board of Directors for supervision.

Sustainability Committee
SBG’s Sustainability Committee was established in June 2020 and schedules meetings on a
flexible quarterly basis. In addition to the Committee members, the heads of relevant
departments attend the meetings to engage in cross-functional discussions based on specialized
knowledge and multiple perspectives.
The Committee met three times in fiscal 2023 (April, October, and December). The
discussions involved a variety of matters such as reviewing material issues relating tosustainability (”Material Issues”), integrating ESG factors into the investment process,developing an approach to responsible AI, advancing mandated non-financial information
disclosure, and responding to climate change.
Committee members

As of March 31, 2024

Chairperson

Yotaro Agari (CSusO, Head of Investor Relations Department & Head of Sustainability Department)

Othermembers

Yoshimitsu Goto (Board Director, Corporate Officer, Senior Vice President, CFO & CISO, Head ofFinance Unit, Head of Administration Unit)

See page 62 for our risk management.

Sustainability governance and risk management structure
Board of Directors of SBG
Supervise

Supervise

ReportSustainability Committee
Chairperson: Chief Sustainability Officer(CSusO)Supervise

Sustainability Department

Fiscal 2023: 3 (11 since established)Main
discussion
matters infiscal 2023

•Reviewing Material Issues•Developing an approach to responsible AI•Integrating ESG factors into the investment process•Advancing mandated non-financial information disclosure

SoftBank Group Report 2024

Promoting sustainability-related activities

ReportChief Risk Officer(CRO)
Risk Management Office
Manage, support

Tim Mackey (Corporate Officer, CLO & GCO, Head of Legal Unit)

Meetings held

Group Risk Compliance Committee(GRCC)
Supervise

Continuously discussing/addressing sustainability-related issues
and response policies

Kazuko Kimiwada (Corporate Officer, Senior Vice President, Head of Accounting Unit)

Committee activity

ReportReportReport, cooperate
Manage, support

Report, cooperate

Each department of SBG,
Each Group company•Responding to climate change•Addressing human rights risks•Strengthening sustainability information disclosure•Establishing sustainability-related Group policies
34

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Our Sustainability

Message from Our Chief Sustainability Officer (CSusO)

External evaluations of sustainability (as of June 30, 2024)

When we look at the external business environment, we can see that the AI

The main external evaluations of the Group’s sustainability are shown below.

revolution (a revolution in AI-powered technology) has made rapid strides, but
we also find sources of concern that will require greater attention, including

Inclusion in ESG indexes

geopolitical tensions and climate change. Amid this volatile and complex
backdrop, it is imperative that we continue to step up our sustainability efforts.
SBG has always remained true to its core philosophy: Information Revolution—
Happiness for everyone. This philosophy embodies our commitment tosustainability. We believe that the Information Revolution, as well as driving
business growth in the medium- to long-term, will deliver the vision ofautonomous driving for safer roads, remote learning for educational
Yotaro AgariCSusO,
Head of Investor Relations Department
Head of Sustainability Department

Index nameCompany name

Dow Jones Sustainability World Index (DJSI World)

SoftBank
LY Corporation

Dow Jones Sustainability Asia Pacific Index(DJSI Asia Pacific)

SoftBank
LY Corporation

FTSE4Good Index Series*2
FTSE Blossom Japan Index*3
FTSE Blossom Japan Sector Relative Index*4

SBG
SoftBank
LY Corporation

MSCI Japan ESG Select Leaders Index*5

SoftBank
LY Corporation

MSCI Japan Empowering Women Index (WIN)*5

SBG
SoftBank
LY Corporation

equality, and many other visions of a more sustainable world.
When it comes to sustainability, an important step we took during theyear under review was to revise our set of strategic material issues inlight of changes in both the internal and external business environment.

Two issues in particular remain paramount concerns: climate change and human capital. Climate

Major evaluations and accreditations
Sustainability Yearbook Member

change is an increasingly pressing challenge. SBG has committed to targets for reducing
greenhouse gas emissions as part of its climate-related goal:*1 Achieve Carbon Neutrality by fiscal

Eruboshi

SBG,*6 SoftBank,*7 LY Corporation*8

SBG
SoftBank

Selected as a “Sustainability Yearbook Member” by
S&P Global in “The Sustainability Yearbook 2024,” alisting of companies with outstanding sustainability.

Granted “Eruboshi” Level 3 (highest grade) certification
as a company promoting women’s advancement (2024,
Ministry of Health, Labour and Welfare)

CDP

Science-Based
Targets (SBTs)

2030. We have also started quantifying our Scope 3 emissions (which encompasses portfolio
companies) with intentions to present a road map for reaching net zero in Scope 3 emissions assoon as possible. As for human capital, it goes without saying that this is of crucial importance toour organization, which invests in AI and other innovative technologies. We are committed tolaying down the infrastructure to empower people to take on challenges and excel.
Another top priority is ensuring responsible AI. With the rapid progress in the AI revolution,
lively debates have ensued about the hidden risks of AI and what measures are needed to control
these risks. As an organization at the forefront of the AI revolution, SBG recognizes theparamount importance of building frameworks for responsible AI —frameworks that will control
the risks but also leverage the opportunities of AI to create new value.

SBG, SoftBank
LY Corporation

SoftBank

Earned a Climate Change Response Score of A- by the
CDP (a global environmental NGO). SoftBank Groupand SoftBank also earned a Supplier Engagement
Rating of A.

The goals detailed in SoftBank’s “Carbon Neutral 2030
Declaration” were certified as Science-Based Targets(SBTs) as they are based on scientific evidence.

Disclosing sustainability information is another priority. We will provide statutory disclosure andpresent a model that is most appropriate to SBG, an approach that reorganizes our previous

For further details, see each company’s website:

disclosures into non-financial information presented in clear, effective language.

*2

Finally, as an investment company, we recognize the need to promote sustainability throughour investment activities. Accordingly, we have introduced into our investment process a

*3

*4

SBG

SoftBank

framework for evaluating sustainability-related risks and opportunities.

*5*1 Applies to greenhouse gas emissions (Scope 1 and 2) from the business activities of SBG and its major subsidiaries (in principle,“Principal Subsidiaries” in the Annual Securities Report, but there are some exceptions for reasons such as regulations)*6 SBG was selected as among the top 15% companies in its industry.
*7 SoftBank was awarded a “Top 10% S&P Global CSA Score” in its industry.
*8 LY Corporation was awarded a “Top 10% S&P Global CSA Score” in its industry.

SoftBank Group Report 2024

LY Corporation

FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that SoftBank Group Corp., SoftBank Corp., and LY Corporation have been independently assessed according to the FTSE4Good
criteria, and have satisfied the requirements to become constituents of the FTSE4Good Index Series. Created by the global index provider FTSE Russell, the FTSE4Good Index Series is designed to measure the performance of companies
demonstrating strong Environmental, Social and Governance (ESG) practices. The FTSE4Good indices are used by a wide variety of market participants to create and assess responsible investment funds and other products.
FTSE Russell confirms that SoftBank Group Corp., SoftBank Corp., and LY Corporation have been independently assessed according to the index criteria, and have satisfied the requirements to become constituents of the FTSE
Blossom Japan Index. Created by the global index and data provider FTSE Russell, the FTSE Blossom Japan Index is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG)
practices. The FTSE Blossom Japan Index is used by a wide variety of market participants to create and assess responsible investment funds and other products.
FTSE Russell confirms that SoftBank Group Corp., SoftBank Corp., and LY Corporation have been independently assessed according to the index criteria, and have satisfied the requirements to become constituents of the FTSE Blossom
Japan Sector Relative Index. The FTSE Blossom Japan Sector Relative Index is used by a wide variety of market participants to create and assess responsible investment funds and other products.
THE INCLUSION OF SoftBank Group Corp., SoftBank Corp., and LY Corporation IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP,
ENDORSEMENT OR PROMOTION OF SoftBank Group Corp., SoftBank Corp., and LY Corporation BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMESAND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

35

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Our Sustainability

Portfolio companies’ sustainability

Investing in businesses that help address environmental andsocial challenges

Considering sustainability standards in investment activities, we support the sustainable

SBG believes that investing in companies with innovative technology and business models candevelopment of society at large while also enhancing the performance of our investments overhelp address global challenges such as climate change and economic inequalities, thereby

the medium- to long-term. Under this belief, we are undertaking the following initiatives.

contributing to a more sustainable world. SoftBank Vision Funds and other investment
businesses of the Group have already invested in many businesses that contribute to social andIntegrating ESG into the investment processenvironmental sustainability using AI.

SBG revised its Portfolio Company Governance and Investment Guidelines Policy in May 2021,
which originally set forth criteria on the governance of portfolio companies to be considered in
the investment process. The revised Policy clearly states that environmental and social risks andInvestments that help address environmental and social challenges

opportunities, in addition to governance, are to be assessed in the selection of investees and in
post-investment monitoring. The Policy applies to SBG and its subsidiaries.*9 SBG and each
investment subsidiary decide and implement their own specific investment plans. SBG willcontinue to actively integrate ESG into the investment process.
*9 Includes SoftBank Vision Funds and other investment subsidiaries managed by subsidiaries of SBG but excludes listed subsidiaries andsubsidiaries that the Group is restricted from controlling for regulatory reasons and their subsidiaries.

ClimatechangeIntegrating ESG into SoftBank Vision Funds’ investments
Described below are ways in which SoftBank Vision Funds integrate ESG into their investments.

Environment

Pre-Investment: assessing the risks of potential investments
SoftBank Vision Funds recognize four material themes in environmental and social fields thatmatter to the international community and to the Company’s investment business: responsible

Higher work
satisfaction andproductivity

CirculareconomyNaturalcapitalSociety

Health,safety, andsecurityAI, climate change, human rights (forced labor), and discrimination/harassment. As part of its
due diligence, SoftBank Vision Funds evaluate the potential investment’s status in addressingthese material themes in environmental and social fields, as well as governance, to assess the

Cybersecurity

Closing gaps
and improving
accessrisks, and use the results for investment decision-making.
Post-Investment: monitoring and engagement
After investing, SoftBank Vision Funds continually monitor the portfolio companies to prevent
risks from materializing. They also engage with the portfolio companies in their efforts toaddress important tasks. Through such post-investment monitoring and engagement, SoftBank

Note: These are examples of portfolio companies that help address environmental and social challenges (as of December 2023).

Vision Funds help drive sustainable development and enhance the performance of the portfolio
companies over the medium- to long-term.

SoftBank Group Report 202436

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Our Sustainability

Addressing environmental and social challenges through our businesses
As a company that primarily engages in investment, SBG works through its portfolio companies to address environmental and social challenges.
The portfolio companies of SoftBank Vision Funds
Harnesses technology to empower fish andshrimp farmers

eFisheryeFishery is the largest aqua-tech company in Southeast Asia. The
company offers affordable software and hardware, improving
farmers’ economics end-to-end. One major innovation is theeFeeder, which automatically dispenses the appropriate feed
in a timely manner improving farming efficiency by reducing
manpower and wastage. This enables sustainable farming
as it reduces water pollution caused by over feeding, while
concurrently improving farmers’ yield by ～23%.

Makes green energy accessible to everyone

Enpal

Improves patient outcomes by connecting
surgical care

ProximieProximie’s digital surgery software facilitates live sharing of the
Operating Room for a connected surgical care ecosystem. The
company enables hospitals, surgeons, and medical devicecompanies to capture data, share information from anywhere in
real time, and generate new insights to improve productivity andpatient outcomes. Proximie directly contributes to improving
healthcare for patients and medical education for the next
generation of doctors.

Swell Energy

Helps small-scale farmers maximize their profits andfarm more sustainably

Swell Energy is creating a smarter grid through cost-effective,

Apollo Agriculture is an agri-fintech platform, empoweringclean, and flexible energy solutions. The company uses its
AI-enabled software modules to aggregate energy resources suchas battery storage systems to provide Virtual Power Plant services
to both utilities and end consumers. Swell helps homeowners andbusinesses achieve total energy security and independence fromrising energy costs through cutting-edge, smart energy
technology that leverages a distributed clean energy network.

small-scale farmers across Africa to increase their profits andfarm more sustainably. Apollo uses artificial intelligence andautomated operations to unlock the massive, untappedsmall-scale farming market, enabling farmers to access the
optimized financing, high-quality farm products, expert digital
advice, and risk management solutions they need to invest andscale their businesses in Kenya and Zambia.

SoftBank Group Report 2024

AI Medical Service

AI Medical Service develops AI-powered endoscopes, enhancing earlygastric cancer detection and patient survival rates. Its productsoftware was recently approved by regulators (Japan and Singapore).
The company represents a commitment to improving public healthand healthcare access. Through partnerships with leading medical
institutions, the company ensures responsible AI and patient dataprotection, promoting equitable healthcare. The initiatives embody ESG
values, focusing on social well-being and wider healthcare access.

Enpal provides a subscription-based decentralized solar energy
solution for residential consumers in Europe. The company offers
customers an all-in-one solar leasing and financing solution
including a photovoltaic (PV) solar energy system, energy
storage/ batteries, heat pumps, and EV charging. Its mission is tobuild renewable communities by making green energy accessible
and affordable for everyone.

Creates a smarter energy

Uses AI to detect early-stage cancer

Apollo Agriculture37

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: Environment

Initiatives for the Maintenance andPreservation of the Global Environment
Maintenance and preservation of the global environment are our responsibility as global citizens and represent an important foundation supporting the Group’s sustainable development and growth.
We are working to reduce the negative impact of our business activities on the environment. We are also leveraging the strengths and advanced technologies of each Group company to address climatechange and other environmental issues.

Basic policy on environmental
initiatives

Climate change

Risk management

Department reports the countermeasures and

At SBG, the Risk Management Office istheir status to the Risk Management Office.

In May 2021, SBG established the

Climate-related information
disclosures in accordance with the
TCFD recommendations (Summary)Environmental Policy as a set of principles for

SBG recognizes the impact of climate change

As for sustainability-related risks including

conducting corporate activities inon our businesses and discloses its responseclimate change, the Sustainability Department

SBG identifies, analyzes, and develops

consideration of the global environment. The

to climate change in line with the TCFD

under the CSusO collects information throughactions to manage climate-related risks andCompany’s activities are in accordance withrecommendations.

reports from major Group companies and each

opportunities for the Investment Business ofdepartment of SBG, and identifies risks taking

Holding Companies and the SoftBank Vision

into account discussions in the Sustainability

Funds business (the “Company’s Investment

Committee. In addition, the Sustainability

Business”).

Environmental Policy

the Policy, which stipulates, among otherguidance, that we comply with environment-

For the full text of our TCFD disclosures, see “Environment
Initiatives” under “Sustainability” on our website.

related laws and regulations, respond toclimate change, reduce environmental impact,conserve resources, and preserve biodiversity.

responsible for the integrated management ofFor further details on our sustainability risk management,see page 34.

Group-wide risks in accordance with the Risk
Management Policy.

Strategy

Governance
SBG’s Board of Directors deliberates andmakes decisions on overall climate-related

Risks and opportunities in the Company’s Investment Business and our responses

actions, including identifying climate-related

Summary of risks and opportunities

risks and opportunities, developing

The following table shows a summary of the anticipated climate-related risks and opportunities

Supplier Code of Conduct

countermeasures, and setting the Group’s

for the Company’s Investment Business.

SBG sets out our Supplier Code of Conduct,target for greenhouse gas emissions

including compliance with environmental

reduction. In addition, the Sustainability

laws and regulations, managing andCommittee, chaired by the CSusO, discusses

reducing waste, avoiding wasteful use ofand examines climate-related actions, reports

resources, and consideration of biodiversity,

its findings to the Board of Directors, and isand requires our suppliers to work insupervised by the Board as required.

For the full text of the Policy, see “Environment Initiatives”
under “Sustainability” on our website.

accordance with the Code.
For the full text of the Code, see “Social Initiatives” under“Sustainability” on our website.
SoftBank Group Report 2024

For further details on our sustainability governance, seepage 34.

Opportunities

Risks

Expected returns from new investments
in companies that provide climate-related
technologies and services (e.g., climate tech)

Reduced investment opportunities due topotential portfolio companies’ reluctance toaccept the Company’s investments if its climatechange response is inadequate

Existing
investments

Enhanced enterprise value of existing portfolio
companies from their adequate response to
climate change

Decline in enterprise value of existing portfolio
companies due to their inadequate response to
climate change

Financing

Expansion of financing opportunities by
gaining investors’ support for the Company’s
steady responses to climate change

Decline in financing opportunities due to lower
evaluation from investors if the Company’s
climate change response is inadequateNew
investments

38

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: Environment
Our recognized impact of risks andopportunities

Responses to risks and opportunities

Although it is true that the Company could

and opportunities through the following

lose investment and financing opportunities

measures:

To achieve the Group target

We are addressing the climate-related risks

to achieve the Group target, which is reviewed when required. SBG and its major subsidiaries
are undertaking greenhouse gas emissions reduction initiatives in accordance with this plan.

if its response to climate change is deemedgrossly inadequate, we are confident that it
is possible to avoid those risks by maintaining

Investments in climate tech

P.37

steady efforts to reduce greenhouse gas

Invest in companies that provide climate-related
technologies and services

emissions. Also, both the transition andResponses in the investment process

physical risks of the Company’s existing

Incorporate climate-related risk/opportunity
assessments into the investment process

portfolio companies are expected to belimited as they include many AI companies

production or complex supply chains.

Greenhouse gas emissions reduction

philosophy, Information Revolution—
Happiness for everyone, we aim to

Achieve Carbon Neutrality by fiscal 2030

Targets and record of performance at SBG and its major subsidiaries
Targets
SBG
SoftBank

Portfolio company engagement

relatively low and that have no large-scale
Meanwhile, under our corporate

Group target*1

P.36

Engage with portfolio companies on climatechange, including holding workshops for thosecompanies

for which greenhouse gas emissions are

In March 2024, SBG formulated and disclosed a plan for reducing greenhouse gas emissions*1

Reduce greenhouse gas emissions from ourbusiness activities, including switching toelectricity derived from renewable energy sources

Record of performance

Achieved Carbon Neutrality from fiscal 2020*2
Achieve Carbon Neutrality in its group by fiscal 2030*2
Achieve Net Zero in its group by fiscal 2050*3

Converted 81.6% of electricity
used at base stations torenewable energy (fiscal 2023)

LY Corporation Achieve net-zero greenhouse gas emissions in LY
Corporation by fiscal 2025*2
Achieve net-zero greenhouse gas emissions in its group by
fiscal 2030*2
Arm

Convert 100% of electricity used by its group to
renewable energy by 2023
Achieve Net Zero in its group by 2030*3

Converted 62.4% of energy
used by its group to renewableenergy (fiscal 2023)
100% of electricity used byits group was converted torenewable energy (fiscal 2022)

contribute to the well-being of people

Greenhouse gas reduction plan to achieve the Group target*1

through the superstructure of the ecosystem(t-CO2)600,000

with entrepreneurs who possess new

591,508534,246*4

Metrics and targets

technologies and business models. In a world

Seeking to further reduce greenhouse gas

increasingly beset by natural disasters andemissions from our business activities, SBG

other climate risks, we can meet the demand

set a Group target to “Achieve Carbon

for climate action and fulfill our corporate

Neutrality by fiscal 2030”*1 in June 2022. To

philosophy by proactively investing inachieve the target, the entire Group isbusinesses that offer the innovative climate

working on switching to electricity derived

solutions the world needs.

from renewable energy sources, using
energy-efficient measures, and othermeasures.

(As of July 2024)

530,255

516,062492,019

466,930

442,828400,000

200,000

0
0

FY2022

FY2023

FY2024FY2025

FY2026FY2027

FY2028FY2030(base year)(result)(plan)(plan)(plan)(plan)(plan)(target)*1 Applies to greenhouse gas emissions (Scope 1 and 2) from the business activities of SBG and its major subsidiaries (in principle,“Principal Subsidiaries” in the Annual Securities Report, but there are some exceptions for reasons such as regulations)*2 Applies to greenhouse gas emissions (Scope 1 and 2)*3 Applies to greenhouse gas emissions (Scope 1, 2, and 3)*4 Some Group companies are being audited as of the date of publication of this Annual Report.

SoftBank Group Report 2024

39

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: Environment

Promoting and expanding the use of renewable energy
U.S. solar power project

SB Energy Global Holdings

To promote renewable energy, SB Energy Global Holdings and its subsidiaries operate a power
generation business that boasts one of the largest solar power businesses in the U.S. The
business has six solar farms,* which collectively generate 1,430 MW.* SB Energy Global
55Holdings is currently constructing three additional solar farms in the U.S., which will collectively
generate 2,130 MW.*5

AMEA PowerAMEA Power is an SBG portfolio company that develops
and operates renewable energy projects in Africa, theMiddle East, and Asia. Its projects contribute to thedecarbonization of these regions and driving socioeconomic
development. Founded in 2016, AMEA Power is one of
the fastest growing renewable energy companies in these*5 Generation capacity in AC, as of March 2024

Providing electricity services that contribute to
CO2 reduction

Renewable energy investments in Africa,
the Middle East, and Asia

regions. AMEA Power has more than 1,600 MW of clean
energy projects in operation and under/near
SB Power

SB Power is an electricity retailer that runs Shizen Denki, a service that discharges net-100%
renewable energy*6 to households. In fiscal 2023, the service contributed to reducing carbon
emissions by 39,000 tons.*7
Households that subscribe to SB Power’s SoftBank Denki service get free access to the Eco
Denki App. They can use the app to monitor their past electricity bills and forecast their electricity

construction.*9 In addition, AMEA Power has a clean energy pipeline of more than 6 GW
across 20 countries.*9 AMEA Power is also developing green hydrogen projects in Africa,
leveraging its expertise in the development of renewable energy projects. In November 2022,
AMEA Power signed a Framework Agreement with the Egyptian government to develop a
1-GW green hydrogen project. Through its activities and project development, AMEA Poweris actively supporting the clean energy transition of the countries.
*9 As of December 2023

bill for the month. They can also easily take advantage of the household energy-saving service
where they can earn PayPay Points based on the amount of electricity they save at specified times.
Through this service, SB Power supports users to reduce their electricity usage. In fiscal 2023, theservice reduced household energy consumption by 14.12 million kWh, thereby cutting carbon
emissions by 7,104 tons. Currently, more than half ofDeveloping energy-efficient technology
Semiconductor architecture that improves energy
efficiency

SoftBank Denki subscribers use this service.*8*6 By combining electricity supplied to customers with Non-fossil Fuel Energy
Certificates that have a renewable energy designation, the service can supply
electricity with a net-100% renewable energy ratio and net-zero CO2 emissions.
*7 This figure is calculated by multiplying the amount of electricity used by Shizen
Denki customers by the national average CO2 emission factor and adding theamount of J-credits retired through support for forest conservation organizations.
*8 As of the end of April 2024

Arm

With accelerated growth in shipments of Arm-based chips, Arm architecture is found in anever-greater range of applications, from smartphones and home appliances to vehicles andservers. Arm recognizes its responsibility to develop energy-efficient designs and believes that it
could be one of the solutions for helping to cut global energy consumption. Arm has developed
Eco Denki App screenshots

numerous technologies that combine exceptional processing with energy efficiency. One
example is Arm Ethos-U55, which provides up to 90% energy reduction for machine learning
workloads on IoT devices compared to its predecessor. Another is Arm Cortex-A715, which
delivers 20% power efficiency improvements to consumer markets compared to its predecessor.

SoftBank Group Report 2024

40

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: Environment

Promoting decarbonization through initiatives
Participation in the One Planet Sovereign WealthFund (OPSWF) Network

Conserving natural capital
SBG, SBIA

SBG and SBIA participate in the One Planet Sovereign WealthConserving natural capital is an increasingly urgent task. The Group therefore makes sustained
efforts to reduce water consumption and other environmental impacts in accordance with its
Environmental Policy.

Fund (OPSWF) Network, which was established as a Working
Group in July 2018. That same year, the OPSWF’s founding

Addressing water challenges

members developed the OPSWF Framework to advance theintegration of climate change risks and opportunities into large
and diversified asset pools. The Abu Dhabi Investment

Water treatment technologies that safeguard water
infrastructure in times of disaster

Authority, the Kuwait Investment Authority, the New Zealand

In May 2021, SoftBank entered a capital and business tie-up

Superannuation Fund, the Public Investment Fund and the
Qatar Investment Authority currently lead the OPSWF’s Steering Group. In July 2019, the One
Planet Asset Manager (OPAM) Initiative was launched to allow for asset managers to support
the OPSWF Framework. Similarly, in July 2020, the One Planet Private Equity Funds (OPPEF)
Initiative was founded by Ardian, The Carlyle Group, Global Infrastructure Partners, Macquarie
Asset Management, and SBIA.
SBIA and the OPPEF Group, now comprising 11 members, actively engage in the OPSWF's
programs and discussions, including the CEO Summits and Peer Exchanges.

SoftBank

with WOTA, which owns proprietary technology forautonomous water treatment. The purpose of this partnershipis to develop a decentralized system of water circulation, onethat is independent of water infrastructure. This system will
enable water reuse and serve as sustainable water infrastructure. It will also safeguard water
access in evacuation centers during a disaster, contributing to a more sanitary environment.
WOTA has developed the WOTA BOX, a portable system for water reuse. Capable ofreclaiming 98% of wastewater for reuse, the WOTA BOX provides a source of water in areas
with no water supply. It can also be combined with WOTA’s other expansion units such as tents

Establishment and operation of the Renewable Energy
Council and the GDC Renewable Energy Council

SBG

to provide up to a hundred showers with just 100 liters of water, which is typically only enoughfor two showers. The system is simple and quick to set up as long as you can connect it to a

Together with local governments, SBG established the Renewable Energy Council and thepower supply. As such, it can serve as a shower unit in evacuation centers when the water

Government-Designated Cities Renewable Energy Council in 2011. Led by 34 prefectures

supply is cut off due to a disaster.

throughout Japan and the local governments of 20 designated cities, the two Councils
share information to promote and expand the use of renewable energy and make policy
recommendations to the Japanese government. As their secretariat, SBG works with affiliatedlocal governments to drive the net-zero transition in Japan.

Promotion of a circular economy
E-commerce services that contribute to a circular
economyLY Corporation

To learn more about the Renewable Energy Council, visit the Council’s website (Japanese language only).
To learn more about the Government-Designated Cities Renewable Energy Council, visit the Council’s website (Japanese language only).

Yahoo! Auctions
Since 1999, Yahoo! Auctions has provided one of Japan’s largest online auction and flea
market services. It has played a part in building a circular economy by providing a way forusers to sell the things they no longer need to people who do need them.
Yahoo! Flea Market
Yahoo! Flea Market is a dedicated online flea market app, which provides a simple way
for users to trade goods for a fixed price. We believe that this app, together with Yahoo!
Auctions, can lead to further growth of a sustainable secondhand market.

SoftBank Group Report 2024

41

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: Social

How We Serve People and Society as a Leader of
the Information Revolution
We strive to create a diverse, inclusive workforce and a positive, respectful workplace.
As a leader of the Information Revolution, we channel the various strengths of our Group companies into addressing the social challenges of this age of information and globalization.

Initiatives related to humancapitalThe Group regards human resources as asource of value creation and important
stakeholders for supporting its sustainablegrowth. Accordingly, we believe thatcreating an internal environment in which
employees can challenge themselves andplay an active role while making the most of
their individuality and abilities will increase
corporate value.

Human resource strategy
SBG’s human resource strategy is to attract
autonomous and professional humanresources and support their growth andadvancement, and we are making ongoing
efforts to achieve these goals. For specificinitiatives, see “Diverse human capitalmanagement” and thereafter.
The human resource strategies ofsubsidiaries and Group companies are
determined by each company, based on the
Cluster of No. 1 Strategy of growing together
in a symbiotic ecosystem where decisions
made by each company are respected.

SoftBank Group Report 2024

Diverse human capital management
Professional recruitment emphasizingcore competencies
SBG hires professionals based on three corecompetencies: professionalism, smart, andrelation. We work to attract excellent anddiverse human resources under a basic policyof assigning the most suitable person to eachposition, regardless of age, gender,
nationality, or disability.
Three core competencies we seek in our
employees
Professionalism
High level of expertise in a relevant fieldnationality, or disability, thereby creating aworkplace rich in diversity where everyone
can play an active role.
As of March 31, 2024, 46.2% of all
employees and 25.0% of managers were
women. Each of them is engaged in theirprofession by making the best use of theiradvanced expertise. We will continue
promoting the advancement of women. In
March 2024, we earned “Eruboshi” Level 3(highest grade) certification under the Act on
the Promotion of Women’s Participation andAdvancement in the Workplace.
Human resources data by gender

Smart
Capacity to think logically and tackle unprecedented
challenges using numbers and reasoning

Relation
Communication skills required to engage in business withleading companies in the world

As of March 31, 2024

Men

Women

Ratio of employees

53.8%

46.2%

Average age (years)

42.7

40.1

Average length of
employment (years)

10.4

10.3

Ratio of managers

75.0%

25.0%

Diversity and inclusion
SBG is committed to assignments that allow
employees, who are the driving force behind
corporate growth, to make the most of theirindividuality and abilities. We promote thehiring of human resources and appointmentof managers regardless of age, gender,

As of March 31, 2024, 2.8% of ouremployees were people with disabilities,
compared to the legally mandated ratio of
2.3%. We are continuing our hiring activities
with the aim of further improving the ratioof employees with disabilities.

Evaluation and compensation
SBG respects employees who actively take onchallenges. To properly reward employees fortheir achievements, we conduct personnel
evaluations and reflect the results of thoseevaluations in employees’ salaries and bonuses
under the principle of reward and punishment.
We also encourage employees to workwith a sense of ownership. Accordingly, ourhuman resource policy emphasizes
contribution to enhancement of corporate
value and includes providing stock-based
compensation based on personnel
evaluations.
In fiscal 2023, the indexed compensationlevels for regular employees by gender wereas follows. Women in managerial positions
received approximately 68% of thecompensation that their male counterparts
received. Women in non-managerial
positions received approximately 85%, andoverall, women received approximately 52%of the compensation that men received.

Human resource development forautonomous and continuous growth
Career development
SBG emphasizes the importance of selfdriven career development. By providing
42

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: Social
opportunities for individual awarenessthrough ongoing one-on-one meetings withline managers and multifaceted 360-degree
feedback from peers, we encourage
employees to grow through self-review andself-reflection.
Education and training
SBG provides an environment allowing
individual employees to voluntarily acquire
the knowledge and skills necessary for theirwork. For example, we offer training
programs, such as English conversation
classes, that can be taken freely at any time,and SoftBank University, which operates
within the Group. We have also allocated atalent development budget to eachdepartment so employees can take external
training courses.
We also provide support for theadvancement of professional personnel, suchas lawyers, patent attorneys, Certified Public
Accountants, and certified tax accountants,
by covering expenses related to theregistration and maintenance of various
professional qualifications required for job
execution. In fiscal 2023, we provided suchsupport to approximately 12% of ouremployees.

Group human resource development
systemThe Group offers a wide variety ofopportunities for employees to play an activerole within our organization. These include
SoftBank Group Report 2024

the Free Agent System, which allows
employees to voluntarily arrange personnel
transfers; SoftBank Academia, designed to
discover and develop the next generation ofGroup management talent; and SoftBank
InnoVenture, a program to train internal
entrepreneurs to create a strategic assemblyof synergistic group companies.
Dual employment
SBG also allows employees to engage in dual
employment (side jobs) as an opportunity
for personal growth through diverse
experiences.

Work-style reform
Improving workplace environments
SBG respects and supports the efforts of
employees to find a good work-life balance.
Therefore, we introduced a “super-flex timesystem” with no core hours and allow
working from home to provide environments
where employees can work regardless oftime and place. This allows employees tochoose their optimal work styles andmaximize their individual performances.
Childcare support
It is extremely important to provide working
parents with opportunities to be involved intheir children’s development, and we believe
proactive efforts must be made to foster thedevelopment of society. Among SBG’s maleregular employees whose spouses gave birth,around 117% took leave of absence forchildcare in fiscal 2023, which is consistent
with the percentage of female regular
employees who took leave of absence forchildcare.

Our efforts to support employees’ worklife balance have achieved some success, andwe aim to make further improvements inchildcare support. To this end, we are taking
measures to alleviate income-related
concerns, such as subsidizing childcare andother expenses through Children andFamilies Agency (previously Cabinet Office)babysitter coupons and letting employees
accumulate and carry over unused annual
leave for pre-natal and post-natal leave,
leave of absence for childcare, and leave ofabsence for childcare at birth. To help
employees who have taken such leave toreturn to work as soon as possible, we have
implemented shared use of company-led
nursery schools. Alongside this, we provide
opportunities for employees with childcarecommitments to engage and interact with
one another.
Well-being
As a pure holding company, SBG takes
various initiatives to manage, maintain, andpromote the health of its employees, who
represent its greatest asset. In addition toregular medical examinations, in fiscal 2023
we introduced a system that allows
employees to undergo optional medical
examinations tailored to age group at theCompany’s expense. About 38% of
employees have used the system.
Meanwhile, we continue encouraging
employees to take annual leave. In fiscal
2023, the annual leave utilization rate wasapproximately 64% (14.6 days). For fiscal
2024 and beyond, we will set targets for ahigher utilization rate in our “generalemployer action plan.” In April 2024, westarted providing leave for women’s healthconditions and leave for infertility treatment
or menopausal conditions regardless ofgender.
Employee engagement
The Group conducts an annual satisfaction
survey of all employees, and 32 domestic
Group companies, including SBG,
participated in the survey in fiscal 2023. Thissurvey was developed to reflect thecharacteristics of the Group. Accordingly,
responses regarding satisfaction with theorganization (job, workplace, and supervisor)
and the company each respondent belongs
to are scored by item to identify issues at an
early stage. Continuous monitoring of theseresults helps us build a strong organizationand increase employee motivation.
A total of 86% of SBG employees
responded to the survey in fiscal 2023 andindicated a continued high level ofsatisfaction. We will continue actively working
to improve employee engagement to realize
more comfortable work environments.

Respect for human rights
SBG has established the Human Rights Policy
and has programs in place to instill humanrights awareness throughout ourorganization, from officers to employees.
Our HR, compliance, risk management, andsustainability teams, along with otherspecialized teams, manage human rights
risks relevant to the Group.
See the full article of the Policy in "Social Initiatives" on
our website.

43

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: Social

Addressing social issues

Smartphone classes for elderly people

SBG has established the sustainability vision: Help shape the next 300 years for our future

At SoftBank shops, SoftBank-certiﬁed expert Smartphone

generations and the planet. Under this vision, SBG and its Group companies engage in social-

Advisors ®*1 help customers find the best price plan andimpact initiatives, drawing on the Group’s strengths.

device, handle the initial setup for the device, and provide

SoftBank

repair services. In SoftBank’s smartphone classes, which are

Digital inclusion

open to all, Smartphone Advisors give attendees an easy-to-

Guided by our corporate philosophy, Information Revolution—Happiness for everyone, we arefollow tutorial on how convenient and fun smartphones cancommitted to leading an Information Revolution that benefits all humankind. Technologicalbe. SoftBank has also partnered with Tokyo’s Minato Ward

progress has benefitted many people, but the benefits are unevenly distributed and a digital

to offer elderly residents free smartphone rentals and classes on how to use them. Since 2022,

divide has emerged. We have identified digital inclusion as one of our material issues and will

SoftBank, in partnership with MONET Technologies, has worked with local governments to run

contribute to the realization of a world where everyone can enjoy the benefits of thethe Smartphone All-Around Support Vehicle, a van equipped to provide mobile smartphone

Information Revolution.

classes. The vehicle is equipped with monitors and tablets through which attendees canGroup companies’ initiatives

rural communities and other areas with poor access to public transport.

The Company’s efforts to close the digital divide target the causal problems, including lack of*1 Support specialist store staff certiﬁed by SoftBank who conduct smartphone classes and provide guidance on using smartphones.
Smartphone Advisor ® is a registered trademark of SoftBank.

communicate with Smartphone Advisors. With this equipment, the initiative reaches remote

access to the Internet and other information sources and lack of knowledge about information
technology. To address these problems, the Company has provided ICT-powered educational
opportunities, smartphone classes for elderly people and other groups, and educational
programs for children designed to foster digital literacy and ethical digital citizenship.

Equipping the next generation with digital literacy

LY Corporation

To prepare the next generation for the world of tomorrow, it
is essential to provide children with digital literacy education

Closing the digital divideArmand safe access to the Internet. With communication tools
becoming increasingly diverse, children are increasingly

Arm’s commitment to Closing the Digital Divide involves working with private and public sector

exposed to online dangers. Against this backdrop, LY

partners on social impact initiatives that leverage technology to address inequalities and provide

Corporation offers education for ethical digital citizenship sotechnology access to underserved populations. One example of this is its partnership with thethat people can enjoy safe and secure online communication.

UNHCR, the UN Refugee Agency. Arm is providing technical and capacity-building support to

Responding to requests from schools and local governments in Japan, official instructors fromthe UNHCR’s Innovation Service, which works to ensure the agency’s humanitarian response is

the LINE MIRAI Foundation visit schools to deliver free online classes. The official instructors

fit for the future and covers a range of areas, including data, digital inclusion, refugee-led

teach children about the nature of online communication, the risks to be aware of, and theinnovation, and environmental resilience. Additionally, Arm Education aims to help close

information literacy necessary for participation in the information society. They also give parents

education and skills gaps in computer engineering and STEM. As part of the initiative, Armtips on how to protect their children from online dangers and offer teachers insights aboutprovides teaching and learning resources, IP tools, and other support to universities, and works

children’s online behavior and how to foster ethical digital citizenship. LY Corporation also

closely with academic and industry partners on research collaborations. Since 2013, Arm has

provides schools with a free textbook, GIGA Workbook, covering topics such as ethical digital

supported and collaborated with over 2,500 universities worldwide and enabled more thancitizenship and information literacy. GIGA Workbook has been introduced as an official

10,000 Arm-based classes.

textbook by many local governments in Japan.

For further details on Arm Education, see Arm’s corporate website.

SoftBank Group Report 2024

44

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: Social
a membership that includes representatives

Responsible AI

from related divisions (e.g., CEO Office,Group companies’ initiatives
Objective and effective AI governance

SoftBank

The Group’s mission is to stay at theLegal, Information System) and from major

forefront of the Information Revolution andGroup companies (e.g., Arm, SoftBank, LY

SoftBank has a dedicated team leading efforts to build an effective system of AI governanceensure that the revolution builds a more

Corporation, SBIA), the working groupto ensure that the company’s AI-driven services are safe and secure for customers to use. For

connected empowered, and joyful world. At

convenes regularly to share information

example, in July 2022, the company established the SoftBank AI Ethics Policy.*2 To ensure thethe core of the Information Revolution today

about best practices and discuss an AI

effectiveness of the governance structure, the company has also set specific rules and checklists

lies AI. Aspiring to become a world leader

governance model for SBG to adopt. We

for AI-related planning, application, development, and outsourcing. SoftBank also takes activein the use of AI, we are committed towill continue efforts to build a governancesteps to raise awareness of AI governance in the workplace. It provides a basic training course

promoting responsible AI so that AI benefits

structure that balances proactive and secure

for all employees along with practical training for employees involved in AI-related planning,

everyone.

approaches to manage the breakneck

development, and application. Employees can also access information about AI governanceadvancements in AI.

initiatives on the company’s web portal. During March 2024, which was the company’s “AI

Establishing AI governanceFor further details on our material issues, see page 32.

SBG’s approach to AI governance
SBG has identified “Responsible AI” as thegovernance strengthening month,” the company issued an e-mail newsletter with information
about AI governance and organized a lecture delivered by an external expert. In April 2024, theProactive and secure use of AI

company established the AI Ethics Committee, a panel that outside experts join, which discusses

most important material issue relating to

Aspiring to become a world leader in the use

and advises the company on matters related to AI ethics. SoftBank will remain committed tosustainability that should be addressed withof AI, we focus on both proactive and securedelivering objective and effective AI governance, incorporating the advice of the AI Ethics

priority and is aiming to establish an

aspects in our approach to AI governance. We

Committee and user feedback.

appropriate group AI governance structure.

established guidelines on generative AI in April*2 As of April 2024, the policy applies to 72 group companies of SoftBank.

As part of this effort, we have established2023, and in April 2024 we added Action

the AI Governance Working Group under theStatements on responsible AI to the SoftBank

Group Risk and Compliance Committee

Group Code of Conduct, that apply to officers

LY Corporation’s precursor, Z Holdings, established an(GRCC) to discuss an approach to AI

and employees of the Company to promote

expert panel on AI ethics, and this panel continues togovernance. Chaired by the CSusO and withthe active but responsible use of AI. One way

function in LY Corporation. In 2022, the Basic Policy

in which we have promoted the active use of

on AI Ethics was established to declare its approach

AI across the Group is to organize a contest in

to AI governance. When the company launched anwhich employees pitch ideas for using

internal chat-based generative AI tool in July 2023,

ChatGPT and other generative AI technologies.

employees were briefed on the proper use of

AI Governance Working Group structure
Board of Directors of SBG

Initiatives to encourage use of generative AI

LY Corporation

Educational manga about AI on Yahoo! JAPAN Kids

generative AI and access was granted upon passing an
Supervise

Report/submit

e-learning test. LY Corporation has also focused on training. As well as providing regularGroup Risk and Compliance Committee(GRCC)
Direct/advise/guidetraining to its engineers, it provides training courses to all employees, including training on AI
governance and training on effective prompt engineering.*3 To help foster AI literacy among

Report/submit

children, the company has published an educational manga about AI on its web portal Yahoo!

AI Governance Working GroupJAPAN Kids. In February 2024, the company held a press briefing about its internal and public

Sub working group(theme-specific)

SoftBank Group Report 2024

Sub working group(theme-specific)

generative AI applications to generate media attention for these initiatives.
ChatGPT usage contest awards ceremony*3 Process of designing a prompt (a question or instruction) that can be acted upon by an AI model.

45

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: Governance

Effective Governance—the Key to Realizing Our Vision
See “Corporate Governance” on our website for the latest
information.

The following information is based on the
Corporate Governance Report filed with theTokyo Stock Exchange on June 26, 2024.

Basic views

SBG’s path to strengthening governance1994 Registered as an OTC stock with the Japan Securities Dealers Association

2015 Japan’s Corporate Governance Code entered into force
2019 Established the Group Risk and Compliance Committee
2020 Formulated the Portfolio Company Governance and Investment Guidelines
Policy; increased the number of External Board Directors; appointed thefirst female Board Director; established the Nominating & Compensation
Committee and the Sustainability Committee; appointed a CSusO and CRO*1;
revised the Board of Directors structure (separation of the management
decision-making function from the business execution function)
2021 Added environmental and social items to the above policy; achieved a
55.6% external ratio of Board Directors and a 100% external ratio of Audit& Supervisory Board members
2022 Transitioned from the First Section of the Tokyo Stock Exchange (TSE) to thePrime Market of the TSE

1995 Appointed the first foreign national Board Director
1998 Listed on the First Section of the Tokyo Stock Exchange
1999 Invited a Board Director from outside the company (equivalent to a
current External Board Director); transitioned to a pure holding company
2002 External board directors system introduced in the Commercial Code(currently the Companies Act) of Japan
Started livestreaming of earnings results briefings

The Company is guided by a fundamental

2003 Started livestreaming of the Annual General Meeting of Shareholders

concept of “free, fair, and innovative” and a

2006 Companies Act of Japan enacted

corporate philosophy of Information2012 Introduced a Corporate Officer system

Revolution—Happiness for everyone. We aim
to be a provider of essential technologies
and services to people around the world*1 Chief Risk Officer

Corporate governance system

Internal Board Director

General Meeting of Shareholders

while maximizing our enterprise value. SBG
recognizes that it is vital to maintain effective
corporate governance to realize this vision.
We continue to strengthen governance by
establishing a charter and regulations: the
SoftBank Group Charter to share the Group’s
fundamental concept and corporate
philosophy, the Group Company
Management Regulations of the SoftBank

Nominating & Compensation Committee
Ratio of External Board Directors
2/3

Separating
management
decision-making
from businessexecution

Elect /
dismiss members of Audit& Supervisory Board

Elect /
dismiss Board Directors

Recommend

Directors and employees.

Audit & Supervisory
Board

Brief

Independent
AuditorCooperate
ReportReportReportReportElect members /delegate partial
authority

Elect chairperson /delegate partial
authority

Investment
Committee*5

Supervise

Brand
Committee

Group Risk andCompliance
Committee

Supervise

Sustainability
Committee

Corporate Officers*2 Special Directors are put in place in accordance with Paragraph 1, Article 373 of the Companies Act.
*3 Of the five External Board Directors, four are designated as Independent Officers.
SoftBank Group Report 2024

Audit

Ratio of External Board Directors*3
5/9

and framework for Group companies, andfollowed by the Company and its Board

Elect /
dismiss
Independent
AuditorReportBoard of Directors*2

Group to set forth the management policy
the SoftBank Group Code of Conduct to beExternal Board Director / External Audit & Supervisory Board member

Call /
report on
execution
situation

Supervise /elect /
dismiss

Representative
Director,
Corporate Officer,
Chairman & CEO

Ratio of External
Audit & Supervisory
Board members*4
4/4

Brief
ReportReportCooperate

Brief /
cooperate

Audit &
Supervisory
Board OfficeInternal Audit
Office*4 Of the four External Audit & Supervisory Board members, three are designated as Independent Officers.
*5 Supervisory Committee is separately put in place to supervise matters such as investments and loans of certain subsidiaries.
46

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: GovernanceApproach to and policy concerning group management

Status of Board of Directors

Based on its unique organizational strategy, the Cluster of No. 1 Strategy, SBG is working to

SBG’s Board of Directors had a total of ninebuild a corporate group that operates a diverse range of businesses in the information andmeetings in fiscal 2022 and seven meetingstechnology sectors and increase its Net Asset Value (NAV). This is enabled by direct investments

in fiscal 2023 (both totals exclude meetings(including investments made through its subsidiaries) such as in SoftBank, Arm, and otherconducted by written resolution). During

Group companies, as well as investments in investment funds such as SVF1, SVF2, and LatAm

these meetings, the members mainly

Funds. In this process, each investee company will seek self-sustained growth. At the same time,

discussed the following topics.

Number of Board resolutions / reports
16
25

20

Fiscal 2023 36

6
9

SBG, as a strategic investment holding company, will help each investee company improve its

17(outside)Fiscal 2022
(inside)corporate value by utilizing the Group’s network of companies while promoting collaboration

16

among investee companies.

19

17

15

Furthermore, the Company will confirm, or make reasonable efforts to ensure, that eachCategory

investee company is operating under environmental, social, and corporate governancestandards that are substantially equivalent to those set forth in the Policy on Governance andInvestment Guidelines for Portfolio Companies of SBG.

Governance(including the managementof subsidiaries)

Compliance (oversight over conflict-of-interest transactions, fiscal year compliancereports), risk management, internal control and internal audits, approval oftransactions by subsidiaries, etc.

Internal management

Board of Directors

Key topics
Compensation of Board Director candidates and Board Directors, reports from eachcommittee, evaluation of the effectiveness of the Board of Directors, opinions andreports from the Audit & Supervisory Board Members Audit Report

Business reports

Reporting on the status of the portfolio and the status of individual business segments

SBG’s Board of Directors consists of members with a wealth of knowledge and experience inFinanceFund procurement, shareholder returns

business management and a global perspective, in consideration of their nationality, ethnicity,

Investment

Consideration of investment projects (e.g., Arm's IPO)

gender, or age. The maximum number of Board Directors is set at 11 under the Articles of

OthersGeneral Meeting of Shareholders, information disclosure, sustainability

Incorporation. As of June 21, 2024, the Board of Directors consisted of nine members (five ofwhom are External Board Directors) and included two foreign nationals and one female.
Agenda items for discussion at the Board of Directors meetings are set forth in the Board of

Summary of results of Board of Directors evaluation

Directors Regulations. The Board discusses statutory matters, as well as critical matters related to

From December 2023 to April 2024, SBG evaluated the overall effectiveness of its Board ofbusiness management, such as investments, loans, and borrowings that exceed a certain

Directors in the following manner.

amount. In addition, Special Directors are put in place in accordance with Paragraph 1, Article
373 of the Companies Act, and matters related to disposal and acceptance of important assets
and borrowing in a significant amount are resolved by the Board of Special Directors meetingfor the purpose of prompt decision-making.

SoftBank Group Report 2024

Subjects

The Representative Director, Corporate Officer, Chairman & CEO, all Board Directors, and all Audit& Supervisory Board members

Evaluation
methodQuestionnaire surveys and interviews were conducted with the target officers by a third-party
institution evaluator about topics that included the composition and operation of the Board and its
support systems.

Evaluation
results

According to the officers, board effectiveness is underpinned by a positive board culture. This
culture includes the trust and the check-and-balance relationship between Representative Director,
Corporate Officer, Chairman & CEO, and the Board of Directors. It also includes active discussions
held by the diverse board. The officers underscored the importance of preserving this board culture.
As for priority issues going forward, it was confirmed that the Board of Directors should contributeto bringing the vision, Information Revolution–Happiness for everyone to life by deepening theinsight of the Board on the AGI revolution and conducting repeated discussions on building an
ecosystem surrounding Arm.
47

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: Governance

Skill Matrix of Board Directors and Audit &Supervisory Board members
SBG believes it is important for the Board Directors and Audit & Supervisory Board members tohave a wide range of viewpoints and experience, as well as a high level of expertise, to ensure
diversity and active discussions and decision-making of the Board of Directors. As of June 21,2024, the Skill Matrix (skill set expected by SBG) of the Board Directors and Audit & Supervisory
Board members was as follows.

Board Directors

As of June 21, 2024 (numbers of shares owned are as of March 31, 2024)

Nominating & Compensation
Committee member

Sep 1981
Jan 1996
Oct 2005
Apr 2006
Jun 2015
Sep 2016
Jun 2017
Nov 2020
		
Apr 2021
Aug 2023

Representative Director,
Corporate Officer,
Chairman & CEO

Masayoshi Son
Years in office:42 years 9 months
Number of shares owned in SBG:

Founded SOFTBANK Corp. Japan (currently SoftBank Group Corp.), Chairman & CEO
President & CEO, Yahoo Japan Corporation (currently LY Corporation)
Director, Alibaba.com Corporation (currently Alibaba Group Holding Limited)
Chairman of the Board, President & CEO, Vodafone K.K. (currently SoftBank Corp.)
Director, Yahoo Japan Corporation (currently LY Corporation)
Chairman and Executive Director, ARM Holdings plc
Chairman & CEO, SoftBank Group Corp.
Representative Director, Corporate Officer, Chairman & CEO,SoftBank Group Corp. (to present)
Board Director, Founder, SoftBank Corp. (to present)
Chairman and Director, Arm Holdings plc (to present)

426,661 thousand shares
Areas of expertise particularly expected by SBG (up to three areas)
Name
Board
Director

Masayoshi Son

Corporate Banking /management
M&A

Finance /Law /Academic
Technology
Accounting Governancebackground

Board Director,
Corporate Officer,
Senior Vice President,
CFO & CISO

Yoshimitsu Goto

Yoshimitsu Goto
Ken Miyauchi
Rene Haas

Years in office:Masami Iijima

Number of shares owned in SBG:

Yutaka Matsuo
Keiko Erikawa

4 years*6
379 thousand shares
Board Director

Ken Miyauchi

Kenneth A. Siegel
David Chao
Audit &
Supervisory
Board
member

Maurice Atsushi Toyama
Yuji Nakata

Years in office:36 years 4 months
Number of shares owned in SBG:

Soichiro Uno

574 thousand shares

Keiichi Otsuka

Board Director

Rene Haas

Years in office:1 yearNumber of shares owned in SBG:-

SoftBank Group Report 2024

Apr 1987
Jun 2000
Oct 2000
Apr 2006
Jul 2012
Oct 2013
Jun 2014
Jun 2015
Jun 2017
Apr 2018
Jun 2020
Nov 2020

Joined The Yasuda Trust and Banking Co., Ltd. (currently Mizuho Trust & Banking Co., Ltd.)
Joined SoftBank Corp. (currently SoftBank Group Corp.)
Head of Finance Department, SoftBank Corp. (currently SoftBank Group Corp.)
Director, Vodafone K.K. (currently SoftBank Corp.)
Corporate Officer, Senior Vice President, SoftBank Corp. (currently SoftBank Group Corp.)
President & CEO and acting owner, Fukuoka SoftBank HAWKS Corp. (to present)
Board Director, SoftBank Corp. (currently SoftBank Group Corp.)
Corporate Officer, Senior Vice President, SoftBank Corp. (currently SoftBank Group Corp.)
Corporate Officer, Senior Vice President, SoftBank Group Corp.
Corporate Officer, Senior Vice President & CFO & CISO, SoftBank Group Corp.
Board Director, Senior Vice President, CFO, CISO & CSusO, SoftBank Group Corp.
Board Director, Corporate Officer, Senior Vice President, CFO, CISO & CSusO,
SoftBank Group Corp.
Jun 2022 Board Director, Corporate Officer, Senior Vice President, CFO & CISO,		SoftBank Group Corp. (to present)*CISO: Chief Information Security Officer *CSusO: Chief Sustainability Officer

Feb 1977
Oct 1984
Feb 1988
Apr 2006
Jun 2007Jun 2012
Jun 2013
Apr 2015
Apr 2018
Jun 2018
Apr 2021
Apr 2023
Apr 2024
Jun 2024

Joined Japan Management Association
Joined SOFTBANK Corp. Japan (currently SoftBank Group Corp.)
Board Director, SOFTBANK Corp. Japan (currently SoftBank Group Corp.)
Executive Vice President, Director & COO, Vodafone K.K. (currently SoftBank Corp.)
Representative Director & COO, SoftBank Mobile Corp. (currently SoftBank Corp.)
Director, Yahoo Japan Corporation (currently LY Corporation)
Representative Board Director, Senior Executive Vice President, SoftBank Corp.
(currently SoftBank Group Corp.)
President & CEO, SoftBank Mobile Corp. (currently SoftBank Corp.)
Board Director, SoftBank Group Corp. (to present)
President & CEO, SoftBank Corp.
Representative Director & Chairman, SoftBank Corp.
Director & Chairman, SoftBank Corp.
Director & Special Advisor, SoftBank Corp.
Special Advisor, SoftBank Corp. (to present)

Jan 1999 Vice President of Sales, Tensilica
Aug 2004 Vice President of Sales and Marketing, Scintera Networks
Oct 2006 Vice President & General Manager, Computing Products Business Unit,
NVIDIA Corporation
Oct 2013 Vice President of Strategic Alliances, ARM Holdings plc
Jan 2015 Executive Vice President & Chief Commercial Officer, ARM Holdings plc
Jan 2017 President of Arm’s IP Product Groups (IPG), ARM Holdings plc
Feb 2022 CEO, Arm Limited (to present)
Jun 2023 Board Director, SoftBank Group Corp. (to present)
Aug 2023 Director, Arm Holdings plc (to present)

Note: “Years in office” refers to the number of years until the conclusion of the General Meeting of Shareholders on June 21, 2024.
*6 Mr. Yoshimitsu Goto has been a Board Director for four years since June 2020 but has served as Board Director for a total of five years,
including one year as Board Director from June 2014.

48

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: Governance
External Board Directors

Independence standards and qualifications forExternal Board Directors
SBG elects Independent External Board Directors in accordance with the independence criteria

Independent
Nominating & Compensation
Committee member

set by the Tokyo Stock Exchange. The Board of Directors elects Independent External Board

External Board Director,
Independent Officer

Director candidates who can contribute to increasing enterprise value through their

Masami Iijima

qualifications, ability, and deep knowledge in their fields of expertise. SBG also elects candidates
for their ability to participate actively in constructive discussions and express their opinions
frankly. SBG ensures adequate independence of each of the External Board Directors, who bringa wealth of knowledge and experience to the Board related to business management and othermatters. Each of them actively participates in discussions at the Board meetings, and SBG makes
management judgments and decisions based on these discussions.

Years in office:6 years
Number of shares owned in SBG:

1 thousand shares
Independent
Nominating & Compensation
Committee member
External Board Director,
Independent Officer

Major activities

Apr 2021 Director, MITSUI & CO., LTD.
Jun 2021 Counselor, MITSUI & CO., LTD.
(to present)
Jun 2021 Director (Audit & Supervisory
Committee member),		
Takeda Pharmaceutical Company
LimitedJun 2022 Director, Takeda Pharmaceutical
Company Limited (to present)
Jun 2023 Director, KAJIMA CORPORATION(to present)

Apr 2002
Aug 2005
Oct 2007
Apr 2019
Jun 2019

Researcher, National Institute of Advanced Industrial Science and Technology
Visiting Scholar, Stanford University
Associate Professor, Graduate School of Engineering, the University of Tokyo
Professor, Graduate School of Engineering, the University of Tokyo (to present)
Board Director, SoftBank Group Corp. (to present)

Jul 1978Apr 1994
Jun 2001
May 2007Jun 2013
Jun 2013
Jun 2014
		
Apr 2015
Jun 2021

Founded KOEI Co., Ltd. (currently KOEI TECMO GAMES CO., LTD.), Senior Executive Director
Director, Foundation for the Fusion of Science and Technology (to present)
Chairman and CEO, KOEI Corporation (currently KOEI TECMO AMERICA Corporation)
Head Director, Association of Media in Digital (to present)
Chairman, Representative Director, KOEI TECMO GAMES CO., LTD.
Chairman, Representative Director, KOEI TECMO HOLDINGS CO., LTD. (to present)
Board Director, TECMO KOEI EUROPE LIMITED (currently KOEI TECMO EUROPE LIMITED)(to present)
Chairman Emeritus (Director), KOEI TECMO GAMES CO., LTD. (to present)
Board Director, SoftBank Group Corp. (to present)

Aug 1986
Jan 1994
Aug 1996
		
Jan 2009
Jan 2009
Jun 2021

Joined Morrison & Foerster LLP
Partner, Morrison & Foerster LLP
Managing Partner, Morrison & Foerster Tokyo Office (Morrison & Foerster Gaikokuho
Jimu Bengoshi Jimusho) (to present)
Member of Executive Committee, Morrison & Foerster LLP
Board Director, Member of Executive Committee, Morrison & Foerster LLP (to present)
Board Director, SoftBank Group Corp. (to present)

Jun 1988
Jun 1989
Aug 1993
May 1996
Jan 1997
Jun 2022

Joined Recruit Co., Ltd. (currently Recruit Holdings Co., Ltd.)
Joined Apple Computer, Inc. (currently Apple Japan, Inc.)
Joined McKinsey & Company, Inc.
Co-Founder and CTO, Japan Communications Inc.
Co-Founder and General Partner, DCM Ventures (to present)
Board Director, SoftBank Group Corp. (to present)

Yutaka Matsuo

Major activities of External Board Directors

Name

As of June 21, 2024 (numbers of shares owned are as of March 31, 2024)

Apr 1974 Joined MITSUI & CO., LTD.
Apr 2008 Executive Managing Officer, MITSUI & CO., LTD.
Jun 2008 Representative Director, Executive Managing
Officer, MITSUI & CO., LTD.
Oct 2008 Representative Director, Senior Executive
Managing Officer, MITSUI & CO., LTD.
Apr 2009 Representative Director, President and Chief
Executive Officer, MITSUI & CO., LTD.
Apr 2015 Representative Director, Chairman of the Board of
Directors, MITSUI & CO., LTD.
Jun 2016 Director, Ricoh Company, Ltd.
Jun 2018 Board Director, SoftBank Group Corp. (to present)
Jun 2019 Counselor, Bank of Japan (to present)
Jun 2019 Director, Isetan Mitsukoshi Holdings Ltd.

Attendance rate andattendance at Board of
Directors meetings forfiscal 2023

Masami Iijima

Makes remarks to supervise business judgments and decision-making based on his
extensive knowledge and broad global experience in corporate management andgovernance. Also, as Chairperson of the voluntary Nominating & Compensation
Committee, leads objective discussions from an independent standpoint and plays animportant role in consulting with the Board of Directors.

Yutaka Matsuo

Makes remarks to supervise business judgments and decision-making based on his
extensive knowledge and broad experience of AI and other technologies as a leading
expert in the field, acquired through his engagement in AI research over many
years. Also, as a member of the voluntary Nominating & Compensation Committee,
expresses objective opinions from an independent standpoint and plays an importantrole in consulting with the Board of Directors.

Keiko Erikawa

Makes remarks to supervise business judgments and decision-making based on her
extensive knowledge and experience in corporate management and technology,
acquired through her career as corporate manager and finance manager of a global
digital entertainment company.

100%
7 of 7 meetings

Kenneth A. Siegel*7

Makes remarks to supervise business judgments and decision-making based on his
extensive knowledge and experience in corporate M&As and strategic alliances, acquired
through his career as an attorney at an international law firm.

100%
7 of 7 meetings

David Chao

Makes remarks to supervise business judgments and decision-making based on his
extensive knowledge and broad experience in investment, technology, and corporate
management, acquired through his long career as a manager of an investment company.

100%
7 of 7 meetings

100%
7 of 7 meetings

Years in office:5 years
Number of shares owned in SBG:

Independent
External Board Director,
Independent Officer

Keiko Erikawa
Years in office:100%
7 of 7 meetings

3 years
Number of shares owned in SBG:

303 thousand shares
External Board Director*7 Mr. Siegel concurrently holds positions with Morrison & Foerster Gaikokuho Jimu Bengoshi Jimusho and Morrison & Foerster LLP.
SBG did not submit notifications to designate him as an Independent Officer as the amount of compensation to be paid to thesefirms in the future is yet to be determined, regardless of whether there are any transactions between SBG and those firms.

Kenneth A. Siegel

Years in office:3 years
Number of shares owned in SBG:

Independent
External Board Director,
Independent Officer

David Chao
Years in office:2 years
Number of shares owned in SBG:

SoftBank Group Report 2024

Note: “Years in office” refers to the number of years until the conclusion of the General Meeting of Shareholders on June 21, 2024.

49

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: Governance
Organizational chart

Corporate Officer system
SBG adopted a Corporate Officer system in July 2012 to further strengthen its business

As of June 21, 2024

General Meeting of Shareholders

CEO Office

execution functions. In November 2020, SBG clarified the individuals responsible for businessexecution by separating the management decision-making function from the business executionfunction.

Corporate Officers

CEO Project Office
Board of Directors
New Business Office
Representative Director,
Corporate Officer, Chairman & CEO
Masayoshi Son

As of June 21, 2024

CFO OfficeFinance Planning Department
Capital Market Department

Audit & Supervisory Board

Finance Unit
Investor Relations Department
Group Management Department

Audit & Supervisory Board members

Investment Planning Department
Representative Director,
Corporate Officer,
Chairman & CEO

Audit & Supervisory Board Office

Human Resources Department

Masayoshi Son

General Administration Department
Administration Unit
Information System Department
Sustainability Department

Board Director,
Corporate Officer,
Senior Vice President,
CFO & CISO
Head of Finance Unit
Head of Administration Unit

Accounting Department
Accounting Unit

*CISO: Chief Information Security Officer

Corporate Officer,
Senior Vice President,
Head of Accounting Unit

Yoshimitsu Goto

Kazuko Kimiwada

Tax Management OfficeInternal Control OfficeCompliance Department
CLO Office

Legal Unit
Legal Projects Department
Corporate Legal Department

Corporate Officer,
CLO & GCO,
Head of Legal Unit

Corporate
Communications Unit

*CLO: Chief Legal Officer*GCO: Group Compliance Officer

Corporate Officer,
Head of CFO Office,Finance Unit

Tim Mackey

Seiichi Morooka

SoftBank Group Report 2024

Corporate Communications Office
Risk Management OfficeInternal Audit Office50

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: Governance
Audit & Supervisory Board members

Audit & Supervisory Board members andthe Audit & Supervisory Board

Independent

The Audit & Supervisory Board members attend Board of Directors meetings, allowing them tomonitor and verify decision-making of the Board and fulfillment of the Board’s obligation tosupervise the execution of duties by each Board Director. Moreover, the Audit & Supervisory
Board members receive regular reports from Board Directors, employees, Audit & Supervisory
Board members and other personnel of major subsidiaries and conduct hearings, as necessary,

Full-time External Audit &Supervisory Board member,
Independent Officer

Maurice Atsushi
Toyamaconsists of four External Audit & Supervisory Board members (two full-time members and two-reported to part-time members. The Audit & Supervisory Board explains details of the audit planfor each fiscal year, interim audit status, and audit results to the Board of Directors.
Furthermore, the Audit & Supervisory Board determines whether or not the reappointment ofJoined Nomura Securities Co., Ltd.
Executive Managing Director, Nomura Securities Co., Ltd.
COO, Nomura Asia Holding N.V.
Executive Managing Director, Nomura Holdings, Inc.
Senior Managing Director, Nomura Securities Co., Ltd.
Executive Managing Director, Nomura Holdings, Inc.
Representative Executive Officer and Deputy President, Nomura Securities Co., Ltd.
Executive Managing Director and Chief Risk Officer, Nomura Holdings, Inc.
Senior Adviser, Nomura Institute of Capital Markets Research
Full-time Audit & Supervisory Board member, SoftBank Group Corp. (to present)

Apr 1988
		
Nov 1993
Jan 1997
Jun 2004
		Jun 2018
Jun 2019

Joined Nagashima & Ohno Law Office (currently Nagashima Ohno & Tsunematsu),
admitted to practice law in Japan
Passed the bar examination of the State of New York, U.S.
Partner, Nagashima & Ohno Law Office (currently Nagashima Ohno & Tsunematsu; to present)
Audit & Supervisory Board member, SoftBank Corp.
(currently SoftBank Group Corp.; to present)
Director (Audit & Supervisory Committee Member), Dream Incubator Inc.
Director (Audit & Supervisory Committee Member), Terumo Corporation (to present)

Nov 1978Aug 1982
Jul 1998
Sep 2006
		Jun 2016
Jul 2016
Jan 2017
Jun 2021

Joined Price Waterhouse Accounting Office
Registered as a Certified Public Accountant
Representative Partner, Aoyama Audit Corporation
Representative Partner, PricewaterhouseCoopers Aarata(currently PricewaterhouseCoopers Japan LLC)
Audit & Supervisory Board Member, TBK Co., Ltd. (to present)
Representative of Otsuka CPA Office (to present)
Director, Shizuoka Bank (Europe) S.A.
Audit & Supervisory Board member, SoftBank Group Corp. (to present)

Number of shares owned in SBG:

part-time members) and is chaired by Maurice Atsushi Toyama, who has served as a full-time

details of various internal and external meetings attended only by full-time members are

Apr 1983
Apr 2007
Apr 2007
Apr 2008
Nov 2008
Apr 2016
Apr 2017
May 2019
Apr 2020
Jun 2021

Years in office:9 yearsa month, in principle. At these meetings, in addition to formulating the audit policy and plan,

Joined San Francisco office of Price Waterhouse (currently PricewaterhouseCoopers)
Certified Public Accountant, State of California, U.S.
Partner, PricewaterhouseCoopers Aarata (currently PricewaterhouseCoopers Japan LLC)
Full-time Audit & Supervisory Board member, SoftBank Corp.
(currently SoftBank Group Corp.; to present)

Certified Public Accountant,State of California, U.S.

to audit the execution of duties by the Board Directors of SBG. The Audit & Supervisory Board

Audit & Supervisory Board member since June 2015. The Audit & Supervisory Board meets once

As of June 21, 2024 (numbers of shares owned are as of March 31, 2024)

Sep 1977
Aug 1981
Jun 2006
Jun 2015
		

Independent
Full-time External Audit &Supervisory Board member,
Independent Officer

Yuji Nakata
Years in office:3 years
Number of shares owned in SBG:-

the Independent Auditor is appropriate, each term.
External Audit &Supervisory Board member

Soichiro Uno

Major activities of External Audit & Supervisory Board members

LawyerAttendance rate and attendance for fiscal 2023
Audit & Supervisory
Board meetings

Years in office:

20 years

Name

Major activities

Board of Directors
meetings

Maurice Atsushi
ToyamaMakes remarks based on his extensive knowledge and experience
as a Certified Public Accountant, State of California, U.S.

85.7%
6 of 7 meetings100%
12 of 12 meetings

Yuji Nakata

Makes remarks based on his extensive knowledge andexperience, acquired through his career as head of risk
management at a financial institution.

100%
7 of 7 meetings100%
12 of 12 meetings

External Audit &Supervisory Board member,
Independent Officer

Soichiro Uno*8

Makes remarks based on his extensive knowledge and experience
as a lawyer.

100%
7 of 7 meetings100%
12 of 12 meetings

Keiichi Otsuka

Keiichi Otsuka

Makes remarks based on his extensive knowledge and experience
as a Certified Public Accountant.

100%
7 of 7 meetings100%
12 of 12 meetings

Years in office:Number of shares owned in SBG:

Independent*8 Although SBG judged that there is no potential conflict of interest between Mr. Soichiro Uno and ordinary shareholders, SBG did notdesignate him as an Independent Officer in accordance with the rules set by the firm (Nagashima Ohno & Tsunematsu) to which hebelongs.

Certified Public Accountant

3 years
Number of shares owned in SBG:

Note: “Years in office” refers to the number of years until the conclusion of the General Meeting of Shareholders on June 21, 2024.

SoftBank Group Report 2024

51

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: GovernanceIndependent Auditor
Status of audit by the Independent Auditor
SBG concluded an independent audit agreement with Deloitte Touche Tohmatsu LLC based on
the Financial Instruments and Exchange Act. The names of the Certified Public Accountants
who executed audit duties in fiscal 2023, the consecutive auditing period, the number ofassistants for the audit duties, the policy for selection of the audit corporation, and evaluationof the audit corporation by the Audit & Supervisory Board for fiscal 2023 are as follows.
Names of Certified Public Accountants who executed audit duties
Designated Limited Liability Partner and Engagement Partners: Nozomu Kunimoto, Ayato
Hirano, Yusuke Masuda
Consecutive auditing period

Compensation for audits and other duties (fiscal 2023)
Compensation for auditing Certified Public Accountants and other assistantsCompensation for audit certification duties
SBG

Certified Public Accountants: 35, Others: 52
Policy for selection of audit corporation and evaluation of audit corporation by
the Audit & Supervisory Board
The Audit & Supervisory Board sets forth criteria for appropriately selecting an Independent
Auditor and appropriately evaluating the Independent Auditor in the Audit & Supervisory Board
Members Audit Regulations. In accordance with such criteria, the Audit & Supervisory Board
takes into account the system to ensure the proper execution of duties by the Independent
Auditor, the independency required by the Independent Auditor, and its expertise, including thepossession of worldwide network resources, and determines whether the reappointment of the
Independent Auditor is appropriate each fiscal year. The Audit & Supervisory Board has
determined that reappointment was appropriate for fiscal 2023. In the event that the Audit &Supervisory Board determines that reappointment is inappropriate, it considers other candidates
for Independent Auditor in accordance with such criteria, upon taking into account factors suchas audits at other companies.
The Audit & Supervisory Board has resolved, as its decision-making policy of dismissal or not
reappointing of the Independent Auditor, that the Independent Auditor may be dismissed by
the Audit & Supervisory Board with unanimity of Audit & Supervisory Board Members when the
Independent Auditor corresponds to any of Paragraph 1, Article 340 of the Companies Act, andthat, other than those cases above, the Audit & Supervisory Board shall submit a proposal on
dismissal or not reappointing of the Independent Auditor to the Annual General Meeting of
Shareholders when it is acknowledged that the execution of appropriate audit is difficult due to theoccurrence of an event which impairs the qualification or independency of the Independent Auditor.
SoftBank Group Report 2024

(Millions of yen)

920

16

Consolidated subsidiaries

4,547

83

Total

5,467

99

Note: The non-audit duties for SBG consist of the preparation of comfort letters when issuing corporate bonds. The non-audit duties forconsolidated subsidiaries of SBG mainly consist of the preparation of comfort letters when issuing corporate bonds.

Compensation to the same network as SBG’s auditing Certified Public Accountants andother assistants (Deloitte Touche Tohmatsu Limited) (excluding “Compensation for auditing
Certified Public Accountants and other assistants”)

18 yearsComposition of assistants who supported audit duties

Compensation for non-audit duties(Millions of yen)Compensation for audit certification duties

Compensation for non-audit duties(Millions of yen)

SBG

(Millions of yen)–0

Consolidated subsidiaries

5,510

116

Total

5,510

116

Note: The non-audit duties for SBG consist of advisory services for taxation. The non-audit duties for the consolidated subsidiaries of
SBG mainly consist of consulting services for system construction support.

Other material compensation for audit certification duties
Not applicable.
Reason(s) why the Audit & Supervisory Board gave its consent to the compensation of
the Independent Auditor, etc.
The Audit & Supervisory Board, based on the “Practical Guidelines for Cooperation withAccounting Auditors” published by the Japan Audit & Supervisory Board Members
Association, reviewed and examined the plan details of the audit conducted by the
Independent Auditor, the performance status of accounting audit duties, and the basis forcalculating compensation estimates, and from the results, has given the consent prescribed in
Paragraph 1, Article 399 of the Companies Act for the compensation paid to the Independent
Auditor.

52

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: Governance

Cooperation between the Audit & Supervisory Board members,
the Independent Auditor, and the Internal Audit Office
The Audit & Supervisory Board members receive regular briefings from the Independent Auditor(Deloitte Touche Tohmatsu LLC) on the audit plan, quarterly reviews, audit results, and othermatters. The Audit & Supervisory Board Members and the Independent Auditor also cooperate
as necessary by exchanging information and opinions, among other measures. Furthermore, theAudit & Supervisory Board members receive regular briefings from the Internal Audit Office,which is responsible for SBG’s internal audits. The briefings include the audit plan and theresults of internal audits performed on each department of SBG and its major subsidiaries. The
Audit & Supervisory Board Members and the Internal Audit Office also cooperate as necessary
by exchanging information and opinions, among other measures.
The Independent Auditor receives briefings from the Internal Audit Office on the audit planand, when necessary, on the results of internal audits and other matters. The Internal Audit
Office receives regular briefings from the Independent Auditor regarding audit results and othermatters. Moreover, both parties cooperate with each other as necessary by exchanging
information and opinions, among other measures.

Committees that make decisions on matters delegated by
the Board of Directors
Investment Committee
The Investment Committee has the purpose of making decisions on matters for which it has beendelegated authority by the Board of Directors, to carry out corporate activities flexibly.
The Committee comprises four Board Directors or Corporate Officers elected by the Board(Masayoshi Son, Yoshimitsu Goto, Kazuko Kimiwada, and Tim Mackey). The agenda items fordiscussion in the Investment Committee are set forth in the Regulations of the Investment Committee.
Such items include investments, loans, and borrowings under a certain amount. Resolutions of theCommittee are only approved by majority agreement. If a proposal is rejected, it is brought to theBoard of Directors. All resolutions of the Committee are reported to the Board of Directors.
Brand Committee
The Brand Committee is a committee that has been delegated authority by the Board of Directors tomake decisions on and properly manage matters related to the SoftBank brand. The Committee
comprises five members including the chairman (Board Director, Corporate Officer, Senior Vice
President, CFO and CISO), who has been selected by the Board of Directors, and four members(Corporate Officer, Senior Vice President Kazuko Kimiwada, the head of CLO Office Natsuko Oga,the head of the Corporate Communications Office Takeaki Nukii, and the head of the General
Administration Department Tatsuya Iida), who have been appointed by the chairman. The Committee
resolves matters set forth in the Regulations of the Brand Committee, including the licensing of the
SoftBank brand. Resolutions of the Committee are only approved by unanimous agreement from all
members, and all decisions made by the Committee are reported to the Board of Directors.
SoftBank Group Report 2024

Voluntary committees
Nominating & Compensation Committee
The Nominating & Compensation Committee is a voluntary advisory body to the Board of
Directors deliberating on matters related to nomination and compensation, and provides advice
and support to the Board of Directors and other appropriate approval organizations. Nominating& Compensation Committee members are elected from among Board Directors, and a majority ofits members are Independent External Board Directors to ensure their independence andobjectivity. The Committee has three members: Masami Iijima (Committee Chairperson,
Independent External Board Director), Yutaka Matsuo (Independent External Board Director), andMasayoshi Son (Representative Director, Corporate Officer, Chairman & CEO). During meetings,
the members discuss the criteria for appointing and dismissing important officers and employees,
candidates for nominating, general compensation policy, individual compensation proposals, andother important matters. It also conducts discussions on successors on an ongoing basis. The
Committee holds regular meetings in April as well as special meetings when necessary. In fiscal
2023, it held two meetings, each with full attendance.
Group Risk and Compliance Committee (GRCC)
The purpose of the Group Risk and Compliance Committee (GRCC) is to supervise the risk
management and compliance program of SBG and its Group companies and discuss important
issues, promotion policies, and other matters on an ongoing basis. The Committee has threemembers, including its chairperson, Tim Mackey (Corporate Officer, Chief Legal Officer (CLO) &Group Compliance Officer [GCO]), who was appointed by the Board of Directors; Yoshimitsu Goto
(Board Director, Corporate Officer, Senior Vice President, CFO and CISO); and Kazuko Kimiwada(Corporate Officer, Senior Vice President). The GRCC deliberates on matters related to the risk
management and compliance activities of SBG and its Group companies as set forth in the GRCC
Operation Regulations. Its decisions are only approved by majority agreement. The Committee’s
agenda items and discussion results are reported to the Board of Directors on a regular basis (atleast once a year) based on the Board of Directors Regulations.
Sustainability Committee
The purpose of the Sustainability Committee is to discuss sustainability-related issues andpromotion policies of SBG and its Group companies on an ongoing basis. The Committee comprises
four members including the chairperson (the head of the Investor Relations Department and theSustainability Department, Yotaro Agari), who has been appointed as Chief Sustainability Officer by
the Board of Directors, and three members (Board Director, Corporate Officer, Senior Vice President
and CFO & CISO Yoshimitsu Goto; Corporate Officer, Senior Vice President Kazuko Kimiwada; andCorporate Officer and CLO & GCO Tim Mackey). The Committee deliberates on matters related tosustainability as set forth in the Sustainability Committee Operation Regulations. The Committee’s
agenda items and discussion results are reported to the Board of Directors as appropriate inaccordance with the provisions of the Board of Directors Regulations..

53

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: Governance

Policy on determining compensation amounts andcalculation methods
Overview of the executive compensation system
The executive compensation policy of SBG is decided by a resolution of the Board of Directors,
accounting for the societal and relative status of each officer, as well as the degree of theirrespective contributions to SBG, while referring to compensation survey results conducted byprofessional organizations, so that the system provides compensation that is reasonablycompetitive and can attract global talent who share the same aspirations. The individual amountof compensation is determined pursuant to the procedure described in “Organization andprocedures for deciding executive compensation.” For Board Directors whose main duties are as
officers of subsidiaries and Group companies, compensation is determined by the compensation
policy of each company, based on the Cluster of No. 1 Strategy, and such compensation is paidby subsidiaries and Group companies. The Compensation for External Board Directors and Audit& Supervisory Board Members consists exclusively of fixed compensation because they are
independent of business execution.
Components of executive compensation
Component

Details

Fixedcompensation

Basic
compensation

Overview

An annual amount is set on an individual basis and paid in fixed monthly cash
installments.
The amount of compensation is decided on an individual basis, taking into consideration
whether the officer is full-time or part-time, as well as their positions and the duties they
are in charge of.

Organization and procedures for deciding executive compensation
Executive compensation is paid within the range of the aggregate amount of compensation
approved by the resolution of the General Meeting of Shareholders, subject to confirmationthat it is in line with the aforementioned compensation policy and is found to be both rationaland reasonable. The aggregate amount of compensation for Board Directors was capped at ¥5billion in monetary compensation and ¥5 billion in share-based compensation,*11 while that for
Audit & Supervisory Board members was capped at ¥160 million.*12
The compensation of the Board Directors for fiscal 2023 has been decided by Representative
Director, Corporate Officer, Chairman & CEO (Masayoshi Son), based on the contents ofdiscussions by the Nominating & Compensation Committee, which is a voluntary advisory bodyto the Board of Directors, within the range of authority entrusted to him by resolution of theBoard of Directors. The Nominating & Compensation Committee shall review proposedcompensation from multiple viewpoints, including consistency with the SBG compensation
policy and make a report to the Board of Directors on its deliberation details. The Board of
Directors reconfirms that the deliberations are in line with the SBG compensation policy. To
ensure independence, compensation for Audit & Supervisory Board members for fiscal 2023
was decided through consultation among Audit & Supervisory Board members after theconclusion of the Annual General Meeting of Shareholders in June 2023.
*11 Resolved at the 38th Annual General Meeting of Shareholders on June 20, 2018. SBG was served by 12 Board Directors (including
three External Directors) at the time of the resolution.
*12 Resolved at the 41st Annual General Meeting of Shareholders on June 23, 2021. SBG was served by four Audit & Supervisory Board
Members (all four being External Audit & Supervisory Board Members) at the time of the resolution.

Total amount of compensation by title (fiscal 2023)
Subtotals for each type of compensation (Millions of yen)
Number ofpeopleTitle
Aggregatecompensationfor Board
Directors*9

Incentive for short-term performance
Cash bonuses

Performancebased
compensation*10

Cash bonuses are paid every fiscal year as compensation for the execution of duties
while in office.

Incentive to improve corporate value over the medium- to long-term
Share-based
payment

Stock options using stock acquisition rights are provided with the aim to encourage
executives to make continuous management effort, while sharing mutual interest withshareholders through increases in the share price.
The contents of stock acquisition rights include normal stock options (with the exercise
price calculated based on the market price at the time of allotment) and share-based
stock options (with an exercise price of ¥1). The exercisable period will be set within arange of 10 years from the day following their allotment date.

*9 Excludes compensation for External Board Directors*10 The amount of cash bonuses and the number of stock acquisition rights allotted as stock compensation are decided based on multiple
performance indicators for adequately rewarding the results achieved through business activities. Specifically, it is decided on an
individual basis and shall take into consideration individual performance based on each officer’s ability and achievements, as well ascompany performance including consolidated results, the stock price, and NAV (Net Asset Value).

SoftBank Group Report 2024

Fixed compensation
Performance-based(Basic compensation) compensation (Bonus)

Total amount ofcompensation
Others (Millions of yen)

Board Directors (excluding External Board Directors)

3

168

344

1

513

External Board Directors

5

193

–

–

193

External Audit & Supervisory Board members

4

90

–

–

90

Total

12

451

344

1

795

Total consolidated compensation paid to respective Board Directors whose total
consolidated compensation is ¥100 million or more (fiscal 2023)

Name

Amount ofconsolidated
compensation(Millions of yen)

Subtotals for each type of consolidated compensation(Millions of yen)
Title

Basic
compensation

Bonus

Share-based
payment

Others

SBG

12

78

–

–

SoftBank Corp.

–

–

10

–

Company name

Masayoshi Son

100

Board Director

Yoshimitsu Goto

351

Board Director

SBG

84

266

–

1

Ken Miyauchi

844

Board Director

SoftBank Corp.

84

726

34

–

Rene Haas

3,458

Board Director

SBG

72

–

–

–

Arm Limited

154

1,237

1,993

2
54

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: Governance

Information security

while working to improve security-relatedInformation Technology Federation of Japan,

education for officers and employees.

Japan’s biggest IT association. Of the Nikkei
500 Stock Average constituent companies

As a strategic investment holding company,
SBG promotes initiatives to strengthen
information security in the Group to realize
and lead a safe and secure digital society.
Constructing an information security
governance system

Initiatives to strengthen
information security
Collaboration with Group companies
and portfolio companies
SBG regularly exchanges information onwhich were rated, SBG was among the 14
companies that were awarded two stars.
For the latest information on SBG’s information security,
see “Information Security” on our website.
For more information about the Information Technology
Federation of Japan’s rating program, see “External
Evaluation” on our website.

information security threats and countermeasures

security in the Group, we have establishedwith Group companies and investee companies

an information security governance systemthat do business globally. In addition towith the appointment of Yoshimitsu Goto

keeping abreast of the latest security-related(Board Director of SBG) as Chief Information

technologies, we act quickly to introduce

To encourage constructive dialogue with

Security Officer (CISO).

advanced services and systems offered by eachshareholders and investors (investors in stocks

company to ensure secure work environments.

and bonds), SBG assigns IR duties to theGroup Information
Security Committee

CISOs of each Group company

In the event of a serious information security

Fiscal 2022
661

Fiscal 2023
762

Main themes of dialogue andshareholder concerns
1. Capital allocation
2. Investment strategy
3. NAV discount
4. Arm
5. SoftBank Vision Funds

Policy for constructive
dialogue with shareholders- Video interview with CFO (short video format)- Transcription of Q&A sessions at various earnings
eventsInvestor Relations Department, which had 17

Information Security Governance Structure

Chief Information Security Officer(CISO)

Fiscal 2021
624

Communication withinternational investors

To promote and strengthen information

Board of Directors of SBG

Number of meetings withinstitutional investors / analysts:

NIST CSF compliance and externalorganization assessments

members including the head of thedepartment as of June 1, 2024. Under thethat the management and the departments

SBG implements measures that comply withsupervision of Board Director, Corporate

will make the necessary changes in their

NIST CSF,*13 a cybersecurity framework

Officer, and Senior Vice President, theinitiatives, disclosures, or messaging. Alongside

adopted by organizations and enterprises

department conducts IR activities in close

this feedback cycle, the Board of Directors

around the world, and has received

coordination with related departments,

regularly hears reports on stakeholder

security-related assessments by external

including Accounting, Finance, Legal, andfeedback and shareholders’ holding trends.

organizations with expertise in the U.S. andGeneral Administration. Dialogue withother countries.

shareholders and investors is the responsibility*13 NIST CSF is a cybersecurity framework (CSF) established by
the National Institute of Standards and Technology (NIST)
that consolidates standards, guidelines, and best practices
for cybersecurity risk management.

of the Investor Relations Department andsenior management, including Board Director,
Corporate Officer, and Senior Vice President.

incident in the Group, the department in

For the latest IR information, see “Investor Relations” on
our website.

Status of implementation of shareprice-conscious management

Relaying stakeholders’ feedback to the
management and the Board of Directors

In accordance with the request it received

control of the CISO. To prevent any recurrence,Two-star certification (highest level) by
the Information Technology Federationof JapanTo create a positive cycle of feedback, opinions

31, 2023, SBG has disclosed the status of

we analyze the causes of information security

SBG’s Group-wide efforts related to cybersecurity

and concerns from shareholders and investors

implementation on our website.

incidents to identify possible issues and reflect

and information disclosure earned a two-star

are conveyed to the management and thethem in our information security strategy

certification (the highest level) by thedepartments concerned in a timely fashion, so

charge shall respond to and restore thesituation quickly and appropriately under the

SoftBank Group Report 2024

from the Tokyo Stock Exchange on March

See “Status of Implementation of Share Price-Conscious
Management” on our website.

55

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: GovernanceInitiatives for taxation

Compliance with laws and regulations
The Group will comply with all relevant tax-related laws and regulations when conducting

Tax Policy (enforced from July 29, 2022)

business activities, and take measures based on the “Action Plan on Base Erosion and Profit

The Group’s Tax Policy sets out the principles concerning taxation affairs to be observed by SBG

Shifting” (BEPS Action Plan) set forth by the Organisation for Economic Co-operation andand its subsidiaries when conducting business activities. The Policy was decided by a resolution

Development (OECD) to ensure appropriate payment of taxes. We will also take measures withof SBG’s Board of Directors. It states the Group’s system for the execution of operations and risk

respect to transfer pricing taxation to ensure compliance with OECD Transfer Pricing Guidelines,

management related to taxation affairs, compliance with all relevant tax-related laws andincluding the arm’s length principle.

ordinances when conducting business activities, endeavor to ensure appropriate payment oftaxes and optimization of tax costs, and establishing favorable relationships with tax authorities.

Appropriate payment of taxes and optimization of tax costs

The Group will conduct its business activities in accordance with the laws and ordinances of

The Group will comply with all tax-related laws and regulations related to its business, andeach country and fulfill its tax obligations appropriately, thereby contributing to the economic

endeavor to ensure appropriate payment of taxes and optimization of tax costs by taking

and social development of the countries in which we operate.

measures such as utilizing preferential tax treatment allowed under the tax laws of each country

See the full text of our Tax Policy on our website.

in which we operate and eliminating double taxation, thereby improving the Group’s corporate
value.

PolicyGovernance

Relationship with tax authorities

The Head of the Accounting Unit of SBG is the person responsible for the taxation affairs of the

The Group will establish sound and favorable relationships with tax authorities in Japan andGroup, and the Accounting Unit of SBG (the “Accounting Unit”) shall be the organization

overseas (“Authorities”) and will sincerely explain the Group’s tax status to the Authorities in a

responsible for overseeing operations related to the taxation affairs of the Group. Each Groupfactual manner. In the event that any difference of opinion arises between the Group and thecompany shall establish a department or appoint personnel specializing in taxation affairs

Authorities with respect to any particular matter, we will strive to resolve such differences of(“Tax-related Department”) and work closely with the Accounting Unit to conduct day-to-day

opinion through constructive discussions.

management of taxation affairs. The Accounting Unit will regularly report on the status ofexecution of duties related to the Group’s taxation affairs to the Board of Directors and the
Audit & Supervisory Board of SBG, and will be supervised to ensure an appropriate system forCompetent department
The Accounting Unit of SBG is in charge of this Policy.

the execution of operations related to taxation affairs.
Revision or repeal
Tax risk management

Any material revision or repeal of this Policy requires a resolution of the Board of Directors of

The Accounting Unit and the Tax-related Departments of Group companies will effectively utilizeSBG.

the knowledge of external experts to constantly stay abreast of the latest information on
tax-related laws and regulations in Japan and overseas, and international standards and the like,and endeavor to proactively foresee tax risks. In addition, they will strive to minimize risks byconsidering countermeasures for any foreseen tax risks. In the event that a significant tax risk of
the Group materializes, each Group company shall immediately report to the Accounting Unit,
and the Accounting Unit will promptly report to SBG’s Board of Directors and Audit &Supervisory Board, and coordinate with Group companies as required, and endeavor to takeappropriate action.
SoftBank Group Report 2024

56

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Sustainability: Governance

Characteristics of the Group’s Taxation

Income taxes paid on a consolidated basis (net)

Income on the consolidated statement of profit or loss is not directly
connected to SBG’s stand-alone tax payment amount.

(Billions of yen)

Fiscal 2020 Fiscal 2021 Fiscal 2022 Fiscal 2023

The consolidated statement of profit or loss of SBG presents the operating results for SBG and
its subsidiaries as a group, while the stand-alone statement of profit or loss presents SBG’s

ConsolidatedJapan

operating results as a stand-alone company. Moreover, the income on SBG’s stand-alonestatement of profit or loss is only the income for accounting purposes, which differs from theincome used as the basis for calculating income taxes (taxable income). SBG has not introduced
the Consolidated Tax Return Filing System (Japanese Group Relief System).

Overseas

The majority of SBG’s stand-alone operating revenue is dividends received
from affiliates, a significant portion of which is non-taxable.
As a pure holding company, the majority of SBG’s stand-alone operating revenue is dividends
received from its subsidiaries and associates. These subsidiaries and associates pay income taxes
on their respective income and then pay dividends from the remaining income. Therefore, a

324.5

589.3

525.9

816.8

189.5

551.2

469.7

717.0

SBG and holding companies(wholly owned subsidiaries)(85.3)

200.0

214.2

443.3

Operating companies, mainly SoftBank
and LY Corporation

274.8

351.2

255.5

273.7

135.0

38.1

56.2

99.8

Notes:
1. The amounts are the net amount of tax payments and tax refunds.
2. Income taxes paid on a consolidated basis match the net amount of “income taxes paid” and “income taxes refunded” in the
consolidated statement of cash flows.
3. Income taxes paid by SBG and intermediate holding companies in Japan for fiscal 2020 was negative due to the refund of JPY 143
billion in withholding income tax paid in fiscal 2019.
4. SBG and intermediate holding companies in Japan have paid JPY 443.3 billion in income taxes for fiscal 2023, including an interim
payment of JPY 118 billion, of which JPY 76.3 billion is expected to be refunded in fiscal 2024.

substantial portion of the dividends received falls outside the scope of taxation for SBG. On theother hand, one-time gains from the sale of shares owned by SBG are taxable.
Illustration for calculation of SBG’s stand-alone income before income tax and income taxes
Calculation of stand-alone income before
income tax in corporate accounting
Gain onsale ofshares,etc.

Dividends
received,
etc.

Calculation of taxable income andincome taxes

Expenses/lossesTaxableincomeIncomebeforeincometaxes

Taxadjustments
Deductdividends
received

× tax rate =Incometaxes

To avoid double taxation,a significant portion is
non-taxable

Note: Loss carryforwards, if any, can be used to partially reducetaxable income.

Taxes related to SoftBank Vision Funds investment business are compliant
with the tax systems of the relevant jurisdictions, including Japan.

SoftBank Group Report 2024

57

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Message from External Board Director

Harnessing Organizational Patience to
Maximize AI-driven Business Opportunities
across Japan, the U.S., and China. Back then,aligned with my own thinking. Since joining

the more diverse the board, the better. We

venture capitalists (VCs) typically focused on

SBG as an external director two years ago, I

are witnessing an unprecedented AI

their domestic markets, operating in “silos”

see my role as leveraging my Silicon Valley

revolution that will impact people in all

My connection with SBG goes back 23 to 24

with U.S. VCs investing in the U.S. andand global investment experience to enhancecorners of the world in a more profound way

years, when I first met Son-san (Masayoshi

Japanese VCs investing in Japan. I always felt

SBG’s corporate value, going beyond thethan the industrial and mobile revolutions.

Son, Representative Director, Corporatethat this silo mentality was somewhat

typical responsibility of overseeing

Therefore, having a diverse range of skills

Officer, Chairman and CEO of SBG). At that

limiting. So, whenever I exchanged ideas

management decisions.

and expertise to navigate this revolution istime, I had already founded DCM Ventureswith Son-san, his global investment

and was investing in technology companies

perspective truly resonated with me andDynamic discussions with adiverse Board

David Chao
External Board Director, Independent Officer

SoftBank Group Report 2024

At the Board meetings, we thoroughly
discuss various topics, including strategic

crucial and we can continue to do better.
In addition, developing a succession planmatters. What I find particularly unique andfor the unique entrepreneur Son-san is a

excellent about SBG is that after each Board

challenge. However, with the AI revolution

meeting, the directors always gather for an

unfolding very rapidly before us, thisinformal discussion that lasts two to threemoment is crucial for SBG’s future growth.

hours. In these sessions, we freely exchange

Usually, the larger a company gets, it

opinions on a variety of topics, including

becomes less agile and flexible. This is why

Son-san’s vision, new projects, market

small nimble start-ups can sometimes

perspectives, and more, sometimes engaging

become giant-killers. Son-san has provenin heated debates. For me, these informal

over the years that he can continue to leadgatherings also play a meaningful part in the

SBG, a very large organization, and at therole of the Board at SBG because they allow

same time, be nimble. Therefore, what we

us to delve deeper into the topics covered inneed most right now is the swift decision-

the formal meetings. Son-san often comesmaking of Son-san, the founder, and theup with surprising new ideas, but because

agile and flexible actions of SBG as an

we have discussed the underlying concepts

organization. Finding a successor is not easy,in these informal settings, we can quickly see

and while we understand the necessity of ahow his ideas fit into the overall strategy.

succession plan, at this pivotal moment, I

Another strength of our Board is the highly

believe our higher priority is to attract greatinteractive discussions that arise from having

talent and ensure sustainable growth aroundmembers with diverse industry backgrounds.

the nimble founder who is also the soul of

We all share the common understanding thatthe company.
58

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Message from External Board Director

The art of patience in venture
investment

stakeholders that this process takes time. We

with promising business models for growth.

need to be patient and continue to support
our portfolio companies from within.

missing the timing. This perfectly exemplifies
the saying: “Chance favors the prepared

The power of reinvention:
What sets SBG apartmind.”In Board discussions, I often share my views

Ultimately, I believe the track record of theon technology trends. Additionally, given myhundreds of companies we have invested inexperience as both an entrepreneur and awill reveal winning trends and help highlight

I think that Son-san and SBG, which heComputer (mainframes, server-client andventure capitalist, I frequently emphasize thethe key companies and areas to focus on. I

founded, are exceptional in their ability toPCs), the Internet, Mobile, and now AI.

need for patience. The nature of venture

hope that we can learn a lot, not only fromboldly transform with the times andWhile PCs are now affordable for personal

investing varies significantly from early tothe successes but also from the failures,“reinvent” themselves to deliver results inuse, the development of the PC market was

middle to late stages. When I first joined, Iembracing new challenges and turning them

new fields. Starting as a software wholesaler,initially driven by B2B, while the growth andwas struck by the view held by some, that

into successes.

then moving into PCs, the Internet, mobile,

proliferation of the Internet and mobile werethe majority of the investments would do

Looking back on the technology revolution
to date, there have been four waves:

Looking ahead at the VC market, my sense

and now AI, they have repeatedly createdpropelled by B2C. So how will the fourth

reasonably well. This expectation, along withis that the industry, aside from AI, is about a

new businesses in entirely different fields. I

wave, AI, unfold? Like the computer

the tendency to seek quick results, needed toyear away from bottoming out. About 12 tohave worked with many successful

revolution, I envision AI initially creating

be addressed. In the venture world, start-ups

18 months ago, when fundraising wastechnology CEOs and corporations globally,

added value in the B2B sector and thenthat go out of business appear earlier in the

difficult and the market was sluggish, manybut Son-san and his team’s ability to

making a significant leap forward from there.

investment cycle. In contrast, companies thatexisting investors made additional

continuously reinvent is rare. It is challenging

In this regard, Son-san’s experience with the

do well in the long run take time to matureinvestments in the form of bridge loans or

enough to venture into new businesses andcomputer revolution, where technology

and the winners are not obvious for manyrounds that propped up the valuations. The

achieve results, but Son-san has successfully

growth was initially centered on B2B, will be

years. In baseball terminologies, there areindustry standard at that time was to provide

and positively reinvented SBG multiple times.

a tremendous advantage in capturing future

strikeouts and hits, and occasionally, a grandone more round of funding that would allow

The recent IPO of Arm is another example.

growth opportunities.

slam home run like Alibaba, which took 15

companies to survive one to two years longer

Within SBG, there is a culture of constantly

years since the company was founded toand see what happens. Therefore, in the next

embracing new challenges. Even though thecompanies emerging as likely core players in

IPO. In venture investing, we need to

12 to 18 months, there will be a clear

future is uncertain, Son-san and SBG are full

the future AI space, and the next-generation

understand this and be patient as an

distinction between companies that canof enthusiasm to create new businesses andAI ecosystem is being built around them.

organization over the long term.

survive and those that cannot. In any case,contribute to society.

Arm is one of these core players. Arm has

In general, venture capital return follows aonce the market goes down, it would takeJ-curve, where the IRR is negative for the first

three to four years to recover, as we saw

three or four years. Some of SoftBank Vision

with the dot-com bubble.

We are already seeing six or sevenalways fortified itself by creating an

SBG’s growth potential in the
AI eraecosystem, expanding into areas such as
mobile, automotive, and servers. This

Funds’ investments have shown early positive

On the other hand, AI companies withresults, making it difficult to see the typicalstrong teams continue to attract funding and

AI is now broadly categorized into machine

Arm’s DNA and will help them maintain its

J-curve pattern. However, it takes a long time

maintain their valuations. Still, over the next

learning and generative AI. SBG has been

competitive advantage to fuel their growth.

for the upward trend of a J-curve to emerge.

two years or so, we will likely see a clearer

involved in AI for the past six to seven years,

With Arm, which provides foundational AI

SBG is investing in promising companies, anddivision within the AI sector, with some areas

closely following the evolution of machinetechnologies, I believe SBG is well-positioned

I believe we will eventually see some home

experiencing growth and others not. Thislearning. This has allowed us to quickly adapt

to capture future growth opportunities andruns. It is crucial to communicate to external

period will be crucial for selecting companies

to the emergence of generative AI without

lead in the AI era.

SoftBank Group Report 2024

ecosystem business model is embedded in59

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Compliance

Commitment to Integrity
Compliance as the foundationof our businessGroup compliance structure
Board of Directors of SBG
OverseeWe believe that our commitment to integrity,
which goes beyond legal and regulatorycompliance, must be the foundation of ourOverseea Group Compliance Officer (GCO) as thechief officer responsible for compliance

ReportGroup Compliance Officer (GCO)
Oversee

conduct in every action they take.

The Board of Directors of SBG has appointed

Appoint

Updatewhere every officer and employee
demonstrates the highest degree of ethicalOversight of program· Leadership· Governance

UpdateGroup Risk and Compliance Committeeof SBG (GRCC)

business. We aim to create an organization

Organizational structure

Structure of SBG’s ethics and compliance program

Report /consult
Report / assist

Group Compliance OfficeDirect / advise / guide

ReportChief Compliance Officer (CCO)of SBG

Direct / advise / guide
Coordinate

Report / consult

Employee of SBG

Risk assessment∙ Company-wide assessment∙ Oversee risk mitigations

Standards and controls∙ Code of Conduct∙ Group Policies∙ Controls

ReportChief Compliance Officer (CCO)of subsidiaries
Report / consult

Employee of subsidiaries

Monitoring, oversight,
and review∙ Ethics and compliance helplines∙ Employee surveys∙ Internal audits

Training and awareness∙ E-learning∙ Face-to-face training∙ Regular communications

across the Company, and similarly, eachsubsidiary appoints a Chief Compliance
Officer (CCO). The GCO and CCOs have theresponsibility to implement systems designed
to ensure compliance with applicable laws
and regulations and to promote ethical

Ethics and complianceprogram and oversightconduct. The GCO and CCOs periodically

The Group Risk and Compliance Committee

report material incidents and risks together(GRCC) consists of Board Directors andwith activities of their ethics and complianceCorporate Officers of SBG and provides

programs to their respective board ofoversight of the risk management anddirectors.

ethics and compliance programs of the

SoftBank Group Report 2024

of noncompliance. SBG’s Board of Directors

and staff across various areas such asreceives regular separate reports on, andanti-corruption, prohibition on discrimination,

evaluates and supervises the effectiveness of,confidentiality, conflicts of interest, antitrust

the ethics and compliance programs.

laws, money laundering, insider trading,working environment, and whistleblowing.

Code of conduct and Group
policies

In April 2024, SBG updated the SoftBank
Group Code of Conduct to proactively
integrate AI into our operations. This

Company. The GRCC assesses the key

SBG has established the “SoftBank Group

update reflects our belief in the future

performance indicators that measure theCode of Conduct” as the standard that allhappiness that AI can bring. It also outlines

effectiveness of the risk management andthe Company’s officers and staff should

the necessary considerations for promoting

ethics and compliance programs such as risk

follow. Our Code of Conduct sets out

the ethical and responsible use of AI by ourassessments, risk mitigation, and incidents

standards to guide the Company’s officers

employees, aiming for the achievement
60

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

ComplianceTop page of the SoftBank Group Code of Conduct website

behaviors. The use of visually memorable
contents is designed to be easily understood.

Monitor, audit, and review
SBG has established a global ethics andTop screen of intranet site, Compliance Awareness Month 2023

compliance helpline to receive reports andconsultations regarding compliance violations
involving the Company or its officers andemployees, from our officers, employees,
business partners, and other third parties.
Reports and consultations can be madeanonymously to the extent permitted bylaws and regulations. We received frequent
reports and requests for advice in fiscal

See the full text of our Supplier Code of Conduct on our website.
See the SoftBank Group Code of Conduct on our website for further details.

Compliance e-learning

2023 from across the Company. The CCOs
are responsible for setting up helplines
for their respective companies. Significant

of responsible AI practices. SBG has also

investment-focused subsidiaries, SBG revisedand staff regarding high-risk areas such as

substantiated cases must be escalated to theestablished the “Supplier Code of Conduct”

the related policies in fiscal 2023 to further

conflicts of interest. SBG has introduced a

GCO.

to clarify the ethical standards we would likestrengthen the management structure.

global training system, which, in addition

SBG conducts an employee survey

SBG conducts an annual review of all theto providing the Code of Conduct training,

to measure its ethical culture and theour suppliers to follow.
SBG has implemented a full suite of Group

Group Policies and made certain revisions asprovides Group companies in Japan andeffectiveness of its compliance program. SBG

Policies that establish Group-wide minimum

appropriate. We will continue to periodicallyabroad with training that addresses different

uses the results of the survey to improve its

requirements for all subsidiaries and theirreview and revise them.

areas of risk for each of them.

ethics and compliance programs for the next

officers and staff across key risk areas such as

As one example of the awareness-raisinganti-corruption, competition law, conflicts ofinterest, insider trading, economic sanctions,information security, privacy, human rights,

activities, SBG holds the ComplianceTraining and awareness

Awareness Month annually for officers
and staff of SBG and those at its major

brand management, corporate governance,

The Company conducts training andsubsidiaries in Japan and overseas. SBG also

the environment, risk management, andawareness-raising activities to ensure that

periodically delivers communications throughtaxes. In line with the actual operation

officers and staff recognize risk areas andanimated videos and comics featuring actualof the centralized management systemhave the information they need to make thecases and familiar compliance issues tofor insider information and investmentright choices.

enable its officers and staff to refresh andconflicts, introduced in 2022 for SBG and its
SoftBank Group Report 2024

year.

The Company provides training for officers

consolidate their knowledge about ethical61

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Risk Management

Mitigating Impediments to Sustainable Growth
Risk management system

Risk management initiatives

At SBG, the Risk Management Office spearheads Group-wide risk management activities cooperating

The Risk Management Office works to strengthen risk management activities by identifying and addressing

with each Group company and department. The office is supervised by the Chief Risk Officer (CRO),risks, with the aim of mitigating factors that adversely affect the Group’s sustainable growth.

who is appointed by the Board of Directors with responsibility for Group-wide risk management.
SBG established the Risk Management Policy to ensure a Group-wide understanding of the

Identifying risks

purpose of risk management and to clarify the basic roles of officers, employees, and risk

The Risk Management Office is pursuing the following initiatives to gain a comprehensive

managers. This policy applies to all officers and employees of SBG and the Group companies tounderstanding of financial and non-financial risks facing the entire Group.

encourage their active involvement in risk management activities. In accordance with SBG’s Risk
Management Regulations and the Group Company Management Regulations, which are set
under the Risk Management Policy, SBG and the Group companies appoint risk managers. The
risk managers are responsible for comprehensively identifying financial and non-financial risks
that might arise during business activities and for monitoring both the countermeasures taken
to address these risks and the status of their implementation.
The Risk Management Office ensures the effectiveness of Group-wide risk management byreceiving reports on important matters from the risk managers and confirming compliance with theregulations. The policy and regulations are periodically reviewed and approved by the Board of
Directors of SBG and other bodies. The Risk Management Office quarterly reports identified risks thatare material to the Group and their countermeasures to the Board of Directors and the Group Risk
and Compliance Committee (GRCC), respectively. Accordingly, both governance bodies supervise theRisk Management Office. The GRCC consists of Board Directors and Corporate Officers of SBG andprovides oversight of the risk management and ethics and compliance programs of the Company.

Key agenda confirmation
When important matters are to be resolved by SBG’s Board of Directors, the Investment
Committee, and other bodies, the Risk Management Office confirms the agenda items in advanceand consults with the relevant departments, if necessary. It also ensures that risk-related
information that needs to be considered is reflected in the agenda.
Portfolio risk analysis
The Risk Management Office performs risk analysis over the entire Group’s investment portfolio
from various perspectives. For example, the Risk Management Office monitors the impacts on
SBG’s financial ratios that are caused by changes in the external environment such as economic
and monetary policies and other political conditions. The concentration of investments in specificcountries, regions, and sectors is also monitored continuously.
Risk information gathering
The Risk Management Office gathers information on various risks from the major Group companies
and each department of SBG. When the risks materialize, the relevant Group companies anddepartments of SBG escalate the issues to the Risk Management Office in a timely manner.

Risk management system
Board of Directors of SBG
Supervise
Appoint /supervise

ReportResponding to risks

ReportBased on the information gathered through the above initiatives, the Risk Management OfficeGroup Risk and Compliance Committee of SBG(GRCC)
Supervise

analyzes and assesses various risks and countermeasures. For material risks that could have asignificant impact on the Group’s sustainable growth, the Risk Management Office collaborates with

Reportthe parties involved in each risk in order to consider countermeasures and monitor the effectivenessChief Risk Officer (CRO)
Risk Management Office
Manage / assist

Report / cooperate

Each department of SBG

SoftBank Group Report 2024of such countermeasures. Material risks and the status of countermeasures are reported to andManage / assist

Report / cooperate

Each Group company

discussed by the Board of Directors and the GRCC. Based on the results of those discussions,
the Risk Management Office strives to strengthen the Group’s risk management system.
62

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Message from Our Chief Risk Officer (CRO)Supporting Sustainable Growth Through Adaptive
Risk Management
It has been three years since you
took over as CRO. Looking back,what are your reflections?

sources, including each division andbeing transformed into a group of

subsidiary, to identify material risks andAI-empowered companies, with Arm at thethe early stages, and the risks we need toconsider how to address them. In fiscal 2023,

core. Sparked by ChatGPT, AI in 2023 evolved

monitor could change depending on future

When I joined SBG in 2020, our investment

we made progress in shifting our holdings toand spread rapidly and had a significant impact

business developments. It is essential tobusiness, especially SVF, was thriving andan AI-centric portfolio and resumedon the economy and financial markets. At theunderstand the business situation of eachposted the highest consolidated net income

investments aimed at moving to offense

same time, concerns about AI risk have also

company, work closely with all parties

ever recorded by a Japanese company.

mode. Meanwhile, our business environment

grown, and many countries and regions,involved, and provide support as needed.

However, the situation has changed drasticallyremains highly uncertain due to the turmoil in

including the European Union, the U.S., andIn addition, I believe it is crucial to manage

since then, and a period of significant deficits

international affairs. I am dedicated toJapan, are actively discussing rulemaking on theexisting investments in SVF. SVF has developed

followed. The composition of our holdings

considering risks from all aspects and support

development and use of AI. In light of this, wea strategic portfolio management policy thathas also changed. In 2020, Alibaba was thethe Company’s sustainable growth.

are working to strengthen our AI governanceincludes helping portfolio companies increaseby monitoring regulatory trends and enhancing

their corporate value through effective

cooperation among Group companies.

engagement. The Risk Management Office1cornerstone of our portfolio, but Arm, once
targeted for sale to NVIDIA, went public in
2023 and is now our core holding.

2

How have the risks changed
following the transition of thecomposition of holding assets?

Currently, many of our investments are in

actively considers the impact of these efforts

seen many companies, and it is hard to find a

Alibaba used to be a major holding, and SVF

company that changes on such a scale andalso had many other investments in Chinese

Are there any particular risks you
are watching closely as
investments are resumed?

with such speed. In addition, as ancompanies, so the Risk Management Office

We are focusing on strategic investments that

accountant, I found it unprecedented thathas focused on swiftly identifying various risks,

have been gradually increasing. Unlike SVF,

understanding a company required more thansuch as tightening regulations in China and its

which is based on financial investments, theseanalyzing financial statements. Typically, I canconflict with the U.S. We have reported to theare business investments with a longer-term

understand the substance of a company by

Board of Directors and GRCC the percentage

perspective. Therefore, we need to consider

looking at its accounting profits and assets,of our total portfolio that is invested in China

various risks, such as the possibility that a

but in our case, that is not enough toand the impact on the Company if the value

portfolio company’s business might notdecipher the true nature of the company.

of our holdings were to plummet. Currently,

perform well and how to manage a portfolio
company that has become a subsidiary.

Throughout my tenure as an auditor, I have3

and continuously monitors the status.

In this context, I became acutely aware of

our holding in Alibaba is virtually zero, and ourthe complexity and importance of the Group’s

Chinese investments as a percentage of total

risk management. I began by analyzing ourholdings have dropped. Therefore, I believe

assets and liabilities to understand the actual

the China risk has been significantly mitigated.

Kiyoshi Ichimurasituation. I then gathered information from all

However, there are new risks. Our portfolio is

CRO,
Head of Risk Management Office

SoftBank Group Report 2024

63

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Risk Factors

Risk Factors
The material risks that the Company (SBG and its subsidiaries) believes could significantly affect investors’
investment decisions as of June 21, 2024 are outlined below. The materialization of these risks could have an
adverse effect on:· NAV (Net Asset Value): equity value of holdings – adjusted net interest-bearing debt*1· LTV (Loan to Value): adjusted net interest-bearing debt ÷ equity value of holdings*1; The ratio of debt toasset holdings.
· Financial condition and results of operations· Distributable amount of SBG
These risks do not include all the risks that the Company could face, nor is there a guarantee that measures
to address such risks will be fully effective. Forward-looking statements were determined as of June 21, 2024,
unless otherwise stated.
*1 See pages 20-21 for details on the calculation method of NAV and LTV.

(1) Group Overall
Under the Company’s management system, the Company is engaged in a wide range of investment activities
based on the investment theme of artificial intelligence (AI), with SBG, a strategic investment holding
company, exercising overall control over its investment portfolio comprising SBG’s subsidiaries, associates, andportfolio companies (hereinafter “portfolio companies”). The Company’s material risks in the execution of its
business are stated in subsections a. through c. below.
Additionally, please refer to “(2) SoftBank Vision Funds business,” “(3) SoftBank business,” and “(4) Arm
business” for the material risks in the SoftBank Vision Funds segment, SoftBank segment, and Arm segment,
respectively.
a. Investment Activities Overall(a) Market environment
The Company invests mainly in information and technology companies that leverage AI; however, thevaluation of these companies can vary significantly depending on the outlook for technological progressand market growth. Therefore, the Company’s equity value of holdings may be affected by these typesof sector-specific factors, in addition to macroeconomic, monetary policy, and stock market trends. In
addition, private portfolio companies are also affected by trends in the venture capital and IPO markets.
Since Arm continues to be a consolidated subsidiary after its listing in September 2023, its stock
price change does not affect the Company’s financial condition and results of operations. However, thestock price change has a substantial effect on the Company’s equity value of holdings since Arm shares
represent a large portion of the Company’s equity value of holdings.
Moreover, the Company may be affected by foreign exchange rate movements in connection with its
ownership of foreign currency-denominated assets and liabilities.
The Company aims to conduct stable financial management to withstand the impacts of market
volatility. For details, see “Message from Our CFO” on pages 16-19.

SoftBank Group Report 2024(b) International conditions and regulatory trends
The Company invests in companies and other entities that operate not only in Japan, but also incountries and regions overseas, such as the U.S., China, India, Europe, and Latin America. Therefore,
due to changes in political, military, or social circumstances and to the establishment of new laws,
regulations, systems and other rules (hereinafter “laws and regulations”) and the strengthening
thereof (including changes in interpretation and implementation) in those countries and regions, theinvestment activities of the Company and the business activities of portfolio companies may not develop
as expected. Laws and regulations include, besides those related to investment, laws and regulations
related to businesses such as AI, telecommunications services, internet advertising, e-commerce,
automated driving, robotics, logistics, financial services and payments, and to other corporate businessactivities (including, but not limited to, laws and regulations related to business permits and licenses,
economic security, import and export, personal information and privacy protection, the environment,
product liability, fair competition, consumer protection, prohibition of bribery, labor management,
intellectual property rights, prevention of money laundering, taxation, and foreign exchange). The
investment activities of the Company and the business activities of portfolio companies are directly
or indirectly affected by those laws and regulations. Recently, countries have been taking steps to
implement stricter regulations from an economic security perspective, against the backdrop of factors
such as the Russia-Ukraine conflict, the situation in the Middle East, and intensified U.S.-China rivalry.
For example, the introduction of laws and regulations to restrict investment in specific countries orcompanies could constrain the Company’s investment activities, as well as cause the realization of
investments to be delayed or the terms and conditions for the realization of investments to deteriorate.
In addition, if heightened geopolitical risk results in supply chain disruptions, or if stricter trade
regulations restrict the import or export of specific products and technologies, and other items, thebusinesses and operating results of portfolio companies may be adversely affected.
Moreover, the investment activities of the Company may require approvals and permissions from theregulatory authorities of relevant countries, or the Company’s involvement with portfolio companies
may be restricted. If the necessary approvals and permissions cannot be obtained or other restrictions
cannot be avoided, the Company may be unable to successfully implement its investment or divestment
plans as it expects.
The Company collects information about the changes in the external environment described above
and assesses the impact they may have on investment activities, while receiving advice from outsideadvisers. Concurrently, the Company works to address each of these regulations. In addition, theCompany continuously monitors the concentration of investments in specific countries or regions, andbusiness sectors, within its investment portfolio. By doing so, the Company identifies risks and reflects
them in its management decisions.
(c) Business development of portfolio companies
The Company aims to maximize returns from a medium- to long-term perspective by making
investments in information and technology companies that leverage AI. However, portfolio companies

64

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Risk Factors

may be unable to develop businesses as envisioned at the time of the investment decision, due
to factors including the obsolescence of portfolio companies’ technologies and business models,and intensified competitive environments. This may lead to a significant deterioration in businessperformance or a drastic revision of their business plans. Moreover, the Company may provide loans,loan guarantees, additional investment or other forms of financial support as deemed necessary to
improve their shareholder value, if they are unable to develop businesses as anticipated. Providing
such support could increase the Company’s exposure to those portfolio companies. Nevertheless, theCompany has a general policy of not making investments solely for the purpose of providing relief.
Even after making investments, the Company continuously monitors major risk factors of portfolio
companies, including financial and management information, key performance indicators, differences
between business plans at the time of the investment decision and actual progress, and the statusof corporate governance. To address these risk factors, the Company implements measures suchas providing advice and dispatching officers to improve the management of portfolio companies asnecessary.
(d) Investment decisions
In the investment decision-making process, the Company may make investment decisions while
misjudging the risks concerning such factors as the technology, business model, competitiveenvironment, financial condition, compliance, and governance of an investment target, or the integrityof the founders and managers who have critical influence. In particular, the transparency, accuracy, andcompleteness of information on which the Company bases its investment decisions are relatively more
likely to be inadequate at private companies.
In the investment decision-making process, the Company seeks to assess investment-related risks
by conducting due diligence on important factors of the target, while obtaining the cooperation of,for example, outside financial, legal and tax advisers as necessary, in addition to referring to researchand reviews by the relevant internal departments. Based on the results of such procedures, investment
decisions are made by either the Board of Directors of SBG, the Investment Committee to whichauthority is delegated by the Board of Directors, or the Investment Committee of the fund management
subsidiary.
b. Fund procurement
The Company utilizes a diverse range of procurement methods, such as loans from financial institutions andthe issuance of bonds, as well as raising funds through asset-backed financing and selling assets.
For loans from financial institutions and bonds, if the procurement environment deteriorates due to factors
such as changes in interest rates or credit rating, the Company may be unable to raise funds at the planned
timing, scale, or conditions. In addition, various covenants may be attached to the debts. If these covenants
are breached, the Company may forfeit the benefit of the term with respect to such obligations. Furthermore,in connection with this forfeiture, the Company may be requested to make lump-sum repayments withrespect to other obligations.
For asset-backed financing (excluding prepaid forward contracts) using public equities such as Arm shares,or private equities, if the value of eligible equity holdings declines, the Company may be required to post
additional cash collateral or incur prepayment obligations. The Company may also face difficulties in raising
new funds and refinancing.
Regarding fundraising through the sale of asset holdings, the Company may be unable to sell assets at

SoftBank Group Report 2024

anticipated prices when necessary due to factors such as sluggish market liquidity, contractual restrictions on
asset sales, and delays in scheduled IPOs.
To control risks related to fund procurement, the Company raises funds with timing and methods that are
deemed appropriate based on careful monitoring of market conditions. In particular, when borrowing fromfinancial institutions, issuing corporate bonds, and conducting asset-backed financing, the Company increase
the stability of each type of fund procurement by conducting prior reviews and implementing measures
based on various anticipated scenarios. Through these measures, the finance departments strive to maintain asufficient cash position with financial discipline.
c. Management team
The Company’s major subsidiaries and investment funds are run autonomously, the subsidiaries by theirrespective CEOs and other leaders, and the investment funds by the CEOs of fund operating subsidiaries
described below. However, unforeseen situations with respect to Representative Director, Corporate Officer,
Chairman & CEO Masayoshi Son, who plays a pivotal role in the Company’s management, could impede theoverall activities of the Company.
If such an unforeseen situation were to occur, the decision-making process could be affected. To minimize
this impact, the Company has drawn up contingency plans. In addition, the Nominating & Compensation
Committee periodically discusses succession plans.
(2) SoftBank Vision Funds business
SoftBank Vision Funds (SVF1, SVF2 and LatAm Funds, hereinafter “SVF”) aim to maximize returns overthe lifecycle of each of the funds by making investments in technology companies primary leveraging AI
that are deemed to have high growth potential. SBG invests in these investment funds as a limited partner.
Additionally, the Company’s wholly owned subsidiaries who manage these funds (SBIA, which manages
SVF1, as well as SBGA, which manages SVF2 and LatAm Funds, hereinafter the “Managers”) are respectively
entitled to receive management fees, performance-linked management fees, and performance fees, each ofwhich is measured by reference to the investment activities of the investment funds.
The material risks at SVF and their Managers are stated in subsections a. through d. below. In this section(2), the phrase “portfolio companies” refers to the investees of SVF.
a. Business execution risks of portfolio companies
Many portfolio companies are seeking to leverage new technologies such as AI and big data to create new
business models. There are various risks involved for these companies to develop their businesses as planned,
earn profits, and establish a solid business foundation.
In particular, these risks include: that they may not be able to develop technologies or implement businessmodels as expected, or provide products and services that meet customer needs and market practices; theirunit economics may not be strong enough to fully cover the cost of the platform and continued investment intechnological advancement; they lose out to other new entrants with the latest technologies or to incumbents
with strong business foundations; they are unable to adjust themselves to their expansion into adjacentbusinesses or different geographies and to changes in the economic or business environment; they are notable to secure profits if the customer acquisition costs, such as advertising and sales staffing, significantly
exceed their original plans; and, they are unable to respond to growing compliance complexity and/or manage
the costs for privacy and AI across varying jurisdictions.
In addition, as the strategic importance of advanced technology in national security has been growing

65

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Risk Factors

in recent years, and with a backdrop of a worsening relationship between the U.S. and China, it is possiblethat stricter regulations in various countries will be introduced, which may adversely affect the businessdevelopment of the portfolio companies.
Furthermore, many portfolio companies have funding needs for business development. If the fund-raising
environment deteriorates, it may not be possible to raise funds on the expected terms, resulting in the need to
cut costs materially, which may impede growth, or to raise funds on terms that dilute the Company’s share in
the portfolio company.
At the Managers, the investment risk team plays a central role in identifying these risks early and mitigatingthem through the investment approval process and ongoing post-investment monitoring.
b. Lack of opportunity to exit from investments
Due to the illiquid nature of many of the investments that SVF may acquire, as well as economic, legal,
political, or other factors, there can be no assurance that SVF will be able to monetize such investments asoriginally planned. Additionally, SVF may be prohibited by contract or other limitations from selling certain
securities for a period, which may mean that SVF is unable to sell investments at favorable market prices.
Approval of an exit strategy is a key part of the Managers’ Investment Committees’ considerations. Exit
strategies are regularly reviewed and updated by the Managers’ investment teams. Exit strategies are alsostress tested under various market conditions by the investment risk team to allow for forward planning. In
setting up a long-term fund structure, it was anticipated that multiple economic downturns could occur andthat some investments may take longer to exit than others.
c. Securities issued by public companies
SVF’s investment portfolios may contain securities issued by public companies. Such asset holdings are subject
to risks that include increased obligations to disclose information regarding such companies, limitations on theability of SVF to dispose of such securities at their discretion, increased likelihood of shareholder litigation andinsider trading allegations being brought against such companies’ executives and board members, including
employees of the Managers. In addition, there may be increased costs associated with addressing each of theaforementioned risks.
The primary mechanism employed to mitigate the market risk following a liquidity event is to follow adeliberate plan for selling down the positions to minimize the market impact and to maximize the value of theproceeds. The Managers also examine whether to hedge the foreign-exchange risk should the securities bedenominated in a currency whose exchange rate relative to USD is volatile.
Additionally, the operational and compliance risks that arise while managing SVF’s public securities
positions are managed through an appropriate control framework spanning the Managers’ operational,
compliance and enterprise risk activities including, policies, staff training, whistleblower helpline, pre-tradeapproval processes (including the approval of trading counterparties), and post-trade reconciliations andexception monitoring.
d. Securing and retaining human resources
The Managers seek to maximize the equity value of SVF funds that they respectively manage, by carefully
selecting investments and promoting growth after investment through the provision of a wide range of
support. For the success of these investment activities, it is essential to secure and retain capable personnel
who possess broad knowledge of technology and financial markets as well as specialized skills in managing
investment businesses. A failure of the Managers to secure or retain an adequate number of capable

SoftBank Group Report 2024

personnel could have an adverse effect on the maintenance or expansion of the investment scale and future
investment performance of the investment funds they manage.
In order to maintain their broad investment and management capabilities, the Managers provide various
HR support programs and ensure the human capital in the firm has the requisite skill sets to meet businessobjectives. The Managers conduct a range of efforts including regularly reviewing performance, organization
design, and training and development, as well as moving staff across the organization to ensure they fulfil
their potential.
(3) SoftBank business
SoftBank Corp. and its subsidiaries (hereinafter the “SoftBank Corp. Group”) engage in its core businessof telecommunications, in addition to providing services such as Yahoo! JAPAN, LINE, and PayPay, anddeveloping its business in various fields within the information and technology domain. The material risks at
the SoftBank Corp. Group are stated in subsections a. through f. below.
a. Changes in the market environment and competition
The telecommunications-related market has seen major changes in the business environment, mainly driven by
the strengthening of pro-competitive policies and new entrants from different industries, and users have also been
increasingly seeking more inexpensive and varied services. In order to address the market environment describedabove, the SoftBank Corp. Group deploys services, products and sales methods that fit consumer preferences.
However, if the SoftBank Corp. Group is unable to meet the expectations of consumers for price plans, voice anddata communications quality and so forth, or if the service and products provided by the SoftBank Corp. Group
have significant defects, there are no assurances that the SoftBank Corp. Group will be able to maintain its current
number of subscribers. Moreover, the introduction, amendment, or change in interpretation or application oflaws, regulations, systems, and so forth, could result in the effective restriction of services and products that the
SoftBank Corp. Group can deliver to its customers, or of sales methods and price plans, etc., causing the SoftBank
Corp. Group to experience a decline in revenue and to incur a larger financial burden.
In certain instances, the SoftBank Corp. Group’s competitors may have a competitive advantage over the
SoftBank Corp. Group in terms of capital, services and products, technology development capabilities, pricecompetitiveness, customer base, sales capability, brands, public recognition, or overall capability in all of these,for example. If these competitors were to sell services and products that harness these competitive advantages
to a greater extent than at present, the SoftBank Corp. Group may be placed at a disadvantage in sales
competition, including price competition, may be unable to provide services and products, or acquire or retain
customers, as anticipated, or may experience a decrease in Average Revenue Per User (ARPU). Furthermore,
the services and products of newly established startup companies and new entrants could raise competition
with the SoftBank Corp. Group’s services and products. Alternatively, it may be costly for the SoftBank Corp.
Group to develop the newly emergent services and products needed to demonstrate competitiveness.
The SoftBank Corp. Group may conduct internal realignment for purposes such as streamlining
overlapping business resources, speeding up decision-making, and generating greater synergies among
businesses. However, if the SoftBank Corp. Group is unable to sufficiently capture the expected benefits of
the realignment, problems such as trouble with and delays in services to be rolled out, adverse effects on
strategies and synergies, and disruptions associated with the realignment could arise.
b. Response to technology and business models
The SoftBank Corp. Group’s primary business domain is the information technology industry, which is subject

66

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Risk Factors

to rapid changes in technology and business models. Notably, the field of generative AI has been evolving
dramatically and has significantly impacted existing business models. The SoftBank Corp. Group is constantly
undertaking measures such as surveying the latest technology and market trends, conducting verification trials
to introduce services with highly competitive technologies, and considering alliances with other companies.
However, there are no assurances that the development of new technologies will proceed on time or results
will be delivered as planned, or that common standards or specifications will be established and commercial
viability will be achieved. Even if the aforementioned measures are undertaken, the SoftBank Corp. Groupmay be unable to develop or introduce outstanding services, technologies and business models in keepingwith market trends due to the inability to appropriately adapt to changes in the market environment in atimely manner, such as the emergence of new technologies and business models, or due to the inability
to deploy equipment and facilities rapidly and efficiently. In this case, the SoftBank Corp. Group’s service
offerings could lose competitiveness in the market, possibly curtailing the number of subscribers that the
SoftBank Corp. Group is able to acquire or retain, or reducing ARPU.
c.	Leakage or inappropriate use of information and inappropriate use of products and services
supplied by the SoftBank Corp. Group.
In its business operations, the SoftBank Corp. Group handles customer information (including personal
information) and other confidential information. The SoftBank Corp. Group strives to build a framework
to protect and manage information assets appropriately, including the appointment of a Chief Information
Security Officer and education and training sessions on information security for officers and employees.
However, this information could be leaked, lost, or involved in a similar incident, either intentionally or
accidentally by the SoftBank Corp. Group (including officers and employees of the SoftBank Corp. Group andpeople related to subcontractors), or through a malicious cyber-attack, hacking, computer virus infections, orother form of unauthorized access or other means by a third party.
Moreover, if the products and services supplied by the SoftBank Corp. Group are used inappropriately forcrimes and so forth such as fraud and the like, it could impair public trust in the SoftBank Corp. Group andthe SoftBank Corp. Group’s credibility.
Such an occurrence could reduce the SoftBank Corp. Group’s competitiveness, and give rise to significant
costs to the SoftBank Corp. Group for payment of damages and modification of security systems, in addition
to having an adverse impact on the SoftBank Corp. Group’s credibility or corporate image and making it
difficult to acquire or retain customers.
Furthermore, on October 1, 2023, LY Corporation completed an intra-group reorganization involving
mainly Z Holdings Corporation as the surviving company and two of its core wholly owned subsidiaries, LINE
Corporation and Yahoo Japan Corporation, and its trade name was changed from Z Holdings Corporation
to LY Corporation. LY Corporation is working to develop and strengthen a framework to ensure the efficientand proper functioning of its group companies’ overall data governance. While such efforts will be continued,
if the countermeasures and measures to strengthen governance fail to function effectively, this could lead toadministrative sanctions on the SoftBank Corp. Group from the authorities, impairment of public trust in the
SoftBank Corp. Group, a decrease in demand for the SoftBank Corp. Group’s services, the formulation andimplementation of additional countermeasures, or the occurrence of data leaks.
Furthermore, LY Corporation has submitted reports concerning the incident of unauthorized accessit announced on November 27, 2023 to the Ministry of Internal Affairs and Communications (MIC) and
the Personal Information Protection Commission of Japan (PPC). LY Corporation received administrative
guidance from MIC on March 5 and April 16, 2024, and it received a recommendation and request for a

SoftBank Group Report 2024

report, etc. from PPC on March 28, 2024. Currently, LY Corporation is implementing measures in responseto this administrative guidance and recommendation. It submitted a report regarding measures to prevent a
recurrence, etc. to MIC on April 1, 2024, and a report summarizing the implementation status of measures
to prevent a recurrence to PPC on April 26, 2024, and is moving forward with these measures. However,if the measures of LY Corporation and the SoftBank Corp. are judged to be inadequate or insufficient, this
could lead to impairment of trust in the SoftBank Corp. Group, a decrease in demand for the SoftBank Corp.
Group’s services or other such consequences. Such outcomes could have an impact on the SoftBank Corp.
Group’s businesses.
d. Consignment of operations
The SoftBank Corp. Group consigns in whole or part to subcontractors customer sales activities, acquisition
and retention of customers, and telecommunications network construction and maintenance for various
services and products, along with the execution of other related operations. In addition, the SoftBank Corp.
Group’s information search services make use of other companies’ search engines and paid search advertising
distribution systems. While the SoftBank Corp. Group strives to reduce risks in the supply chain, if these
subcontractors (including their directors and employees, or related parties) are unable to execute operations
in line with the SoftBank Corp. Group’s expectations, or if a human rights infringement-related issue occurs,such as a case where the information of the SoftBank Corp. Group’s or its customers is obtained withoutauthorization, it could have an impact on the SoftBank Corp. Group’s business.
Moreover, any damage to the credibility or corporate image of these subcontractors as a result of the kindof incident described above would also have an impact on the SoftBank Corp. Group’s credibility or corporate
image. Furthermore, if these subcontractors should fail to comply with laws and regulations, the SoftBank
Corp. Group could receive a warning or administrative guidance from the regulatory authorities, or beinvestigated for non-fulfillment of its supervisory responsibility, and the SoftBank Corp. Group’s credibility or
corporate image could deteriorate as a result, making it difficult to acquire and retain customers.
e. Service disruptions or decline in quality due to faults in related systems and other factors
In the provision of various services by the SoftBank Corp. Group, including telecommunications networks and,systems for customers such as, Yahoo! JAPAN, LINE and PayPay, there is a possibility that a major problem could
occur if the SoftBank Corp. Group were to become unable to continuously provide the services, or were to
suffer a decline in the quality of the services, due to human error or serious problems with equipment or systems(including factors due to natural disasters and other unpredictable events), or cyber-attack, hacking or otherform of unauthorized access or other causes by a third party. The SoftBank Corp. Group has built redundancy
into its networks, along with clearly defining restoration procedures in preparation for systems faults and otherincidents. In the event of a system fault or other incident, the SoftBank Corp. Group conducts restoration
activities with appropriate capabilities in place, such as setting up an Incident Response Headquarters according
to the scale of the incident. Even with these measures in place, the SoftBank Corp. Group may be unable to
avoid disruptions of services or declines in quality. If such disruptions of services or declines in quality were to
become widespread or significant time were required to restore services, the SoftBank Corp. Group’s credibility
or corporate image could deteriorate, making it difficult to acquire and retain customers.
f. Economic security
In accordance with the Act on the Promotion of Ensuring National Security through Integrated
Implementation of Economic Measures (hereinafter, the “Economic Security Promotion Act”), the SoftBank

67

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Risk Factors

Corp. and LY Corporation were designated as specified social infrastructure providers (core infrastructure
providers) in the telecommunications business on November 16, 2023. From May 17, 2024, this new
regulatory framework became effective. If the SoftBank Corp. or LY Corporation fail to comply with anational government review mandated by the Economic Security Promotion Act, the authorities may impose
administrative measures against them, such as recommendations or orders for business improvement orsuspension. These administrative measures may potentially cause temporary business suspensions, delays,or additional capital expenditures, as well as extra measures and costs, and impairment of public trust in the
SoftBank Corp. Group. Such outcomes could have an impact on the SoftBank Corp. Group’s businesses,
financial position, and results of operations.
(4) Arm businessArm’s operations primarily consist of licensing semiconductor intellectual property (IP), including the design ofenergy-efficient microprocessors and associated technologies. Arm licenses its CPU and related technologies
to semiconductor companies to design into computer chips. These chips are built into end products such as
smartphones, digital TVs and electronics for cars, by systems companies. Arm’s revenue includes licensing feesfor Arm’s technology, and royalty received on chips with Arm’s products that the licensees have shipped. The
material risks at Arm are stated in subsections a. through j. below.
a. Change in the industry business dynamic
Demand for Arm’s technology and services is largely dependent on the semiconductor and electronics
industries, which are volatile and intensely competitive. The revenue Arm generates from licensing activities
is also largely dependent on the rate at which semiconductor and systems companies develop and adopt
new generations of Arm’s products, which is affected by the demand for these companies’ chips and otherproducts. Decreasing demand from systems companies for chips based on Arm’s products would directly andadversely affect the amount of royalty revenues Arm receives.
Arm’s success depends substantially on the acceptance of its products and services by semiconductor andsystems companies. There are competing architectures in the market and there is no certainty that the market
will continue to accept Arm’s products.
The semiconductor and electronics industries have also become increasingly complex and subject toincreasing design and manufacturing costs. Many of Arm’s customers utilize third-party vendors for electronic
design automation tools and the manufacture of their semiconductor designs. Arm works closely with thosethird parties to ensure that its technology is compatible with their design tools and manufacturing processes.
However, if Arm fails to optimize its products appropriately or if Arm’s access to such tools and processes ishampered, then Arm’s products may become less desirable.
In order to mitigate against these risks, Arm’s management team regularly reviews its strategy andlong-term product development plans to test that Arm is developing products to meet future needs. Armworks with many partners and companies in the semiconductor and electronics industries and is well
positioned to detect any change and act accordingly.
b. Competition
The market for Arm’s products is intensely competitive and characterized by rapid changes in design andmanufacture technologies, end-user requirements, industry standards, and new products. Arm anticipatescontinued challenges from current and new competitors, including established technologies, such as the x86
architecture, and free, open-source technologies, such as the RISC-V architecture.

SoftBank Group Report 2024

Arm’s competitors may devote greater resources to the development, promotion and sale of products andservices, they may offer lower pricing and different customer engagement models, and their performance,features and product quality may be more desirable than those of Arm. Arm may therefore have to invest
substantial resources to further develop its ecosystem that allows it to compete with alternative architectures.
To remain competitive, Arm must continue to innovate and develop new products and services, as well as
enhancements to existing products and services, in response to expressed or anticipated customer demand
and market opportunities. If Arm is unable to anticipate or react to these competitive challenges, itscompetitive position could weaken.
Arm mitigates against these risks by working closely with leading semiconductor companies. Arm’s
established ecosystem includes many software and chip design engineers who understand how to build Armbased chips and write software optimized for Arm processors. Arm invests in this ecosystem to help further
reduce the total cost of developing and maintaining a portfolio of Arm-based chips.
c. Customer concentration
A significant portion of Arm’s total revenue is generated from a limited number of key customers. As a resultof this customer concentration, Arm is particularly susceptible to adverse developments affecting its key
customers and their respective businesses.
In order to mitigate against this risk, Arm typically develops multiple processors each year, reducing theimpact of a customer deciding not to move forward with Arm.
d. Fragmentation of the global market
The global market for Arm’s products may be impacted by geopolitical factors. A shift towards geopolitical
rivalry could lead to the fragmentation of the global semiconductor market, as certain countries want more
end-to-end control of architecture, leading to increased architectural fragmentation and a reduced role for a
global architecture. For Arm, this could lead to increased costs to support region specific products, reduced
revenue as a result of lost investment in territories that no longer use Arm products and loss of potential
markets and future licensing opportunities.
Arm mitigates against this risk by working with trade authorities to reduce the risk of any impact of new
trade barriers and reviewing its strategy to ensure that it is developing products in line with the future needsof the industry.
e. Concentration on China
A significant portion of Arm’s revenues are derived from Chinese semiconductor companies and original
equipment manufacturers, or OEMs, and from non-Chinese semiconductor companies and OEMs thatutilize Arm’s products in chips and end products sold into China. A failure of Arm to maintain China-sourced
revenues, access new and existing markets in China or gain traction for new business areas in China, or aloss of Arm’s market share in China, could materially and adversely affect Arm’s results of operations andcompetitive position.
China is a significant source of semiconductor industry revenues. However, the near-term growth prospectsof the Chinese semiconductor industry and related industries are unclear due to the uncertain effects of tradeand national security policies, continued elevated levels of indebtedness, and related policies. A prolonged
downturn or slow recovery in the Chinese semiconductor industry or economy generally could materially andadversely affect Arm.
In addition, political actions including trade protection and national security policies of the U.S. and Chinese

68

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Risk Factors

governments currently do and could in the future limit or prevent Arm from transacting business in China orwith Chinese customers or suppliers.
Arm mitigates against these risks by ensuring that any U.S/China policy changes are kept under close
review. In addition, Arm regularly reviews Arm China’s*2 sales pipeline and any requests from Arm China
to deviate from standard licensing contracts in order to monitor and manage developments in the Chinese
market.

regarding the outcome of the litigation or how the litigation will affect Arm’s relationship with Qualcomm,which is currently a major customer of Arm. Arm’s involvement in such litigation could cause significant
reputational damage in the industry, in its relationship with Qualcomm and/or other third-party partners.
Arm mitigates against these risks by closely monitoring developments in relevant jurisdictions in relation topatents, litigation trends and incidence of claims.

*2 Arm China is a joint venture between SBG’s subsidiary and Chinese investors, through which Arm accesses the Chinese market.

h. Infringement of proprietary rights
Arm has in the past been and it may in the future be subject to claims by third parties alleging infringement,
misappropriation or other violation of third-party intellectual property rights. Under Arm’s customer
agreements, it agrees in some cases to indemnify customers if a third party files a claim asserting that its
products infringe such third party’s intellectual property rights. Such claims can result in costly andtime-consuming litigation, require Arm to enter into royalty or licensing arrangements, subject Arm todamages or injunctions restricting the sale of its products, result in invalidation of a patent or family of
patents, require Arm to refund license fees to its customers or to forgo future payments or require Arm toredesign or rebrand certain of its products.
Arm mitigates against these risks by designing and implementing its products without the use of
intellectual property belonging to third parties, except under strictly maintained procedures and with thebenefit of appropriate license rights.

f. Changes in business model
Arm has in the past made and may in the future make changes to its business model. Arm can provide
no assurance that customers will accept these changes. In such case, Arm may not realize the anticipatedfinancial benefits of such changes as anticipated, on the expected timeline or at all.
In addition, increases in the number or value of licenses signed in the future may not materialize in thesame way or at all under a new business model and, therefore, licensing revenue and royalty revenue may belower than expected. Further, the use of a new business model may have unexpected consequences for Arm,
including making Arm’s products less attractive to customers.
Arm actively considers the impact of next generation technology adopted by market participants, whichmight result in Arm exploring new markets and/or different solutions for existing and prospective customers.
To that end, Arm has begun allocating resources and maintains dialogues with ecosystem partners to explore
the viability of new products including, without limitation, new products in its IP portfolio, as well as solutions
beyond individual IP designs such as compute subsystems, chiplets and complete end chip solutions. To theextent that Arm pursues entry into new markets or offerings of different solutions, such enterprise may be
unsuccessful for any number of reasons. It may also result in Arm competing with certain existing customers,
which may result in such customers seeking alternative architectures or products from competitors.
In order to mitigate against these risks, Arm undertakes extensive reviews in relation to its new businessmodels, including undertaking discussions with its customers in advance of implementing key changes, inorder to ensure that any risks are identified and managed appropriately.
g. Protection of IP rights
Arm’s success and ability to compete depends significantly on protecting its intellectual property rights. Arm
primarily relies on patent, copyright, trade secret and trademark laws, trade secret protection and contractual
protections, such as confidentiality, invention assignment and license agreements with its employees,
customers, partners and others to protect its intellectual property rights. The steps Arm takes to protect its
intellectual property rights may be inadequate. Arm also may not be able to obtain desired patents. Arm’s
exposure to different legal jurisdictions may also impact its ability to exercise its contractual and other rights
around intellectual property in such jurisdictions. If Arm is unable to successfully navigate the relevant legal
and regulatory environment and/or enforce its intellectual property and/or contractual rights in relevant
jurisdictions, its business, results of operations, financial condition and prospects could be materially andadversely impacted.
Litigation has been and may be necessary to enforce Arm’s patents and other intellectual property rights.
Any such litigation could be costly and would divert the attention of management and technical personnel
from normal business operations.
Arm is involved in pending litigation, including but not limited to lawsuits with Qualcomm, Inc. andQualcomm Technologies, Inc. (together “Qualcomm”) and Nuvia, Inc. Arm can provide no assurances

SoftBank Group Report 2024

i. Brand and reputation
Arm’s brand and reputation are critical factors in its relationships with customers, employees, governments,
suppliers, and other stakeholders. Arm’s reputation can be impacted by catastrophic events, incidents
involving unethical behavior or misconduct, product quality, security or safety issues, allegations of legal
noncompliance, internal control failures, corporate governance issues, security incidents, workplace incidents,
climate issues, the use of its technology for illegal or objectionable applications, marketing practices, theconduct of suppliers or representatives, and other issues that result in adverse publicity. Additionally, concerns
about Arm’s practices related to artificial intelligence, or AI, and machine learning, or ML, or the ultimate
uses of Arm’s products in conjunction with AI and ML technologies, even if unfounded, could damage
Arm’s reputation. If Arm fails to respond quickly and effectively to these corporate crises and other similar
threats, the ensuing negative public reaction could significantly harm its brand and reputation. Arm’s brandand reputation may also be damaged by the actions of third parties that are imputed to Arm, for example,
through Arm China.
Arm mitigates against these risks by investing in the verification and validation of its products. Arm has
rigorous quality assurance and verification and validation processes to reduce the risk of faults or bugs. Arm
regularly gathers feedback from its customers and partners to determine whether the perception of Arm ischanging, and ensure that corrective action can be taken early if customers are becoming less satisfied with its
products or behavior.
j. Export restrictions and trade barriers
Arm’s headquarters are in the U.K., and it currently operates in jurisdictions around the world, including
the U.S., China, India, South Korea, Japan, Taiwan and Europe. Risks associated with these international
operations include exposure to political, economic and financial conditions and expected and unexpectedchanges in legal and regulatory environments.
Arm is subject to governmental export and import requirements that could subject Arm to liability or restrict

69

Table of Contents

Who We Are

Message from Our CEO

Message from Our CFO

Growth Assets

Foundation for Our Growth

Financial Section

Corporate Information

Risk Factors

its ability to license its products. If the U.S. Department of Commerce were to broaden U.S. export restrictions
on foreign-origin items, this could subject more of Arm’s products to U.S. export controls and restrictions.
Furthermore, if the U.S. Government implemented expanded economic sanctions on specific countries orregions where certain customers and trading partners are based, that could impact Arm’s freedom to license
its products to designated countries or entities.
Trade relations between countries where Arm does business or where Arm’s customers have end customers
have recently been volatile, and the U.S. government has imposed export sanctions on certain of Arm’s
trading partners and entities. These measures may increase costs and/or reduce distribution in key markets.
Arm mitigates against these risks by maintaining strong relationships with the U.S., U.K. and EU export
control authorities in order to effectively monitor any policy and regulatory developments.
(5) Othersa. Compliance
The Company conducts investment activities pursuant to laws and regulations in each country. If theCompany and its portfolio companies (including officers and employees) conduct activities in breach of thoselaws and regulations, regardless of whether they were aware of the breach or not, the Company and its
portfolio companies may be subject to administrative sanctions or legal measures. As a result, the credibility
and corporate image of the Company and its portfolio companies may be impaired, their contracts may becanceled by business partners, or a financial burden may be incurred. Furthermore, in countries and regions inwhich the Company and its portfolio companies conduct business activities, tax laws and regulations may be
newly introduced or amended, or their interpretation or enforcement may be revised, leading to additional tax
burdens. Views differing with those of tax authorities may also give rise to additional tax burdens.
The Company has established the SoftBank Group Code of Conduct, which applies to all officers andemployees, in order to go beyond compliance with laws and regulations and conduct corporate activities
based on a high ethical standard. The Company also works to strengthen the Group compliance structure andcarries out activities to increase the knowledge and awareness of officers and employees, such as training. In
addition, the legal departments collect information on new or revised laws and regulations, while receiving
advice from outside advisers.
b. Intellectual property
Infringement of SBG’s SoftBank brand by a third party could impair the corporate image or credibility of
SBG and subsidiaries that employ the SoftBank brand. Additionally, infringement of the intellectual propertyof subsidiaries and portfolio companies by a third party could have a negative impact on these companies’
business development and results of operations. On the other hand, if the Company and its portfolio
companies were to unintentionally infringe on intellectual property rights held by a third party, the Company
and such portfolio companies may be prevented from using the intellectual property or subjected to claims forcompensatory damages, license fees, and so forth from the third party.
In light of the importance of SBG’s brands in supporting sustained business growth, SBG strives tostrategically obtain trademarks worldwide, while evaluating the intellectual property activities and strategies
of subsidiaries and forming intellectual property partnerships with them. Through these and other efforts, SBG
aims to protect and utilize intellectual property throughout the Group as a holding company.

infringement of rights or benefits. These third parties may comprise shareholders, portfolio companies,business partners, and employees (including current and past shareholders and employees of portfolio
companies). Such lawsuits could hinder the Company’s investment activities or may impair the Company’s
corporate image, as well as create a financial burden.
d. Sustainability
The Company believes that it is crucial to take the lead and implement essential activities to address
sustainability. However, the Company’s sustainability activities may diverge significantly from the expectationsof internal and external stakeholders, including investors; for example, investors may judge that sustainability
factors are not sufficiently integrated into the Company’s governance structure and management strategy, orthat the Company’s measures are inadequate for addressing identified material issues related to sustainability,
especially issues with higher priorities such as responsible AI, climate change, or human capital. In these cases,
the Company’s evaluation by stakeholders may deteriorate and adversely affect its investment and financing
activities.
In addition, the Company may be unable to adequately assess the risks and opportunities associatedwith the sustainability aspects of portfolio companies. In these cases, portfolio companies may be unable todevelop their businesses as expected by the Company. Additionally, if sustainability-related regulations over
the Company’s investment activities and its portfolio companies’ business activities are tightened, the pace ofinvestment may slow down or the cost to address such regulations may increase.
The SoftBank Corp. Group has a Sustainability Committee, which is chaired by the Chief Sustainability
Officer (“CSusO”) appointed by the Board of Directors. The Sustainability Committee regularly discusses
sustainability-related issues and countermeasures, along with strengthening sustainability-related response
measures and disclosures. In investment activities, each investment entity analyzes the risks and opportunities
associated with the sustainability aspects of portfolio companies and carries out comprehensive investment
evaluations.
e. Information security
Amid the rising threat of cyber-attacks around the world in response to recent international conditions, theCompany and its portfolio companies may be unable to completely prevent cyber-attacks, hacking, computervirus infections, or other forms of unauthorized access or internal misconduct. The inability to prevent such
events could lead to the leakage, alteration, or loss of information, or cause other such security incidents.
Such occurrences may impair the credibility and corporate image of the Company and its portfolio companies
and may hinder their business activities. The Company and its portfolio companies may also incur financial
losses or additional cost outlays or other responses may be needed to address such occurrences.
The Chief Information Security Officer (CISO), who is appointed by the Board of Directors, is responsible forthe information security of the Company. Under the leadership of the CISO of SBG, the Company endeavors
to protect information assets by identifying vulnerabilities and risk factors that could threaten information
security and by implementing information security measures focused on organizational, physical, technical,
and human dimensions according to risk.

c. Litigation
The Company faces the possibility of lawsuits by third parties claiming compensatory damages for the alleged

SoftBank Group Report 202470