Corporate Governance Report
Mercari,Inc.
October 6, 2023
Mercari, Inc.
Representative Executive Officer and CEO: Shintaro Yamada
Inquiries: Group Governance Team
03-6804-6907
Securities Code: 4385
https://about.mercari.com/en/

The Company’s corporate governance situation is as follows.

Ⅰ. Our Basic Policy on Corporate Governance, Capital Structure, Company Attributes, andOther Basic Information
1.Our Principle
To achieve our mission of “Circulate all forms of value to unleash the potential in all people,” Mercari Group (the Group)
aims to “unleash” the potential in all people by using technology to create an ecosystem that circulates all forms of value (bothtangible and intangible). In order to collaborate with various stakeholders to achieve this mission, the Company will pursue thebest Corporate Governance and continually strive to enhance it.
As part of our efforts to pursue and enhance the best Corporate Governance, we have chosen to establish a company withthree committees (Nominating Committee, Compensation Committee, and Audit Committee). By clarifying the separation of thesupervisory and the executive functions, we will build a system that supports swift and decisive decision-making as well asactive and sound risk-taking of the executive function while strengthening the supervisory function of the Board of Directors.

【Rationale for Not Implementing Certain Principles of the Corporate Governance Code】【Supplementary Principle 2.4.1 (Ensuring Diversity at the Company, Including the Empowerment of Women in the
Workplace)）
The Group believes that diversity among its members is the source of innovation needed to achieve the Group mission of“Circulate all forms of value to unleash the potential in all people.” The Group aims to create equal opportunities so that all
employees can embody its three values (Go Bold, All for One, and Be a Pro).
Since the Group’s hiring and promotion focuses on equal opportunities rather than equal outcomes, it does not set any Groupwide standards for promotion, such as aiming for a certain number of nationalities or genders to be represented. However, theGroup does set “process KPIs” for each organization and monitors the progress of those KPIs.

The Company knows that diversity and inclusion are essential to the achievement of the Group mission. In the fiscal year
ended June 30, 2023, it became the first Japanese company to obtain Edge Assess certification, a global certification programthat looks at gender equality. The Company is also implementing correction measures to eliminate the gender pay gap between
men and women.
Details of the Group’s efforts to address diversity and inclusion, as well as information on employees’ nationalities and thegender ratio, have been disclosed in the Impact Report found below.
https://about.mercari.com/en/press/news/articles/20230921_impactreport/【Principle 2.6】
The Company has not adopted a corporate pension plan. Therefore, there is no situation in which the Company functions as
an asset owner of a corporate pension plan.
【Supplementary Principle 4.1.2】
The Company is in the internet industry, where the environment and technologies change rapidly. Therefore, the Company
believes that a detailed and rigid mid- to long-term business plan is not suitable. Instead, the Company explains its mid- tolong-term management strategies through efforts such as investor relations (IR) activities to promote understanding ofshareholders and investors.

【Disclosure Based on the Principles of the Corporate Governance Code】
The Company’s corporate website linked below contains the Corporate Governance Guidelines, Policy for Appointment andDismissal of Directors and Officers, and Policy for Determining the Details of Compensation for Individual Directors andOfficers (the “Directors/Officers Compensation Policy”).
https://about.mercari.com/en/ir/governance/basic-policy/【Principle 1.4】(Cross-Shareholdings)
The Company’s stance is described in Article 6 of the Corporate Governance Guidelines.
【Principle 1.7】(Related Party Transactions)
The Company’s stance is described in Article 7 of the Corporate Governance Guidelines.
【Principle 3.1】(Appropriately Disclosing Information and Ensuring Transparency)(1) Corporate Philosophy, Strategy, and Planning
The Company’s Corporate Philosophy is stated in 1. Our Principle above.
For more information about the Company’s Corporate Strategy and Planning, see “Mid- to Long-Term Policy” in thefiscal year ended June 30, 2023, Q4 financial results materials posted to the corporate website.
(2) Basic Policy and Basic Approach to Corporate Governance
The Company’s stance is described in Article 1 of the Corporate Governance Guidelines.
(3) Policy and Procedures for Determining Directors’ and Executive Officers’ Compensation
The Company’s stance is described in the Directors/Officers Compensation Policy.
(4) Policy and Procedures for Determining Directors’ and Executive Officers’ Appointment and Dismissal
The Company’s stance is described in the Policy for Appointment and Dismissal of Directors and Officers.
(5) Explanation of Individual Nominations of Candidates for Directors
The Company’s stance can be found under No.2 “Election of Ten (10) Directors” in the reference materials included in
the Notice of the 11th Annual General Meeting of Shareholders found at the corporate website link below.
https://about.mercari.com/en/ir/stock/shareholdermeeting/【Supplementary Principle 3.1.3】(Addressing Sustainability Issues)
The Company’s investment in sustainability and human capital, as well as efforts to address climate change based on the
TCFD recommendations, is disclosed in the Impact Report.
https://about.mercari.com/en/press/news/articles/20230921_impactreport/
The Group also recognizes that intellectual property is a significant asset to the management of the Group and strives to bothprotect its own intellectual property and respect the intellectual property of third parties. To do so, the Group adopts an “Open”
and “Defensive” strategy with regard to intellectual property.
“Open” means establishing relationships with people outside the Company through intellectual property activities, such as
collaborating with rights holders in taking measures against counterfeit items listed on Mercari. “Defensive” means utilizing
intellectual property to protect “a global marketplace where anyone can buy & sell” which is stated in the Company’s mission.
・Anti-counterfeit measures: The Company aims to eradicate counterfeit items from all marketplaces in Japan, not just
Mercari, by working with relevant government agencies (METI, Japan Patent Office, Ministry of Finance Customs and Tariff
Bureau, etc.) and rights-holder organizations (JETRO, CIPP, etc.).
・Open-source software (OSS): The Company has thus far promoted the use of open-source software in developing its
products. Additionally, the Company has established an open-source management organization and is working to give back to
the community by publishing software it has developed as open-source projects.
・Patent defense organizations: The Company has joined an organization consisting of mainly US-based tech companies andcollaborates with other participating companies to eradicate inappropriate use of patents (also known as “patent trolling”).
【Supplementary Principle 4.1.1】(Matters Decided by the Board of Directors and Scope of Delegation to Executive Officers)
The Company’s stance is described in Article 9 of the Corporate Governance Guidelines.
【Principle 4.9】(Criteria for Independent Outside Directors)
The Company’s stance is described in the Policy for Appointment and Dismissal of Directors and Officers.
【Supplementary Principle 4.11.1】 (Skills Matrix for the Board of Directors)
The Company’s stance can be found under No.2 “Election of Ten (10) Directors” in the reference materials included in the
Notice of the 11th Annual General Meeting of Shareholders found at the corporate website link below.
https://about.mercari.com/en/ir/stock/shareholdermeeting/【Supplementary Principle 4.11.2】 (Concurrent Executive Positions at Other Listed Companies Held by Directors)
The Company’s stance can be found under No.2 “Election of Ten (10) Directors” in the reference materials included in the
Notice of the 11th Annual General Meeting of Shareholders found at the corporate website link below.
https://about.mercari.com/en/ir/stock/shareholdermeeting/【Supplementary Principle 4.11.3】(Evaluation of the Effectiveness of the Board of Directors)
The Company discloses information regarding the evaluation of the effectiveness of its Board of Directors at the following
link:
https://about.mercari.com/en/ir/governance/board-evaluation/【Supplementary Principle 4.14.2】(Training Policy for Directors)
The Company’s stance is described in Article 20 of the Corporate Governance Guidelines.
【Principle 5.1】(Policy for Constructive Dialogue with Shareholders)
The Company’s stance is described in Article 2 of the Corporate Governance Guidelines.

2.Capital Structure
Foreign Stock Ownership Ratio

More than 30%【Major Shareholders】
Name or Title

Number of Shares Owned

Ratio (%)

Shintaro Yamada

39,157,546

24.10

The Master Trust Bank of Japan, Ltd. (Trust Account)

15,944,500

9.81

MSIP CLIENT SECURITIES

9,318,784

5.74

Hiroshi Tomishima

8,170,900

5.03

Custody Bank of Japan, Ltd. (Trust Account)

7,363,700

4.53

suadd K.K.

6,567,000

4.04

GOLDMAN SACHS INTERNATIONAL

3,526,854

2.17

DAIWA CM SINGAPORE LTD-NOMINEE ROBERT LUKE COLLICK

3,435,000

2.11

GOLDMAN, SACHS & CO. REG

2,932,224

1.80

EUROCLEAR BANK S.A./N.V.

2,563,942

1.58

Controlling Shareholder(excluding parent company)―――

Parent Company

None

Supplementary Explanation○Major Shareholders:(1) The ratio of shares owned compared to the total number of shares issued (excluding treasury stock) is rounded to the second
decimal place.
(2) In a Statement of Large-Volume Holdings submitted for inspection on May 11, 2022, Capital Research and Management
Company stated that they were in possession of the following shares as of April 29, 2022. However, the Company was
unable to confirm the number of shares actually held on the record date for exercising voting rights. Thus, the Company has
omitted Capital Research and Management Company from the list of major shareholders above. The content of Article 2(Matters Regarding the Submitter) of the submitted Statement of Large-Volume Holdings is as follows:【Name / Number of Shares Considered Owned / Ratio of Shares Owned】
Capital Research and Management Company / 6,141,300 / 3.83%(3) In a Statement of Large-Volume Holdings submitted for inspection on September 6, 2022, Luxor Capital Group, LP statedthat they were in possession of the following shares as of August 30, 2022. However, the Company was unable to confirm
the number of shares actually held on the record date for exercising voting rights. Thus, the Company has omitted Luxor
Capital Group, LP from the list of major shareholders above. The content of Article 2 (Matters Regarding the Submitter) of
the submitted Statement of Large-Volume Holdings is as follows:【Name / Number of Shares Considered Owned / Ratio of Shares Owned】
Luxor Capital Group, LP / 5,101,540 / 3.17%

3.Company Attributes
Listed Stock Market and Market
SectionFiscal Year-End
SectorTokyo Stock Exchange Prime

June

Information and Communication Technology

Consolidated Number of Employees
as of Preceding Year-end

1000 or more employees

Consolidated Revenue as ofPreceding Year-end

100 billion–1 trillion JPY

Number of Consolidated Subsidiary
Companies as of Preceding Year-end

Less than 10 companies

4.Guidelines for Protection of Minority Shareholders in Transactions with Controlling Shareholders―――

5.Other Special Circumstances Significantly Affecting Corporate Governance―――

Ⅱ. Business Management Organization and Other Corporate Governance Systems Regarding
Decision-Making, Execution of Business, and Supervision in Management
1.Organizational Composition and Operation
Organizational Form

Company with Three Committees (Nominating Committee, Compensation
Committee, and Audit Committee)【Directors】
Maximum Number of Directors
Stipulated in Articles ofIncorporation

No maximum number

Term of Office of Directors
Stipulated in Articles ofIncorporation

1 yearChair of the Board of Directors

CEO

Number of Directors

10【Matters Regarding Outside Directors】
Number of Outside Directors

6

Number of Independent Directors
Designated From Among Outside
Directors

6Outside Directors’ Relationship with the Company (1)Name

Relationshipwith theCompany (*1)

AttributeaMakiko Shinoda

From anothercompany

Masayuki Watanabe

From anothercompany

Takuya Kitagawa

From anothercompany

Daiken Tsunoda

AttorneyKazuhiko Toyama

From anothercompany

Fumiyuki Fukushima

CPA

b

c

d

e

f

g

h

i

j

k

○

*1 Categories for “Relationship with the Company”
A hollow circle (◯) signifies the individual currently or recently having that relationship with the Company, whereas ahollow triangle (△) signifies the individual having that relationship with the Company in the past.
A filled circle (●) signifies an immediate family member currently having that relationship with the Company, whereasa filled triangle (▲) signifies an immediate family member having that relationship with the Company in the past.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.

Person in charge of business execution of the Company or its subsidiaryNon-executive director or a person in charge of business execution of a parent company of the Company
Person in charge of business execution of a fellow subsidiary of the Company
Party whose major business partner is the Company or a person in charge of business execution thereof
Major business partner of the Company or a person in charge of business execution thereof
Consultant, accounting professional, or legal professional who receives a large amount of monetaryconsideration or other property from the Company besides compensation as a director
Major shareholder of the Company (or a person in charge of business execution of the said major shareholder
if the shareholder is a corporation)
Person in charge of business execution of a business partner of the Company (which does not correspond to anyof d., e., or f.) (the Director themself only)
Person in charge of business execution of a corporation to which outside officers are mutually appointed (theDirector themself only)
Person in charge of business execution of a corporation that receives donations from the Company (the Director
themself only)
Other

Outside Directors’ Relationship with the Company (2)Name

MakikoShinodaCommittee
Participation
Nom.

○

Comp.

○

Audit

Independent
Director○

Supplementary Explanation of
the Relationship―――

Reasons for Appointment

As Outside Director, Makiko
Shinoda is expected to supervise
and provide advice to the
management of the Company as it
continues to grow by utilizing her
specialized knowledge and extensive
experience in diversity & inclusion,sustainability, finance, etc. In
addition to contributing tostrengthening the supervisory
function of the Company’s
management, she is expected tocontribute to strengthening theindependence and objectivity of thenomination process for Directors
and the decision process forcompensation of Directors andExecutive Officers as a member of
the Nominating Committee and theChair of the Compensation
Committee.
Furthermore, the Company has
appointed Ms. Shinoda as anindependent director, having
determined that her appointment
meets the requirements forindependent directors set forth by
Tokyo Stock Exchange, Inc., andthere is no likelihood of any conflictsof interest arising with generalshareholders.

Masayuki
Watanabe

TakuyaKitagawa○○○

As Outside Director, Masayuki
Watanabe is expected to supervise
and provide advice to the
management of the Company as it
continues to grow by utilizing his
expertise in global businessexpansion, given that he has
experience in founding andmanaging tech companies in andoutside of Japan. In addition to
Masayuki Watanabe is a person incontributing to strengthening thecharge of business execution ofsupervisory function of the
FOODCODE, LTD., which theCompany’s management, he isCompany has ordinary transactions expected to contribute towith as a general consumer.
strengthening the independence andHowever, this does not have any
objectivity of the nomination process
impact on the Company’s decisionfor Directors as a member of the
making.
Nominating Committee.
Furthermore, the Company has
appointed Mr. Watanabe as anindependent director, having
determined that his appointment
meets the requirements forindependent directors set forth by
Tokyo Stock Exchange, Inc., andthere is no likelihood of any conflictsof interest arising with generalshareholders.

○

As Outside Director, Takuya
Kitagawa is expected to supervise
and provide advice to the
management of the Company as it
continues to grow by utilizing his
specialized knowledge in areas oftechnology, including artificial
intelligence (AI) and data science,and extensive experience acquired
through his endeavors in creating
new business opportunities andaddressing social issues through theutilization of AI and data. In
addition to contributing tostrengthening the supervisory
function of the Company’s
management, he is expected tocontribute to strengthening theindependence and objectivity of thedecision process for compensation of
Directors and Executive Officers asa member of the Compensation
Committee.
Furthermore, the Company has
appointed Mr. Kitagawa as anindependent director, having
determined that his appointment―――

meets the requirements forindependent directors set forth by
Tokyo Stock Exchange, Inc., andthere is no likelihood of any conflictsof interest arising with generalshareholders.

DaikenTsunodaKazuhiko
Toyama

○

○

○

○

○

―――

As a practicing partner at a law
office possessing a high level ofexpertise in the area of corporate
law, Daiken Tsunoda has experience
as an outside audit and supervisoryboard member and outside director
at other companies, and isparticularly knowledgeable in theareas of the Companies Act andcorporate governance. As Outside
Director, Mr. Tsunoda is expected tosupervise and provide advice to the
management of the Company as it
continues to grow by utilizing thisexperience and knowledge. In
addition to contributing tostrengthening the supervisory
function of the Company’s
management, he is expected tocontribute to strengthening theaudit function as the Chair of the
Audit Committee.
Furthermore, the Company has
appointed Mr. Tsunoda as anindependent director, having
determined that his appointment
meets the requirements forindependent directors set forth by
Tokyo Stock Exchange, Inc., andthere is no likelihood of any conflictsof interest arising with generalshareholders.

―――

As Outside Director, Kazuhiko
Toyama is expected to supervise andprovide advice to the managementof the Company as it continues togrow by utilizing his abundant
knowledge and profound insight asa specialist in the management ofcorporate restructuring consulting
firms, as well as in corporate
governance. In addition tocontributing to strengthening thesupervisory function of theCompany’s management, he isexpected to contribute tostrengthening the independence andobjectivity of the nomination process
for Directors and the decision
process for compensation of
Directors and Executive Officers as
the Chair of the Nominating
Committee and a member of theCompensation Committee.

Furthermore, the Company has
appointed Mr. Toyama as anindependent director, having
determined that his appointment
meets the requirements forindependent directors set forth by
Tokyo Stock Exchange, Inc., andthere is no likelihood of any conflictsof interest arising with generalshareholders.

Fumiyuki
Fukushima○○

Fumiyuki Fukushima has provided
appropriate and valuable advice andsuggestions on the building of aninternal control system and risk
management. As Outside Director,
Mr. Fukushima is expected tosupervise and provide advice to the
management of the Company as it
continues to grow by utilizing his
extensive experience in practicing
auditing as a certified public
accountant and abundant
knowledge of accounting andinternal controls. In addition tocontributing to strengthening thesupervisory function of theCompany’s management, he isexpected to contribute tostrengthening the audit function asa member of the Audit Committee.
Furthermore, the Company has
appointed Mr. Fukushima as anindependent director, having
determined that his appointment
meets the requirements forindependent directors set forth by
Tokyo Stock Exchange, Inc., andthere is no likelihood of any conflictsof interest arising with generalshareholders.

―――【Committee Information】
Committee Composition and Attributes of Chair
All Committee
Members

Full-Time
Members

InsideDirectors

OutsideDirectors

Chair

Nominating
Committee

4

1

1

3

Outside Director

Compensation Committee

4

1

1

3

Outside Director

Audit
Committee

3

2

1

2

Outside Director

Additional Duties as Director

Concurrent【Executive Officers】
Number of Executive Officers

6

Committee Composition and Attributes of Chair
Name

Nominating
Committee
MemberRepresentation
Rights
Shintaro Yamada

Yes

Yes

Naoki Aoyagi

NoNo

Sayaka Eda(Sayaka Ando)
Shuji Kawano

No

Yes

No

No

John Lagerling

No

No

Hirohisa Tamonoki

No

No

Compensation
Committee
Member

EmployeePosition

○
×
×

○
×
×

No

×
×
×

×
×
×

No

No
No

No
No

【Audit Structure】
Presence of Director(s) and/or
Employee(s) Assisting with the Dutiesof the Audit Committee

Present

Matters Regarding the Independence of Assisting Director(s) and/or Employee(s) from Executive Officers
The Company has established a dedicated organization to assist with the duties of the Audit Committee and assigns thenecessary employees to this organization. The Company obtains the consent of the Audit Committee when determining humanresources-related matters involving assisting employees.

Cooperation Among the Audit Committee, Accounting Auditors, and Internal Audit Department
In the fiscal year ended June 30, 2023, Outside Directors and Auditors exchanged information regularly. Auditors and the Internal
Audit Department also regularly exchanged information regarding topics such as the implementation of internal audits and strived
to enhance the Company’s audit function. Additionally, the Internal Audit Department, Auditors, and the Accounting Auditor
shared information regularly and as necessary and exchanged opinions regarding audit-related problems, challenges, etc.
At the Annual General Meeting of Shareholders held on September 28, 2023, the Board of Directors resolved to modify theCompany’s articles of incorporation to transition the Company to a Company with Three Committees, and the Company
transitioned to a Company with Three Committees on the same day. Following this transition, the Company will continue to
strive for the same close cooperation among Outside Directors, the Audit Committee, the Internal Audit Department, and the
Accounting Auditor.

【Independent Directors】
Number of Independent Directors

6

Other Matters Relating to Independent Directors
The Company has appointed all Outside Directors that meet the qualifications as independent directors.
The Company’s criteria for independence of Outside Directors is described in the Policy for Appointment and Dismissal of
Directors and Officers linked at the end of the following webpage:https://about.mercari.com/en/ir/governance/basic-policy/【Incentives】
Incentive Policies Implemented for
Directors and Executive Officers

Introduction of stock option plan and others

Supplementary Explanation
Decisions on compensation for Directors and Executive Officers are made as described in the Directors/Officers Compensation
Policy.

Recipients of Stock Options

Outside Directors, Executive Officers

Supplementary Explanation
The Company has introduced a one-yen stock option plan and a phantom stock plan for Executive Officers as mid- to longterm incentives. For Directors, the Company has introduced a one-yen stock option plan with the goal of strengthening thesupervisory function and sharing profits with shareholders in the mid- to long-term. Details of the compensation structure for
Directors and Executive Officers are described in the Directors/Officers Compensation Policy.
Additionally, the Company granted stock options with share price conditions as incentive compensation in October 2020 tosome Directors before the transition to a Company with Three Committees. The details of these stock options can be found insection A, chapter IV, part 4-(4) (Compensation of Officers, etc.) of the 11th Annual Securities Report.

【Compensation for Directors and Executive Officers】
Disclosure of Individual Directors’Compensation

Only the individual compensation of certain Directors is disclosed.

Disclosure of Individual Executive
Officers’ Compensation

No individual compensation is disclosed.

Supplementary Explanation
The details of compensation of officers can be found in section A, chapter IV, part 4-(4) (Compensation of Officers, etc.) of the
11th Annual Securities Report.

Policy on Determining Compensation
Amounts and Calculation Methods

Established

Disclosure of Policy on Determining Compensation Amounts and Calculation Methods
The Company’s policy on determining compensation for Directors and Executive Officers is described in the Directors/Officers
Compensation Policy.

【Support System for Outside Directors】
The Company’s support system for Outside Directors is described in Article 18 and Article 20 of the Corporate Governance
Guidelines.
The Company’s policy on compensation for Outside Directors is described in the Directors/Officers Compensation Policy.

2.Matters Regarding Management of Business Execution, Audits/Supervision, Nominations, and Compensation
Decisions (Outline of the Current Corporate Governance System)
The Company transitioned from a Company with an Audit and Supervisory Board to a Company with Three Committees as of theGeneral Meeting of Shareholders on September 28, 2023.
(a) Board of Directors
The Board of Directors of the Company discusses and decides upon fundamental corporate management matters, the core of theCompany’s strategies, and other important management matters, as well as supervises the Executive Officers’ execution ofduties, as the Company works to achieve its Group mission.
The Board of Directors is composed of ten (10) Directors, including six (6) Independent Outside Directors.
In promoting management that aims for the sustainable growth and enhancement of the corporate value of the Group, theCompany establishes a structure that ensures overall diversity of the Board of Directors and the right balance of knowledge,
experience, and ability necessary to carry out highly effective supervision of the Group.
The status of the Board of Directors’ activities in the fiscal year ended June 30, 2023, can be found in section A, chapter IV, part
4-(1)-3) Status of Activities of the Board of Directors, etc. in the Fiscal Year Under Review of the 11th Annual Securities Report.
(b) Nominating Committee
The Nominating Committee deliberates evaluation of Directors, candidates for Directors, candidates for Executive Officer, Chief
Executive Officer succession planning, and other topics, and determines policies for appointment and dismissal of officers,
proposals for appointment and dismissal of Directors, and other items.
The Nominating Committee is composed of four (4) Directors, including three (3) Independent Outside Directors. The Chair isselected from the Independent Outside Directors in order to ensure objectivity and transparency in deliberation regarding
nominations.
(c) Compensation Committee
The Compensation Committee fairly and transparently deliberates and determines policies for determining compensation, etc.
of Directors and Executive Officers, as well as individual compensation, etc. for Directors and Executive Officers.

The Compensation Committee is composed of four (4) Directors, including three (3) Independent Outside Directors. The Chair isselected from the Independent Outside Directors in order to ensure objectivity and transparency in deliberation regarding
Directors/Officers compensation.
(d) Audit Committee
The Audit Committee audits the execution of duties by Directors and Executive Officers, creates audit reports, evaluates andselects Accounting Auditors, and enhances the quality of audits by collaborating with the Internal Audit Department.
The Audit Committee is composed of three (3) Directors, including two (2) Independent Outside Directors. The Chair isselected from the Independent Outside Directors in order to ensure objectivity and transparency in audits.
(e) Executive Officers
Executive Officers receive significant delegation of authority regarding business execution from the Board of Directors, takecharge of executing business in their area of responsibilities, and carry out business execution based on swift and bold decisionmaking and sound risk-taking. At the time this report was submitted, the Company had six (6) Executive Officers.
Accounting Auditors
The Company has entered into an audit contract with Ernst & Young ShinNihon LLC, and in addition to undergoing periodic
audits, the Company receives guidance from time to time on accounting issues and strives to implement appropriate accounting
processes.

(f)(g) Summary of details of limited liability agreement
Under provisions of Article 427, paragraph (1) of the Companies Act, the Company has entered into agreements with Mayumi
Tochinoki and its Outside Directors limiting their liability for damages as provided for in Article 423, paragraph (1) of theCompanies Act. Under these agreements, the maximum amount of liability for damages is to be the amount stipulated in Article
425, paragraph (1) of the Companies Act.
(h) Overview of directors and officers liability insurance policy contents
The Company has entered into a directors and officers liability insurance policy with an insurance company, as provided forin Article 430-3, paragraph (1) of the Companies Act, which provides coverage for the Directors, Executive Officers, Auditors,
and Vice Presidents of the Company and other companies in the Group (however, this does not include Mercari, Inc. (US)). In
the event that those insured incur losses arising from responsibilities related to the execution of their duties, or from claims
being pursued in relation to said responsibilities, they shall be reimbursed under the terms of the policy. To ensure theappropriateness of the execution of duties of officers, the directors and officers liability insurance policy stipulates that
insurance payments shall not be made under certain circumstances, such as in cases of malicious intent or gross negligence.
Moreover, the insurance premiums for this policy are paid by the Company in full, and there is, in effect, no burden on theinsured themselves.

3. Rationale for Our Current Corporate Governance System
The rationale for the Company’s current corporate governance system is described in Article 1 of the Corporate Governance
Guidelines.

III. Policies for Shareholders and Other Stakeholders
1. Initiatives to Facilitate the Annual General Meeting of Shareholders and Exercising of Voting Rights
Supplementary Explanation

Early Notification of Annual General
Meeting of Shareholders

Exercising Voting Rights
ElectronicallyElectronic Voting Platforms andOther Initiatives to Facilitate theExercising of Voting Rights by
Institutional Investors

The Company strives to disclose notices for general meetings of shareholders
early so that shareholders are able to have sufficient time to consider proposals
and exercise their voting rights appropriately. For the 11th Annual General
Meeting of Shareholders held on September 28, 2023, the Japanese language
version of the notice was disclosed on the Company’s website on Wednesday,
September 6, and the English language version of the notice was disclosed on
the Company’s website on Friday, September 8.

The Company has implemented the exercising of voting rights over theinternet since the 7th Annual General Meeting of Shareholders in 2019.

The Company has implemented an Electronic Voting Platform for shareholders
to exercise their voting rights since the 7th Annual General Meeting of
Shareholders in 2019.

The Company posts English language versions of the full text of the Notice of
the Annual General Meeting of Shareholders on the Company’s website before
the notification is mailed to shareholders.

Provision of Notifications(Summarized) in English

Notification:
The Company prints the notification for general meetings of shareholders incolor, with figures, photographs, and other visuals, in order to make allnecessary information as easy to understand as possible for those who havemade the decision to invest. Furthermore, the Company posts notifications ofgeneral meetings of shareholders on the Company’s website and strives tofacilitate these meetings and the exercising of voting rights.
In 2023, the Company held an exclusively online general meeting ofshareholders to remove constraints such as time and cost of travel that makeit difficult for some shareholders to attend and to enable all shareholders toparticipate.

Other

2. Current IR Activities
Supplementary Explanation

CreationandPublication
Disclosure Policies

ofRegular Information Sessions for
Individual Investors

Regular Information Sessions forAnalysts and Institutional Investors

Regular Information Sessions forOverseas Investors

Regular Information Sessions forOverseas Investors
Publishing Documents on Our IR
WebsiteEstablishment of Department in
Charge of IR

Explanationfrom theRepresentative
Themself

The Company has created an IR Policy, consisting of Basic
Disclosure Policy, Information Disclosure Methods, Quiet
Period, Our Future Outlook, and Dealing With The Spreadingof Rumors to Influence Stock Prices. This IR Policy is postedon the Company’s website.
https://about.mercari.com/en/ir/strategy/policy/

The Company provides business descriptions during general
meetings of shareholders, providing an opportunity for
dialogue between the Company and individual investors. The
Company has also established an inquiry form on the IR
section of its website, through which it answers questions
from individual investors.

The Company holds regular information sessions for analysts
and institutional investors alongside the announcement of thefinancial results. At these information sessions, the Company
explains its management situation, strategies, initiatives, andforecast. Following information sessions, the Company
promptly publishes video recordings of the session andsummaries of the question and answer session.

To assure fair disclosure, the Company hosts live broadcasts
of information sessions with simultaneous interpreting.
Following information sessions, the Company promptly
publishes video recordings of the session and summaries of
the question and answer session. Furthermore, the Company
organizes IR activities overseas utilizing online meetings andonline conferences held for overseas investors organized by
securities companies.

The Company strives for fair disclosure on the Company’s
website in both Japanese and English.
https://about.mercari.com/en/ir/

The Company employs people to be exclusively responsible for
IR.

Yes

Yes

Yes

Other

The Company discloses (in both Japanese and English)
records of interviews between the Representative Executive
Officer and CEO and major shareholders, holds information
sessions regarding certain areas led by heads of businesses asnecessary, and publishes presentation materials and Q&A
summaries from those sessions.
The Company also actively posts information regarding its
culture, services, and initiatives on company media such as“mercan”, “merpoli”, and the “mercari R4D” YouTube channel.

3. Initiatives Regarding Our Respect for Stakeholders
Supplementary Explanation

Regulations regarding our respect for
stakeholders in internal regulations,etc.

Implementation of environmental
preservation activities, CSR
activities, etc.

Establishment of policies, etc. forproviding information to
stakeholders

Other

The Company’s policy is described in Article 2 and Article 8 of the Corporate
Governance Guidelines, as well as the Compliance Policy linked below.
https://static.jp.mercari.com/compliance

The Company discloses reports to stakeholders regarding the Company’s social
responsibilities, such as the implementation status of CSR activities, including
environmental preservation activities, in its Impact Report, found at the link
below.
https://about.mercari.com/en/press/news/articles/20230921_impactreport/
The Company has also published pages about sustainability on Mercari’s
corporate website.
https://about.mercari.com/en/sustainability/

The Company strives to appropriately disclose information in accordance withthe following IR Policy, which includes a Basic Disclosure Policy.
https://about.mercari.com/en/ir/strategy/policy/
In addition, the Company discloses important information in both Japaneseand English simultaneously.

The Company has set “Unleashing the Potential in Diverse Talent Worldwide”
as one of its material topics. The Company believes that diversity among its
members is the source of innovation needed to achieve its Group mission andaims to create equal opportunities so that all employees can embody its threevalues (Go Bold, All for One, and Be a Pro).
In the fiscal year ended June 30, 2023, the Company became the first Japanesecompany to obtain Edge Assess certification, a global certification program thatlooks at gender equality. The Company has also implemented correction
measures designed to eliminate the gender pay gap between men and women.
Details of measures the Company has taken, including efforts to address
diversity and inclusion, have been disclosed in the Impact Report found below.
https://about.mercari.com/en/press/news/articles/20230921_impactreport/

Ⅳ. Regarding Our Internal Control System
１．Our Internal Control System - Basic Stance and Status
The Company maintains an internal control system and risk management structure based on the Basic Policy for Establishing
Internal Control Systems defined by the Board of Directors.
(a) A System to Ensure that Executive Officers and Employees Comply with Laws, Ordinances, and Articles of Incorporation in
Performing Their Duties
i. Under the Basic Compliance Policy, the Company ensures that Executive Officers and employees have a sufficientawareness of compliance and abide by laws, ordinances, articles of incorporation, and internal regulations in
performing their duties.
ii. The Company stipulates official authority, clearly defines responsibilities and authority, and establishes a system
for the performance of duties in each department. The Company also prepares, disseminates, and operates thenecessary approval systems, internal regulations, and manuals.
iii. The Company establishes, disseminates, and appropriately operates a system for making reports to andconsulting with internal and external points of contact as an internal whistleblowing system.

iv. The Company strictly addresses Executive Officers and employees who violate laws or regulations in accordancewith the company’s Rules of Employment and Executive Officer Regulations.
v. The Company designates a personal information protection manager who plays a central role in the development
and operation of personal information protection systems. Furthermore, the Company institutes an office under
the direction of the manager and endeavors to appropriately protect personal information and continuously
improve personal information protection.
vi. The Company stipulates a basic policy to ensure appropriate financial reporting and establishes and puts into
practice internal controls regarding financial reporting to ensure the appropriateness and reliability of the content
of financial reporting.
vii. The Company’s basic policy is to have absolutely no ties with anti-social forces and to refuse all unjust demands.
This policy is documented in writing, made clear to all people within the Company, and followed appropriately.
viii. The Internal Audit Department audits the status of business execution and reports the results to theRepresentative Executive Officer, the Audit Committee, and the Board of Directors.
ix. Audit Committee members exercise their authority as stipulated by laws and regulations to audit Executive
Officers’ performance.
(b) Systems for Ensuring the Efficient Performance of Duties by Executive Officers
i. The Board of Directors operates in accordance with the articles of incorporation and Board of Directors
Regulations, deliberates and determines important matters stipulated in laws and ordinances, the articles ofincorporation, and the Board of Directors Regulations, etc., and supervises the execution of duties by Executive
Officers.
ii. Executive Officers hold regular Executive Officers Meetings attended by all Executive Officers and efficiently,
flexibly, and swiftly perform business duties by working together closely, exchanging opinions, and sharing
information.
ⅲ. To ensure the efficient performance of duties by Executive Officers, the Company has established Organization
Regulations, Division of Duties Regulations, and Approval Regulations.
(c) Systems Related to the Storage and Management of Information Related to the Performance of Executive Officers’ Duties
i. Based on document management regulations, etc., the Company appropriately retains and manages minutes ofimportant meetings and other important documents containing information relating to the performance of duties
by Executive Officers (including electromagnetic records).
ii. Under the Company’s Basic Policy on Information Security, the Company protects and manages information
assets based on its Regulations for Information Security Management, etc.
(d) Regulations and Other Systems Concerning Management of the Risk of Losses
i. Under the Basic Risk Management Policy, the Company recognizes the importance of identifying various risks
associated with the Company’s business, and as such, practices comprehensive risk management and endeavors to
identify, assess, and manage various risks, based on risk management regulations.
ii. The Company establishes a risk management department and establishes and strengthens operations of a risk
management system to prepare against disasters, accidents, system failures, and other unforeseen circumstances.
(e) Structure for Ensuring the Propriety of the Business Activities of the Corporate Group Consisting of the Company and its
Subsidiaries
The Group shares the same mission and values and endeavors to make the most of business resources throughout theGroup to maximize the value of the Group’s business as a whole.
i. In order to ensure the propriety of management throughout the Group, the Company stipulates Regulations on theManagement of Related Companies that respect the autonomy of subsidiaries while ensuring they abide by thesame regulations on important matters. Subsidiaries will share their operations with the Company in advance toensure appropriate business operations as part of the Group.
ii. The regulations and other systems concerning management of the risk of losses in the previous item apply to allcompanies within the Group, allowing the Company to manage the risk of the Group as a whole in an allencompassing, comprehensive manner.
ⅲ. The authority and liabilities of subsidiaries in performing their duties are clearly stipulated in the Regulations
on the Division of Duties, Regulations on Administrative Authority, and other internal regulations in order toallow for the efficient performance of duties.
ⅳ. The Internal Audit Department carries out audits of the Company Group’s business activities to ensure they areappropriate and in compliance with laws, regulations, and the articles of incorporation. The results are reported to
the Representative Executive Officer, the Audit Committee, and the Board of Directors, and shared with the
Accounting Auditor.
(f) Matters Related to Employees Requested to Assist with the Duties of the Audit Committee, Matters Related to the
Independence from Executive Officers of Employees Assisting with the Duties of the Audit Committee, and Matters Related toEnsuring the Effectiveness of Instructions Given to Employees Assisting with the Duties of the Audit Committee
i. The Audit Committee can station employees to assist with the Audit Committee’s duties (hereafter referred to as
employees assisting the Audit Committee).
ii. Employees assisting the Audit Committee shall comply with the Audit Committee’s orders, shall not concurrently
perform duties for other divisions or departments, and shall carry out administrative work related to the operationof the Audit Committee and collect necessary information for the Audit Committee’s audit.

ⅲ. Reassignment, performance evaluation, and disciplinary action related to employees assisting the Audit
Committee require the prior consent of the Audit Committee.
iv. The Company will grant employees assisting the Audit Committee authority to investigate and gather
information necessary in performing their duties.
(g) Structures for Reporting to the Audit Committee
i. Structures for Directors (excluding Directors who are members of the Audit Committee), Executive Officers, andemployees to report to the Audit Committee(i) Directors (excluding Directors who are members of the Audit Committee), Executive Officers, andemployees will, in addition to matters required by law, also report the following matters to the Audit
Committee or Audit Committee members without delay: matters that could have a significant impact on
the Company, matters decided at important meetings, the status of the internal whistleblowing system
and internal auditing system, etc.
(ii) Directors (excluding Directors who are members of the Audit Committee), Executive Officers, andemployees will promptly report information related to the performance of their duties when demanded by
the Audit Committee or Audit Committee members.
ii. System for those in managerial positions of subsidiaries and those who have received reports from them to reportto the Audit Committee(i) Those in managerial positions of subsidiaries and those who have received reports from them willpromptly report items related to the performance of their duties when demanded by the Audit Committeeor Audit Committee members.
(ⅱ) Those in managerial positions of subsidiaries and those who have received reports from them willreport violations of laws and regulations as well as matters that could have a significant impact on the
Company or the Company’s subsidiaries to the Audit Committee or Audit Committee members without
delay.
(h) Structures to Ensure That Those Who Have Made Reports as Defined in the Previous Item Are Not Treated Unfairly Due to
Their Report
i. The Company prohibits any kind of unfair treatment toward those who have made reports to the Audit Committeeor Audit Committee members as defined in the previous item due to the fact that they filed a report. The Company
enforces this in all Group companies.
ii. Employee evaluations and disciplinary action taken against those who have made reports as defined in theprevious item must not take into account the fact that they filed a report. The individual who filed the report may
request the Audit Committee to investigate into the reasons behind their employee evaluation and/or disciplinary
action.
(i) Matters Related to the Policy Surrounding Liability for Expenses, Obligations, etc. Incurred by Audit Committee Members in
Performing Their Duties
The Company bears the cost of expenses necessary for Audit Committee members to perform their duties. This
includes expenses incurred through employing external professionals such as external attorneys, certified public
accountants, and consultants as necessary by the Audit Committee.
(j) Other Systems to Ensure that Audits by the Company’s Audit Committee Are Performed Effectively
i. The Audit Committee and Audit Committee members will exchange opinions with the Representative Executive
Officer regularly. Furthermore, they will hold interviews with Directors (excluding Directors who are members of
the Audit Committee), Executive Officers, and employees in key positions as necessary.
ii. The Audit Committee and Audit Committee members will exchange opinions with the Accounting Auditor asnecessary.
ⅲ. The Audit Committee and Audit Committee members can independently seek the advice of legal professionals,
certified public accountants, and other professionals as necessary.
iv. The Audit Committee gives the Internal Audit Department instructions regarding audits and continuously
receives reports from the Internal Audit Department regarding the status of execution of duties, discoveries, etc.
v. Reassignment, performance evaluation, and disciplinary action related to the person in charge of the Internal
Audit Department require the consent of the Audit Committee.

２．Exclusion of Anti-Social Forces - Basic Policy and Implementation Status
a. Basic Policy on the Exclusion of Anti-Social Forces
The Company declares a resolute stance against anti-social forces, and the Company’s policy of ensuring no ties with organizedcriminal organizations and all other forms of anti-social forces is stipulated in the Company’s Basic Policy for Establishing
Internal Control Systems, Code of Ethics, Compliance Policy, and other documents.
b. Status of the Company’s Basic Policy on the Exclusion of Anti-Social Forces(a) Status of Internal Regulations
Based on the above declaration, the Company has established Regulations on the Exclusion of Anti-Social Forces andSubsidiary Rules on Dealing with Anti-Social Forces, and prohibits all forms of contact with anti-social forces. The Company
does not have and has never had any relation with anti-social forces.
(b) Supervisory Department for Dealing with Anti-Social Forces

The Company positions the department in charge of compliance as its supervisory department for eliminating anti-social forces,
and provides a system for immediate reporting/consultation regarding the unfair demands of anti-social forces, organized crime,and criminal activity.
(c) Methods Used in Excluding Anti-Social Forces
The Company uses Dow Jones, internet searches, and other databases to investigate whether or not there is any information tosuggest stockholders, directors, or new business partners have any connections to anti-social forces before relationships areformed. Furthermore, if the Company discovers or suspects that existing business partners have connections to anti-social
forces, the Company has structures in place to ensure the prompt cut-off of all business ties with them.

Ⅴ. Other
1.Anti-Takeover Measures
Anti-Takeover Measures

No measures in place

Supplementary Explanation―――

2. Other Items Related to Corporate Governance Systems, etc.
Structure

Timely Disclosure System