Processes That Are the Source of Value Creation
CSR
CSR Policy
We believe that helping to resolve social issues through our businesses is a means of fulfilling our responsibilities tosociety and stakeholders that best reflects the Septeni Group. Through this approach to CSR, we aim to realize asustainable society as well as the Septeni Group’s Mission of “Inspiring the world with entrepreneurship.” We willcontinue to carry out CSR activities centered on this approach.

Priority Challenges and Initiatives
Priority Challenge (Related SDGs)

Social Value Provided• Contribution to creating asociety in which everyone canparticipate• Contribution to improving
labor productivity

Diversity andInclusion

Support for Culture,
Sports and theEntertainment Industry• Contribution to creating afulfilling society• Contribution to industrial
development through DX

Support the Sound
Development ofthe Digital Advertising
Industry• Contribution to creating a safe
and secure digital society

Industry Development
through Utilization of AI• Generation of innovation• Contribution to improving
labor productivity

Development ofHigh-Quality
Human Resources• Contribution to improving
labor productivity• Contribution to revitalizationof regions outside of majorurban centers

Integrated Report 2020

INDEX

Main Initiatives in the Fiscal Year Ended September 2020
Promotion of women’s participation
Promotion of Group-wide support for women’s careers, including an online seminar on “Building Careers for
Women’s Participation” given by an external lecturer
LGBT initiatives
Ongoing awareness-raising activities through LGBT & Allies Network; received the Gold Award (highest rating) on
the PRIDE INDEX for the third consecutive year
Measures against discrimination and harassment
Implementation of anti-harassment training for managers and e-learning for all employees
Support for culture
Provision of the “RouteM” manga artist development support program, which has more than 100 exclusive participants
Hosting of classes at an art university to support creative students
Support for sports
Provision of support for top sabre fencer Shihomi Fukushima; formation of SEPTENI RAPTURES professional
dance team
Note: From the fiscal year ending September 2021, we are adding support for the entertainment industry.

Implementation of in-house educational activities using owned media and e-learning for all employees, andexternal activities including speaking at seminars

Utilization/application of data in HR technology
Formulation and publication of Digital HR Guidelines for safe and secure handling of data
Utilization/application of data in digital marketing
Provision of original AI and data & solutions such as PRECOG and Odd-AI to corporate advertisers
Promotion of initiatives based on research at the Human Capital Lab, including expansion of the target area foronline recruiting in response to the COVID-19 pandemic, and development and implementation of an original
online selection process in collaboration with Group company MANGO, Inc. In recognition of its efforts, Septeni
received the Excellence Award for Recruiting at the 5th HR Technology Awards sponsored by the Ministry ofEconomy, Trade and Industry (fifth consecutive year to receive an HR Technology Award).

OUR MISSIONOUR STRATEGYOUR WAYCOPORATE DATA31

Processes That Are the Source of Value Creation

Highlights
Development of High-Quality
Human Resources

Research concepts, research themes
and initiatives based on research

Diversity and Inclusion

Main initiative

At the Human Capital Lab, which we established in 2016 as our research and development

We believe that the independent and valuable work of employees from various backgrounds

division, we use AI (i.e., machine learning) and other means to integrate and analyze thecontributes to business results, leading in turn to the sustainable growth of the Group.

extensive volume of human resource data that we have accumulated. Based on this, weBased on this belief, we promote and support diverse work styles, as stated in “Diversity,”

conduct ongoing research to shed light on the structure of human resource development

which is part of our code of conduct, the Septeni Way.

in growth industries from a scientific perspective and widely share the results.

Ken Kubo
SEPTENI HOLDINGS CO., LTD.

The Company-wide introduction of telework in response to the COVID-19
pandemic has significantly changed the ways we communicate within
the Company. Employees have not all adapted in the same way to thischange in working conditions—their behavior tends to differ dependingon their personality and individual traits. I thought that conducting ananalysis might help us optimize human resource development andmanagement for a telework environment, so I carried out a study of the
impact of the telework environment on the adaptation of new employees
to their workplace.
When we released my report on the study results, it received a verystrong response. We want to continue providing valuable information toboth employees and society at large through various kinds of research.

Based on Human Capital Lab research, since recruitment of 2018 graduates, we havebeen conducting online recruiting for students living in regions outside major urbancenters, who would otherwise face substantial burdens in terms of time and costs. InFebruary 2020, in response to the COVID-19 pandemic we decided to leverage thisGroup representative Koki Sato andOutside Director Etsuko Okajima
conducted an online diversity workshop,with the aim of instilling understanding of
the significance of diversity and inclusion.
Approximately 200 employees attended.

Support for Culture and Sports

Main initiative

We support the activities of our human resources in a wide range of endeavors including
individual and team sports and the arts. From the fiscal year ending September 2021, weare adding support for the entertainment industry.

know-how to bring new graduate recruiting online for students living in all regions. We
conducted recruiting activities that kept the need to visit the Company to a minimum sothat students could take part in the selection process with peace of mind.

Nozomi Hirano
SEPTENI HOLDINGS CO., LTD.

We published more detailed data on recruiting and selection as well as
information to help students understand the Company so that they
could be confident in their choice of companies to apply to. In terms ofindividual feedback to new employees, we provided personal career
simulations based on the information they gave during the selectionprocess. Many students said that the information we provided waspersuasive and reassuring.
I will keep in mind the need to provide information more openly as I
continue working to support each employee’s growth and participation.

Integrated Report 2020

INDEX

Shihomi Fukushima
SEPTENI HOLDINGS CO., LTD.

OUR MISSIONOUR STRATEGY

I won in my category at the All Japan Fencing Championships in
September 2020, achieving my second victory there in four years. The
tournament was presented online only, but my co-workers at the Septeni
Group supported me by watching my matches via streaming from thepreliminary round, which was very encouraging. After winning, I received
many messages. Some told me how inspired and impressed they wereby my swordplay, and I was delighted to know that I could make people
feel that way. I will continue doing my best to inspire and thrill more andmore people through fencing.

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Corporate Governance

Basic Approach
The Company and the company group comprising its
subsidiaries (hereinafter called the “Group”) consider that
their corporate governance is based on improvements andthe implementation thereof to ensure that actions are taken
pursuant to the Group’s corporate philosophy and codeof conduct, decisions are made in a transparent, fair andefficient manner, laws and regulations are strictly observed,
and corporate performance is monitored appropriately.

Governance Highlights
Number of Directors (Outside Directors Included in Total)(As of January 2021)

8 (5)Average Attendance Rates at Board of Directors’ Meetings(Fiscal year ended September 2020)
Directors

Auditors

100%98%(13 meetings)(13 meetings)

Number of Auditors (Outside Auditors Included in Total)(As of January 2021)

4 (3)Average Auditor Attendance Rate at Board of Auditors’Meetings (Fiscal year ended September 2020)

98%(14 meetings)

Integrated Report 2020

Evaluation of the Effectiveness of the Boardof Directors
The Company analyzes and evaluates the effectiveness ofthe Board of Directors once a year in principle with thegoal of enhancing its effectiveness. The evaluation for
the fiscal year ended September 2020 was based largelyon the results of interviews and surveys regarding theoperation of the Board that we conducted in accordancewith the advice of third-party institutions as well as
discussions by the Board and among corporate officers attraining sessions. As a result, it was confirmed that theBoard of Directors operates appropriately and that itseffectiveness has been ensured through specific, voluntary
initiatives for improvement based on clearly defined goals.
Moreover, recognizing that there is room for improvement
in balancing discussions, in decision-making and in reporting,among other matters, the Board of Directors is actively
working to enhance its effectiveness by implementing
initiatives that address outstanding issues.

Officer Compensation Plan
In the fiscal year ended September 2017, the Group
introduced a new compensation plan (a board incentive
plan (BIP) trust) to more clearly define the relationshipbetween the compensation of the Company’s directors(excluding outside directors and non-residents of Japan)
and executive officers (excluding non-residents of Japan;
collectively, “Directors, etc.”) and the Group’s businessresults in the medium-to-long term as well as theCompany’s shareholder value, while creating a strong
incentive to enhance business results and corporate
value in the medium-to-long term. As a result,compensation for directors of the Company consistsof monthly compensation and stock compensation,and compensation for outside directors who areINDEXOUR MISSIONOUR STRATEGY

independent from business execution consists ofmonthly compensation only.

Director and Auditor Compensation(Fiscal Year Ended September 2020)
Category

Number ofRecipients

OfficerCompensation

Remarks

Directors

7¥158,966
thousand4 outside directors
included in left
¥39,200 thousand

Auditors

4¥43,800
thousand3 outside auditors
included in left
¥12,600 thousand

Notes:
1.	Certain directors of the Company concurrently serve as directors of Groupsubsidiaries, which pay part of the compensation expense for their service
as subsidiary directors. The total of director compensation paid by theCompany and by Group subsidiaries was ¥194,852 thousand.
2.	The number of recipients includes one outside director who retiredon August 31, 2020 and one outside auditor who retired at the close of
the 29th Ordinary General Meeting of Shareholders held on December
18, 2019.
3.	In addition to the above compensation, the Company is paying a retirement
benefit of ¥266 thousand to an outside auditor who retired at the close of
the 29th Ordinary General Meeting of Shareholders held on December
18, 2019. This payment is based on the resolution to make termination
payments upon the abolition of the retirement allowance system for officers
approved at the 13th Ordinary General Meeting of Shareholders held on
December 18, 2003.

BIP TrustThis is a performance-linked stock compensation planthat aims to establish a clearer relationship between
compensation for Directors, etc. and the value of theGroup’s stock. The Company’s shares are purchased fromthe market as officer compensation, kept in a trust account,and delivered in accordance with the recipient’s positionand degree of achievement of the performance targets inthe Midterm Business Policies.

OUR WAYCOPORATE DATA33

Corporate Governance

Outline of the Group’s Corporate
Governance Structure

Board of Directors

Group management involves a holding company structurein which the Company is a holding company and theultimate parent company for Group operating companies.
This system separates Group-wide management andadministration from execution in discrete Group businesses
by delegating authority to Group operating companies
while enhancing the holding company’s ability to supervise
and monitor Group businesses.
Outside directors involved in Board deliberation supervise
the execution of duties, and independent corporate auditors
who are not involved in executive decisions conduct audits.
The Company employs this system because both of thesefunctions help ensure more effective corporate governance.

• Introduced an entrustment-type executive officer system in January
2017 with a monitoring-oriented model that focuses primarily on
monitoring Group Executive Officers.
• Presents the overall direction of basic policies and other management
matters, creates an environment that supports appropriate risk-taking
by the management team, and takes responsibility for monitoring thebusiness execution of the management team.
• Consists of eight directors, a majority of five of whom are independent
outside directors.
• In principle, meetings are held once a month and on extraordinary
occasions as required.

Group Management Meeting• In charge of decision-making on execution of business mattersthroughout the Company and the Group’s operating companies,
and those that involve multiple operating companies.
• The Board of Directors appoints Group Executive Officers in chargeof businesses. The Group President and Chief Executive Officer,

Corporate Governance System (As of December 23, 2020)
Appoint and dismiss

Appoint and dismiss

Board of Directors

Board ofAuditors

Request for advice

AdviseNomination Advisory
Committee

ReportInternal Auditing
OfficeGroup President and Chief Executive Officer
Group Executive Officers(Group Management Meeting)

Report and consult

Committees
The Company has established various committees to create asystem that enables clarification of authority and responsibility, as
well as prompt and appropriate decision-making.

In charge of reviewing and evaluating financial information andtimely disclosure information.

• CSR Committee
In charge of fulfilling social responsibility through CSR activities.

INDEX

OUR MISSION

Executive Sessions•A ttended only by outside directors to ensure an opportunity forexchanging information and sharing understanding based on
independent and objective standpoints.
•O ther independent external parties, including outside auditors
and accounting auditors, may attend the sessions, which also
provides increased opportunities for cooperation among participants.

Internal auditsGroup companies and departments

Integrated Report 2020•T he Company has adopted a Board of Auditors system consistingof four auditors, three of whom are highly independent outsideauditors.

Ensures independence, objectivity and accountability in thedeliberation process for matters related to the appointment anddismissal of management team personnel (including Companydirectors and Group Executive Officers) as a discretionary
committee of the Board of Directors.

Coordinate

CSR Committee
Select and supervise•C onducts audits of directors’ execution of duties based on audit
policies, audit plans and other criteria established by the Boardof Auditors.

• Nomination Advisory Committee

Financial Results andDisclosures Committee

Whistleblower
hotlineBoard of Auditors• Financial Results and Disclosures Committee

Operational auditsGroup Risk ManagementCommittee• In principle, meetings are held twice a month and on extraordinary
occasions as required.

 esponds promptly and effectively to the increasingly diverse,
Rcomplex and decentralized risks faced by the Group, andoversees risk management for the entire Group.

Accounting audits

Accountingauditors•T he Group Management Meeting supports decision-making by
the Group President and Chief Executive Officer, and discusses
important management matters for the Group.

• Group Risk Management Committee

General Meeting of Shareholders
Appoint and dismiss

who is concurrently a representative director, oversees the businessexecution of Group Executive Officers.

• In principle, meetings are held once every quarter.

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Corporate Governance

Structuring a Management Team Using
FFS Theory

Management Team Personality Matrix

The Company has incorporated the Five Factors & Stress(FFS) theory into its AI-based personnel system and otheraspects of human resource management. Developed by
Human Logic Laboratory, Inc., this theory can be used toscientifically build teams of people. It quantifies five factors
as well as stress levels for individuals to understand theirthought processes and behavior.
By examining the characteristics of Board members
based on the FFS theory, the Company has structured aBoard of Directors with leaders who drive a team that canreadily adapt to emerging situations and relationships.
This enables operational flexibility in a rapidly changing
business environment. Following here are a personality
matrix of the Company’s Board of Directors and the resultsof an individual member personality analyses.

Koki Sato

A leader who embraces change. Has excellent judgment anddetermination. Good at missions that require pushing theboundaries.

IsamuUeno

A team-builder who embraces change. Persuades others to geton board and cooperate. Good at reconnaissance missions forinnovation.

Tadahiro
MatsudaMulti-skilled with excellent judgement. Balances offense anddefense well. Good at missions that require resourcefulness.

EtsukoOkajima

A team-builder who embraces change. Persuades others to get
on board and cooperate. Good at reconnaissance missions forinnovation.

YusukeAsakuraA rationalist and team-builder. Persuades others to get on boardand cooperate. Good at missions that require planning.

YoshikiIshikawa

A team-builder who embraces change. Persuades others to get
on board and cooperate. Good at reconnaissance missions forinnovation.

AkieIriyama

Multi-skilled with excellent flexibility. Balances offense anddefense well. Good at missions that require resourcefulness.

MioTakaoka

A rationalist and team-builder. Persuades others to get on boardand cooperate. Good at missions that require planning.

◆: Driver● Isamu Ueno
● Etsuko Okajima◆ Koki Sato

● Yoshiki Ishikawa● Akie Iriyama◆ Tadahiro Matsuda

Analytical

Personality Profile

Leadership Type●: Team-builder

IntuitiveName

Offense (Creates the future)● Yusuke Asakura● Mio Takaoka

Defense (Solves problems)

Note: Personality profiles provided with the consent of each director.

Integrated Report 2020

INDEX

OUR MISSIONOUR STRATEGYOUR WAYCOPORATE DATA35