Line Yahoo Specifies 'Data Governance' in Executive Evaluations... Establishes Security Governance Committee

Including 'Data Governance' in Bonus Evaluation Criteria

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Line Yahoo has specified 'data governance' as an evaluation criterion for determining executive compensation. As the issue of selling Line Yahoo shares enters a prolonged phase, and with the Japanese government's multifaceted pressure on information security measures continuing, it is interpreted that security issues have been unusually reflected in the executive evaluation criteria.

According to the notice for the 2023 Line Yahoo annual general meeting of shareholders, 'data governance' was cited as a standard for executive compensation payment for the 2023 fiscal year (April 2023 to March 2024). Executive compensation is divided into ▲stock compensation (60-80%) ▲bonuses (10-20%) ▲base salary (10-20%). Among these, data governance has been included as an evaluation item for determining bonuses.

Bonuses are incentives given based on short-term performance or contributions to enhancing corporate value. Bonuses are determined based on quantitative evaluations such as operating profit for the year and qualitative evaluations of important management goals. Evaluation criteria include performance as well as data governance, sustainability, progress toward carbon neutrality, and diversity, equity, and inclusion (DE&I) factors such as the proportion of female managers.

Data governance refers to the policies and processes for managing data used by a company. It emphasizes security, privacy, and compliance with data management regulations. Including it as a key item in executive performance evaluation signifies that it is regarded as a core management objective.

Industry insiders interpret this as a measure to respond to the Japanese government's strong demands for improvement following the Line data leak incident. Since data governance has been unusually adopted as an evaluation metric for all executives beyond just information protection or data management officers, it is analyzed as a demonstration of the company's commitment to improving security. Professor Seong-Yeop Lee of Korea University's Graduate School of Technology Management said, "It is rare to reflect data or security obligations in key performance indicators (KPIs). Since Japan's Ministry of Internal Affairs and Communications strongly demanded strengthening security governance, this appears to be an effort to comply."

In addition, Line Yahoo has decided to establish a governance organization to strengthen information security. According to the 'Report on Line Yahoo's Improvement Status and Response Policy' announced by the Japanese Personal Information Protection Commission on the 22nd, Line Yahoo plans to form a Security Governance Committee chaired by the Chief Executive Officer (CEO). Furthermore, it will create a group-level 'Group Chief Information Security Officer (CISO) Board.' Not only the Line Yahoo CISO but also the SoftBank CISO will participate.

Although various security improvement measures are being prepared, the Japanese government continues to apply pressure. The Japanese Personal Information Protection Commission has demanded that Line Yahoo report on the implementation status of improvement measures by the 28th of next month. Line Yahoo reported improvement measures, including system separation from Naver Cloud, on the 26th of last month, but the commission is requesting that the implementation schedule for incomplete measures be advanced and that progress be reported accordingly.

This content was produced with the assistance of AI translation services.