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Corporate Governance

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Basic Approach to Corporate Governance

The basic policy of the Resona Group is to strengthen its corporate governance by establishing responsible management systems and strengthening supervision as well as surveillance functions while working to improve the transparency of management.

With the injection of public funds into Resona Bank in June 2003, Resona Holdings became the first banking institution to adopt the Committees Governance Model in the interest of realizing highly transparent as well as sound and efficient management. Resona Holdings increased management transparency by appointing a majority of independent directors not only to the Nomination Committee, Compensation Committee, and Audit Committee, but also to the Board of Directors. In our quest for management that reflects the Resona Groupfs management philosophy, we have separated management oversight and operations functions, shifting certain responsibilities to the executive officers to enable quick decision making while bolstering the Board of Directorsf supervisory function.

On the other hand, the subsidiary banks of Resona Holdings all adopt the Company with Corporate Auditors model.This governance framework at Group banks ensures consistency in the strengthening of Groupwide governance as a whole and the framework of subsidiary banksf governance structure that facilitates their autonomous management.

Group Corporate Governance Framework
 

Activities at Resona Holdings

Board of Directors
The Board of Directors, with ten directors, six of whom are independent directors, fully ensures that management engages in substantial discussion in fulfilling their responsibilities of making decisions about the Groupfs important management issues and supervising the execution of business activities by executive officers and directors. One of the unique features of the Committees Governance Model is that, while the Board of Directors makes decisions regarding important management issues and supervises the execution of operations, clearly defined roles give executive officers responsibility for the execution of operations, thus strengthening the Board of Directorsf supervisory function and accelerating the execution of operations.In fiscal 2009, the Board of Directors met 15 times. In June 2005, a system was adopted under which the presidents of all subsidiary banks became executive officers of Resona Holdings, and steps are being taken to enhance the supervisory functions of the holding company vis-`a-vis subsidiary banks.
Nomination Committee
The Nomination Committee comprises three directors, with the committee chairman and one other member being independent directors. The committee makes decisions regarding proposals for the selection and dismissal of directors that are submitted to the General Meeting of Shareholders, based on the specific qualities that the Group should seek in its directors as well as the Standards for Appointing Independent Director Candidates, both of which have been discussed and decided at the committeefs meetings. In fiscal 2009, the committee met five times. Please note that, to accelerate the Groupfs management reforms and attain sustained increases in corporate value, the Nomination Committee introduced a succession plan in June 2007, which serves as a mechanism to ensure that the most appropriate candidates are selected to fill top management roles and responsibilities.
Compensation Committee
The Compensation Committee comprises three directors, including two independent directors, one of whom serves as the committee chairman. This committee makes decisions regarding policies for compensation and other benefits for individual directors and executive officers as well as the compensation and other benefits for specific individuals. In addition, the committee considers the role a director compensation system should play in enhancing the Groupfs corporate value. In fiscal 2009, the committee met three times. Please note that the committee chose to eliminate the directorsf retirement benefit system in fiscal 2004 and introduced a performance-based compensation system. In fiscal 2010, the committee introduced a stock purchase based compensation system.
Audit Committee
The Audit Committee comprises three directors, including two independent directors, one of whom chairs the committee. In addition to auditing the execution of duties by executive officers and directors, this committee makes decisions regarding proposals for the selection and dismissal of independent accounting auditors. In addition, the committee works with the Internal Audit Division, Compliance Division, Risk Management Division, Financial Accounting Division, and other internal control related units to supervise and verify internal control systems and make the necessary responses, urging executive officers and other responsible persons to make necessary improvements. This committee met 14 times in fiscal 2009.
Executive Committee
Resona Holdings has set up an Executive Committee as a body to deliberate and report on generally important management items and important matters in the execution of operations to support the decision-making process in the execution of operations. The Executive Committee consists of representative executive officers as well as executive officers and employs serious debate to ensure the transparency of decisions regarding significant management issues. In fiscal 2009, this committee met 40 times.
Internal Auditing Council

As a body to deliberate and report on important matters related to internal audits, Resona Holdings has established an Internal Auditing Council that is independent from the Executive Committee, which serves as a body for the execution of business. The council is composed of all representative executive officers, the executive officer in charge of the Internal Audit Division, and a general manager of the Internal Audit Division. Contents of deliberations and reports are reported to the Board of Directors and the Audit Committee.

The council met 16 times in fiscal 2009 and, in addition to discussing the internal auditing plan, it reported on the results of internal audits.

Management Supervision of Group Companies
Resona Holdings, as the Group holding company, supervises the management of its subsidiary banks and other Group companies, with the objective of raising corporate value. The Company has established a system for managing and controlling Group companies, clearly identifying items for which prior discussion with Resona Holdings is necessary and items that require reporting.
 

Subsidiariesf Corporate Governance Systems

Subsidiary banks, which are managed as Group members by Resona Holdings, work together to raise corporate value.

The Board of Directors, which includes independent directors, fully ensures that management employs thorough discussion in making decisions regarding the execution of duties and oversees the execution of duties by directors and executive officers.

The Corporate Auditors Meeting, which comprises the corporate auditors, was established to carry out solid auditing functions in the subsidiary banksf operations.

In addition to this are the Executive Committee, a body that deliberates generally important issues related to management as well as important issues related to the execution of operations; the Credit Committee, which deliberates important items related to credit operations; and the Audit Committee, which deliberates important themes related to internal auditing.

 

Internal Control

Basic Stance

The Resona Group is implementing a thoroughgoing differentiation strategy with the aim of becoming gthe unrivaled leader in retail financial services.h Key elements of this strategy are further selectivity and concentration in business domains (review and confirmation of priority regions and priority businesses) and the establishment of a Resona Style (emphasizing the creation of a new corporate culture, placing more importance on individuals, and pursuing the most-trusted status).

Moving toward the attainment of these business goals, Resona is working to secure greater efficacy and efficiency in its operations and to clarify processes related to compliance in its business activities. We are aiming to construct internal control systems befitting the Resona Group|systems that are understood and followed by the entire Group.

Basic Policy
To enhance corporate value, the Resona Group has established a basic policy on internal control, which has been passed by the Board of Directors, to realize an internal control system that is appropriate for the Group.
Status of Internal Control Systems
In accordance with its basic policy in Group internal control systems, the Resona Group is striving to ensure the efficacy of its internal control systems through appropriate development and operations of all internal control systems, including the Internal Auditing System, the Compliance System, and the Risk Management System.
 

Corporate Governance Report

  Corporate Governance Report(368KB)