Basic Approach to Corporate Governance
The Resona Group has never lost sight of the significance of the public fund injection the Resona Bank received in June 2003.
Exerting our capabilities as a financial mediator and consulting institution, we strive to realize excellent corporate governance in order to meet the expectations of stakeholders and society h ave of us as a bank by cultivating soundness and user-friendliness. Resona Holdings became the first Japanese ba nking institution to adopt the Committees Governance Model. We have separated management oversight and operation functions, shifting certain responsibilities to the executive officers to enable quick decision making while bolstering the Board of Directors’ supervisory function. We increased management transparency and objectivity by appointing a majority of independent directors not only to the Nominating Committee, Audit Committee, and Compensation Committee, but also to the Board of Directors in the interest of realizing highly transparent as well as sound and efficient management. In addition, all Group banks, which are wholly owned subsidiaries of the Company, shifted to a company with auditors structure. By unifying their basic approach to corporate governance, the members of the Resona Group have further streng thened corporate governance at all Group banks in line with the aim of ensuring and enhancing autonomous management at each bank. Toward the full repayment of public funds, we will workto maintain the soundness of the current managementstructure and promote corporate management in line with the Resona Group Corporate Mission, thereby maximizing our corporate value.
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 Group's 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 Directors' 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.
In addition, since a director retired on November 4, 2012 , the Board of Directors comprises nine directors, including six outside directors.
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 committee's meetings. In fiscal 2009, the committee met five times. Please note that, to accelerate the Group's 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.
In addition, since a director of the Nominating Committee retired on November 4, 2012 and the committee newly appointed an outside director on the 9th of the same month, the committee comprises three directors, with the committee chairman and the other members being outside directors.
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 Group's corporate value. In fiscal 2009, the committee met three times. Please note that the committee chose to eliminate the directors' 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.
In addition, since a director of the Compensation Committee retired on November 4, 2012 and the committee newly appointed an outside director on the 9th of the same month, the committee comprises three directors, with the committee chairman and the other members being outside directors.
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.
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.
Subsidiaries' 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 banks' 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.
The Resona Group is implementing a thoroughgoing differentiation strategy with the aim of becoming "the unrivaled leader in retail financial services." 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.
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.