Overview of Corporate Governance System
Basic Approach to Corporate Governance
Resona Holdings, Inc. (hereinafter the “Company”) has established the “Basic Corporate Governance Policy” to clarify its basic approach to and framework and operation policy for corporate governance, with the aim of facilitating the sustained growth and improvement of the corporate value of the Resona Group (hereinafter the “Group”) over the medium and long terms.
Basic Approach to Corporate Governance
The Company, as the holding company of the financial services group, shall maximize the corporate value of the Group.
The Company shall respect all stakeholders, including shareholders, and aim at achieving excellent corporate governance so that the Company can make decisions rapidly and decisively in response to environmental changes, including economic and social changes.
The Company shall develop a structure that enables all Resona Group members to engage in business operations in a concerted manner and, to this end, has positioned the Group’s “Purpose” together with the “Corporate Mission (Resona Group Management Philosophy)” as a cornerstone of business management, aiming to realize the “Long-Term Vision,” which represents ideals regarding what the Group should look like over the long term.
The Company’s Corporate Governance System
Based on the above-mentioned basic approach to corporate governance, the Company shall clearly separate the management supervision function from the business execution function, and adopt the form of “company with a nominating committee, etc.” as a corporate governance system because the Company determines that this system can enhance the supervision and decision-making functions of the Board of Directors.
The Company shall fully utilize external views in its business management and secure transparency and fairness in management by making the Board of Directors, on which highly independent outside directors constitute a majority, and the three committees (the Nominating Committee, the Compensation Committee and the Audit Committee) fulfill their functions.
The Company shall ensure the autonomy of its subsidiaries and instruct the subsidiaries to manage their business activities based on the above-mentioned basic approach to corporate governance so that the Group will grow together with local communities.
Corporate Governance Framework
Management Supervision of Group Companies
Resona Holdings, as the Group holding company, supervises the management of its 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.
Resona Succession Plan
Aiming for sustained improvements in corporate value, the Group introduced a succession plan in June 2007 that serves as a mechanism to ensure the successions of the president and other officers roles and responsibilities at the Company, and Group subsidiary banks and secure the transparency of the process of selecting and nurturing officers.
The scope of the succession plan covers various candidates, from those who are candidates for the president to those who are new candidates for directorships. The process of selection and nurturing successors is carried out steadily according to a schedule, matching qualified candidates to the appropriate rank. The Company retains the objectivity of this process by drawing on the advice of external consultants. Evaluations of candidates undergoing the process are reported to the Nominating Committee. In addition to receiving reports on candidate evaluations, members of the Nominating Committee come into direct contact with candidates as part of the process, evaluating candidates’ characters from various aspects.
The activities of the Nominating Committee are reported to the Board of Directors, of which outside directors are the majority, and are discussed from diverse perspectives. Through the entire process, which is highly transparent, each potential director’s capabilities and competencies are closely studied and enhanced where appropriate.
In addition, Resona Holdings has set forth seven competencies that define the ideal candidate for the position of director. By ensuring that the directors in the Nominating Committee as well as the other directors share common ideals regarding candidates, the Company clarifies standards for the evaluation and nurturing of successors and thereby aims to realize impartiality during the entire process.
Compensation for Directors and Executive Officers
Purpose and Basic Concepts
Purpose
The compensation system’s purpose is to ensure that supervisory functions afforded by officers remain effective by providing appropriate incentives for the realization of the Resona Group’s Purpose, Corporate Mission and Long-Term Vision in amounts commensurate with the responsibilities, etc., borne by each recipient.
Basic Concepts
The officer compensation system in place at Resona Holdings is based on the following concepts.
- Compensation packages for executive officers shall be in alignment with the Resona Group’s management strategies. Accordingly, such packages shall be designed to restrain excessive risk-taking as a financial service provider while encouraging the pursuit of proactive initiatives aimed at securing medium- to long-term improvement in corporate value and discouraging overemphasis on short-term operating results. At the same time, individual compensation packages shall be commensurate with the level of the respective recipient’s contribution to the value delivered to diverse stakeholders, including customers, shareholders and society as well as employees. Meanwhile, compensation packages for directors shall be designed so that recipients are encouraged to fully focus on exercising their supervisory functions over management.
- The volume of compensation shall be set at a competitive and appropriate level through a determination process that takes into account the Group’s business environment and objective data provided by external research organizations, ensuring that the Group attracts top-tier talent.
- In principle, the Compensation Committee, consisting entirely of highly independent outside directors, determines the details of the compensation system while monitoring its execution with the aim of securing objectivity and transparency.
Compensation Systems for Directors and Executive Officers
Resona Holdings’ compensation system for directors and executive officers is as described below.
Compensation System for Directors
In addition to the compensation described above, the officers named below are eligible to receive the following compensation. Duty-based additional compensation: Fixed compensation paid to individuals who are appointed to act as members of the Nominating, Compensation or Audit Committee or concurrently serve as directors or corporate auditors at Group banks, etc., based on additional responsibilities associated with the recipient’s duties
Additional allowances: Fixed compensation paid to outside directors who are appointed to chair the Board of Directors, the Nominating Committee, Compensation Committee or Audit Committee based on the burdens arising from these responsibilities
Compensation Systems for Directors and Executive Officers
In addition to the compensation described above, the officers named below are eligible to receive the following compensation.
Duty-based additional compensation: Paid in a fixed amount to executive officers who concurrently serve as directors at Resona Holdings or directors or corporate auditors at Group banks, etc., based on additional responsibilities associated with the recipient’s duties
Status to the Corporate Governance Code
The Company adopts all principales set forth by the Corporate Governance Code.