Corporate Governance

We have a Corporate Governance Basic Policy that establishes policies and frameworks for achieving effective corporate governance with the aim of promoting sustainable growth of the Group and improving corporate value over the medium to long term. We constantly review our philosophy of corporate governance and work to improve it.

Furthermore, based on our Management Principles, we manage in a way that contributes to value creation for various stakeholders such as shareholders, customers, employees, and local communities, we are ensuring the fairness, transparency, and speed of decision-making, and we are building a corporate governance system appropriate for a financial group.

As a company with an Audit and Supervisory Board, the Board of Directors, auditors, and the Audit & Supervisory Board had been supervising management in the Group. Following a resolution to amend the Articles of Incorporation at the ordinary general meeting of shareholders held in June 2025, the Company transitioned to company with an Audit and Supervisory Committee. Along with this, Audit & Supervisory Committee Members, including independent outside directors, will exercise their voting rights in board meetings, and the Audit & Supervisory Committee will check important documents to audit the legality and appropriateness of the status of directors’ business execution and enhance the effectiveness of its supervisory function of management. In addition, the Compensation and Personnel Committee continues to be composed exclusively of independent outside directors to ensure objectivity and transparency in compensation and personnel matters for directors and executive officers.

In order to ensure that the Board of Directors functions most effectively and efficiently, and from the perspective of revitalizing the Board of Directors, the Articles of Incorporation stipulate that the number of directors (excluding directors who are Audit & Supervisory Committee Members) be no more than seven and the number of directors who are Audit & Supervisory Committee Members be three.

In order to ensure the independence of the Board of Directors and to demonstrate that it functions fairly and transparently, the Company appoints a number of outside directors who maintain views that are independent from the Group, making up at least one-third of the members. By combining internal directors who are familiar with the Group’s business with outside directors with extensive experience and knowledge outside the Company and giving the Board of Directors diverse members with different backgrounds of specialist knowledge and experience, the group ensures a good balance of knowledge,experience and skills on the Board of Directors. Of the nine directors (seven men and two women), five are independent outside directors.

The Audit & Supervisory Committee consists of three members (two men and one woman), two of whom are independent outside directors(Audit & Supervisory Committee Members).

Ensuring independence and diversity

Candidates for directors (excluding directors who are Audit & Supervisory Committee Members) are appointed by the Board of Directors after any deliberation by the Compensation and Personnel Committee. In addition, candidates for directors who are Audit & Supervisory Committee Members are appointed by the Board of Directors after any deliberation by the Compensation and Personnel Committee and with the consent of the Audit & Supervisory Committee. Persons satisfying the following items are appointed from among candidates. In appointing, the Company will take into account the Company's policy on the composition of the Board of Directors and the length of his/her service as an Officer of the Group, etc.

The Board of Directors makes decisions on important matters such as matters related to the management plan and governance and basic policies on risk and compliance in order to enhance discussions on the management strategies of the Group. Directors who are Audit & Supervisory Committee Members are directly involved in the discussions and decision-making processes of the Board of Directors and thus assume a highly effective supervisory function over management. In addition, in order to strengthen cooperation within the Group and enhance governance, the Company and the Bank of Yokohama have integrated the operation of the Board of Directors, and a system has been established where the Company's directors can participate in the Higashi-Nippon Bank’s board meetings, etc. as observers.

In FY2024, in light of the roles and responsibilities to be fulfi lled by the Board of Directors, we set four themes to be continuously addressed and promoted initiatives such as holding discussions toward the formulation of the New Medium-term Management Plan and enhancing directors' study sessions, participating as observers in mutual meetings aimed at eliminating information gaps between groups,appropriately following up on the management plan and the overall budget, and ensuring opportunities for substantial dialogue with investors, to improve the Board Meeting effectiveness. As a result, the Board of Directors conducted and shared a self-assessment that “the Board Meetings as a whole continued to be generally effective.”

In FY2025, based on the evaluation of effectiveness in FY2024, we will work to further improve the effectiveness of the Board Meetings in order to promote sustainable corporate growth and enhance corporate value over the medium to long term.

For more information, please see our Corporate Gover nance Report.

Audit & Supervisory Board Members have audited the legality and appropriateness of directors’ business execution through the following investigations based on the audit policy and audit plan set by the Audit & Supervisory Board.

In FY2024, we mainly focused audits on the “status of initiatives aimed at sustainable growth and medium- to long-term enhancement of corporate value,” and the “status of establishment and operation of the Group’s internal control systems.” The findings were compiled as the Audit & Supervisory Board Observations and reported to the Board of Directors and the Management Committee. The Audit & Supervisory Board has conducted self-assessments on the effectiveness of operations and activities of the Audit & Supervisory Board. In concrete terms, each Audit & Supervisory Board Member conducted a self-assessment based on a questionnaire that was discussed by the Audit & Supervisory Board. Based on the aggregate results,opinions were exchanged by the Audit & Supervisory Board, and efforts were made to improve the management and activities of the Audit & Supervisory Board.

The Company transitioned to a company with an Audit & Supervisory Committee in June 2025.

The Audit & Supervisory Committee works closely with the Internal Audit Department, the Internal Control Department, and accounting auditors to conduct systematic, effective, and effi cient audits utilizing the Company's internal control system. In addition, the Audit & Supervisory Committee decides opinions on the appointment, dismissal,etc., and compensation, etc., of directors (excluding Audit & Supervisory Committee Members) as a supervisory function for business executives.

The Management Committee, which consists of representative directors, directors, and others, is established under the Board of Directors.

Based on the basic policy and management plans decided by the Board of Directors, the Management Committee discusses and decides on important business execution matters and strategies for fl exible business execution within the Group, and also holds preliminary discussions on resolutions of the Board of Directors as necessary.

In addition, for important matters related to the Group’s business execution, the meetings listed below are positioned as part of the Management Committee, and these meetings conduct intensive deliberation on items within their respective jurisdictions.

In order to enhance Board of Directors meetings, the Company provides outside directors with advance explanations of the agenda of the Board of Directors meetings, as well as opportunities for on-site visits to sales branches of the Group companies. When outside directors are appointed, they are provided with the opportunity to acquire knowledge and information about the Group’s management philosophy, management policies, business plans, and business structure. Furthermore, we work for coordination between the Representative Director, the Internal Audit Department, and accounting auditors, as well as for interchange between the outside directors and the directors of Group companies.

In order to ensure that directors obtain information about the company in a timely and appropriate manner, a staff member is assigned to the Corporate Planning Department to assist directors in obtaining information. To ensure that audits by the Audit & Supervisory Committee are conducted effectively, we have a dedicated staff member in the Office of the Audit and Supervisory Committee to support audits by the Audit & Supervisory Committee.

To enable directors to fulfi ll their roles and responsibilities, the Company provides opportunities to obtain knowledge and information, receive advice from external experts, and raise awareness through peer evaluations (mutual evaluations) by directors.

For the purpose of ensuring objectivity and transparency in compensation and personnel matters of directors and executive Officers, a Compensation and Personnel Committee composed solely of independent outside directors has been established as a voluntary mechanism. The Compensation and Personnel Committee performs the functions of both a nominating committee and a compensation committee. The Chairperson of the Committee shall be elected from among the members of the Committee and shall serve as the Chair. As a general rule, the President provides explanations, and if necessary, the Chairperson may appoint a person other than a committee member to attend the meeting and hear his/her report or opinion. The secretariat is established in the secretarial Office of the Corporate Planning Department, and meetings are held as needed. In FY2024, 12 meetings were held.

The Committee resolves and deliberates on the compensation and personnel matters of Officers of the Company and its subsidiaries.

Matters to be resolved

Matters to be deliberated

Matters to be reported

Matters to be deliberated

The Company has adopted by resolution of the Board of Directors a policy (‘the Policy’) concerning decisions on the details of remuneration etc. for individual directors (excluding directors who are Audit & Supervisory Committee Members). The outline of the document is as follows. This policy was decided after deliberation by the Compensation and Personnel Committee, which is comprised solely of outside directors.

＊1 In the event of a serious violation of a mandate contract between the Company and an Officer concerning the Officer’s duties, or in the event of a sudden deterioration in business performance or a serious incident or scandal that damages corporate value, the Company may require that the Officer forfeit stock delivery points (zeroing out), return granted Company shares, etc. (clawback), or provide compensation.
＊2 The Company has established “Stock Acquisition and Ownership Guidelines” and encourages directors, etc. of the company and its subsidiaries to acquire and hold a certain number of shares of the company’s common stock in order to make them aware of management from the perspective of shareholders.

The details of compensation etc. for directors who are Audit & Supervisory Committee Members are determined through discussions with them and the details are as follows.

The specialization and experience required by the Company are considered to be “Regional sales,” which is essential for understanding the business models of subsidiaries that are regional financial institutions; “Corporate management and organizational operation,” “Legal affairs and risk management,” and “Finance and accounting,” which are universally required for corporate management; “International & market operations” and “IT and digital (DX),” which are required to provide more advanced expertise necessary to respond to the changing business environment; “Sustainability (Environment and Society),” which is required to solve issues in the environmental and social domains in order to enhance corporate value in a sustainable manner; and “Human capital,” which is required to maximize human capital and promote the human resource strategies linked with the Company’s management strategy. The following table presents the details of the combination of skills and the skills possessed by each individual, including the Executive Officers, along with the Directors.