A Message from an Outside Director

Shinsei Bank will steadily move forward to bolster stable profitability.(Shigeru Kani/Professor, Yokohama College of Commerce)

Shigeru Kani (Professor, Yokohama College of Commerce)

Q1: Can you explain the role of the outside directors?

A: The role of outside directors is to oversee business management by executive officers. Central to this role is the socalled corporate governance. Naturally, we do not monitor the status of business execution round the clock. Our main activity is to put across our opinions on agenda items at the Board of Directors meetings.

Q2: How would you characterize the discussions at the Board of Directors meetings?

A: All board members freely express their opinions at every meeting. Overall, I think our meetings are rich in content and have a sense of pressing importance. In addition to asking questions to executive officers, the outside directors state their opinions on agenda items, which leads to robust discussions. At Shinsei Bank's Board meetings, we express our opinions without reserve and have frank and honest discussions.

Q3: What issues do you, as an outside director, have to consider in discussions at the Board meetings?

A: The executive officers give one hundred percent of their energy every day in the field in order to improve the Bank's business results. The Bank's business is thus executed on site. However, it is also important for us to constantly check from a broader perspective and with some distance from the field whether the management is adopting the optimum strategy. This is exactly the role required of the outside directors. The outside directors therefore use their knowledge, which has been developed in their own field of expertise, to tell their honest opinions to the management.

Q4: What do you think is particularly important in performing your role as an outside director?

A: As I said earlier, the role of the outside directors is to oversee business management. It means we assume an important role in checking business execution so that the Bank's management does not move in the wrong direction and also of strengthening their incentives in order to improve the Bank's results. To achieve these, it is most important to maintain an appropriate risk-return balance. What I consider to be particularly important is to confirm that the Bank is constantly maintaining the basic management principle of taking appropriate risks while generating returns. In that sense, the outside directors need to avoid becoming too friendly with the management. I consciously create some distance from them so that I can become as exacting as possible.

Q5: Lastly, please tell us, as an outside director, what you would like to achieve in the future.

A: Having cleaned up its past negative legacy, Shinsei Bank is moving forward with all of its executive officers and employees having a strong sense of urgency to expand its customer base and to create a stable earnings base. Meanwhile, the environment surrounding the financial economy is about to change rapidly and enormously. In such a drastically changing environment, I would like to carefully monitor the Bank's business management situation by paying sufficient attention to risk management, so that the Bank will be able to steadily increase its earnings while expanding its customer base. We would very much appreciate the continued support and guidance provided by our shareholders and all other stakeholders.

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