Company with Board of Statutory Auditors

Overview

Shinsei Bank has established a corporate governance framework as a "Company with an Audit & Supervisory Board" ( kansayakukai-setchi-gaisha ). This model aims to ensure appropriate managerial decision-making and business implementation in order to establish a corporate governance framework with sufficient organizational checking functions. We aim to achieve this through the following two key actions:
1) Consolidating business execution authorities and responsibilities in the Board of Directors; and
2) Assigning Audit & Supervisory Board Members and an Audit & Supervisory Board that are independent of the Board of Directors auditing duties that include auditing of the Board of Directors. In addition to this, we have adopted an Executive Officer system which ensures the fl exibility of our day to day business execution.

Reasons for Nomination of Outside Directors

Name Reason for Nomination
Outside Director
Yasuhiro Hayasaki *
Mr. Yasuhiro Hayasaki was asked to stand as an Outside Director in order to reflect in the Bank? management his experience and a wide range of knowledge in the field of finance, including a career at the Bank of Japan.
Outside Director
Ayumi Michi *
Ms. Ayumi Michi was asked to stand as an Outside Director in order to reflect in the Bank? management her expertise and experience as a lawyer as well as her broad knowledge of diversity, including gender.
Outside Director
Hiroko Sasaki *
Ms. Hiroko Sasaki was asked to stand as an Outside Director in order to reflect in the Bank's management her knowledge and experience at a financial institution, consulting firm and in the elderly business, as well as her expertise as a venture company manager, and to add gender and generation diversity to the Board of Directors.
Outside Director
Masahiro Terada *
Mr. Masahiro Terada was asked to stand as an Outside Director in order to reflect in the Bank? management his expertise and experience as a lawyer, as well as his experience as an in-house attorney at a financial institution and as an outside audit & supervisory board member etc. at other companies.
  • *Shinsei Bank has submitted to the Tokyo Stock Exchange an independent director registration form identifying Yasuhiro Hayasaki, Ayumi Michi, Hiroko Sasaki and Masahiro Terada as independent directors.

Reasons for Nomination of Outside Audit & Supervisory

Name Reason for Nomination
Outside Audit & Supervisory
Ikuko Akamatsu
Ms. Ikuko Akamatsu was asked to stand as an Outside Audit & Supervisory Board Member in order to reflect in the Bank?s audit operations, her expertise in compliance and governance, etc. and to take on the promotion of diversity, as well as for her professional knowledge and experience as a certified public accountant and a certified fraud examiner, and extensive experience as a consultant based on the aforementioned expertise.
Outside Audit & Supervisory
Shiho Konno
Ms. Shiho Konno was asked to stand as an Outside Audit & Supervisory Board Member in order to reflect in the Bank?s audit operations, her expertise and extensive experience as a lawyer, and based on her experience as an outside director at listed companies as well as her expertise in corporate governance and to take on the promotion of diversity.

Summary of Executive Committee and Other Important Committees

Name Main Purpose
Executive Committee The President's decision-making body for day-to-day business execution
ALM Committee Negotiate, coordinate and make decisions concerning medium- and long-term Asset and Liability Management
Compliance Committee Discuss the bank-wide risk operation policy and management framework for the Bank's portfolios, and the Bank's approach to major portfolios, sectors, products and so forth
Risk Policy Committee Discuss the bank-wide risk operation policy and management framework for the Bank's portfolios, and the Bank's approach to major portfolios, sectors, products and so forth
Doubtful Debt Committee Promptly inform top management about significant bad debt exposure, and make decisions on write-offs and other matters concerning sale of debts, debt forgiveness, and so forth
SME Loan Committee Through discussions on the business policy and challenges for the entire institutional banking business, take initiative in bank-wide efforts to achieve SME loan goals set in the Revitalization Plan
IT Committee Discuss, coordinate and make decisions on matters concerning the Shinsei Bank Group's information technology systems
Business Continuity Management Committee Discuss, coordinate and make decisions concerning the organization of the business continuity structure throughout the Bank
Basel Committee Discuss, coordinate and make resolutions on matters concerning regulatory capital, with a focus on Basel regulations
Management Development Committee Discuss, coordinate and make decisions about the HR system, HR measures and so forth

Legal and Compliance Activities

Compliance Framework

The Bank's Compliance Committee, the Legal and Compliance Division, and Compliance Supervisors (General Managers) and Compliance Managers who are assigned in divisions, branches, and departments constitute the main elements of our compliance organization. The Compliance Committee, with our Chief of Staff as its chair, examines and discusses important compliance matters. On the other hand, the Legal and Compliance Division plans various measures concerning compliance risk and implements these measures through central management.

Compliance Activities

Every year, we create a compliance program which promotes the development of regulations and training programs. We place particular emphasis on the use of training sessions as a tool to ensure the proliferation of compliance awareness and conduct trainings such as the "Shinsei Bank Code of Conduct"—a basic policy for the Bank employees, voluntary training based on compliance risk of each division, branch, and department, and training for respective important compliance matters such as revisions of laws and regulations, on an ongoing basis. In addition to group training, we are also working to create an environment that maximizes the effectiveness of training by introducing active e-learning courses and regularly transmitting a "Short Lesson for Compliance" by e-mail, which summarizes compliance issues.

Legal Supervision

In order to mitigate these risks, Shinsei Bank has established a specialized section within its Legal and Compliance Division which presides over such legal affairs, including compliance with corporate and transactional laws, legal documentation and litigation supervision and through this specialized support, we aim to prevent and manage any legal risk.

Internal Audit

The Internal Audit Division (IAD) of the Bank reports directly to the CEO as well as to the Audit & Supervisory Board. The IAD supports the CEO in his responsibilities for controlling business execution, and in particular for establishing an effective system of internal controls. The IAD provides independent and objective assessments of the effectiveness of risk management, control and governance processes, the reliability of information and information technology systems, and compliance with statutory, legal and regulatory requirements as well as internal policy and procedure requirements of the Bank, and provides solutions to management. The IAD also maintains a close relationship with the Audit & Supervisory Board and provides them with internal audit-related information.

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