CORPORATE GOVERNANCE

Last Update:

May 14,

2021

Credit Saison Co., Ltd.

Representative, Executive President and COO Katsumi Mizuno

Contact: 03-3988-2110

Securities Code:

8253

https://www.saisoncard.co.jp/

The corporate governance of Credit Saison Co., Ltd. (the "Company") is described below.

I. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information

1. Basic Views

■Management Philosophy

We will fulfill our corporate social responsibility by striving to meet the expectations of all of our customers, shareholders, and business partners. We will compete successfully in the market by promoting our three shared values:

practical implementation of the principles of customer satisfaction as a leading-edge service company; mutual respect for our interests and those of our business partners; and,

developing a corporate culture of creative innovation. ■Corporate Governance

To realize our basic management policy of obtaining the understanding and approval of our stakeholders such as our customers, business partners, employees, shareholders and society by continuously improving corporate value over time and creating innovative services, the Company is implementing a variety of initiatives to improve and strengthen our corporate governance in recognition of the enormous importance of enhancing management transparency and bolstering management supervisory functions to attain business objectives.

The Company has adopted the Audit & Supervisory Board (the "ASB") model, with the ASB members. To ensure the Company retains the confidence of our shareholders and other investors, the Company strives to improve and strengthen corporate governance by nominating outside Directors and the outside ASB members. The Board of Directors and Nomination & Remuneration Committee receive advice and recommendations from outside Directors to ensure the appropriateness of business decision-making. This enables Directors, who are well versed in business matters, to maintain and improve management efficiency. In addition, the ASB is strengthening its management oversight function by coordinating with Directors, executive officers and others from the Internal Audit Office and the unit responsible for supervision of internal controls.

In March 2020, the Company reviewed the composition of the Board of Directors and introduced an executive officer system in order to further strengthen our corporate governance system through the separation of business

1

CORPORATE GOVERNANCE

execution and management oversight. Thus, the Company will achieve more appropriate management and supervisory functions and establish an efficient business execution system.

The Board of Directors consists of 8 Directors, including 3 outside Directors, 3 of whom qualify as "independent directors." Along with deciding operational execution with regards to important matters concerning management, the Board oversees the performance of duties by Directors. In order to build a flexible management system that responds to changes in the business environment and earns the confidence of shareholders in the Company's management, the term of office for Directors is set at 1 year.

The ASB consists of 4 ASB members, including 3 outside ASB members, 3 of whom qualify as "independent directors." It determines audit policy and matters concerning the execution of other duties by the ASB members as well as compiling audit reports. Furthermore, in order to realize sustainable growth in corporate value, the Company has positioned the enhancement of corporate governance as an important management initiative, and the Company is working to achieve this by establishing an internal control system, strengthening our risk management system, ensuring thorough compliance, and creating mechanisms through diversity and inclusion.

In constructing the internal control system, the Corporate Planning Department, which is the division responsible for internal control, serves as a hub for constructing the internal control system and the Board of Directors determines the basic policy for the internal control system in order to establish a system to ensure the appropriateness and efficiency of operations. With regard to the internal control system for financial reporting, mainly the Risk Management Department is responsible for promoting the development of internal controls for the Company and its consolidated subsidiaries, and the Audit Office conducts independent monitoring of such internal controls.

With regard to risk management, the Company strives to prevent eliciting risks and to minimize their impact on the Company with Risk Management Committee and the Risk Control Department, which serve as a hub for such striving. To be prepared for such occasions, the Company is making efforts to maintain its risk-management system by regularly training its employees, based on the principles of the "Risk Management Regulations," "Regulations Regarding Management of Risk of Loss" and the "Crisis Management Regulations." In addition to the above, the Group Strategy Office of the Corporate Planning Department oversees the status of business execution at Group companies and shares information with the departments in charge of each Group company regarding matters inherent in our Group or control matters that involve serious risks.

The Company has established the Compliance Committee to ensure a legal compliance, fairness and ethical behavior in its corporate activities. In addition to appointing a compliance officer in each department, the Company has established the "Action Declaration" to determine how the company itself should act, and have compiled the "Behavioral Standards" to explain how executives and employees should act. The Company is working to strengthen our compliance system by disclosure on internal website to ensure thorough implementation of this Declaration, disseminating information regarding counseling desk, and conducting compliance training, etc.

The structure for diversity and inclusiveness is available on the"III -3" section of this report.

2

CORPORATE GOVERNANCE

The Company will continue to consider the ideal management structure that is appropriate for it hereafter, taking into consideration the international trends in corporate governance and the basic policy on internal control systems.

[Reasons for Non-compliance with Principles of the Corporate Governance Code]

■Chapter 4 Responsibilities of the Board of Directors

[Supplementary Principle 4-1-3: Roles and Responsibilities of the Board (1)]

The business climate surrounding the Company is greatly changing due to the digital revolution, including FinTech, and businesses that require new viewpoints, such as startups abroad, are expanding. Therefore, it would not be appropriate to establish, through a limited discussion at one point of moment, the requirement of knowledge, experience, and ability for our chief executive officer or the like (the "CEO etc."), and thus, at this moment, the Company has not formulated specific plans for successors such as the CEO etc. or conducted supervision on such plans by the Board of Directors. The Company will hereafter consider the ways through which Board of Directors may appropriately supervise succession plans by, for example, discussing at the Nomination and Compensation Committee on the guidelines for succession plans which would fit our mid-term or long-term management strategies.

[Supplementary Principle 4-3-2: Roles and Responsibilities of the Board of Directors (2)]

The business climate surrounding the Company is greatly changing due to the digital revolution, including FinTech, and businesses that require new viewpoints, such as startups abroad, are expanding. Therefore, it would not be appropriate to establish, through a limited discussion at one point of moment, the requirement of knowledge, experience, and ability for the CEO etc., and thus, at this moment, the Company has not formulated either evaluation criteria for appointment of the CEO etc. or particular procedures for the appointment of the CEO etc. The Company will hereafter consider the ways through which the Company may appropriately appoint the qualified CEO etc. by, for example, discussing at the Nomination & Compensation Committee on the guidelines for succession plans which would fit our mid-term or long-term management strategies.

[Supplementary Principle 4-3-3: Roles and Responsibilities of the Board (3)]

At the present time, the Company has established neither evaluation criteria nor dismissal grounds for the removal of the CEO etc. If any event such as (i) violation of laws, regulations, articles of incorporation, or other relevant rules or (ii) significant impairment of the Company's corporate value by the CEO, etc., which constitutes legitimate ground for dismissal of the CEO etc., happens, the Board of Directors which is attended by independent Directors will, after sufficient deliberations, resolve the dismissal of the CEO etc.

3

CORPORATE GOVERNANCE

[Principle 4-11: Assumptions for ensuring the effectiveness of the Board of Directors and Audit & Supervisory Board]

In this volatile and rapidly changing business environment, the Company believes that it is important that the Board of Directors are composed of those with diverse experience, knowledge and characteristics including but not limited to gender and internationality, in order to enhance the Company's ability to create values. The Company has appointed Directors who are able to draw out the Company's strength with sufficient diversity to respond to changes of business format which will fit the Company's mid-term or long-term management strategies. However, at this point, the Company has not yet formed a Board of Directors that can be said to have sufficiently considered gender and internationality. The Company will hereafter strive to appoint a diverse range of Directors, including those from the perspectives of gender and internationality, based on our mid-term or long-term management strategy. The Company has appointed independent outside Directors who possess the knowledge necessary to effectively contribute to the Company's sustainable growth and the improvement of corporate value over the mid-term or long-term, including knowledge of financial matters such as capital efficiency. The ASB members of the Company are also appointed as the ones who are equipped with appropriate experience and abilities as well as the necessary knowledge of finance, accounting and legal affairs.

[Disclosure Based on the Principles of the Corporate Governance Code]

■Chapter 1 Ensuring Shareholders' Rights and Equality

[Principle 1-4: Strategic Shareholding Shares]

  1. Details of policy and verification related to Strategic Shareholding Shares

The Company holds strategic shareholding shares only when they are necessary and reasonable for our Company Group's business strategies.

To examine the reasonableness of holdings, the Company comprehensively verifies the profitability of holdings at the meetings of the Board of Directors and ALM committees based on an appropriate understanding of the risks and costs associated with holding them as well as the returns from holding them, taking into consideration a mid-term or long term perspective.

As a result of the verification, the Company promptly sells the shares which are decided to be unreasonable to hold, taking into account its market influences and other factors.

  1. Criteria for Exercising Voting Rights Pertaining to Strategic Holding Shares

The Company comprehensively determines whether exercising the voting rights of the shares it holds conforms to the purpose of the Company's shareholdings and contributes to the common interests of the shareholders of the investees, and appropriately exercises such rights.

  1. Policy on How to Respond in the Event that a Strategic Shareholder Indicates an Intention to Sell In the event that a company which holds shares in the Company as a strategic shareholding indicated its intention to sell such shares, the Company will respect the intention of such shareholding company.

4

CORPORATE GOVERNANCE

[Principle 1-7: Transactions between Related Parties]

Related parties transactions involving Directors and/or the ASB members are (i) clearly identified by the "Rules of the Board of Directors" as a matter to be approved by the Board of Directors, and (ii) monitored by the Board of Directors through prior approval of actual individual transactions and reporting of their results. The existence of such transactions is confirmed annually with the Directors, the ASB members, and the representative Directors of the Company's subsidiaries.

■Chapter 2 Appropriate Collaboration with Stakeholders Other Than Shareholders [Principle 2-6: Roles of Corporate Pension Funds as Asset Owners]

Our corporate pension plan has introduced a defined contribution pension plan. Employees covered by the corporate pension plan are managed individually.

■Chapter 3 Appropriate Information Disclosure and Transparency

[Principle 3-1: Enhancement of Information Disclosure]

  1. Our management philosophy is available on the "I-1" of this report and on our website. [https://corporate.saisoncard.co.jp/company/]
    Management strategies and plans are announced at financial results briefings for analysts and other occasions. The Company has also formulated a new mid-term management plan starting in FY2019, and details of this plan are available on our website.
    [https://corporate.saisoncard.co.jp/ir/data/]
  2. Our basic stance on corporate governance is available on the "I-1" of this report and on our website. [https://corporate.saisoncard.co.jp/esg/governance/]
  3. Individual remunerations of each Director are determined, based on the results, etc. of the evaluations made by all Directors, including the evaluated Director, of the degree of contributions of each Director to our business performance, and after FY 2020 will be determined, based on the remuneration standards established by the Nomination & Remuneration Committee, by the representative Director and CEO who is delegated by the Board of Director, to the extent of the scope of such delegation.
    The remunerations of Directors are composed of the "Fixed Remuneration," "Performance-Linked Variable Remuneration" and "Restricted Stock Compensation," and Outside Directors receive only Fixed Remunerations.
  4. The overview of Policy on Determining Individual Directors' Compensation are described in the Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods of "Ⅱ-1" [Compensation for Directors] of this report. The Board of Directors discusses and determines the contents of the proposal for the election and dismissal of Directors to be submitted to the General Meeting of Shareholders after deliberation by the Nomination & Remuneration Committee based on the results of the hearing of all Directors. In addition, the ASB members are designated with the prior

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original document
  • Permalink

Disclaimer

Credit Saison Co. Ltd. published this content on 14 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 May 2021 15:16:15 UTC.