ORIX : Releases its Corporate Governance Report 2021 (English version)

Corporate Governance Report

Final revision date: January 14, 2021

ORIX Corporation

Representative Executive Officer: Makoto Inoue

Contact: IR and Sustainability Department [phone]

Securities Code: 8591

https://www.orix.co.jp/grp/en/I.

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

1.

Basic Views

• • ORIX believes that a robust corporate governance system is essential for ensuring objective management and carrying out appropriate business activities in line with its core policies. We have therefore established a sound and transparent corporate governance system.

• • Details concerning corporate governance can be found below under II-2. Matters Relating to Business Execution, Audits and Supervision, Nomination, Compensation Determination, and Other Functions (Overview of Current Corporate Governance Structure), on the ORIX website and in securities reports.

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

The Company complies with all principles of the Corporate Governance Code.

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

The details of disclosure items pursuant to each principle of the Corporate Governance Code are as follows.

[Principle 1-4 Cross-Shareholdings]

• • ORIX does not engage in cross-shareholdings of publicly-traded shares.

[Principle 1-7 Related Party Transactions]

• • ORIX has established internal rules that in principle prohibit transactions by directors and executive officers with the company and its subsidiaries and takes measures to inform personnel about these rules and enforce them. Internal rules also provide that in cases where ORIX engages in certain transactions with a company at which an ORIX director or executive officer also serves as a director or executive with representative authority, a prior report must be made to the relevant division and prior approval must be obtained from the Board of Directors, and ORIX takes measures to inform personnel about these rules and enforce them. When transactions are conducted with the approval of the Board of Directors, the details are reported to the Board and systems are in place to monitor and ensure that those transactions will not give rise to concerns regarding harm to the interests of the company or its shareholders.

[Principle 2-3 Sustainability Issues, Including Social and Environmental Matters]

• • Cognizant that due consideration for sustainability issues is essential to meet societal expectations and achieve long-term growth as an enterprise that creates new value, ORIX appropriately addresses sustainability issues including social and environmental problems.

• • ORIX established a Sustainability Policy as an action policy concerning sustainability and takes actions to address sustainability in business based on this policy. We seek to identify risks and opportunities relating to sustainability in each business field as we undertake business activities.

[Sustainability Policy]

https://www.orix.co.jp/grp/en/sustainability/about/index.html [Sustainability Report]https://www.orix.co.jp/grp/en/sustainability/sustainability_report/index.html

[Principle 2-6 Roles of Corporate Pension Funds as Asset Owners]

Status of Measures concerning ORIX Group Corporate Pension Funds

• • ORIX established an Asset Management Committee chaired by the ORIX Group CFO and with the officers responsible for finance, accounting, and personnel as members.

• • Matters concerning asset management policies and policy-based asset composition allocations are investigated by the Asset Management Committee and determined by the Representative Counsel.

  The financial status of the pension fund is extremely good and excessive risks have not been taken in asset management. Management policies emphasize curtailing decreases in value. In principle, the policy-based asset composition allocation is determined at the time of financial recalculation, which is performed every five years, and is verified annually and reviewed as necessary.

• • All service providers to whom management of the fund has been outsourced have accepted the Japanese version of the Stewardship Code. The fund holds quarterly management reporting conferences concerning service providers and conducts quantitative analysis. In addition, with respect to qualitative analysis, service providers are required to submit annual written survey responses, and thereby appropriate management is confirmed.

• • Exercise of voting rights concerning ORIX Group shares and investment targets is performed in accordance with the decision-making criteria of management service providers, and there are no matters involving conflicts of interest.

• • Personnel with appropriate qualifications are assigned to the administrative offices of the fund, and the qualifications of those personnel are enhanced by sending them to outside seminars and other means.

[Principle 3-1 Full Disclosure]

ORIX implements full disclosure of information through means such as the Company's websites and the following reports.

[ORIX Website]https://www.orix.co.jp/grp/en/ [Securities Reports]https://www.orix.co.jp/grp/en/ir/library/financial_result/index.html

[Integrated Report]

https://www.orix.co.jp/grp/en/ir/library/annual_report/index.html

[Sustainability Report]

https://www.orix.co.jp/grp/en/sustainability/sustainability_report/index.html

• 1) ORIX has established and publicly released its core policies and target business indicators. The details are released in securities reports.

• 2) For information on ORIX's fundamental approach to corporate governance, please refer to I-1. Fundamental Approach, etc. above.

  Details can be found below under II-2. Matters Relating to Business Execution, Audits and Supervision, Nomination, Compensation Determination, and Other Functions (Overview of Current Corporate Governance Structure), on the ORIX Website (corporate governance) and in securities reports (4.4. Corporate Governance, etc.).

• 3) The Compensation Committee formulates policies on the determination of director and executive officer compensation and the details of the compensation of each individual based on those policies. For information concerning the policies on the determination of director and executive officer compensation by the Compensation Committee, see (2) Policy for Determining Compensation of Directors and Executive Officers under II-1. Director and Executive Officer Compensation: Disclosure of Policies on Determination of Compensation Amounts and Methods of Calculation.

• 4) The Nominating Committee determines proposed resolutions relating to the appointment and dismissal of directors to be submitted to the annual general meeting of shareholders. For information on policies and procedures relating to the determination of director candidates and screening of executive officers, see 3.

  Matters Relating to the Three Committees, 1) Nominating Committee under II-2. Matters Relating to Business Execution, Audits and Supervision, Nomination, Compensation Determination, and Other Functions.

• 5) For information on the reasons why director candidates were nominated, see the reference information (matters to be resolved) in the Notice of the 57th Annual General Meeting of Shareholders.

  (See:https://www.orix.co.jp/grp/en/ir/library/shareholder_meeting/)

  For information on the reasons why outside directors were nominated, see II-1. Directors: Relationship with the Company (2).

  Also, regarding the nomination of executive officers, decisions are made in light of the policies described above in (4), taking into consideration the individual business experience and knowledge of each candidate. Profiles of each executive officer can be found on the ORIX website.

  (Seehttps://www.orix.co.jp/grp/en/about/overview/officer/index.html)

[Principle 4-1-1 Roles and Responsibility of the Board (1)]

• • For information on the scope of responsibility delegated by the Board of Directors to the management team, see (2) Matters Relating to the Board of Directors under II-2. Matters Relating to Business Execution, Audits and Supervision, Nomination, Compensation Determination, and Other Functions.

[Principle 4-8 Effective Use of Independent Directors]

• • For information on action policies relating to the effective use of independent directors, refer to (2) Action Policies Relating to the Effective Use of Independent Directors under II-1. Independent Directors: Other Matters Relating to Independent Officers.

[Principle 4-9 Independence Standards and Qualifications of Independent Directors]

• • For information on ORIX's Conditions for Director Independence, see (1) Status of Independent Directors under II-1. Independent Directors: Other Matters Relating to Independent Officers.

[Principle 4-11-1 Preconditions for Board and Kansayaku Board Effectiveness]

• • For information on ORIXs approach concerning the structure of the Board of Directors, see (2) Matters Relating to the Board of Directors under II-2. Matters Relating to Business Execution, Audits and Supervision, Nomination, Compensation Determination, and Other Functions.

[Principle 4-11-2 Preconditions for Board and Kansayaku Board Effectiveness]

• • For information concerning the status of concurrent positions held by directors, see the directors' professional experience posted on the ORIX website.

  (See:https://www.orix.co.jp/grp/en/about/overview/officer/index.html)

  Also, for information concerning the key concurrent positions held by outside directors, see II-1. Directors: Relationship with the Company (2).

[Principle 4-11-3 Preconditions for Board and Kansayaku Board Effectiveness]

• • The Secretariat of the Board of Directors conducts a survey of all Directors. The effectiveness of the Board of Directors is evaluated and analyzed, and actions to improve the administration of the Board of Directors are implemented.

• • An overview of the effectiveness of the Board of Directors for FY2020.3 follows.

• • The Secretariat of the Board of Directors provided a questionnaire (details below) to the Directors.

• • Based on the results of the questionnaire, the Secretariat of the Board of Directors personally interviewed each Director to gather additional information including opinions not available from the questionnaire alone and requests concerning the operations of the Board of Directors.

• • The Secretariat of the Board of Directors reported the results of the questionnaire and interviews to the Board of Directors. The Board of Directors formulated action plans for the issues raised by the report.

• • June 2020: Questionnaire conducted

• • July 2020: Interviews conducted based on the questionnaire

• • August 2020: Final results of the evaluation presented to the Board of Directors, action plan formulated

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