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Corporate Information

Corporate Governance

The Credit Saison Group recognizes bolstering management supervisory functions for business objective attainment and management transparency enhancement is of paramount importance for obtaining the understanding and consent of our shareholders—our basic management policy. We secure this through the creation of innovative services and continuous corporate value improvement.

Corporate Governance System

Credit Saison’s corporate governance system is supported by an audit & supervisory board. To ensure we retain the confidence of our shareholders and other investors, we strive to improve and strengthen our corporate governance by nominating outside directors and outside audit & supervisory board members. Directors, who have detailed operational knowledge, strive to uphold and enhance management efficiency by listening to the advice and proposals of outside directors to ensure that decision-making in Board of Directors meetings and other important meetings is valid and appropriate. The Audit & Supervisory Board works closely with those responsible for internal audit and internal control systems, strengthening management supervision functions.

The Board of Directors consists of 15 directors, including two outside directors, one of which is an “independent director” appointed from outside the Company. Along with deciding on the operational implementation of important matters concerning management, the Board supervises business execution by directors. Directors serve for one year. This policy allows us to build a flexible management structure capable of adapting to a changing business environment, while also requiring management to earn the confidence of shareholders every year.

The Audit & Supervisory Board consists of four audit & supervisory board members, including three outside audit & supervisory board members who are “independent directors” appointed from outside the Company. It determines audit policy and matters concerning the execution of other duties by audit & supervisory board members as well as compiling audit reports. Moreover, based on the premise that thoroughness in corporate governance is important to achieving continuous corporate value creation, the Audit & Supervisory Board strives to ensure internal control systems function well, reinforce risk management systems, and promote rigorous compliance.

In building internal control systems for operations, the Board of Directors decides on basic policies for putting properly functioning internal control systems into place with the aim of building systems that ensure appropriate and efficient operations, centering on the Corporate Planning Department, where divisions tasked with supervision of internal controls reside. With regards to our response to regulation for financial reporting, the Corporate Risk Management Department leads the way in promoting the proper functioning of internal controls at the Company and consolidated Group companies, and those responsible in the Internal Audit Office carry out independent monitoring.

With regards to risk management, the Risk Management Committee and the Corporate Risk Management Department lead the way in working to prevent risks from materializing and minimize the effect on the Company when risks become apparent. To this end, the Company conducts periodic internal education and training for people working with “risk management rules,” “rules concerning management of risk of loss” and “crisis management rules” and, in this way, strives to maintain its risk management systems. With regards to various issues within the Group and supervisory factors with the potential to create serious risks, the Group Strategy Office of the Corporate Planning Department leads the way in monitoring business execution at Group companies and sharing information with the management departments of Group companies.

With regards to our compliance systems, the Compliance Committee and the Corporate Risk Management Department have been established to ensure legal compliance, fairness, and ethical standards in our corporate activities. Having assigned compliance responsibilities to employees in each department, the Company has issued a declaration on how it will conduct itself, and is working to strengthen compliance systems by distributing a pamphlet to promote careful adherence to the Company’s standards of conduct that sets out how directors, executive officers, and employees should conduct themselves, publicizing the compliance consultation desk set up as a contact for those with compliance concerns, and implementing compliance training.

We will continue to study approaches to management that suit the Credit Saison Group based on our basic policies for ensuring the proper functioning of internal controls and international trends regarding corporate governance.

Corporate Governance Structure

Corporate Governance Structure

Personal Relationships between Outside Directors, Outside Audit Board Members and the Company

The Company has two outside directors and three outside audit & supervisory board members.

Directors, who have detailed operational knowledge, strive to uphold and enhance management efficiency by listening to the advice and proposals of outside directors to ensure that management decision-making is valid and appropriate. Of the two outside directors, one is an “independent director” appointed from outside the Company who is unlikely to have any conflicts of interest with common shareholders. Of the outside audit & supervisory board members, three are “independent directors” nominated by the Board of Directors, strengthening management supervisory functions.

* All outside executives who meet the criteria to serve as non-employee “independent directors” on either the Board of Directors or the Audit & Supervisory Board are designated as “independent directors.”

Selection Criteria for Outside Directors

For the selection of outside directors, the Company has adopted selection criteria in order to ensure appropriate and correct decisionmaking through management supervisory functions. Accordingly, the selection criteria for outside directors require candidates to possess either practical experience as a corporate manager, or a record of achievement and expansive knowledge in a specific specialized field. Furthermore, for the selection of outside audit & supervisory board members, the Company has adopted selection criteria to ensure sound and transparent management through audits carried out from an impartial and objective perspective. Accordingly, the selection criteria for outside audit & supervisory board members require candidates to possess abundant knowledge and experience in a variety of fields.

The Company has not established any specific criteria and policies regarding independence from the Company for the purpose of appointing outside directors or outside audit & supervisory board members. However, in the course of making new appointments, the Company gives due consideration to ensuring the independence of these executives by referring to the requirements for “independent directors” stipulated by the Guidelines Concerning Listing Control, etc. and the Securities Listing Regulations of the Tokyo Stock Exchange.

<Business Management Organization for Management Decision-Making, Execution and Supervision Other Conditions>

Organization format Company with statutory audit &
supervisory board members
Number of directors stipulated by
the Articles of Incorporation
Up to 25
Term of office for directors stipulated
by the Articles of Incorporation
1 year
Chairman of the Board of Directors President
Number of directors 15
Appointment of outside directors Appointed
Number of outside directors 2
Of outside directors, the number
who are “independent directors”
1
Appointment of outside audit &
supervisory board members
Appointed
Number of outside audit &
supervisory board members
3
Number of outside audit &
supervisory board members
designated as “independent directors”
3

The outside directors are briefed on the results of the audit & supervisory board members’ audits and accounting audits at meetings of the Board of Directors. The outside directors cooperate with the Internal Audit Office, which is an internal audit division, and the Corporate Planning Department, which is an internal control division, by receiving briefings on the status of business execution from each division, and other means.

The outside audit & supervisory board members strive to strengthen cooperation with the accounting auditors and the Internal Audit Office, while working to enhance the effectiveness of audits by seeking briefings from the internal control divisions as necessary.

Remuneration for Directors and Audit Board Members

The total amount of remuneration in fiscal 2014 for different classifications of directors and audit & supervisory board members, along with sub-totals for different types of remuneration, are shown below.

<Details of Remuneration for Directors and Audit & Supervisory Board Members>

Position Total
remuneration
amount
(Millions of yen)
Total amount of
remuneration by type
(Millions of yen)
Number
of persons
Basic
remuneration
Bonuses
Directors
(Excluding outside directors)
532 405 127 15
Audit & supervisory board members
(Excluding outside audit &
supervisory board members)
8 8 - 1
“Outside directors” 43 43 - 4

Notes:

  1. The total amount of remuneration paid to directors does not include employee salaries in the case of employees who serve concurrently as directors.
  2. As of March 31, 2015, the Company had 14 directors and four audit & supervisory board members.

<Remuneration for Independent Auditors>
Paragraph 1 of the Certified Public Accountants Law: ¥103 million
Remuneration based on non-audit duties: ¥2 million

Overview of Internal Control Systems

As per the Corporate Law, the Board of Directors has set basic policies for directors to build a system that ensures adequacy and efficiency of the Company’s business and compliance with laws, regulations and the Articles of Incorporation. These policies are based on the philosophy to “always realize profitable growth and maximize the satisfaction of customers and other stakeholders by pursuing innovative ideas and strategies.” With regards to our response to so-called J-SOX regulation for financial reporting internal controls, the Corporate Risk Management Department leads the way in promoting the proper functioning of internal controls at the Company and consolidated Group companies, and those responsible in the Internal Audit Office carry out independent monitoring. On this basis, reports are submitted to authorities on whether internal controls are effective. In building our internal control systems, we aim to build highly efficient and effective systems that help to maximize benefits for our stakeholders by maintaining appropriate business processes while increasing earnings performance and strengthening profits.

Rigorous Implementation and Enhancement of Compliance

Based on this reinforcement of corporate governance and internal controls, the Compliance Committee and departments responsible for compliance are taking the lead in strengthening our compliance system to ensure our business activities are compliant with laws and regulations, and with standards of fairness and ethical behavior.

The director in charge of the departments responsible for compliance chairs the Compliance Committee and periodically convenes Compliance Committee meetings to deliberate on and determine compliance related matters, and, on this basis, submits reports to Board of Directors meetings.

To ensure familiarity and observance with Company rules, regulations and ethics, we have published standards and guidelines in Our Compliance, a pamphlet distributed to regular and contract employees. The Company is working to prevent misconduct and scandals by publicizing its compliance consultation desk. The consultation desk strives to create a user-friendly environment by maintaining systems inside and outside the Company for accepting inquiries, including dedicated addresses on the Company intranet and the Internet. When a report is received, departments responsible for compliance cooperate closely with an attorney and aim to quickly resolve the relevant matters, report to the Compliance Committee, and then take action to prevent reoccurrence. In addition, the Compliance Department invites outside lecturers to conduct compliance training for executives and training for senior management including division managers. The Company appoints compliance officers and compliance coordinators in each division, and the divisions take the initiative in conducting compliance training in cooperation with the Compliance Department. In addition, our compliance officers and compliance coordinators also play a role in controlling the Company’s administrative risks.

Security and Reliability of Information Systems

As the use of IT grows, maintaining the security and stability of information systems is becoming increasingly important to ensure that customers can rely on the Company’s credit cards. We have implemented countermeasures against system disruptions, which may be caused by a wide variety of factors, including natural disasters, accidents or computer viruses, and higher system efficiency was achieved by centralizing clerical work. Credit Saison will continue efforts to keep its systems secure, reliable and efficient.

Risk Management

To prevent and appropriately respond to risk, the Company has formulated risk management rules and rules concerning management of risk of loss and, through the Risk Management Committee and the Corporate Risk Management Office of the Corporate Planning Department, works to prevent risks from materializing and minimize the effect on the Company when risks become apparent. To this end, the Company conducts periodic internal education and training for people working with the risk management rules, rules concerning management of risk of loss and crisis management rules, and the Board of Directors periodically examines the rules and issues revisions and improvements. In this way, the Company strives to maintain its risk management systems. We strive to ensure the stability of our management base in the event of a largescale disaster or other emergency. To this end, we have prepared countermeasures to ensure the continuity of critical operations and reduce the risk of operational interruption as much as possible. We maintain control over factors within the Credit Saison Group that have the potential to create serious risks by monitoring the operations of Group companies under the affiliated company rules, which are administered primarily by the Group Strategy Office of the Corporate Planning Department. Our risk management systems are further enhanced through information-sharing with the management organizations of Group companies. Moreover, in the event that a risk occurs, the Company works to respond swiftly based on the crisis management rules, mainly administered through the Crisis Management Committee.

Proactive Disclosure of Information

The Company proactively discloses financial information through management reports, investment conferences, IR meetings and other events, and strives to ensure highly transparent management by posting financial result summaries, IR activities and other information on its website.

Principles regarding Antisocial Forces

The Company declares the following principles in order to prevent damage that may be inflicted by groups and individuals that pursue economic interests by taking advantage of violence, force, and fraudulent techniques (so-called antisocial forces).

  1. The Company will not have any relationship with antisocial forces.
  2. The Company will cooperate with external expert organizations and persons, including police, the Metropolitan area violation prevention association and lawyers, and will deal with antisocial forces in an appropriate and systematic manner in order to prevent damage that may be inflicted by such forces.
  3. The Company will not accept any unreasonable demand from antisocial forces, and will firmly deal with such forces and take legal actions.
  4. The Company will not provide funds to or do back-door deals with antisocial forces.
  5. The Company will ensure the safety of officers and employees who deal with unreasonable demands from antisocial forces.
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