Corporate GovernanceFundamental Approach toward Corporate Governance
JASDEC’s corporate philosophy positions users - including
investors, issuers and market intermediaries - as the main
focus of our business operations. Our shares are owned byinstitutions belonging to the Japanese financial industry, manyof which are also participants in our services. We aim toprovide user-oriented services, while responding appropriately
to environmental and structural changes that affect financial

and capital markets in Japan and overseas, through a governancestructure that is centered on our participant shareholders,
and through frameworks that fully reflect participants’needs. By establishing Advisory Committees comprised ofstakeholders - especially participants, we ensure that theviews of stakeholders are fully reflected in our business
operations and the development of our systems.

Adopting the Structure of a Company with Nominating Committee, etc.
JASDEC is organizationally structured as a company witha nominating committee, etc. This structure provides a clear
demarcation between management supervision functions
and executive functions, as required under the Companies
Act, and reflects internationally recommended principles
and practices. By making full use of lawfully designatedcommittees and other bodies, on which outside directors

hold the majority of seats, we ensure the transparency andfairness of decision-making processes and improve theeffectiveness of management supervision functions. To
ensure timely and efficient operational management, theboard of directors delegates operational decision-making
functions to executive officers.

Corporate Governance Framework

Shareholders’ Meeting
Board of Directors
The majority shall be representative ofshareholders or independent members, while
the others represent executive officers.

Supervision

Nominating
Committee

Determining proposals for shareholders meeting regarding
the appointment and dismissal of directors, etc.

CompensationCommittee

Determining the amount of remuneration for individual
directors and executive officers.

Audit Committee

Auditing execution of duties by directors and executive officers.
Preparing audit reports.

Audit Committee
OfficeExecutive Board

Execution ofOperations

CEO
Executive Officers

CRO

Internal Audit OfficeBusiness Groups

Risk Management
Department- 07 -Supporting Audit Committee’s activities.

Risk Committee

Advising the board of directors on comprehensive risk
management activities of JASDEC and its subsidiary.

AdvisoryCommittees

Advising executive officers on issues regarding theexecution of operations.

Integrated Risk
Management Council

Promoting comprehensive risk management activities.

Management Supervision Structure
Board of Directors

Nominating Committee

The Board of Directors determines fundamental management
policies including medium-term management plans, andmonitors progress under those policies. The Board of Directors
also makes decisions on important aspects of management
including the appointment and dismissal of members of thecommittees, executive officers, and representative executiveofficers. It also supervises executive officers in the performanceof their duties from a position that is independent fromoperational executive functions.
Our commitment to user-oriented business operations andthe public good is reflected in the fact that the majority of theBoard of Directors are outside directors who are participant
shareholders. The other members are independent directors,
who have no relationship with JASDEC, and directors who
concurrently serve as executive officers.
Outside directors who are participant shareholders are, inprinciple, appointed from among major shareholders basedon the frequency with which they use our systems.
In accordance with this policy, the Board of Directors
consists of eight outside directors chosen from among
participant shareholders, three independent directors andtwo directors who concurrently serve as executive officers.

The Nominating Committee, in addition to determining thecontent of proposals submitted to the general meeting ofshareholders concerning the appointment or dismissal ofdirectors, also promotes sound corporate governance bydeciding on the appointment and dismissal criteria fordirectors and executive officers and by confirming thecontent of proposals submitted to the board concerning
matters such as the selection of representative executiveofficers, the appointment and dismissal of executive officers,
and the allocation of executive officer duties.

Compensation Committee
The Compensation Committee sets policies on thedetermination of the amount of remuneration for executiveofficers and directors. The committee also decides on theindividual remuneration awarded to executive officers anddirectors.

Risk Committee
The majority of the members of the Risk Committee areindividuals who are not involved in operational executivefunctions within the JASDEC Group. The Risk Committee
advises and supports the Board of Directors with respect
to all aspects of risks affecting the JASDEC Group.

Audit Committee
The Audit Committee audits and reports on the performanceof duties by directors and executive officers.

Business Execution Structure
Executive Board

Advisory Committees

The Executive Board, comprising all executive officers,
deliberates and makes decisions on important aspects ofoperational executive functions under the supervision of theBoard of Directors.
The allocation of executive officer duties is decided with due
consideration being given to maintaining mutual supervisionof business groups and ensuring the independence of internal
auditing and overall risk management.

Advisory Committees, which consist of participants andother stakeholders, are established to provide advice andopinion regarding the matters of business operations toexecutive officers as requested or otherwise deemednecessary.

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