Corporate Governance

Based on its management policy of maintaining a sound and proactive
enterprising spirit, YMFG aims for management transparency and fair,swift and bold decision-making that will lead to sustainable growth andincreases in corporate value over the medium to long term. To this end andrecognizing that creating an effective corporate governance system is an
important management priority, on an ongoing basis we are pursuing theinitiatives described below to enhance our corporate governance.
i. We strive to ensure the rights of shareholders and create an environmentthat facilitates the appropriate exercise of shareholders’ rights andsubstantive shareholder equality.
ii. We cooperate closely with our principal stakeholders, including
customers, the local community, shareholders and employees.
iii. We diligently disclose important management-related information to ourprincipal stakeholders.
iv. We endeavor to ensure the effectiveness of the business execution
supervisory and auditing function through the establishment of various
institutions, including the Board of Directors.
v. We create systems to promote constructive dialogue in order to build
long-term relationships with shareholders.
The Board of Directors, consisting of 10 directors (including six outsidedirectors), makes decisions about important matters related to the Group’s
management and supervises the directors. Furthermore, we have adopted
the chief officer (CXO) system and the executive officer system to fortify theBoard of Directors’ supervisory function and enhance the business executionfunction. The Nomination Committee discusses matters related to theappointment and dismissal of directors, and the Compensation Committee
discusses matters related to the compensation of the directors. Bothguarantee the objectivity and transparency of decision-making processes.
YMFG has adopted an audit and supervisory committee system. TheAudit and Supervisory Committee comprises three directors, of whom two
are outside directors. The committee audit the execution of operations bydirectors, configure, audit and verify the operation of internal control systems
at YMFG and its subsidiaries, and prepare audit reports. By having the Auditand Supervisory Committee, which chiefly comprises outside directors, exercise
its voting rights at Board of Directors meetings, we endeavor to reinforce itsauditing and supervisory function with respect to the Board of Directors andenhance the transparency and speed of the decision-making process.
The Group Executive Management Meeting, the Group Asset and Liability
Management Committee, the Group Compliance Committee and the Group
Risk Management Committee discuss important management issues.

YMFG Corporate Governance Structure (As of July 1, 2020)
YMFG
General Meeting of Stockholders
Appointment/Dismissal

Appointment/Dismissal

Cooperation

Audit and Supervisory Committee

Board of Directors

3 Members

10 Directors

Auditors and Supervisory
Committee Office

Accounting Auditor

Appointment
Accounting Audit

CompensationCommitteeCommandAudit and Inspection Dept.

Reports andRecommendation

Internal Audit

Group Executive
Management MeetingGroup ALM Committee

Group CEOGroup Compliance Committee

Deliberative
organ

Report(including 6 outside directors)(including 2 outside directors)
Cooperation
ReportAppointment/Dismissal

Group Risk Management Committee

NominationCommittee(Voluntary advisory body)Business Execution Structure

CEO: Chief Executive Officer
COO: Chief Operating officer
CIO: Chief Innovation/information and Strategic Investment officer
CSO: Chief Strategy Officer

Group COO

Head of CEO Office

Investment Project Consideration Committee
Unit COO
Regional Co-creation UnitUnit COO
Financial Unit

Group CIO Strategic Innovation
Investment Business H.Q.

CommandCommandCommandGroup CSO
Corporate Staff Division
CommandOperation Departments

Yamaguchi BankMomiji Bank

Kitakyushu Bank

YM Securities YM Lease, YM Consulting, Izutsuya Withcard, Yamagin Card, YM Guarantee, Sanyu, YMFG Zone Planning, YM Asset

Company with an audit and supervisory committee

Management, Momiji Estate, YM Life Planning, Hoken Hiroba, YM Saison, Momiji Card, Data Qvic, YM Career

YMFG Board of Directors and Corporate Auditors (As of July 1, 2020)
Director

Masao Kusunoki*DirectorTakeshi Yoshimura
President and Group COO

Director

Director

Yumiko Nagasawa*

Minako Suematsu*

Chairman and Group CEOKeisuke Mukunashi
Vice President and Unit COO

Koichiro Kuno

Noriyuki Yanagawa*Director
Audit and Supervisory Committee Member

Susumu Fukuda

Director
Audit and Supervisory Committee Member

Kazuo Tsukuda*

Director
Audit and Supervisory Committee Member

Michiaki Kunimasa** Masao Kusunoki, Yumiko Nagasawa, Noriyuki Yanagawa, Minako Suematsu, Kazuo Tsukuda and Michiaki Kunimasa are outside directors under Article 15 of Section 2 of theCompanies Act.

YMFG Annual Report 202012