Shizuoka Financial Group

Small Meeting with Outside Directors

June 27, 2024
Clearing the way
to a new era

Introduction to Outside Directors

Kumi Fujisawa

Kazuto Tsubouchi

Position and responsibilities
with Shizuoka Financial Group

Position and responsibilities
with Shizuoka Financial Group

Director
Nomination and Remuneration
Committee member
Committee of Administrative
Supervision member
Advisory Board member

Yearappointed

1995
2004
2011
2013
2014
2018
2021
2022

Main posts

Founded IFIS Japan Ltd. as Representative Director
Director, Investment Trusts Association, Japan
Director, Sophia Bank Ltd.
Public Governor, Japan Securities Dealers Association (current post)
Director, Shizuoka Bank, Ltd.
Representative Director, Sophia Bank Ltd.
Director, Toyota Tsusho Corporation
Director, Net Protections Holdings, Inc. (current post)
Director, CellSource Co., Ltd. (current post)
Chairperson, Institute for International Socio-Economic Studies(current post)
Director, Shizuoka Financial Group, Inc. (current post)

Director (Audit & Supervisory
Committee Member)
Nomination and Remuneration
Committee member
Committee of Administrative
Supervision member

Yearappointed

1976
2000
2006
2012
2015
2018
2020
2022

Main posts

Joined Nippon Telegraph and Telephone Public Corporation (currentlyNTT).
General Manager at Kanazawa Branch Nippon Telegraph and Telephone
West Corporation
Member of the Board of Directors and Managing Director of Accounts andFinance Department, NTT Docomo, Inc.
Chief Finance Officer (CFO), NTT Docomo, Inc.
Chairperson, Foundation for MultiMedia Communications
Chairperson, Information & Telecommunication Equipment Constructor’s
Association
Director, Shizuoka Bank, Ltd.
Director (Audit & Supervisory Committee Member), Shizuoka
Financial Group, Inc. (current post)2

Skills Matrix of the Board members
Each Board member contributes to the sustained growth of the community and of the Group by playing a role inmanagement, society/economy, and business based on their individual insights.
Skills Matrix of the Board members
ManagementDirector
Katsunori Nakanishi Representative(Chairman)

Society/Economy

Supervision ofmanagement as a listedcompany

Leading of thecomprehensive financialgroup

Prospect toward regionalsociety and economy●●Business
Financial intermediaryfunctions

New businesses(development,composition)

●

●

●

Response to the socialchanges

Hisashi Shibata

Representative Director(President)

●

●

●

Minoru Yagi

Director●●●

Yutaka Fukushima

Director●●

Kumi Fujisawa

Outside Director●

Kazutoshi Inano

Outside Director●Koichi Kiyokawa
Motoshige Itoh
Kazuto Tsubouchi
Naomi Ushio

Director(Audit & Supervisory
Committee Member)
Outside Director(Audit & Supervisory
Committee Member)
Outside Director(Audit & Supervisory
Committee Member)
Outside Director(Audit & Supervisory
Committee Member)●●●(Innovation)

●

●

●

●

●

●

●(Environment)

●

●(IT)

●

●
(Diversity)●●

Roles in which the Board members are expected to play
1. Supervision of the management of the listed company and Leading of the comprehensive financial group, both of which are essential as the foundations for flexible
and robust governance needed to achieve sustained growth and enhanced Group management
2. Prospect toward regional society and economy and Response to the social changes that contribute to the sustainable community and economic development
3. Demonstrating wholesome Financial intermediary functions and developing new businesses and the composition, to contribute to the community growth3

Efforts to enhance corporate governance within the Shizuoka Financial GroupTo achieve sustained growth in a harsh economic environment characterized by prolonged monetary easing policies or other factors, theGroup has quickly moved to developing new business domains while enhancing the Group management. It shifted to a holding company
structure in October 2022 while effectively applying external insights to enhance governance structures in support of reforms and to takeon challenges.

Corporate governance enhancement
efforts

Shizuoka Financial
Group: Reformsand Challenges

Externalenvironment

2005

2010
The Global Financial
Crisis

2015
Great EastJapan
Earthquake

2022

2020

2023

2024

Lengthy large-scale monetary easing by the Bank of Japan
Policy of negative interest rates
Shift to a holding company
structure

Enhancement of the Group management : total ordinary profit of approx. 10.0 billion yen achieving by all Group companies(e.g., establishing new companies)

BPR: Top line strengthened through improvement of productivity and shift offrontline personnel

Sales structure reforms: Revision of
branch functions and other measures

Launching a next-generationaccounting system

Developing new business domains (e.g., structured finance, asset building loans)
Launching alliances with companies from other industries, advancing them to theVC business, and pursuing other initiatives• Four Outside Directors appointed(of a total 10 Directors)

20082013

2015• One Outside Director appointed• Committee of Administrative• Advisory board establishedSupervision established

2020• Two Outside Directors appointed• Remuneration Committee established

１

FiveBoard ofInside Directors Directors

Five Outside Directors(including two females)

２

Shift a company that possesses an Audit &Supervisory Committee
Auditing and supervision that are independent from thebusiness execution and on an objective viewpoint

One
Inside Director

Audit &SupervisoryCommittee• Three Outside Directors appointed(of a total nine Directors)

2022• Five Outside Directors appointed(of a total 10 Directors)• Nomination and Remuneration
Committee established

Governance under the holding company structure
Balanced Board of Directors consistingof knowledgeable and experienced insideand outside Directors

2021

Three Outside Directors(including one woman)

３

Adoption of Group CxO system
Chief Officers appointed to supervise the operation areas to achieve theGroupwide optimization

Chief Executive Officer (CEO) Chief Compliance/Risk Management Officer (CRO)
Chief Finance Officer (CFO)
Chief Internal Audit Officer (CIAO)
Chief Information Officer (CIO) Chief Innovation Officer (CINO) NEW4Administration of the Shizuoka Financial Group Board of Directors
Based on the separation of supervision and execution, the Board receives important reports on strategy and risk management anddiscusses the Group management from an overarching perspective, being separately from decisions concerning specific executive
matters.

Enhancing discussions by the Board of Directors

Enhancing the supervisory functions of the Board

The Board selects items by importance and secures sufficient time for discussion of them.
Management functions based on the separation of supervision and execution through reportbased monitoring, which is secured by transfer of authority to the execution units.

Resolving information imbalances and reinforcing Board supervision through Director training
camps and by creating opportunities for outside Directors to better understand the businessexecution

Major themes considered by the Board of Directors(examples of typical agenda items)
Proposals• Recognition of and responding to the issues related to shareprice and market capitalization (increasing corporate value)• IR activity reports (e.g., sharing information on items of theinvestors’ interests)• Establishing new companies (SFG Marketing and SFG Real
Estate Investment Advisors)• Partial reorganization

Internalcontrols

Reporting• Courses of action for the new business fields• Approach to sales of customer assets to realize customer-centricmanagement• Evaluating the effectiveness of the Board and analyzing theresults• Evaluating the efficacy of internal controls• Group CxO reports• Reports on subsidiary business conditions

Management
evaluation

Proposals

Importantbusinessdecisions• Formulating and revising medium-term business plans• Reviewing fixed asset evaluation based on Branch strategies,
etc., and revising business forecasts

Reporting Proposals

Management
policies andstrategies(held as a special Board meeting)Details

Reporting

Category

Director’s Camp• Appointment of Directors, etc.
• Decisions on remuneration of Directors, etc.

Directors, Group CxOs,
subsidiary presidents,etc.

DateAugust 2023
(two days, overnight)

Topics• Governance (Supervisory style by the Board of Directors)• Digital (generative AI)• Focal points in the management for community co-creation

Attendees

Encouraging joint efforts with executive sections andunderstanding their business execution
1

2

Exchanging opinions with top management of Group companies(Shizuoka Capital, Shizugin Management Consulting, Shizugin TMSecurities)
Exchanging opinions on courses of action of each company for and the progress of
their independent strategies and organizational structures

Exchanging opinions with the section that establishes new business(Chief Innovation Officer [CINO], Business Development Department)
Exchanging opinions with the chief officers and sections in charge regarding new
business domains and courses of action for innovation, targeting at enhancement oforganizational structures in new-business development

3

Exchanging opinions with independent Directors
Aligning perspectives with the Board secretariat to make the Board more effective5

(Reference) Corporate governance structureShizuoka Financial Group corporate governance structure
Nomination and Remuneration
Committee

Advisory Board

Supervision

Audit & Supervisory Committee

Board of Directors

Director/President

Committee of Administrative
Supervision

Group-wide Executive Committee
Execution

EnvironmentalCommittee

Human CapitalManagement
Committee

Sustainability Committee(Group Executive Committee)

Group-wide Committee for Integrated Risk
and Budget Management

Instructions, management
Shizuoka Bank
(including Bank subsidiaries)

Shizugin Management
Consulting

Group-wide Compliance Committee

Group Chief Officers(CxOs)

Consultation, reporting

Shizugin Lease

Shizuoka Capital

Shizugin TM Securities

SFG Marketing

SFG Real Estate
Investment Advisors

Meeting bodies in charge of supervisory functions
Meeting body

Category

Ten Directors (including five Outside Directors)

Board of Directors
Audit & Supervisory
Committee

Nomination andRemuneration Committee

Membership (as of June 17, 2024)

Statutory

Functions• Responsible for corporate governance of the Group, enhance independence for the business execution and supervise theGroup management systems and business execution.

Four Directors (including three Outside Directors) • Works with internal audit sections to achieve objective audits from the vision of oversight independence of business execution.
Seven Directors (including five Outside Directors)• Advises on executive nomination, remuneration systems, etc., and deliberates executive remuneration as the body tasked by
the Board with remuneration decisions.

Seven Directors (including five Outside Directors)
Committee of• Reinforcing the supervisory functions of the Board toward the business execution by monitoring how the business is executed.
Optional
Administrative Supervision
Group CIAO
Advisory Board

Four Directors (including two Outside Directors)
Six outside experts• Offers the specialized external opinions to the Group management as an advisory body to the President of the holdingcompany.

6Contact
Yukimasa Okumoto, Corporate Planning Office, Corporate Planning Department,
Shizuoka Financial Group, Inc.
Tel: +81-54-261-3111 (main switchboard)+81-54-345-9161 (direct)

Fax: +81-54-344-0131

E-mail: ir@jp.shizugin.com URL: https://www.shizuoka-fg.co.jp/
Shizuoka Financial Group
Website (IR News)