Corporate Governance
CORPORATE GOVERNANCE

Kyushu Financial Group, Inc.
Last updated: June 23, 2022

Kyushu Financial Group, Inc.
Yoshihisa Kasahara, President and Representative Director
Phone: 096-326-5588
Securities code: 7180
https://www.kyushu-fg.co.jp
This document describes the state of the corporate governance at Kyushu Financial Group, Inc. (“Kyushu Financial”)

I. Basic Stance on Corporate Governance and Capital Structure, Business Attributes, and Other Basic
Information
1. Basic Stance
The Kyushu Financial Group (the “Group”) establishes the Group Management Philosophy (see the attachment), and in order tocarry it into action, complies with laws and regulations and ensures appropriate business decision-making and execution ofoperations as well as endeavors to achieve high degrees of transparency, openness, and soundness of management, thereby
enhancing corporate governance.
<Group Management Philosophy>
1. The Group will respond to the trust and expectations of customers and will provide optimal, high-level comprehensive
financial services to customers.
2. The Group will grow with local communities and actively contribute to the realization of vibrant communities.
3. The Group will nurture an abundance of creativity and an open-minded organizational culture, continuing to challenge itself
to move toward a better future.
In accordance with its basic stance on the corporate governance system stated below, Kyushu Financial has adopted the form as
a Company with Audit and Supervisory Committee because it regards the form suitable to accelerate and improve the efficiency
of decision making through delegation of authority for further enhancement of discussions regarding medium- to long-term
management strategies at the Board of Directors, which consists of 15 Directors (including 5 External Directors), as well as toenhance supervision of the Board of Directors and strengthen corporate governance by establishing an Audit and Supervisory
Committee, the majority on which consist of the External Directors, and giving voting rights at the Board of Directors meeting
to the Directors who are Audit and Supervisory Committee Members (hereinafter the “Audit and Supervisory Committee
Members”).
<Basic stance on the corporate governance system>
1. We clearly define supervision and execution in order to establish an environment that allows the Board of Directors to focus
on the supervision of Directors’ performance of duty, thereby ensuring the effectiveness of corporate governance.
2. The Board of Directors delegates decision-making on the execution of individual operations to the Senior Management
wherever possible unless it involves matters specified in laws and regulations or the articles of incorporation, or material
matters of execution of operations such as policies, strategies, or plans pertaining to Kyushu Financial’s management.
3. We have in place and leverage optional internal bodies, including the Group Executive Commission and other various
committees, in order to help the Senior Management with prompt and decisive decision-making, thereby ensuring flexible
execution of operation and enhancing our corporate governance.
4. We leverage objective views offered by our External Officers wherever possible in order to ensure the fairness andtransparency of our decision-making process pertaining to our operation.
We have also developed and published our “Corporate Governance Guidelines” with the aim of achieving the sustainablegrowth of the Group and increasing our medium- and long-term corporate value. The Group’s officers and employees read the
Guidelines for a full understanding so that they act accordingly.
(URL：https://kyushu-fg.co.jp/company/governance/)[Reasons for not applying the principles of the Corporate Governance Code] Updated[Principle 3-1 (iv)] Policy and Procedure regarding the Dismissal of the Senior Management[Supplementary Principle 4-3 (3)] Establishment of an Objective, Timely, and Transparent Procedure for Dismissal of CEOs
We have described our policy for appointment of Directors (including Audit and Supervisory Committee Members) in Articles 9(Appointment of Directors [Excluding Those Who Are Audit and Supervisory Committee Members]) and 12 (Appointment of
Directors Who are Audit and Supervisory Committee Members) of the Corporate Governance Guidelines published on our
website. However, we have not formulated the policy and procedure for dismissal of the senior management (including CEO).
Nevertheless, Kyushu Financial has established the Nominating and Remuneration Committee and the matters regarding
appointment and dismissal of management are referred to the committee, increasing transparency and fairness in the decisionmaking process pertaining to the nomination of and compensation.
[Supplementary Principle 4-1 (3)] Development and Supervision of Plans for Successors of Chief Executive Officers

Kyushu Financial has not formulated a succession plan. Nonetheless, we are developing successor candidates based on the
training policy for the Directors (including Audit and Supervisory Committee Members) stated in Article 14 (Assistance System
and Training Policy for Directors), Paragraph 1 of the Corporate Governance Guidelines published on our website, and theBoard of Directors, through comments by Directors, confirms the development status of candidates for the next Representative
Directors as needed.
We will continue to discuss application of the above principles in terms of transparency, openness, and soundness of ourmanagement.
[Supplementary Principle 4-10 (1)] Authority and Roles of Nominating and Remuneration Committee
Kyushu Financial has the Nominating and Remuneration Committee (hereinafter the “Committee”) as the advisory body for the
Board of Directors in order to make our decision-making process fairer and more transparent, thereby helping improve ourcorporate governance, through focused discussions and exchanges of opinions with Representative Directors and External
Officers about matters pertaining to the nomination of and compensation to the management (Directors [including Directors who
are Audit and Supervisory Committee Members] and Executive Officers).
The Committee is consulted regarding matters such as appointment and dismissal of management and compensation to the
management, and seeking prior consultation with the Nominating and Remuneration Committee is built into the decisionmaking process, when submitting matters regarding nomination of and compensation to the Company’s management to theBoard of Directors.
The Committee met four times in fiscal 2020 and five times in fiscal 2021 and had sufficient discussions on matters regarding
nomination of and compensation to the management, thereby contributing to the strengthening of independence and objectivityof the functions and accountability of the Board of Directors.
The Committee currently consists of four persons—two Representative Directors and two Independent External Directors—and isheaded by the President and Representative Director.
External Officers account for a majority in the Committee and we will continue to review the composition of the members.
[Disclosure pursuant to the principles of the Corporate Governance Code] Updated(Disclosure pursuant to the principle requiring that specified matters be disclosed)[Principle 1-4] Cross-held Shares
1. Cross-shareholding policy and criteria for exercising voting rights
Article 23 (Cross-held Shares), paragraphs 1 and 3 of the Corporate Governance Guidelines specify our cross-shareholding
policy and criteria for exercising voting rights. Please visit our website, where the Article is published.
(URL：https://kyushu-fg.co.jp/company/governance/)-Our Approach to Reduction in Cross-held Shares
The Group holds the review stated in “2. Details of the review concerning cross-held shares” below in accordance with the
Corporate Governance Guidelines. If the review has concluded that the necessity of cross-holding certain shares is low, we
proceed with their gradual reduction with the consent of the issuers, taking account of any impact on the market.
-Specific Criteria for Exercising Voting Rights
As a rule, the Group exercises its voting rights regarding all proposals in accordance with the Corporate Governance Guidelines.
We also discuss whether we agree or disagree with each proposal* that will likely have an impact on the corporate value of ourGroup and/or investee companies.
* The following are examples of proposals.
-Proposal for appointment of a Director/Auditor; proposal for compensation or retirement bonuses (when there is a governancerelated concern [e.g. occurrence of a scandal or poor performance over a certain period])-Proposal for appropriation of surplus (dividends paid despite a loss; no dividend payment despite a surplus for a certain period)-Proposal for material changes to the articles of incorporation-Proposal for issuance of new shares-Proposal for material reorganization (e.g. M&A, business merger)-Proposal for anti-takeover measures, etc.
2. Details of the review concerning cross-held shares
The Group regularly makes qualitative (e.g. the purposes of holding the shares and compliance) and quantitative* evaluation ofrespective cross-held shares in order to comprehensively determine whether retaining those shares is still relevant, and reports
the details of the review to the Board of Directors.
* Formula for quantitative evaluation
Gross income from business (Net interest income + Fee and commissions) + Annual dividend - Expenses - Cost of credit/Bookvalue ≧ Return on shareholders’ equity
Please note that, even when the review concludes that a stock fails to meet the quantitative criteria, we may retain the stock if theissuer likely improve its performance through dialogue with us.
We also set the alarm (watching) point to review, as appropriate, each stock that may make market risk come to surface anddetermine whether to retain it.
We also monitor the details and results of reviews by the Group companies and report them to the Board of Directors and otherrelevant bodies, and ensure consolidated market risk management in order to enhance our functions as a holding company.
[Principle 1-7] Transactions with Affiliated Parties
Please see Article 20 (Prevention of Transactions Contrary to the Interest of Shareholders) of the Corporate GovernanceGuidelines published on our website.
(URL：https://kyushu-fg.co.jp/company/governance/)[Supplementary Principle 2-4 (1)] Ensuring Diversity in Appointment of Core Human Resources(1) Promotion of Female Participation
In April 2021, the Group’s Higo Bank and Kagoshima Bank formulated the Second Action Plan based on the Act on the
Promotion of Female Participation and Career Advancement in the Workplace for realizing a workplace environment that would
motivate all female employees, enable them to continue their respective careers, and demonstrate their abilities, and set forthgoals for appointing them to managerial positions.
Based on the fiscal year action plan, we will continue to develop a workplace environment that allows all employees to fully
demonstrate their individuality and ability by holding individual interviews and group training sessions, offering opportunities
for information exchange, and operation of an in-house nursery school.
(Ratio of female employees in managerial positions: targets and results [as of the end of March 2022])[Higo]
Target: 12.0% or higher Result: 12.4% [44 persons][Kagoshima]
Target: 4.0% or higher
Result: 4.4% [14 persons]
The banks have been evaluating well-motivated, capable human resources for promotion in a fair manner irrespective of theirgender. In order to further promote female participation, we intend to increase the number of female managers, the starting point
for future executives, by boosting their abilities as well as by developing a female-friendly working environment and raisingawareness by supporting their carrier development.
Based on the fiscal year action plan, we will continue to develop a workplace environment that allows all employees to fully
demonstrate their individuality and ability by holding individual interviews and group training sessions, offering opportunities
for information exchange, and operation of an in-house nursery school.
(2) Hiring Foreign Employees
A total of 11 foreigners are working at Higo Bank (seven) and Kagoshima Bank (four) together as of the end of March 2022.
Amid anticipated market contraction due to population decline in Japan, there is a rising need to deepen ties with foreigncountries from a long-term perspective. Kyushu Financial, through the hiring of foreign workers, aims to implement measuresthat would popularize the acceptance of foreign labor throughout the local region, while strengthening our business frameworkin growing Asia. In the most recent three years, Higo Bank newly hired three foreigners while Kagoshima Bank hired one, andthe banks plan to continue with such hiring.
(3) Mid-Career Recruitment
As of the end of March 2022, Kyushu Financial had three full-time employees (two males [one mid-career recruitment and one
new graduate] and one female [mid-career recruitment]), 40 employees on dispatch from Higo Bank and 31 from Kagoshima
Bank.
Kyushu Financial hires regular employees to improve its expertise and diversity for the following purposes.
(i) Hire highly specialized human resources for the future business strategy and business expansion as well as for strengtheningof governance structure in order to further accelerate the speed of implementation and contribute to the business of Kyushu
Financial.
(ii) Hire our own employees and combine them with dispatched employees to develop a diverse corporate culture and promote
vitalization of Kyushu Financial as a whole.
(iii) Increase the name recognition of Kyushu Financial Group through the hiring activities of Kyushu Financial and generatesynergies with hiring activities at its subsidiary banks to realize high quality hiring at the Group as a whole.
Kyushu Financial so far has hired a total of three full-time employees (one new graduate and two mid-career recruitment).
Kyushu Financial hired a new graduate (a science major from a graduate school) for a full-time position for the first time infiscal 2021. The person has been assigned to a specialized department and is being nurtured as part of its digital human resource.
In addition, of the two mid-career hires, one specializes in securities audit and another is engaged in digitization.
(4) Human Resource Development Policy, In-House Environment Development Policy
The basic strategy of the personnel department is “improving personnel development and engagement” and it aims to realize thegoal by combining the two pillars of “developing human resources for realizing value co-creation” and “respecting diversity andimproving job satisfaction.” In “developing human resources for realizing value co-creation,” we aim to implement new growth
support measures, which would make the human resources more flexible and energetic, such as systems for transfer and tryingout a new post in addition to the support for human resource development in new fields, as well as initiatives that would extend
the fields in which employees can thrive to the entire group. In “respecting diversity and improving job satisfaction,” we, as agroup, will implement initiatives for improving employee engagement so as to raise the job satisfaction of individual employees
and realize diverse workstyle and workplace environment.
For details, see the Integrated Report published on our website.
(URL: https://kyushu-fg.co.jp/english/ir/library/disclosure/)
Developing human resources and boosting engagement (pp.63–66)[Principle 2-6] Fulfillment of Functions as an Asset Owner of Corporate Pensions-The Group manages the reserves of the corporate pensions through the corporate pension funds offered by Higo Bank andKagoshima Bank (hereafter the “Funds”). To ensure stable and long-term total earnings for corporate pensions and the paymentof pension benefits over the years to come, we have thorough reviews and discussions by the asset management committees,councils, and board of representatives (hereafter the “Bodies”) at these Funds and work with investment consultants and asset
managers, thereby forming optimum pension assets.
-With regard to the management of reserves, we make the following efforts so that we will serve functions expected to be as an
asset owner.
-At the Funds, the Bodies discuss matters regarding managements (e.g., the selection of investment products, allocation ofinvestments, and earnings/risk analysis). Then the Funds appraise investments and manage earnings in accordance with theinvestment policies they have determined. We also conduct overall evaluations and monitoring of asset managers, taking
account of their track records, investment policies, investment systems, and investment processes, among others.
-We select the Funds’ employees who are qualified in terms of skills in investments and administration (e.g. Heads of Market,
Personnel, and Planning departments; union representatives) as the members of the Bodies at the Funds. Moreover, we assign
employees with expertise in investments (e.g. those with experience in market departments) to the position of business managers
at the Funds.
In December 2019, the Funds announced that they would adopt the “Principles for Responsible Institutional Investors <<Japan’s
Stewardship Code>>” (hereafter the “SS Code”). In the role of “Institutional investors as asset owners,” the Funds will urge
asset managers to follow the principles of the SS Code, thereby helping increase the corporate value of investee companies andboosting medium- and long-term return on investment.
[Principle 3-1 (i)] The Group Management Philosophy and Medium-term Management Plan
We have established and published the Group Management Philosophy. The details of the Philosophy are stated in “I. 1. Basic
Stance” in this document. The Group Medium-term Management Plan is also published on our website.
(URL：https://kyushu-fg.co.jp/company/plan/)[Principle 3-1 (ii)] Basic Stance on Corporate Governance and Basic Policy
Details are stated in “I. 1. Basic Stance” in this document. Please also refer to Article 3 (Basic Stance of the Group on Corporate
Governance) of the Corporate Governance Guidelines published on our website.
(URL：https://kyushu-fg.co.jp/company/governance/)[Principle 3-1 (iii)] Policy and Procedure for Determining Directors’ Remuneration
Please see Article 13 (Compensation to Directors) of the Corporate Governance Guidelines published on our website.
(URL：https://kyushu-fg.co.jp/company/governance/)
We also have the Nominating and Remuneration Committee as the advisory body for the Board of Directors concerning thenomination of and compensation to the Management. We follow the processes specified below when we make decisions
regarding compensation and other benefits to the Management.
-The total compensation to Directors who are not Audit and Supervisory Committee Members and Executive Officers for eachfiscal year is submitted to the Nominating and Remuneration Committee for deliberation and determined by the Board of
Directors.
-The individual amount of compensation to Directors who are not Audit and Supervisory Committee Members and Executive
Officers is submitted to the Nominating and Remuneration Committee for deliberation and determined by the President within
the bounds of the total compensation for the fiscal year determined by the Board of Directors.
-Compensation and other benefits to Audit and Supervisory Committee Members shall be treated separately from those to
Directors who are not Audit and Supervisory Committee Members, and determined through discussions among Audit andSupervisory Committee Members within the amount resolved on at the General Shareholders Meeting.
[Principle 3-1 (iv)] Policy and Procedure for Appointment, Dismissal, or Nomination of Directors
Please see Articles 9 (Appointment of Directors [Excluding Those Who Are Audit and Supervisory Committee Members]) and
12 (Appointment of Directors Who are Audit and Supervisory Committee Members) of the Corporate Governance Guidelines
published on our website.
(URL：https://kyushu-fg.co.jp/company/governance/)
We have established the Nominating and Remuneration Committee in order to ensure transparency and fairness in the decisionmaking process pertaining to the nomination of and compensation to the Management, and continuously discuss our policy andprocedure for dismissal of Directors, etc.
[Principle 3-1 (v)] Explanation about the Appointment, Dismissal, or Nomination of each Candidate for the Post of Director in
nominating them
The reasons for the appointment of individual candidates for the posts of Directors at Kyushu Financial are disclosed in theattachment to the Convocation Notice of the General Shareholders Meeting. Copies of the Convocation Notice of the General
Shareholders Meeting are mailed to all shareholders. The Notice is also published on our website.
(URL：https://kyushu-fg.co.jp/ir/stock/shareholders/)
We will also ensure accountability should we dismiss a Director.
[Supplementary Principle 3-1 (3)] Sustainability Initiatives
As a financial institution firmly rooted in the local region, the Kyushu Financial Group considers a sustainable local community
a key premise for its lasting growth. The Group is working to “pivot to a sustainable business model” toward achieving the longterm vision of its “evolution into a Group that co-creates regional value, building a better future together with customers, local
communities, and employees” as expressed in the Group’s 3rd Medium-Term Management Plan.
As a financial institution firmly rooted in the local region, the Kyushu Financial Group considers a sustainable local community
a key premise for its lasting growth. The Group is working to “pivot to a sustainable business model” toward achieving the longterm vision of its “evolution into a Group that co-creates regional value, building a better future together with customers, local
communities, and employees” as expressed in the Group’s 3rd Medium-Term Management Plan.
In February 2019, the Kyushu Financial Group formulated the “Sustainability Declaration” for the entire Group, while HigoBank and Kagoshima Bank drew up the “Overall Sustainability Concept.”
In June 2021, the Group identified “sustainability materiality,” which are the important challenges shared across the Group forrealization of a sustainable local community. The Group is carrying out various measures based on the identified materiality
including promotion of digital financial services and environmental business.
For details, see the “Sustainability Vision” published on our website.
(URL: https://www.kyushu-fg.co.jp/english/csr/vision/)
In investment in human capital, we have set forth the personnel strategy of “improving personnel development and engagement”
as part of the 3rd Medium-Term Management Plan, and are working on “developing human resources for realizing value cocreation” and “respecting diversity and improving job satisfaction.”
For details, see the Integrated Report published on our website.
(URL: https://kyushu-fg.co.jp/english/ir/library/disclosure/)“Developing human resources and boosting engagement” in the Integrated Report
Kyushu Financial Group regards environmental issues, including climate change, as important management challenges, and inJune 2019, it declared its support for the TCFD recommendations. It is striving for transparent disclosure based on theframework of the TCFD recommendations and working on reduction of environmental load such as CO2 emissions. In May
2022, Kyushu Financial joined PCAF and is pushing forward the measurement and disclosure of GHG emissions related toinvestment and loan portfolios to strengthen its response to climate change.
For details, see “Response to climate changes” published on our website.
(URL: https://www.kyushu-fg.co.jp/english/csr/sdgs/climate/)[Supplementary Principle 4-1 (1)] Summary of the Scope of Delegation to the Management
Please see Article 8 (Roles of Directors and the Board of Directors), Paragraph 2 of the Corporate Governance Guidelines
published on our website.
(URL：https://kyushu-fg.co.jp/company/governance/)[Principle 4-9] Criteria for independence of an Independent External Director and his/her qualifications
Please see the Attachment (Criteria for Independence of an External Officer) to the Corporate Governance Guidelines publishedon our website.
(URL：https://kyushu-fg.co.jp/company/governance/)[Supplementary Principle 4-10 (1)] Authority and Roles of Nominating and Remuneration Committee
Kyushu Financial has the Nominating and Remuneration Committee (hereinafter the “Committee”) as the advisory body for the
Board of Directors in order to make our decision-making process fairer and more transparent, thereby helping improve ourcorporate governance, through focused discussions and exchanges of opinions with Representative Directors and External
Officers about matters pertaining to the nomination of and compensation to the management (Directors [including Directors who
are Audit and Supervisory Committee Members] and Executive Officers).
For the roles and composition of the Committee, see “Reasons for not applying the principles of the Corporate GovernanceCode.”[Supplementary Principle 4-11 (1)] About the Balance between Knowledge, Experience, and Skills Required of the Board of
Directors
Please see Articles 7 (Composition of the Board of Directors), 9 (Appointment of Directors [Excluding Those Who Are Audit
and Supervisory Committee Members]), Paragraphs 2 and 4, and 12 (Appointment of Directors Who are Audit and Supervisory
Committee Members), Paragraph 2 of the Corporate Governance Guidelines published on our website.
(URL：https://kyushu-fg.co.jp/company/governance/)
From the perspective of the medium- to long-term value creation to realize its co-creation vision of “evolution into a regional
value co-creation Group that creates a better future together with customers, local communities, and employees,” Kyushu
Financial identified the 10 skills of corporate management, sales, market investment, legal, risk management, financial affairs,
accounting, regional industry promotion, global business, personnel, human resource development, SDGs, ESG, and DX,
technology and prepared a skill matrix that lists knowledge, experience, and ability of each Director. Among these items, we
listed seven fields in which we expect contributions from External Directors—corporate management, market investment, legal
and risk management, regional industry promotion, SDGs, ESG, and DX, technology. The skills matrix is included in the last
page of this report.
[Supplementary Principle 4-11 (2)] Directors Serving as Officers at Other Listed Companies
Our Directors who also serve as officers at other listed companies are disclosed on Page 50 in the Convocation Notice of theGeneral Shareholders Meeting. Copies of the Convocation Notice of the General Shareholders Meeting are mailed to allshareholders. The Notice is also published on our website.
(URL：https://kyushu-fg.co.jp/ir/stock/shareholders/)“Status of Directors and Corporate Auditors,” Notice of the 7th Ordinary General Meeting of Shareholders[Supplementary Principle 4-11 (3)] Summary of Analysis and Evaluation of the Overall Effectiveness of the Board of Directors
We analyze and evaluate the overall effectiveness of the Board of Directors annually, referring to our Directors’ selfassessments. The Board of Directors Meeting held in May 2022 conducted the analysis and evaluation for fiscal 2021 based on
self-evaluations of all Directors that encompassed how the Board of Directors is composed and how it operates. The meetingconcluded that the overall effectiveness of the Board of Directors is ensured, and agreed that the following are the challenges

that should be met to facilitate even more active discussions at Board meetings.
■ Enhancement of discussions regarding medium- to long-term management strategy and issues■ Expansion of information provision to External Officers and opportunities for opinion exchange[Supplementary Principle 4-14 (2)] Policy on Training for Directors
Please see Article 14 (Assistance System and Training Policy for Directors), Paragraph 1 of the Corporate Governance
Guidelines published on our website.
(URL：https://kyushu-fg.co.jp/company/governance/)[Principle 5-1] Policy on Constructive Dialogue with Shareholders
Please see Article 21 (Dialogue with Shareholders) of the Corporate Governance Guidelines published on our website.
(URL：https://kyushu-fg.co.jp/company/governance/)
2. Capital structure
Stock ownership by foreign investors

10% to less than 20%[Status of large shareholders] Updated
Name
The Master Trust Bank of Japan, Ltd. (trust account)Iwasaki Ikuei Bunka Zaidan
Meiji Yasuda Life Insurance Company
Employees’ Stock Ownership Association of Kyushu Financial Group, Inc.
Custody Bank of Japan, Ltd. (Trust Account)
The Bank of Fukuoka, Ltd.
Takara Kogyo Co., Ltd.
Iwasaki Sangyo Co., Ltd.
The Dai-ichi Life Insurance Company, Limited
The Miyazaki Bank, Ltd.
Controlling shareholders (excluding theparent company)―――

Parent company

N/A

Number of SharesHeld54,641,400
20,936,070
18,568,563
15,617,976
13,928,100
12,620,730
9,088,000
7,616,887
7,209,960
6,212,126

Proportion
(%)
12.63
4.83
4.29
3.61
3.21
2.91
2.10
1.76
1.66
1.43

Note
―――
3. Business attributes
Stocks listed on Updated

Prime Market of the Tokyo Stock Exchange; Main Board of the Fukuoka Stock
Exchange

Fiscal year-end

March

Industry

Banking(Consolidated) Number of employees atthe end of the previous fiscal year

1,000 or more

(Consolidated) Net sales for theprevious fiscal year

100 billion to less than 1 trillion

Number of consolidated subsidiaries atthe end of the previous fiscal year

10 to less than 50

4. Policy on the protection of minority shareholders when a transaction, etc. is conducted with the controlling shareholder―――
5. Other special circumstances that may have a material impact on corporate governance
There are no other special circumstances that may have a material impact on our corporate governance.

II. State of business management bodies pertinent to business decision-making, execution, andsupervision and other corporate governance frameworks
1. Matters pertaining to the structure of bodies and organizational operation, etc.

Organizational form

Company with Audit and Supervisory Committee[Directors]
Number of directors specified in thearticles of incorporation

20

Term of office of directors specified in
the articles of incorporation

1 yearChairperson of the Board

Chairperson of Kyushu Financial (except when he/she also serves as the
President)

Number of directors

15

Appointment of External Directors

Yes

Number of External Directors

5

Number of External Directors designatedas independent officers

5

Relations with the Company (1)Name
Katsuaki Watanabe
Yuji Nemoto
Kenichi Sekiguchi
Katsuro Tanaka
Yuko Tajima

AttributeaRelations with the Company (*)
b
c
d
e
f
g
h
i

from anothercompany
from anothercompany
from anothercompany
from anothercompany
from anothercompany*Classified into the following items*“○” means the director presently falls or has recently fallen under the category;“△” means the director fell under the category in the past
* “●”means a close relative of the director presently falls or has recently fallen under the category;“▲” means a close relative of the director fell under the category in the pasta
Executive of a listed company or its subsidiaryb
Executive or non-executive director of the parent company of a listed companyc
Executive of a fellow subsidiary of a listed companydPerson or executive of a company whose major trading partner is a listed company

j

k

e
f
g
h
i
j
k

Major trading partner of a listed company or executive of a major trading partner thereof
Consultant, accounting expert, or legal expert who receives a large sum of money or any other financial benefits other than
executive compensation from a listed company
Major shareholder of a listed company (In case the major shareholder is a corporation, executive of the corporation)
Executive of a listed company’s trading partner who is not classified into d, e, or f above (applicable only to the person)
Executive of an entity with which a listed company has exchanged personnel as External Officers (applicable only to theperson)Executive of an entity to which a listed company makes donations (applicable only to the person)
Other
Relations with the Company (2) Updated

Name

Audit andSupervisory
Committee
MemberIndependent
Officer

Note to the Classified
Item

Katsuaki
Watanabe

Yes

Director, Sumitomo
Electric Industries, Ltd.

Yuji Nemoto

Yes

Professor at Toyo
University

Honorary Advisor
Auditor at Hulic Co.,
Ltd., Meiji Yasuda Life
Insurance Company

KenichiSekiguchi

Yes

Yes

The Group has capitalties with Meiji Yasuda
Life Insurance
Company. Meiji Yasuda
Life also has regulartransactions with HigoBank and Kagoshima
Bank, both of which are
the Group’s wholly
owned subsidiaries. The
appointee himself has no
special interest in theGroup.

Reason for Appointment
Katsuaki Watanabe has a great wealth ofexperience as well as a broad view andextensive knowledge that he has acquired asa manager at a major manufacturingbusiness. We have decided that he would
provide a neutral and objective viewnecessary to supervise the overall operationof the Group, and thus we have appointed
him as an External Director. He meets thecriteria for independence specified by thestock exchanges and fulfills the Criteria for
Independence of an External Officer that wehave established.
Yuji Nemoto engages in regional policies asa university professor and has a great wealthof experience as well as a broad view andextensive knowledge as an expert in public
policy, urban development, and regional
development. We have decided that hewould provide a neutral and objective viewnecessary to supervise the overall operationof the Group, and thus we have appointed
him as an External Director. He meets thecriteria for independence specified by thestock exchanges and fulfills the Criteria for
Independence of an External Officer that wehave established.
Kenichi Sekiguchi has a great wealth ofexperience as well as a broad view andextensive knowledge that he has acquired asa manager at a major financial institution.
We have decided that he would provide aneutral and objective view necessary to
conduct audits that ensure the soundmanagement of the Group, and thus we haveappointed him as an External Director who is
an Audit and Supervisory Committee
Member. He meets the criteria for
independence specified by the stock
exchanges and fulfills the Criteria for
Independence of an External Officer that wehave established.

Senior Managing Partner
at TMI Associates,
Attorney

Katsuro Tanaka

Yuko Tajima

Yes

Our wholly owned
subsidiary Kagoshima
Bank has a contract for
legal advisory services
with TMI Associatesthat the appointee jointly
run as Senior Managing
Partner. The appointee
himself has no special
interest in the Group.

Yes

Yes

Katsuro Tanaka has a great wealth ofexperience as well as a broad view andextensive knowledge that he has acquired as
an attorney. We have decided that he would
provide a neutral and objective viewnecessary to conduct audits that ensure thesound management of the Group, and thus
we have appointed him as an External
Director who is an Audit and Supervisory
Committee Member. He meets the criteria
for independence specified by the stock
exchanges and fulfills the Criteria for
Independence of an External Officer that wehave established.
Yuko Tashima has a great wealth ofexperience as well as a broad view andextensive knowledge that she has acquired asa public prosecutor and an attorney. We havedecided that she would provide a neutral andobjective view necessary to conduct auditsthat ensure the sound management of theGroup, and thus we have appointed her as anExternal Director who is an Audit andSupervisory Committee Member. She meetsthe criteria for independence specified by thestock exchanges and fulfills the Criteria for
Independence of an External Officer that wehave established.

Partner Attorney at
Sawayaka Law OfficeDirector at the Chiba
Bank, Ltd.
Auditor at Tokio Marine& Nichido Life
Insurance Co., Ltd.

Yes

[Audit and Supervisory Committee]
Composition of the Committee and attributes of the chairperson

All Committee
Members(persons)

Audit andSupervisory
Committee

Directors and employees who assist
duties of the Audit and Supervisory
Committee

Full-time
Committee
Member(persons)

5

Internal Director(persons)

1

2

External
Director(persons)

Chairperson

3Internal Director

Yes

Matters regarding independence of the said Directors and employees from non-executive directors
Kyushu Financial has established the Office of Audit and Supervisory Committee as the department that helps the Audit andSupervisory Committee and its members with their duty, and appropriately assigns employees who serve as assistants thereto.
Some of them are dedicated staff, while others work also for different departments.
Kyushu Financial places these employees under the command of the Audit and Supervisory Committee and its Members inorder to ensure their independence from Directors who are not Audit and Supervisory Committee Members.
Kyushu Financial has established the Rules concerning Employees Serving as Assistants to the Audit and Supervisory
Committee and Directors Who are Audit and Supervisory Committee Members. The rules specify that the Audit andSupervisory Committee and its members are asked in advance to give their opinions regarding the appointment, performance
evaluation, or transfer of, or disciplinary action against the employees who assist with their duty and such opinions are respected.
How Audit and Supervisory Committee, Financial Auditors, and the internal audit unit work together
The Audit and Supervisory Committee Members have experience and insight related to finance and accounting. They meet ourFinancial Auditors regularly or as necessary to receive reports and exchange opinions as part of their efforts to work closely with
the Financial Auditors.
The Members also work closely with the Audit Division, which is our internal audit department, and request the Division to
conduct an investigation or take other necessary actions in order to ensure efficient and effective audits.
The Audit Division regularly or as necessary reports to the Board of Directors the results of internal audits in the Group, alongwith the evaluations of the Group’s internal management process that are based on these audit results. If the Division obtains any
cases or problems that may have material effects on our operation, it promptly reports them to the Board of Directors and the
Audit and Supervisory Committee. It also works with the Financial Auditors for internal control pertaining to financial reporting.
[Discretionary committees]
Any discretionary committee equivalent
to a nomination committee or acompensation committee

Yes

How discretionary committees have been set up, their composition, and attributes of chairpersons
All
CommitteeMembers(persons)

Full-time
CommitteeMember(persons)

Internal
Director(persons)

External
Director(persons)

External
Expert(persons)

Other(persons)

Nominating andRemuneration
Committee

4

0

2

2

0

0

Internal
Director

Nominating andRemuneration
Committee

4

0

2

2

0

0

Internal
Director

Name ofCommittee
Discretionary
Committee
Equivalent to a
Nomination
Committee
Discretionary
Committee
Equivalent to aCompensation
Committee

Chairperson

Note
We have the Nominating and Remuneration Committee as the advisory body for the Board of Directors in order to make ourdecision-making process fairer and more transparent, thereby helping improve our corporate governance, through focused
discussions and exchanges of opinions with Representative Directors and External Officers about matters pertaining to thenomination of and compensation to the Management.
[Independent Officers]
Number of independent officers

5

Other matters regarding independent officers
We designate all external officers as independent officers if they qualify.
[Incentives]
Measures taken in relation to theprovision of incentives for Directors

Introduction of a performance-linked compensation plan

Note to the applicable item
The total amount of compensation Kyushu Financial paid to its Directors and Corporate Auditors in fiscal 2021 is as follows.
-Total amount of compensation for 10 Directors (excluding External Directors): 166 million yen (including performance-linked
compensation of 39 million yen)
-Total amount of compensation for two Directors who are Audit and Supervisory Committee Members (excluding External Audit
and Supervisory Committee Members): 10 million yen-Total amount of compensation for 1 Corporate Auditor (excluding External Auditors): 1 million yen

-Total amount of compensation for 5 External Directors and Auditors: 36 million yen
Kyushu Financial in June 2021 shifted from a Company with a Board of Corporate Auditors to a Company with Audit andSupervisory Committee. The number of Directors (excluding External Directors) to whom compensation was paid include two
Directors who retired at the conclusion of the sixth Ordinary General Meeting of Shareholders held on June 18, 2021. The total
amount of compensation does not include employee-portion salaries for an employee who is concurrently working as an officer.
Those entitled to stock options

Note to the applicable item―――
[Compensation to Directors]
Disclosure status (of individualcompensation for Directors)

Individual amounts of compensation are not disclosed.

Note to the applicable item Updated
The total amount of compensation Kyushu Financial paid to its Directors and Corporate Auditors in fiscal 2020 is as follows.
Total annual compensation for 11 Directors (excluding External Directors): 134 million yen (including performance-linked
compensation of 17 million yen)
Total annual compensation for 2 Corporate Auditors (excluding External Auditors): 14 million yen
Total annual compensation for 5 External Directors and Auditors: 34 million yen
Any policy on how to finalize theamounts of compensation or how to
calculate the amounts Updated

Yes

Disclosed details of the policy on how to finalize the amounts of compensation or how to calculate the amounts
Compensation, bonuses, and other financial benefits in exchange for the performance of duty that our Directors receive from us
shall be determined by the resolution of our General Shareholders Meeting.
The 6th Annual Shareholders Meeting held on June 18, 2021 passed a resolution setting the total annual remuneration for
Directors who are not Audit and Supervisory Committee Members at 300 million yen or less (including 36 million yen or less toExternal Directors who are not Audit and Supervisory Committee Members) and the total annual remuneration to Directors who
are Audit and Supervisory Committee Members at 120 million yen or less.
We have set forth the following policy for deciding the details of compensation and other benefits for individual Directors who
are not Audit and Supervisory Committee Members by the resolution of the Board of Directors.
-Compensation and other benefits to Directors who are not Audit and Supervisory Committee Members (excluding External
Directors) are systematically determined in such a way that operational decision-making and supervision fully function, and acertain part of it is decided according to how much the Director has contributed to the performance of the delegated field or
department.
-Compensation and other benefits to respective Directors are determined by the Board of Directors through a fair and transparent
deliberation within the amount resolved on at a General Shareholders Meeting in accordance with the system set forth in thepreceding paragraph. Opportunities to appropriately involve External Directors with this process for advice are provided.
Individual remunerations to Directors who are Audit and Supervisory Committee members are treated separately from those to
Directors who are not Audit and Supervisory Committee members and determined through discussions among Directors who are
Audit and Supervisory Committee members within the amount resolved on at a General Meeting of Shareholders.
Kyushu Financial’s executive compensation and other benefits consists of the basic compensation (fixed compensation) andearnings-based bonus (performance-linked compensation), and the Board of Directors Meeting held in June 2021 passed a
resolution setting forth that Representative Directors, Directors who are Senior Managing Executive Officers or above, and fulltime Directors receive the basic compensation (fixed compensation) and earnings-based bonus (performance-linked
compensation), while Directors who are Audit and Supervisory Committee Members and other Directors who are not Audit andSupervisory Committee Members receive the basic compensation (fixed compensation) alone.
The payment criteria (evaluation benchmark, payment ratio, and compensation quota) of the earnings-based bonus(performance-linked compensation) included in the executive compensation are submitted to the Nomination and Remuneration
Advisory Committee for deliberation and determined by the Board of Directors. The details for fiscal 2022 determined in the
Board of Directors Meeting held in March 2022 are as follows.
A. The payment ratio of basic compensation (fixed compensation) to earnings-based bonus (performance-linked compensation)is 75:25.
B. The payment of the earnings-based bonus (performance-linked compensation) shall be based on the consolidated net income,which indicates the overall state of the Group’s operation. It is paid according to the compensation quota table for each level ofconsolidated net income. The compensation quota is set from 60 million yen to 120 million depending on the level ofconsolidated net income.
Compensation to Executive Officers consists of the basic compensation (fixed compensation) and earnings-based bonus(performance-linked compensation) and those entitled to the earnings-based bonus (performance-linked compensation) andpayment criteria are determined by the Board of Directors Meeting.
[Support System for External Directors] Updated
The Corporate Planning Division assists External Directors who are not Audit and Supervisory Committee Members with theirduty, and the Office of Audit and Supervisory Committee assists Directors who are Audit and Supervisory Committee Memberswith theirs.
Board meeting documents are provided to External Directors ahead of the meeting, and Directors in charge of each departments
provide explanations about the documents prior to the meeting.

2. Matters pertaining to such functions as the execution of operations, audits and supervision, nomination, and determinationof compensation (summary of the current corporate governance framework) Updated<Execution of operations>(1) Board of Directors;
Our Board of Directors is defined as the decision-making body for matters specified in laws and regulations or the articles ofincorporation and for the execution of the Group’s material operations. Matters to be discussed and standards for monetaryamounts have been established and specified in the Rules for the Board of Directors in order to distinguish supervision andexecution.
(2) Group Management and Execution Council
The Group Management and Execution Council consists of Representative Directors and Senior Managing Executive Officers orabove, and deliberates and makes decisions on matters delegated by the Board of Directors and discusses material mattersconcerning the Group’s operation. The Council promotes in-depth and active discussions toward prompt and decisive decisionmaking.
(3) Committees under the Group Management and Execution Council
The following committees individually hold regular discussions on matters for which they are responsible in order to effectively,
efficiently, and promptly address the Group’s cross-organizational issues.
- Comprehensive Budgeting Committee
The Comprehensive Budgeting Committee discusses the Group’s overall budget, progress toward goals, and crossorganizational issues, among others, based on the medium-term management plan.
- ALM Committee
The ALM Committee discusses the management of and policy on the Group’s comprehensive risk, credit risk, market risk, andliquidity risk, along with matters regarding Group-wide revenue management, investments, and procurement.
- CR Committee
The CR Committee discusses how well the Group’s operational risk management and crisis management is working. The
Committee also examines the effectiveness and appropriateness of the Group’s control environment for legal compliance anddiscusses cross-organizational issues pertaining to compliance with laws and regulations.
-Organizational Capability Improvement Committee
The committee discusses matters regarding organizational integration of Kyushu Financial Group, improvement of governance,
human resource-related policies, formulation of strategies, their realization, and verification of their effects.
- New Business Development Committee
The New Business Development Committee discusses matters concerning new businesses expected to help increase the Group’s
consolidated revenue, the exploration of new revenue sources, and new domestic and overseas markets in our business domains.
- Digital Innovation Committee
The Digital Innovation Committee discusses matters concerning the development and implementation of policies and strategies
regarding how to take advantage of digital technologies adopted to change the Group’s marketing and business processes andhow to develop the infrastructure for these technologies. The Committee also examines the effects brought about by the
implementation of these policies and strategies.
-Sustainability Promotion Committee
We grasp the status of implementation of the measures related to sustainability of our Group on a regular basis, and have crossorganizational discussions on measures that contribute to sustainability of the Group, customers, and the region.
(4) Executive Officers
We have introduced the executive officer system in order to separate the “functions of business decision-making and supervising
Directors’ performance of duty,” for which Directors should be responsible, and the “function of executing operations,” forwhich Executive Officers should be responsible. The separation has led to clear definitions of Directors’ and Executive Officers’
roles and responsibilities, systematically enabling flexible and efficient execution of operations.

<Supervision and audit>(1) Supervision by the Board of Directors
Our Board of Directors consists of 10 Directors, who are financial experts and have developed their careers in the Group, and 5
independent External Directors, who supervise the overall operation of the Group from a neutral and objective perspective. The
Board primarily makes decisions regarding matters specified in laws and regulations or the articles of incorporation as well as
the execution of material operations pertaining to the Group’s business, and supervises the performance of Directors’ duty.
(2) Audit by Audit and Supervisory Committee
In our framework, Audit and Supervisory Committee Members attend important meetings (including the Board of Directors
meetings, the Group Management and Execution Council, and other committees) and hold regular report and interview session
with the Audit Division and risk management departments in accordance with the audit policy and audit plan formulated eachfiscal year. Furthermore, the Committee Members with considerable knowledge about corporate management, including finance,
conduct monitoring and inspection related to financial audits.
(3) Internal audit
The Audit Division of Kyushu Financial is independent from the audited departments. The Division audits the appropriatenessand effectiveness of the internal management system, which covers risk management, in accordance with the audit policy andplan for the fiscal year. The Division also reports the details of internal audits to the Board of Directors, the Group Managementand Execution Council, and the Audit and Supervisory Committee.
(4) Financial audit
We have a financial audit contract with Deloitte Touche Tohmatsu LLC that has been executed pursuant to the Companies Act
and the Financial Instruments and Exchange Act so that Deloitte conducts audits accordingly.
<Nomination; Determination of compensation>(1) Nominating and Remuneration Committee
We have the Nominating and Remuneration Committee as the advisory body for the Board of Directors in order to make ourdecision-making process fairer and more transparent, thereby helping improve our corporate governance, through focused
discussions and exchanges of opinions with Representative Directors and External Officers about matters pertaining to thenomination of and compensation to the Management.
(2) Nomination of Management-We consult the Nominating and Remuneration Committee about candidates for the posts of Directors who are not Advisory andSupervisory Committee members. Then the candidates are selected by the Board of Directors and appointed at the General
Shareholders Meeting in accordance with the articles of incorporation.
-We consult the Nomination and Remuneration Advisory Committee about candidates for the posts of Directors who are Audit
and Supervisory Committee Members. Subsequently, with the consent of the Audit and Supervisory Committee, the candidates
are selected by the Board of Directors and appointed at the General Meeting of Shareholders in accordance with the articles ofincorporation.
-We consult the Nominating and Remuneration Committee about candidates for the posts of Executive Officers, and then thecandidates are appointed at a Board of Directors meeting.
(3) Remuneration for Management
The 6th Annual Shareholders Meeting held on June 18, 2021 passed a resolution setting the total annual remuneration for
Directors who are not Audit and Supervisory Committee Members at 300 million yen or less (including 36 million yen or less toExternal Directors who are not Audit and Supervisory Committee Members) and the total annual remuneration to Directors who
are Audit and Supervisory Committee Members at 120 million yen or less.
The Board of Directors and Audit and Directors who are Supervisory Committee Members have the authority to finalize thepolicy on the determination of the amounts of compensation to Kyushu Financial’s Directors who are not Audit and Supervisory
Committee Members, Directors who are Audit and Supervisory Committee Members, and Executive Officers or of how to
calculate the amounts. The details of the authority and the scopes of their discretion are as stated below.
-Compensation and other benefits to Directors who are not Audit and Supervisory Committee Members shall be determined by
the Board of Directors through a fair and transparent deliberation within the amount resolved on at the General Shareholders
Meeting. Opportunities to appropriately involve External Directors with this process for advice are provided.
-Remunerations to Directors who are Audit and Supervisory Committee Members are treated separately from those to Directors
who are not Audit and Supervisory Committee Members and determined through discussions among Directors who are Audit
and Supervisory Committee Members within the amount resolved on at a General Meeting of Shareholders.
Based on the delegation resolution by the Board of Directors, President and Representative Director of Kyushu Financial
decides the concrete details of individual compensation amounts of Directors who are not Audit and Supervisory Committee
Members and Executive Officers.
The authority is regarding evaluation and distribution of the basic compensation of each of Directors who are not Audit andSupervisory Committee Members and Executive Officers as well as of the earnings-based bonus (performance-linked
compensation) based on the performance of respective operations they are in charge. The reason for delegating the authority is
because the President and Representative Director is the most appropriate to grasp the performance of Kyushu Financial in acomprehensive manner and evaluate Directors who are not Audit and Supervisory Committee Members and Executive Officers.
To ensure appropriate execution of the authority, proposals concerning the total annual compensation for Directors who are not
Audit and Supervisory Committee Members and Executive Officers is submitted to the Nominating and Remuneration
Committee for deliberation and determined by the Board of Directors every fiscal year. Proposals concerning individual

compensation for them is submitted to the Committee for deliberation and determined by President and Representative Director,
with the total compensation amount for the fiscal year as the upper limit decided at the Board of Directors Meeting.

3. Reason for the adoption of our current corporate governance framework
Please see “I. 1. Basic Stance” in this document for the reason why we have adopted the current system.

III. Status of measures concerning shareholders and other stakeholders
1. Efforts to revitalize the General Shareholders Meeting and facilitate the exercise of voting rights Updated
Note
Early mailing of the Convocation
Notice of the General Shareholders
Meeting

In addition to mailing the notice of the meeting ahead of the statutory deadline, we
publish the notice on our website and disclose it at the Tokyo Stock Exchange inorder to make sure that our shareholders have ample time to read all proposals.

Scheduling the General Shareholders
Meeting for a date on which few othershareholders meetings are held

The 7th Annual Shareholders Meeting was held on June 17, 2022.

Exercising voting rights by anelectronic means

We have introduced an online voting system.

Participation in an electronic platform
for the exercise of voting rights andother efforts to improve theenvironment for the exercise of voting
rights by institutional investors

We use the electronic platform designed for institutional investors to exercise theirvoting rights. The platform is run by ICJ, Inc.

Preparing the notice of the meeting(summary) in English

We publish the notice of the meeting in English on our website and make itavailable at the Tokyo Stock Exchange and on the platform for exercising voting
rights.

Other

We make the following efforts to ensure that the Shareholders Meeting proceedswith clarity and transparency for our shareholders.
-The notice of the meeting includes a list of candidates with their photos.
-Business reports are explained using visuals projected onto a screen.
-In addition to the main venue, satellite venues are set up in order to stream themeeting live for as many local shareholders as possible.

2. Status of IR-related activities

Note

Briefing
byRepresentativePreparing and publishing ourdisclosure policy

Please see Article 25 (Ensuring Appropriate Disclosure of Information
and Transparency) of the Corporate Governance Guidelines publishedon our website.
(URL：https://kyushu-fg.co.jp/company/governance/)

Holding regular briefing sessions forindividual investors

We have been holding briefing sessions for individual investors since
fiscal 2016.

Yes

Holding regular briefing sessions foranalysts and institutional investors

We hold semiannual briefing sessions for analysts and institutional
investors where President and Representative Director and General

Yes

Manager of Corporate Planning Division provide explanations about
our business strategies and financial condition.
In June this year, in response to the coronavirus infections, we
streamed the video of the briefing on our website and held individual
meetings, including telephone conferences.

Holding regular briefing sessions foroverseas investors

We hold briefings for overseas investors through conferences
organized by a securities company.
The conference scheduled last year was cancelled due to thecoronavirus infections.

Publishing IR materials on our website

We publish information about our financial results, timely disclosure
information, and documents used at corporate recruiting sessions,among others, on our website. In addition to the annual report, Kyushu
Financial discloses financial summary reports, Annual Securities
Report, Integrated Report, and company briefing materials in English.

Establishing IR-related departments(staff)IR departments: Public Relations and IR Division

N/A

3. Status of efforts toward sustainable relations with stakeholders Updated
Note

Establishing our determination tomaintain sustainable relations withstakeholders in the internal rules

Environmental actions and CSR
initiatives

Please see Chapter 3 (Ensuring Shareholders’ Rights and Equality) and Chapter 4(Appropriate Cooperation with Stakeholders Other Than Shareholders) of the
Corporate Governance Guidelines published on our website.
(URL：https://kyushu-fg.co.jp/company/governance/)
The Group has formulated “Environmental policy” and “Green Procurement
Guidelines” shared across the Group and have been working on the conservationof the bountiful natural environment of Kumamoto and Kagoshima.
The Group’s Higo Bank has planted more than 140,000 trees in cumulative total in
the Aso Daikan no Mori it owns. Kagoshima Bank has been participating in aforestry project every year, undertaken by companies nurturing the environment,
and is engaged in environmental conservation through afforestation activities.
We also continue with proactive efforts for local revitalization, which consists ofparticipation in local events, sponsorships for sports and cultural events, andcontribution to social services, among others.
For details, see the websites of Kyushu Financial, Higo Bank, and Kagoshima
Bank.
“Environmental policy” and “Green Procurement Guidelines” of Kyushu Financial
Group(URL: https://www.kyushu-fg.co.jp/english/csr/csrmanagement/)“Participation in environmental conservation activities” of Kyushu Financial
Group(URL: https://www.kyushu-fg.co.jp/english/csr/sdgs/activities/)“Environmental conservation activities” of Higo Bank
(URL: https://www.higobank.co.jp/aboutus/csr/#environment [Japanese])“Environmental initiatives” of Kagoshima Bank
(URL: https://www.kagin.co.jp/investor/315_eco.html [Japanese])

Establishing a policy pertaining to theprovision of information forstakeholders

We have an established set of rules pertaining to timely disclosure for the purposeof providing information to stakeholders, thereby ensuring appropriate information
disclosure.

Other

Higo Bank and Kagoshima Bank in the Group have made their General Employer
Action Plans in relation to the Act on the Promotion of Female Participation andCareer Advancement in the Workplace. These banks have established andexpanded their internal systems to support employees with children in developing
their careers while parenting as part of their efforts to facilitate women’s
successful careers. The Group will continue to focus on talent development as agateway to women’s career advancement and actively assign female employees tomanagerial positions.

IV. Matters regarding our internal control system
1. Basic stance on the internal control system and how it has been organized(1) Systems for ensuring that the performance of duty by the Group’s Directors, Executive Officers, and other employees
conforms to laws and regulations as well as the articles of incorporation
A. Kyushu Financial defines compliance as one of its most important management issues. We have established the Group-wide
Basic Compliance Policy in order to ensure that Directors, Executive Officers, and other employees in the Group arecommitted to compliance.
B. Kyushu Financial has the CR Management Division as the Group’s compliance management department. We also have aregular committee to deliberate material matters pertaining to compliance across the Group, thereby ensuring that ourcompliance system fully works and keeps improving.
C. Kyushu Financial has established the Group-wide Basic Policy on Actions against Anti-social Forces in order to make surethat Directors, Executive Officers, and other employees in the Group firmly reject any connections with anti-social forces thatthreaten the order and safety of civil society.
D. Kyushu Financial has established the Group-wide Basic Management Policy on Customer Protection in order to make surethat Directors, Executive Officers, and other employees in the Group are committed to protecting customers’ interests andimproving convenience for customers.
E. Kyushu Financial has established the Group-wide Compliance Hotline Rules. The Group’s whistleblowing hotline has been
set up according to the Rules to receive reports on any misconduct or violations of laws or requests for consultation aboutsuch misconduct or violations, thereby ensuring that appropriate actions are taken to address the problems.
F. Kyushu Financial has established the Group-wide Basic Policy on Internal Audits and Internal Audit Rules. Our Audit
Division or the Group companies’ audit departments regularly conduct(s) internal audits in order to examine theappropriateness and effectiveness of the Group’s control environments for legal compliance and customer protection.
(2) Systems for storage and management of information pertaining to the performance of duty by Directors
Kyushu Financial has established an independent set of rules about document management to ensure that information
pertaining to the performance of duty by our Directors is kept and managed for a reasonable period.
(3) Rules for managing the risk of losses the Group may incur and other systems
A. Kyushu Financial defines risk management as one of its most important management issues. We have established the Groupwide Basic Policy on Risk Management in order to ensure that Kyushu Financial and its Group companies work together toappropriately manage various risks facing the Group.
B. Kyushu Financial has the CR Management Division as the Group’s risk control department, along with a committee that
discusses material matters concerning risk management across the Group, in order to ensure that its risk control works
properly.
C. Kyushu Financial has established the Group-wide Basic Policy on Business Continuity in order to ensure in times of crisis thecontinuity of its business as well as the Group companies’ business, and the recovery of the whole Group’s regular functions
as soon as possible.
D. Kyushu Financial has established the Group-wide Basic Policy on Internal Audits and Internal Audit Rules. Our Audit
Division or the Group companies’ audit departments regularly conduct(s) internal audits in order to examine theappropriateness and effectiveness of the Group’s risk management system.
(4) Systems for ensuring that Directors in the Group efficiently perform their duty
A. The Rules for the Board of Directors at Kyushu Financial include basic provisions pertaining to how the Board of Directors is
composed and operated. We also have the Group Management and Execution Council and other committees that deliberate
and make decisions on matters delegated by the Board of Directors, thereby having in place the business management
framework in which the Group is efficiently and appropriately operated in accordance with the Rules for the GroupManagement and Execution Council and the committees’ guidelines.
B. Kyushu Financial has established the Organization Rules and Official Authority Rules that specify its organization,
operations, and authority in order to ensure that Directors promptly and efficiently perform their duty.
(5) Systems for ensuring appropriate operations in the corporate group that consists of Kyushu Financial and its Group
companies
A. Kyushu Financial has established the Group Business Management Rules, thereby having in place the Group’s business
management framework designed to provide guidance and perform management in order to ensure the subsidiaries’
appropriate management while respecting the Group companies’ management autonomy.
B. Kyushu Financial has the Rules concerning Matters for Discussion with and Reporting by Subsidiaries. These Rules specify
that material matters regarding the Group companies’ decision-making and execution of operations must be discussed with orreported to Kyushu Financial regularly or as necessary in order to ensure that Directors and Executive Officers in the Groupefficiently and appropriately perform their duty.
C. Kyushu Financial has the Corporate Planning Division as the department that controls the operation of the Group companies.
The Division provides assistance and guidance pertaining to the subsidiaries’ business plans and supervises the promotion of
the plans in accordance with the Organization Rules.
D. Kyushu Financial has established the Group-wide Basic Policy on Internal Control pertaining to Financial Reporting in orderto ensure its compliance with the accounting standards and other relevant laws and regulations, and the appropriateness andreliability of its financial reporting.
E. Kyushu Financial has established the Basic Policy pertaining to Internal Transactions and the Basic Policy pertaining toInternal Business Alliances in order to ensure that transactions within the Group are appropriately conducted in accordancewith laws and regulations.
F. Kyushu Financial has established the Group-wide Basic Policy on Internal Audits and Internal Audit Rules. Our Audit
Division or the Group’s audit departments regularly conduct(s) internal audits in order to examine the appropriateness andeffectiveness of the control environment for transactions within the Group.
(6) Matters regarding employees assigned as assistants to the Audit and Supervisory Committee and Directors who are Audit
and Supervisory Committee Members (hereinafter “Audit and Supervisory Committee Members) to assist their duty on theirrequestKyushu Financial has established the Office of Audit and Supervisory Committee as the department that helps the Audit andSupervisory Committee and its members with their duty, and appropriately assigns employees who serve as assistants
thereto. Some of them are dedicated staff, while others work also for different departments.
(7) Matters regarding ensuring the independence of the employees in the preceding paragraph from Directors who are not Audit
and Supervisory Committee Members and ensuring effectiveness of instructions by the Audit and Supervisory Committee
and its members to the said employees
A. Kyushu Financial places these employees under the command of the Audit and Supervisory Committee and its Members inorder to ensure their independence from Directors who are not Audit and Supervisory Committee Members.
B. Kyushu Financial has established the Rules concerning Employees Serving as Assistants to the Audit and Supervisory
Committee and Directors who are Audit and Supervisory Committee Members. The rules specify that the Audit andSupervisory Committee and its Members are asked in advance to give their opinions regarding the appointment, performance
evaluation, or transfer of, or disciplinary action against the employees who assist with their duty and such opinions arerespected.
(8) Systems for ensuring Directors who are not Audit and Supervisory Committee Members, Audit and Supervisory Committee
Members, Executive Officers, Corporate Auditors, and other employees in the Group, or those who have received reports
from them to make reports to the Audit and Supervisory Committee and systems regarding other reports to the Audit andSupervisory Committee
A. Kyushu Financial has established the Group-wide Rules of Reporting to the Audit and Supervisory Committee. When anyone
of Directors who are not Audit and Supervisory Committee Members, Audit and Supervisory Committee Members,
Executive Officers, Corporate Auditors, or other employees in the Group discover a fact that may cause considerable damage
to Kyushu Financial or any Group company, he/she must report the fact immediately to our Audit and Supervisory
Committee according to these Rules.
B. Directors who are not Audit and Supervisory Committee Members, Audit and Supervisory Committee Members, Executive
Officers, Corporate Auditors, and other employees in the Group report on material matters pertaining to the execution ofoperations regularly or as necessary to the Audit and Supervisory Committee, and take appropriate actions when the Audit
and Supervisory Committee asks them for reporting, pursuant to the Rules of Reporting to the Audit and Supervisory
Committee. Furthermore, if a person receives a report on a material matter pertaining to the execution of operations fromanyone of Directors who are not Audit and Supervisory Committee Members, Audit and Supervisory Committee Members,
Executive Officers, Corporate Auditors, or other employees in the Group, he/she is required to report it to the Audit andSupervisory Committee.
C. Kyushu Financial has system in place pursuant to the Group-wide Compliance Hotline Rules, which enables anyone of
Directors who are not Audit and Supervisory Committee Members, Audit and Supervisory Committee Members, Executive
Officers, Corporate Auditors, or other employees in the Group to report directly to the Audit and Supervisory Committee if
he/she needs to report any misconduct or violation of laws they have discovered. Furthermore, the CR Management Division
promptly reports on whistleblowing in the Group to the Audit and Supervisory Committee Members.
(9) Systems for ensuring that those who have made a report to the Audit and Supervisory Committee Members do not receive
disadvantageous treatment because of their report
Kyushu Financial has established the Group-wide Rules of Reporting to the Audit and Supervisory Committee andCompliance Hotline Rules, which forbid disadvantageous treatment of a person who has made a report to the Audit andSupervisory Committee.
(10) Matters regarding the prepayment of the expenses that arise from the performance of duty by the Audit and Supervisory
Committee, the expenses that arise from reimbursement procedures and other performance of the duty, or the policy
pertaining to debt disposal
When Audit and Supervisory Committee Members request the prepayment of any expenses, etc. arising from execution ofduties by the Audit and Supervisory Committee, Kyushu Financial promptly pays the amount or disposes of the debt, except
when it determines that the expenses are not necessary for the Audit and Supervisory Committee to perform their duty.

(11) Systems for ensuring that effective audits are conducted by the Audit and Supervisory Committee
A. The Audit and Supervisory Committee Members may attend the meetings of the Board of Directors, the Group Management
Execution Council, or other committees to offer their opinions in accordance with the Rules for the Board of Directors, theRules for the Group Management and Execution Council, and the committees’ guidelines.
B. Directors who are not Audit and Supervisory Committee Members exchange opinions regularly or as necessary with Audit
and Supervisory Committee Members in order to maintain appropriate communication.
C. The Audit Division of Kyushu Financial or the audit departments of its subsidiaries regularly report(s) audit results to the
Audit and Supervisory Committee and work appropriately with the Office of Audit and Supervisory Committee, thereby
ensuring effective audits by the Committee.
2. Basic stance on the exclusion of anti-social forces and our actions(1) Basic stance
The Group has established the following principles in order to reject any connections with anti-social forces that threaten theorder and safety of civil society.
A. We take Group-wide measures to handle any unreasonable demands from anti-social forces. These measures include legal
responses that involve civil and criminal procedures.
B. We work closely with external professional bodies, including the police and attorneys, in ordinary times as part of our efforts
to prepare ourselves to deal with anti-social forces.
C. We refuse any transactions as well as any other connections with anti-social forces.
D. Under no circumstances do we provide funds or any other benefits for anti-social forces.
E. We maintain our solid control environment in order to keep anti-social forces excluded and prevent any transactions withthese forces.
(2) Present state
Our CR Management Division manages all information about anti-social forces that Kyushu Financial and the Group companies
have. The Division collects and shares the information whenever possible.

V. Other
1. Anti-takeover measures
Anti-takeover measures

Note to the applicable item
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N/A

2. Other matters concerning our corporate governance framework Updated
Please see the attachment for the following.
-Corporate Governance Framework-Framework of Timely Disclosure-Skills Matrix[Corporate Governance Framework][Framework of Timely Disclosure]