Foundations for the Creation of Shared Value

Audit and Supervisory Board chair

Message fromoutside director Seiji Higaki

Outside director

Seiji Higaki

Following our transition to a company with an Audit andSupervisory Board in June 2020, this is a message from thechair of the Audit and Supervisory Board.

Transition to a company with an Audit andSupervisory Board
T&D Holdings was established 16 years ago, but we expect the
management of insurance companies to become much moredifficult in future, as aging population with fewer children, globalization, and other factors are expected to produce a longterm decline in customer numbers. It is the unanimous perception of all the members of the Board of Directors that carrying
on with business as usual won’t work if we are to practice thekind of management that can win through such a situation andmeet the expectations of shareholders. That was a major motivation for the recent change in our governance system.

For example, in June 2020, we acquired a 25% stake in Fortitude, an American reinsurance holding company.
It was the first time our Group had taken such action, andit was preceded by some robust argument, as well as many
reports and preliminary briefings. The auditor and other outside directors under the Company with Board of Auditors
system all had the idea that we must not shirk from what is
not business as usual, and we reached the decision to go
forward after a process of careful debate that addressed allconcerns. From now on, more matters will be entrusted to the
Executive Management Board and matters to be discussed by
the Board of Directors will be narrowed down and focused toforward-looking discussions enabling more depth and speed indecision-making process.

Discussion in the Board of Directors
We, outside directors, discussed whether the motivations andobjectives of the change in governance system were sound, andhow the Company should operate in future to follow such objectives. We were keenly aware that changing the form of a company does not automatically change its content, so we focused our
discussion on how to make the content follow the change.
Transitioning to a company with an Audit and Supervisory
Board makes a clear distinction between supervision and execution. The change underlines the importance of expediting
management decision-making and the Board’s proper involvement in medium to long-term management decisions such as
strategy formulation.
I think the utmost difficulty for the Board of Directors is toselect what really must be discussed right now, and that is
also the most important role for the Board. The Company has
discussed a considerable number of proposals in its Board of
Directors, but I think the current transition will make the Boardof Directors into more of a forum for discussion focusing on a
medium to long-term perspective.

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T&D Holdings INTEGRATED REPORT 2020

As Audit and Supervisory Board chair
I think the essential difference between an Audit and Supervisory Board and an auditor is that a Board acts as an organization.
In our case, I think the most important thing is for the five Audit
and Supervisory Board members to discuss using the same
information and facing the same direction to some degree, so
as Board chair, I would like to work to ensure that kind of operation. Having seen a variety of companies, I think the common
characteristic of growing companies is that they are organizations with good internal communication. Our Audit and Supervisory Board is a gathering of people with different opinions
and careers, so once we’ve confirmed that we’re on the same
page, I would like the Board to be a forum that respects theopinions and career of each member, and fosters unreserved
exchange of views.

Promotion of Integrated Group Management
Sixteen years have now passed since the establishment of T&D Holdings, but during that time, the operating environment
surrounding the Group has continued to change. In particular, interest rates worldwide have trended lower, while FinTech
has evolved even further.
Considering the need to further enhance the capabilities of the Group in order to steadily grow corporate value in thisbusiness environment, one of the basic strategies in our medium-term management plan is promoting integrated Groupmanagement. To this end, we are working to bring together the Group’s managerial resources, demonstrate synergies
within the Group, and drive home the Group’s corporate culture.

Strengthen corporate governance to further promote integrated Group management.
Environmental changes• Low interest rates worldwide• Uncertainty of global economy• Advancement of FinTech• High expectations of Stakeholder

Separation of supervisionand execution•	Further strengthening of management functions and supervisionfunctions of the Board of Directors•	Enhancement of speed and efficiency of business execution

Recognition of issues•	Formulation of overall strategy•	Rapid responses to environmental
changes

Further strengthening offunctions is required

Transition to a company with
an Audit and Supervisory Board

Toward sustained
enhancement ofGroup
corporate value(From June 2020)• Advancement of business administration aimed at enhancement ofcorporate value• Promotion of integrated Groupmanagement activities

� Transition to a company with an Audit and Supervisory Board
Especially in the last few years, the pace of change in the business environment has accelerated. It therefore became
necessary that we further reinforced the Group’s functions in order to formulate an overall strategy and swiftly respond toenvironmental changes. In June 2020 we transitioned to a company with an Audit and Supervisory Board with the goal of
separating management/oversight from business execution, strengthening the Board of Directors’ management and oversight functions, and enhancing the flexibility and efficiency of business execution.

Themes of Integrated Group Management Measures� New marketing strategy for the DX era•	Merging of face-to-face and non-face-to-face, and development of new customers among the millennial generation

� Strengthening of asset management capabilitiesof the Group life insurance companies•	Seeking enhancement and improvement of efficiency ofalternative investment

� New work styles in the post-COVID-19 era•	Realizing diverse work styles that are effective and efficient,and improve productivity

T&D Holdings INTEGRATED REPORT 202047

Foundations for the Creation of Shared Value

Tripartite talk between outside directors

Three outside directors came together to discuss
corporate governance issues that T&D Holdings
faces, the role of outside directors, management
in a post COVID-19 world, and more.

Outside director

Kensaku WatanabeWorking for a new level ofgrowth by applying our
new form of governance.

On taking the position of outside director

Belonging to an audit company, I have been auditing mega banks for over 10 years. I would like to contribute by
applying my experience in auditing financial institutions. My
impression of the T&D Insurance Group is that it is built arounda core of life insurance companies with history and tradition,
but it also is a lively corporate group that aims for a new
dimension in insurance, by creating value through its approachof “Try & Discover,” contributing to the SDGs, and engaging in
ESG investment.
YamadaI used to be with T&D Financial Life as an outside
auditor for four years.
The T&D Insurance Group holds roundtable discussions withthe outside officers of each core company which I have participated on a number of occasions. Originally I saw my role as an
outside auditor supervising T&D Financial Life, a life insurancecompany centered on over the counter sales in banks, but
by participating in the Group’s study groups, I came to havea broader awareness of integrated Group management. In
taking the position of outside director for T&D Holdings now, I
would like to bring such an approach to a next level.
Watanabe

Challenges and changes in T&D governance

Higaki
I think the Company is rather weak in its integrated
management as a Group. The three life insurance companies
came together through Group integration, but the result hascome out only as 1+1+1=3, or maybe about 3.1. The market islooking for 1+1+1=4 or 4.5. In that sense, I had a strong feeling48

T&D Holdings INTEGRATED REPORT 2020

that the Group wasn’t fully utilizing its valuable management
resources, and I have been mentioning this concern to theBoard of Directors.
I have been in the Board of Directors for two years, and I’ve
been heartened to see that the Board engages in spirited de-Outside director

Outside director

Seiji Higaki

Shinnosuke Yamadabate, and that the outside directors, including myself, express
some harsh opinions. The insurance industry has entered aharsh environment, and in a situation such as today’s, whichcalls for new growth, I think there is a strong awareness, par-ticularly among the outside directors, questioning whether we
can go on without changing. As a result, I see diverse opinions
expressed by the internal directors too.

The role demanded of outside directors in a company with an Audit and Supervisory Board

Yamada“Company with an Audit and Supervisory Board”
includes supervision, and that covers what is called appropriateness auditing, not just auditing for legal compliance in auditor auditing. I think we are expected to exert our supervisory
functions fully over all aspects of management.
From the perspective of those audit functions, I think it’s important to start by getting to know the T&D Insurance Group.

I agree with the point that we must have a mindsetof monitoring execution. From my own position as a lawyer, it’seasier to have opinions about risks, but if we talk about the risksof every little thing, there is little room left for any discussion.
The outside directors are facing in the same direction of aiming
to enhance corporate value. I want to thoroughly understandthe content of the Company’s business, and raise more specificopinions so that discussions can be more stimulated.
Watanabe

YamadaI believe our stakeholders also expect thatthe outside directors serve to stimulate debate in the Boardof Directors.
For example, the question of which standards to choose
among accounting systems contains elements of the individual company’s strategy. On such points, I want to use myknowledge of accounting to provide advice that will foster thesustainable growth of the T&D Insurance Group, and enhance
its corporate value in the medium to long-term.

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49

Foundations for the Creation of Shared Value

Tripartite talk between outside directors

Expectations of T&D Holdings President Uehara

HigakiI believe Mr. Uehara has settled ideas on things
like his sound sense of crisis and his vision for the future, andI would like to give him my active support. I’m having highexpectations of Mr. Uehara to use his sound sense of crisis tocreate many ambitious followers, and to flesh out the detailsof that sense. He actually has many supporting followers, so I
want him to manage this Group as the leader of those people.

When I consider what the most important thing for
improving corporate governance is, I think the attitude at the
top is vital. Earlier, Mr. Higaki talked about integrated Groupmanagement, and I think it’s very important for all the personnel of the T&D Insurance Group to face the same direction,with common management philosophy and vision, and work
together to enhance corporate value.
I think adopting a new Group brand message themed on a
progressive and innovative spirit is one expression of that. I
would like Mr. Uehara to stand in the vanguard of the Group,
Yamadaexerting dynamism and centripetal force, and to meet the expectations of stakeholders by aiming for a highly efficient andtransparent management organization.
Watanabe When we discuss governance, depending on thecorporate culture, I also think the message from the leader isvitally important.
I think that in the end, the personal message from the leader
is hugely important in setting the direction of the personnel’s
mindset and raising their motivation. There are now endlessproblems including responses to COVID-19, and I’d like to
see a strong message going out, that also touches on those
aspects as well.

Management in a post COVID-19 world

YamadaI think the unprecedented situation of COVID-19
highlights the vital importance of risk management. In the
Company too, it needs to carefully observe risk in many aspects, such as sales activities, underwriting insurance, andasset management.
The Group needs to discuss how to evaluate risk, and how to
prepare for such risk.
Higaki
I think the spread of COVID-19 infection will cause avariety of changes in society. In that kind of context, I think thequestion is whether leaders can provide the employees withproper management.
For example, as the infection spreads, employees are taking
a risk in commuting, or going out on sales visits, so is that ac-

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T&D Holdings INTEGRATED REPORT 2020

ceptable and appropriate? I think what’s asked of us now is notto just follow how the world is shifting, but rather, how detailed
and precisely we can counteract to the changes in society.
Watanabe For sales activities too, in these COVID-19 times
we must revisit the customer-oriented approach the Grouphas been putting importance on until now. I see this as a good
opportunity to think about what methods are positive for thecustomers too, and generate value for them. In the spirit of “Try& Discover,” I want the whole Group to put its wisdom together and do its utmost to get through this difficult time.

Towards further growth of the T&D Insurance Group

YamadaI think this transition to a company with an Audit
and Supervisory Board has built a more highly transparent
management organization. The Audit and Supervisory Board,in which I and the other outside directors are the majority, hasa neutral and independent position as it monitors whether the
Board of Directors’ decision making on business execution
is appropriate and efficient. Also, the Audit and Supervisory
Board members are in close liaison with the Internal Audit
Department and the accounting auditor, as we strive to fully
exert our management monitoring functions. Through thesemeasures, we aim to achieve an insurance group that grows
sustainably, together with society.

Watanabe The new organization is in place, so the next thingis for the participating members to have a stronger awarenessof soundness and transparency in governance as they tackle
operations. I think that kind of mindset will ultimately lead tohigher corporate value enhancement and growth.
HigakiI want to make the most of the new form of governance to work for higher corporate value and stepped-up
growth, as a corporation that can contribute to society. It’s notthat things have been bad until now, but they weren’t earning
full marks either. I want us to aim to level up in our actions forall stakeholders, including society and employees, as was mentioned earlier, rather than just focusing on corporate value.

T&D Holdings INTEGRATED REPORT 2020

51

Foundations for the Creation of Shared Value

Corporate GovernanceT&D Holdings has been enhancing its corporate governance on the basic approach of creating efficient and transparent
management systems to facilitate flexible and cohesive group operations.
The Company values the purport of the Japan’s Corporate Governance Code, which applies to listed companies, and has
established the Basic Policy on Corporate Governance* as an initiative in response to the major principles.

* Please refer to the Company’s website for more details of the Basic Policy on Corporate Governance.

https://www.td-holdings.co.jp/en/company/governance/

Promoting Group Management
T&D Holdings, as a holding company, fulfills the roles of deciding
on the strategy of the T&D Insurance Group (the “Group”), appropriately allocating the Group’s business resources and formulating
capital strategies. Along with this, the Company shall strive to establish a Group business management system through such means
as rigorously enforcing Group-wide risk-return management by
accurately grasping the business risks borne by its six directly owned
subsidiaries, centered on affiliates Taiyo Life, Daido Life, T&D Financial Life, as well as T&D Asset Management, Pet & Family Insurance

and T&D United Capital.
The directly owned subsidiaries, with their own unique businessstrategies, aim to expand the Group’s corporate value by maximizing their uniqueness and specialization through determining marketing strategies and operating businesses in line with their strengths.
In this way, the Group is promoting flexible and cohesive groupmanagement by clarifying the respective roles and responsibilities of
the Company and its directly owned subsidiaries.

History of T&D Holdings’ Corporate Governance
2004

2006

2010

2012

2013

2015

2017

2018

2020

April
Establishment of
T&D Holdings, Inc.

June
Introduction of theexecutive officer
system, clarified
the responsibilities
for oversight andexecution.

June
Designation of all
Outside Directors/
Auditors as
Independent
Directors/
Auditors.

June
Introduction ofstock compensation-type stock
options as an
executivecompensation
system.

June
The number ofoutside directors
increased from
one to two.

January
Establishment of
the Nomination
andCompensation
Committee.

June
The number ofoutside directors
increased fromtwo to three.

June
Introduction oftrust-type stockcompensation(the Board
Incentive Plan
(BIP) Trust) as
an executive
compensation
system.

June
Transition to acompany with an
Audit andSupervisory
Board.
The number ofoutside directors
increased fromthree to five.

(No. of people)
5
4

AugustCommencementof the evaluationof theeffectivenessof the Boardof Directors.
October
Establishment
and announcementof the Basic
Policy on
Corporate
Governance.

Number of outside directors

Outside directorsof which; female outside directors

3
2
1

1

1

1

* Abolition ofstock
compensationtype stock
options.

2

2

(1)

(1)

5
3

3

(1)

(1)

25

25

1

0

Ratio of outside directors

(%)
50

36

40
30
20
10

13

11

11

0

52

(1)

T&D Holdings INTEGRATED REPORT 2020

10

18

18

Corporate Governance System
Our general shareholders’ meeting on June 25, 2020 resolved toof Directors. Furthermore, by clarifying the functions and roles ofchange our Articles of Incorporation, to transition to a company

various meeting bodies, and performing swift and effective scru-

with an Audit and Supervisory Board.
The objectives of this transition are to greatly strengthen the
managerial functions (determining management policies and overall strategy) and oversight functions of the Board of Directors, andto further raise the agility and efficiency of business execution.
The Audit and Supervisory Board, which includes a majority ofoutside directors, will audit business execution. In addition, it will
exert highly independent auditing and oversight functions, because members of the Audit and Supervisory Board, who are not
involved in business execution, have voting rights on the Board

tiny etc. based on the roles of each body, the Board of Directors
focuses its efforts on the oversight of business execution, to greatly strengthen the corporate governance of the Group as a whole.
Since 2015, the Company has also had the Nomination and Compensation Committee as an advisory body to the Board of Directors.
The purpose of this committee is to scrutinize the fairness andappropriateness with which directors are appointed and dismissed,
and of directors’ compensation and other matters, in order to ensure transparency and enhance accountability in management.

Corporate Governance Framework
1 Shareholders’ Meeting
Appointment
Dismissal

2 Board of Directors
Directors (Audit and Supervisory
Directors
Board Members)

ReportingOffering
opinions

Group Compliance Committee

Appointment
Dismissal
Reporting3

Audit andSupervisory Board

Auditing, etc.

Group SDGs Committee

Instruction

President

Reporting

ReportingAssess the relevance of the financial audit

Audit and Supervisory
Board Office

Cooperating

ReportingInstruction

Group Risk Management Committee

Group ERM Committee

External auditing

5 Group Strategy Board

4 Executive Management Board

Group Management Promotion Committee
Group IT and Digital Committee

6 Independent Auditor

Nomination and Compensation
Committee

Appointment
Dismissal

Group HR Commitee
Organizational UnitsGroup Planning Department, Business Development Department, Group Finance and Accounting Department,
Public Relations Department, General Affairs Department, Risk Management Department

1 Shareholders’Meeting

Internal
auditing

Internal Auditing
Department

The Shareholders’ Meeting is the highest decision-making entity of the Company. At the meeting, reports are made on the Group’sbusiness and consolidated/non-consolidated financial statements, and resolutions are made on important issues, which are stipulated in laws and ordinances and the Articles of Incorporation, such as the appropriation of retained earnings and election of officers.
The Ordinary General Meeting of Shareholders is held once a year.

2 Board of Directors

The Board of Directors makes resolutions on important issues related to the business execution of the Company, and oversees theperformance of directors and executive officers.

3 Audit and

The Audit and Supervisory Board, which is comprised of a majority of outside directors as members, audits the performance of directors’ (excluding directors that are also Audit and Supervisory Board members) duties from a neutral and independent standpoint.

Supervisory Board
4 Executive Manage-

ment Board

The Executive Management Board deliberates and passes resolutions on important matters concerning the Company’s management and the corporate management of the Group.

Board

The Group Strategy Board deliberates on items mainly concerning Group growth strategies and important matters pertaining tothose items from a Group-wide perspective in order to achieve sustained improvement in the Group’s corporate value.

Committees

Committees discuss the strategies and matters of the Company or those common to the Group.

5 Group Strategy

6 Information related

Category

Remuneration for audit certification services (¥ millions)

Remuneration for non-audit services (¥ millions)to the Independent
Auditor (FY2019)

Submitting company

188

16

Consolidated subsidiaries

226

13

Total

414

30

T&D Holdings INTEGRATED REPORT 202053

Foundations for the Creation of Shared Value

Corporate Governance
Roles of the Board of Directors
The Board of Directors shall make decisions on important business matters and oversee the execution of business in accordance with laws and ordinances, the Articles of Incorporation,and the Company’s relevant rules.
Owing to our transition to a company with an Audit and Supervisory Board and in accordance with the provisions of the Articles
of Incorporation, decisions on some important business execu-

tions are delegated from the Board of Directors to the directors
themselves pursuant to a resolution of the Board of Directors.
This separates management oversight from business execution,
thereby further strengthening the management functions (deciding on management policies and overall strategy) and oversightfunctions of the Board of Directors. It also drives improvement in
the flexibility and efficiency of business execution.

Composition of the Board of Directors
The Articles of Incorporation stipulate that the Board of Directors shall have no more than nine members (excluding directorsthat are also Audit and Supervisory Board members) and no
more than five directors that are also Audit and Supervisory
Board members. The personnel that make up the Board of
Directors are equipped with the right balance of knowledge, experience, and capabilities, as well as diversity, well-suited to thewide range of business domains in the life insurance business,the core business of the Group.
Also, to facilitate sufficient communication and swift decision-making throughout the Group, and from the viewpoint ofstrengthening corporate governance, we appoint presidents
from our three life insurance companies and directors (excluding
directors that also serve as Audit and Supervisory Board members) who concurrently serve subsidiaries and the Company.
Furthermore we appoint five outside directors in order to suitably reflect into the Group’s management policies, internal controls, and business execution oversight, the opinions of individuals
from outside the Company who hold extensive experience andinsight, such as corporate managers, legal experts, and accounting professionals.

Shareholders’ Meeting
InsideOutsideAppointment, Dismissal
Board of Directors (5 Outside Directors among 14 Directors)

Appointment, Dismissal
Audit and Supervisory Board(3 Outside Directors among 5 Board Members)

Role of Audit and Supervisory Board
As an independent organization tasked with carrying out the mandate of the Company’s shareholders, the Audit and Supervisory Board
is responsible for monitoring the execution of directors’ duties in accordance with the provisions set forth in laws, regulations, the Articles of Incorporation, and Company rules.

Composition of the Audit and Supervisory Board
The Articles of Incorporation stipulate that the Audit and Supervisory Board shall have no more than five members, the majority of which shallbe outside Audit and Supervisory Board members. The members also possess adequate knowledge of finance and accounting. To further
enhance independence, the Board chair is selected from among the external Audit and Supervisory Board members.

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T&D Holdings INTEGRATED REPORT 2020

Effectiveness Evaluation of the Board of Directors
To ensure the effectiveness of the Board of Directors, the Company conducts an annual performance review of the Board of
Directors as a whole based on the self-evaluations of individual
directors. The performance review examines whether the Boardof Directors is functioning appropriately and producing results,
and how the Board of Directors is contributing to increasing

the Company’s corporate value over the medium- to long-term.
Based on this effectiveness evaluation and in light of our transition to a company with an Audit and Supervisory Board, we will
work on further enhancing the oversight functions of the Boardof Directors and the decision-making process.

Summary of the evaluation of the effectiveness of the Board of Directors as a whole in fiscal 2019
1. Evaluation procedures

Based on mainly self-evaluations (questionnaire) of directors and Audit & Supervisory Board members, aswell as interviews, we analyzed and evaluated the overall effectiveness of the Board of Directors in fiscal
2019 (including the voluntary Nomination and Compensation Committee).

2. Evaluation items (5 items)(i) Function of the Board of Directors (ii) Composition of the Board of Directors(iii) Operation of the Board of Directors (iv) Provision of information to Outside Directors/Audit & Supervisory Board members (v) Overall assessment

3. Overall assessment

The Company considers the Board of Directors of the Company is generally performing its roles and responsibilities effectively as a whole, through the enforcement of advance measures prior to actual discussions at
the Board of Directors and the improvement of the operation of the Board of Directors, etc.

4. Improvement status of issues
recognized in the previous
evaluation

The items recognized as issues in the fiscal 2018 evaluation have, for the most part, been improved. Those
items included the strengthening of monitoring functions in Group management in order to bolster governance, as well as improvement of explanations concerning the discussions of the Nomination and Compensation Committee and further improvement of materials and explanations to deepen and invigorate deliberations at Board of Directors meetings.

5. Issues and initiatives
going forward

Issues	Regarding the development of a framework for enhancing the effectiveness of the Board of
Directors, the Company continues to recognize the necessity for improvement.
Initiatives • Further enhancement of discussions concerning mainly Group management strategies fromthe view point of Group-wide management• Further examination of discussion items by the Nomination and Compensation Committee• Development of concise and easy-to-understand materials and improved explanations

Nomination and Compensation Committee
The Company has established a Nomination and Compensation
Committee as an advisory body to the Board of Directors for the
purpose of discussing the fairness and appropriateness of theappointment, dismissal, and compensation of directors, Audit
and Supervisory Board members, and executive officers among
other related issues, as well as for ensuring the transparency ofmanagement and enhancing accountability.
This Committee consists of the President and Outside
Directors, and the majority of the members are assigned from
Outside Directors to ensure independence and neutrality.
Furthermore, the chair of the Committee is chosen out of Outside Directors by mutual vote of the Committee’s members.

Nomination and Compensation Committee — Main topics of discussion/reporting in fiscal 2019
Main topics of discussion/reporting

1st• Selection and appointment of director candidates and substitute Audit & Supervisory Board member candidate• Selection and appointment of director candidates, Audit & Supervisory Board member candidates, and executive officers at direct subsidiaries

2nd• Results of fiscal 2018 evaluation of directors and executive officers• Results of fiscal 2018 evaluation of representative directors of direct subsidiaries• Selection and appointment of director candidates, Audit & Supervisory Board member candidates, and executive officers for soon-tobe established subsidiaries• Company officer regulations concerning executive benefits at directly owned subsidiaries

3rd• Executive compensation for directors for soon-to-be established subsidiaries• Company officer regulations concerning executive compensation for soon-to-be established subsidiaries

4th• Succession plan

5th

• Sorting out points of discussion concerning the strengthening of governance frameworks

6th• Selection and appointment of executive officers• Selection and appointment of executive officers at direct subsidiaries

7th• Amendment to company officer regulations concerning executive benefits

T&D Holdings INTEGRATED REPORT 2020

55

Foundations for the Creation of Shared Value

Corporate Governance
Determination of compensation
Policies on determining compensation
The Company’s policy on executive compensation is set out in our Basic Policy on Corporate Governance.
Composition of executive compensation
Our executive compensation system is designed to function as asound incentive geared towards boosting the Group’s mediumto long-term earnings and enhancing corporate value.
Compensation for directors (excluding outside directors andpart-time directors) has three components: (1) monthly com-pensation, (2) bonuses, and (3) trust-type stock compensation(non-residents of Japan are excluded). Both (1) and (2) varydepending on role and performance, while (3) utilizes a trust
scheme. Compensation for part-time directors, including outside
directors, is comprised of monthly fixed compensation.

Monthly compensation and bonuses

Trust-type stock compensation

Variable according to roles and business performance

Linked to the Company’s share price• Individual evaluations of each officer are reflected in the assessment ranking for
determination of monthly compensation and bonuses.
• Individual evaluations of officers are carried out based on an evaluation of corporate
performance and the evaluation of a division in charge, according to the evaluation
criteria, as determined by the Board of Directors. The evaluation results are subjected
to detailed studies that are deliberated at the Nomination and Compensation
Committee and by the Representative Directors, to be finalized by the President.

• A compensation system that can work as an incentive for the Group to enhance its
business performance and corporate value over the medium- to long-term, and topromote the sharing of an awareness of common interest with shareholders.
• Stock and cash are delivered based on the number of points granted, commensuratewith executive ranking, within the limit established by the resolution of the
Shareholders’ Meeting.

Individual officer evaluations
Individual evaluations of officers are based on an assessment of the Company’s performance and an evaluation of the division the officer is in charge of, in accordance with the evaluation criteria decided on by the Board of Directors.
Calculation method

Assessment ofCompany performance• To clarify the assessment according to how much progress has been made on achieving Company targets, total
shareholder return (TSR) is used as a benchmark to assess the Company’s performance, alongside a number of otherperformance indicators outlined in the Group’s Medium-Term Management Plan.
• For performance indicators, a coefficient according to the achievement rate for each item is multiplied to yield a score.
• For TSR, the score is calculated based on the rate of divergence between the Company’s figure and those of listed
life insurance companies set as the benchmark.

Evaluation of thedivision the officer
is in charge of• An evaluation of business execution in each division compared to its execution plan is carried out to calculate a score
for the division the officer is in charge of, based on how much progress has been made on achieving divisional targets.

A weighted average is taken for the scores for both the Company performance assessment and the evaluation of the division
the officer is in charge of, based on evaluation weightings set
according to responsibilities for each role. Note that the representative director’s evaluation weighting for the Company
performance assessment is 100%.
The individual evaluations of each officer, as calculated above,
are discussed by the Nomination and Compensation Committee
and finalized by the president following consultation with therepresentative directors.

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T&D Holdings INTEGRATED REPORT 2020

Key performance indicators of Company performance (FY 2019)
ActualTargetAchievement ratio

Value of new business¥ 115.8 billion¥ 135.0 billion

85.8%

Consolidated adjusted net income (Note)¥ 67.1 billion¥ 64.0 billion

104.8%(Note) Consolidated adjusted net income is calculated by adding net income and additional
internal reserves in excess of the legal standard requirements related to reserves forcontingency and price fluctuations (after taxes).

Payment ratios by type of compensationon the basis of a standard assessment according to the individu-

In terms of the compensation structure for directors, we assign ra-

al officer evaluation.

tios to performance-linked compensation (monthly and bonuses)
and the trust-type stock compensation so the system can function
as a sound incentive geared towards boosting the Group’s medium- to long-term earnings and enhancing corporate value.
For monthly compensation, the ratio fluctuates either negatively or positively by roughly 5% on the basis of a standard assessment according to the individual officer evaluation. For bonuses,
the ratio fluctuates either negatively or positively by roughly 40%

Trust-type stock compensation

10%-22%

Performance-linked compensation
Performance-linked
compensation(bonuses)

14%-21%(monthly compensation)

57%-74%

Total amounts of compensation by officer category andcompensation type (FY 2019)
Monthly compensation
Category

Persons receiving compensation

Amount(¥ millions)

Trust-type stock compensation, theBoard Incentive Plan (BIP) Trust

Reserve for bonuses
Persons receiving compensation

Amount(¥ millions)

Persons receiving compensation

Amount(¥ millions)

Total compensation
Persons receiving compensation

Amount(¥ millions)

Directors (excluding outside directors)

11

190

6

62

6

62

11

315

Audit & Supervisory Board members(excluding outside Audit & Supervisory
Board members)

2

54

0

—

0

—

2

54

Outside directors

3

28

0

—

0

—

3

28

Outside Audit & Supervisory Board
members

2

19

0

—

0

—

2

19

Total

18

292

6

62

6

62

18

418

(Notes) 1. T he abovementioned payments include portions for two directors who stepped down from their posts, as of the close of the fifteenth Ordinary General Meeting of Shareholders held on June
26, 2019. As of March 31, 2020, the Group had 12 directors and four Audit & Supervisory Board members.
2. Compensation for individual officers is not stated because no officer received total consolidated compensation of ¥100 million or more.

Process for determining compensation
The Nomination and Compensation Committee discusses important decisions and changes concerning benefits and the likefor officers of the Company and its directly owned subsidiaries,
reports the results of those discussions to the Board of Directors, and offers its opinions when necessary. For monthly compensation and bonuses, an individual evaluation based on theassessment of Company performance and the evaluation of thedivision the officer is in charge of is carried out to determine theindividual amounts, which are based on a compensation table
decided on by the Board of Directors following discussion by the
Nomination and Compensation Committee.

Executive compensation after transition to a company with an Audit and Supervisory Board
Compensation for directors not serving as Audit and Supervisory
Board members
Compensation for directors (excluding outside directors andpart-time directors) not serving as Audit and Supervisory Board
members is the same as that described above from “Compositionof executive compensation” through to “Payment ratios by typeof compensation.” However, at the Ordinary General Meeting of
Shareholders held on June 25, 2020, it was decided that considering the duties of directors not serving as Audit and Supervisory
Board members, as well as various other circumstances such as therecent economic situation, the amount of annual compensation for
directors that are not Audit and Supervisory Board members will
be limited to ¥450 million (of which, the amount for outside directors shall be no more than ¥40 million). Outside directors (including part-time directors) that do not serve as Audit and Supervisory
Board members are independent of the Company’s businessexecution and therefore receive a fixed monthly amount as compensation linked to Company performance would not be suitable.
Compensation for directors serving as Audit and Supervisory
Board members
At the Ordinary General Meeting of Shareholders held on June25, 2020, it was decided that considering the duties of directors serving as Audit and Supervisory Board members, as wellas various other circumstances such as the recent economic
situation, the amount of annual compensation for directors thatare also Audit and Supervisory Board members will be limited
to ¥150 million.
Compensation for directors that serve as Audit and Supervisory
Board members is a fixed monthly amount because they are
independent of the Company’s business execution and compensation linked to Company performance would not be suitable.

T&D Holdings INTEGRATED REPORT 202057

Foundations for the Creation of Shared Value

Corporate GovernanceRisk Management
Basic concept for risk management
At the T&D Insurance Group, T&D Holdings has formulated aGroup Risk Management Policy setting forth the Group’s basic
approach to risk management and, based on this policy, the direct subsidiaries have developed their risk management systemthat covers their affiliates as well.
T&D Holdings has established a Group Risk Management
Committee and manages risks within the Group. The Committee
receives reports, regularly and as required, on risks assessedusing uniform economic value-based risk management indicators, from the direct subsidiaries, in order to identify and manage the various types of risks faced by Group companies. Basedon the report received, T&D Holdings reports on these risks to
the Board of Directors and provides guidance and advice to theGroup companies as necessary, thereby ensuring that proper risk
control is implemented at each company and strengthening therisk management system for the entire Group.

Audit and Supervisory Board

Executive Management Board

Group Risk Management Committee

Risk Management Department

Deliberation and Reporting

Internal audits

Board of Directors

Guidance and advice

Pet & Family Insurance
As of June 25, 2020

Risk management
In light of the social and public nature of the life insurance business, the T&D Insurance Group views risk management as a key
priority issue in order to ensure sound and adequate business
management. Under overall control by the holding company,
T&D Holdings, each Group company implements the necessary
risk management suited to their respective business model
based on the principle of self-responsibility.

The T&D Insurance Group classifies major management risks
as shown below. Risk management policies have been established for each of these risks, and efforts are made to preventthese risks from occurring or to confine them within certain
acceptable levels.
The risks we see as important in connection with our Group’sbusiness are as follows:

Risks as a holding company

Business risks

Risk related to reliance on the performance of the life insurance
business
Risk related to dividend income
Risk related to expanding scope of operations
Risk related to regulatory changes

Underwriting risk
Investment risk
Liquidity risk
Operational risk*

Reputational risk
Affiliate and other entity risk

* Operational risks are classified into sub-categories, i.e. administrative risk (including personal information leakage risks), system risk, legal risk, labor and personnel risk, and hazard risk, and aremanaged separately.

58

T&D Holdings INTEGRATED REPORT 2020

Risk awareness and assessment (risk profile)
The T&D Insurance Group uses a risk profile* to comprehensive-

cyber security mandatory for all executives and employees. Cy-

ly categorize risks surrounding the Group, in order to respondto increasingly diverse and complex risks. We comprehensively
identify risks by category, ascertain and assess them, and use
them to prioritize initiatives in light of comprehensive factors
including severity, impact, and the degree to which they are
under control. The risks are reflected in management planningas necessary. As a rule, we review our risk profiles twice a year
in order to accurately recognize and ascertain emerging severerisks, as well as major changes to previously recognized risks andthe gap between in-house/ the industry’s customs and the world.
We report our findings to the Group Risk Management Committee and Board of Directors.

ber attacks etc. have the potential to stop systems and impede
our operations, and to cause leakage of important information.
In particular, in order to provide even safer services to customers, we utilize security tools to conduct round-the-clock monitoring of cyber threats that target financial institutions, which haveincreased in recent years in both frequency and sophistication.
We have also established the cross-organization Group Computer Security Incident Response Team (CSIRT) along with company-level CSIRT teams, which collect information, conduct analysis and implement measures in connection with cyber attacks.
In addition, we conduct Group- and company-level drills andparticipate in industry-wide drills and training. Issues identified
through these drills are reflected in our response procedures
and manuals to strengthen our practical responsiveness.
Along with conducting multi-layered security measures (entrance, exit, and internal), we regularly receive diagnostic security evaluations from independent institutions and promptly
implement the necessary measures.
Executives and employees also receive training on information
security and cyber security and drills are continually conducted on
handling suspicious email in order to further raise security literacy.

* Risk profile is a general risk management tool to characterize risks from various factors such as
nature and magnitude.

Cyber security initiatives
The T&D Insurance Group recognizes that one of the importanttasks of management is properly protecting and managing information assets in compliance with laws and regulations. This specifically involves protecting information assets from increasingly
sophisticated cyber threats. To fulfill our social responsibilities as
a company engaged in life insurance business, we have formulated our Group Information Security Policy and Rules on theGroup’s Cyber Security Management and made engagement inComplianceBasic compliance policies
The Group has formulated the T&D Insurance Group CSR Charter, the T&D Insurance Group Compliance Code of Conduct,
and the T&D Insurance Group Basic Policy for Strengthening theCompliance Structure. The Group ensures that corporate officers and employees are conversant with these basic policies andstandards to promote rigorous Group-wide compliance efforts.
* Please see the Company’s website for more detail of the Compliance Promotion System.

https://www.td-holdings.co.jp/en/company/governance/compliance.html

Basic policies to block relationships with antisocial forces
In its Group Compliance Code of Conduct, the Group defines
its policy toward antisocial forces as to “reject and stringently
respond to any antisocial forces which threaten the order andsafety of the civil society.” In accordance with this policy, theGroup has formulated “T&D Insurance Group Basic Policy for
Responding to Antisocial Forces,” and has announced this on
the Company’s website.
* T&D Insurance Group Basic Policy for Responding to Antisocial Forces

Accountability
The Company works to disclose information in line with the basic
concept of striving to increase the transparency of management
by appropriately and timely disclosing corporate information,
including appropriate financial information and non-financial
information regarding management strategies, management
priorities and other matters.
In specific terms, the Company strives to provide easy-to-understand disclosure based on the fair disclosure rules of timeliness,fairness and accuracy in order to maintain and reinforce trust
among all of its stakeholders, including customers, shareholders,
employees, insurance agents, business partners, and local communities, and to increase the level of management transparency.
In releasing information, the Company strives to disclose information to as many people as possible using various media.
Furthermore, the Company is actively engaged in IR activities
based on its IR Policy (see page 73), while ensuring that briefings
are provided by members of senior management, in principle.

https://www.td-holdings.co.jp/information/antisocial-forces.html(Japanese only)

T&D Holdings INTEGRATED REPORT 2020

59

Foundations for the Creation of Shared Value

ERM (Enterprise Risk Management)
Increasing
Corporate
Value (EV)ERM (Enterprise Risk Management) is a strategic management method used to achieve managerial goals such as raising corporate value(EV) and maximizing earnings, through the integrated management of
capital, profit and risk. As its major feature, it quantifies capital, profit
and risk with the same criteria to make them “visible,” and by integrally
managing them and making management decisions, it enables us topursue profit by controlling soundness through a comparison between
risks and management strengths.

In t

egr

ate d M an a g

em

en

t

Capital

Risk

Proﬁt

Organizational Systems
The Group has organized the Group ERM Committee to conduct ERM on a Groupwide basis. The committee leads efforts
to promote ERM throughout the Group, aiming to improve its
soundness while achieving stable and sustainable increases incorporate value.

Board of Directors
Board of Directors
Executive Management Board, Group Strategy Board
Executive Management Board, Group Strategy Board
Integrated management of capital efficiency and capital adequacy
Integrated management of capital efficiency and capital adequacyGroup ERM Committee
T&D HoldingsGroup Finance &Secretariat
Group ERM Committee
Accounting
T&D
Holdings
T&D Holdings
Department
Group
Finance &Secretariat
Group Planning
Department
Accounting
T&D Holdings
Department
Group Planning Department

T&D Holdings
Risk Management
Department
T&D
Holdings
Risk Management
Department

Soundness(Capital Adequacy)
Soundness(Capital Adequacy)Core life insurancecompanies
risk management
Corelife insurance
departments
companies
risk management
departments

PDCA Cycle
Under ERM, the process of realizing the growth of corporate value is the PDCA cycle. It leads the management toward achieving
goals, while repeating PLAN (formulating the managementplan), DO (implementing planned initiatives), CHECK (monitoring progress), and ACTION (reviewing the management plan).
The Group evaluates capital, profit and risk on an economic
value basis and sets standards for soundness and profitability
as the Group Risk Appetite. Then, it promotes ERM through theabove PDCA cycle in order to meet the Group Risk Appetite.

Soundness

Required level of ESR

At least 133%

Profitability

Neutral level of ESR

Around 185%

ROEV

At least 7.5% in the medium
to long termCore ROEV

60

PLAN
PLAN

Formulating
management plan
Formulating
management planSoundness(Capital Adequacy)
Soundness(Capital Adequacy)

At least 5.0% in the medium
to long term

T&D Holdings INTEGRATED REPORT 2020

Reviewing
management plan
Reviewing
management planCore life insurancecompanies
actuarialandCorelife insurance
accounting
companies
departments
actuarial andaccounting
departments

DO
DO

CapitalCapitalIntegrated
Management
Integrated
RiskManagementProfit
Risk

ACTIONACTIONGroup risk preference standards

ERM Committees of corelife insurance companies
ERM Committees
Secretariat of core
life
insurancecompanies
planning
departmentsofcore life insurance
Secretariatcompanies
planning departments ofcore life insurance companies

Profitability(Capital Efficiency)
Profitability(Capital Efficiency)

Implementing
planned initiatives
Implementing
planned initiatives
Profitability(Capital Efficiency)
Profitability(Capital Efficiency)

Profit

CHECK
CHECK

Monitoring progress
Monitoring progress* Starting with this Mid-term Plan period, Ultimate Forward Rate is applied to the ESR Measurement
Model and to MCEV Calculation.
* ESR = surplus (capital) ÷ EC (risk)* ROEV = Amount of EV increase (excluding increases or decreases in capital etc.) ÷ Average EV
balance (Group basis)* Core ROEV = (value of new business + expected earnings on the risk free rate) ÷ Average EV
balance (total of three life insurance companies)

Action on Integrated Risk Management
Our Group categorizes and quantifies various risks that surround the Group, and identifies the impact of loss. It also practices appropriate control of risks in the business as a whole, including unquantified risks, in order to tackle integrated risk management that leads toattainment of management goals.
1. Risk quantification
Our Group employs internal models to gage asset management
risks, insurance underwriting risks, and operational risks. Specifically, we use “value at risk” as an indicator for these risks, andwith a measurement period of one year and a confidence levelof 99.5%, we calculate the loss value which is considered as therisk volume.

200%

2. Risk control
We ensure financial soundness and capital adequacy by controlling the risks quantified as above (economic capital) withina certain range of the net assets (surplus) found by subtracting
liabilities from economic value-based assets, while also applying
then current finance supervision system concerning soundness.
The required level of ESR 133% is necessary to cover the riskvolume of 99.93% confidence level.

ESR

Ultimate Forward Rate
not applied(surplus ÷ EC)

198%

189%
175%

150%

162%

168%

Ultimate Forward Rate applied

159%

Required level of ESR 133%
EC

Surplus*1

100%(required economic value-based
capital) = risk volume *2(Net economic value-based assets)

2,222.7

2,115.6
50%

1,669.1

1,324.5

1,208.1

1,029.3

2,495.9

2,168.7

1,365.2

1,319.2(¥ billions)

2,556.2

1,290.60%Mar. 31, 2016

Mar. 31, 2017

Mar. 31, 2018

Mar. 31, 2019

Mar. 31, 2020*1 Difference between assets, evaluated on an economic value basis, and liabilities. Evaluation ofassets and liabilities is calculated using basically the same assumptions as for MCEV. The capital
cost rate used as the risk margin is set as 5% since the end of March 2017, with reference to theinsurance capital standard (ICS) which is being studied by the IAIS (International Association of
Insurance Supervisors). In addition to applying the Ultimate Forward Rate since the end of March
2019, subordinated debt is added into the surplus (¥170 billion at the end of March 2020).
*2 The economic value based risk volume (after diversification effect) calculated by the internal
model (measurement period 1 year, VaR 99.5%). Necessary capital for MCEV is evaluated by
the same internal model.

3. Stress test implementation
We strive to keep track of a wide range of risks, to make sure wecan also handle risks not fully grasped by quantification, while
also controlling quantified risks. We run stress tests to check the
impacts of widely identified risks, and of severe shocks which
exceed expectations, such as major worsening of financial

markets or large-scale disasters. We analyze the results of stresstests and check our countermeasures etc. in advance, and webuild a framework that can maintain our soundness in all kindsof situations.

Results of ERM Management:
Maintaining high level of new business margin with product portfolio reforms
As the external environment changes, such as diversification ofcustomer needs and revision of the standard yield rate and standard mortality table, we strategically utilized ERM to flexibly manage capital, profit and risk for the Group as a whole. Although thevalue of new business decreased year on year pertaining mainly
to sales reduction, the new business margin was maintained at ahigh level even in a low interest rate environment.

〈Value of new business〉
Ultimate forward rate applied
20-year JGB yield (spot rate)
119.5

140.3 162.1
129.4 Old standard(¥ billions)

115.8

56.3
0.45%
2015

0.66%

0.54%

2016

2017

2018

〈New business margin* (Total for all products)〉
8.2%
8.5%
3.5%
2015

6.3%
2016

2017

0.32%

0.36%

2019
(Fiscal Year)

8.1%

7.1%
2018

2019
(Fiscal Year)* New business margin = value of new business ÷ present value of new business premiums

T&D Holdings INTEGRATED REPORT 2020

61

Foundations for the Creation of Shared Value

Financial Strategy

Financial strategy(capital management)
Investment

Pursuing a specialization strategy in eachlife insurance company

ReturnInvestment

Building digital life insurance channels• Efficient application of Group capital

Fundingprocurement

ReturnReturnInvestment

Business investment to diversify
profit sources• Balanced management between economic
value and financial accounting• Shareholder return, with a capitalefficiency mindset
Disclosure

ReturnFinancial markets(shareholders, creditors, etc.)

Growth strategy (core business
reinforcement and businessportfolio diversification)

Improving Group capital efficiency

T&D Insurance Group promotes ERM across the whole group, and practices business operation that positions
Embedded Value (EV) expansion as fundamental while balancing it against financial accounting. We make efficient use ofcapital through the combination of use of Group capital and optimum selections of external capital, to advance businessportfolio diversification.

• Planned reduction of strategic shareholding

Securing Profitability
Profitability indices: ROEV, core ROEV, adjusted ROE
As indices of profitability (capital efficiency), we manage ROEV
(Return on Embedded Value), core ROEV which takes as its
numerator the increase within EV attributable to new contracts,
and adjusted ROE* (adjusted profit ÷ shareholder’s equity)which is based on profit in financial accounting.

Profitability (capital efficiency) indices
ROEV

Core ROEV

Medium to long-termtarget level: 7.5%
21.5%
6.9%
6.7%

* Movements in our adjusted ROE are shown on the next page.

6.5%

6.9%

0.9%*
5.4%*

0.3%

3.9%

Medium to long-termtarget level: 5.0%

(17.3)%
2015

2016

2017

2018
2019
(Fiscal Year)

2015

2016

2017

2018
2019
(Fiscal Year)* Ultimate Forward Rate is applied from fiscal 2019.

Strategic Shareholding
Our Group has strategic shareholdings that are mainly held by
Taiyo Life and Daido Life. The balance of such holdings at theend of March 2020 is ¥204.3 billion in 40 stocks held by Taiyo
Life and ¥216.6 billion in 170 stocks held by Daido Life. We areworking on a planned and ongoing reduction of strategic shareholdings. We will continue that reduction process, with reference
to stock market conditions and other factors.

62

T&D Holdings INTEGRATED REPORT 2020

Purpose of strategic shareholding• The maintenance and expansion of stable trading relationshipsthat are profitable in the long term.
• The maintenance and reinforcement of business partnerships• Earnings in the medium to long-term through equity value
appreciation and the receipt of dividends etc.

Validation of the appropriateness of strategic shareholding
The Board of Directors of T&D Holdings and those of Group
companies which have strategic shareholdings engage in spe-stocks, on the basis of validation findings. We will continue toconsider the sale of strategic shareholdings held by the Group
which the Board of Directors deems lacking in significance.

cific study, on an annual basis, of (1) the appropriateness of the
purpose of holding the shares, (2) whether the benefits and risksof the shareholdings are proportionate to the capital cost, andother issues, concerning each individual strategic shareholding,to validate the appropriateness of such holdings.
In fiscal 2019, we sold or partially sold our holdings of 21* Taiyo Life and Daido Life exercise voting rights associated with strategic shareholdings in thesame way as for shares held purely as investments, in line with the Japanese Stewardship Code.

Policies on Return to Shareholders
T&D Insurance Group’s basic policy is to strive to raise shareholder
value and provide stable profit returns, while maintaining neces-sary internal reserves for the Group, with reference to maintaining
the sound management of the Company and Group companies.

• We determine total payout ratio flexibly, on the basis of capital efficiency (Adjusted ROE). (However, we maintain a level of at least 40% of
earnings subject to return)• We aim for stable, continuing increase in cash dividends, taking Adjusted DOE as our guideline.
• We determine the value of share buybacks on the basis of total payout, while taking the level of EPS into account.

Our basic approach
Total payout ratio

Cash dividend

Share buybacks

Adjusted ROE
Around 8% in the last fiscal year

Adjusted DOE
Around 3%

EPS growthGroup adjusted profit/shareholders’ equity

Total dividend value/shareholders’ equity

Group adjusted profit per share

At least 40% of earnings subject to return

Referenced
indices

Referenced indices
Adjusted ROE
9.5%

9.6%

9.5%

8.6%

7.7%

2.6%

2.6%

2.9%

3.0%

3.0%

¥ 111.00¥ 117.81¥ 124.23¥ 118.50¥ 111.31

2016/032017/032018/03

2019/032020/03

Adjusted DOE
EPS

Shareholder return performance
Raise

Policies on
return to shareholders

Around 30% of adjusted net income in themedium to long term
49.5%
46.1%

At least 40% of adjusted net income*Applied ahead of schedule,
from fiscal 2015
48.4%

49.3%

* “Group adjusted profit” will be
introduced from fiscal 2020

40.9%

Total payout ratio
Share buybacks(¥ billions)
Annual dividend
per share
Total dividend(¥ billions)

29.0%
23.3%

30.0

50
(Additional acquisition)

3.0

2013/03¥ 25.0 16.8
2014/03¥ 25.0 16.6
2015/03¥ 30.019.4¥ 32.5

2016/032017/03(Mid-term Plan before the Previous Plan)(Group MCEV per share)¥ 2,468¥ 2,930¥ 3,456¥ 2,919¥ 44.0¥ 42.0¥ 37.5
20.5

13.0

17.0

17.0

14.0

10.0

¥ 22.5 15.1

39.5%

23.3

25.7

26.4

2018/03

2019/032020/03¥ 3,8682021/03(Current Mid-term Plan)(Previous Mid-term Plan)¥ 3,621¥ 44.0 (Forecast)¥ 3,873¥ 4,302

Ultimate Forward Rate is applied from fiscal 2019.

T&D Holdings INTEGRATED REPORT 2020

63

Foundations for the Creation of Shared ValueContribution to Climate Change Mitigation and Adaptation— Action for the TCFD —The T&D Insurance Group has enacted “T&D Insurance Group Environmental Policy,” and we are well aware of the importanceof environmental issues in all our corporate activities. We also make sure all our executives and employees behave withconcern for protection of the global environment. We have endorsed the declaration of the Task Force on Climate-related
Financial Disclosures (TCFD), and we are keen to take action on disclosure of clear environment-related financial information.
* Please refer to our Sustainability Report for details.

https://www.td-holdings.co.jp/en/csr/report/

Governance
The Board of Directors has established the Group SDGs Committee, as a subordinate organ to the Board, with the missionof deliberating on and considering basic policies related to the
SDGs and CSR, and on measures related to the global environT&D Holdings

ment and social issues. The Group SDGs Committee has established the Climate Change Risk Subcommittee, as a subordinate
organ. The organization can be summarized as follows:

Board of Directors
Group SDGs Committee*
President

Department in charge of Promoting Sustainability
Sustainability Promotion Division, Group Planning Department(Committee Secretariat)

Group Strategy Board

Executive Management Board

Climate Change Risk Subcommittee
Departments

SDGs Promotion Working Group

Group companies
Department in charge of
Sustainability/CSR

Department in charge of
Sustainability/CSR

Department in charge of
Sustainability/CSR

Department in charge of
Sustainability/CSR

Department in charge of
Sustainability/CSR

Department in charge of
Sustainability/CSR

Departments

Departments

Departments

Departments

Departments

Departments

Pet & Family Insurance* The Group SDGs Committee is chaired by the Representative Director and President, and vice-chaired by the Representative Director and Executive Vice President (Executive Officer in charge of
Sustainability).

Strategies
The Group has the following perceptions of the risks and opportunities brought by climate change.
[Risks]
We expect climate change to bring physical risks *1 and transition risks *2. We perform scenario analysis to validate these
impacts. Please refer to our Sustainability Report 2020 for detailsof scenario analysis.
*1 Business risks associated with natural disasters caused by extreme weather such as typhoons
and floods, and those associated with phenomena such as an increase in the average temperature and a rise in the sea level*2 Business risks arising from the behavior of governments, corporations, and consumers in theprocess to carry out the transition to a low carbon society (through a significant reduction ofgreenhouse gas emissions)[Opportunities]• Opportunities to expand insurance earnings by providing andexpanding the scope of coverage
If global warming causes changes in disease incidence rates
and average lifespans, we expect that to generate needs forcoverage (death, pension, medical treatment) against new risks.

64

T&D Holdings INTEGRATED REPORT 2020

• Opportunities to raise the value of investment assets andexpand investment returns stably in the long term
As the reduction of greenhouse gas emissions progresses, theGroup, as an institutional investor, expects to finance and invest in expanding clean energy developers and energy-saving
operators, and to own and operate realty (office buildings etc.)
of superior environmental performance.
• Opportunities to extend our business fields and expand earnings
In our own operations, rather than as an institutional investor,
we expect to open up or join new business fields that suppressor adapt to climate change.

Risk Management[Risk identification and assessment process]
Our Group uses risk profiles to comprehensively examine therisks affecting the Group. We register risks related to climatechange into risk profiles, then identify, grasp, and assess all risks
which impact any aspect of our operations, including insurance
underwriting risks, asset management risks, operational risks,and reputational risks.
[Risk management process]In order to reliably recognize and grasp the emergence of newimportant risks and changes in previously recognized risks, weupdate our risk profiles on a semi-annual basis, and report to theBoard of Directors and other bodies.
Management of climate change-related risks(1) Physical risks• Together with large-scale disaster risks (insurance underwriting risks), we consider measures such as use of reinsurance tomitigate deterioration in our insurance bottom line.
• We monitor our existing products, and take appropriate measures, such as product revisions.

(2) Transition risks• We practice investment and financing with considerationof climate change-related risks, based on the Principles for
Responsible Investment (PRI).
• We monitor variations and trends in economic policies andlegal regulations etc., and share information with the wholeGroup, in the Group SDGs Committee and elsewhere. We
take action to make sure our Group’s responses do not fallshort of the level expected of a listed company.
[Integrated risk management]
Our Group practices ERM (Enterprise Risk Management) for
integrated risk management, for unified management of capital,
earnings, and risks. We have set ESR (Economic Solvency Ratio),which is an economic value-based risk management indicator,
as a specific, quantitative indicator for setting our levels of risk
preference and tolerance.
* For details, please refer to the ERM (Enterprise Risk Management) page.

Metrics and Targets
The T&D Insurance Group sets goals related to environmental
protection, and takes action during its everyday business activities
towards reaching those goals. The three goals are “reduce electricity consumption,” “reduce office paper consumption,” and“improve the green purchasing ratio.” We measure the resultssemi-annually and disclose them in reports and on the website.
• Electricity consumption reduction goal
We reached our five-year goal from fiscal 2008 and fiscal
2013, and are now working towards our ten-year goal, which
we newly set in fiscal 2018.

• Office paper consumption reduction goal
We reached our five-year goal from fiscal 2014, and are now
working towards the five-year goal which we newly set in
fiscal 2019.
• CO2 emission volume
We constantly measure and disclose Scope 1 (our own directemissions), Scope 2 (indirect emissions from electricity andother purchased energy), and Scope 3 (raw material procurement, transportation, disposal, and other indirect emissions).

TOPIC Action on environmental issues

Forest conservation activities

Environmental communications and educational activities

As a life insurance company which uses a variety of paper inour business, for pamphlets, policy provisions, etc., Taiyo Lifehas established “Taiyo Seimei no Mori” (the Forests of
Taiyo Life) in Nasu Shiobara City in Tochigi prefecture andTakashima City in Shiga prefecture. These forests are intended to recycle forest resources and conserve vegetation.

T&D Holdings endorses the activities of the Japan UNEP
Association which produces the Japanese edition of UNEPFORUM — Environmental Magazine Tying UNEP to Enterprises,
published by the United Nations Environment Programme(UNEP). This publication is distributed to all companies in
the T&D Insurance Group as well as to local elementary andjunior and senior high schools, public libraries, and otherparties to raise awareness of environmental issues.

T&D Holdings INTEGRATED REPORT 2020

65

Foundations for the Creation of Shared Value

Providing Workplace Environments that Enable All People toParticipate Actively
In our effort to provide workplace environments that enable all people to participate actively, the T&D Insurance Group
respects the dignity and diversity of all people. We also see the necessity of healthful and safe workplace environments, andwe are working in various ways to create them.
Action for Diversity
Active participation of women
The Group’s three life insurance companies are working torevise their respective personnel and compensation systems,
as well as introducing various support systems to enhance thework-life balance. By fostering Group-wide collaboration to
reduce total working hours and encourage male employees totake childcare leave, we are promoting the creation of workAction plans
Targets for promotion of female
employees to management positions[Action measures]
Planned development andpromotion to management
positions
Enhanced support for careerformation and work-lifebalance
Promoting mindset change
in management positions

Planned development andpromotion of female employeeswith ambition and ability

Ratio of female managers(attainment deadline)

Ratio of female managers(total of the three life insurance companies)

At least 20%

15.8%(Attained)

14.5%

16.2%

17.0%

14.9%

Maintain over 15%
Promotion of diverse work styles
and support for new challenges

Becoming a company in which female
employees can work to their full ability
with peace of mind

(March 2022)

At least 15%(April 2022)
April 2016

April 2017

April 2018

April 2019

April 2020

Employment of persons with disabilities
To create workplaces which are easy for persons with disabilities to work in, we advise them to attend interviews witha job-seeking support worker, so that they can go into thescreening process with confidence. We also run workplaceinspection sessions to prevent mismatches before and after
people join the company. After persons with disabilities enter
the company, we continue developing the workplace environ-ment to facilitate their work, with measures such as installing
special PC equipment and considering commuting routes. We
bring in specialized job coaches who provide support, andsuperiors hold three-person interviews with the employee anda job-seeking support worker in attendance to provide advice.
These efforts are taken throughout the company to help persons with disabilities find jobs.

Empowerment of Seniors
Each of our three life insurance companies has introduced are-hiring system for people of retirement age. From the standpoint of work-style reform, the Group is working to promote theempowerment of older workers and we are introducing various

systems adapted to each company’s circumstances.
Taiyo Life and Daido Life organize life planning seminars forworkers nearing retirement age, as an opportunity for them tothink about how they will live and work in future.

 LGBT-friendly
In our Group Human Rights Policy, T&D Insurance Group clearlystates our basic approach to respecting human rights, by which
we strive to develop workplace environments where every employee can exert their abilities to the full. Each Group company

66

place environments where everybody is motivated to play anactive role. To steadily advance these measures to promote theactive participation of female employees, the Group’s three life
insurance companies formulated their action plans based on
their respective business models.

T&D Holdings INTEGRATED REPORT 2020

is working to support LGBT people too, with measures such asproviding training and establishing consultation desks, with aview to promoting diversity.

Utilization and Development of Personnel
Since the group’s foundation, T&D Insurance Group has promoted “Nurture a corporate culture where diverse human resources canfeel job satisfaction and reach their potential.” Each of the companies under our corporate umbrella is formulating its own unique education and training plans and working to develop and improve employee capabilities. This is in line with the Group policy that aims toraise each company’s corporate value by making the most of the originality and expertise of its business strategy.
Action to provide growth opportunities
The three life insurance companies provide education and training, based on the main pillars of OJT (on-the-job training), grouptraining, and support for personal development. The companies
provide enthusiastic support for acquiring qualifications, andthey offer diverse curricula via distance education, e-learning,and other methods, which help each individual employee toautonomously build their career. The companies also practiceplanned reassignment (rotation) so that, as each employee
accumulates diverse work experience, they raise their ability
to complete their work with a company-wide perspective.

To provide better services
The Group’s three life insurance companies are working toenhance the skills of their customer service staff based on a basic
knowledge of life insurance, specialist knowledge and compliance essential to increase customer satisfaction. The three life
insurance companies have diverse staff members such as sales
representatives, customer service staff, agents and wholesalers

who are engaged in duties to provide the most suitable services
to customers depending upon each individual business model.
The companies have developed human capital training programsfor such diverse staff, and always work to provide their staff members with the best educational and training opportunities.

[New staff education programs (Taiyo Life)]
Sales staff at Taiyo Life learn about products, taxation, and FP(financial planning) through internal training and acquisition ofqualifications. This training enables them to design and sell theideal life insurance to suit the needs of each individual customer(family composition, occupation and income, children’s education plans, insurance subscriptions, etc.), in order to raise customer satisfaction.

Phase II development training

Phase III development training

Months 1 through 3Months 4 through 6Months 7 through 12

This phase deepens understanding ofbasic knowledge, such as productknowledge, and raises the sales skills
that are needed to propose ideal
insurance coverage to customers.

This phase further polishes sales skills
and provides knowledge about
aftersales follow-up, such as insurance
premium payment administration.

This phase teaches methods for
proposing insurance coverage to fit
each individual customer's life plan.

[E-DFP system (Daido Life)]
Daido Life has established its own E-DFP (Executive Daido
Financial Planner) system, which teaches sales staff a wide rangeof specialist knowledge, including taxation, finances, and financial products. This system is intended to enable staff to accurately grasp ever more advanced and diverse customer needs andpractice high-quality consulting sales. The E-DFP qualification isaccredited for those who have passed all courses in life insurance
College Course Exams (six subjects) and for those who havepassed grade 2 Certified Skilled Professional of Financial Planning (can also apply to AFP (Affiliated Financial Planner) and CFP(Certified Financial Planner)).

FP3 grade

E-DFP system (As of March 2020)

FP
proficiency
test

Profesionalcourse exams

Advanced
professionalcourse exams

Life insurance college
course exams forsix subjects

Life consultant

Senior life
consultant

Total life consultant

Grade 3 Certified Skilled
Professional of
Financial Planning

Grade 2 Certified Skilled
Professional of
Financial Planning or higher

E-DFP qualification acquisition
820 people total

Learning productknowledge, contract
administration, andother basic knowledge
necessary for insurance
sales work

Phase I development training

Common-to-industry
educational system

Training to pass
general course exams

Pre-registration
training

RegisterPre-exam training

General course exams

Class attendance contracts

Education systems for newly-hired sales staff (New staff education, FP education)

1,806 people total (Including CFP and AFP certified staff)

T&D Holdings INTEGRATED REPORT 202067

Foundations for the Creation of Shared Value

Initiatives for Health and Productivity Management
Each company in the T&D Insurance Group aims to create workplace environments according to the principles of health and productivity management, in which all employees can work vigorously, both mentally and physically.

Initiatives by Taiyo Life

Initiatives by Daido Life

Taiyo Life is advancing Taiyo’s GENKI Project*, an effort
to make all employees, customers, and society energized and healthy. The project provides various support
measures to promote employee health, including Kurort
Health Walking using the Kaminoyama Onsen Kurort(health resort) Program in partnership with Kaminoyama
City in Yamagata Prefecture, Smart Life Stay (accommoda-

Daido Life has introduced the KENCO SUPPORT PROGRAM for its personnel, which provides wearable devices that can measure pulse, step count, and other aspectsof everyday activities. It has also totally banned smoking
within the company, and organizes lectures and otherevents on health. These efforts are intended to promote
employees’ health and raise their health literacy. Daidotion packages that incorporate the government’s specified
health guidance), and internal anti-smoking campaigns.
Since 2017, Taiyo Life has been working on health management with measures such as increasing the value ofthe company subsidy for cancer screening, and providing“MCI screening testing,” which diagnoses dementia risk,
together with health checkups.

Life is also trying to shorten working hours from conventional lengths, and stepping up its measures for disease
prevention and mental health. These efforts are elements
in a program called Daido KOKO KARA, which aims todevelop within the company and nurture a corporate
culture as a company that practices health management.

* The Taiyo’s GENKI Project is promoted by an organization that has the company
president as its leader and all operating officers as members.

Initiatives by T&D Financial Life
Having set “Building workplaces for job satisfaction” asa management policy, T&D Financial Life is working toshorten working hours with methods such as “no overtimeday” and “go home early day,” and automatic shutdowns
on work PCs. It performs health checkups on all personnel,
runs stress checks to prevent mental health problems,
abolished smoking areas in the company and bannedsmoking during work hours, and subsidizes sports-related
costs for club activities in the company. These and othermeasures are used to promote employee health.
In collaboration with the health insurance society, thecompany is also working on specified medical check-ups
and health guidance based on Data Health Plans.

68

T&D Holdings INTEGRATED REPORT 2020

Certified Health and Productivity
Management Organization: White 500
Taiyo Life and Daido Life have been approved as “Certified Health and Productivity Management Organization(White 500)” for four consecutive years in the large company category, under a certification system organized by
the Ministry of Economy, Trade and Industry (METI), forcompanies which practice health and productivity management for employee health promotion.
By promoting Taiyo’s GENKI Project at Taiyo Life andDaido KOKO KARA at Daido Life, we implement various
measures to promote employee
health, aiming to create workplaces where all employees canwork vigorously, both mentallyand physically.

Enacting the T&D Insurance Group Human Rights Policy
Our Group declares “respect for human rights” in the T&D Insurance Group CSR Charter, and we are advancing project
activities that respect the human rights of all the Group’s personnel and stakeholders.
Recently, we have enacted the “T&D Insurance Group Human Rights Policy” to clearly state our Group’s philosophy on
respect for human rights, in line with the “Guiding Principles on Business and Human Rights” which the United Nations
Human Rights Council sets as a code of conduct for all nations and companies.
* Please refer to our website for details of the T&D Insurance Group Human Rights Policy.

https://www.td-holdings.co.jp/en/csr/csr-policy/human-right-policy.html

Implementation of human rights due diligence
In advance of the enactment of the T&D Insurance Group
Human Rights Policy, we implemented human rights due
diligence in the Company and all our direct subsidiaries.
This human rights due diligence did not find any
human rights issues requiring correction in this Group’sbusiness activities.
In future, we will run an ongoing process of humanrights due diligence to validate the state of our response to human rights issues in our Group’s businessactivities, and to check for any such issues. The resultsof this due diligence will be reported annually to theGroup SDGs Committee. The content of the reportto the committee will also be reported to the Board of
Directors of T&D Holdings, and passed to the Group
Compliance Committee.
In the event that any human rights issue is found by thisdue diligence, we will take action to solve the problem.

Human Rights Management System (human rights due diligence)
T&D Holdings Board of Directors

Group SDGs Committee

Committee Secretariat (T&D Holdings Group Planning Department)
Report the results to the committee*1

Group company’s departments in charge of sustainability
Instruct to implement due diligence / Aggregate the results*2

Relevant departments of each Group companies(compliance / human resources / asset management, etc.)
Implement human rights due diligence*1 Results of human rights due diligence are also reported to the Group Compliance Committee.
*2 Results of each company’s human rights due diligence are reported to the board of directors of each company.

T&D Holdings INTEGRATED REPORT 2020

69

Foundations for the Creation of Shared ValueManagement Organization
Board of Directors (as of June 25, 2020)

Representative Director and President

Representative Director and Executive Vice President

Director and Senior Managing Executive Officer

Hirohisa Uehara

Kanaya Morinaka

Mitsuhiro Nagata

Personal history

Personal history

Personal history

Apr 1984 Joined Taiyo LifeJan 2005	General Manager of Investment Planning Department of Taiyo LifeFeb 2005 Director of T&D Asset Management
Apr 2007	General Manager of Group Planning Department of
T&D Holdings
Apr 2010 Director of T&D Asset Management
Apr 2011	Executive Officer and General Manager of Group
Planning Department of T&D Holdings
Apr 2012 Director of T&D Financial LifeApr 2014 Executive Officer of Taiyo LifeJun 2014 Director and Executive Officer of Taiyo LifeApr 2015 Director and Managing Executive Officer of Taiyo LifeApr 2016	Director and Senior Managing Executive Officer of
Taiyo LifeApr 2017 Director of Taiyo Life		
Executive Vice President of T&D Holdings
Jun 2017 Director of T&D Financial Life
		Representative Director and Executive Vice President of T&D Holdings
Apr 2018	Representative Director and President of T&D
Holdings (current)

Apr 1984 Joined Daido LifeApr 2010 Executive Officer of Daido LifeApr 2013 Managing Executive Officer of Daido LifeJun 2015 Director and Managing Executive Officer of Daido LifeApr 2017	Director and Senior Managing Executive Officer ofDaido LifeJun 2019	Representative Director and Senior Managing
Executive Officer of Daido LifeApr 2020 Director of Daido Life (current)		
Executive Vice President of T&D Holdings
Jun 2020	Representative Director and Executive Vice President of T&D Holdings (current)

Director of Daido Life

Apr 1985 Joined Daido LifeApr 2008	General Manager of Profit Management and Actuarial Department of Daido LifeApr 2011 Executive Officer of Daido LifeApr 2015 Managing Executive Officer of Daido LifeJun 2015 Director and Managing Executive Officer of Daido LifeApr 2017 Managing Executive Officer of T&D Holdings
Apr 2018 Director of Daido Life		
Senior Managing Executive Officer of T&D Holdings
Jun 2018 Director of T&D Financial Life (current)		Director and Senior Managing Executive Officer of
T&D Holdings (current)
Jul 2019 Director of T&D United Capital
Apr 2020	Director and Senior Managing Executive Officer ofDaido Life (current)

Reasons for selection

Significant concurrent positions

Mr. Kanaya Morinaka has business experience in the Group
mainly in sales, products, planning, and human resources. He
is expected to fulfill the roles mainly of supervising key management decisions and the execution of business by utilizing
his extensive management knowledge and experience in theGroup’s holding company and insurance company, which
includes being in charge of corporate planning units.

Director and Senior Managing Executive Officer of Daido Life
Director of T&D Financial Life

Director and Managing Executive Officer

Director (outside officer, part-time)

Director (outside officer, part-time)

Yoshihisa Tanaka

Naoki Ohgo

Kensaku Watanabe

Personal history

Personal history

Personal history

Nov 1989 Joined Taiyo LifeApr 2011	General Manager of Public Relations Department of
Taiyo LifeApr 2014 Director of T&D Financial Life		
Director of T&D Asset Management		General Manager of Group Planning Department of
T&D Holdings
Apr 2015	Executive Officer and General Manager of Group
Planning Department of T&D Holdings
Apr 2019 Director of Pet & Family Insurance		Managing Executive Officer of T&D Holdings
Jun 2019 Director of T&D Financial Life (current)		
Director of Taiyo Life (current)		Director and Managing Executive Officer of T&D
Holdings (current)
Jul 2019 Director of T&D United Capital (current)

Apr 1985 Joined McKinsey & Company, Inc.
Jul 1999 Partner of McKinsey & Company, Inc.
Jul 2005	Executive Officer of GE Consumer Finance K. K.
(current Shinsei Financial Co., Ltd.)Aug 2008 Representative Director of Root F Co., Ltd. (current)
Jun 2017 Director of T&D Holdings (current)

Mar 1997 Registered as an Attorney
Apr 1997	Joined Okazaki, Ohashi & Maeda(current Tokei Partners)
Jan 2006 Partner of Tokei Partners (current)
Jun 2016	Audit & Supervisory Board Member of
T&D Financial LifeJun 2020 Director of T&D Holdings (current)

Significant concurrent positions
Director of Taiyo Life
Director of T&D Financial Life
Director of T&D United Capital70

T&D Holdings INTEGRATED REPORT 2020

Significant concurrent positions

Significant concurrent positions
Representative Director of Root F Co., Ltd.
Director of Orient Corporation

Significant concurrent positions
Attorney

Reasons for selection
Mr. Kensaku Watanabe possesses significant expertise andextensive insight as an attorney at law specialized in corporate legal affairs. He is expected to fulfill the roles mainly ofsupervising key management decisions and the execution ofbusiness from the perspective of protecting general shareholders by utilizing this knowledge and experience.

Director (part-time)

Director (part-time)

Director (part-time)

Naoki Soejima

Minoru Kudo

Masafumi Itasaka

Personal history

Personal history

Personal history

Apr 1981 Joined Taiyo LifeOct 2008	General Manager of Marketing Planning Department of Taiyo LifeApr 2009 Executive Officer of Taiyo LifeApr 2011 Managing Executive Officer of Taiyo LifeJun 2011 Director and Managing Executive Officer of Taiyo LifeApr 2014	Representative Director and Senior Managing
Executive Officer of Taiyo LifeApr 2016	Representative Director and Executive Vice President of Taiyo LifeApr 2019	Representative Director and President of Taiyo Life(current)
Jun 2019 Director of T&D Holdings (current)

Apr 1978 Joined Daido LifeApr 2005	General Manager of General Marketing Department of Daido LifeJun 2005 Director of Daido LifeJun 2006 Executive Officer of Daido LifeApr 2008 Managing Executive Officer of Daido LifeJun 2009 Director and Managing Executive Officer of Daido LifeApr 2011	Director and Senior Managing Executive Officer ofDaido LifeApr 2014	Representative Director and Executive Vice President of Daido LifeApr 2015	Representative Director and President of Daido Life(current)
Jun 2015 Director of T&D Holdings (current)

Jun 2004 Joined Daido LifeSep 2007	General Manager of Business Development Department of T&D Financial LifeApr 2011 Executive Officer of T&D Financial LifeApr 2015 Managing Executive Officer of T&D Financial LifeJun 2015	Director and Managing Executive Officer of T&D
Financial LifeApr 2017	Representative Director and President of T&D
Financial Life (current)
Jun 2017 Director of T&D Holdings (current)

Significant concurrent positions
Representative Director and President of Taiyo Life

Significant concurrent positions
Representative Director and President of T&D Financial Life

Significant concurrent positions
Representative Director and President of Daido Life
Corporate Auditor of Ezaki Glico Co., Ltd.

Directors serving as Audit and Supervisory
Board members are on the next page

Number of Company shares held and attendance at meetings of Board of Directors/Audit & Supervisory Board
Number of the Company’s share
held*1

Board of Directors

Internal

OutsideHirohisa Uehara

42,55124 / 24

Kanaya Morinaka

22,860—Mitsuhiro Nagata

21,07924 / 24

Yoshihisa Tanaka

6,356

19 / 19

Naoki Ohgo

1,649

24 / 24

Kensaku Watanabe
Internal

Directors who
are Audit andSupervisory Board
Members

Internal

OutsideAttendance to the Board of
Directors’ meetings*20

Attendance to Audit & Supervisory
Board meetings*2—

Naoki Soejima

17,68719 / 19

Minoru Kudo

49,52824 / 24

Masafumi Itasaka

5,378

24 / 24

Junichi Yanai

6,485

24 / 24

19 / 19

Yasuo Teraoka

20,96424 / 24

19 / 19

Haruka Matsuyama

3,043

23 / 24939

24 / 240—

Seiji Higaki
Shinnosuke Yamada*1 As of May 31, 2020
*2 FY2019

T&D Holdings INTEGRATED REPORT 202071

Foundations for the Creation of Shared ValueManagement Organization
Directors who are Audit and Supervisory Board Members (As of June 25, 2020)

Director (Audit and Supervisory Board Member(Full-Time))

Director (Audit and Supervisory Board Member(Full-Time))

Director (Audit and Supervisory Board Member)(outside officer, part-time)

Junichi Yanai

Yasuo Teraoka

Haruka Matsuyama

Personal history

Personal history

Personal history

Apr 1984 Joined Taiyo LifeApr 2017	Deputy General Manager of General Affairs Department of Taiyo LifeJun 2017	Audit & Supervisory Board Member of Taiyo Life(current)		Audit & Supervisory Board Member of T&D Holdings
Jun 2020	Director (Audit and Supervisory Board Member(Full-Time)) of T&D Holdings (current)

Apr 1995 Assistant Judge to the Tokyo District Court
Jul 2000 Registered as an Attorney
Jul 2000 Joined Hibiya Park Law Offices
Jan 2002 Partner of Hibiya Park Law Offices (current)
Jun 2013 Director of T&D Holdings
Jun 2020	Director (Audit and Supervisory Board Member) of
T&D Holdings (current)

Audit & Supervisory Board Member of Taiyo LifeOct 2000 Joined Daido LifeApr 2011	General Manager of Market & Alternative Investment Department of Daido LifeApr 2013 Executive Officer of Daido LifeApr 2015 Executive Officer of T&D Holdings
Jun 2018	Audit & Supervisory Board Member of Daido Life (current)		Audit & Supervisory Board Member of T&D Holdings
Jul 2019	Audit & Supervisory Board Member of T&D United
Capital (current)
Jun 2020	Director (Audit and Supervisory Board Member(Full-Time)) of T&D Holdings (current)

Reasons for selection

Significant concurrent positions

Attorney at law
Audit & Supervisory Board Member of MITSUI & CO., LTD.
Director of Mitsubishi UFJ Financial Group, Inc.
Director of Restar Holdings Corporation

Mr. Junichi Yanai has experience in the Group mainly in asset
management and planning, and possesses financial and accounting knowledge. He is expected to fulfill the roles mainlyof auditing and supervising key management decisions andthe performance of duties by directors not serving as Audit
and Supervisory Board members by utilizing his extensive
business knowledge and experience in the Group’s holding
company and insurance company, etc., which includes audit
duties as a full-time Audit and Supervisory Board Member at
the Company.

Audit & Supervisory Board Member of Daido Life
Audit & Supervisory Board Member of T&D United Capital

Reasons for selection

Director (Audit and Supervisory Board Member)(outside officer, part-time)

Director (Audit and Supervisory Board Member)(outside officer, part-time)

Seiji Higaki

Shinnosuke Yamada

Personal history

Personal history

Apr 1975 Joined The Daiwa Bank, Ltd.
Jun 2003 Executive Officer of Resona Bank, Ltd.
Jun 2005 Executive Officer of Resona Holdings, Inc.
Jun 2006 Director of Resona Holdings, Inc.
Jun 2007	Director, President and Representative Executive
Officer of Resona Holdings, Inc.
Apr 2009	Representative Director and Executive Officer ofResona Bank, Ltd.
Jun 2011 Director and Vice Chairman of Resona Bank, Ltd.
Apr 2013 Director of Resona Holdings, Inc.
Jun 2013 Chairman of Resona Research Institute Co.,Ltd.
Jun 2018 Director of T&D Holdings
Jun 2020	Director (Audit and Supervisory Board Member) of
T&D Holdings (current)

Oct 1983	Joined Asahi Accounting Company(current KPMG AZSA LLC)
Mar 1987 Registered as a Certified Public Accountant
Jul 2010 Partner of KPMG AZSA LLC
Jul 2010	Executive Board Member of The Japanese Instituteof Certified Public Accountants
Jun 2020	Director (Audit and Supervisory Board Member) of
T&D Holdings (current)

Significant concurrent positions

Reasons for selection
Having served as a director, president and representative executive
officer of a bank holding company and as a representative director andexecutive officer of a bank, Mr. Seiji Higaki has a wealth of knowledge
and experience in corporate management. He is expected to fulfill theroles mainly of auditing and supervising key management decisions
and the performance of duties by directors not serving as Audit andSupervisory Board members from the perspective of protecting general shareholders by utilizing this knowledge and experience.

72

T&D Holdings INTEGRATED REPORT 2020

Reasons for selection
Mr. Yasuo Teraoka has experience in the Group mainly in asset management and business investment, and possesses financial and accounting
knowledge. He is expected to fulfill the roles mainly of auditing andsupervising key management decisions and the performance of duties
by directors not serving as Audit and Supervisory Board members
by utilizing his extensive business knowledge and experience in theGroup’s holding company and insurance company, etc., which includes
audit duties as a full-time Audit and Supervisory Board Member andbeing in charge of business investment units at the Company.

Significant concurrent positions
Certified public accountant
Director (independent auditor) of Kyowa Exeo Corporation

Reasons for selection
Mr. Shinnosuke Yamada possesses significant expertiseand extensive insight as a certified public accountant. He is
expected to fulfill the roles mainly of auditing and supervising
key management decisions and the performance of duties bydirectors not serving as Audit and Supervisory Board members from the perspective of protecting general shareholders
by utilizing this knowledge and experience.

Significant concurrent positions

Ms. Haruka Matsuyama has sophisticated expertise andextensive insight as an attorney at law specialized in corporate legal affairs. She is expected to fulfill the roles mainlyof auditing and supervising key management decisions andthe performance of duties by directors not serving as Audit
and Supervisory Board members from the perspective ofprotecting general shareholders by utilizing this knowledge
and experience.

IR Activities
T&D Holdings, Inc. strives to promote investor relations (IR) activities based on the core principles of timeliness, fairness,
and accuracy, with the aim of garnering the trust of and proper evaluation from shareholders, investors, and so forth. In thissection, we highlight the Company’s fiscal 2019 major initiatives and outline its IR policy.
Major Initiatives
The Company conducts highly communicative investor relations (IR) activities, on the principle that its top management is responsible
for all IR statements.
In addition to holding regular financial results meetings for institutional investors and analysts, the Company holds one-on-one on-site meetings with investors in Japan and overseas, and shares views obtained through dialog broadly with management and employees in the Group.
The Company also publishes corporate information in a timely manner through its IR site, and has been rated highly by external
assessment organizations.

 cenes from an IR meeting for institutionalS
investors and analysts

Evaluations by External
Assessment Organizations

Meetings Held in FY2019
Financial results meetings for institutional investors
and analysts

2

Financial results telephone conferences for institutional
investors and analysts

4

Conferences sponsored by securities firms

1One-on-one meetings
Information meetings for individual investors

Total 1722

* The number of evaluated companies differs
depending on the timing of surveys, etc.

2019 Internet IR Award (Daiwa Investor Relations Co. Ltd.)
Evaluated 3,838 listed companies*

Selected as one of 108 winners of theCommendation Award
FY2019 All Japanese Listed Companies’ Website Ranking(Nikko Investor Relations Co., Ltd.)
Evaluated all 3,807 listed companies*

Selected as one of 173 companies with grade AAA
websites in the Overall Ranking for the third consecutive year

T&D Holdings IR Policy
1. Purpose of IR Activities
T&D Holdings, Inc. (the “Company”) strives to promote investor relations(“IR”) activities based on the core principles of timeliness, fairness andaccuracy, with the aim of garnering the trust of and proper evaluation fromshareholders, investors, and so forth.
2. Basic Policy
The Company strives to clearly and continuously provide informationon the T&D Insurance Group’s business environment and management
strategies, financial condition, and performance to shareholders, investors,
and so forth. The Company will disclose information stipulated in the
Financial Instruments and Exchange Act, the Insurance Business Act, otherrelated laws and ordinances, and the rules of the Tokyo Stock Exchange ina timely, appropriate and fair manner.
3. IR Information
The Company provides the following IR-related information in addition
to statutory and mandatory reporting requirements (including financial
statements, Annual Securities Report (“YUHO Report”), earnings releases,“TANSHIN Report,” and other timely information).
•	Materials of IR events (conferences, financial results meetings, IR fairs,etc.) for investors and analysts.
•	Integrated reports and other IR-related booklets/publications.

The IR information described above will be posted appropriately on the
Company’s website, including pages for shareholders, investors, and so forth.
4. Structure Related to IR Activities
The Company’s top management is in principle responsible for all IR
activities and statements. However, employees in charge of IR may act onbehalf of the management depending on the nature of the IR event, its
scale, or other factors.
The department in charge of IR handles all inquiries from shareholders,investors, and so forth concerning the Company’s IR activities.
5. Feedback to Management
Information gathered from shareholders, investors, and so forth throughIR activities is fed back appropriately to the management and reported
regularly to the Board of Directors and other committees.
6. Silent Period
In order to ensure fairness and prevent the unauthorized disclosure offinancial information, the Company maintains a “Silent Period” in its IR
activities for three weeks prior to the announcement of quarterly financial
results. During this period, the Company refrains from commenting on
financial results, and, in principle, from participating in IR events andholding IR meetings.

T&D Holdings INTEGRATED REPORT 202073