Corporate Governance

Based on its management policy of maintaining a sound and proactive
enterprising spirit, YMFG aims for management transparency and fair,swift and bold decision-making that will lead to sustainable growth andincreases in corporate value over the medium to long term. To this end andrecognizing that creating an effective corporate governance system is an
important management priority, on an ongoing basis we are pursuing theinitiatives described below to enhance our corporate governance.
i. We strive to ensure the rights of shareholders and create an environmentthat facilitates the appropriate exercise of shareholders’ rights andsubstantive shareholder equality.
ii. We cooperate closely with our principal stakeholders, including
customers, the local community, shareholders and employees.
iii. We diligently disclose important management-related information to ourprincipal stakeholders.
iv. We endeavor to ensure the effectiveness of the business execution
supervisory and auditing function through the establishment of various
institutions, including the Board of Directors.
v. We create systems to promote constructive dialogue in order to build
long-term relationships with shareholders.
The Board of Directors, consisting of 9 directors (including three outsidedirectors), makes decisions about important matters related to the Group’s
management and supervises the directors. Furthermore, we have adopted
the executive officer system to fortify the Board of Directors’ supervisory
function and enhance the business execution function. The Nomination
Committee discusses matters related to the appointment and dismissalof directors, and the Compensation Committee discusses matters related
to the compensation of the directors. Both guarantee the objectivity andtransparency of decision-making processes.
YMFG has adopted an audit and supervisory committee system. TheAudit and Supervisory Committee comprises three directors, of whom two
are outside directors. The committee audit the execution of operations bydirectors, configure, audit and verify the operation of internal control systems
at YMFG and its subsidiaries, and prepare audit reports. By having the Auditand Supervisory Committee, which chiefly comprises outside directors, exercise
its voting rights at Board of Directors meetings, we endeavor to reinforce its
auditing and supervisory function with respect to the Board of Directors andenhance the transparency and speed of the decision-making process.
The Group Executive Management Meeting, the Group Asset and Liability
Management Committee, the Group Compliance Committee and the Group
Risk Management Committee discuss important management issues.

YMFG Corporate Governance Structure (As of July 1, 2019)
YMFG
General Meeting of Stockholders
Appointment/Dismissal

Appointment/Dismissal

Cooperation

Audit and Supervisory Committee

Board of Directors

3 Members

9 Directors

Auditors and Supervisory
Committee Office

ReportAccounting Auditor

Appointment(including 3 outside directors)(including 2 outside directors)
CooperationReport

Appointment/Dismissal

Accounting Audit

Compensation
Committee

CommandAudit and Inspection Dept.

Reports andRecommendation

Internal Audit

Nomination
Committee(Voluntary advisory body)Group Executive
Management Meeting(Deliberative body)Group ALM Committee

Business Execution Structure

PresidentGroup Compliance Committee
Group Risk Management Committee

Executive directors

Investment Project Consideration Committee(Executive Managers ofGeneral Headquarters)

Operational Headquarters (Operational Departments)

General Headquarters (Corporate Departments)

CommandCommandOperation Departments

Yamaguchi Bank

Momiji Bank

Kitakyushu Bank

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

Company with an audit and supervisory committee

YM Asset Management, Momiji Estate, YM Life Planning, Hoken Hiroba, YM Saison, Momiji Card, Data Qubic

YMFG Board of Directors and Corporate Auditors (As of July 1, 2019)
President

Managing Director

Takeshi Yoshimura

Ichinari Koda

Vice-PresidentManaging Director

Hirohide Umemoto

Director

Masao Kusunoki*

Koji Oda
Managing Director

Mitsuru Kato

Director
Audit and Supervisory Committee Member

Susumu Fukuda

DirectorAudit and Supervisory Committee Member

Kazuo Tsukuda*DirectorAudit and Supervisory Committee MemberMichiaki Kunimasa** Masao Kusunoki, Kazuo Tsukuda and Michiaki Kunimasa are outside directors under Article 15 of Section 2 of the Companies Act.

YMFG Annual Report 201912