Overview of Corporate Governance

Basic Policy

The KBK Group engages in management that constantly aims to enhance corporate value by gaining further trust from all stakeholders including shareholders and investors. We recognize that enhancing management soundness through compliance with laws and conducting fair and highly transparent corporate activities are the ways to fulfill corporate social responsibility and enhance corporate social trust. Accordingly, the KBK Group, while regarding the establishment of corporate governance as a key priority, works to enhance the function of the Board of Directors and the Audit and Supervisory Committee, as well as strengthen the risk management system, increase awareness of compliance, and enhance the IR function.
KBK works to realize effective corporate governance by appropriately implementing the following basic policies.

1. We handle operations accurately to substantially maintain shareholders’ rights, and develop an environment in which shareholders can exercise their rights appropriately while securing effective equal treatment of shareholders.
2. We make efforts to cooperate appropriately not only with our shareholders, but also with an array of other stakeholders including employees, customers and clients.
3. We appropriately disclose financial and non-financial information of KBK in compliance with the relevant laws and regulations, and also work to proactively disclose information beyond which is required by law and regulations, while ensuring transparency and fairness in KBK’s decision-making.
4. The Board of Directors, Audit and Supervisory Committee and Audit and Supervisory Committee Members appropriately perform their roles and duties of making clear direction in business strategy, of improving the environment that supports appropriate risk taking by senior management, and of highly effective monitoring of management and Directors, etc.
5. In order to contribute to KBK’s sustainable growth and enhancement of corporate value over the medium to long term, we engage in constructive dialogue with shareholders even outside the General Meeting of Shareholders.

Corporate Governance System

We consider that KBK’s current system of corporate governance, with the establishment of a Board of Directors and Audit and Supervisory Committee, is appropriate and reasonable from substantive perspectives including KBK’s scale and the nature of its business. We have introduced an executive officer system, and are endeavoring to strengthen the operation of various functional committees, primarily the Governance Committee, with an awareness of the guidance given in the Companies Act and Corporate Governance Code regarding strengthening the supervisory and audit functions. In addition, we have established a Nomination Committee and Compensation Committee, each composed of a majority of Outside Directors, as discretionary advisory bodies under the Board of Directors, in order to strengthen the functional independence, objectivity and accountability of the Board of Directors on matters such as officers’ nomination and compensation. The committees respond to the Board of Directors on matters concerning nomination and compensation.