Corporate Governance

Basic Approach

SMFL was established through a merger between Sumisho Lease and SMBC Leasing and has grown in part through the acquisition of an aircraft leasing business and the merger with SMFL Capital.

Our business domain is expanding rapidly. While responding appropriately to continuing changes in the business environment going forward, we aim for sustainable development for society and sustainable growth for SMFL. As a representation of this commitment, we have formulated the "SMFL Way."

The "SMFL Way" is our fundamental approach to corporate management that reflects our management philosophy, and we believe that strengthening and enhancing corporate governance is an important management challenge in the context of following this approach.

Business management organizational structure

A diagram showing the corporate governance structure of the company. It illustrates the roles and coordination between the General Shareholders' Meeting, Board of Directors, Auditors, Accounting Auditors, Executive Management Meetings, President, Audit Office, Audit Department, various committees, business divisions, corporate staff, and group companies.
A table listing the purpose, overview, and meeting frequency of various committees. From left to right, the table includes the committee name, purpose/overview, and meeting frequency. Specifically, there are the following committees: Human Rights Awareness Promotion Committee (promotion of human rights awareness and training on human rights issues, held as needed), ALM Committee (operation of ALM and interest rate forecast analysis, held biweekly in principle), IR Committee (contributing to the improvement of company performance, held quarterly), SDGs Promotion Committee (promoting SDGs management, held annually), Investment and Loan Committee (review and reporting of investment and loan projects, held weekly), Security Trade Control Committee (compliance with the Security Trade Control Law, held semi-annually), Emergency Response Promotion Committee (verification of emergency response promotion, held annually), Pension System Committee (discussion of pension asset management policies, held annually), Risk Management Committee (risk monitoring and promotion of measures, held as needed), Compliance Committee (operation of the compliance system, held semi-annually), Hygiene Committee (maintaining employee health and safety, held monthly).

Directors and Corporate Auditors

SMFL operates under a structure of eight directors and six corporate auditors, of which two directors and two corporate auditors were appointed from outside SMFL. From the perspective of improving the transparency and soundness of management, SMFL operates an executive officer system under which the decision-making and supervisory functions are separated from the business execution functions. Our business is executed by 49 executive officers (including five serving concurrently as directors) appointed by the Board of Directors.

Board of Directors

FY2023 Board of Directors attendance
(officers and position as of the end of March 2024)
A table showing the attendance count and attendance rate of directors concerning corporate governance. Representative Director and Chairman: Shoichiro Oka (attended 15 out of 15 meetings, 100%), Representative Director and President: Masaki Tachibana (attended 15 out of 15 meetings, 100%), Representative Director and Executive Vice President: Masaru Shiomi (attended 14 out of 15 meetings, 93%), Representative Director and Executive Vice President: Eiichi Sekiguchi (attended 15 out of 15 meetings, 100%), Director and Senior Executive Officer: Takashi Arima (attended 12 out of 12 meetings, 100%, appointed in June 2023), Director and Managing Executive Officer: Eiji Ishida (attended 15 out of 15 meetings, 100%), Outside Director: Norihiko Nonaka (attended 15 out of 15 meetings, 100%), Outside Director: Fumihiko Ito (attended 14 out of 14 meetings, 100%, appointed in April 2023).

As well as making decisions on important matters, the Board of Directors monitors business execution by directors and executive officers. It is chaired by the Chairman of SMFL in order to ensure a balanced allocation of roles with the President, who is the Chief Executive Officer of SMFL.

In principle, the Board of Directors meets once a month, and monitors business execution by directors and executive officers while making resolutions and reporting on progress of the Medium-Term Management Plan and business plans of SMFL and the SMFL Group, organizational and personnel matters, other important management matters, and matters stipulated by laws, regulations, the Articles of Incorporation, and the Regulations of the Board of Directors.

A total of 15 meetings of the Board of Directors were held in FY2023 (including four documented resolutions in accordance with the provisions of Article 370 of the Companies Act). The attendance of individual directors is as follows.

Structure for Execution of Business

At SMFL, executive officers selected by the Board of Directors are in charge of the execution of business, and the Management Committee is the ultimate decision-making entity for business execution. The members of the Management Committee consist of directors who serve concurrently as executive officers as well as executive officers nominated by the President, and the members deliberate important matters of business execution.

With regard to business operations, SMFL has established meetings such as the Information Liaison Meeting which serve as venues for wide-ranging and flexible communication of information and exchange of opinions, as well as various committees that serve as cross-departmental organizations for coordination and discussion, in order to deliberate important business reports and specific measures.

Conditions for Resolutions on Director Appointments

SMFL's Articles of Incorporation stipulate that a director must be appointed by majority vote at the Shareholders' Meeting with attending shareholders representing one-third or more of eligible voting rights.

The Articles of Incorporation also stipulate that cumulative voting shall not be used in director appointment.