MS&AD Insurance Group Basic Policies on Corporate Governance

 

MS&AD Insurance Group Holdings, Inc. (hereinafter referred to as “MS&AD” or “the Company”) has established the MS&AD Insurance Group Basic Policies on Corporate Governance for the purpose of indicating the basic approach to and framework for corporate governance.

 

1. ​In line with its Corporate Philosophy (Mission), MS&AD, as a holding company overseeing all group businesses, has established a management framework that ensures transparent, fair, swift and decisive decision-making that takes into account the standpoint of all stakeholders. The Company's objectives are to sustain stability and consistent growth over the long term by using corporate resources efficiently and managing risks properly and ultimately, to further increase corporate value.
    
2. To this end, the “MS&AD Insurance Group Corporate Philosophy (Mission), Corporate Vision and Code of Conduct (Values)” were formulated as something all officers and employees of the Group should adhere to in all situations. In addition to working to disseminate these principles among all officers and employees of the Company and its Group companies, the Company positions corporate governance, compliance and risk management as important management issues in the Medium-term Management Plan and actively promotes that Plan.

 

1. In order to realize our Corporate Philosophy (Mission), the Company aims toward the sustainability of society and sustainable enhancement of corporate value by fulfilling our responsibilities to seven types of stakeholders (customers, shareholders, agents, business partners, employees, local  communities/ global society and the environment) based on the “Perspective of Sustainability of the MS&AD Insurance Group.”
    
2. Perspective of Sustainability of the MS&AD Insurance Group
   In order to realize our Corporate Philosophy (Mission), the MS&AD Insurance Group will create shared value and aim toward a resilient and sustainable society through corporate activities that implement “Story of Value Creation.”
   We will consistently strive for supreme quality that lives up to the trust and expectations upon us. Together with our stakeholders, we continue to contribute to the creation of society where anyone can pursue a stable life and boldly engage in dynamic business activities, while preserving the sustainability of the global environment and society.

3. Efforts to engage stakeholders
   We will fulfill our responsibilities to stakeholders and create shared value by working with them through the following efforts.

 

4. Schemes for Receiving Feedback from Customers
   The MS&AD Insurance Group has formulated a “Basic Policy for Responding to Customers’ Voices ” in order to receive all customer feedback (in the form of inquiries, consultations, requests, complaints, disputes, compliments and gratitude, etc.). This feedback is used to make quality improvements.

5. Speak Up 
   The MS&AD Insurance Group has established an environment where all employees, etc. can speak up their concerns and worries in a frank and positive way. One such initiative is a whistleblowing system enabling all employees, etc. of the Company and its subsidiaries to directly report illegal or improper behavior to internal and external contact points. All these efforts aim to receive a wide range of employee, etc. feedback and enable early detection and resolution of problems.
    
6. Promotion of Diversity and Inclusion
   In order to conduct Group management with  awareness of changes in the global environment, the MS&AD Insurance Group establishes a working environment that enables employees to demonstrate their full potential regardless of gender, nationality or disability, and aims to establish a corporate culture that respects diversity and diverse values.

1. The Company's Organizational Structure

• As a Company with an Audit and Supervisory Committee, the Company aims to expedite decision-making and business execution by appropriately exercising the supervisory function of the Board of Directors and delegating part of important business execution decisions to Directors. In addition, the Audit and Supervisory Committee has the function of auditing the execution of duties by Directors as part of the Board of Directors, and will endeavor to improve governance through strengthening of each functions and actively disclosing information. 
• The Company forms the Nomination Committee, the Remuneration Committee, and the Governance Committee (The majority of each committee’s members and each chairperson have been appointed from among the Independent Outside Directors) as internal committees of the Board of Directors, thus building a highly effective and transparent corporate governance system.
• The Company has introduced an Executive Officer System and is proceeding to delegate authority over business execution to these Executive Officers to ensure rapid execution.
   

2. Role of the Board of Directors

(1)In addition to matters specified by laws and regulation and the Company’s articles of Incorporation, the Board of Directors discusses and decides upon important matters involving Group management strategy and corporate management, including the Group’s management policies, management strategies and capital policy, in addition to overseeing the duties of Directors and Executive Officers.
(2) The Board of Directors allocates management resources according to risk appetite controlled with a balance of risk, return and capital, and aims to increase corporate value in the medium-to-long term by achieving sustainable growth and improvement in profitability and capital efficiency with a foundation of soundness.
(3) The Board of Directors determines the extent to which some decisions related to the execution of important business operations are delegated to Directors. In addition to appointing Executive Officers, the Board of Directors aims to separate management decision making and oversight by the Board of Directors from business execution by Executive Officers by clarifying their respective roles.
(4) Executive Officers are responsible for executing business in the respective areas of business entrusted to them by the Board of Directors and report on the status of business execution to the Board of Directors.

 

3. Composition of the Board of Directors and Roles of Outside Directors

(1) The Board of Directors shall have a balanced composition with diverse knowledge and expertise. The number of Directors shall be 17 or less, consisting of up to 12 Directors (excluding those who are Audit and Supervisory Committee Members.) and up to 5 Directors who are Audit and Supervisory Committee Members as stipulated in the Articles of Incorporation. Candidates for Directors are nominated by the Board of Directors based on the “Criteria for the Selection of Director Candidates” (see 10. Nomination Process below).
Furthermore, a majority of the Directors are nominated as Independent Outside Directors to incorporate perspectives independent from management, strengthen monitoring and oversight functions, and conduct highly transparent management.
(2) Outside Directors are expected to perform the following roles.

• Provisioning of advice from a broad perspective on management policies and management improvement based on their knowledge and experience, with the aim of promoting sustainable corporate growth and increasing corporate value over the medium- to long-term.
• Supervising of management through important decision-making at the board level.
• Monitoring of conflicts of interest between the Company and related parties such as management (Note) and/or major shareholders.
• Realizing supervising function from a standpoint independent of management by fulfilling accountability for stakeholders, including shareholders.

(Note) Collectively refers to the Directors, Audit & Supervisory Board Members and Executive Officers of the Company and domestic insurance companies in the Group in which the Company has a direct investment (same applies hereinafter)

4. Operation of the Board of Directors

(1) Resolutions of the Board of Directors
Except in cases otherwise stipulated by law, resolutions of the Board of Directors are made by a majority of the directors attending the meeting, where a majority of Directors are in attendance.
(2) Operation of the Board of Directors

• To allow for required, adequate discussion of important decisions regarding business execution and oversight of the performance of duties, the Board of Directors defines the agenda, length of deliberation and frequency of meetings of the Board of Directors.
• To enable meaningful views, comments and questions to be presented in its meetings, the Board of Directors makes efforts to send out and explain proposals to the Board of Directors, giving adequate consideration to the time required for preparation by attendees.
• The Board of Directors determines its annual schedule and anticipated agenda items in advance.

 

5. Evaluation of the Board of Directors
The Board of Directors periodically analyzes and evaluates its own overall effectiveness, and publishes an overview of the results.

 

6. Audit and Supervisory Committee Members

(1) Responsibilities of Audit and Supervisory Committee
As a statutory independent organization, the Audit and Supervisory Committee is entrusted by shareholders to audit the execution of duties by Directors. It is responsible for establishing a good corporate governance system that meets the trust of society by properly executing its duties, and plays a part in the supervisory function of the Company in cooperation with the Board of Directors.
(2) Composition and Roles of the Audit and Supervisory Committee

• The number of Directors who are Audit and Supervisory Committee Members is defined in the Articles of Incorporation and has having up to 5 members, a majority of which shall be Outside Directors in accordance with the law. Candidates for Directors who are Audit and Supervisory Committee Members are nominated by the Board of Directors with the approval of the Audit and Supervisory Committee, based on the “Criteria for the Selection of Director Candidates” (see 10. Nomination Process below).
• The Audit and Supervisory Committee makes decisions regarding auditing policies and auditing plans.
• The Audit and Supervisory Committee makes decisions regarding proposals to be submitted to the General Shareholders Meeting on the appointment or dismissal of Accounting Auditors, and the non-reappointment of Accounting Auditors. It also has the right to consent to decisions regarding remuneration of the Accounting Auditors.
• The Audit and Supervisory Committee determines the opinions regarding the appointment, dismissal, and resignation of Directors (excluding those who are Audit and Supervisory Committee Members.).
• The Audit and Supervisory Committee determines the opinions regarding the renumeration, etc. of Directors (excluding those who are Audit and Supervisory Committee Members.).

7. Accounting Auditors
The Board of Directors and the Audit and Supervisory Committee endeavor to take appropriate action to ensure adequate auditing by the Accounting Auditors.
 

8. Support Systems for Directors / Training Policy
(1) The Company has assigned a person in the secretariat of the Board of Directors to each of the Outside Directors to provide support in areas such as providing briefings in advance.
(2) The Company has established a system for ongoing provision of information and training at the time of appointment and during the term of Directors.
(3) The Company provides appropriate opportunities for Outside Directors to share information and exchange opinions with management and senior employees.
(4) The Company bears the expenses required to enable Outside Directors to fulfill their roles.
 

9. Group Management Committee
The role of the Group Management Committee is to discuss management policies, management strategies and key issues for the management of the Company and its Group companies. It also monitors specific business operations by receiving reports on matters decided upon by Executive Officers.
 

10. Nomination Process

• The Board of Directors appoints candidates for Directors (excluding those who are Audit and Supervisory Committee Members.) and Directors who are Audit and Supervisory Committee Members, and Executive Officers based on advice from the Nomination Committee. The approval of the Audit and Supervisory Committee shall be obtained for candidates for Directors who are Audit and Supervisory Committee Members.
• The Nomination Committee deliberates on major management personnel matters and provides advice on these matters to the Board of Directors. Such matters include the selection of candidates for Directors (excluding those who are Audit and Supervisory Committee Members.) and Directors who are Audit and Supervisory Committee  Members, and Executive Officers of the Company as well as the selection of Directors and Audit & Supervisory Board Members for domestic insurance companies in which the Company has direct investments.
• The Nomination Committee is made up of 3 or more members.
• A majority of members and the chairperson shall be appointed from among the Independent Outside Directors by the Board of Directors.

 

11. Process of Determining Remuneration

(1) Remuneration of Directors (excluding those who are Audit and Supervisory Committee Members.)

• The amount of remuneration for each Director is determined by the Board of Directors within the amount specified by resolution of the General Shareholders Meeting, after deliberation by the Remuneration Committee.
• The Remuneration Committee deliberates on matters such as performance evaluations and remuneration for the Company’s Directors (excluding those who are Audit and Supervisory Committee Members.) and Executive Officers and provides advice to the Board of Directors.
• The Remuneration Committee is made up of 3 or more members.
• A majority of members and the chairperson shall be appointed from among the Independent Outside Directors by the Board of Directors.

(2) Remuneration of Directors who are Audit and Supervisory Committee Members

• The amount of remuneration of each Director who are is Audit and Supervisory Committee Member is determined by discussion by Audit and Supervisory Committee Members, within the amount specified by resolution of the General Shareholders Meeting.

 

12. Governance Committee
The Governance Committee whose chairperson is elected by mutual vote of the Independent Outside Directors has been established for the purpose of discussion by Independent Outside Directors, Chairman & Director, Vice Chairman & Director and President regarding matters related to the status of policies regarding and stance on corporate governance. Independent Outside Directors shall comprise a majority of Committee members, who shall be selected by the Board of Directors.

 

13. Task-Specific Committees
The Company has established the Sustainability Committee, Quality Improvement and Compliance Committee, Digitalization Committee, Group Systems Committee, Group International Business Committee, ERM Committee and Merger Preparation Committee with the aim of deliberating important management issues involving business execution, to coordinate perspectives across various departments.

 

1. Roles of the Company (Holding Company)

• The Company has executed into business management agreements with the domestic Group insurance companies in which it has invested directly (hereinafter referred to as the “Directly Invested Companies”), and supervises management of Group companies in order to realize management strategies, improve management efficiency and ensure financial soundness and appropriate operations within the Group.
• The Company has established “Basic Policy Pertaining to System for the Group’s Internal Controls,” “The Group’s Risk Management Basic Policy,” “The Group’s Compliance Basic Policy,” “The Group’s Internal Audit Basic Policy,” “The Group’s Risk Appetite Statement,” and “The Group’s Basic Policy on Information Technology Governance.” In addition to requiring compliance with these policies by Group companies, either the approval of or reporting to the Company is required for important matters involving the Directly Invested Companies in line with the business management agreements.
• The Company establishes a group management strategy such as the Group’s Medium-term Management Plan.
• The Company provides guidance and supervision through monitoring of the progress of management plans formulated by Group companies and the status of business execution, with the aim of achieving the goals of the Group.

2. Role of Directly Invested Companies

• The Directly Invested Companies formulate their own policies and appropriately establish internal management systems based on the Group’s Basic Policies, in addition to formulating management plans in each company based on the Group’s Medium-term Management Plan to conduct management as individual companies.
• The Directly Invested Companies also appropriately supervise the management of their subsidiaries under business management agreements.

 

1. Constructive Dialogue with Shareholders
The Company has disclosed the Policy on Constructive Dialogue with Shareholders and has established the system for promoting constructive dialogue with shareholders from the perspective of enabling deeper dialogue in the medium- to long-term and enhancing corporate value.

2. Ensuring Shareholder Rights and Equality
The Company acts appropriately to effectively ensure the rights of shareholders, and endeavors to enable shareholders to appropriately exercise those rights as follows.

• The Company will take appropriate action to enable shareholders to effectively exercise their voting rights in the General Shareholders Meeting.
• The Company will provide accurate information to contribute to appropriate decision-making in the exercise of voting rights of shareholders.
• The Company provides adequate explanation of capital policies, etc., that have a material impact on the interests of shareholders.
• In the event a proposal by the Company is approved in the General Shareholders Meeting but with a considerable number of votes in opposition, the Company analyzes the reason and volume of opposing votes, and responds appropriately.
   

3. Prevention of Transactions that Conflict with the Interests of Shareholders
When the Company does business with a related party such as a Director or a major shareholder, prior approval of the Board of Directors is required for important or non-standard transactions to ensure they do not harm the joint interests of the Company and the Company's shareholders.

 

4. Strategic Equity Holdings
The Company discloses its policy to reduce the Group’s holdings of strategic equities to zero and its approach to ensuring appropriate responses to the exercise of voting rights in strategic equities.

 

• The Company and the Group's domestic insurance companies conduct disclosure based on the “Basic Policy for Disclosure of Information,” to ensure that they act in accordance with law and disclosure rules stipulated by financial instrument exchange, and that their stakeholders are able to fairly, correctly and promptly understand important information.
• In addition to disclosure required by law, the Company also discloses non-financial information of significant interest to shareholders, including ESG (Environment, Society, Governance) along with financial information, in an easily viewable “Integrated Report” format, intended to contribute to a constructive dialogue with stakeholders, including shareholders.
• In addition, this information is also disclosed in easily-accessible format on the Company's website, and other efforts, including the use of video, will be made to provide stakeholders with a better understanding on the website.

Supplementary Provision
Revision and abolition of this basic policies shall be determined by resolution of the Board of Directors except for any revision made pursuant to the proviso to Paragraph 1 of Article 4 and Paragraph 3 of Article 4 of the Regulations for Management of Policies and Regulations etc.

END

Established, June 22, 2015
Last Amended, June 23, 2025