[Translation]

May 13, 2015

 

Sumitomo Mitsui Financial Group, Inc.

 

Establishment of SMFG Corporate Governance Guideline

 

As part of our effort to strengthen and improve corporate governance with the aims of further increasing managerial transparency and fairness and increasing our corporate value over the mid to long term, Sumitomo Mitsui Financial Group, Inc. (“SMFG”; President: Koichi Miyata) announces that we have established the SMFG Corporate Governance Guideline (the “Guideline”) in due consideration of the content of the Final Proposal of Japan’s Corporate Governance Code, recently prepared by a Council of Experts under a joint Secretariat comprising the Financial Services Agency and the Tokyo Stock Exchange.

 

1.       Purpose of the Establishment of the Guideline

 

The Guideline has been established with the purpose of SMFG seeking sustainable growth and improved corporate value over the mid to long term through the realization of effective corporate governance while also preventing the occurrence of any untoward events or situations as a corporation.

 

We consider corporate governance to be “a structure for transparent, fair, timely, and decisive decision making by SMFG, with due attention to the needs and perspectives of shareholders, customers, personnel (including directors, corporate auditors, and employees), and local communities”. We will pursue effective corporate governance with the Guideline as a plan of action for the directors, corporate auditors, and employees of SMFG, recognizing that strengthening and enhancing corporate governance is one of the principal tasks facing management.

 

2.       Summary of the Guideline

 

(1)     Shareholder relations

-        SMFG will endeavor to enable shareholders to exercise their voting rights appropriately through such measures as sending and disclosing shareholder meeting convocation notices early enough to ensure that shareholders have sufficient time to examine the contents thereof.

-        SMFG will establish policies concerning measures and organizational structures aimed at promoting constructive dialogue with shareholders.

 

(2)     Strategic shareholdings

-        SMFG will disclose its policy with respect to its strategic shareholdings in other listed companies.

-        The Board of Directors will examine the economic rationale from the mid to long term perspective and future outlook of major shareholdings on an annual basis, taking into consideration both associated risks and returns, in order to confirm the objective and rationale behind such shareholdings.

-        SMFG will establish and disclose standards to ensure the appropriate execution of voting rights in relation to shareholdings.

 

 (3)   Relations with stakeholders other than shareholders

-        For increasing corporate value over the long term, SMFG will respect its stakeholders, including customers, directors, corporate auditors, employees, and local communities, and will endeavor to maintain favorable and smooth relations with them.

-        SMFG will promote diversity, including the active participation of women, and endeavor to foster a corporate culture that makes diversity a strength.

 

(4)     Information disclosure

-        In order to ensure effective corporate governance, SMFG will disclose the following information:

•                Business plans;

•                Basic views and guidelines on corporate governance;

•                Policies and procedures in determining the compensation of directors;

•                Policies and procedures in the nomination of director candidates and corporate auditor candidates; and

•                Reasons for the nomination of each director candidate and corporate auditor candidate.

 

(5)     Composition of Board of Directors

-        One-third or more of the directors, and at least two of them, will be elected as independent outside directors.

-        The Board of Directors will be constituted by directors with various backgrounds of expertise and experience, and the Board of Directors will maintain the appropriate number of directors to allow it to function most effectively and efficiently.

 

 

 

(6)     Support system and training policy for directors and corporate auditors

-        SMFG will develop an internal system necessary and sufficient for the directors and corporate auditors to effectively fulfill their roles and responsibilities.

-        Upon assuming their positions and on a continuing basis thereafter, SMFG will provide directors and corporate auditors with information and knowledge related to business activities necessary in overseeing management, and will provide other such training opportunities necessary for the directors and corporate auditors to fulfill their expected roles.

-        SMFG will establish a system to sufficiently share internal information with Outside Directors and Corporate Auditors.  Additionally, SMFG will promote the understanding of our Mission and corporate culture and will continually provide information regarding its management environment and other such matters.

 

(7)     Selection standards for director candidates and corporate auditor candidates

-        SMFG will establish and disclose selection standards and procedures for director candidates and corporate auditor candidates. SMFG will appoint at least one person who has appropriate expertise in finance and accounting as a corporate auditor.

-       SMFG will establish and disclose independence standards for Outside Directors and Corporate Auditors.  In principle, Outside Directors and Corporate Auditors will be individuals that satisfy the independence standards set forth by SMFG in addition to the independence requirements set forth by each stock exchange on which SMFG is listed.

 

End.