Chapter 4
Enhancing Corporate Infrastructure Under a New Governance Framework

1. New leadership and enhancing corporate governance

On April 1, 2017, Sumitomo Mitsui Financial Group (SMFG) and Sumitomo Mitsui Banking Corporation (SMBC) inaugurated a new management team. The major members were: Koichi Miyata, who had been President of SMFG and assumed double roles as Chairman of the Board of SMFG and SMBC; Takeshi Kunibe, new President of SMFG and Group CEO, and former President of SMBC; and Makoto Takashima, new President and CEO of SMBC, and former Senior Managing Executive Officer at SMBC.

One of the earliest tasks undertaken by the new leadership team was enhancing the corporate governance of SMFG and SMBC Group. The highlight of the related initiatives was a shift from a “Company with Board of Company Auditors” to a “Company with a Nominating Committee, etc.,” which was undertaken in fiscal year 2017 (ended March 2018).

SMFG had started engaging in organizational efforts to address the issue of corporate governance in 2015, when the company established the SMFG Corporate Governance Guidelines in May, and defined the enhancement of corporate governance as one of the highest priority management issues. Accordingly, in June the same year, the number of outside directors was notably increased. Then, in June 2017, SMFG changed its institutional status to a “Company with a Nominating Committee, etc.” Behind this transition, there were two intentions. One is to strengthen corporate governance by enhancing the supervision of the Board and the other is that as a Global Systemically Important Bank (G-SIB), the status was better suited to dealing with international financial regulations and oversight, and was expected to help make communication smoother with overseas institutional investors and regulatory authorities.