Since the June 1997 establishment of an Advisory Board, which included experienced and resourceful individuals from outside the Company, ORIX has strengthened its corporate governance framework with the aim of objectively determining whether its business activities are emphasizing the interests of its shareholders.
In June 1998, we introduced a Corporate Executive Officer system to help separate strategic decision-making functions from day-to-day administrative operations. In June 1999, ORIX reduced the number of members on its Board of Directors, arranged for three Advisory Board members to fill two positions as independent directors and one position as an advisor to the Board, and phased out the Advisory Board. In addition, the Nominating Committee and the Compensation Committee were established to operate as support units for the Board of Directors.
To ensure the more effective separation and speedy execution of the decision-making and monitoring functions of the Board of Directors and the executive function of management, ORIX adopted a "Company with Committees" board model in June 2003, following the April 2003 implementation of revisions to the Commercial Code of Japan that permit this model. In line with the new board model, nominating, audit, and compensation committees were set up. When the Company Law took effect on May 1, 2006, ORIX became a company with a revised "Company with Committees" board model under that law.
There were five outside directors following the Annual General Meeting of Shareholders held on June 24, 2008, and all five seats on the nominating committee have been filled by outside directors since June 2007. As a result, all three committees-including the nominating, audit, and compensation committees-are now comprised entirely of outside directors. ORIX believes that changing the membership composition in this manner will promote increased management transparency and objectivity.
