Corporate Governance

As of January 1, 2018

Our Corporate Governance System

Outline of the Internal Control System

We believe that a robust corporate governance system is a vital element of effective and enhanced management and have established sound and transparent corporate governance to carry out appropriate business activities in line with our core policies and to ensure objective management.

ORIX's corporate governance system is characterized by:

• separation of operation and oversight through a "Company with Nominating Committee, etc." board model;
• Nominating, Audit and Compensation Committees composed entirely of non-executive directors and the Audit Committee composed entirely of outside directors;
• all outside directors satisfing strict conditions for independence; and
• all outside directors being qualified in their respective fields.

We believe that swift execution of operations is vital to effectively responding to changes in the business environment. Furthermore, we believe that ORIX's governance system promotes improved management transparency through a system in which outside directors, who are experts in their respective fields monitor and advise on legal compliance and the appropriate execution of operations.

Based on these principles, our board of directors possesses oversight function and, under the "Company with Nominating Committee etc". board model, which we adopted in June 2003, delegates certain responsibilities to the three committees to carry out the role of effective governance. Please see the history of ORIX's corporate governance system below.

Oversight by directors is separate from the execution of operations within the three committees that form the heart of the board of directors. Each committee is formed entirely by non-executive directors to help avoid conflicts of interest with our shareholders.

In addition, all outside directors must meet the conditions for director independence as set forth by the Nominating Committee.