Corporate Governance

As a bank that owns and operates an ATM network that manages deposits from a large number of customers and has a nature similar to that of public infrastructure, the Bank recognizes that ensuring disciplined corporate management is vital in responding to social trust and seeks to ensure effective corporate governance. This is achieved by maintaining and improving corporate governance and compliance systems to ensure transparent, fair and swift managerial decision making; clarifying the roles and responsibilities of executives and employees; strengthening management oversight functions; and ensuring equitable operations. The Bank adopts the organizational form of a Company with Audit & Supervisory Board. At the Board of Directors, the Bank ensures effective corporate governance through decision making by Directors with executive authority over operations who are well versed in the Bank’s operations and Outside Directors who have considerable experience and insight in their areas of expertise as well as through audits by the Audit & Supervisory Board Members.

The Bank has conducted “evaluation of effectiveness of the Board of Directors” since FY2015 to improve the effectiveness of the Board of Directors as a forum for strategic and constructive discussions within the Seven Bank Group. In FY2024 as well, a questionnaire survey was anonymously conducted for Directors and Audit & Supervisory Board Members about the operation of the Board of Directors, the composition of the Board of Directors, agenda items of the Board of Directors and other items. The results were deliberated at the Board of Directors.

It has been confirmed that the Bank’s Board of Directors has been fulfilling both its decision-making and supervisory functions as all Directors and Audit & Supervisory Board Members share its roles, responsibilities and issues for improvement, and conduct deliberations from diverse perspectives through free and open discussions based on the members’ respective knowledge and expertise. Thus, according to the results of the evaluation, the Board of Directors has been operating appropriately, thereby ensuring its effectiveness.

Issues for improvement were also identified, which included the diversity of members of the Board of Directors, the appointment and dismissal of senior management, and the need to enhance discussions on internal control and risk management systems. We will continue to work for improvements.

The Bank’s Independence Standards for Outside Officers are as follows.

Other matters concerning Independent Officers
The Bank registers all persons who fulfill the qualifications of Independent Officers, as well as the Independence Standards for Outside Officers, as Independent Officers.

We believe that the role of Directors and Audit & Supervisory Board Members is to realize appropriate business management by supervising and auditing business execution while fully understanding the social responsibilities and mission of the banking business. In order to properly fulfill this role, we utilize the skill matrix when appointing Directors and Audit & Supervisory Board Members, and aim for a well-balanced composition of members with diverse skills and expertise.

Seven Bank’s “Policy on Compensation of Officers and Compensation System for Officers” were, excluding compensation for Audit & Supervisory Board Members, proposed to the Board of Directors by the Nomination & Compensation Committee, and determined with a resolution of the Board of Directors as follows:

The Bank decides compensation of officers based on the following points.

The Bank has established a Nomination & Compensation Committee, comprising a total of five members made up of three Independent Outside Directors and two Representative Directors, chaired by an Independent Outside Director, as an advisory body to the Board of Directors (as of the end of the fiscal year under review)*. The Nomination & Compensation Committee proposes specific amounts of compensation, etc. to be granted to Directors within the range of the total amount approved at the General Meeting of Shareholders, for determination by resolution of the Board of Directors. From the perspective of understanding the process of discussion, Audit & Supervisory Board Members may participate as observers who do not possess voting rights, when a Nomination & Compensation Committee meeting is held. The procedure is stipulated in the Regulations for Officers, which is modified, amended, or abolished by a resolution of the Board of Directors upon discussion with the Audit & Supervisory Board Members.
Compensation, etc. for Audit & Supervisory Board Members is determined upon discussion by the Audit & Supervisory Board Members within the range of the total amount approved at the General Meeting of Shareholders.

• ※The Nomination & Compensation Committee consists of a total of seven members: five Independent Outside Directors and two Representative Directors as of July 1, 2025.

The Bank’s compensation structure for officers comprises “basic compensation” as fixed compensation and “bonuses” and “performance-based stock compensation” as variable compensation, which are applied as follows.

Each plan is positioned as follows.

The ratio of each plan has been decided as described below by a resolution of the Board of Directors upon a proposal by the Nomination & Compensation Committee. Factors taken into account included a balance between fixed compensation and variable compensation, a balance between cash remuneration and stock compensation, and a balance between bonuses and stock compensation, which are incentives to execute management with a well-balanced perspective in both the short-term and the medium- to long-term (excluding compensation for Audit & Supervisory Board Members).

In addition, non-executive Directors and Audit & Supervisory Board Members receive only fixed compensation, as their role is to supervise the Bank’s management from an objective and independent standpoint.

To provide a competitive compensation level and thereby secure highly capable human resources, the Bank’s compensation level for officers has been determined by a resolution of the Board of Directors based on the proposal made by the Nomination & Compensation Committee. The deliberation was based on the analysis and comparison of data on the compensation levels of a group of companies of the same size and operating in the same industry as the Bank, which has been drawn from a larger body of objective data on compensation levels provided by an outside professional organization (excluding compensation for Audit & Supervisory Board Members).

For the performance-based portion of bonuses and performance-based stock compensation, the degree of target achievement is used as an evaluation indicator. For this purpose, the performance forecasts for the fiscal year ended March 31, 2025, including consolidated ordinary income and consolidated ordinary profit, disclosed with the announcement of the financial results for the previous fiscal year (on May 10, 2024) are used as target figures.

Fiscal year under review (from April 1, 2024 to March 31, 2025)

Audit & Supervisory Board Members and the Accounting Auditor hold regular meetings to exchange opinions and promote mutual cooperation, based on the audit contract with KPMG AZSA LLC. Audit & Supervisory Board Members perform audits on the execution of duties by Directors by attending the Board of Directors meetings or other means. In addition to conducting their own operational and accounting audits, Audit & Supervisory Board Members receive reports on results of external audits by the Accounting Auditor, and check the appropriateness thereof. Members from the Internal Audit Division are also present when receiving accounting audit reports from the Accounting Auditor, in an effort to facilitate close cooperation.

The Bank has in place the Internal Audit Division, which is independent of the Bank’s other departments engaging in business operations and directly reports to the President and Representative Director.
The Internal Audit Division annually sets a basic policy for internal auditing plans and priority issues to be addressed, which are to be approved by the Board of Directors. Individual internal auditing plans are formulated by the General Manager of the Internal Audit Division, and approval of these plans is obtained from the President and Representative Director, who is the officer in charge of the Internal Audit Division. Individual internal audits are conducted by investigating and evaluating the appropriateness and effectiveness of internal management systems as a whole based on the following items to discover problems, if any, and suggest how to address them. The results of these audits are reported to the President and Representative Director, the Executive Committee, the Board of Directors, and the Audit & Supervisory Board.

Internal audits are conducted on all the Bank’s departments and systems, including those of its subsidiaries. Audits are also conducted on the operations of the Bank’s major outsourcing contractors regarding the status of management by its relevant internal departments, as well as on the outsourcing contractors themselves, within the scope agreed with them. Audit & Supervisory Board Members receive periodic reports from the Internal Audit Division on its audit plans and results, and request investigations as necessary to ensure that the audit results of the Internal Audit Division are effectively utilized for internal control system audits by Audit & Supervisory Board Members. In addition, Audit & Supervisory Board Members receive reports on the status of internal control systems regularly or as necessary from the departments in charge of internal control functions, and ask for detailed explanations as necessary.

Concerning the system upgrades stipulated in Article 362, Paragraph 4, Item 6 of the Companies Act, the Board of Directors made a resolution on May 8, 2006, on matters to be implemented by the Bank. Progress of the details of this resolution is reviewed each fiscal year. In line with this resolution, Seven Bank strives for good corporate governance and internal control, while ensuring appropriateness in the Seven Bank Group’s operations.

As of the end of June 2025, Seven-Eleven Japan Co., Ltd., which is the leading shareholder of the Bank, directly holds 39.92% of the voting rights of the Bank. At the same time, Seven & I Holdings Co., Ltd., the parent company of Seven-Eleven Japan Co., Ltd., indirectly holds 39.92% of the voting rights of the Bank. Therefore, the two companies fall under the definition of other affiliates of the Bank.

Seven & i Holdings Co., Ltd., one of the Bank’s other affiliates, is a pure holding company engaged in the planning, management, and operation of the Seven & I Group, which operates the domestic convenience store business with Seven-Eleven at its core, the overseas convenience store business, the superstore business, financial services and other businesses, aiming to become a worldwide top-class retail group centered on “food.” Seven Bank operates, with financial services at its core, ATM platform business, banking business, credit card and electronic money businesses, etc. Although Seven & i Holdings’ financial services includes not only the Bank and its subsidiaries, but also Seven Financial Service Co., Ltd., and Seven CS Card Service Co., Ltd., their services and target customers are different from ours, and therefore we consider that our clear business demarcation is and will be ensured. As business segments clearly differ between the Seven & i Group and the Bank, we believe that we are in the position where we can grow together with the Seven & i Group through developing unique retailor-specific financial services mainly for customers visiting the Seven & i Group stores.

When conducting transactions, etc., with companies of the Seven & i Group, the Bank will comply with the arm’s-length rule under the Banking Law, which is a rule established to prevent the soundness of the Bank’s management from being compromised through conflict-of-interest transactions. The Bank fully confirms the necessity for such transactions and that the conditions of such transactions do not differ significantly from conditions of usual transactions with third parties. In the event of a transaction of particular significance with another company in the Seven & i Group, the Bank will set up a special committee to discuss and determine the appropriateness of the terms of transaction and the fairness of the procedure in order to ensure the benefit of minority shareholders, and the committee will thoroughly discuss from an independent standpoint at a different level from the Board of Directors and makes a final decision.

The Bank believes that in order to achieve sound and sustainable growth, it is essential to engage in business development (innovation) by integrating collaboration with various partners to an advanced degree based on our credibility and transparency of management as a corporate entity. Furthermore, we recognize that listing on the market is one of the most effective ways to ensure the Bank’s credibility and transparency of management. As an independently listed company, the Bank autonomously deliberates and determines, independently of Seven & i Holdings Co., Ltd., its own business strategies, personnel policies, capital policies, etc., in engaging in its business activities. In addition, to ensure the necessary independence from Seven & i Holdings Co., Ltd., we have established the Nomination & Compensation Committee chaired by an Independent Outside Director as an advisory body to the Board of Directors. This Committee deliberates on matters concerning recommendations of candidates for Directors and Executive Officers, thereby ensuring independence from Seven & i Holdings Co., Ltd. in the appointment of top management. Furthermore, the Bank has also appointed Independent Outside Directors and Independent Outside Audit & Supervisory Board Members, who provide supervision to ensure that no conflicts of interest arise between Seven & i Holdings Co., Ltd. and its minority shareholders. The Bank does not have any agreements concluded regarding group management with Seven & i Holdings Co., Ltd. In addition, to comply with the disclosure obligations, etc., of Seven & i Holdings Co., Ltd., the Bank has established the Guidelines for Reporting of Material Facts with Seven & i Holdings Co., Ltd. and reports to the Seven & i Holdings Co., Ltd. accordingly. These reports are limited to matters that impact the timely disclosure of Seven & i Holdings Co., Ltd., materially impact the consolidated financial statements of Seven & i Holdings Co., Ltd., and may potentially impair the credibility of the Seven & i Group.