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Corporate Governance

By enhancing its corporate governance, DBJ strives to create a management structure that is both efficient and highly transparent. DBJ works to ensure the soundness and appropriateness of all its operations, maintain its level of trust and carry out financing smoothly. To these ends and founded on appropriate governance, through all our operations we endeavor to comply with all laws and regulations, protect customers and appropriately manage a variety of risks.
DBJ has established the Core Competencies that Underlie Our Corporate Philosophy, a Code of Conduct and a Commitment to Stakeholders, outlining management principles and action guidelines that all executives and regular employees are expected to follow, which underscore the bank's corporate philosophy. We believe that our efforts to achieve the tenets of our corporate philosophy are closely linked to our ability to benefit stakeholders. Consequently, DBJ's Board of Directors works to achieve the highest level of corporate governance possible through a corporate philosophy that emphasizes sustainable management. As a result, we endeavor to disclose information appropriately and in a timely fashion and be thoroughly accountable, to ensure management trustworthiness.

1. Compliance

Compliance System

Legal Compliance
DBJ has established a Compliance Policy to ensure thorough compliance with all laws and regulations. We endeavor to cultivate a compliance-oriented corporate culture.
Compliance Affairs
DBJ recognizes that a having robust compliance system is essential to maintaining the trust of its clients. Consequently, we accord this system high management importance. Various compliance activities are described below.
  • Compliance System Creation and Operation
    DBJ has created the General Risk Management Committee, composed of Bank executives, to deliberate compliance risks. The committee confers with the compliance officers located at each branch regarding the compliance situation of each division,and confirms reporting and communicating compliance-related issues.
    The committee aims to quickly understand and resolve compliance-related issues. For this reason, the committee operates through a line of communications outside the standard lines of reporting. We have created the Compliance Hotline, which communicates with the committee, acting as an internal compliance communications desk.
  • Awareness of Compliance Items
    DBJ has prepared a Compliance Manual, which contains specific behavioral guidelines that ensure legal compliance. The manual is distributed to all executives and employees. To thoroughly educate all executives and employees, the Bank also holds training seminars and briefings.
  • Compliance Programs
    DBJ formulates detailed compliance programs for each fiscal year. After discussion in the General Risk Management Committee the “action plans”.

2. Customer Protection Management System

DBJ recognizes that the establishment and maintenance of a customer protection management system is vital because it protects the people who use the financial institution's systems and raises their level of convenience. DBJ recognizes the extreme importance of such a system from the standpoint of operational soundness and appropriateness.
DBJ has established a Customer Protection Management Policy to protect customers and raise the level of customer convenience, and formulated internal regulations based on this policy. We have publicized these regulations bankwide through briefing sessions. In particular, we have incorporated a declaration on our policies related to personal information into our Declaration on Personal Information Protection.

3. Risk Management

DBJ has established a risk management system, as it recognizes that ensuring operational appropriateness and soundness are core to its business.

Comprehensive Risk Management
DBJ has created a comprehensive risk management structure that adopts an overall approach to addressing the various categories of risk that it faces directly, including credit risk, market risk and operational risk. DBJ determines policies related to comprehensive risk management, and ensures their familiarization throughout the Bank.
Credit Risk Management
Credit risk refers to the risk of sustaining losses resulting from a decline in the value of assets (including off-balance-sheet items) due to deterioration in the financial condition of the borrower. One particular source of risk when extending credit to overseas borrowers is the country risk, or the risk of failure of the financial institutions in the borrower's home country, owing to such factors as foreign currency, political and economic conditions. DBJ has established policies related to credit risk and formulated and organizational structure and risk management policies to combat such risks.
Market and Liquidity Risk Management
Market risk can be broadly classified into interest rate risk, exchange risk and stock market risk. Market risk describes the risk of loss from fluctuations in the value of assets or liabilities (including off-balance-sheet items), owing to changes in interest rates, exchange rates, stock markets and various other markets. DBJ divides these risks broadly into interest rate risk and exchange risk. Liquidity risk is the risk of a mismatch occurring in the periods when funds are used and raised, causing unexpected differences in the flow of funds (cash flow risk). This situation makes securing funds difficult and creates situations in which interest rates on borrowed funds are substantially higher than usual rates. At such times, because of market complexities entities in these circumstances may become unable to participate in market transactions, compelling them to conduct transactions under substantially less favorable terms than otherwise would be the case. The risk of losses for these reasons is known as market liquidity risk. DBJ has introduced policies related to the management of market risk and liquidity risk, as well as appropriate operational structures and risk management policies.

4. Operational Risk Management

DBJ recognizes the vital importance of establishing a comprehensive risk management system pertaining to operational risk from the standpoint of sound and appropriate operations as a financial institution.
DBJ defines operational risk as risks from operational processes, inappropriate actions by executives or regular employees or those arising from risks of failure due to extrinsic events (portion excluded in calculating the capital adequacy ratio) as well as from DBJ itself (portion included in calculating the capital adequacy ratio).

5. Internal Audit Systems

DBJ has established the Internal Audit Department under the direct supervision of the DBJ president and independent from other operating departments. The department conducts inspections to ensure the appropriateness and effectiveness of internal controls, including the Bank's overall operational compliance and risk management, and performs evaluations and recommends improvements.


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