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## Corporate Govern ance 

The Daiwa Securities Group clearly separates the supervisory and executive functions of management to create a highly transparent and objective corporate governance system. The Group is pursuing a management structure that improves the efficiency of head office operations and maximizes synergies between the Group companies. Under this structure, employees responsible for head office functions also perform similar roles for securities subsidiaries, in addition to the corporate executive officers of Daiwa Securities Group Inc. 

## Features of the Corporate Governance System 

In 1999, the Daiwa Securities Group became the first listed Japanese company to adopt a holding company structure. Since then, we have been pursuing a highly transparent and objective corporate governance system that maximizes synergies between Group companies while showcasing the independence and unique expertise of each Group member. 

In June 2004, Daiwa Securities Group Inc. made a transition to a “Committee System” of corporate governance and accelerated the decision-making process by transferring a substantial portion of authority from the Board of Directors to corporate executive officers. In addition, we strengthened the supervisory functions of management by increasing the number of outside directors and establishing the Nominating Committee, Audit Committee, and Compensation Committee. The representative directors of the major Group companies also serve as corporate executive officers of the holding company, thereby allowing them to effi- ciently implement individual business strategies based on Group strategies. 

## Corporate Governance System at Daiwa Securities Group 

The Nominating Committee met three times in FY2011 to dis- cuss the composition of the Board of Directors and its effect on corporate governance, the basic policy for nominating candidates for directorships, and the selection of these candidates. The Nomi- nating Committee selects candidates for directorships in light of the Group’s selection standards for the appointment of directors. These standards include criteria that ensure the independence of outside directors. 

The Audit Committee met 12 times during FY2011. The com- mittee evaluated the activities of directors and corporate executive officers, audited documentation including financial statements and business reports, and prepared an audit report for the period under review. 

The Compensation Committee met six times in FY2011 to discuss compensation policy and determine the compensation of each director, and also studied a Group-wide incentive plan aimed at improving consolidated earnings results. 

The Board of Directors met 10 times during FY2011 and out- side directors had a 98% record of attendance. 

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