Under the leadership of JS Group Corporation, which is operated as a pure holding company,  Group operating companies work as independent partners to carry out their duties and produce  superior results. The JS Group Corporation works to create and provide value that is attractive for all stake- holders to be able to continue as a corporate group that has the trust of society. The Company  therefore recognizes strengthening of corporate governance as its most important management  theme. The Company undertakes various effective measures to expedite decision-making,  ensure effective and efficient business execution, and prepare an appropriate structure for  Group control. The JS Group Corporation has adopted an auditor system, with a Board of Corporate Auditors  consisting of four auditors, including two outside auditors. The reason for employing this system  is that by further enhancing the auditor system, we can strengthen oversight of management  activities. Management therefore believes that this corporate governance system responds to the  trust of shareholders and other investors. Furthermore, the Board of Directors comprises eight  directors, including three outside directors, as of June 17, 2010. Each director is appointed for a  term of one year. The supervision and objective advice provided by our outside directors helps  to ensure transparent and timely decision-making. In order to enhance corporate governance of Group companies, the JS Group Corporation,  which is operated as a pure holding company, is working to accelerate discussion and decision- making on management strategies, medium- to long-term policies and investment proposals that  Corporate Governance Approach to Corporate Governance Outline of Corporate Governance System JS Group Corporation Annual Report 2010 35 Activities for Sustainable Management Corporate Governance Appointment/discharge Appointment/discharge/ supervision Direction/supervision Liaison Liaison Accounting  audit Audit Business audit Appointment/discharge Appointment/discharge Risk Management Meeting Internal Audit Committee Compliance Committee Investment Strategy Council Investment and Loan Council Environmental Strategy Committee Group IT Strategy Committee Reorganization Deliberation Council New Business Deliberation (Acquisition) Council Independent Auditors Operating Companies Board of Corporate Auditors Operating Companies Audit Dept. Operating Companies General Meeting of Shareholders Management Meeting Board of Directors Representative Directors Organization Division Managers (Directors) Governance Structure