March 27, 2000 Full-scale Alliance and Scheduled Merger of The Sumitomo M&F and Mitsui M&F Corporate Governance The new insurance and financial group will extend corporate governance to be enabled to take into consideration the markets and shareholders and to maximize its corporate valuation. (1) Corporate strategy functions and operations will be separated to effect both strategic decision-making and sound day-to-day operations; and to this end, a management structure for operating officers and an advisory board will be introduced, and the introduction of a stock option plan will also be examined. (2) The new company will place greater emphasis on investor relations and the disclosure of information in order to operate with a high level of transparency. (3) For more well-integrated risk management, insurance risks, asset investment risks, and all other risks will be weighed scientifically, and the existence of an appropriate level of capital corresponding to the overall risk will be confirmed and managed. (4) The required capital versus income for each business area will be carefully analyzed, and while maintaining its high rating, capital will be applied to more efficient use in order to enhance a return on equity.