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MC’s Basic Policy on Corporate Governance

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MC’s corporate philosophy is enshrined in the Three Corporate Principles. Through corporate activities rooted in the principles of fairness and integrity, MC strives to continuously raise corporate value. MC believes that by helping to enrich society, both materially and spiritually, it will also meet the expectations of shareholders, customers and all other stakeholders. In order to achieve these goals, MC recognizes strengthening corporate governance on an ongoing basis as an important management issue as it is a foundation for ensuring sound, transparent and efficient management. MC, based on the Audit & Supervisory Board System, is thus working to put in place a corporate governance system that is even more effective. This includes strengthening management supervision through such measures as appointing Outside Directors and Outside Audit & Supervisory Board Members who satisfy the conditions for Independent Directors or Independent Audit & Supervisory Board Members, and establishing advisory bodies to the Board of Directors where the majority of members are Outside Directors, Outside Audit & Supervisory Board Members and Outside Members. At the same time, MC uses the executive officer system, etc., for prompt and efficient decision-making and business execution.

Corporate Governance Framework (As of July 1, 2021)

MC SIM事務局, 総務部 危機管理室(PH-K), 総務部 総務チーム(PH-A)

Board of Directors

The Board of Directors is responsible for making decisions concerning important management issues and overseeing business execution. In-house Directors utilize their rich experience of working within MC and Outside Directors utilize their practical, objective, and professional perspectives to ensure appropriate decision-making and management oversight.

(Composition and Size of the Board of Directors and the Policy and Process for Appointing Nominated Directors)

Composition and Size The board of Directors is an appropriate size and composition for transparent, fair, prompt, and decisive decision-making and highly effective supervision, with one third or more being made up of Outside Directors.
Appointment Policy To ensure decision-making and management oversight are appropriate for MC which is involved in diverse businesses and industries in a wide range of fields, and from the perspective of ensuring diverse standpoints, several Directors are appointed from both within and outside MC with the depth of experience and high levels of knowledge and expertise needed for fulfilling their duties.
  In-hoise Directors In addition to Chairman of the Board and President & CEO, MC’s in-house Directors are appointed from executive officers (senior executive vice presidents & executive vice presidents) responsible for companywide management, In-house Directors utilize their rich experience of working within MC and Outside Directors utilize their practical, objective, and professional perspectives to ensure appropriate decision-making and management oversight.
Outside Directors Outside Directors are appointed from those who possess a practical perspective of highly experienced company officers and those who possess an objective and professional perspective with a deep insight on global situation and socio-economic trends, with a variety of viewpoints to ensure appropriate decision-making and management oversight.
Appointment Process Based on the above policy, the President & CEO proposes a list of nominated Directors, which is then deliberated at the Governance, Nomination and Compensation Committee and resolved by the Board of Directors before being presented at the Ordinary General Meeting of Shareholders.
MC SIM事務局, 総務部 危機管理室(PH-K), 総務部 総務チーム(PH-A)

Composition of the Board of Directors

Board of Directors’ Structure (As of July 1, 2021)
Total 11
Number of non-executive and non-independent Directors (Chairman of the Board) 1
Number of Executive Officers 5
Number of Independent Outside Directors (number of women) 5(1)
Operation of the Board of Directors (As of July 1, 2021)

The Board of Directors includes Audit & Supervisory Board Members in addition to Directors. The Board operates as follows:

Position Director Audit & Supervisory
Board Member
Total
Chairman (Non-executive, non-managerial) 1 - 1
Number of Executive Officers/Number of Full-time Audit & Supervisory Board Members 5 2 7
Number of Independent Outside Directors/Independent Outside Audit & Supervisory Board Members (number of women) 5(1) 3(2) 8(3)
Board of Directors Structure (As of July 1, 2021)
Ken Kobayashi 2016 Chairman of the Board (present position)
2010 President andChief Executive Officer
1971 Joined MC
Takehiko Kakiuchi*1 2016 President andChief Executive Officer (present position)
1979 Joined MC
Kazuyuki Masu*1 2019 Member of the Board, Executive Vice President, Corporate Functional Officer, CFO (present position)
2017 Member of the Board, Executive Vice President, Corporate Functional Officer, CFO, IT
2016 Executive Vice President, Corporate Functional Officer, Chief Financial Officer
1982 Joined MC
Akira Murakoshi*1 2021 Member of the Board, Executive Vice President, Corporate Functional Officer, CDO, CAO, Corporate Communications, Corporate Sustainability & CSR (present position)
2020 Member of the Board, Executive Vice President, Corporate Functional Officer, CDO, Human Resources, Global Strategy
2017 Executive Vice President, Corporate Functional Officer, Corporate Communications, Human Resources
1982 Joined MC
Yasuteru Hirai*1 2021 Member of the Board, Executive Vice President, Corporate Functional Officer, Global Strategy (Concurrently)Chief Compliance Officer, Officer for Emergency Crisis Management Headquarters (present position)
1984 Joined MC
Yutaka Kashiwagi 2021 Member of the Board, Executive Vice President, Corporate Functional Officer,Business Development for Japan
(Concurrently)General Manager, Kansai Branch (present position)
1986 Joined MC
Akihiko Nishiyama*2 2018 Professor, Ritsumeikan University (present position)
2015 Member of the Board, MC (present position)
2013 Adjunct Professor, Hitotsubashi University (resigned in March 2018)
2004 Professor, Dept. of International Liberal Arts, Tokyo Jogakkan College (resigned in March 2013)
1975 Joined Tokyo Gas Co., Ltd. (resigned in March 2015)
Akitaka Saiki*2 2017 Member of the Board, MC (present position)
2016 Retired from Ministry of Foreign Affairs of Japan
1976 Joined Ministry of Foreign Affairs of Japan
Tsuneyoshi Tatsuoka*2 2018 Member of the Board,MC (present position)
2015 Retired from METI
1980 Joined the Ministry of International Trade and Industry (currently Ministry of Economy, Trade and Industry (METI))
Shunichi Miyanaga*2 2019 Member of the Board, MC (present position)
2019 Chairman of the Board, MHI (present position)
2014 Member of the Board, President and CEO, MHI
2013 Member of the Board, President and CEO, MHI
1972 Joined Mitsubishi Heavy Industries, Ltd. (“MHI”)
Sakie Akiyama*2 2020 Member of the Board, MC (present position)
2018 Founder, Saki Corporation (present position)
1994 Founder and CEO, Saki Corporation
1987 Joined Arthur Andersen & Co. (Currently Accenture PLC)
(resigned in April 1991)
  1. *1 Indicates a Representative Director.
  2. *2 Indicates the fulfillment of the conditions for Outside Directors as provided for in Article 2, Item 15 of the Companies Act. Also indicates the fulfillment of the conditions for Independent Directors / Auditors as specified by Tokyo Stock Exchange, Inc. and other stock exchanges in Japan as well as selection criteria for Outside Directors specified by MC.
Number and Percentage of Independent Outside Directors

* Based on the status as of July 1, 2021

MC SIM事務局, 総務部 危機管理室(PH-K), 総務部 総務チーム(PH-A)

Matters Deliberated by the Board of Directors

In order to lead MC's sustainable growth and increase medium- to long-term corporate value, the Board of Directors deliberates on important management issues, such as management strategies, and supervises business execution through reports by officers of the status of their duties. In addition, matters requiring a resolution by the Board of Directors in accordance with laws and regulations and the Articles of Incorporation are deliberated and resolved based not only on the economic aspects, but also with an emphasis on ESG (Environment, Social, and Governance) perspectives. In particular, for investments and loans, the Board of Directors sets out monetary threshold standards (amounts do not exceed 1% of total assets and are set individually depending on the nature of the risk) in accordance with MC’s scale of assets and investments. Investments and loans that exceed this monetary threshold are deliberated and resolved by the Board of Directors. Business execution other than these matters for resolution by the Board of Directors is entrusted to Executive Officers in accordance with the allocation of duties decided by the Board of Directors for prompt and efficient business execution. Business is executed by the President, as the Chief Executive Officer, and the Executive Committee (meets twice monthly), as a management decision-making body responsible for business execution. Furthermore, the Board of Directors strives to construct an internal control system for increasing corporate value by conducting appropriate, valid, and efficient business execution in conformity with laws, regulations, and the Articles of Incorporation. Each year, the Board checks on the implementation of the internal control system and makes ongoing improvements and enhancements. In addition, as our company with a broad range of businesses, there is a possibility that conflicts of interest may arise when directors engage in transactions with the core business companies. However, regarding conflicts of interest in individual cases, we respond appropriately by having directors who may cause conflicts of interest refrain from attending meetings of the Board of Directors, and by having multiple outside directors and ensuring a diverse perspective.

MC SIM事務局, 総務部 危機管理室(PH-K), 総務部 総務チーム(PH-A)

Board of Directors’ Advisory Bodies

Governance, Nomination and Compensation Committee

The committee meets at least three times a year and a majority of its members are Outside Directors. It deliberates on matters related to governance, nomination, and compensation.

Composition of the Committee (*Committee Chairman) (As of July 1, 2021)
  • Outside Members (5):
    Akihiko Nishiyama (Outside Director), Akitaka Saiki (Outside Director), Tsuneyoshi Tatsuoka (Outside Director), Shunichi Miyanaga (Outside Director), Sakie Akiyama (Outside Director)
  • In-house Members (3):
    Ken Kobayashi (Chairman of the Board), Takehiko Kakiuchi (President and CEO), Shuma Uchino (Full-time Audit & Supervisory Board Member)

Number and Percentage of Outside Directors

* Based on status as of July 1, 2021

MC SIM事務局, 総務部 危機管理室(PH-K), 総務部 総務チーム(PH-A)

President’s Performance Evaluation Committee

The President’s Performance Evaluation Committee has been established as a subcommittee to the Governance, Nomination and Compensation Committee, comprising the same Chairman and Outside Directors as the parent committee to deliberate the assessment of the President’s performance. The President is not a member.

MC SIM事務局, 総務部 危機管理室(PH-K), 総務部 総務チーム(PH-A)

International Advisory Committee

The International Advisory Committee has met annually since its establishment in 2001. The committee comprises experts with a wide range of backgrounds in government, business and academia. Members of the committee offer advice from an international standpoint with respect to MC’s management and corporate strategies as it develops its business globally. The committee also deliberates and reports on geopolitical and economic conditions. The International Advisory Committee fulfills a crucial role in deepening discussions in meetings of the Board of Directors.

International Advisory Committee

Total 11
Number of in-house committee members 3
Number of outside committee members (Outside Directors and Audit & Supervisory Board Members) 2
Number of outside committee member (overseas) 6
Overseas Members(As of Julyl 1, 2021)
Member Nationality Title Years served Principal area of specialization and background
Ambassador Richard Armitage United States of America Former United States Deputy Secretary of State 5 years Ambassador Armitage previously served as Special Emissary to Jordan and United States Deputy Secretary of State. He is widely experienced in foreign diplomacy, is a leading expert on Asia and Japan within the US and is acknowledged as an authority on the Middle East.
Professor Joseph S. Nye United States of America Harvard University Distinguished Service Professor 13 years Professor Nye is a globally renowned scholar in the field of geopolitics. He has extensive networks not only in academia, but also in political and economic circles. Within the International Advisory Committee, he provides an annual overview of the international situation and makes valuable suggestions regarding industry trends.
Mr. Ratan N. Tata India Chairman, Tata Trusts 21 years Mr. Tata has expanded his business presence to over 100 countries worldwide and has particularly deep knowledge of industrial as well as political and economic developments in India.
Mr. George Yeo Singapore Former Chairman, Kerry Logistics Network 8 years Mr. Yeo has previously served as Singapore’s Minister for Information and the Arts, Minister for Health, Minister for Trade and Industry, and Minister for Foreign Affairs. His background brings a wealth of knowledge in the geopolitical situation in ASEAN and China to the committee.
Mr. Niall FitzGerald, KBE Ireland Former CEO and Chairman, Unilever 8 years Mr. FitzGerald, KBE has served as Chairman of several major companies such as Reuters and Unilever, as well as the British Museum. He has an outstanding knowledge of both geopolitics and industry, and his consideration of the impacts of geopolitical changes on business provides valuable advice for the International Advisory Committee.
Mr. Jaime Augusto Zobel de Ayala II The Philippines Chairman, Ayala Corporation 21 years Mr. Zobel has experience in growing a global business launched from the ASEAN region, and therefore has a thorough knowledge of various geopolitical and industry trends in Asia, particularly in the ASEAN region.
Japanese Members (As of Julyl 1, 2021)
  • Chairman of IACKen Kobayashi Chairman of the Board
  • Takehiko Kakiuchi President and CEO
  • Yasuteru Hirai Member of the Board, Executive Vice President
  • Akitaka Saiki Outside Director
  • Tsuneyoshi Tatsuoka Outside Director
Main discussion themes
  • State of the Global Economy: Trade tensions, trends in emerging countries, country-based outlook
  • Geopolitics: Bilateral relations, world order, global risks
  • Innovation: Digitalization-driven changes in industry and society around the world

* Advice and recommendations of committee members were obtained remotely during fiscal year ended March 31, 2021.

MC SIM事務局, 地域総括部 対外企画チーム(PM-W)

Outside Directors and Outside Audit & Supervisory Board Members

Outside Directors and Outside Audit & Supervisory Board Members are as follows (as of April 1, 2021).

Independent Outside Directors
  • Akihiko Nishiyama

    Main career: Professor, Ritsumeikan University

    Number of years on Board of Directors: 5 years

    Mr. Nishiyama has profound knowledge of organizational change, human resource development, and business management based on his many years of practical work experience, entrepreneurship, management experience, and management survey at a think tank, as well as his research activities in business administration at universities.

    Attendance at Board Meetings (FY2019)
    Regular: held 11 times, attended 11 times [100% attendance rate]
    Extraordinary: held 3 times, attended 3 times

    Attendance at Governance, Nomination and Compensation Committee Meetings (FY2019)
    Held 4 times, attended 4 times [100% attendance rate]
  • Akitaka Saiki

    Main career: Former Vice-Minister of Foreign Affairs, Ministry of Foreign Affairs of Japan

    Number of years on Board of Directors: 3 years

    Mr. Saiki has served in a succession of key posts at the Ministry of Foreign Affairs of Japan. He possesses profound knowledge of geopolitics developed through foreign diplomacy, as well as important insight into various foreign country risks and an extensive personal network for dealing with these.

    Attendance at Board Meetings (FY2019)
    Regular: held 11 times, attended 11 times [100% attendance rate]
    Extraordinary: held 3 times, attended 3 times

    Attendance at Governance, Nomination and Compensation Committee Meetings (FY2019)
    Held 4 times, attended 4 times [100% attendance rate]

    International Advisory Committee Meeting (FY2019)
    Held once, attended once [100% attendance rate]
  • Tsuneyoshi Tatsuoka

    Main career: Former Vice-Minister of Economy, Trade and Industry, Ministry of Economy, Trade and Industry of Japan

    Number of years on Board of Directors: 2 years

    Mr. Tatsuoka has served in a succession of key posts at the Ministry of Economy, Trade and Industry of Japan. He possesses profound knowledge of industrial policy in natural resources and energy, and manufacturing, and domestic and global economic policies and trends, as well as deep insight on sustainability gained through these experiences.

    Attendance at Board Meetings (FY2019)
    Regular: held 11 times, attended 11 times [100% attendance rate]
    Extraordinary: held 3 times, attended 3 times

    Attendance at Governance, Nomination and Compensation Committee Meetings (FY2019)
    Held 4 times, attended 4 times [100% attendance rate]

    International Advisory Committee Meeting (FY2019)
    Held once, attended once [100% attendance rate]
  • Shunichi Miyanaga

    Main career: Chairman of the Board, Mitsubishi Heavy Industries, Ltd.

    Number of years on Board of Directors: 1 year

    Based on his deep knowledge of the technology sector, Mr. Miyanaga has many years of experience as Member of the Board, President and CEO of a conglomerate manufacturing listed company that conducts business around the world, and has global business management experience.

    Attendance at Board Meetings (FY2019)
    * This shows attendance since the appointment of Directors on June 21, 2019.
    Regular: held 8 times, attended 8 times [100% attendance rate]
    Extraordinary: held twice, attended twice
  • Sakie Akiyama

    Main career: Founder and CEO, Saki Corporation

    Appointed June 2020

    Ms. Akiyama worked as an international management consultant, and based on her deep knowledge in the digital and IT sectors, she started an industrial inspection robotics firm and gained deep insight on innovation that has helped MC grow into a global company.
  • Member of the Governance, Nomination and Compensation Committee
  • Member of the International Advisory Committee
Independent Outside Audit & Supervisory Board Members
  • Yasuko Takayama

    Main career: Former Audit & Supervisory Board Member, Shiseido Company, Limited

    Number of years on Audit & Supervisory Board: 4 years

    Ms. Takayama has served in key positions including Full-time Audit & Supervisory Board Member at Shiseido Company, Limited. She possesses profound knowledge of brand strategy, marketing, and sustainability gained at B-to-C companies, and management perspectives nurtured through extensive experience as an Outside Director and Outside Audit & Supervisory Board Member.

    Attendance at Board Meetings (FY2019)
    Regular: held 11 times, attended 11 times [100% attendance rate]
    Extraordinary: held 3 times, attended 3 times

    Attendance at Audit & Supervisory Board Meetings (FY2019)
    Held 12 times, attended 12 times [100% attendance rate]
  • Rieko Sato

    Main career: Partner, ISHII LAW OFFICE

    Appointed June 2020

    Ms. Sato possesses profound knowledge of corporate law practice (Companies Act, Financial Instruments & Exchange Act, compliance, etc.) based on her extensive experience as an attorney, as well as a management perspectives gained through extensive experience as an Outside Director and Outside Audit & Supervisory Board Member.
  • Takeshi Nakao

    Main career: CEO, PARTNERS HOLDINGS, Co. Ltd.

    Appointed June 2020

    Mr. Nakao possesses profound knowledge of finance and accounting as a certified public accountant, as well as extensive insight gained through many years of experience in advisory work regarding M&A activity, corporate revitalization, and internal control.
MC SIM事務局, 総務部 危機管理室(PH-K), 総務部 総務チーム(PH-A)

Selection Criteria for Outside Directors and Outside Audit & Supervisory Board Members

To make the function of Outside Directors and Outside Audit & Supervisory Board Members stronger and more transparent, Mitsubishi Corporation has set forth Selection Criteria for Outside Directors and Outside Audit & Supervisory Board Members as follows, after deliberation by the Governance, Nomination and Compensation Committee, which is composed with a majority of Outside Directors and Outside Audit & Supervisory Board Members. Each of the five Outside Directors and three Outside Audit & Supervisory Board Members satisfy the requirements for Independent Directors and Independent Audit & Supervisory Board Members as stipulated by Japanese stock exchanges, such as the Tokyo Stock Exchange, Inc., and Mitsubishi Corporation’s Selection Criteria for Outside Directors and Outside Audit & Supervisory Board Members.

[Selection Criteria for Outside Directors]

  1. Outside Directors are elected from among those individuals who have an eye for practicality founded on a wealth of experience as corporate Executive Officers, as well as an objective and specialist viewpoint based on extensive insight regarding global conditions and social and economic trends. Through their diverse perspectives, Outside Directors help ensure levels of decision-making and management oversight appropriate to the Board of Directors.
  2. To enable Outside Directors to fulfill their appointed task, attention is given to maintain their independency*; individuals incapable of preserving this independency in effect will not be selected to serve as Outside Directors.
  3. Mitsubishi Corporation’s operations span a broad range of business domains; hence there may be cases of conflict of interest stemming from business relationships with firms home to a corporate Executive Officer appointed as Outside Directors. Mitsubishi Corporation appropriately copes with this potential issue through the procedural exclusion of the director in question from matters related to the conflict of interest, and by preserving a variety of viewpoints through the selection of numerous Outside Directors.

[Selection Criteria for Outside Audit & Supervisory Board Members]

  1. Outside Audit & Supervisory Board Members are selected from among individuals who possess a wealth of knowledge and experience across various fields that is helpful in performing audits. Neutral and objective auditing, in turn, will ensure sound management.
  2. To enable Outside Audit & Supervisory Board Members to fulfill their appointed task, attention is given to maintain their independency*; individuals incapable of preserving this independency will not be selected to serve as Outside Audit & Supervisory Board Members.

* Independency for the purpose of Selection Criteria for Outside Directors and Outside Audit & Supervisory Board Members

To make a judgment of independence, Mitsubishi Corporation checks if the person concerned meets the conditions for Independent Directors and Independent Audit & Supervisory Board Members as specified by stock exchanges in Japan such as the Tokyo Stock Exchange, Inc., and whether the person concerned is currently any of the following items (1) to (7) and whether they have been at any time in the past three fiscal years.

  1. (1) A major shareholder of Mitsubishi Corporation (a person or entity directly or indirectly holding 10% or more of the voting rights), or a member of business personnel of such a shareholder*1.
  2. (2) A member of business personnel of a creditor of Mitsubishi Corporation exceeding the threshold set by Mitsubishi Corporation*2.
  3. (3) A member of business personnel of a supplier or a customer of Mitsubishi Corporation exceeding the threshold set by Mitsubishi Corporation*3.
  4. (4) A provider of professional services, such as a consultant, lawyer, or certified public accountant, receiving cash or other financial benefits from Mitsubishi Corporation, other than Directors’ or Audit & Supervisory Board Members’ remuneration, where the amount exceeds ¥10 million per fiscal year.
  5. (5) A representative or partner of Mitsubishi Corporation’s independent auditor.
  6. (6) A person belonging to an organization that has received donations exceeding a certain amount*4 from Mitsubishi Corporation.
  7. (7) A person who has been appointed as an Outside Director or Outside Audit & Supervisory Board Member of Mitsubishi Corporation for more than eight years.
  1. *1 A member of business personnel refers to a managing director, corporate officer, Executive Officer, or other employee of a company.
  2. *2 Creditors exceeding the threshold set by Mitsubishi Corporation refer to creditors to whom Mitsubishi Corporation owes an amount exceeding 2% of Mitsubishi Corporation’s consolidated total assets.
  3. *3 Suppliers or customers exceeding the threshold set by Mitsubishi Corporation refer to suppliers or customers whose transactions with Mitsubishi Corporation exceed 2% of Mitsubishi Corporation’s consolidated revenues.
  4. *4 Donations exceeding a certain amount refer to donations of more than ¥20 million per fiscal year.

If a person is still judged to be effectively independent despite one or more of the above items (1) to (7) applying, Mitsubishi Corporation will explain and disclose the reason at the time of their appointment as an Outside Director or Outside Audit & Supervisory Board Member.

MC SIM事務局, 総務部 危機管理室(PH-K), 総務部 総務チーム(PH-A)

Enhancing the Monitoring Function of the Board of Directors

To ensure that the Directors and Audit & Supervisory Board Members are able to perform their management supervision and audit functions adequately, the Board of Directors’ Office and the Audit & Supervisory Board Members’ Office have been established, and have been providing necessary information and support appropriately and in a timely manner for them to perform their duties.
For Outside Directors and Outside Audit & Supervisory Board Members, the offices provide below measures to ensure that they can effectively participate in the discussion fully and to enhance the Board’s monitoring function.

Briefing Sessions before Board of Directors’ meetings

Prior to each Board of Directors’ meeting, we secure an opportunity for management executives of the Corporate Staff Section and Business Groups to explain overviews and points regarding topics under their charge by using the materials of the Board of Directors’ meetings, and to respond to questions or comments from Outside Directors and Outside Audit & Supervisory Board Members. To make discussions in the Board of Directors’ meetings substantial, each one is conducted thoroughly over the course of three hours on average. Moreover, in order to appropriately monitor the process of discussion on the executive side, we also explain the overviews and points of discussions in the Executive Committee (a management decision-making body). The sessions are also utilized to appropriately share timely information that helps enhance deliberations at the meetings. A total of 32 hours of briefing were held in the fiscal year ended March 31, 2021.

Informal Meetings of the Board of Directors

Informal meetings of the Board of Directors are held as necessary with all Directors and Audit & Supervisory Board Members to provide a forum for free discussion outside of Board of Directors’ meetings.

Meetings of Independent Outside Directors and Independent Outside Audit & Supervisory Board Members

MC endeavors to enhance cooperation among Independent Outside Directors and Independent Outside Audit & Supervisory Board Members by providing opportunities for free discussion about a wide range of themes related to MC’s business management and corporate governance, and these discussions are reported to the Board of Directors as necessary.

■Main Discussion Themes (Fiscal Year Ending in March 31, 2021)

  • The Corporate Governance Framework of MC
  • Succession planning
  • Future issues and initiatives based on evaluation of the effectiveness of the Board of Directors
Orientation upon Assumption of Office

To deepen understanding of MC, all Business Groups and the Corporate Staff Section conduct orientation sessions for newly appointed Outside Directors and Outside Audit & Supervisory Board Members when they assume office(a total of 29 sessions during the Fiscal Year Ending in March 31, 2021).

The Offices also provide ongoing opportunities to increase their understanding of the businesses and strategies of Mitsubishi Corporation, including annual site visits of subsidiaries and affiliates and opportunities for dialogue with the management, for dialogue with Business Group CEOs, Business Division COOs and General Managers, and small group discussions with Executive Vice Presidents. Additionally, the Offices provide Directors and Audit & Supervisory Board Members with opportunities for third-party training programs, of which expenses are borne by Mitsubishi Corporation.

MC SIM事務局, 総務部 危機管理室(PH-K), 総務部 総務チーム(PH-A)

Evaluation of the Effectiveness of the Board of Directors

DFF Inc., MC SIM事務局, 総務部 危機管理室(PH-K), 総務部 総務チーム(PH-A)

Shares

Stance on Exercising Voting Rights Relating to Listed Stocks

MC attaches great importance to dialogue and communication with its business investees through various channels, aiming to create business opportunities and build, maintain and strengthen business and partner relationships, and from the perspective of raising the mid- and long-term corporate value of MC and these companies. MC considers exercising voting rights to be an important approach. For this reason, when exercising voting rights relating to a business investee, the responsible department for the oversight of MC reviews its business conditions (earnings, capital efficiency, etc.) from both quantitative and qualitative standpoints in accordance with internal regulations. These regulations stipulate matters to be considered, etc., when determining whether to vote for or against proposals such as appropriation of surplus, election of Directors and Audit & Supervisory Board Members, and revision of executive remuneration. Then MC exercises its voting rights appropriately for individual matters for resolution. Furthermore, with regard to the proposals for the election and dismissal of Outside Directors and Outside Audit & Supervisory Board Members of listed subsidiaries, Mitsubishi Corporation’s internal regulation also stipulate that their independence from Mitsubishi Corporation is to be examined before exercising voting rights.

Guideline for Holding MC Shares (Standard)

MC has adopted variable remuneration including not only cash remuneration linked to consolidated business results and individual performance but also stock remuneration (stock-option-based remuneration) to provide further incentive to improve corporate value over the medium and long terms.

Shareholder Rights
Reference:Share Handling Regulations
https://www.mitsubishicorp.com/jp/en/ir/library/share/pdf/share.pdf
Reference:Articles of Incorporation (Chapter 2 Article 9)
https://www.mitsubishicorp.com/jp/en/ir/library/articles/pdf/articles.pdf
MC SIM事務局, 総務部 危機管理室(PH-K), 総務部 総務チーム(PH-A)

Initiatives on Japan’s Corporate Governance Code

MC has long worked to implement corporate governance as the foundation of sound, transparent and efficient management. We have determined that MC is implementing all principles set forth in Japan’s Corporate Governance Code. (For more information, please see the Corporate Governance Report on MC’s website.)

Reference:Corporate Governance Report (Translation of report filed with the Financial Instruments Exchange)
https://www.mitsubishicorp.com/jp/en/about/governance/pdf/governance_report_e.pdf
MC’s Stance on Acquisition, Holding, and Reduction in Listed Shares
Verified the purpose of holding listed shares and reduced by around 10% compared to the previous fiscal year

MC may acquire and hold shares acquired for other than pure investment as a means of creating business opportunities and building, maintaining and strengthening business and partner relationships. When acquiring these shares, MC confirms necessity of its acquisition based on the significance and economic rationale of the purchase. Also, Mitsubishi Corporation periodically reviews the rationality of continuing to hold the shares and promotes reducing holdings of stocks with decreased significance. Shareholdings in the fiscal year ended March 31, 2021 were reduced by slightly less than 20% compared to the previous fiscal year.

[Verification policy for holding individual shares]
The Board of Directors verifies all of the listed shares held by MC from the perspectives of both economic rationale and qualitative significance of holding them every year.
The economic rationale is confirmed by whether or not the related earnings from each stock, such as dividends and related business profits on transactions, exceed MC’s target capital cost (Weighted Average Cost of Capital) for the market price of each individual share.
The qualitative significance is confirmed by the achievement or status of progress of the expected purpose for holding the stock, etc.
[Matters verified by the Board of Directors]
Verification was conducted by the Board of Directors for all listed shares held by Mitsubishi Corporation as of March 31, 2021 (market price was approximately 0.6 trillion yen). As a result of verification from the perspectives of both economic rationale and qualitative significance of holding them, numerous shares were identified as candidates for reduction due to a decreased importance of the expected purpose and significance for holding them, etc.
MC’s Pension Management Structure
Operation by experienced experts and appropriate monitoring

In an effort to utilize personnel with experience in markets and investment, those responsible for pension management are appointed from the Finance Department of MC and serve concurrently as employees of the MC Pension Fund. The basic policy and management guidelines for safe and efficient management of the reserve are drafted and issued to institutions contracted to undertake management, which are then monitored constantly. Marked with the responsibility for autonomous allocations it holds, the fund has announced its acceptance of Japan’s Stewardship Code and requires the institutions entrusted with management of the assets to perform stewardship activities.

MC SIM事務局, 総務部 危機管理室(PH-K), 総務部 総務チーム(PH-A)

Policy and Procedures for Appointment and Dismissal of Management Executive and Appointment of Nominated Directors and Audit & Supervisory Board Members

Ensuring objectivity and transparency through deliberation at the Governance, Nomination and Compensation Committee, where Outside Directors and Outside Audit & Supervisory Board Members have a majority

For the appointment of President and CEO, the requirements of the role, the basic policy on appointment, and selection of individual candidates are deliberated and reviewed by the Governance, Nomination and Compensation Committee where Outside Directors and Outside Audit & Supervisory Board Members have a majority (5 Outside Directors out of 8 Committee Members).
Appointments are then decided by the Board of Directors, which also appoints and assigns duties to Executive Officers. Moreover, the policy and process for appointment and all appointment proposals of Directors and Audit & Supervisory Board Members and each appointment proposal are deliberated by the Governance, Nomination and Compensation Committee and resolved by the Board of Directors, before being presented at the Ordinary General Meeting of Shareholders. Furthermore, MC’s policy is to take a flexible approach to determining and dealing with dismissal of President and CEO. The matter is deliberated by the Governance, Nomination and Compensation Committee and resolved by the Board of Directors.

Details of Retired Executives Currently Serving in Advisory Positions
Honorary Chairman to receive no remuneration (July, 2020 onward), no further appointment of Senior Corporate Advisor to be made

MC appoints, as necessary, retired executives (presidents and chairmen of the board) to the positions of Honorary Chairman. However, currently, there is no one appointed.

MC SIM事務局, 総務部 危機管理室(PH-K), 総務部 総務チーム(PH-A)

Policy of Dialogue with Shareholders

  1. (a) Basic Stance
    MC’s corporate philosophy is enshrined in the Three Corporate Principles. Through corporate activities rooted in the principles of fairness and integrity, MC strives to continuously raise corporate value. MC believes that by helping to enrich society, both materially and spiritually, it will also meet the expectations of shareholders, customers and all other stakeholders. To achieve this, MC is committed to fulfill accountability as a corporate enterprise and gain credibility and reputation from stakeholders including shareholders and investors, by communicating with them in a proactive manner and by disclosing, in a timely and appropriate manner, information about business conditions including the progress in management plans, quantitative financial information, and non-financial information such as for corporate governance and sustainability & CSR affairs.
  2. (b) Persons in Charge and Promoting System
    Positioning IR activities as an important management matter, MC is promoting communication with shareholders and investors as well as proactive information disclosure, led by the management, with the President and CEO being chief and CFO being director in charge. To ensure the effectiveness of dialogues with shareholders and investors and information disclosure, MC established a dedicated department in charge, the Investor Relations Department. In addition, MC built a cross-sectional company structure not limited to the dedicated department in charge, by organically linking business groups to corporate staff departments (i.e., Corporate Strategy & Planning Department, Corporate Communications Department, Corporate Administration Department, Corporate Sustainability & CSR Department, Legal Department, Corporate Accounting Department, and Finance Department).
    With respect to information disclosure, on which dialogue with shareholders and investors is premised, MC sets up the Disclosure Committee, whose members are the CFO, Executive Officers in charge of Corporate Communications, Corporate Administration, Legal, and Corporate Sustainability & CSR and persons in charge of corporate staff departments (General Managers), as well as a working group consisting of working-level persons from corporate staff departments. After thoroughly reviewing and checking details of information to be disclosed, the team tries to disclose proactive, highly transparent information through websites, Integrated Reports, Annual Securities Report, Notice of Ordinary General Meeting of Shareholders, Investors’ Note, and newspaper ads, etc. As a policy for its information disclosure system, MC developed and disclosed Information Disclosure Regulations to keep all officers and employees fully informed.
  3. (c) Policy of Dialogue with Shareholders and Investors and Results of Activities
    To continually raise mid- and long-term corporate value, MC is promoting constructive communication with shareholders and investors, led by the management including the President and CEO.
    • Ordinary General Meeting of Shareholders
      MC positions the Ordinary General Meeting of Shareholders as the place to fulfill accountability to shareholders. In addition to proactive information disclosure in the Notice of Ordinary General Meeting of Shareholders, MC tries to respond to questions raised by shareholders in a respectful manner.
    • Communication with Individual Investors
      MC holds regular meetings for individual investors by the management and the IR department.
    • Dialogue with Institutional Investors
      In addition to quarterly financial results briefings hosted by President and CEO and CFO, the management of business groups host business-briefing sessions. President and CEO, CFO, the Investor Relations Department, Corporate Administration Department, Corporate Sustainability & CSR Department, and other departments call on domestic and foreign institutional investors to hold briefing sessions, and respond to their request for individual interviews.
    <Activities Conducted in the Fiscal Year Ended March 31, 2021>
    President and CEO: The Ordinary General Meeting of Shareholders, communication through meetings with domestic and foreign institutional investors and analysts (3 times), and quarterly financial results briefings.
    CFO: Communication through meetings with domestic and foreign institutional investors and analysts (about 18 times), and quarterly financial results briefings. Group Management Teams: Business briefing sessions (2 times).
    Investor Relations Department: Communication through meetings with domestic and foreign institutional investors and analysts (about 400 times), and regular meetings with individual investors (3 times).
    Corporate Administration Department, Corporate Sustainability & CSR Department and other departments:Communication through meetings with domestic and foreign institutional investors (about 25 times).
  4. (d) Feedback to Business Management and Control of Insider Information
    MC has developed a system by which the opinions from shareholders and investors and business challenges obtained through IR and SR activities are adequately reported to the management including President and CEO and the Board of Directors and the Executive Committee. In addition, the departments in charge feedback the opinions obtained through communication with shareholders and investors across, financial results briefings and other means MC to help improve business management. With respect to the handling of insider information in communicating with shareholders, MC has set forth the Standard for the Prevention of Unfair Stock Trading in accordance with the Code of Conduct for MC’s Officers and Employees. MC keeps all officers and employees fully informed of this requirement.
Reference:In Investor Information on our website, MC posts various types of IR information in addition to the documents listed below. Please visit the following website for details.
https://www.mitsubishicorp.com/jp/en/ir/
  • Presentation Materials
  • Earnings Release
  • Integrated Reports
  • Financial Statements
  • Quarterly Reports
  • Investors’ Note
  • Corporate Brochure
MC SIM事務局, 総務部 危機管理室(PH-K), 総務部 総務チーム(PH-A)