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)
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.|
|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）|
The Board of Directors includes Audit & Supervisory Board Members in addition to Directors. The Board operates as follows:
|Position||Director||Audit & Supervisory
|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）|
|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)
＊ Based on the status as of July 1, 2021
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.
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.
＊ Based on status as of July 1, 2021
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.
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
|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|
|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.|
* Advice and recommendations of committee members were obtained remotely during fiscal year ended March 31, 2021.
Outside Directors and Outside Audit & Supervisory Board Members are as follows (as of April 1, 2021).
Main career: Professor, Ritsumeikan University
Number of years on Board of Directors: 5 years
Main career: Former Vice-Minister of Foreign Affairs, Ministry of Foreign Affairs of Japan
Number of years on Board of Directors: 3 years
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
Main career: Chairman of the Board, Mitsubishi Heavy Industries, Ltd.
Number of years on Board of Directors: 1 year
Main career: Founder and CEO, Saki Corporation
Appointed June 2020
Main career: Former Audit & Supervisory Board Member, Shiseido Company, Limited
Number of years on Audit & Supervisory Board: 4 years
Main career: Partner, ISHII LAW OFFICE
Appointed June 2020
Main career: CEO, PARTNERS HOLDINGS, Co. Ltd.
Appointed June 2020
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]
[Selection Criteria for 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.
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.
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.
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 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.
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)
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 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.
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.
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.)
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.
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.
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.
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.