Since June 21 2024, MC transtioned to a Company with an Audit & Supervisory Committee. Therefore, the status of activities in FY2023 (ended March 31, 2024) is based on the status of a company with an Audit & Supervisory Board prior to the transition.
The Audit & Supervisory Committee comprises all of the Audit & Supervisory Committee Members responsible for auditing the decision-making processes and management performance of Directors in compliance with the Companies Act and other laws and regulations as well as Mitsubishi Corporation (MC)’s Articles of Incorporation and internal rules and regulations.
In-house Audit & Supervisory Committee Members and Independent Audit & Supervisory Committee Members ensure the soundness of the management by executing audits informed by abundant working experience at MC and by experience in their particular fields as well as a neutral and objective perspective, respectively. In addition to making resolutions on matters required by law and other important issues, the Audit & Supervisory Committee strives to enhance information-sharing among the Members through briefings on key matters and reporting on the status of the auditing activities of each of the Members.
| Directors who are Audit & Supervisory Committee Members (In-house) | Job History, Positions and Responsibilities | Attendance at Board of Directors Meetings(FY2023) | Attendance at Audit & Supervisory Board Meetings(FY2023) | ||
|---|---|---|---|---|---|
| Number of meetings attended/held | Attendance rate | Number of meetings attended/held | Attendance rate | ||
| Mitsumasa Icho | 2024 Directors who are Audit & Supervisory Committee Members (In-house)(present position) 2022 Full-time Audit & Supervisory Board Member 1982 Joined MC |
Regular:11/11 Extraordinary:3/3 |
100% | 12/12 | 100% |
| Akira Murakoshi | 2024 Directors who are Audit & Supervisory Committee Members (In-house)(present position) 2023 Full-time Audit & Supervisory Board Member 1982 Joined MC |
Regular:8/8 Extraordinary:2/2*Indicating attendance after appointment as Audit & Supervisiory Board Member on June 22, 2023.* |
100% | 9/9*Indicating attendance after appointment as Audit & Supervisiory Board Member on June 22, 2023.* | 100% |
| Directors who are Audit & Supervisory Committee Members (Independent)*Indicates the fulfillment of the conditions for Outside Director 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. as well as selection criteria for Independent Directors specified by MC.* | Job History, Positions and Responsibilities | Attendance at Board of Directors Meetings(FY2023) | Attendance at Audit & Supervisory Board Meetings(FY2023) | ||
|---|---|---|---|---|---|
| Number of meetings attended/held | Attendance rate | Number of meetings attended/held | Attendance rate | ||
| Tsuneyoshi Tatsuoka | 2024 Directors who are Audit & Supervisory Committee Members (Independent) (present position) 2018 Director, MC 2018 Corporate Adviser, MC (resigned in Jun. 2018) 2015 Retired from METI 1980 Joined the Ministry of International Trade and Industry (present Ministry of Economy, Trade and Industry (METI)) Held the position of : Counsellor, Cabinet Secretariat (Office of Assistant Chief Cabinet Secretary), Deputy Vice-Minister of Economy, Trade and Industry, and Vice Minister of METI |
Regular:11/11 Extraordinary:3/3 |
100% | - | - |
| Rieko Sato | 2024 Directors who are Audit & Supervisory Committee Members (Independent) (present position) 2020 Audit & Supervisory Board Member, MC 1998 Partner, ISHII LAW OFFICE (present position) 1989 Shearman & Sterling LLP (resigned in 1990) 1984 Admitted to the Japan Bar (Attorney-at-Law) |
Regular:11/11 Extraordinary:3/3 |
100% | 12/12 | 100% |
| Takeshi Nakao | 2024 Directors who are Audit & Supervisory Committee Members (Independent) (present position) 2020 Audit & Supervisory Board Member, MC 2006 CEO, PARTNERS HOLDINGS, Co., Ltd. (present position) 1993 Admitted to Certified Public Accountant of Japan 1989 Joined KPMG Minato Audit Corporation (currently KPMG AZSA LLC) (resigned in 1996) |
Regular:11/11 Extraordinary:3/3 |
100% | 12/12 | 100% |
＜The following description relates to the status of activities in FY 2023, so it is based on a company with an Audit & Supervisory Borad before the transition to an Audit & Supervisory Committee.＞
Prior to each fiscal year, the Audit & Supervisory Board formulates audit plans with key areas. In FY2023 (ended March 31, 2024), the following three key audit areas were selected for the monitoring of specific progress in management and execution.
Opportunities were created for all Audit & Supervisory Board Members, including the Independent Audit & Supervisory Board Members, to engage in dialogues with the Chairman of the Board, President and CEO, Senior Executive Vice President, Corporate Functional Officers, Business Group Heads/CEOs, Business Division COOs, General Managers of Administrative Departments, General Manager of Internal Audit Department, General Manager of the Corporate Strategy & Planning Department and General Managers of the Corporate Staff Section.
Besides the Audit & Supervisory Board, Full-time Audit & Supervisory Board Members attended meetings of major internal management bodies, including Board of Directors; Governance, Nomination and Compensation Committee; Executive Committee and Business Strategy Committee; and provided opinions as necessary. Besides the Audit & Supervisory Board, the Independent Audit & Supervisory Board Members attended meetings of the Board of Directors after being briefed on discussions in the Executive Committee and lower conference bodies, and provided opinions as necessary.
Audit & Supervisory Board Members proactively conducted on-site audits and visits of overseas and domestic MC Group companies in an effort to grasp the local circumstances. In selecting the locations of the on-site audits and visits for the Audit & Supervisory Board Members, besides quantitative aspects such as investment amount and net income, qualitative aspects such as the business environment and compliance cases were also taken into account.
In FY2023 (ended March 31, 2024),the Audit & Supervisory Board Members met with the CEOs and executive officers of 12 MC Group companies in three locations overseas and 16 domestic MC Group companies, as well as the regional cheifs of 7 overseas and domestic offices. The Audit & Supervisory Board Members reported on the results of their on-site audits to the Chairman of the Board, the President and CEO, and the relevant executive officers.
At least one Independent Audit & Supervisory Board Member participated in on-site audits and visits with 6 companies in 2 countries overseas and 8 domestic MC Group companies, as well as 2 overseas and domestic offices.
In addition to dialogues with the CEOs and other executive officers of the MC Group companies, opportunities were arranged for the exchange of information every quarter with the Audit & Supervisory Board Members of 34 major MC Group companies in Japan. The Audit & Supervisory Board Members of the MC Group companies also arranged subcommittees to provide opportunities to share information and exchange opinions. We also provided assistance in training for those who would be assigned to the MC Group companies as full-time Audit & Supervisory Board Members. We will continue working to strengthen the Group corporate governance through regular monitoring.
MC conducted annual evaluations of the Board of Directors in order to make continuous improvements to the effectiveness of its corporate governance. The Audit & Supervisory Board (Members) focused on the following matters, referring to the issues reviewed in the effectiveness evaluation.
For matters to be submitted for approval or reported to the Board of Directors, preliminary briefings were held for the Independent Directors and Independent Audit & Supervisory Board Members by management on the executive side prior to deliberation by the Board of Directors. For the Audit & Supervisory Board, in addition to these preliminary briefings, members also received explanations from the Audit & Supervisory Board Member's Office staff related to Board of Directors matters of especially high importance as well as matters that were not quantitatively applicable to the Board of Directors but that were still qualitatively important. The Audit & Supervisory Board Members then exchanged their opinions and awareness.
As an activity of the Audit & Supervisory Board Members, MC has traditionally provided opportunities for discussion between all Audit & Supervisory Board Members and management executives such as the Chairman of the Board, President and CEO, Senior Executive Vice President, Corporate Functional Officers and Group CEOs. As in the previous fiscal year, Independent Directors also actively participated in them in FY2023 (ended March 31, 2024). In addition, since FY2020, we have incorporated Business Reports from senior management, which used to be held at meetings of the Board of Directors, into this dialogue, allowing sufficient time for the provision of information, including questions and answers. Independent Audit & Supervisory Board Members also participated in dialogues with the Division Chief Operating Officer to ensure opportunities to hear the opinions of employees on the ground.
To increase the effectiveness of the audits performed by the Audit & Supervisory Board Members, in FY2023 (ended March 31, 2024), continuing initiatives implemented in the previous fiscal year, we further enhanced the reviews of the activities of the Audit & Supervisory Board. Specifically, as in previous years, the Audit & Supervisory Board held mid-year and year-end reviews of audit progress, focusing mainly on key audit areas. In addition, the Audit & Supervisory Board carried out an evaluation of its effectiveness, mainly through a survey of its members and hearing about the survey results. The Audit & Supervisory Board discussed the findings of this evaluation in order to review its auditing methods and deliberate matters to be followed up in the audit activities for coming fiscal year. The evaluation found that the audits performed by the Audit & Supervisory Board functioned adequately as well as effectively, and that it will continue to bolster its effectiveness going forward by working to enhance operations in such areas as efficiently setting up dialogues.
Audit & Supervisory Board Members strived to further strengthen cooperation with Independent Auditors and the Internal Audit Department in order to assess the Company's situation with the aim of improving the effectiveness of audits.
We worked with Independent Auditors through their outline briefings on accounting audit plans, audit reports for quarterly results and monthly meetings. We also exchanged opinions with the Independent Auditors of MC Group companies in Japan and overseas.
With regard to performance evaluations of Independent Auditors, we kept track of evaluation data during the fiscal year from regular audit reports and other sources, and held an Independent Auditor evaluation conference at the end of FY2023 (ended March 31, 2024). As a result, we had concluded that the current Independent Auditors performed appropriate audits in a professional manner, and accordingly, the Audit & Supervisory Board resolved to reappoint the Independent Auditors.
The Internal Audit Department and Full-time Audit & Supervisory Board Members held monthly meetings where exchange of opinions are made concerning reports on internal audit results. Also at Audit & Supervisory Board meetings, the Internal Audit Department shared their quarterly audit results.
In addition, Audit & Supervisory Board Members attended the internal auditor liaison meetings of 45 major MC Group companies in Japan held by the Internal Audit Department, while the General Manager of the Internal Audit Department attended liaison meetings held by MC’s Audit & Supervisory Board Members with the Audit & Supervisory Board Members of the MC Group companies mentioned above, and all parties collected audit information and exchanged opinions.
The Audit & Supervisory Committee has five Members. Of the 2 In-house Audit & Supervisory Committee Members, Mitsumasa Icho has experience in the corporate management, and finance and accounting departments, and Akira Murakoshi has experience in the corporate management. Of the 3 Independent Audit & Supervisory Committee Members, Tsuneyoshi Tatsuoka possesses the deep knowledge of the industry as a whole as well as the deep insight into sustainability, including environmental and energy policies. Rieko Sato and Takeshi Nakao have extensive experience as an attorney (corporate law) and a certified public accountant respectively. Of the 5 Audit & Supervisory Committee Members, Mitsumasa Icho, In-house Audit & Supervisory Committee Member, and Takeshi Nakao, Independent Audit & Supervisory Committee Member, have a considerable degree of knowledge and experience concerning finance and accounting. One of the Full-time Audit & Supervisory Committee Members heads the Audit & Supervisory Committee and is also the specified Audit & Supervisory Committee Member stipulated by the law. Audit & Supervisory Committee Members are assisted as needed by the 12-members of Audit & Supervisory Committee Member's Office (as of April 1, 2024), which is an independent organizational body.
＜The following description relates to the status of activities in FY 2023, so it is based on a company with an Audit & Supervisory Borad before the transition to an Audit & Supervisory Committee.＞
In FY2023 (ended March 31, 2024), as part of their activities based on the audit plan, Audit & Supervisory Board Members attended important meetings of major internal management bodies (129 meetings including Executive Committee and Business Strategy Meeting, etc.) and held discussions with internal departments, including important offices in Japan and overseas (70 dialogues with executive officers (Chairman of the Board, etc.), dialogues with CEOs and other executive officers at 12 overseas business subsidiaries/affiliates and 16 domestic ones, as well as with the regional chiefs of 7 overseas and domestic offices). At the same time, Audit & Supervisory Board Members hed regular meetings with MC’s independent auditors and Internal Audit Department, to accurately and in a timely manner grasp MC’s situation through close cooperation. The Audit & Supervisory Board provided a forum for lively discussion, where the Audit & Supervisory Board Members reported and shared their audit activities as well as making decisions on statutory matters and so forth. In FY2023 (ended March 31, 2024), Audit & Supervisory Board were held 12 times, and all Audit & Supervisory Board Members were in attendance at every meetings. At the Audit & Supervisory Board meeting implemented in the end of the last fiscal year or in the beginning of the fiscal year, the audit plan for that fiscal year is decided upon and a review of the previous fiscal year’s audit activities was carried out. These matters were also reported to the Board of Directors. Furthermore, in addition to statutory matters such as the audit report and the selection and dismissal, and remuneration of the independent auditors, the Audit & Supervisory Board also discusse major investment and finance projects and issues identified through audit activities such as on-site audits, tours and dialogues, etc.
Regarding internal audits, the Internal Audit Department (which had 83 members as of April 1, 2024) conducts audits of MC and its overseas regional subsidiaries and affiliated companies from a Company-wide perspective. In addition, each Business Group has established its own internal audit organization, which audits the operations that fall under its Group organization on a consolidated basis. These internal audits are based on annual audit plans and are conducted after selecting audit targets. Under a dual reporting system, the audit results are reported each time to the President and CEO, Audit & Supervisory Board Members(which was converted to the Audit & Supervisory Committee on June 21, 2024) and other concerned parties. They are also reported regularly to the Board of Directors and the Executive Committee.
MC conducts regular audits throughout the year of MC and MC Group companies in accordance with the International Standards for Internal Auditing every three to five years, taking into factors such as accounting risks and business scale. In addition to legal compliance, the MC Group also considers social norms and business ethics in verifying and evaluating each process of governance, risk management and internal controls. MC has also been conducting thematic audits annually. In FY2023 (ended March 31, 2024), we focused on the status of audit function at major subsidiaries.
The three certified public accountants who carried out the accounting audit of MC were Yuki Higashikawa, Hirofumi Otani and Sogo Ito of Deloitte Touche Tohmatsu LLC. They were assisted by 30 certified public accountants, 22 junior accountants and 121 other staff.
Continuing from the previous year, the Audit & Supervisory Board Members, Corporate Accounting Department, and independent auditors held regular meetings at the time of quarterly financial results, and provided opportunities for exchanging opinions.
In addition, the Internal Audit Department makes regular audit reports to the Audit & Supervisory Board, the Audit & Supervisory Board Members had monthly meetings with the Internal Audit Department, and the Audit & Supervisory Board Member and the Internal Audit Department held liaison meetings with the Audit & Supervisory Board Members and internal audit departments of MC's subsidiaries and affiliates, and so forth. In addition, the Audit Department also participated in the regular meetings for exchanging information and opinions with Audit & Supervisory Board Members and Independent Auditors in FY2023 (ended March 31, 2024).
After the transition to the Audit & Supervisory Committee, this cooperation will be continued to strengthen the linkages supporting tripartite audits (Audit & Supervisory Committee Audits, Internal Audits and Accounting Audits).
Fees paid to MC’s independent auditors Deloitte Touche Tohmatsu LLC for FY2023 were as follows:
