The Audit & Supervisory Board comprises all of the Audit & Supervisory Board Members responsible for auditing the decision-making processes and management performances of Directors in compliance with the Companies Act, and other laws and regulations as well as Mitsubishi Corporation’s Articles of Incorporation and internal rules/regulations.
Full-time Audit & Supervisory Board Members ensure the soundness of the management by executing audits from a perspective based on abundant working experience at MC, while Independent Audit & Supervisory Board Members execute audits with a background of abundant working experience in their particular fields as well as neutral and objective perspectives. In addition to resolutions of matters required by law and other important issues, the Audit & Supervisory Board strives to enhance information-sharing among the members through briefings on key matters and reporting the status of auditing activities for each of the members.
Full-time Audit & Supervisory Board Members | Job History, Positions and Responsibilities | Attendance at Board of Directors Meetings (FY2021) | Attendance at Audit & Supervisory Board Meetings (FY2021) | Attendance at Governance, Nomination & Compensation Committee Meetings (FY2021) | |||
---|---|---|---|---|---|---|---|
Number of meetings attended/held | Attendance rate | Number of meetings attended/held | Attendance rate | Number of meetings attended/held | Attendance rate | ||
Hajime Hirano | 2019 Full-time Audit & Supervisory Board Member (present position) 1979 Joined MC |
Regular:11/11 Extraordinary: 2/2 |
100% | 12/12 | 100% | - | - |
Mitsumasa Icho | 2022 Full-time Audit & Supervisory Board Member (present position) 1982 Joined MC |
- | - | - | - | - | - |
Independent Audit & Supervisory Board Members | Job History, Positions and Responsibilities | Attendance at Board of Directors Meetings (FY2021) | Attendance at Audit & Supervisory Board Meetings (FY2021) | ||
---|---|---|---|---|---|
Number of meetings attended/held | Attendance rate | Number of meetings attended/held | Attendance rate | ||
Rieko Sato* | 2020 Audit & Supervisory Board Member, MC (present position) 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: 2/2 |
100% | 100% | 100% |
Takeshi Nakao* | 2020 Audit & Supervisory Board Member, MC (present position) 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: 2/2 |
100% | 100% | 100% |
Mari Kogiso* |
2022 Audit & Supervisory Board Member, MC (present position) |
- | - | - | - |
Reference:Please refer to “Selection Criteria for Independent Directors and Independent Audit & Supervisory Members” on the MC website for thoughts regarding independence in selection criteria for Independent Directors and Independent Audit & Supervisory Members.(https://www.mitsubishicorp.com/jp/en/about/governance/corporategovernance.html)
* Based on the status as of June 24, 2022
Prior to the start of each fiscal year, the Audit & Supervisory Board formulates audit plans with key areas. In the fiscal year ended March 31, 2021, the following three key audit areas were selected for the monitoring of specific progress in management and execution.
1.Related Measures for Midterm Corporate Strategy 2021:
2.Enhancing MC Group Management:
3.Initiatives to Strengthen Group Corporate Governance:
1Dialogue with executive officers
Audit & Supervisory Board Members engage in dialogues with the Chairman of the Board, President and CEO, Corporate Functional Officers, Business Group CEOs, Business Division COOs, Administrative Department General Managers, General Manager of Auditing Department, General Manager of the Corporate Strategy & Planning Department and General Managers of the Corporate Staff Section. In the fiscal year ended March 31, 2022, 65dialogues were held, and at least one Independent Audit & Supervisory Board Member participated in 62 of these dialogues.
2Attendance at important meetings
Besides the Audit & Supervisory Board meetings, the Full-time Audit & Supervisory Board Members attend meetings of major internal management bodies, including the Board of Directors; the Governance, Nomination and Compensation Committee; the Executive Committee and the Business Strategy Committee; and provide necessary opinions (130 times in the fiscal year ended March 31, 2022). Besides the Audit & Supervisory Board meetings, the Independent Audit & Supervisory Board Members attend meetings of the Board of Directors after being briefed of discussions in the Executive Committee and lower conference bodies, and provide necessary opinions (25 times in the fiscal year ended March 31, 2022).
3On-site audits and observations
Audit & Supervisory Board Members proactively conduct 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 are also taken into account.
Amid ongoing restrictions on movement due to the COVID-19 pandemic, the Audit & Supervisory Board fulfilled its duties while adapting to the situation by enhancing onsite audits and observations in Japan and conducting remote audits of overseas sites using a variety of tools.
In the fiscal year ended March 31, 2022, dialogues were held with the CEOs and executive officers of 3 companies in 3 countries overseas and 15 domestic MC Group companies, as well as the regional heads of 11 overseas and domestic offices. The Audit & Supervisory Board Members reported on the results of their on-site audits and visits to the Chairman of the Board, the President and CEO, and relevant executive officers.
At least one Independent Audit & Supervisory Board Member participated in on-site audits and visits with 3 companies in 3 countries overseas and 14 domestic MC Group companies, as well as 9 overseas and domestic offices.
*1 Numbers for the fiscal year ended March 31, 2022
*2 Indicates the number of cases
in which more than one Independent Audit &
Supervisory Board Member joine
4Reinforcement of Group Corporate Governance
In addition to dialogues with the CEOs and other executive officers of the MC Group companies, opportunities are arranged for the exchange of information every quarter with the Audit & Supervisory Board Members of 39 major Group companies in Japan, and Audit & Supervisory Board Members of the MC Group companies also hold subcommittees to provide opportunities to share information and exchange opinions. We also provide assistance in training for those who will 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 conducts 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.
Improving the scope of information sharing on important investment and loan projects
For matters to be submitted for approval or reported to the Board of Directors, preliminary briefings are held for 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 receive explanations from Audit & Supervisory Board staff related to Board of Directors matters of especially high importance as well as matters that are not quantitatively applicable to the Board of Directors but that are still qualitatively important. Audit & Supervisory Board Members then exchange opinions and share their awareness of risks in relation to the loan and investment projects.
Enhancing the provision of Information to Independent Directors and Audit & Supervisory Board Members through various dialogues hosted by the Audit & Supervisory Board Member's office
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, President, Corporate Officers and Group CEOs. As in the previous fiscal year, Independent Directors also actively participate. In addition, since the fiscal year ended March 2021, 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 participate in dialogues with the Division Chief Operating Officer to ensure opportunities to hear the opinions of employees on the ground.
Enhancing the Effectiveness of the Audit & Supervisory Board and Its Members
To increase the effectiveness of the audits performed by Audit & Supervisory Board Members, in the year ended March 31, 2022, we further enhanced the reviews of the activities of the Audit & Supervisory Board conducted in previous years. Specifically, the secretariat held mid-year and year-end hearings with each of the Audit & Supervisory Board Members to identify insights about overall auditing activities and things to improve in the coming year respectively. The results were shared and discussed among the Audit & Supervisory Board Members. At these hearings, the participants also discussed the progress of auditing in the key audit areas designated at the start of the fiscal year, and insights from these discussions were then fed back to executives. Through such new processes and other means, we sought to improve auditing methods.
We work with accounting auditors through their outline briefings on accounting audit plans, audit reports for quarterly results and monthly meetings. During on-site audits and visits, we also exchange opinions with the accounting auditors of MC Group companies in Japan and overseas if necessary.
With regard to performance evaluations of accounting auditors, we keep track of evaluation data during the fiscal year from regular audit reports and other sources, and hold an accounting auditor evaluation conference at the end of the fiscal year. As a result, we have concluded that the current accounting auditors performed appropriate audits in a professional manner, and accordingly, the Audit & Supervisory Board resolved to reappoint the accounting auditors.
The Internal Audit Department and Full-time Audit & Supervisory Board Members hold monthly meetings where exchange of opinions are made concerning reports on internal audit results. Also at Audit & Supervisory Board meetings, the Internal Audit Department reports their quarterly audit results that are also reported to the President and CEO.
In addition, Audit & Supervisory Board Members attend the internal auditor liaison meetings of 49 major MC Group companies in Japan held by the Internal Audit Department, while the General Manager of the Internal Audit Department attends 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 collect audit information and exchange opinions.
The 2 In-house Audit & Supervisory Board Members each have experience in the corporate management, and finance and accounting departments, and they are appointed as Full-time Audit & Supervisory Board Members, respectively. The 3 Independent Audit & Supervisory Board Members each have many years’ experience as an attorney (corporate law) and certified public accountant, and experience as Full-time Audit & Supervisory Board Member at a listed company, respectively. Of the 5 Audit & Supervisory Board Members, Mitsumasa Icho, Full-time Audit & Supervisory Board Member, and Takeshi Nakao, Independent Audit & Supervisory Board Member, have a considerable degree of knowledge and experience concerning finance and accounting. One of the Full-time Audit & Supervisory Board Members heads the Audit & Supervisory Board and is also the specified Audit & Supervisory Board Member stipulated by the law. Audit & Supervisory Board Members are assisted as needed by the 8-member Audit & Supervisory Board Members Office (as of June 24, 2022), which is an independent organizational body. As part of their activities based on the audit plan, Audit & Supervisory Board Members attend important in-house meetings (130 meetings including meetings of the Executive Committee and the Business Strategy Meeting) and hold discussions with internal departments, including important offices in Japan and overseas (65 dialogues with management execution departments under the Chairman of the Board, dialogues with management execution personnel at 3 overseas business investees and 15 in Japan, as well as with office heads at 11 offices in and outside Japan). At the same time, Audit & Supervisory Board Members hold regular meetings with Mitsubishi Corporation’s independent auditors and Internal Audit Department, to accurately and in a timely manner grasp Mitsubishi Corporation’s situation through close cooperation. The Audit & Supervisory Board provides a forum for lively discussion, where the Audit & Supervisory Board Members report and share their audit activities as well as making decisions on statutory matters and so forth. In the fiscal year ended March 31, 2022, Audit & Supervisory Board were held 12 times, and all Audit & Supervisory Board Members were in attendance at every meeting. At the first Audit & Supervisory Board for the fiscal year, the audit plan for that fiscal year is decided upon and a review of the previous fiscal year’s audit activities is carried out. These matters are 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 discusses 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, 2022) 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. The audit results are reported each time to the President and CEO, Audit & Supervisory Board Members and other concerned parties. They are also reported regularly to the Board of Directors and the Executive Committee.
The three certified public accountants who carried out the accounting audit of Mitsubishi Corporation were Yuki Higashikawa, Hirofumi Otani and Sogo Ito of Deloitte Touche Tohmatsu LLC. They were assisted by 29 certified public accountants, 18 junior accountants and 56 other staff.
The Audit & Supervisory Board Members, Corporate Accounting Department, and independent auditors hold regular meetings at the time of quarterly financial results and monthly, and provide opportunities for exchanging opinions with subsidiaries and affiliates as necessary.
In addition, the Internal Audit Department makes regular audit reports to the Audit & Supervisory Board, the Audit & Supervisory Board Members have monthly meetings with the Internal Audit Department, and the Audit & Supervisory Board Member and the Internal Audit Department hold liaison meetings with the Audit & Supervisory Board Members and internal audit departments of subsidiaries and affiliates, and so forth.
This cooperation is intended to strengthen the linkages supporting three-way audits (Audit & Supervisory Board Member Audits, Internal Audits and Accounting Audits).
Fees paid to Mitsubishi Corporation’s independent auditors Deloitte Touche Tohmatsu LLC for the fiscal year ended March 31, 2022 were as follows: