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Governance

Status of Corporate Governance

In terms of strengthening corporate governance, Mitsui & Co. worked to improve diversity among members of the Board of Directors. At the same time, an even greater number of discussions were held at Board of Directors' meetings regarding Mitsui & Co.'s future direction and business strategies. In these ways, Mitsui & Co. has been moving forward with efforts to enhance the effectiveness of the Board of Directors.

Basic View on Corporate Governance

In structuring the corporate governance framework, the Company places emphasis on "improved transparency and accountability" and "the clarification of the division of roles between the oversight activities and the executive activities of management." For "improved transparency and accountability," the Company ensures sound supervision and monitoring of management with the viewpoints of External Directors and External Audit & Supervisory Board Members. The Company has also established an internal control system for disclosure so that all executives and employees fulfill their accountability to stakeholders under the principle of fair disclosure. For "the clarification of the division of roles between the oversight activities and the executive activities of management," the Company delegates execution of business to Managing Officers substantially while the Board of Directors retains a supervisory role over Managing Officers' business activities. Chief Operating Officers of the 16 Headquarter Business Units and the 2 Overseas Regional Business Units serve concurrently as Managing Officers and engage in business operations for the consolidated Group in a responsive and flexible manner.

While increasing the effectiveness of supervisory functions by having Audit & Supervisory Board Members, the Company implements corporate governance by maintaining an Audit & Supervisory Board system because it believes that having internal Directors who are familiar with its business practices and operations is essential to the business of a general trading company. By adopting a Committee System in which External Directors and External Audit & Supervisory Board Members participate, the Company achieves highly effective corporate governance to secure "improved transparency and accountability" and "the clarification of the division of roles between the oversight activities and the executive activities of management."

Mitsui & Co. has presented to the Tokyo Stock Exchange and other stock exchanges a corporate governance report that describes the status of Mitsui & Co.'s corporate governance.

Filed on June 19, 2024


Corporate Governance Report (PDF 1,964KB)

Board of Directors

The Board of Directors is the highest authority for execution of business and supervision, and in order to secure this function, the Company has limited the number of Directors to the maximum to enable substantial discussions and gives priority to the appointment of new External Directors in the case of increasing the number of board members in order to enhance the division of roles between management oversight and execution. In addition, the Company has established the Governance Committee, the Nomination Committee, and the Remuneration Committee to serve as advisory bodies to the Board of Directors. These committees comprise mainly external members.

At Board of Directors' meetings, matters that are deliberated or reported on abide by the Company's internal regulations. In addition to matters concerning fundamental policies related to management, important business execution and matters authorized by resolutions of the General Meeting of Shareholders, the Company passes resolutions on matters determined by law and company statute. We also receive reports regarding matters determined by law and the status of important business operations.

Regular meetings of the Board of Directors are held once every month in principle and extraordinary meetings are held from time to time at any time if deemed necessary.

Directors

As of June 19th, 2024

  • Representative Director, Chair of the Board of Directors

    Tatsuo Yasunaga

  • Representative Director, President and Chief Executive Officer

    Kenichi Hori

  • Representative Director, Executive Vice President

    Yoshiaki Takemasu

  • Representative Director, Senior Executive Managing Officer

    Tetsuya Shigeta

  • Representative Director, Senior Executive Managing Officer

    Makoto Sato

  • Representative Director, Senior Executive Managing Officer

    Toru Matsui

  • Director

    Samuel Walsh

  • Director

    Takeshi Uchiyamada

  • Director

    Masako Egawa

  • Director

    Fujiyo Ishiguro

  • Director

    Sarah L. Casanova

  • Director

    Jessica Tan Soon Neo

Executive Committee

The Executive Committee is organized for deliberating on basic polices and important matters relating to overall management. The committee consists of the Chair of the Board of Directors, the President and Chief Executive Office (the committee chair), the Directors in charge of Corporate Staff Units, and Representative Directors or Managing Officers nominated by the President and Chief Executive Officer. The Executive Committee is held weekly, in principle. Matters referred to the Executive Committee are determined by the President and Chief Executive Officer, taking into consideration discussions among the committee members.

We are reaffirming the role of the Executive Committee as our management leadership team to allow for a more agile response to an increasingly complex business environment and surrounding risks, and to ensure the steady realization of our management strategies. By reaffirming the role of the committee, we aim to achieve further increase in corporate value and growth of the Mitsui & Co. group.

Executive Committee Members

As of June 19th, 2024

  • President and Chief Executive Officer

    Kenichi Hori

  • Chair of the Board of Directors

    Tatsuo Yasunaga

  • Executive Vice President

    Yoshiaki Takemasu

  • Senior Executive Managing Officer

    Kazumasa Nakai

  • Senior Executive Managing Officer

    Tetsuya Shigeta

  • Senior Executive Managing Officer

    Makoto Sato

  • Senior Executive Managing Officer

    Toru Matsui

  • Senior Executive Managing Officer

    Tetsuya Daikoku

  • Executive Managing Officer

    Yuichi Takano

  • Executive Managing Officer

    Tetsuya Fukuda

Audit & Supervisory Board

The Audit & Supervisory Board Members supervise the Directors' execution of duties as an independent institution with the mandate of the shareholders. For this purpose, Audit & Supervisory Board Members carry out multifaceted, effective audit activities such as attending important internal meetings, verifying reports and investigating our business, and take necessary measures in a timely manner.

Audit & Supervisory Board meetings are held periodically and precede meetings of the Board of Directors. Moreover, additional meetings are held on an as-needed basis. The Audit & Supervisory Board Members attend meetings of the Board of Directors to monitor how the proceedings of the meetings are managed and the content of the decisions made. These members also actively express their opinions.

Auditing by the Audit & Supervisory Board Members covers a variety of areas, among which are execution of duties by Directors, decision-making processes at the meetings of the Board of Directors and others, status of construction and operation of the internal control system, independence of the Independent Auditors, system of financial reporting, accounting policies and processing of financial information, tax policies and tax processing.

Evaluation Results of the Effectiveness of the Board of Directors

Each year, the Board of Directors analyzes and evaluates its effectiveness, taking into consideration relevant matters, including self-evaluations of each Director, and discloses a summary of the results.

At the Board of Directors meeting held on April 9, 2024, we analyzed and evaluated the effectiveness of the Board of Directors meeting for the year ended March 31, 2024. We would like to inform you of the results.

The Board of Directors continues to work to maintain and improve the effectiveness of the Board of Directors, and aims to ensure thorough supervision of management by the Board of Directors and to achieve sustainable increases in corporate value.

The methods and results of the evaluation of effectiveness of the Board of Directors for the year ended March 31, 2024, and prior years, are summarized as follows:
Please note that the summary of the methods and results of the evaluation of effectiveness of the Board of Directors is also described in the Corporate Governance Report.

Evaluation of effectiveness (Excerpt from the Corporate Governance Report)

Summary of Effectiveness Evaluation of the Board of Directors

The effectiveness of the Board of Directors is evaluated every year in order to check actions on issues identified in the previous fiscal year and identify issues to be tackled in the next fiscal year. The process emphasizes the maintenance of a PDCA cycle for the improvement of effectiveness of the Board of Directors.
Based on the results of the effectiveness survey for the fiscal year ended March 2023, the Board of Directors and its Secretariat took action on the following matters in the fiscal year ended March 2024.

Issues identified for FYE 3/2024 Actions Evaluations in the FYE 3/2024 survey
(1) Continuing discussions concerning the number and diversity of directors, the percentages of internal and external directors, and institutional design, with the aim of further enhancing the quality of deliberations
  • Discussions about Mitsui & Co.'s executive structure and institutional design at the Governance Committee meetings, Executive Committee meetings, and free discussion sessions of Board of Directors in July, August, and October of 2023
  • While maintaining the current structure as a company with an Audit & Supervisory Board, transition to a 12-member Board of Directors with equal numbers of internal and external directors by reducing the number of internal directors after the Ordinary General Meeting of Shareholders in 2024
All officers, including external officers, expressed positive views on the number of directors and the percentages of internal and external directors that will result from the changes to the governance structure. There were comments that we are not only affirming the current state of our governance, but also discussing future reform options from a multifaceted perspective, and that the effectiveness of the Board of Directors has been ensured.
(2) Consideration of actions to improve the quality and efficiency of deliberations by the Board of Directors The following Secretariat recommendations are now being implemented progressively: 1) Reduction of the number of Board meetings and extension of the meeting duration, 2) free choice of meeting attendance methods, 3) measures to improve engagement among Executive Committee members, directors, and Audit & Supervisory Board members Favorable evaluations were expressed in the survey on the following points: "There has been major improvement and progress in terms of the enhancement of pre-meeting briefings, and changes to the number and formats of meetings toward efficient and high-quality meeting management." "The criteria for matters to be resolved by the Board of Directors have been revised to achieve greater focus and balance in the agenda, while maintaining detailed pre-meeting briefings."

Effectiveness evaluation for FYE 3/2024

After discussion of the results from the survey at External Members Meeting in February 2024 and a Governance Committee meeting and an Executive Committee meeting in March 2024, the effectiveness evaluation was resolved by the Board of Directors in April.

Self-evaluation
  • Implemented from December 2023 to January 2024
    15 directors and 5 Audit & Supervisory Board members
  • 5-level evaluations, comparisons with the previous fiscal year, and comments for each question
  • The evaluation of the effectiveness of the Board of Directors in FYE 3/2024 was carried out through self-evaluation.

 

Evaluation results
  • The management team is continually working to improve governance and regards this as a priority.
  • As in FYE March 2023, the effectiveness of the Board of Directors was ensured through ample support from the Board of Directors Secretariat and related corporate units.
  • Efforts are being made to ensure and strengthen monitoring functions as part of the Board of Directors management, and the effectiveness of the Board of Directors is improving year by year. Enhanced pre-meeting briefings are contributing to the efficient management of Board meetings, allowing more time to be spent on substantive deliberations.
  • Various creative steps have been taken to ensure effective oversight by the Board of Directors, especially external directors, including the selection and clear explanation of group-wide themes, and thorough explanations of the positioning of individual projects in company-wide strategies and project details.
  • The Board of Directors is functioning very effectively, and various steps are being taken to achieve further improvement in effectiveness. There is also need for continuous action and fine-tuning in relation to aspects that require further improvement.

The overall conclusion based on the above results is that the Board of Directors achieved an appropriate level of effectiveness in FYE 3/2024.

 

Steps toward further improvement of effectiveness

Initiative for FYE March 2025
Further enhancement of the quality of deliberations and the efficiency of meeting management under the new structure—Consideration of the following issues based on changes to the governance structure after the General Meeting of Shareholders in June 2024:

  • Initiatives that contribute both to the enhancement of the quality of deliberations at Board meetings and the improvement of meeting management efficiency
  • Further enhancement and efficient management of various forums designed to deepen deliberations at Board meetings, including pre-meeting briefings and free discussion sessions, as well as the creation of more opportunities for exchanges of views among directors and Audit & Supervisory Board members

Medium to long-term initiative
Continuous consideration of the governance structure, including institutional design, based on annual evaluations of the effectiveness of the Board of Directors and results of dialogue with stakeholders

Remuneration of Executives

Structure of Remuneration

Remuneration of Directors and Audit & Supervisory Board Members

The Company has established a policy for determining the remuneration of individual Directors by resolution of the Board of Directors, following deliberation by and reporting from the Remuneration Committee. In each fiscal year, the Remuneration Committee discusses the remuneration structure for Directors and Audit & Supervisory Board Members, and examines the appropriateness of the proportions of fixed remuneration, result-linked bonuses, and stock-based remuneration based on trends at other companies and then reports this as well as the appropriateness of clawback provisions to the Board of Directors, among other measures, in order to emphasize transparency in the determination of Directors' and Audit & Supervisory Board Members' remuneration.

Remuneration for Directors of the Company is comprised of fixed remuneration (basic remuneration), result-linked bonuses (short-term incentive) and restricted stock-based remuneration as stock-based renumeration (long-term incentive). From the perspective of respecting the independence of External Directors and Audit & Supervisory Board Members, who are independent from business execution, they are not eligible for result-linked bonuses or stock-based renumeration. In addition, the Company will not pay retirement compensation to Directors and Audit & Supervisory Board Members.

With the approval of the 103rd Ordinary General Meeting of Shareholders on June 22, 2022, the Company revised the remuneration for Directors for the fiscal year ending March 2023 and thereafter. An overview of the revised structure is shown below. The Company also established the Share Ownership Guidelines in FY March 2023.

The composition of remuneration for Directors (excluding External Directors) from FY March 2023 is 2:1 for monetary remuneration:stock-based renumeration and 1:1:1 for basic remuneration:short-term incentive:long-term incentive.

Overview of Remuneration of Directors and Audit & Supervisory Board Members

Overview of Remuneration of Directors and Audit & Supervisory Board Members

* Capped a total amount of ¥240 million / year

Composition of remuneration for Directors (excluding External Directors)

Composition of remuneration for Directors (excluding External Directors)

Overview of Policy for Determining Remuneration of Individual Directors
Position Type Compensation Cap Overview
Directors
(excluding External Directors)
Performance-linked restricted stock-based remuneration Stock-based ¥300 million
  • Performance linkage conditions: The initial evaluation period is to consist of the three fiscal years extending to the fiscal year ending March 2025, from the fiscal year ending March 2023. During the initial evaluation period, we will focus on management indicators that include ESG elements, including response to climate change, ROE, etc. Amounts shall be within the variation range of 80% to 120% for each management indicator.
  • Restriction on disposal: 30 years
  • Lifting of restriction on disposal: End of the restriction on disposal period or retirement of Director
  • Clawback clause: Applies
  • Total number of shares to be issued or disposed of: No more than 300,000 per year
  • Paid-in amount per share: Average closing price of Company stock during the immediate prior three months
Tenure-linked restricted stock Stock-based ¥500 million
  • Number of shares of the Company's common stock determined according to position shall be paid individually.
  • Restriction on disposal: 30 years
  • Lifting of restriction on disposal: End of the restriction on disposal period or retirement of Director
  • Clawback clause: Applies
  • Total number of shares to be issued or disposed of: No more than 500,000 per year
  • Paid-in amount per share: Average closing price of Company stock during the immediate prior three months
Result-linked bonus Monetary ¥1.5 billion
  • Total amount of bonuses = (Consolidated profit for the year x 50% x 0.1%) + (Core Operation Cash Flow x 50% x 0.1%)
  • Amount individually paid = Total amount of bonuses x Position points / Sum of position points
Position: Chair/President Points: 10
Position: Executive Vice President Points: 7
Position: Senior Executive Managing Officer Points: 6
Position: Executive Managing Officer Points: 5
Directors Basic remuneration Monetary ¥1 billion
  • Amount determined according to position shall be paid individually
Audit & Supervisory Board Members Basic remuneration Monetary ¥240 million
  • Amount determined by discussion among the Audit & Supervisory Board Members shall be paid individually
  • * For details, please refer to 4. Corporate Governance (4) Remuneration of Directors and Audit & Supervisory Board Members under 4. Corporate Information in our Annual Securities Report for the fiscal year ended March 2023.
Share Ownership Guidelines
Position Type Goal regarding ownership of the Company's shares
Internal Directors President and Chief Executive Officer Ownership of the Company's stock equivalent to three times basic remuneration (annual amount)
Other Directors Ownership of the Company's stock equivalent to basic remuneration (annual amount)
Remuneration of directors and Audit & Supervisory Board Members in the fiscal year ended March 31, 2023

Please scroll horizontally to look at table below.

Category of Position Number of Recipients(*1) (¥ million)
Basic Remuneration Results-linked Bonuses Stock-based Remuneration
(variable)
Stock-based Remuneration
(fixed)
Total Remuneration
Directors (Excluding External Directors) 13 685 1,402 256 353 2,696
Audit & Supervisory Board Members (Excluding External Audit & Supervisory Board Members) 2 150 - - - 150
External Directors 5 109 - - - 109
External Audit & Supervisory Board Members 4 62 - - - 62
Total 24 1,007 1,402 256 353 3,017
  • *1 The above includes Directors and Audit & Supervisory Board Members who retired from office in the fiscal year to March 2023
  • *2 In addition to the above amounts, a total of ¥399 million was paid to 89 retired Directors, and ¥37 million to 11 retired Audit & Supervisory Board Members, as pensions (representing payments determined prior to the abolition of those systems).
  • *3 Amounts are rounded to the nearest ¥1.0 million.

External Directors / External Audit & Supervisory Board Members

Selection Criteria

External Directors

  • The prospective person's extensive business experience and knowledge are required to deliberate and knowledge of his or her particular area of business should be used.
  • The Company puts great value on ensuring independence of External Directors from Mitsui in the pursuit of their management oversight functions.
  • With a view to overseeing business operations in a way that reflects the perspectives of our diverse stakeholders, Mitsui shall take into consideration the fields from which candidates originate, along with their gender.
Reasons for Appointing Each External Director / Major Activities in the Fiscal Year Ended March 31, 2023
Name Samuel Walsh
Independent Director(*1)
Reasons for Appointment Mr. Walsh has global expertise and excellent management skills cultivated through his long years working in upper management within the automobile industry and as chief executive officer of an international natural resources company. At the Board of Directors' meetings, he makes many proposals and suggestions from a broad-minded standpoint based on his abundant business management experience, and makes significant contributions to active discussions at the meetings of the Board of Directors, and to improving the effectiveness of said meetings. In the year ended March 31, 2023, Mr. Walsh served as a member of the Governance Committee and actively provided his opinions with the aim of creating a highly transparent governance system. He has diverse perspectives based on global corporate management experience and expertise and knowledge related to capital policy and business investment. The Company appointed him as an External Director so that he may continue to advise and supervise its management.
Attendance at Meetings in FY2023 (Number of Meetings Attended / Total Number of Meetings)
  • Board of Directors 15/15
  • Governance Committee 3/3
  • External Members Meeting 12/12
Significant Concurrent Positions (*2)
  • Chairman of the Board, Gold Corporation (Australia) the Perth Mint
Name Takeshi Uchiyamada
Independent Director(*1)
Reasons for Appointment Mr. Uchiyamada has long been involved in research and development on environmental and safety technologies at Toyota Motor Corporation that could realize a mobility society responding to the needs of the times, as well as in the development of products demanded by consumers, and has been exercising his excellent managerial skills as an executive officer of Toyota Motor Corporation. At the Board of Directors' meetings, he makes many proposals and suggestions from a broad-minded standpoint based on his management experience at a global company and his in-depth knowledge of society in general, and makes significant contributions to active discussions as the meetings of the Board of Directors, and to improving the effectiveness of said meetings. In the year ended March 31, 2023, he served as a member of the Nomination Committee, and contributed to the discussions with the aim of enhancing the transparency and effectiveness of the procedures for the appointment of executives, including the CEO, and External Director. In view of these points the Company appointed him as an External Director so that he may continue to advise and supervise its management.
Attendance at Meetings in FY2023 (Number of Meetings Attended / Total Number of Meetings)
  • Board of Directors 15/15
  • Nomination Committee 6/6
  • External Members Meeting 12/12
Significant Concurrent Positions (*2)
  • Executive Fellow, Toyota Motor Corporation
  • External Director, JTEKT CORPORATION (schedule to retire in June 2023)

JTEKT CORPORATION is an equity accounted associated companies of Toyota Motor Corporation.

Name Masako Egawa
Independent Director(*1)
Reasons for Appointment Ms. Egawa has deep insight in finance and corporate management gained through her experience of management as a director of the University of Tokyo and chancellor of School Juridical Person Seikei Gakuen, her many years of experience working at global financial institutions, and her research on management and corporate governance at Japanese companies. Her broad range of public contributions includes the activities at the Japan-United States Educational Commission and councils of the Ministry of Finance. In the year ended March 31, 2023, she served as a member of the Governance Committee, actively provided her opinions with the aim of creating a highly transparent governance system. In addition, as a member of the Remuneration Committee, she contributed to the discussions related to executive remuneration the Company appointed her as an External Director so that she may advise and supervise its management.
Attendance at Meetings in FY2023 (Number of Meetings Attended / Total Number of Meetings)
  • Board of Directors 15/15
  • Governance Committee 3/3
  • Remuneration Committee 7/7
  • External Members Meeting 12/12
Significant Concurrent Positions (*2)
  • External Director, Tokio Marine Holdings, Inc. (scheduled to retire in June 2023)
  • Chancellor, School Juridical Person Seikei Gakuen
Name Fujiyo Ishiguro
Independent Director(*1)
Reasons for Appointment In addition to advanced knowledge of business management and the IT/DX sector gained through her many years of experience as an IT entrepreneur, Ms. Ishiguro has also developed profound insights about business management through her experience as an external director of listed companies. She has also made extensive contributions to the public interest, including serving as a committee member of Industrial Structure Council of Ministry of Economy, Trade and Industry. The Company appointed her as an External Director with the expectation that she will apply her extensive knowledge of business management and IT/DX to advise and supervise the Company's management from diverse perspectives.
Attendance at Meetings in FY2023 (Number of Meetings Attended / Total Number of Meetings) — (*3)
Significant Concurrent Positions (*2)
  • External Director, Monex Group, Inc.
  • Director, Chief Evangelist, Netyear Group Corporation
  • Director of the Board (External), SEGA SAMMY HOLDINGS INC.
Name Sarah L. Casanova
Independent Director(*1)
Reasons for Appointment Ms. Casanova amassed extensive knowledge of the international consumer business through her experience working for McDonald's in North America, the CIS, and Southeast Asia. She served as Chief Executive Officer of McDonald's Company (Japan) from 2013 to 2019 and demonstrated her management acumen by pursuing growth strategies that have yielded a dramatic improvement in the company's performance. The Company appointed Ms. Casanova as an External Director with the expectation that she will use her profound knowledge of the international consumer business and her management experience in a global business corporation to advise and supervise the Company's management from diverse perspectives.
Attendance at Meetings in FY2023 (Number of Meetings Attended / Total Number of Meetings) — (*3)
Significant Concurrent Positions (*2)
  • Representative Director, Chairperson, McDonald's Company (Japan), Ltd.
  • Representative Director, Chairperson, McDonalds's Holdings Company (Japan),Ltd.
Name Jessica Tan Soon Neo
Independent Director(*1)
Reasons for Appointment In addition to knowledge of the IT/DX sector gained through her experience working for IBM and Microsoft, Ms. Tan has also developed profound knowledge of business management through her role as an external director of listed companies in Singapore. In parallel with her business career, she was elected as a Member of Parliament of Singapore in 2006 and is currently serving as the Deputy Speaker of the Parliament of Singapore, making a wide range of contributions to the public interest. The Company has appointed Ms. Tan as an External Director with the expectation that she will use her knowledge of managing global corporations and her profound insights about society in general to advise and supervise the Company's management from diverse perspective.
Attendance at Meetings in FY2023 (Number of Meetings Attended / Total Number of Meetings) — (*3)
Significant Concurrent Positions (*2)
  • Non-Executive Independent Board Director, SATS Ltd.
  • Non-Executive Independent Board Director, CapitalLand India Trust Management Pte. Ltd.
  • Member and Deputy Speaker of the Parliament of Singapore.
  • *1 An External Director who is unlikely to have conflicts of interest with general shareholders, as stipulated by the stock exchange
  • *2 As of June 21, 2023

External Audit & Supervisory Board Members

The External Audit & Supervisory Board Members shall be selected with the objective of further heightening the neutrality and independence of the auditing system, and, in particular, it is expected that the External Audit & Supervisory Board Members will give an objective voice to their auditing opinions from the standpoint of neutrality, building on such factors as independence. When selecting candidates for External Audit & Supervisory Board Members, the Audit & Supervisory Board shall confirm that no issues with independence arise by taking into consideration such factors as relations with the Company, management and important staff members.

Reasons for Appointing Each External Audit & Supervisory Board Member / Major Activities in the Fiscal Year Ended March 31, 2023
Name Kimitaka Mori
Independent Audit & Supervisory Board Member(*1)
Reasons for Appointment Mr. Mori has deep insight in corporate accounting, accounting audit activities and risk management gained through his many years of experience as a certified public accountant. Since he took his office as an External Audit & Supervisory Board Member, at the Board of Directors meetings and Audit & Supervisory Board Members meetings, he has made his valuable remarks based on his expertise and from his objective and neutral standpoint and made significant contributions to improveet of the supervising functions of the Board of Directors meetings and Sudit & Supervisory Board meetings. Although he has no direct experience in corporate management, considering the above, the Company appoint Mr. Mori as an External Audit & Supervisory Board Member.
Attendance at Meetings in FY2023 (Number of Meetings Attended / Total Number of Meetings)
  • Board of Directors 15/15
  • Audit & Supervisory Board 21/21
  • Remuneration Committee 7/7
  • External Members Meeting 11/12
Significant Concurrent Positions (*2)
  • Certified Public Accountant
  • External Director, Japan Exchange Group, Inc.
  • External Audit & Supervisory Board Member, East Japan Railway Company
  • External Director, Sumitomo Life Insurance Company
Name Yuko Tamai
Independent Audit & Supervisory Board Member(*1)
Reasons for Appointment Ms. Tamai is appointed as an External Audit & Supervisory Board Member in expectations of the expression of her objective audit opinions from an independent and neutral standpoint, with advanced insight into various types of corporate transactions, corporate governance and risk management cultivated through her many years of experience in legal affairs as a lawyer as well as extensive experiences as an external board member of other companies and a Commissioner (part-time) of Certified Public Accountants and Auditing Oversight Board. The Company deem her capable of performing her duties as an External Audit & Supervisory Board Member appropriately by giving valuable opinions, advice, and so forth regarding the Company's management utilizing her experience and knowledge.
Attendance at Meetings in FY2023 (Number of Meetings Attended / Total Number of Meetings)
  • Board of Directors 11/11
  • Audit & Supervisory Board 12/13
  • Governance Committee 2/2
  • External Members Meeting 7/10
Significant Concurrent Positions (*2)
  • Attorney at law
  • Partner, Nagashima Ohno & Tsunematsu
Name Makoto Hayashi
Independent Audit & Supervisory Board Member(*1)
Reasons for Appointment Mr. Hayashi is appointed as an External Audit & Supervisory Board Member in expectations of the possession of his advanced insight into governance and risk management cultivated through his many years of experience as a public prosecutor. The Company deem his capable of performing his duties as an External Audit & Supervisory Board Member appropriately by giving valuable opinions, advice, and so forth regarding the Company's management utilizing his experience and knowledge.
Attendance at Meetings in FY2023 (Number of Meetings Attended / Total Number of Meetings)
  • — (Joined from June 2023)
Significant Concurrent Positions (*2)
  • Attorney at law
  • Special Counsel, Mori Hamada & Matsumoto
  • Outside Director, AEON CO., LTD.
  • *1 An External Audit & Supervisory Board Member who is unlikely to have conflicts of interest with general shareholders, as stipulated by the stock exchange
  • *2 As of June 21, 2023

Criteria of Independence for External Officers (Directors/Audit & Supervisory Board Members)

External Directors or External Audit & Supervisory Board Members of the Company who do not fall under any of the following items are to be judged to have independence.

  1. Person who is currently or was in the past 10 years an executive director, executive officer, managing officer, manager, employee, administrative officer, etc. (hereinafter referred to as "executing person") of the Company or its consolidated subsidiaries
  2. Person or the executing person of a corporation holding either directly or indirectly 10% or more of the total number of the voting rights of the Company
  3. Person whose major business partner is the Company or its consolidated subsidiaries*1 or the executing person of the same
  4. Major business partner of the Company or its consolidated subsidiary*2 or the executing person of the same
  5. Person who is in charge of auditing operations of the Company or the Company's consolidated subsidiary, as partners etc. of the auditing firm of the Independent Auditor of the Company or the Company's consolidated subsidiary
  6. Person providing professional services such as consultant, lawyer and certified public accountant who received from the Company monetary payment or other property benefits ¥10 million or more in total other than officer remuneration in the most recent business year (if the one who received the relevant property is an organization such as corporation and association, it shall be referred to the person who belongs to an organization which received from Mitsui property benefits more than higher of either ¥10 million or 2% of the consolidated gross sales of such organization)
  7. Person or the executing person of a corporation who received the annual total of ¥10 million or more of donations or aid funds from the Company or its consolidated subsidiary in the most recent fiscal year
  8. Person who has fallen under any of 2. to 7. above in the past three years
  9. Spouse or relative within the second degree of kinship (hereinafter referred to as "close relatives") of the person who is currently or has been recently the important executing person of the Company or its consolidated subsidiary (including director who is not the executing person in the case of External Audit & Supervisory Board Member)
  10. Close relatives of the person who currently falls or has fallen recently under any of 2. to 7. above (excluding the one who is not important)
  • *1. If the relevant business partner received from the Company or the Company's consolidated subsidiary the payment equivalent to 2% or more of its annual consolidated transaction volume in the most recent business year or the relevant business partner obtained from the Company or the Company's consolidated subsidiary the money loans equivalent to 2% or more of its consolidated total assets in the most recent business year, the relevant business partner is deemed to be the person whose major business partner is the Company or the Company's consolidated subsidiary.
  • *2. If the Company or its consolidated subsidiary received from the relevant business partner the payment equivalent to 2% or more of Mitsui's annual consolidated transaction volume in the most recent fiscal year or the relevant business partner provided the Company or its consolidated subsidiary with the money loans equivalent to 2% or more of Mitsui's consolidated total assets, the relevant business partner is deemed to be the major business partner of the Company or its consolidated subsidiary.

Support Systems

For External Directors, before regular and extraordinary meetings of the Board of Directors, materials on the proposals are provided and advance explanations are given. For External Audit & Supervisory Board Members, company information which contributes their auditing, including summaries of regular meetings between Full-time Audit & Supervisory Board Members and staff in the Audit & Supervisory Board Member Division, are timely provided by the Full-time Audit & Supervisory Board Members and the staff. Advance distribution of materials and advance explanations are conducted regarding regular and extraordinary meetings of the Audit & Supervisory Board and the Board of Directors.

For External Members, the Company provides personal computers and tablets ("Officer PCs") and distributes materials for meetings of the Board of Directors in a timely manner, thereby ensuring the time to review agendas. In the FYE 22/3, since it has been difficult and inappropriate that all Directors and Audit & Supervisory Board Members gather physically due to the spread of COVID-19, the Company holds the meetings of the Board of Directors and the meetings of the Audit & Supervisory Board Members as fully or partially remote meetings using web conference system, depending on the situation around COVID-19. The Company has set up the usage environment of such web conference system on the Officer PCs and provides supports to use them in order to ensure the environment that allows the External Directors and External Audit & Supervisory Board Members to discuss effectively in remote meetings. The Company has set up Board of Director's database for use in storing information such as minutes and other materials from past meetings of the Board of Directors, and maintain a platform that enables access to such database from the Officer PCs.

External Members Meetings

External Members Meetings are periodically held for the purpose of exchanging information and opinions regarding important matters in management among External Members, or among External Members, Internal Directors, Full-time Audit & Supervisory Board Members, and/or Managing Officers. The External Members Meetings were held 10 times in the FYE 24/3, where External Directors, External Audit & Supervisory Board Members, Internal Directors, Full-time Audit & Supervisory Board Members, Independent Auditors, and Managing Officers exchanged information and opinions regarding matters such as feedback on dialogue with capital markets (expectations and requests), initiatives on climate change (Scope 3 emissions results and update on the business activities reducing GHG emissions in the value chain), and Wellness Ecosystem Creation (one of the three Key Strategic Initiatives set forth in the Medium-term Management Plan 2026), etc.

Coordination between supervision by the External Directors or auditing by External Audit & Supervisory Board Members, the auditing by the Internal Auditing Division, Audit & Supervisory Board Members and the Independent Auditors, and relationship with divisions involved in internal control

External Members, through the Board of Directors, the Audit & Supervisory Board and the External Members Meetings respectively, mutually coordinate with internal audits, auditing by Audit & Supervisory Board Members and accounting audits, as well as supervise and audit the internal control system. Specifically, they periodically receive reports on the following at meetings of the Board of Directors and the Audit & Supervisory Board, respectively: results of the internal audits and internal audit plans, results of auditing by the Audit & Supervisory Board and audit implementation plans, summary of management letters by Independent Auditors, assessment results with regard to the internal control system in accordance with the Financial Instruments and Exchange Act of Japan, the operational status of compliance programs, and other matters regarding the structure and management of internal controls. At the External Members Meetings, External Directors, Audit & Supervisory Board Members and Independent Auditors mutually exchange information and opinions and regarding the policy of audits, and Audit & Supervisory Board Members hosted the free discussion meeting with External Directors.

Full-time Audit & Supervisory Board Members, at their discretion, hold a meeting to exchange opinions beforehand among the External Directors and Audit & Supervisory Board Members on certain important matters to be discussed at meetings of the Board of Directors, in order to provide External Board Members with sufficient information for effective discussion at meetings of the Board of Directors.

Policy on Training for Directors and Audit & Supervisory Board Members

Upon assumption, opportunities are given to Directors and Audit & Supervisory Board Members for gaining full understanding of the business, financial affairs, organization, etc., of Mitsui, the Companies Act of Japan and related laws and regulations, corporate governance and internal control to ensure that they may fulfill their duties including the respective roles expected of Directors or Audit & Supervisory Board Members, which are mandated by the shareholders (fiduciary responsibility) and each legal responsibility. Furthermore, opportunities are given for keeping them up to date as necessary.

Policy Related to Acquisition and Holding of Listed Shares

The Company defines the criteria of classification of stocks for investment held for pure investment purposes and stocks for investment held for purposes other than pure investment purposes as follows.

(Stocks for investment held for pure investment purposes)

Investment held for the purposes of realizing gains solely arising from changes in the value of shares or dividends thereon

(Stocks for investment held for purposes other than pure investment purposes)

Stocks for investment held for purposes other than for pure investment purpose

With respect to the exercise of voting rights of stocks for investment, the content of each proposal shall be considered based on the management policies and business plans etc., of the investee, and deliberation shall be conducted on a case-by-case basis.

At the Company, the Portfolio Management Committee, which is an advisory body to the Executive Committee, establishes company-wide portfolio strategy as well as investment and loan policies, periodically monitors the company-wide portfolio, and verifies the rationale for holding of all assets including stocks for investment through asset portfolio review that is conducted each year. When acquiring stocks for investment, the Company shall conduct a prior stringent assessment of creating business opportunities, or building, maintaining, or strengthening business and collaborative relationships, in addition to profitability and capital efficiency. At the same time, for listed stocks, the Company shall verify the economic rationale based on the status of dividends, business-related profits, and other related profits, in comparison to total cost such as acquisition cost, fair value and its cost of capital, and conduct verification of qualitative aspects based on the status of and outlook for the creation of business opportunities, as well as business and collaborative relationship with each investee. If, as a result of these verifications, the rational of holding these assets has significantly declined, our policy is to sell and reduce such assets. Further the Board of Directors confirms that the qualitative rationale is verified for holding all individual stocks, and identifies stocks that will be considered for sell in the future due to dilution of the rationale, considering both qualitative and quantitative aspects.

Independent Auditors

The Company appoints certified public accountants belonging to Deloitte Touche Tohmatsu LLC as Independent Auditors to carry out auditing under the Companies Act of Japan and the Financial Instruments and Exchange Act of Japan as well as auditing of consolidated financial statements in English. To secure prompt financial closing and reliability, the auditing work of the Company and its consolidated subsidiaries is in principle entrusted solely to Deloitte Touche Tohmatsu, which belongs to the same network as Deloitte Touche Tohmatsu LLC.