• Egawa:The Company has been working for some time to revise its criteria for matters to be resolved by the Board of Directors so that the Board could focus on a smaller number of substantial items. In parallel with these efforts, we also discussed a reduction in the frequency of Board meetings. Board members residing outside Japan were especially vocal about that change. In fact, many non-Japanese companies have fewer board meetings and allocate more time to each meeting.
  According to a survey that I referenced previously, American companies hold a total of five to nine board meetings per year, including four to five face-to-face meetings and one to four telephone meetings. The average duration of meetings was over five hours for face-to-face meetings and one hour for telephone meetings. My impression is that Mitsui’s practice is getting closer to those of overseas companies. Having reduced the frequency of meetings, we now use online meetings and written resolutions for urgent matters. Meanwhile, for our face-to-face meetings, we spend greater time on more substantive discussions. In addition to thorough pre-meeting briefings, we also hold free discussion sessions and the External Members Meeting before and after Board meetings. By combining sessions such as these, we have, in effect, increased the amount of discussion. The pre-meeting briefings also include explanations and discussions about investments that are strategically important but not included in the agenda for Board meetings.
• Yasunaga:I also felt that we were holding too many Board meetings. However, when discussing investments, we also need to align our schedules with those of other parties, including our business partners and host countries. In some cases, it is too late if we only deliberate on investments once every three months. That is why we needed to hold meetings often enough to align with the speed of deal making. Under these circumstances, we have to adjust our approaches, such as discussing individual investments well in advance where possible or deliberating via online meetings. That said, some members have commented that it is difficult to discuss important projects online. So, while recognizing the need for in-person meetings, an ongoing issue for us is how to effectively modify the way in which meetings are conducted.

• Yasunaga:I would like External Directors to continue holding these sessions and highlight aspects that may not be apparent to those of us within the Company.
  Meanwhile, our frontline staff continuously apply PDCA cycles to projects, while both the Portfolio Management Committee and the Executive Committee monitor progress on the middle game^* for every investment. If all of this information were reported to the Board of Directors, there would be too much to report, and the Board would not be able to function effectively. The Board therefore needs to focus mainly on new projects and projects with issues. We also need to ensure that PDCA cycles are applied efficiently. For example, there are projects with issues for which reports are submitted on a weekly basis, so the executive side may need to reconsider how internal reporting should be made in order to improve efficiency. On a different note, I think paying visits to frontline operations is the best way for External Directors to learn about our frontline efforts to create value and enhance return on investment. This year, for example, External Directors were invited to visit some of our frontline operations in North America, and we would like to arrange more visits to provide opportunities to observe our frontline operations in each region.
• Takano: Finally, as Chair of the Board, what is your vision for the future of the Board of Directors in light of the recent changes in the governance structure?
• Yasunaga:I would like to take a natural approach. Despite changes in the number of Directors and the composition of the Board of Directors, we will continue to prioritize our goal of achieving unanimity. Diversity is meaningless if opposing views are suppressed through majority decision-making. For us to sustainably grow while embracing diversity, unanimous decision-making by a diverse Board of Directors is essential. If we were unable to reach unanimous decisions, that would indicate that certain problems do exist. I therefore do not intend to change our basic commitment to making unanimous decisions. In my view, even if a deadline is looming and we do not have much time left, we need to debate issues fully and explore a conclusion that satisfies all members. This is the greatest value of our diverse Board of Directors. To continue providing this value, we will strive to have more interactive discussions and deepen our mutual understanding toward further enhancing the effectiveness of the Board of Directors.

* The intermediate stages between the entry and exit points of investments, where the focus is on enhancing individual businesses and implementing turnarounds to improve earnings power.