Moderator : This September, Mitsui published its first human capital report entitled Empowering People to Build Brighter Futures. I would like to begin by asking CHRO Takemasu about the publication of the report and an overview of Mitsui’s HR strategy.

Takemasu : To begin with, the first thing I would like to say is that Mitsui is a company that has truly placed importance on people throughout its long history. For Mitsui, placing importance on people means people are constantly placed at the center of management. As you are aware, Mitsui has a variety of businesses in a very wide range of industries globally. As a result, Mitsui’s activities are inevitably somewhat difficult to understand when viewed from outside. Therefore, we took some steps when publishing this report to place the highest priority on increasing comprehensive understanding as much as possible starting with human resources and human capital for a wide range of stakeholders. Based on this, we hope that this report will provide an opportunity and assistance for investors to gain a deeper understanding of how the company’s continuous focus on human resources is connected to the sustained increase of the company’s corporate value.

When preparing the report, we were conscious of introducing management data in a way that is as accessible as possible to provide an understanding of the company’s current situation and the direction it should take, such as coverage of diverse employees actually working in the company, improvement of training systems inside and outside the company that Mitsui has focused on for the past few years, significant revisions to personnel systems planned to be implemented next year, and various personnel measures for work style reforms. After discussions in several meetings of the Corporate Management Committee, the content was eventually confirmed by the Board of Directors, resulting in the publication of the report. Meanwhile, several areas for improvement also became visible through preparation for publication. Based on suggestions and requests from readers about these, we will endeavor to make further improvements to content in future. To be honest, as this publication was the first one, we didn’t make it with too much of a pre-determined structure, and instead just pushed ahead in a way we felt was right. We would like to improve in various areas and hope this will provide an opportunity to have dialogue with you all.

Mitsui has mentioned strengthening of group management capability in the Medium-term Management Plan which ends in FY March 2026. We have three specific HR strategies for the realization of this. The first is the development of diverse and highly-capable individuals, the second is the practice of inclusion required for this, and the last is ensuring the appropriate global assignment of people. The most important management issue in Mitsui is achieving sustained improvement of corporate value by drawing out the full value of human resources and further increasing this. Through updates to the report, we would like to continue to show the virtuous cycle of growth of employees to be encouraged through investment in HR, employees who have grown contributing to sustained improvement of corporate value, and being able to powerfully continue to further invest in HR through enhancement of corporate value.

Moderator : Director Uchiyamada and Audit & Supervisory Board Member Tamai have experience serving as officers in other companies. Please tell us your thoughts on the characteristics of Mitsui’s people and HR strategy, and the issues faced by Mitsui from the perspective of an external officer. Let us begin with you, Mr. Uchiyamada.

Uchiyamada : When viewing Mitsui from the outside, I often heard the phrase Mitsui is People. Now that I have actually joined the company, I have learned that it is a company that truly emphasizes HR development and HR utilization. As explained by Vice President Takemasu earlier, I feel that the three pillars of our HR strategy, which are HR development, inclusion, and the utilization of HR through appropriate HR assignment, are working very well. Internal discussion on HR strategy is conducted in a very open format, and efforts are made every day to share the results not only on an office organization level but among all employees.

Direct communication between top management and junior employees is actively carried out in a variety of opportunities not limited to the aspect of HR. The current CEO, Mr. Hori, is also very actively providing opportunities for junior employees to hear what top management has to say on not only the approach to HR development, but also an overarching viewpoint. As a result, we have been able to provide many junior employees with a variety of opportunities at work, and junior employees are also seen working in a variety of situations in internal newsletters much more frequently than in the past.

The company places much emphasis on HR in this way, but if I had to raise an issue going forward, it would be increasing diversity. Specifically, I think there is still a lot of room to promote diversity more than in the past concerning opportunities for female employees and non-Japanese employees to fulfill their potential.

Tamai : Mr. Uchiyamada raised what I think are the important points, so I would like to add to it. To begin with, something that I view very favorably as a characteristic of the company concerning HR strategy or people is inclusion. Within the scope of diversity and inclusion (D&I) in the HR strategy, I think various companies are progressing well toward the targets set for promoting diversity. I think a characteristic of Mitsui is that it emphasizes inclusion.

As mentioned by Mr. Uchiyamada, placing great importance on internal communication supports this. I think this is something that applies not only within head office but also with group companies. Something I often hear in group companies is the word Kurumaza meeting, which means sitting in a circle and having discussions. Not only Japanese people, but I’ve also heard also non-Japanese are using this Japanese word Kurumaza. You can tell that a great deal of attention is given to encouraging vigorous communication.

Something I see to be a challenge that may be a wider problem not limited to Mitsui could be that diversity between generations is a very difficult issue. Lifestyles, thinking and expectations about the company and work vary depending on the generation. I think it is necessary to devise HR strategy while skillfully taking these onboard. In particular, management is inevitably limited to a specific generation, so I think skillfully taking in the opinions of a wide range of ages in this context is vital and an important issue.

Moderator : When the Q&A session was conducted in the external director panel discussion at last year’s investor day, former external director Kobayashi raised the diversity issue by commenting, “although Mitsui has many talented female employees and non-Japanese employees, they have unfortunately not risen to the level of top management on the executive side, and I would like to see us put in more effort”.
I would like to hear from President Hori about what kind of progress there has been with D&I in Mitsui since last year’s Investor Day.

Hori : I have received a very high level of support and guidance about the progress of D&I from the company’s external directors including former Director Kobayashi. Everyone in the management team is facing the same direction, and we would like to steadily accumulate results by addressing each case one by one.
Over the past year, particular progress has been made with mentoring of female executive candidates by members of the Corporate Management Committee. This activity has paid off very well, and a total of over twenty individuals are now in the program. Nine of them are serving as general managers. Also, this year marked the first time a female who joined the company as a new graduate became a managing officer. Although there has been a certain degree of progress such as this, we would like to carefully take action to further broaden and deepen the talent pool.
At Mitsui, the accomplishments of global employees have historically involved employees hired in Japan being transferred to be stationed overseas in many cases. However, there has now been an actual increase in cases where people hired in a variety of countries worldwide go to other countries as experts and representatives. This is now being institutionalized as well. This energizes the company as a whole, and leads to a common belief among all members of the company to create such a diverse team. We will proceed to spread specific examples of this. Furthermore, there have also been cases in which executives have been transferred from group companies to the parent company in both domestic and overseas companies.
We would like to deliberately pick up such cases, expand the HR pipeline and proceed with D&I from a larger perspective in Mitsui.

Moderator : Since this year’s General Meeting of Shareholders, Ms. Ishiguro, Ms. Casanova and Ms. Tan have been appointed as new external directors, increasing the ratio of female and non-Japanese directors of the Board of Directors. I would like to hear comments from Director Uchiyamada, who chairs the Nomination Committee, about his views on how D&I in the Board of Directors contributes to management.

Uchiyamada : At present, there are six external directors, including four women and two men. In addition, the five external directors other than myself are non-Japanese or people who have experience living or working overseas, and I am the only one who is completely local, so to speak. Something that has immediately changed since June is that everyone stands around talking before a meeting of the Board of Directors, and this is now mainly conducted in English, which is difficult for me. Jokes aside, I feel that the breadth of discussion has expanded due to the increase in diversity of external directors in meetings of the Board of Directors since June. For example, I think there have been exchanges of diverse opinions in a variety of discussions such as sustainability, future portfolio reconfiguration, utilization of HR and further participation by female and non-Japanese employees.

Increasing diversity is something the Nomination Committee has been asking the executive side to implement. We have started by actively increasing diversity of external directors, but we think it will also be necessary to expand this to internal directors in future.

Moderator : Ms. Tamai, acceleration of the promotion of women has been raised as a recent D&I issue, but what are your thoughts about the kind of initiatives required to create a workplace enabling active participation by women?

Tamai : I think there are two points with respect to establishing a workplace environment. The first is ensuring an environment without unnecessary stress. In particular, I think women who work while raising children are required to fully utilize limited time to produce results in their work.

Regarding this point, Mitsui has established a very large number of various systems and institutions, so I think it is just a matter of operation and awareness. I think it is important to create a virtuous cycle in which employees feel good utilizing the systems and this leading to the improvement of performance.

Another point is a positive one regarding the company providing employees with opportunities for feeling fulfillment and growth within the work they actually do is also very important.

Moderator : Next, I would like ask CHRO Takemasu some questions. Mitsui has currently established a variety of HR measures based on its HR strategy. How much do you think their operation has permeated through the company? Also, what is your view of employees’ awareness and understanding of the various measures?

Takemasu : Mitsui is planning a major revision of the HR system next year. I think many people are cautious or feel concern about significant changes. To address this, the Human Resources & General Affairs Division is already playing a central role by providing a considerable number of employee briefings. Steps are being taken in a variety of ways in the form of townhall meetings in an effort to ensure understanding of the intent of the systems through interactive communication with employees. Meanwhile, tone at the top (management’s stance toward employees) is also very important. President Hori has already given several messages on revising the HR system. We intend to continue such detailed approaches in future. In addition, we also believe that line managers and managerial personnel on the business frontline are the key to spreading new systems throughout the business frontline, and would also like to make sincere efforts to provide training to such people. Revisions to the HR system will provide employees with a wider range of career options. Meanwhile, the company expects that each employee will accumulate work with higher added value through the revised system, and that there will be a shift in work style itself to more productive work as an organization.

I would also like to comment on human capital. Displaying the full potential of human capital is up to employees themselves. For this reason, I think improving employee engagement is more important than ever before. Human capital itself also basically belongs to employees, and by no means unconditionally belongs to the company. Therefore, I think the company must do its best to engage in improving retention of employees.

As human resource mobilization and globalization progress more and more, Mitsui must establish a more appealing workplace environment to attract human resources. We would like to implement the revision of HR systems with this in mind.

Moderator : Finally, I would like to hear some comments from President Hori. How have Mitsui’s HR and D&I initiatives led to the enhancement of corporate value? Also, could you tell us about what you would like to further emphasize in future?

Hori : Mitsui provides solutions to a variety of social issues, and we call these real solutions. This is a model that does not work unless Mitsui’s teams providing solutions can have realistic ideas.

The most important thing is having a professional background, but it is important to have diversity and for people within the team to complement each other. I think our source of strength is in building diverse groups enabling various ideas regardless of race, gender, nationality or age. I believe that naturally working within a diverse group with respect for each other is Mitsui’s style of inclusion. For example, a wide range of solutions cannot be found without the perspectives of both economically developed regions and markets referred to as the global south. In this respect, I think it is important to combine people with experiences in various countries. Creating a dynamic team and ensuring it fully functions will become increasingly important for the creation of added value for Mitsui.

I think D&I initiatives are a source of corporate value. I would like to strengthen this point based on the policies and measures that today’s panelists have spoken about.

I have a question for Mr. Takemasu. There has been a lot of qualitative talk so far, but I would like to ask about quantitative aspects.
I believe Mitsui conducts an engagement survey, but have you seen an increase in engagement through various measures? Please tell us if there are any points that are issues within Mitsui as items causing particularly low employee satisfaction.

Takemasu : The results of the Mitsui engagement survey are directly connected to the evaluation of line managers. However, because the items checked in the survey have a very wide scope, we should avoid overreacting to the results. Particular emphasis is placed on how scores change year on year, and this impacts the evaluation of managerial personnel and line managers.
Furthermore, when appointing personnel with important responsibilities requiring submission to the Corporate Management Committee, the results of multifaceted evaluation are sent to all members of the Corporate Management Committee as very important reference materials to obtain approval for the personnel proposal.
It is actually difficult to briefly sum up the improvement of engagement that you asked about. The reason for this is that Mitsui engagement survey scores have very strong regional characteristics. Firstly, there are differences between Japan and overseas. Furthermore, there are also significant differences between the West and Asia, for example, including conditions.

If your question is intended to be about results within Japan, overall scores in the Mitsui engagement survey have risen slightly in the main scores over the past three years. However, our biggest challenge is next year’s score. This is because we are planning a major revision of personnel system next year.
I think this will have an impact on the engagement score unless the personnel understand the intent and the new systems permeate throughout the company, so we are focusing measures to ensure they are understood by all personnel.

I have questions for Mr. Takemasu and Ms. Tamai. Looking at the current human capital report, the overall turnover rate is 1.41 percent on a standalone basis. Do you assess this number to be unavoidable or do you think there is still room to lower it further?
Also, looking by gender, it is 1.79 percent for women and 1.25 percent for men, with women having a higher turnover rate, and this has continued for the past five years. Could you please describe your awareness of this issue?

Takemasu : I share exactly the same understanding and concern on this. Specifically, regarding the turnover rate and voluntary resignation rate of women. Mitsui has established the promotion of women as a vey important management goal and management issue. The percentage of women among new graduate hires is now approaching 40 percent.
On the other hand, unless we carefully look at the reasons behind female employees leaving Mitsui, I don’t think we will be able to eventually increase the number and percentage of women promoted to managerial positions. At Mitsui, the Human Resources & General Affairs Division conducts interviews to all employees voluntarily resigning in the form of so-called exit interviews.
Something we have learned through these interviews is that the reason for women resigning is not only the work, but also involves the work style mentioned earlier. I think there have been several cases in the past where departures could have been avoided if Mitsui’s working environment was a little more evolved.
Therefore, I think that the turnover rate is a very important indicator, and we are continuing discussions in the Corporate Management Committee about measures to lower it as much as possible.

Tamai : Something I can add is related to something I briefly mentioned earlier. I think additions need to be properly made to areas that are lacking in systems and mechanisms.
Also, something I have seen in a variety of places not limited to Mitsui is situations where a little support or approach from a superior, or colleagues providing cover to get through when a women is considering her future at the company leads to subsequent stability.
I think people’s awareness and communication are quite important for preventing turnover, and I occasionally make comments on this within the company. I would like to monitor the turnover rate going forward from this perspective.

I think the Ito Report on Human Capital Management 2.0 that has been talked about since it was published by the Ministry of Economy, Trade and Industry also brings up the issue of how companies endeavor to evaluate initiatives while understanding the actual return on investment.
Therefore, I think the kinds of KPIs set as the results of human capital investment are also necessary for accumulating a track record.
For example, I think it is possible to have a variety of viewpoints such as what kind of perspectives should be considered to set targeted KPIs and ascertain results, how to produce advantages across comparisons within an industry, and how to reliably produce numbers as results among listed companies as a company representing Japan and to aim for a level in which they are reflected in corporate value.
I would like to ask Mr. Hori about what kind of viewpoint has been taken when actually reaping the results as effects since these initiatives were started.

Hori : We also consider a variety of KPIs, but I think something that we need to be careful of is the output of each person and how this is represented in competitiveness and productivity, and I think how we carefully view this is important.
The numbers of employees of group companies are set according to the business models of the group companies. Furthermore, KPIs should be changed because the productivity of people working on a variety of projects in the parent company alone, for example, has qualities that differ from the productivity of other divisions.
Even in the parent company, there are people in charge of trading operations in the case of Mitsui, but the KPIs there differ from the KPIs that professionals providing services overall should face. I think it is necessary to view these by differentiating the specifics.
For this reason, rather than comparing with companies in the same industry or other trading companies, we carefully monitor and consider benchmarks for each industry in which we work, functionality and overall profitability of the parent company, and how much leverage of operations on the size of assets under management applies when assets are increased.
Of course, this is quite a complex mechanism, and this is what we look at as management. At present we are paying attention to the things I just mentioned because using a per capita format is too haphazard and the overall picture cannot be seen. Because this is a very important theme, I would like to continue to address it though engagement in a variety of ways.

I have a question for Mr. Takemasu. You mentioned that significant changes will be made to HR system next year. The details of the system have been announced, and the main point is stated to be the elimination of the differentiation between business staff and administrative staff. This alone does not convey why it is necessary to go to such lengths just to have understanding among employees and engagement with them.
When viewed from the outside, it appears that Mitsui’s HR system including personnel have functioned quite well until now. You explained that some employees are not yet convinced about conducting major reforms despite this, and that you are in the process of convincing them.
What are you trying to change by going to such extent with the HR system next year? I think you probably have things in mind beyond what has been stated in the release, so I would like you to explain this.

Takemasu : It’s difficult to say more than what is written in the release, but if you feel that I maybe exaggerating a little, it may be because I think the system revisions will have a significant impact on the company’s overall engagement score next year. The reason for this is that it will require a transformation of employees’ awareness.
As you mentioned, Mitsui categorizes career-track positions into business staff and administrative staff. The category referred to as administrative staff does not have a path to managerial positions, and transfers are limited. This has been carried over from the so-called clerical positions that existed long before the Equal Employment Opportunity Act was passed.
However, although the categories of business staff and administrative staff remain in Mitsui’s case, we have actively promoted position transfers in which motivated administrative staff make the transition to becoming business staff, and lowered the barriers between both in a variety of ways.
However, these categories remaining has actually been a bottleneck not only on the administrative staff side but also for awareness on the business staff side. The reason this is a problem is that it is a bottleneck for improving productivity as a company.
Many of the people we refer to as administrative staff already handle business processes at a very high level. Because Mitsui is a trading company, trading business is very important. Many of the people playing central roles in the business processes for this trading business are administrative staff.
I am certain that productivity of the company as a whole can be significantly increased by leveraging the experience of these people more and further drawing upon their skills. It is my view that the system revisions are for this purpose.

I have a question for Mr. Uchiyamada. Around four years have passed since you were appointed as an external director in 2019. From the outside, it appears that discussions on whether or not to give the go-sign for investments, particularly at the Board of Directors level, has changed markedly now compared when you were initially appointed in terms of the number of investments and the level of discussion.
I would like to hear any thoughts or stories you may have regarding discussions over investments when you were first appointed compared to now.

Uchiyamada : Given the type of company Mitsui is, the number of investments account for quite a large number of topics discussed on the Board of Directors. Of course, due to the very large number, we have actually revised the criteria for submission to the board, and separated these into cases that must undergo concentrated discussion by the Board of Directors and those that can be executed by the Corporate Management Committee. The latter do not go completely unchecked, and we receive reports at fixed intervals on what kind of investments they are and the results of investment.
Also, by revising the criteria for submission, the Board of Directors is now able to take time to discuss larger investments from a variety of angles, and the time spent to discuss each investment has actually increased. In addition, briefings are always provided in advance to inform members, in order to enable discussions during the limited time in meetings of the Board of Directors.
In particular, external directors are not involved with each case on a day-to-day basis. However, we spend a lot of time studying each case because we must work with internal directors to pass resolutions in meetings of the Board of Directors.
Furthermore, individual cases cannot be understood without understanding the larger strategy, and at present we are particularly asking the executive side to explain the company’s overall portfolio strategy and the strategy of each business unit in order to improve our background for addressing each case.