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ANNUAL REPORT 2011

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DISCOVERING OUR POTENTIAL
Sustainability

CORPORATE GOVERNANCE

BASIC POLICY

MC's corporate philosophy is enshrined in the Three Corporate Principles—Corporate Responsibility to Society, Integrity and Fairness, and Global Understanding Through Business. Through corporate activities rooted in the principles of fairness and integrity, MC strives to continuously raise corporate value. MC believes that by helping to enrich society, both materially and spiritually, it will also meet the expectations of shareholders, customers and all other stakeholders.

In order to ensure sound, transparent and efficient management, MC is working to put in place a corporate governance system, based on the Corporate Auditor System, that is even more effective. This includes strengthening management supervision by appointing independent directors and independent corporate auditors, and using the executive officer system to expedite and bolster decision-making and business execution.

Board of Directors

MC's Board of Directors has 13 members, including 5 outside directors. Outside directors represent more than one-third of all directors. Board meetings are also attended by the 5 corporate auditors, 3 of whom are outside corporate auditors.

As a rule, the Board convenes once a month and is responsible for making decisions concerning important management issues and overseeing business execution. The objective and expert viewpoints of outside directors and outside corporate auditors ensure appropriate decision-making and management oversight.

Board of Directors' Advisory Bodies

MC also has a Governance & Compensation Committee and an International Advisory Committee as advisory bodies to the Board of Directors. These committees are made up mostly of outside directors and outside corporate auditors as well as other experts from outside MC. The Governance & Compensation Committee conducts continuous reviews of corporate governance-related issues at MC and also discusses the remuneration system for directors and corporate auditors, including the policy for setting remuneration and appropriateness of remuneration levels for these corporate officers, and monitors operation of this system. The International Advisory Committee holds discussions on management issues and advises MC management from a global perspective.

Business Execution

The president, as the Company's Chief Executive Officer, manages the Company's business through the Executive Committee, a decision-making body of executive officers. Important management issues are first determined by the Executive Committee, which meets around twice a month, and then referred to the Board of Directors for deliberation and final determination.

Furthermore, in order to clarify the functions and responsibilities of officers for executing duties, we introduced the executive officer system, thereby promoting faster and more efficient business execution.

CORPORATE GOVERNANCE FRAMEWORK (As of June 24, 2011)

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