Governance: Board of Directors and Shares, etc.

Since the 2000s, MC has advanced corporate governance reforms in line with its policies. To enable management and business execution that anticipate change and drive growth through transformation and reinforcement, MC has continuously focused on enhancing corporate value through thorough deliberation and effective oversight by the Board of Directors.

In June 2024, MC transitioned to a Company with an Audit & Supervisory Committee, aiming to accelerate decision-making through the delegation of authority. This shift also strengthens the Board’s monitoring function by deepening discussions on management policies and strategies, further enhancing our ability to respond swiftly to rapid changes in the external environment.

The Board of Directors deliberates on important management issues and supervises business execution through reports on major items such as Corporate Strategy, the business strategy of various Business Groups, and related matters. In addition, matters requiring resolution in accordance with laws and regulations, as well as loan and investment proposals exceeding a monetary threshold standard set by the Company, are deliberated and resolved not only with consideration not only for economic aspects, but also with a strong focus on sustainability perspectives. MC has also established appropriate internal control systems, review their effectiveness annually, and endeavor to continuously improve and strengthen them.
Business execution outside these matters requiring Board resolution is delegated to Executive Officers. The President serves as Chief Executive Officer, responsible for overall business execution, while the Executive Committee (which meets twice per month) functions as a key management decision-making body.

The Composition of the Board of Directors can be found at the link below.

The Board of Directors deliberates on important management issues and supervises business execution through reports on major items in Midterm Corporate Strategy 2024, business strategy of Business Groups, and related matters.
The results of deliberations for FY2024 are as follows.

(notes)
Percentage of Independent Outside Directors on the Corporate Governance and Nomination Committee: 70% (7/10)

To enhance the objectivity and transparency of the policy and amounts for the remuneration of Directors and Executive Officers—determined by the Board of Directors—and to ensure fairness throughout the decision-making process, the Compensation Committee deliberates and monitors the following matters.

Takehiko Kakiuchi^* (Chairman of the Board)
Katsuya Nakanishi (Director, President and Chief Executive Officer)
Kotaro Tsukamoto (Director, Senior Executive Vice President)
Tsuneyoshi Tatsuoka (Independent Director)

To ensure that Directors (excluding those who are Audit & Supervisory Committee Members) and Directors who are Audit & Supervisory Committee Members can adequately perform their monitoring and audit functions, the Board of Directors’ Office and the Audit & Supervisory Committee’s Office (herein collectively referred to as the “Support Offices”) have been established. These offices, appropriately and timely provide necessary information and support to enable Directors to fulfill their duties effectively.
For Independent Directors, the Support Offices implement the following measures to facilitate active participation in discussions and strengthen the Board’s monitoring function.

Prior to each Board meeting, executives from the Corporate Staff Section and Business Groups provide explanatory summaries of agenda items to Independent Directors. These sessions also serve to share information that enhances deliberations.

Regular meetings are held to provide a forum for open discussion among Independent Directors on a wide range of topics.

To deepen understanding of MC’s diverse businesses, Independent Directors visit subsidiary and affiliate sites annually and hold discussions with their management teams.

Based on thePolicy of Corporate Governance, MC continuously works to strengthen its governance and fully implements all principles of Japan’s Corporate Governance Code.
(For more information, please refer to the Corporate Governance Report on MC’s website.)

MC may hold shares acquired for purposes other than pure investment as a means of creating business opportunities and building, maintaining, and strengthening business and partner relationships. When acquiring such shares, MC confirms the necessity of the acquisition based on its economic rationale in accordance with internal rules. MC also conducts an annual review of the rationality for continuing to hold these shares with the Board of Directors and aims to reduce holdings that have lost significance. In the Fiscal Year ended March 31, 2025, MC sold approximately 54.9 billion yen of its shareholdings (including 14.1 billion yen in deemed holding shares), a decrease of approximately 10% from the previous fiscal year.

The Board of Directors reviews all listed shares held by MC from the perspectives of both economic rationale and qualitative reason of continuing to hold them.
The economic rationale is confirmed by whether related earnings, such as dividends and business profits from transactions, exceed MC’s target capital cost relative to the market price of each share.
The qualitative reason is confirmed by the achievement or progress toward the expected purpose for holding the share.

The Board of Directors for all listed shares held by MC as of March 31, 2025. Based on verification from both economic and qualitative perspectives, several shares were identified as candidates for reduction due to diminished significance of their original purpose and other factors.

MC places great importance on dialogue and communication with its investee companies to create business opportunities, strengthen partnerships, and enhance corporate value for both MC and these companies. Exercising voting rights is considered one of the most critical tools for such engagement. When voting on proposals related to investee companies, including listed shares acquired for purposes other than pure investment, the responsible department reviews business conditions (e.g., earnings, capital efficiency, etc.) from both quantitative and qualitative perspectives in accordance with internal rules. These rules outline considerations for decisions on proposals such as appropriation of surplus, election of Directors and Audit & Supervisory Board Members, and revisions to executive remuneration. Furthermore, for proposals concerning the election or dismissal of Independent Directors and Independent Audit & Supervisory Board Members of listed subsidiaries, MC’s internal rules require an assessment of their independence from MC before voting.

To leverage personnel with market and investment experience, individuals responsible for pension management are appointed from MC’s Finance Department and concurrently serve as employees of the Mitsubishi Corporation Pension Fund. The fund drafts and issues policies and management guidelines for safe and efficient reserve management to contracted institutions, which are then continuously monitored. As part of its autonomous allocation responsibilities, the fund has adopted Japan’s Stewardship Code and requires entrusted institutions to carry out stewardship activities.

For the appointment of the President and CEO, the Corporate Governance and Nomination Committee—where Independent Directors form a majority (7 out of 10 Committee Members)—deliberates and reviews the requirements for the role, the appointment policy, and potential candidates. The Committee then submits its recommendation to the Board of Directors, which makes the final decision. The Board also deliberates and determines the appointment of Executive Officers and their respective responsibilities.
For Directors who are Audit & Supervisory Committee Members, the President and CEO, in consultation with Full-Time Audit & Supervisory Committee Members and based on the appointment policy, prepares a proposal for candidates. After deliberation by the Corporate Governance and Nomination Committee and with the consent of the Audit & Supervisory Committee, the proposal is resolved by the Board of Directors and submitted to the General Meeting of Shareholders.

Since Former President Kakiuchi assumed office in April 2016, the Governance, Nomination & Compensation Committee, an advisory body to the Board, implemented a thorough succession planning process, including discussions on the requirements for the President role. Independent Directors, Independent Audit & Supervisory Board Members, and successor candidates engaged in ongoing dialogue outside of formal committee meetings. This process ultimately led to the selection of President Nakanishi.

MC may appoint retired executives (e.g. former President and CEO) as Corporate Advisors when necessary. Currently, Ken Kobayashi serves as the sole Corporate Advisor. The role does not include serving as a Director, participating in internal management meetings, or involvement in the Company’s decision-making process. The Corporate Advisor primarily engages in external activities of high social significance at the Company’s request.
Effective July 2020, the Corporate Advisor performs duties on a part-time basis and receives no remuneration.

Under MC’s Policy on Stakeholders Engagement, in addition to the Ordinary General Meeting of Shareholders, MC organizes various informational meetings and interactive forums to actively engage in dialogue with shareholders and investors. These efforts aim to deepen understanding of MC’s corporate philosophy, principles, fundamental management policies, targets, and strategies.