Audit & Supervisory Board/Audit & Supervisory Committee
Since June 21 2024, MC transtioned to a Company with an Audit & Supervisory Committee. Therefore, the status of activities in FY2023 (ended March 31, 2024) is based on the status of a company with an Audit & Supervisory Board prior to the transition.
The Audit & Supervisory Committee comprises all of the Audit & Supervisory Committee Members responsible for auditing the decision-making processes and management performance of Directors in compliance with the Companies Act and other laws and regulations as well as Mitsubishi Corporation (MC)’s Articles of Incorporation and internal rules and regulations.
In-house Audit & Supervisory Committee Members and Independent Audit & Supervisory Committee Members ensure the soundness of the management by executing audits informed by abundant working experience at MC and by experience in their particular fields as well as a neutral and objective perspective, respectively. In addition to making resolutions on matters required by law and other important issues, the Audit & Supervisory Committee strives to enhance information-sharing among the Members through briefings on key matters and reporting on the status of the auditing activities of each of the Members.
Structure of the Audit & Supervisory Committee
Please check the link below for data on Structure of the Audit & Supervisory Committee.
Percentage of Independent Audit & Supervisory Committee Members among Total Audit & Supervisory Board Members*
＜The following description relates to the status of activities in FY 2023, so it is based on a company with an Audit & Supervisory Borad before the transition to an Audit & Supervisory Committee.＞
Audit Plans
Prior to each fiscal year, the Audit & Supervisory Board formulates audit plans with key areas. In FY2023 (ended March 31, 2024), the following three key audit areas were selected for the monitoring of specific progress in management and execution.
1. Following-up Execution Status of Midterm Corporate Strategy 2024:
- Progress of growth strategy implementation
- Effects and issues of business management system
- Progress of human resources and sustainability measures
- Operation status of new department
2. Enhancing MC Group Risk Management:
- Personnel structure on the execution side for risk management on a consolidated basis.
- Efforts to strengthen IT infrastructure and information security systems
- Status of three-way audits at consolidated companies
3. Initiatives to Strengthen Group Corporate Governance:
- Status of discussions regarding our company's governance
- Further enhancement of deliberations at the Board of Directors
Audits of Management Performance
1. Dialogue with Executive Officers
Opportunities were created for all Audit & Supervisory Board Members, including the Independent Audit & Supervisory Board Members, to engage in dialogues with the Chairman of the Board, President and CEO, Senior Executive Vice President, Corporate Functional Officers, Business Group Heads/CEOs, Business Division COOs, General Managers of Administrative Departments, General Manager of Internal Audit Department, General Manager of the Corporate Strategy & Planning Department and General Managers of the Corporate Staff Section.
2. Attendance at Important Meetings
Besides the Audit & Supervisory Board, Full-time Audit & Supervisory Board Members attended meetings of major internal management bodies, including Board of Directors; Governance, Nomination and Compensation Committee; Executive Committee and Business Strategy Committee; and provided opinions as necessary. Besides the Audit & Supervisory Board, the Independent Audit & Supervisory Board Members attended meetings of the Board of Directors after being briefed on discussions in the Executive Committee and lower conference bodies, and provided opinions as necessary.
3. On-site Audits and Observations
Audit & Supervisory Board Members proactively conducted on-site audits and visits of overseas and domestic MC Group companies in an effort to grasp the local circumstances. In selecting the locations of the on-site audits and visits for the Audit & Supervisory Board Members, besides quantitative aspects such as investment amount and net income, qualitative aspects such as the business environment and compliance cases were also taken into account.
In FY2023 (ended March 31, 2024),the Audit & Supervisory Board Members met with the CEOs and executive officers of 12 MC Group companies in three locations overseas and 16 domestic MC Group companies, as well as the regional cheifs of 7 overseas and domestic offices. The Audit & Supervisory Board Members reported on the results of their on-site audits to the Chairman of the Board, the President and CEO, and the relevant executive officers.
At least one Independent Audit & Supervisory Board Member participated in on-site audits and visits with 6 companies in 2 countries overseas and 8 domestic MC Group companies, as well as 2 overseas and domestic offices.
4. Reinforcement of Group Corporate Governance
In addition to dialogues with the CEOs and other executive officers of the MC Group companies, opportunities were arranged for the exchange of information every quarter with the Audit & Supervisory Board Members of 34 major MC Group companies in Japan. The Audit & Supervisory Board Members of the MC Group companies also arranged subcommittees to provide opportunities to share information and exchange opinions. We also provided assistance in training for those who would be assigned to the MC Group companies as full-time Audit & Supervisory Board Members. We will continue working to strengthen the Group corporate governance through regular monitoring.
Enhancing the Effectiveness and Auditing Activities of the Audit & Supervisory Board (Members)
MC conducted annual evaluations of the Board of Directors in order to make continuous improvements to the effectiveness of its corporate governance. The Audit & Supervisory Board (Members) focused on the following matters, referring to the issues reviewed in the effectiveness evaluation.
1. Strengthening collaboration among the Independent Directors and Audit & Supervisory Board Members
For matters to be submitted for approval or reported to the Board of Directors, preliminary briefings were held for the Independent Directors and Independent Audit & Supervisory Board Members by management on the executive side prior to deliberation by the Board of Directors. For the Audit & Supervisory Board, in addition to these preliminary briefings, members also received explanations from the Audit & Supervisory Board Member's Office staff related to Board of Directors matters of especially high importance as well as matters that were not quantitatively applicable to the Board of Directors but that were still qualitatively important. The Audit & Supervisory Board Members then exchanged their opinions and awareness.
2. Enhancing the provision of Information to the Independent Directors and Audit & Supervisory Board Members through various dialogues hosted by the Audit & Supervisory Board Member's office
As an activity of the Audit & Supervisory Board Members, MC has traditionally provided opportunities for discussion between all Audit & Supervisory Board Members and management executives such as the Chairman of the Board, President and CEO, Senior Executive Vice President, Corporate Functional Officers and Group CEOs. As in the previous fiscal year, Independent Directors also actively participated in them in FY2023 (ended March 31, 2024). In addition, since FY2020, we have incorporated Business Reports from senior management, which used to be held at meetings of the Board of Directors, into this dialogue, allowing sufficient time for the provision of information, including questions and answers. Independent Audit & Supervisory Board Members also participated in dialogues with the Division Chief Operating Officer to ensure opportunities to hear the opinions of employees on the ground.
3. Enhancing the Effectiveness of the Audit & Supervisory Board and Its Members
To increase the effectiveness of the audits performed by the Audit & Supervisory Board Members, in FY2023 (ended March 31, 2024), continuing initiatives implemented in the previous fiscal year, we further enhanced the reviews of the activities of the Audit & Supervisory Board. Specifically, as in previous years, the Audit & Supervisory Board held mid-year and year-end reviews of audit progress, focusing mainly on key audit areas. In addition, the Audit & Supervisory Board carried out an evaluation of its effectiveness, mainly through a survey of its members and hearing about the survey results. The Audit & Supervisory Board discussed the findings of this evaluation in order to review its auditing methods and deliberate matters to be followed up in the audit activities for coming fiscal year. The evaluation found that the audits performed by the Audit & Supervisory Board functioned adequately as well as effectively, and that it will continue to bolster its effectiveness going forward by working to enhance operations in such areas as efficiently setting up dialogues.
Enhancement of Tripartite Audits
Audit & Supervisory Board Members strived to further strengthen cooperation with Independent Auditors and the Internal Audit Department in order to assess the Company's situation with the aim of improving the effectiveness of audits.
1. Collaboration with Independent Auditors / Evaluation of Independent Auditors
We worked with Independent Auditors through their outline briefings on accounting audit plans, audit reports for quarterly results and monthly meetings. We also exchanged opinions with the Independent Auditors of MC Group companies in Japan and overseas.
With regard to performance evaluations of Independent Auditors, we kept track of evaluation data during the fiscal year from regular audit reports and other sources, and held an Independent Auditor evaluation conference at the end of FY2023 (ended March 31, 2024). As a result, we had concluded that the current Independent Auditors performed appropriate audits in a professional manner, and accordingly, the Audit & Supervisory Board resolved to reappoint the Independent Auditors.
2. Collaboration with the Internal Audit Department
The Internal Audit Department and Full-time Audit & Supervisory Board Members held monthly meetings where exchange of opinions are made concerning reports on internal audit results. Also at Audit & Supervisory Board meetings, the Internal Audit Department shared their quarterly audit results.
In addition, Audit & Supervisory Board Members attended the internal auditor liaison meetings of 45 major MC Group companies in Japan held by the Internal Audit Department, while the General Manager of the Internal Audit Department attended liaison meetings held by MC’s Audit & Supervisory Board Members with the Audit & Supervisory Board Members of the MC Group companies mentioned above, and all parties collected audit information and exchanged opinions.