The Mitsui Fudosan Group believes that ensuring sound, transparent and efficient management is of great significance for earning the trust of all stakeholders.
From that perspective, we have been striving to build an optimal corporate governance framework. As a part of such efforts, we have also been addressing the strengthening of internal control.
Mitsui Fudosan has introduced its Corporate Officer System with the aim of creating a business execution framework that best suits its operating environment and activities. By promoting the separation and reinforcement of the management and executive functions, the system enhances management soundness and efficiency. In addition, seeking to further reinforce the management of the Mitsui Fudosan Group, we have also introduced our Group Corporate Officer system, under which executives at Group companies have been given a status and mission similar to those of the corporate officers of Mitsui Fudosan.
Outside directors are invited and elected under the objective of reinforcing the supervisory function of the directors as well as the transparency of management. Outside directors deliver their opinions concerning the rationality and validity of the company's decision-making as necessary.
We have also established the Advisory Committee, consisting of experts from business and academia, to receive comprehensive and insightful advice from an impartial standpoint, thus offering more diverse perspectives to management. In fiscal 2010, the Committee convened twice, and instructive advice was received from the respective Committee members.
Important matters related to business execution are deliberated and reported at the weekly meeting of the Executive Management Committee, consisting of executive managing directors and executive corporate officers. To keep abreast of important decision-making processes and the status of business execution, full-time corporate auditors also attend the meetings of the Executive Management Committee and provide opinions as necessary. In addition to this, the Executive Management Committee also supervises and manages internal control and risk management items.
Further, special committees have been established as advisory panels and operational coordination panels for the Executive Management Committee such as the Strategy Planning Special Committee, the Risk Management Special Committee, the Social Philanthropic Committee and the Environmental Committee. The Strategy Planning Special Committee formulates and deliberates group strategy and the management plan and engages in risk management of Mitsui Fudosan and the Mitsui Fudosan Group in collaboration with the Risk Management Special Committee.
Discussions to strengthen approaches are being held both in the Social Philanthropic Committee and in the Environmental Committee under the objective of promoting social philanthropic and environmental activities based on Mitsui Fudosan Group's perspective on CSR.
Corporate Governance Organization (From April, 2010)
Number of Directors and Auditors (as of April 2012)
- Directors : 13, including 4 outside directors (*1)
- Corporate Auditors : 5, including 3 outside auditors (*1)
(*1) We have submitted notices on 7 outside directors/auditors to the Tokyo Stock Exchange as our independent directors/auditors.
The Board of Directors, which consists of thirteen members (including four directors from outside the Company), makes decisions on material issues of Mitsui Fudosan and monitors the business execution status of directors. Board meetings are attended by corporate auditors, who provide opinions as necessary.
Mitsui Fudosan introduced the Corporate Auditor System. The Board of Corporate Auditors has five members, including three from outside the Company. The Board formulates auditing policies and determines the responsibilities of each Board member. It also receives reports and discusses material items on audits conducted according to such policies and responsibilities.
The corporate auditors cooperate with and receive periodic reports from the Audit Department, which is responsible for internal audits of the Company, and the Company's Certified Public Accountant, realizing mutual collaboration. Furthermore, the Corporate Auditors Department has been assisting the corporate auditors' duties.
At Mitsui Fudosan Group, setup and management of systems an internal control system in compliance with the Companies Act is performed. We formulated the “Basic Policy for Establishing a System to Ensure Appropriate Business Practices of Joint Stock Corporations (Internal Control System)” in October 2006 that ensures the adequacy of businesses including execution of business according to laws and regulations and the Company's Articles of Incorporation. The outline of the Policy is as follows.
- System to ensure that execution of business by directors and employees conforms to laws and regulations and the Company's Articles of Incorporation
The Company is working to prevent violations of laws and regulations and its Articles of Incorporation in various ways, such as through the formulation of Compliance Rules and other internal rules, and by establishing the Risk Management Special Committee. The Company also set up an Internal Consultation System to foster compliance among employees.
- System related to storage and management of information concerning the execution of business by directors
All information is appropriately stored and managed according to internal rules, including Archives and Documents Rules and Information Management Rules.
- Regulations and other frameworks related to risk management of losses
Based on Risk Management Regulations and other internal rules, the Executive Management Committee supervises and controls risk management items concerning the entire company or the Mitsui Fudosan Group. It heads two committees charged with uncovering and comprehending risk issues and devising solutions for them - the Strategy Planning Special Committee, which handles business risk, and the Risk Management Special Committee, which is responsible for management of administrative risk. In addition, the Crisis Management Subcommittee, which reports to the Risk Management Special Committee, was established to grasp the magnitude of accidents and other crises, and to formulate responses and policies as necessary.
- System to ensure appropriate business practices by the Mitsui Fudosan Group (consisting of the parent company, subsidiaries, and affiliated companies)
The Mitsui Fudosan Group Compliance Policies have been formulated as behavioral guidelines for executives and employees of the Group. For operational control of Group companies by the parent company Mitsui Fudosan, a set of Subsidiaries and Affiliates Administration Rules has been devised, enabling important risk issues to be managed via approvals and monitoring of Mitsui Fudosan. In addition, Internal Consulting Systems have been set up in each Group company to provide advice related to compliance.
The Audit Department proposes audit activity plans to test the effectiveness of risk management and internal control of the Company from the perspective of the entire Mitsui Fudosan Group to evaluate and improve it, and performs internal audits with the approval of the Executive Management Committee.
Results of the internal audits are reported to the officers in charge, feedback is given to the relevant department and follow ups of the improvement progress are made. Furthermore, audit activity is reported every six months to the Executive Management Committees, Board of Directors meetings, and Board of Corporate Auditors meetings, and information is shared and collaboration is realized with the auditors.
Based on the Financial Instruments and Exchange Law, at the end of every period Mitsui Fudosan evaluates internal control related to the current Mitsui Fudosan Group financial report, submits the Internal Control Report, and releases it publically. Results of this Internal Control Report received an internal control audit from KPMG AZSA LLC, and were deemed appropriate.