The Mitsui Fudosan Group takes a standpoint of sound, transparent and efficient management in the aim of building optimum corporate governance to earn the trust of all stakeholders.
Corporate Governance Structure
Mitsui Fudosan has both a Board of Directors and a Board of Corporate Auditors and has also established a Compensation Advisory Committee and Nomination Advisory Committee to enhance transparency regarding compensation for managing directors and nomination of managing directors and corporate auditors. It has also adopted a corporate officer system to enhance the soundness and efficiency of management by separating and strengthening management and executive functions. Mitsui Fudosan also invites and appoints outside directors to strengthen the oversight functions of the directors and enhance management transparency. Further, Mitsui Fudosan has established an Advisory Committee consisting of experts from business and academia to diversify the perspective of management by providing a more comprehensive viewpoint.
I In addition, corporate auditors conduct audits to evaluate the status of business execution by managing directors while coordinating with the Internal Audit Department, which serves as the Company’s internal auditing department, as well as with the certified public accountant.
Moreover, steps have been taken to put in place the Mitsui Fudosan Group Compliance Policies, as well as a structure that will ensure that Group directors and employees engage in business activities in an appropriate manner.
Corporate Governance Structure
(1) Board of Directors
The Board of Directors, headed by Chairman Hiromichi Iwasa and comprising twelve members, including eight internal directors (Hiromichi Iwasa, Masanobu Komoda, Yoshikazu Kitahara, Kiyotaka Fujibayashi, Yasuo Onozawa, Hiroyuki Ishigami, Takashi Yamamoto, and Wataru Hamamoto) and four outside directors (Masako Egawa, Masafumi Nogimori, Tsunehiro Nakayama, and Shinichiro Ito), decides on issues material to Mitsui Fudosan and monitors the execution of business by managing directors. In addition, under Article 373 (1) of the Companies Act, Mitsui Fudosan has designated a special managing director who may pass judgment on the urgent acquisition of assets via bidding, etc., when so empowered by the Board of Directors under Article 362 (4) of the Companies Act. The corporate auditors also attend meetings of the Board of Directors and provide opinions as necessary.
(2) Compensation Advisory Committee
The Compensation Advisory Committee, headed by President and Chief Executive Officer Masanobu Komoda as Chairman and comprising six members, including one internal director (Yasuo Onozawa) and four outside directors (Masako Egawa, Masafumi Nogimori, Tsunehiro Nakayama, and Shinichiro Ito), meets on matters pertaining to the compensation of managing directors.
(3) Nomination Advisory Committee
The Nomination Advisory Committee, headed by President and Chief Executive Officer Masanobu Komoda as Chairman and comprising six members, including one internal director (Yasuo Onozawa) and four outside directors (Masako Egawa, Masafumi Nogimori, Tsunehiro Nakayama, and Shinichiro Ito), meets on matters pertaining to the nomination of managing directors and corporate auditors, as well as the appointment and dismissal of managers.
(4) Board of Corporate Auditors / Corporate Auditor’s Department
The Board of Corporate Auditors, headed by Permanent Auditor Kenji Iino and comprising five corporate auditors, including two internal auditors (Kenji Iino and Masatoshi Sato) and three outside auditors (Yoshitaka Kato, Yasushi Manago, and Yukimi Ozeki), formulates auditing policies and determines assignments. It also receives reports and discusses material items on audits conducted according to these policies and assignments. Note that the Corporate Auditor’s Department has been established specifically to assist the corporate auditors with their work, and each corporate auditor has been assigned two dedicated employees.
(5) Corporate Officer System
Mitsui Fudosan has introduced a 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 a Group corporate officer system, under which executives at Group companies have been given a status and mission similar to those of the corporate officers.
(6) Executive Management Committee
The Executive Management Committee, consisting of executive corporate officers, has been formed to deliberate and report on important matters related to business execution and supervises internal control and risk management. Full-time corporate auditors also attend meetings to stay informed of important decision-making processes and the status of business execution, and provide opinions as necessary.
(7) Financial Auditing
Mitsui Fudosan has concluded an auditing contract with KPMG AZSA LLC as its certified public accountant, which conducts audits. There is no shared interest between the auditor and the Company, nor between employees conducting operations for the auditor and the Company.
Initiatives for Corporate Gavernance
Initiatives for Corporate Governance
Matters to be Resolved by and Reported to the Board of Directors
The following matters shall be resolved by or reported to the Mitsui Fudosan Board of Directors as stipulated by laws and regulations, the Company’s Articles of Incorporation, and company rules such as those regarding the Board of Directors.
- Matters related to shareholders’ meetings
- Matters related to managing directors Prospective managing director candidates The appointment and dismissal of representative directors The appointment and dismissal of executive directors Compensation and bonuses for directors Other important matters
- Matters related to the Company’s structure
- Important matters related to compliance, etc. Formulating a compliance promotion plan for the fiscal year Reporting on the results of compliance promotion activities implemented during the fiscal year Formulating an audit plan for the fiscal year Reporting on audit activities implemented during the fiscal year Evaluating internal controls concerning financial reporting during the fiscal year and formulating audit-related policy (J-SOX activities)
- Important matters related to personnel The appointment and dismissal of corporate officers and executive corporate officers The appointment and dismissal of key employees Compensation and bonuses for corporate officers, etc.
- Important matters related to finance and assets
- Other matters that are especially important in regard to managing the Company or executing duties
Analysis and Assessment of the Effectiveness of the Board of Directors
Each year, the Company analyzes and evaluates the efficacy of the Board of Directors, aiming to further enhance its functions. An overview and results of our evaluation of the Board of Directors’ efficacy are provided below.
- Evaluation method
The Company conducted interviews and free-response questionnaires with all directors and all corporate auditors regarding the Board of Directors’ efficacy. The results of these interviews and questionnaires were then analyzed and evaluated at a Board of Directors meeting held on May 24, 2019.
- Evaluation items
・Board of Directors structure (number of members, ratio of executive to non-executive members, diversity, etc.)
・Status of operation of the Board of Directors (number of meetings held, attendance rates, time spent for deliberation, number of items deliberated, provision of information, questions and answers, etc.)
・Other (issues raised in the previous evaluation of Board of Directors’ efficacy; Compensation Advisory Committee; Nomination Advisory Committee; meetings of outside directors and outside auditors; etc.)
- Evaluation results and future responses
To achieve sustained increases in the Group’s corporate value, it was confirmed that the Board of Directors efficacy was properly maintained. The results of this evaluation will be used to further improve the functioning of the Board of Directors.