Corporate governance framework

Mitsui & Co. has chosen to base its corporate governance framework on a corporate auditor system, headed by the audit & supervisory board. To achieve effective corporate governance for shareholders and other stakeholders, the Company has established the following governing bodies:

1. The Board of Directors is Mitsui & Co.'s ultimate decision-making body for business execution and oversight. To ensure that those functions are fulfilled, Mitsui appoints no more than the number of directors necessary to enable effective deliberations, and conducts an annual assessment of the Board in order to validate its effectiveness and discloses a summary of the results. The company has also established the Governance Committee, Nomination Committee, and Remuneration Committee as advisory bodies to the Board of Directors, with external directors and external audit & supervisory board members serving as members of these committees.
2. The audit & supervisory board members audit the execution of the duties of the Board of Directors as an independent body and report to shareholders. In pursuit of this objective, the audit & supervisory board members carry out multifaceted, effective auditing activities, such as attending important internal meetings and auditing various types of reports, and develop necessary measures in a timely manner.

To ensure transparency and accountability, which are key requirements of corporate governance, we are endeavoring to strengthen management oversight and supervision, taking into account the perspectives of external directors and external audit & supervisory board members. At the same time, the Company is developing its internal control framework with respect to information disclosure, and, based on the general rules of fair disclosure, executives and employees are responsible for ensuring accountability. Furthermore, to separate the functions of business execution and oversight, Mitsui has broadly transferred the authority for business execution to the Company's executive officers, and the Board of Directors is responsible for overseeing the execution of business by the executive officers. The chief operating officers of the Company's 16 Headquarters business units and 2 overseas regional business units also serve concurrently as executive officers, supporting a dynamic approach to business execution across Mitsui & Co. global group.

At the time of the General Meeting of Shareholders in June 2022, there were 14 directors, five of whom were external directors (including three female directors, two foreign directors).

We have five audit & supervisory board members, two full-time and three external (including 1 female audit & supervisory board members), and we have established the Audit & Supervisory Board Member Division as a framework to provide added support to the audit & supervisory board members in the execution of their duties. Audit & supervisory board members attend the meetings of the Board of Directors and other important in-house meetings, overseeing procedures and resolutions, and visit offices in and outside Japan and important affiliate companies.

Business execution and internal control system

In the fiscal year ended March, 2012, we adopted the so-called "J-SOX" standards defined in Japan's Financial Instruments and Exchange Act as the basis for the evaluation of our internal control systems. We are determined to maintain highly effective internal control systems that are compliant with the new global standards and in keeping with the values of Mitsui & Co., and to ensure that all employees, including those working for affiliated companies, are fully aware of and comply consistently with the basic principle that "without compliance there will be no work and no company".

At the core of our internal control system, the Corporate Management Committee establishes basic internal control policy and carries out company-wide internal control evaluations and improvements.

Furthermore, to respond to the increasingly diverse kinds of risks associated with our business, we have established the Compliance Committee, which formulates the compliance structure of Mitsui & Co. and maintains and strengthens its effectiveness; the Disclosure Committee, which establishes principles and basic policy for disclosures of the company and conducts individual discussions on important disclosures; J-SOX Committee, which formulates the structure to secure trustworthiness of the company's financial reporting and maintains and strengthens its effectiveness; the Portfolio Management Committee, which establishes the corporate portfolio strategy as well as investment and finance policies, monitors the company's entire portfolio, and examine important individual proposals; the Crisis Response Headquarters, an ad-hoc body reporting directly to the president, which exercises swift, precise decision-making when there is a need for a swift response; the Sustainability Committee, which promotes the sustainability management at the company related to company's sustainability and environmental, social and governance (ESG) issues; the Information Strategy Committee, which plans company-wide information and DX strategy and determines and monitors essential policies concerning establishment of a management platform and promotion of the structure of the information strategy; and, the Diversity Committee, which makes proposal regarding basic policy and the plan for diversity promotion, and formulates and implements targets set along with the plan.

Current status of the internal auditing structure

Based on the order or approval of the President and Chief Executive Officer, for the purpose of contributing to the effective achievement of management goals, the Internal Auditing Division, evaluates how internal control is present and functioning with an emphasis on the effectiveness and efficiency of operation, the reliability of financial reporting, compliance with laws and regulations as well as safeguarding of Company assets. The adequacy and effectiveness of each process in risk management, control and governance with each organizational unit shall also be evaluated, and suggestions and proposals shall be made for their improvement.

In the regular audits which covers the company, its overseas offices, overseas trading subsidiaries and other subsidiaries, internal auditors carry out independent and objective evaluations, pursuant to the rules on internal audits, etc., with an emphasis on risk management, effectiveness of management and operations, compliance, and appropriate financial reporting.

Overview of corporate governance and internal control

Overview of our corporate governance and internal control framework is as follows:

Corporate Governance and Internal Control Principles

Mitsui & Co. enacted the following "Corporate Governance and Internal Control Principles" in April 2006 (Revised on 16th December, 2021)

• Mitsui & Co., Ltd. Corporate Governance and Internal Control Principles (PDF 382KB)