(* Those responsible for management of MUFG Group: meaning the corporate executive officers and executive officers of MUFG and the directors, corporate executive officers and executive officers of MUFG Group companies.)
2. Approach to corporate governance
2-1. Basic approach
MUFG will aim to realize effective corporate governance through fair and highly transparent management based on the guidance provided by these Policies.
2-2. Role as a holding company
2-3. MUFG’s governance structure
- To enhance the flexibility of management by division of executive and oversight functions, while also creating a strucure whereby the Board of Directors oversees management of the entire Group.
- To build an efficient and highly effective corporate governance structure through coordination among the Board of Directors, committees required by the Companies Act (Nominating and Governance Committee,* Compensation Committee and Audit Committee) and optional committees (Risk Committee), etc.
(* Which is a “nominating committee” as provided for in the Companies Act.)
- To realize a corporate governance structure with even greater accountability to domestic and overseas stakeholders.
3. Role of the Board of Directors
3-1. Role of the Board of Directors
The Board of Directors decides key management policies and is responsible for management oversight. Decisions on matters of business execution other than specific matters stipulated by laws and regulations shall in principle be delegated to corporate executive officers; provided, however, that decisions on particularly important matters of business execution shall be made by the Board of Directors.
The matters performed by the Board of Directors are as follows.
- Decisions on key management policies such as business strategy, risk management policy, capital policy and resource allocation for the entire Group.
- Oversight of the execution of duties by directors and corporate executive officers.
- Decisions on the MUFG Group’s internal controls system, and oversight of the establishment and operation of such systems.
- Election of corporate executive officers.
- Oversight of matters such as the development of the corporate governance structure and the establishment of a sound corporate culture.
4. Duties of Directors
4-1. Duties of Directors
Directors shall make timely and appropriate decisions on investment and other management matters based on the reasonable collection of information.
Directors shall thoroughly review reports and proposals from management and request explanations or express opinions as necessary for discussion.
4-2. Expectations for independent outside directors
5. Composition and other matters regarding the Board of Directors
The Board of Directors shall be composed of 20 directors or less in order to ensure its effectiveness.
The Board of Directors as a whole shall have an appropriately balanced composition that provides a deep understanding of MUFG Group’s business and a wealth of knowledge and expertise on finance, financial accounting, risk management and compliance and so forth.
Accordingly, the Board of Directors shall meet the following requirements in particular.
- The Board of Directors shall have a balanced composition consisting of internal directors who are familiar with the business of MUFG Group and independent outside directors who oversee management and directors from an independent and objective standpoint.
- The percentage of independent outside directors, in principle, shall be more than half.
- To ensure the effectiveness of oversight of MUFG Group’s management by the Board of Directors, the Presidents of The MUFG Bank, Ltd. Mitsubishi UFJ Trust and Banking Corporation, and Mitsubishi UFJ Securities Holdings Co., Ltd. will, in principle, also serve as directors of MUFG.
5-2. Election of Directors
- Directors, as elected by the shareholders and entrusted as managers, shall have the qualities required to be able to appropriately fulfill their duty of loyalty and duty of care in the execution of their duties and to contribute to the sustainable growth and the increase of corporate value of MUFG over the medium- to long-term.
- Independent outside directors shall have a wealth of knowledge and experience in the fields of corporate management, finance, financial accounting and law and the qualities required for oversight of the execution of duties by management from an independent and objective standpoint, meeting the independence standards of MUFG.
- Executive directors shall have extensive knowledge of MUFG Group’s business and the ability to appropriately perform management of MUFG Group.
5-3. Term of office of directors
5-4. Directors with concurrent posts
6. Operation of the Board of Directors
6-1. Resolutions of the Board of Directors
6-2. Requirements of the Chairman of the Board of Directors
The role of Chairman of the Board of Directors and the role of President and Group Chief Executive Officer shall be separated and a suitable director shall be appointed as Chairman to ensure that the Board of Directors effectively fulfills its role of management oversight.
In principle, when MUFG has a director who concurrently serves as Corporate Executive and Chairman, such director shall be elected as Chairman of the Board of Directors.
6-3. Role of Chairman of the Board of Directors
Chairman of the Board of Directors shall lead the Board of Directors and shall be obligated to ensure the board’s effectiveness.
Chairman of the Board of Directors shall set the schedule and agenda for board meetings after exchanging opinions with each director on a day to day basis, so that the Board of Directors is able to make sound decisions based on sufficient information.
6-4. Support framework
6-5. Provision of information
Management is obligated to provide sufficient information to directors that relates to the execution of duties of directors.
Management shall distribute the Board of Directors’ meeting agenda and deliberation materials prior to meetings of the Board of Directors in principle to ensure that directors have the opportunity to understand the content in advance.
Management shall conduct training and the like, including training about the business activities and management environment of MUFG, particularly for independent outside directors, on an ongoing basis, including at the time of appointment, in order to provide necessary information in addition to the Board of Directors’ meeting agenda.
6-6. Evaluation of the Board of Directors
6-7. Information exchange among independent outside directors
6-8. Appointment of Lead Independent Outside Director
6-9. Advice of outside professionals
7-1. Establishment of committees
Committees may appoint external advisers and have them participate in committee deliberations.
7-2. Nominating and Governance Committee
- The Nominating and Governance Committee shall decide the content of proposals that are submitted to general meetings of shareholders regarding the election and removal of directors.
- The Nominating and Governance Committee shall discuss and make recommendations to the Board of Directors on personnel matters regarding key management positions such as Chairman, Deputy Chairman and President and Group Chief Executive Officer of MUFG and Chairmen, Deputy Chairmen and Presidents of major subsidiaries.
- The Nominating and Governance Committee shall formulate and implement succession plans for the nomination of the next generation of senior executives.
- The Nominating and Governance Committee shall discuss and make recommendations to the Board of Directors on matters pertaining to the policy and framework for corporate governance.
- The Nominating and Governance Committee shall be composed of three (3) or more members, with the members being independent outside directors and the President and Group Chief Executive Officer.
- The chairman of the Nominating and Governance Committee shall be appointed from among the independent outside directors by the Board.
- Resolutions of the Nominating and Governance Committee shall be adopted by an affirmative vote of a majority of the members present who constitute in number a majority of all the members eligible to vote.
- The Nominating and Governance Committee shall establish Director Election Standards and nominate as director candidates those who meet such standards.
- With respect to the nomination of candidates for key management positions such as Chairman, Deputy Chairman and President and Group Chief Executive Officer of MUFG and Chairmen, Deputy Chairmen and Presidents of major subsidiaries, the appropriateness of the nomination shall be discussed in light of the personnel requirements for each position.
7-3. Compensation Committee
- The Compensation Committee shall establish a policy regarding decisions on compensation for corporate executive officers and directors, and shall decide the details of individual compensation based on this policy. If a corporate executive officer or a director concurrently serves as an officer or employee of a subsidiary, the Compensation Committee shall in the same way decide the aggregate amount of compensation for such person inclusive of that to be received as an officer or employee of the subsidiary.
- The Compensation Committee shall discuss and make recommendations to the Board of Directors on the establishment, revision and abolition of systems pertaining to compensation for officers, etc. of MUFG and its key subsidiaries.
- The Compensation Committee shall be composed of three (3) or more members, with the members being independent outside directors and President and Group Chief Executive Officer.
- The chairman of the Compensation Committee shall be appointed from among the independent outside directors by the Board.
- Resolutions of the Compensation Committee shall be adopted by an affirmative vote of a majority of the members present who constitute in number a majority of all the members eligible to vote.
- In order to achieve sustainable growth and increase of corporate value, policy regarding decisions on the details of compensation, while preventing excessive risk-taking, shall be determined with the aim of increasing motivation to contribute to medium- to long-term performance, not just short-term performance.
- Levels of compensation, etc. shall be decided as competitive and appropriate for MUFG and its subsidiaries in light of the state of the economy and society, etc.
7-4. Audit Committee
- The Audit Committee shall decide the content of proposals pertaining to the election, removal and non-reappointment of the accounting auditor to be submitted to general meetings of shareholders, as well as auditing the execution of duties by directors and corporate executive officers and preparing auditing reports. The Audit Committee has the power to consent to decisions on compensation for accounting auditor.
- The Audit Committee shall properly exercise its authority to perform investigations, including fieldwork, into the business and finance of MUFG and its subsidiaries, in order to effectively fulfill its role and duties.
- The Audit Committee shall be composed of five (5) or more members who are non-executive directors.
- A majority of the members of the Audit Committee shall be appointed from among the independent outside directors.
- The chairman of the Audit Committee shall be appointed from among the independent outside directors by the Board.
- In order to ensure the effectiveness of audit, full-time member(s) of the Audit Committee shall be appointed.
- Resolutions of the Audit Committee shall be adopted by an affirmative vote of a majority of the members present who constitute in number a majority of all the members eligible to vote.
- An Audit Committee Secretariat shall be established in order to assist the Audit Committee with its duties.
- The Audit Committee may give specific instructions to the Internal Auditing Division as necessary for the effective performance of audit.
- The Audit Committee and the Internal Auditing Division shall share information as appropriate to ensure a system of mutual cooperation.
- Decisions on the key personnel of the Internal Auditing Division shall be made after the resolution at the Audit Committee.
7-5. Risk Committee
- The Risk Committee shall discuss and make recommendations to the Board of Directors on material matters relating to the risk management operations, matters relating to top risk matters and any other material matters that require discussion by the Risk Committee.
- The Risk Committee shall approve and amend U.S. Risk Committee Policy etc. appoint the Chair of U.S. Risk Committee and concur with liquidity risk tolerance at CUSO (Combined U.S. Operation) level prior to the approval at the U.S. Risk Committee.
- The Risk Committee shall be composed of independent outside directors, internal directors and external experts.
- The chairman of the Risk Committee shall be appointed from among the independent outside directors by the Board.
- The Risk Committee shall receive reports on material risk management matters from the Group Chief Risk Officer in charge of risk management and the risk management department and shall collaborate with them as appropriate.
- The Risk Committee shall regularly monitor the operations of U.S. Risk Committee and report it to the Board of Directors.
7-6. U.S. Risk Committee
- The U.S. Risk Committee shall approve risk management policies of all MUFG’s U.S. operations and liquidity risk management important matters.
- The U.S. Risk Committee shall oversight overall risk management framework in respect of MUFG’s operations in the U.S. and the material risks to which MUFG’s operations in the U.S. may be exposed.
- The U.S. Risk Committee shall deliberate on the status, control and management of all types of risk on a group basis, report and make recommendations to MUFG Risk Committee.
- The U.S. Risk Committee shall be composed of the members of MUAH Risk Committee, delegate(s) from MUFG, Regional Executive for the Americas and MUAH CEO.
8. Corporate executive officers
8-1. Duties of corporate executive officers
Corporate executive officers shall execute business and make decisions on the execution of business delegated to them by the Board of Directors.
Corporate executive officers owe a duty of loyalty and a duty of care in respect of the execution of their duties, and shall contribute to MUFG’s sustainable growth and increase of corporate value over the medium- to long-term.
Corporate executive officers shall periodically report to the Board of Directors regarding the status of the execution of their duties at least once every three (3) months.
Corporate executive officers shall make explanations on matters as requested by the Board of Directors and the Board committees.
Corporate executive officers are obligated to provide the Board of Directors with information necessary for directors to fulfill their duties, and to report necessary proposals to the Board of Directors.
Accordingly, any events that may have a particularly material effect on the management of the Group, such as events that may require a change to the Group’s key management policies or internal control system, shall be reported to the Board of Directors.
9. Relations with shareholders and other stakeholders
9-1. Ensuring shareholders’ rights and equality
- MUFG will take appropriate actions to ensure shareholders’ effective exercise of voting rights at General Meetings of Shareholders.
- MUFG will provide information appropriately to contribute to allow shareholders to make appropriate decisions on the exercise of their voting rights.
- MUFG will provide adequate explanation about capital policy and the like that would have a significant effect on shareholder interests.
- In addition to disclosing its policy with respect to cross-shareholdings of listed shares, with regard to individual strategic shareholdings, MUFG will verify the significance and economic rationale from a medium- to long-term perspective, and disclose the contents of the verification. MUFG shall also establish and disclose specific standards that ensure the appropriate exercise of voting rights pertaining to strategic shareholdings, and shall respond according to the standards.
9-2. Dialogue with shareholders
The Board of Directors shall establish and disclose policies relating to the organizational structures and measures aimed at promoting constructive dialogue with shareholders.
9-3. Related party transactions
9-4. Appropriate collaboration, etc. with all stakeholders
MUFG’s sustainable growth and increase of corporate value over the medium- to long-term are realized through the contributions of stakeholders such as customers, employees and local communities. In performing its management activities, MUFG will strive to build appropriate collaborative relationships with all stakeholders.
Under the “MUFG Way” which is its basic stance towards the performance of its management activities and is the policy for all of its activities, based on the belief that sustainable environment and society are the main prerequisites for the Group's sustainable growth with regard to sustainability, MUFG will work to create value by solving environmental and social issues and taking the Group's management strategy together.
MUFG will establish MUFG Group Code of Conduct as a basis for the judgments and actions of all officers and employees, and will establish an appropriate framework for whistleblowing by employees and so forth, and monitor its enforcement.
10. Appropriate disclosure of information
10-1. Approach to disclosure of information
With an aim to ensure that stakeholders evaluate MUFG based on a proper understanding, MUFG will ensure transparency in information disclosure through appropriate disclosure of its financial information (such as information on its financial condition and operating results) and information regarding business strategy and risk management.
From the perspective of ensuring the fairness and soundness of the securities market, MUFG recognizes the importance of managing the security of undisclosed material information that would influence investment decisions and will practice strict information security.