To realize sustained growth and increase corporate value, the Mitsubishi Electric Group works to maintain the flexibility of its operations while promoting management transparency. These endeavors are supported by an efficient corporate governance structure that clearly defines and reinforces the supervisory functions of management while ensuring that the company is responsive to the expectations of customers, shareholders, and all of its stakeholders. Additionally, the Mitsubishi Electric Group recognizes that not only ethics and legal compliance, but also compliance in the wider sense of the term that includes the perspective of corporate ethics, are the foundation of the Group's continued existence. Based on this understanding, ongoing efforts are being made to strengthen initiatives related to anti-trust laws, the prevention of corrupt practices and supply chain management, as priority action items.
Mitsubishi Electric Corporation
In recent years corporate governance in Japan has garnered strong attention, to the point that strengthening and enhancing the efficiency of corporate governance has become a priority issue for all companies.
Mitsubishi Electric has adopted Three-committee System, with the separation of the management supervisory functions from the execution of business being one of its core principles. Based on this principle, the Chairman, who oversees the management supervisory functions, is separate from the President & CEO, who is head of all Executive Officers, and neither included among the members of Nomination or Compensation committees. The clear division of supervisory and executive functions allows the Company to ensure effective corporate governance.
Additionally, Mitsubishi Electric works to continuously strengthen its corporate governance, as stated in the CSR Materiality. To further enhance the Board of Director’s management supervisory function, venues were established for supplying information to, and exchanging views with, Outside Directors, in FY2016. Such information-sharing and exchanges continued through FY2019 to provide them with more timely and pertinent information.
Additionally, in order to further enhance the functioning of the Board of Directors, the Board meetings are reviewed on an annual basis, which was also held again in FY2019. As a result of the Board of Directors review, the Board of Directors was evaluated as making ongoing and effective improvements in response to the results of annual reviews, and achieving even better results every time with respect to sharing timely and appropriate management information with Executive Officers, which is essential for the Board to properly fulfill its business supervisory function.
This evaluation in effect endorses the performance of the Board of Directors, but going forward further efforts will be made to improve the performance of the Board of Directors by enhancing the opportunities for exchanging opinions between the supervisory side and executive side and improving the management of the Board of Directors review through conducting individual interviews regarding review results and expanding time for opinion exchange.
Mitsubishi Electric will continue to build an even stronger corporate governance framework, to ensure corporate management is soundly supervised by a proper oversight mechanism.
Corporate Governance Framework
Visit to a plant by Directors
Mitsubishi Electric Corporation
Mitsubishi Electric engages in a wide variety of businesses on a global scale. In order for the Board of Directors to oversee whether these businesses are executed properly, it is extremely important for information about management to be provided to us directors in a timely and appropriate manner.
At the Board of Directors, adequately detailed information is provided for directors to supervise management, and a forum has been set up with the main objective of providing Outside Directors with more information about management, so I feel the information we directors receive is extremely extensive. I also get the sense that the company is actively providing us with opportunities to visit various offices and plants in an effort to directly hear the opinions of workers and to obtain solid business information.
The performance of the Board of the Directors is evaluated, and efforts are made to improve it. A review of all members is conducted every year, where all directors can freely share their views about the operations of the Board and about how information is shared, etc.
Readjustments are constantly made in response to the results of the review of the Board of Directors, and improvements have been achieved with every review, such that I feel we have become able to discuss various matters more frankly than ever before.
As directors, we feel these opportunities are highly beneficial to understand the current state of Mitsubishi Electric's business, and to engage us in discussions. We hope this timely and appropriate provision of management information will continue to be enhanced, so that the management supervisory functions of the Board of Directors may be further strengthened.
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With the Mitsubishi Electric Group Corporate Ethics and Compliance Statement formulated in 2001 as our basic guideline for compliance, the Mitsubishi Electric Group recognizes the importance of ethics and absolute compliance with legal requirements as a fundamental precondition for the Group's continued existence.
Based on this awareness, we are attempting to perfect a compliance system which promotes compliance in the broadest sense, encompassing the perspective of corporate ethics, rather than merely focusing on following the letter of the law. At the same time, we are working to educate our employees in this area.
With regard to anti-trust laws, we make ongoing Group-wide efforts to both prevent any recurrence of such incidents and prevent previous incidents from being forgotten. In addition to formulating and operating internal regulations that govern Mitsubishi Electric and its affiliated companies in Japan and overseas, we have also strengthened internal audits that specialize in anti-trust laws, and place importance on employee training through a combination of e-learning and classroom programs. We will continue to make greater efforts to prevent similar incidents from occurring and previous incidents from being forgotten, through regular monitoring of the status of daily business activities and internal regulations, practical employee training that matches actual transaction situations, and other such initiatives.
We engage in Group-wide initiatives to prevent bribery. The "Mitsubishi Electric Group Anti-Bribery Policy" that was established on April 1, 2017 reiterates to people in and outside the Group our policy that, among other things, our Group companies, their officers and employees do not offer bribes and do not pursue profits that can be realized only by offering bribes. Furthermore, we are conducting monitoring activities such as maintaining and enacting internal regulations for interactions with public officials inside and outside the country as a measure to prevent bribery. In addition, we provide education to employees who regularly interact with public officials in the combined form of e-learning programs and face-to-face education. In the light of the current global situation where anti-bribery regulations are becoming increasingly tighter, we will continue to enhance measures in each region, and take effective and efficient measures by selecting countries and transactions with particularly high risks of being involved in bribery, to respond to the expansion of our business at a global level.
As for supply chain management, we ensure the fair and impartial selection and evaluation of business partners in Japan and overseas by providing an explanation of the Group's Purchasing Policy and CSR Procurement Policy, and requesting business partners' understanding of these policies. By ensuring proper evaluation of suppliers based on selection and evaluation criteria established by the Group, risks are also mitigated along the supply chain. We have also established the CSR Procurement Guidelines in 2018 to widely disseminate Mitsubishi Electric’s CSR policies and matters for compliance by our business partners. Approaches will be made to all business partners to verify their agreement to promote procurement activities in line with the guidelines.
Meeting of compliance managers in the Asia region
Seminars for suppliers (Thailand region)
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