Marubeni operates under a corporate audit governance system, adhering closely to the Companies Act, with a control structure designed to facilitate a clearly defined decision-making process, business execution system, and supervisory system. Marubeni has established the structure as shown in the diagram below.
Marubeni conducts a diverse range of businesses globally. Accordingly, Marubeni has established a corporate audit governance model with a Board of Directors mainly comprising internal directors (with appointment of Independent directors and collaboration with the Audit & Supervisory Board) in order to ensure rapid and efficient decision-making and appropriate supervisory functions in management. Marubeni has determined that this governance model is functioning effectively as set forth in items (a) and (b) below. Therefore, Marubeni will retain the current governance structure.
(a) Ensuring rapid and efficient decision-making
Marubeni ensures rapid and efficient decision-making by structuring the Board of Directors mainly around directors who serve concurrently as executive officers and are well-versed in the Company's diverse business activities.
(b) Ensuring appropriate supervisory functions
Marubeni ensures appropriate supervisory functions by implementing various measures, including appointing Independent directors; assigning dedicated staff to the Audit & Supervisory Board Member’s Office; fostering collaboration among the Audit & Supervisory Board Members, the Audit Department, the Independent Audit & Supervisory Board Members, and the corporate auditors of Group companies; and implementing advance briefings on matters referred to the Board of Directors for both independent directors and Audit & Supervisory Board Members on the same occasions.
Our Board of Directors comprises 10 directors (including four independent directors) who deliberate on overall corporate policy and major issues, while monitoring the performance of individual directors. Each director's term of office is one year. This is to flexibly put in place an optimal management structure in response to changes in the business environment, while clarifying management responsibility.
The Audit & Supervisory Board comprises five Audit & Supervisory Board Members (including three Independent Audit & Supervisory Board Members). Marubeni has adopted a corporate audit governance system. The Audit & Supervisory Board Members are responsible for overseeing directors in the execution of their duties by attending important meetings, such as the Board of Directors, and by monitoring business activities and financial conditions in accordance with the auditing policies and plans set by the Audit & Supervisory Board. The Audit & Supervisory Board Members have monthly meetings with the independent auditors to exchange information and opinions on auditing plans, progress of auditing activities at Marubeni and Group companies, audit results, key points and considerations on earnings results, and accounting audit trends.
The President also holds regular meetings with the Audit & Supervisory Board Members and reports to them on business performance. Other directors, division COOs, and the general managers from the Corporate Staff Group report to the Audit & Supervisory Board Members each year on business performance.
The Corporate Management Committee was established as an advisory committee for the President and comprises five members of the board, including the President, as well as one senior managing executive officer and three managing executive officers. The committee deliberate substantive matters related to management and operations.
The members of the Committee of Heads of Divisions are the President, the representative directors, Chief executive officer (Group CEOs) the division COOs, and regional CEOs and COOs appointed by the President. They discuss matters pertaining to budgeting, account settlement, and financial planning, as well as other issues relating to the execution of business.
The Committee of Executive Officers comprises 37 executive officers (five of whom are also directors) to announce management policies issued by the President and to discuss financial performance, the results of internal audits and other issues that affect business execution, and to facilitate the exchange of information between the oversight function and the implementation function. Keeping communication lines open between the directors and executive officers, independent directors also attend these meetings. Executive officers are selected by the Board of Directors and appointed to one-year terms of office.
|Overview of Corporate Governance Systems|
|Organization||Company with Auditors|
|Chairman of the Board||Chairman|
|Directors (independent directors*)||10 (4)|
|Audit & supervisory board members (independent audit & supervisory board members*)||5 (3)|
|Major Board and Committee Meetings||Board of Directors||19 times|
|Audit & Supervisory Board||11 times|
|Corporate Management Committee||31 times|
|Committee of Heads of Divisions||2 times|
|Committee of Executive Officers||4 times|
Marubeni has established various committees designed to enhance corporate governance. A brief description of the principal committees and their respective governance roles is given below.
|Investment and Credit Committee||Projects pending approval, such as investments, are discussed and approved by the Investment and Credit Committee prior to appearing on the Corporate Management Committee's agenda.||Held three times a month in principle|
|Compliance Committee||The Compliance Committee provides support and guidance with regard to practicing compliance and as such develops, maintains, and manages the Marubeni Group's compliance structure.||Held four times a year and when necessary|
|CSR & Environment Committee||The CSR & Environment Committee is responsible for discussing and reporting on the Marubeni Group's CSR and environmental protection activities as well as the policies for these activities.||Held when necessary|
|Internal Control Committee||The Internal Control Committee is responsible for developing and monitoring the enforcement of internal control policies based on the Companies Act as well as drafting revisions when necessary. It also establishes, operates, and verifies the effectiveness of internal control systems for financial reports in accordance with the Financial Instruments and Exchange Act, while also drafting internal control reports.||Held when necessary|
|Disclosure Committee||The Disclosure Committee creates disclosure policies, ensures that internal systems concerning legally mandated and timely disclosure are in place, and decides the importance and appropriateness of the information targeted for legally mandated or timely disclosure.||Held when necessary|
|The Customs Clearance Supervising Committee establishes and maintains systems to ensure that the Marubeni Group follows appropriate procedures when importing and exporting and also conducts related internal inspections and training.||Held once a year and when necessary|
|Security Trade Control
|The Security Trade Control Committee establishes and maintains security trade control systems, inspects and approves transactions, and conducts internal audit and training concerning security trade controls.||Held once a year and when necessary|
Independent directors offer opinions on business management drawn from their broad experience and high-level perspective, and give advice to better implement corporate governance.
Independent directors attend the meetings of the Board of Directors and the Committee of Executive Officers, including on an ad hoc basis, making active contributions from the perspective of internal control. Prior to meetings, Independent Directors are provided with agendas and fully briefed on management issues and project execution status. One Independent Director has been assigned the position of chairman of the Governance and Remuneration Committee and also serves as a member of the Nomination Committee together with three other Independent Directors.
Independent Audit & Supervisory Board Members monitor the directors' execution of duties and draw upon their wealth of professional expertise to offer various recommendations and advice to enhance the Audit & Supervisory Board.
Independent Audit & Supervisory Board Members attend meetings of the Audit & Supervisory Board and also the Board of Directors and Committee of Executive Officers. In addition, the Independent Audit & Supervisory Board Members meet with the President on a regular basis, as well as with members of the Audit Department, Corporate Accounting Department, and independent auditors, for an exchange of opinions. They receive audit-related information from Full-time Audit & Supervisory Board Member, which they use in the execution of their auditing duties. Two of the Independent Audit & Supervisory Board Members are also members of the Governance and Remuneration Committee.
Since assuming the position of independent director in 2013, I have continued to actively provide input at meetings of the Board of Directors based on my experience in the Ministry of Economy, Trade and Industry. By voicing opinions from an outside perspective, I aim to help facilitate more active discussion and encourage deeper examination of the matters brought before the Board of Directors. Also, given the exceptional diversity of a general trading company’s business and the wide range of investment proposals discussed, I focus on posing questions from the perspectives of how each proposal will contribute to Marubeni’s profits and how we can manage the risks they may entail.
Global Challenge 2018, the new mid-term management plan that started with the year ending March 31, 2017, defines strategies and targets for natural resource and non-natural resource-related businesses. I believe that this policy is appropriate from the perspectives of risk management and corporate governance. Natural resource-related businesses are heavily impacted by international market conditions and can therefore suffer from substantial fluctuations in profits or losses that are beyond the control of a company. One characteristic of general trading companies are their various functions for hedging risks to reduce the impacts these risks may have. For this reason, I think Marubeni should work to contribute to the development of the global economy by seeking out business opportunities while appropriately managing risks. It is important to act without delay when the threat of an unexpected loss comes to light in order to maintain financial soundness, and this holds true for non-natural resource-related businesses as well.
Global Challenge 2018 puts forth a clear vision for Marubeni, namely aiming to become a true global company that contributes to both regional economies and society. In my new capacity as chief independent director, I will work closely together with internal and external executives and Audit & Supervisory Board Members while encouraging exchanges of opinions with senior management and stimulating active discussion among executives. In this manner, I hope to help further the Company along the path toward the goals of this plan and contribute to Marubeni’s growth as a global company.
Amounts of executive compensation, details of policies regarding calculation methods used to decide compensation, and methods for making compensation decisions are as follows.
Compensation for directors and Audit & Supervisory Board Members is decided based on limits to the amount of total compensation for directors and Audit & Supervisory Board Mmembers determined by the General Meeting of Shareholders. From March 31, 2017, compensation for directors is decided through a process involving discussion and formulation of proposals by the Compensation Consultative Committee, a body whose membership consists of a majority of independent executives, with the proposals then being approved by the Board of Directors. Compensation for individual Audit & Supervisory Board Members is decided through deliberation by the Audit & Supervisory Board Members. The Company shares the benefits and risks of stock price fluctuations with shareholders and issues stock options to all internal directors as a competition system for heightening their motivation to improve the Company’s stock price and corporate value. Basic compensation paid to directors other than independent directors consists of fixed compensation and variable compensation, the latter of which is linked to business performance in the previous fiscal year. Compensation for independent directors and Audit & Supervisory Board Members, all of whom are completely independent from business execution, consists entirely of fixed compensation.
|Position||Total Amount of Compensation||Number of Recipients|
|Directors (excluding independent directors)||¥711 million||¥711 million||10|
|Audit & Supervisory Board Members (excluding Independent Audit & Supervisory Board Members)||¥72 million||¥72 million||3|
|Independent executives||¥60 million||¥60 million||5|
|Total||¥843 million||¥843 million||18|
|Name||Position||Company Category||Total Amount of Compensation|
|Teruo Asada||Director||Issuing company||¥100 million||¥100 million|
|Fumiya Kokubu||Director||Issuing company||¥123 million||¥123 million|