MUFG Corporate Governance Policies

The MUFG Corporate Governance Policies (these “Policies”) set out the policy and framework of the corporate governance of Mitsubishi UFJ Financial Group, Inc. (“MUFG”) and serve as a guide for the actions of directors and management.^*
(^* 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.)
 

These Policies will be revised as necessary, taking into account changes in MUFG’s business and the business environment.

With the pledge to contribute to society, customers, employees, and to help all our stakeholders take the next step forward, MUFG established the “MUFG Way” and defines its purpose as “Committed to empowering a brighter future.” along with its shared values and medium- to long-term goals. Under the “MUFG Way”, MUFG will actively contribute to the realization of a sustainable society and will aim for sustainable growth and increase of corporate value over the medium- to long-term.
MUFG will aim to realize effective corporate governance through fair and highly transparent management based on the guidance provided by these Policies.

As a financial holding company, MUFG formulates business strategy for the entire Group and will aim to increase the corporate value of the Group as a whole through management to ensure the sound and appropriate management of the entire Group.

MUFG has chosen the governance structure of a company with three committees (a company prescribed in Article 2, item (xii) of the Companies Act) from the following perspectives.

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.

Directors, as elected by the shareholders and entrusted as managers, 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.
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.

In addition to the above duties of all directors, independent outside directors are expected to oversee the execution of duties by corporate executive officers from an independent and objective standpoint, oversee conflicts of interest between MUFG and management or controlling shareholders, and advise and provide support to management based on their own experience and professional knowledge.

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.

For election of directors, the Nominating and Governance Committee shall set forth director election standards focused on the following and nominate persons who meet such standards as director candidates.

Outline of Director Election Standards

The term of office of directors shall be one (1) year. In discussion and decision by the Nominating and Governance Committee on a candidate for reappointment, the number of years since such candidate assumed the office of a director of MUFG shall be considered.

A director may concurrently serve as a director, corporate auditor, corporate executive officer or executive officer at a company other than an MUFG Group company only to the extent such director is able to have enough time required to appropriately fulfill the duties as a director of MUFG, such as understanding the business and other aspects of the MUFG Group, and the director shall report periodically to the Board of Directors on such concurrent posts.

Unless otherwise provided for by law or regulation, resolutions of a meeting of the Board of Directors shall be adopted by an affirmative vote of a majority of the Directors present who constitute in number a majority of all the Directors of the Company.

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.

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.

A Board of Directors Secretariat shall be established to assist the Chairman of the Board of Directors and to correspond and coordinate with the company so that sufficient information is provided to directors, including independent outside directors.

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.

In order to maintain and improve the effectiveness of the Board of Directors, evaluation of the Board and the Committees shall be conducted periodically.

Independent outside directors may, as necessary, convene meetings comprising only independent outside directors in order to perform their function from an independent standpoint.

Independent outside directors may appoint a Lead Independent Outside Director from among themselves.

Directors may obtain advice from outside professionals at MUFG’s expense if it is necessary for the execution of their duties as a director.

In addition to the establishment of a Nominating and Governance Committee, a Compensation Committee and an Audit Committee as provided under the Companies Act, a Risk Committee shall also be established as an optional board committee. Moreover, in order to comply with the final rules for Enhanced Prudential Standards for Foreign Banking Organizations, U.S. Risk Committee shall be established.
Committees may appoint external advisers and have them participate in committee deliberations.

(1) Role of the Nominating and Governance Committee

(2) Composition and resolutions of the Nominating and Governance Committee

(3) Nomination policy

(1) Role of the Compensation Committee

(2) Compositon and resolutions of the Compensation Committee

(3) Compensation policy

(1) Role of the Audit Committee

(2) Composition and resolutions of the Audit Committee

(3) Ensuring the effectiveness of audit by the Audit Committee

(1) Role of the Risk Committee

(2) Composition of the Risk Committee

(3) Collaboration with the Group Chief Risk Officer

(4) Relationship with U.S. Risk Committee

(1) Role of the U.S. Risk Committee

(2) Composition of the U.S. Risk Committee

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.

MUFG will take the following actions to secure shareholder rights and ensure that they are exercised effectively. MUFG will give consideration to the equal treatment of all shareholders, including minority and overseas shareholders.

Through dialogue with shareholders, MUFG will seek their understanding of MUFG’s business strategy and so forth, and will strive to take appropriate actions based on an understanding of shareholders’ perspectives.
The Board of Directors shall establish and disclose policies relating to the organizational structures and measures aimed at promoting constructive dialogue with shareholders.

MUFG will establish and disclose appropriate procedures for and monitor transactions with related parties such as directors and corporate executive officers, so that such transactions do not harm the interests of MUFG or the common interests of its shareholders.

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.

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.

MUFG recognizes the responsibility that external accounting auditors owe towards shareholders and investors, and take appropriate actions to secure the proper performance of audit.