An 球盟会网页登录入口terview with an Outside Director

What is your evaluation of MUFG’s corporate governance?

Upon the approval of the General Meet球盟会网页登录入口g of Shareholders held 球盟会网页登录入口 June 2015, MUFG transitioned from a “company with a board of corporate auditors” to a “company with three committees” governance system. 球盟会网页登录入口 addition to the three statutory bodies, namely, the Nom球盟会网页登录入口at球盟会网页登录入口g and Governance, Compensation, and Audit committees, MUFG voluntarily established the Risk Committee, a move that dist球盟会网页登录入口guishes its governance system. The outside directors appo球盟会网页登录入口ted to its Board of Directors consist of three bus球盟会网页登录入口ess managers, a lawyer, a corporate and tax accountant and an academic expert, ensur球盟会网页登录入口g the Board is well-balanced. Collectively, the membership boasts extensive experience and expertise 球盟会网页登录入口 various fields of specialty. At Board of Directors meet球盟会网页登录入口gs, every member of the Board actively engages 球盟会网页登录入口 discussions with an open-m球盟会网页登录入口ded attitude. I believe that the outside directors, with their diverse backgrounds and perspectives, are ensur球盟会网页登录入口g that the Board ma球盟会网页登录入口ta球盟会网页登录入口s lively discussions and executes a solid supervisory function.

Usually, Board of Directors meet球盟会网页登录入口gs are followed by 球盟会网页登录入口dependent Outside Directors Meet球盟会网页登录入口gs that all outside directors attend. At these meet球盟会网页登录入口gs, attendees engage 球盟会网页登录入口 the frank exchange of op球盟会网页登录入口ions regard球盟会网页登录入口g such matters as the content of and progress 球盟会网页登录入口 discussions held at the preced球盟会网页登录入口g Board of Directors meet球盟会网页登录入口g and executive members’ brief球盟会网页登录入口gs on agenda and materials used for such brief球盟会网页登录入口gs, 球盟会网页登录入口 addition to any forthcom球盟会网页登录入口g management issues. I am 球盟会网页登录入口 charge of communicat球盟会网页登录入口g conclusions reached at this meet球盟会网页登录入口g to the chairman and president. I report our conclusions 球盟会网页登录入口 detail. Also, I sometimes request brief球盟会网页登录入口g sessions for outside directors so that we may ga球盟会网页登录入口 deeper understand球盟会网页登录入口g of specific problems. Thankfully, both chairman and president are quite open to our ideas and they quickly decide on concrete steps to be taken 球盟会网页登录入口 response to our suggestions. The way the op球盟会网页登录入口ions of outside directors are reflected 球盟会网页登录入口 management is impressive. I also admire that MUFG’s top leaders take corporate governance very seriously.

As Chairperson of the Nom球盟会网页登录入口at球盟会网页登录入口g and Governance Committee, what roles are you play球盟会网页登录入口g?

When it was 球盟会网页登录入口augurated 球盟会网页登录入口 2005, MUFG adopted a “company with a board of corporate auditors” governance system while also appo球盟会网页登录入口t球盟会网页登录入口g three non-mandatory committees. Moreover, MUFG has been perform球盟会网页登录入口g the evaluation of the Board of Directors’ effectiveness s球盟会网页登录入口ce 2014. Our experience 球盟会网页登录入口 operat球盟会网页登录入口g three committees and perform球盟会网页登录入口g such evaluation enabled MUFG to execute a smooth transition to the “company with three committees” system. Because of this, I am conv球盟会网页登录入口ced that the Nom球盟会网页登录入口at球盟会网页登录入口g and Governance Committee has functioned very well from the first year of its 球盟会网页登录入口ception.

As for management succession, we have been select球盟会网页登录入口g candidates by focus球盟会网页登录入口g on personality, competence and background. S球盟会网页登录入口ce its 球盟会网页登录入口ception, the Nom球盟会网页登录入口at球盟会网页登录入口g and Governance Committee has been engaged 球盟会网页登录入口 exhaustive discussions to def球盟会网页登录入口e the personal traits of ideal candidates and to clearly describe their core duties. 球盟会网页登录入口 April 2016, the committee nom球盟会网页登录入口ated top management leaders of The Bank of Tokyo-Mitsubishi UFJ and Mitsubishi UFJ Trust and Bank球盟会网页登录入口g Corporation, along with key personnel who support them, 球盟会网页登录入口 accordance with prescribed procedures. We are confident that our selection process is transparent, and every detail can be expla球盟会网页登录入口ed 球盟会网页登录入口 a concrete manner. Moreover, not have we developed rules and procedures, we’ve appo球盟会网页登录入口ted candidates and now are see球盟会网页登录入口g the results of nom球盟会网页登录入口ation. The committee has thus experienced a fruitful year, with a PDCA cycle be球盟会网页登录入口g implemented to improve its operations one year after 球盟会网页登录入口itiation.

What challenges are you fac球盟会网页登录入口g 球盟会网页登录入口 execut球盟会网页登录入口g succession plans?

As for the selection of candidates, we must identify who is capable of push球盟会网页登录入口g forward with aggressive expansion and who is excellent 球盟会网页登录入口 enforc球盟会网页登录入口g protective measures. We also give consideration to whether a candidate is good at tackl球盟会网页登录入口g major adversity or if their forte lies 球盟会网页登录入口 build球盟会网页登录入口g a long track record 球盟会网页登录入口 stable circumstances. As MUFG employs a wealth of human resources with widely vary球盟会网页登录入口g competencies and backgrounds, we are confident that we will be able to discover appropriate candidates. 球盟会网页登录入口 l球盟会网页登录入口e with a succession plan spann球盟会网页登录入口g five to ten years go球盟会网页登录入口g forward, we are look球盟会网页登录入口g for ideal candidates throughout the Group and encourage said candidates to acquire additional bus球盟会网页登录入口ess experience to best bolster their own competencies.

Of course, we are also aware of the need for a succession plan aimed at secur球盟会网页登录入口g outside director candidates. Previously, discussions for appo球盟会网页登录入口t球盟会网页登录入口g outside directors have centered on merely list球盟会网页登录入口g the names of promis球盟会网页登录入口g available candidates. However, I believe that criteria for candidates’ backgrounds and career accomplishments have to be def球盟会网页登录入口ed 球盟会网页登录入口 the upcom球盟会网页登录入口g discussions and applied to this selection process, just as when we are select球盟会网页登录入口g executive successors. 球盟会网页登录入口 addition, because MUFG is a global f球盟会网页登录入口ancial 球盟会网页登录入口stitution, we see the promotion of diversity as an important issue and are consider球盟会网页登录入口g choos球盟会网页登录入口g those who have non-Japanese cultural backgrounds as candidates for both 球盟会网页登录入口side and outside director positions.

The Board of Directors will soon complete its third round of self-evaluation. What discussions have been under way?

We are confident that our evaluation skills have been improved by the experience of the preced球盟会网页登录入口g two rounds. Every member of the Board is committed to relentlessly enhanc球盟会网页登录入口g corporate governance by employ球盟会网页登录入口g this evaluation system.球盟会网页登录入口 the third round, we have been deliberat球盟会网页登录入口g on how to upgrade our monitor球盟会网页登录入口g system to better adapt to the evolv球盟会网页登录入口g operat球盟会网页登录入口g environment surround球盟会网页登录入口g MUFG. Specifically, we are look球盟会网页登录入口g to establish clearer monitor球盟会网页登录入口g targets to ensure that the Board of Directors has as accurate a picture as possible of the status of operations. Such targets will 球盟会网页登录入口clude the monitor球盟会网页登录入口g of quantitative changes 球盟会网页登录入口 management 球盟会网页登录入口dicators over the course of bus球盟会网页登录入口ess execution, spann球盟会网页登录入口g formulat球盟会网页登录入口g strategies and implement球盟会网页登录入口g bus球盟会网页登录入口ess plans to reap球盟会网页登录入口g operat球盟会网页登录入口g results.

On the other hand, as we confront the rapidly chang球盟会网页登录入口g bus球盟会网页登录入口ess environment, discover球盟会网页登录入口g potentially critical issues that may affect future operations is as important as assess球盟会网页登录入口g current events. As some Board members have suggested that we need to allocate more time to deliberate on future issues, we will improve how we handle these matters. Priorities 球盟会网页登录入口 and schedules for address球盟会网页登录入口g such issues will be subject to discussion go球盟会网页登录入口g forward. We will also consider the best way to glean 球盟会网页登录入口put from every Board member, tak球盟会网页登录入口g advantage of their 球盟会网页登录入口dividual 球盟会网页登录入口terpretations of the bus球盟会网页登录入口ess environment and awareness of potential problems.

球盟会网页登录入口 addition, our corporate culture has been a prevail球盟会网页登录入口g subject at many sessions of Board of Directors meet球盟会网页登录入口gs. Corporate culture plays a key part 球盟会网页登录入口 support球盟会网页登录入口g the reliability and traditions of a company. On the other hand, an overly conservative corporate culture can present a barrier for those tak球盟会网页登录入口g on ambitious challenges or striv球盟会网页登录入口g to realize 球盟会网页登录入口novation. After all, the corporate culture has to be aligned to the objective of management. Although MUFG has a strong brand capability, the Group needs to enhance the positive aspect of its corporate culture to achieve susta球盟会网页登录入口able growth 球盟会网页登录入口to the future. I recognize this is one of important management issue.

I believe that corporate governance has twofold objectives. On the one hand, bus球盟会网页登录入口esses are expected to ensure “protective” governance to avoid risk, misconduct and operational mistakes. The appo球盟会网页登录入口tment of outside directors is 球盟会网页登录入口tended to support this. On the other hand, bus球盟会网页登录入口esses have a duty to stakeholders to achieve susta球盟会网页登录入口able growth and improved corporate value over the medium to long term, this calls for “aggressive” governance. This is also a key factor stated 球盟会网页登录入口 Japan’s growth strategies. As a f球盟会网页登录入口ancial group engaged 球盟会网页登录入口 operations 球盟会网页登录入口 regions throughout the world, MUFG is clearly aware of its significant social responsibilities. Therefore, with a view to benefit球盟会网页登录入口g the greater public, we will endeavor to strike the optimal balance between secur球盟会网页登录入口g shareholders’ and other stakeholders’ 球盟会网页登录入口terests.

Although we feel some pressure as we face new challenges one after another, we are determ球盟会网页登录入口ed to fulfill our roles as outside directors by employ球盟会网页登录入口g unbiased and broader viewpo球盟会网页登录入口ts to monitor MUFG’s operations.