Corporate Governance

Fundamental Principles regarding Corporate Governance

The Company considers corporate governance to be the system for making transparent, fair, prompt, and bold decisions by taking into account the views of stakeholders, such as shareholders, customers, employees and local communities. The Company develops business organizational structures and systems and takes the measures necessary to achieve Our Vision “Building new businesses -and the future- with our material intelligence”, based on Our Purpose “We promote the well-being of the world through a spirit of exploration and diverse technologies.”, under Our management philosophy of “With creativity and productivity, we, Mitsui Kinzoku Group, will explore products of value to society, and seek an eternal growth of our group.” It views corporate governance as one of its most important managerial tasks.
Pursuing its objective of “making a contribution to all stakeholders,” the Company executes policies throughout the business group by focusing on the following:

• Providing shareholders with payments of sound dividends consistent with the Company’s performance, and disclosing information in an appropriate manner.
• Providing customers with high-value products
• Establishing harmonious and mutually prosperous relationships with local communities.
• Creating a rewarding working environment and working conditions for employees.

Moreover, as an institutional foundation that enables the Company to carry out fair and valuable business activities, the Company has been taking the following measures and other measures.

• Establishing various company regulations and rules, including the Code of Ethics
• Election of Outside Directors
• Introducing various audit systems and whistle-blowing systems

• Corporate Governance Guidelines（209KB）
• Integrated Report Corporate Governance（958KB）

Current Status of Corporate Governance

Directors and Business Execution

The Company, in order to enhance the agility and flexibility of business execution and increase the vitality of management, introduced the Executive Officer system and delegated a significant portion of decision-making regarding important business execution of the Company to the Executive Officers, in accordance with the articles of incorporation and internal regulations such as “Assignment of Responsibilities for Management” on “Regulations for the Board of Directors (Torishimariyaku-kai kisoku)”. The Executive Officers are responsible for making decisions and execution of business activities.
The Company believes that it is necessary to swiftly and thoroughly implement the company’s business strategy at sites where business is executed, as well as be deeply knowledgeable about actual business conditions when making business decisions. For this reason, the Representative Director and the Executive Directors serve concurrently as high-ranking Executive Officers who are in charge of either the entire company, a business department, or a functional division.
Directors discuss legally prescribed matters and/or particularly important business matters designated by internal regulations at the Board of Directors meetings, which are convened once a month and as needed, and supervise the performance of operations by Executive Officers. To properly and efficiently fulfill the supervisory function, the Board of Directors consists of Internal Directors who are experienced and knowledgeable in the Company’s businesses and an Outside Director. Furthermore, an Outside Director has been elected as the chairperson of the Board of Directors meetings since June 29, 2022, in order to promote separation between business supervision and execution.
In terms of business execution, the Executive Council, which consists of Executive Officers at the level of Senior Executive Officers or higher (including those who concurrently serve as Directors), discusses specific matters regarding business operation at meetings held twice a month and as needed and directs business operations based on the results of these discussions.
There are Executive Officers who also serve concurrently as Directors. The President and Representative Director assumes the highest management responsibilities in planning, deciding, and promoting the management plans of the Mitsui Kinzoku Group, as well as the highest business executive responsibilities in running the businesses of the Mitsui Kinzoku Group.

The Audit and Supervisory Committee

The Company has been operating the Board of Directors with a focus on executive directors for business execution. However, in order to expedite decision-making related to management, enhance discussions on key agenda items in the Board of Directors such as the formulation of management policies and strategies, and strengthen the supervisory function of the Board of Directors over management, the Company changed to a company with an audit and supervisory committee based on the resolution of the 99th Annual General Meeting of Shareholders held on June 27, 2024.  
There are one full-time director who is an Audit and Supervisory Committee Member with experience in business execution within the Company, and three part-time outside directors who are Audit and Supervisory Committee Member.
A full-time director who is an Audit and Supervisory Committee Member has an experience centered around areas in legal affairs and has an appreciable extent of knowledge for legal affairs and risk management.

Accounting Auditor

The Company has entered an audit agreement with KPMG AZSA LLC, and undergoes accounting audits based on the provisions stated in the law. The accounting audits of the Company were executed by three Certified Public Accountants (CPAs) who are the designated limited liability partners and the managing partners of KPMG AZSA LLC. There are 7 CPAs and 8 other assistants who help with the accounting auditing operations performed by the CPAs.

Basic Approach to Internal Control Systems

The Company believes that conducting fair business activities that observe corporate ethics and comply with laws and regulations is essential if the Company is to achieve long-term development and sustained growth.
Based on this belief, the Company’s Board of Directors has made a resolution about the development of a structure to ensure that the Mitsui Kinzoku Group conducts operations in an appropriate manner. The outline of the resolution is as follows.

1. Systems for ensuring that the execution of duties by the Directors and employees of the Company and its subsidiaries is in compliance with relevant laws and regulations and the Company’s Articles of Incorporation
   • 1) To ensure that the conduct of business activities by the Directors and employees of the Company and its subsidiaries is in compliance with relevant laws and regulations and the Company’s Articles of Incorporation, the Company clarifies and promotes its compliance system by instituting its “Code of Behavior,” which Directors and employees are required to observe, and internal regulations.
   • 2) The Company clearly defines the authority of the Directors through the issuance of internal regulations, including “Regulations for the Board of Directors (Torishimariyaku-kai kisoku).” Also, by appointing Outside Directors who have a high degree of independence, the Company increases transparency and creates a framework to ensure that the Directors execute their duties appropriately.
   • 3) In addition, the Company conducts internal audits of accounting, tax affairs, legal affairs, safety, quality, facilities, the environment, hygiene, ICT, etc. for the purpose of maintaining soundness of overall internal control among others.
2. Systems for storing and safekeeping of information related to the execution of the duties of the Directors
   For information related to the execution of the duties of the Directors, the Company has prepared, stores, and keeps in custody such information according to laws and regulations, the “Regulations for the Board of Directors (Torishimariyaku-kai kisoku),” “Information Management Rules (Jouhou kanri kisoku),” “Regulations Regarding Documentation (Bunsho kisoku),” regulations concerning ICT governance, and other internal regulations.
3. Regulations and systems concerning the management of losses and hazards of the Company and its subsidiaries
   To prevent the materialization of risks related to the execution of business activities of the Company and its subsidiaries and to respond to risks that have already materialized, based on its “Risk Management Regulations (Risk management kisoku),” the Company designates organizational units in charge of each type of risk to monitor and evaluate the risks that may arise in the business activities of the Company and subsidiaries, decides on policies for risk management, and implements measures to deal with risks when they materialize.
   The Company establishes “Regulations for Emergency Responses (Kinkyu-jitai hasseiji no taiou ni kansuru kisoku)” to protect human lives and assets and to swiftly recover and continue business in the event of a large disaster.
4. Systems to ensure that the Directors of the Company and its subsidiaries execute their duties efficiently
   As the basis for systems that ensure the Directors execute their duties efficiently, the Board of Directors holds a regular meeting once a month, and at other times as necessary. In addition, the Company determines assignment of responsibilities for management and clarifies the approving authorities including those of subsidiaries, and transfer of authority to executive departments, with an aim to enhance the efficiency of decision-making. Also, through the introduction of the Executive Officer system, the Company endeavors to accelerate the execution of business activities.
5. Systems to ensure that the Mitsui Kinzoku Group consisting of the Company and its subsidiaries conducts operations in an appropriate manner
   The Company establishes “Assignment of Responsibilities for Management” and “Regulations for the Management of Subsidiaries and Affiliates (Kankei-gaisha kanri kisoku)”, clearly defining the authority delegated to subsidiaries of the Company for decision-making and execution. This aims to streamline decision-making processes, while also obligating regular reporting to relevant divisions and sectors on sales performance, financial status, and other important business matters. Resolutions made by Board of Directors of the Company will be applicable to those meeting certain criteria.
   The company establishes and maintains an internal control system based on autonomous internal controls, while promoting the sharing of information to enhance internal control measures. Relevant business divisions and sectors of the Company will verify the status of internal controls in each subsidiary and provide support for improvement as necessary.
6. Matters concerning employees who are to assist the duties of the Audit and Supervisory Committee and matters related to ensuring the independence of such employees from Directors and effectiveness of instructions given by Directors who are Audit and Supervisory Committee Members to such employees
   • 1) Under the Company’s “Regulations for Company Work Systems (Kaisha shokusei kisoku),” the Company establishes an Audit and Supervisory Committee Support and assigns three dedicated employees and no director to assist the Audit and Supervisory Committee in the execution of their duties. In addition, the selection and evaluation of these employees is made with reference to the opinions of the Directors who are Audit and Supervisory Committee Members.
   • 2) The employees who are assigned to assist the duties of Directors who are Audit and Supervisory Committee Members shall assist Directors who are Audit and Supervisory Committee Members in accordance with the “Regulations for Company Work Systems.” At the meetings of the Audit and Supervisory Committee, such employees shall receive instructions from Directors who are Audit and Supervisory Committee Members, and also shall report on the progress of matters that they were instructed to address, and provide information.
7. Systems to report to the Audit and Supervisory Committee
   • 1) When the Directors and employees of the Company and Directors, Corporate Auditors, and employees of the Company’s subsidiaries discover facts that may cause serious losses to the Company, or when other events occur concerning the matters requiring reporting specified by the Audit and Supervisory Committee, they shall report to the Audit and Supervisory Committee.
   • 2) Upon auditing of subsidiaries by the Directors who are Audit and Supervisory Committee Members, Directors, Corporate Auditors, and employees of the Company’s subsidiaries shall report the status of operations and other matters required by the Directors who are Audit and Supervisory Committee Members.
   • 3) Regarding the details of the reporting made via the whistleblowing system, a system shall be setup for promptly sharing the information with the Directors who are Audit and Supervisory Committee Members.
8. Systems to ensure that persons who reported to the Audit and Supervisory Committee will not receive detrimental treatment because of the reporting
   The Company shall prohibit detrimental treatment of the Directors and employees of the Company and Directors, Corporate Auditors, and employees of the Company’s subsidiaries who reported to the Audit and Supervisory Committee because of the reporting.
9. Matters concerning procedures for advance payment or reimbursement of fees arising in connection with the execution of duties by the Directors who are Audit and Supervisory Committee Members and other policies regarding handling costs or obligations arising in connection with the execution of such duties
   When the Directors who are Audit and Supervisory Committee Members request advance payment or reimbursement of expenses for their execution of duties, based on deliberation by the responsible department the Company shall make advance payment of or reimburse such expenses swiftly except in the case that such expenses or obligations are proved to be unnecessary for the execution of duties by such Directors who are Audit and Supervisory Committee Members.
10. Other systems to ensure that audits by the Audit and Supervisory Committee  are performed effectively

The Representative Directors and Directors who are Audit and Supervisory Committee Members meet periodically to exchange opinions. The Directors who are Audit and Supervisory Committee Members may attend important meetings to exchange information with Directors and employees thoroughly. Moreover, a system is in place that enables close collaboration between Audit and Supervisory Committee and the Internal Audit Department for audits.

Basic Approach towards the Excluding Antisocial Forces and Organizations

The Code of Conduct, which specifies the values and standards of conduct shared by all officers and employees in the Mitsui Kinzoku Group, stipulates that everyone must firmly stand against antisocial forces and/or organizations, and hold no relationships whatsoever with these parties.
The Legal & Administrative Department currently heads the Mitsui Kinzoku Group’s efforts to exclude antisocial forces and/or organizations. The Company will continue working to further strengthen the structure for excluding antisocial forces and/or organizations.