Press Information
Tokyo, June 26, 2014 - Effective June 26, Mitsubishi Heavy Industries, Ltd. (MHI) shifted to a new corporate governance structure. In addition to significantly scaling back the size of the Board of Directors and raising the ratio of outside directors to 25%, the number of directors having representation rights has been reduced - for example, by preventing the Chairperson from simultaneously serving as a Representative Director. The aim is to form efficient and highly transparent and trustworthy mechanisms in the company's management structure - especially within the Board of Directors - appropriate to expanding business in the global market and boosting profitability following the company's complete shift to a business domain-based structure in April.
Until the new changes took place, all directors in the position of Executive Vice President or higher had been elected as Representative Directors; however, now, Representative Directors are limited to the directors with specific positions to further clarify their responsibility and authority. At the same time, by preventing the Chairperson from simultaneously serving as Representative Director, the Chairperson is now able to concentrate exclusively on supervising business administration as leader of the Board of Directors.
MHI has been taking steps at corporate governance reform continually for nearly 10 years. In 2004 the company had a total of 28 directors, including only 1 outside director (ratio: 3.6%). Then in June 2005 the number of outside directors was increased to 2 and the number of directors was trimmed to 17. Simultaneously, the tenure of directors was shortened from 2 years to just 1 and a system of executive officers was introduced. After that, the internal audit system was strengthened, performance-based remuneration was introduced, and the number of outside directors was increased further. Then in June 2012, the company's first non-Japanese outside director was appointed, and initiatives were launched to promote ongoing dialogue with individual shareholders and both domestic and overseas institutional investors.
Leveraging the shift to its new governance system, augmenting the launch of the Business Domains structure in April, MHI will now proceed forward even more vigorously with measures targeting realization of the company's goal to become a robust earnings-generating enterprise with a business scale of 5 trillion yen.
About MHI Group
Mitsubishi Heavy Industries (MHI) Group is one of the world’s leading industrial groups, spanning energy, smart infrastructure, industrial machinery, aerospace and defense. MHI Group combines cutting-edge technology with deep experience to deliver innovative, integrated solutions that help to realize a carbon neutral world, improve the quality of life and ensure a safer world. For more information, please visit www.mhi.com or follow our insights and stories on spectra.mhi.com.