Initiatives to Strengthen Corporate Governance

Based on our fundamental mission of "We contribute to society through urban development," and with our brand slogan ""A Love for People A Love for the City"" we aim to achieve "true corporate value enhancement" by striking a high balance between growth as a corporate group and coexistence with various stakeholders. To achieve this, we position the development and promotion of a corporate governance system as one of the most important management challenges.

Mitsubishi Estate aims to realize the enhancement of corporate value through a harmonious balance between corporate growth and the interests of its various stakeholders by following its brand slogan, "A Love for People, a Love for the City," based on its basic mission of "contributing to society through urban development." The Company shall position the development and promotion of its corporate governance system as one of the most important management issues in realizing this goal.

Changes in Corporate Governance
Evaluation of the effectiveness of Board of Directors

The Evolution of Mitsubishi Estate’s Corporate Governance System
Evaluation of the Effectiveness of the Board of Directors

Changes in corporate governance

The Evolution of Mitsubishi Estate’s Corporate Governance System

Since transitioning to a company with Nominating Committee in 2016, our basic principle has been to "clarify and strengthen the roles of management oversight and business execution, and to strive to ensure transparency and objectivity in management in order to fulfill our accountability to stakeholders, including shareholders." Based on this, we have steadily promoted improvements to our corporate governance system, taking into account changes in social conditions and the business environment surrounding the company, as well as the demands of stakeholders.

In fiscal year 2025, we disclosed the reasons for adopting the skills matrix and our quantitative reduction targets for policy-held shares. Furthermore, with the aim of strengthening executive commitment to achieving the goals of the "Long-Term Management Plan 2030," Remuneration Committee resolved to revise the executive Remuneration system for the first time since fiscal year 2022, and this revision has been in effect since fiscal year 2026.

The following is an overview of the changes in our corporate governance structure to date.

Since transitioning to a company with nominating committee, etc., structure in 2016, the Company’s basic policy has been to “develop and promote its corporate governance system to bring about greater clarity with regard to roles and the strengthening of functions in both management supervision and business execution, while also working to ensure the transparency and objectivity of management in order to fulfill its obligation to be accountable to its shareholders and other stakeholders.” To this end, the Company has steadily promoted the improvement of its corporate governance system, giving due consideration to changes in social conditions and the business environment as well as to the demands of its stakeholders.

In FY2025, Mitsubishi Estate disclosed the reasons for selecting the skills for the Board of Directors skills matrix and its quantitative reduction target for strategic shareholdings. Furthermore, with the aim of further encouraging a stronger commitment among executive officers to achieving the targets of Long-Term Management Plan 2030, the Remuneration Committee decided on the first revision of the remuneration systems since FY2022, and the Company adopted the revisions in FY2026.

The following is an overview of the changes made to Mitsubishi Estate’s corporate governance system to date.

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Evolution of Corporate Governance System

Effectiveness evaluation of the Board of Directors

Evaluation of the Effectiveness of the Board of Directors

Objectives and evaluation methods / Past efforts

Objectives, Evaluation Methods, and Past Initiatives

Board of Directors conducts an annual analysis and evaluation of the overall effectiveness of the Board, based on evaluations by each Director, with the aim of confirming whether Board of Directors is effectively functioning through its supervisory function to achieve medium- to long-term corporate value enhancement and improve Board of Directors. The Board then discloses an overview of the results and, after consideration by Board of Directors, formulates and implements measures to improve effectiveness as necessary.

Up until now, based on the analysis results of effectiveness evaluations, we have refined the agenda and enhanced discussions on management plans, as well as improved reporting opportunities and content from executive officers and enhanced information provision to outside Director, in order to appropriately fulfill our roles. From fiscal year 2020, based on the "Long-Term Management Plan 2030" formulated and announced in January 2020, we have added items related to initiatives that should be further enhanced in the future, in addition to the conventional evaluation items, from the perspective of appropriately monitoring management aimed at improving shareholder value and social value from a long-term viewpoint.

Furthermore, in each phase, including the creation of questionnaires, analysis of response results, and sharing of issues, we received advice from a third-party evaluation organization in fiscal years 2020 and 2023.

With the aim of confirming that the Board of Directors is functioning effectively through its oversight function to improve corporate value on a medium- to long-term basis and to enhance corporate governance, the Board of Directors analyzes and evaluates its effectiveness as a whole based on evaluations conducted annually by each director. In addition, the Board discloses a summary of the evaluation results and subsequently formulates and implements policies based thereon to enhance its effectiveness where necessary.

In accordance with the results of the analysis of the annual evaluation of the Board of Directors' effectiveness, the Board has thus far implemented initiatives to enable it to carry out its role appropriately. These include enhancing discussions regarding management plans by carefully examining agenda items as well as increasing opportunities for and improving the content of reporting from corporate executive officers, in addition to ensuring that information is provided more extensively to outside directors.
In FY2020, based on Long-Term Management Plan 2030—unveiled in January 2020—the Company included items regarding initiatives to be improved going forward in addition to existing items from the perspective of appropriately monitoring management to increase social value and shareholder value over the long term.

In FY2020 and FY2023, the Company consulted with a third-party evaluation organization at each phase of the evaluation process, which involved the creation of questionnaires, an analysis of the questionnaires' responses, and the sharing of recognized issues to be addressed.

Evaluation results (FY2025)

Results of Evaluation

Regarding the "main challenges for further improving effectiveness" identified in the previous effectiveness evaluation for FY2024, the following responses and improvements were confirmed:

The evaluation was able to confirm the following initiatives and improvements with regard to "Major Tasks for Further Enhancing Board Effectiveness" identified in the previous evaluation of effectiveness undertaken in FY2024.

In the survey results, the majority of items received a "appropriate" response. Furthermore, during the discussions and exchange of opinions in Board of Directors report, it was confirmed that Board of Directors is currently being managed appropriately, and issues were raised for further revitalization of discussions and strengthening of monitoring functions.

Based on the above, our Board of Directors has concluded that it is "functioning effectively."

Furthermore, after reviewing the valuable insights gained from Board of Directors and providing feedback on the roles Director expect from each other and their current level of satisfaction, we have identified the following two points as new challenges.

In the questionnaire results, respondents rated a majority of the items as appropriate. Moreover, in the discussion and exchange of opinions during the report to the Board of Directors, it was confirmed that the Board of Directors currently operates appropriately, following which issues were raised for further stimulating discussion and strengthening monitoring functions.

Based on the above, the evaluation confirmed that the Board of Directors was functioning effectively.

There was also a review of helpful suggestions made at meetings of the Board of Directors and feedback was provided on the roles that directors expect of each other and the current level of satisfaction.
With the expectation that the environment will continue to change rapidly, it was decided to set and work to address the following two points as the "Major Tasks for Further Enhancing Board Effectiveness" in FY2026.

Tasks for Further Enhancing Board Effectiveness