MC's corporate management treats the continual strengthening of corporate governance as an important path towards achieving this because corporate governance forms the foundation for ensuring the soundness, transparency and efficiency of management. The foundation of MC's corporate governance framework is its corporate auditor system and in order to build a more effective corporate governance framework, MC is working to strengthen its oversight function by increasing the number of outside directors and outside corporate auditors and separating the management of the corporation from the execution of operations by introducing an executive officer system.

MC's Board of Directors has 15 members, including 5 outside directors. As a rule, the Board convenes once a month and is responsible for making decisions concerning important management issues and overseeing business execution.

In 2001, the adoption of an executive officer system clarified the separation of the roles and responsibilities of directors and executive officers. Furthermore, in 2004, the term of directors was reduced from two years to one year to provide greater flexibility in determining the composition of the Board of Directors. In 2006, the Articles of Incorporation were amended to allow the Board of Directors to approve resolutions in writing from the perspective of facilitating flexibility in how the Board operates. To clarify and strengthen the function of outside directors and outside corporate auditors, MC, in 2007, established standards for the selection of these directors and corporate auditors.

Moreover, aiming to build a governance framework conducive to the advancement of INNOVATION 2009, MC, in 2008, limited the executive officers allowed to concurrently serve as directors to those officers whose office of responsibility pertains to the management of MC in its entirety. The meeting of the Board of Directors, whose number of corporate directors has been reduced to 10 (from 15 directors in 2007) is made up of the corporate directors and outside directors whose office pertains to the management of MC in its entirety, and the corporate auditors, further enhancing the function of overseeing the execution of operations.

The president, as MC's highest officer, executes business through the Executive Committee, the decision-making body for corporate management. Moreover, important corporate management issues are first decided by the Executive Committee (which meets, in principle, two times a month) and then referred to the Board of Directors for deliberation and final determination.

The Governance Committee and the International Advisory Committee are made up of internal directors, outside directors and other respected individuals from outside MC. These advisory bodies offer advice from a third-party perspective. The Governance Committee was established in 2001 and has since convened two to three times per year to discuss issues relating to corporate governance. In fiscal 2007, the Governance Committee discussed such topics as the utilization of diverse human resources, a review of executive officers' remuneration system, and MC's environmental and CSR basic policies.

The International Advisory Committee was established in 2001 and discusses issues relating to globalization of MC's operations. This committee meets around once a year.

When conducting their audits, the five corporate auditors, including three outside corporate auditors, utilize staff members of the Corporate Auditors' Office, which is under their direct control. At the same time, to conduct audits, the corporate auditors attend meetings of the Board of Directors and other important meetings and hold discussions with internal departments, including important offices in Japan and overseas, as well as visit main subsidiaries that are important from the perspective of Group management.

Regarding internal audits, the Internal Audit Department conducts audits of MC, subsidiaries and affiliated companies from a company-wide perspective. In addition, each business group has established its own internal audit organization, under which audits are carried out on a consolidated basis. These internal audits are conducted after selecting audit targets based on an annual audit plan. The results of audits by the Internal Audit Department are reported to the president, corporate auditors and other concerned parties and regularly to the Board of Directors and the Executive Committee.