GovernanceIntroduction

Message from the Chairman of the Board
We will deepen discussions with the executive
team in both “offensive” and “defensive” areas forincreasing corporate value over the medium term.
Drawing on my experience as president in implementing the business integration, including the Post Merger Integration (“PMI”), as the non-executive Chairman of the Board, I will
strive for the smooth operation of the Board of Directors and the Governance Committee
as an advisory body as well as the Nomination Committee and the Compensation
Committee as consultative bodies. We will also ensure that the Board of Directors reliably
fulfills this role to attain the objectives of the Medium-Term Management Plan for
FY2023-FY2025 (“2025 MTMP”) and ultimately achieve Our Mission.

Message from thePresident & CEO

Value Creation Story Business Strategies

Financial Strategy

Strategy to EnhanceNon-financial Capital

Governance

Data Section

Dialogue with Independent Outside Directors
Toward further raising the effectiveness of the Board of Directors
and advancing governance
We held a roundtable discussion with five independent Outside Directors, who exchanged wide-ranging opinions onvarious topics. These ranged from their assessment of the process for formulating the Medium-term Management Planfor FY2023 - FY2025 (“2025 MTMP”) to the key points of governance, the future expectations of Mitsubishi HC Capital,
and the ideal business model that transcends the framework of the leasing business.

Takahiro Yanai
Director, Chairman(Chairman of the Board)

Mitsubishi HC Capital designated the first two years after the business integration in April 2021 as the period for the PMI. One of ourpriority issues during this stage was to deepen mutual understanding
between the two predecessor companies. At the same time, theBoard of Directors also ascertained the overall picture of the integrated company from a variety of perspectives by discussing numerous proposals based on conservative and broad-based standards foritems to be submitted to the Board of Directors. Through this process,each member of the Board of Directors has gained a deeper understanding of the Company. In FYE3/2023, the second year of theintegration, active discussions were held when formulating theMedium-Term Management Plan. In this manner, along with ourdefensive-oriented discussions focused on risk management, wehave gradually deepened “offensive” discussions that contribute toour strategy formulation.
Regarding the governance system design of Mitsubishi HCCapital, the Company has established the Governance Committee as
an advisory body as well as the Nomination Committee and theCompensation Committee as consultative bodies to the Board ofDirectors. These are voluntary committees, with the majority of theNomination Committee and Compensation Committee composed ofIndependent Outside Directors, however, by stipulating that the Boardof Directors shall attach high importance to resolutions by eachcommittee, we have established a system under which the opinionsof Independent Outside Directors are firmly reflected in theCompanyʼs important decision-making.
In FYE3/2023, the Nomination Committee discussed theselection of a successor in the event of a change in the president,
while the Compensation Committee discussed re-evaluating theexecutive compensation system from the perspective of stakeholders.
The Board of Directors reached conclusions in line with the results ofeach resolution. The Governance Committee serves as an advisory
body to the Board of Directors and primarily evaluates the effectiveness of the Board of Directors and discusses improvement measures

65MITSUBISHI HC CAPITAL INTEGRATED REPORT 2023based on this evaluation. For example, we have received feedback
regarding the operational aspects of the Board of Directors, such asproviding better explanations prior to deliberating on important
proposals, and we are taking improvement actions to enhance theeffectiveness of the Board of Directors. Based on these evaluations ofeffectiveness, we plan to review the standards for items to be submitted to the Board of Directors in the second half of FYE3/2024,
delegate as many matters as possible to the executive team, andensure that the Board of Directors spends sufficient time on deliberating themes of higher importance in terms of governance and strategy.
Meanwhile, to steadily execute the role of the Board ofDirectors, Outside Directors are actively implementing on-site inspections. We will deepen discussions at board meetings by observing
business sites in Japan and overseas and listening directly to group
executives and employees, including the management teams ofoverseas subsidiaries. In the future, we will continue to increase
opportunities for on-site inspections, including those for ourselves.
The 2025 MTMP features the major theme of “transformation”
toward exploring the frontiers of the future without being bound byprecedents while considering significant changes in the externalenvironment. To realize this “transformation,” we aim to create a
corporate culture that does not fear failure.
Taking on this challenge naturally involves risks. With this inmind, the Board of Directors needs to strengthen its defensivefunctions to appropriately monitor risks. Concurrently, each director
should leverage his or her own specialized knowledge to provide
appropriate advice to the executive team, and I believe that ouroffensive functions that support the implementation of this strategy
will assume an even greater degree of importance.
As the Chairman of the Board of Directors, I will make myutmost efforts to ensure the smooth operation of the Board ofDirectors to enable the Board of Directors to engage in both offensive- and defensive-oriented discussions and implement governancethat meets the expectations of various stakeholders.

Hiroyasu Nakata

Yuri Sasaki

Director(Independent OutsideDirector)

Director(IndependentOutside Director)

Koichiro Hiraiwa

Hiroko Kaneko

Masayuki Saito

Director (Audit and SupervisoryCommittee member)(Independent Outside Director)

Director (Audit and Supervisory
Committee member)(Independent Outside Director)

Director (Audit and Supervisory
Committee member)(Independent Outside Director)

Post merger integration process (PMI) is a cornerstone of growth

Q

During these past two years following the merger,
you have successfully completed the PMI as
originally planned. What are your thoughts about
the issues that lie ahead?

Saito Under the new system created through the mergerof the former Mitsubishi UFJ Lease & Finance and theformer Hitachi Capital, our pro-forma rule-making hasnearly been completed, and we are about to enter a maturation process. As we do so, first of all, everybody must
thoroughly acquaint themselves with each other in Japanand at the overseas companies we have acquired. We alsoneed to respect each companyʼs corporate culture while
management must clearly present and implement sharedvalues. This process should enable optimal integration andresult in the creation of “one team.” The management teamhas a solid understanding of our current position, and in
the future, it will likely advance steadily in the presentdirection. I will continue to fully contribute to this processby providing my advice and support.

Hiraiwa Generally speaking, it is said that it takes 30 years
to truly unify a company through integration after a merger.
To put this into better perspective, this is the same amountof time for a new employee to eventually become an executive. While this might very well be true, I also feel that wecannot spend such a long time on our integration process.
2025 MTMP has been formulated based on the solid foundation of Our Mission. I am sure all employees agree withthis thinking. This is precisely why I believe 2025 MTMP has
great significance and originality. To realize Mitsubishi HC
Capitalʼs Our Mission, it is important to embed the respective corporate cultures and traditions cultivated by eachcompany into the new management structure.
Saito Mitsubishi HC Capital now has great potential
because it laid the cornerstone for significant growth during
the past two years of PMI. Mitsubishi HC Capital will firmly“sowing seeds” and “gaining a solid foothold” as set forthin 2025 MTMP over the next three years, which is designated as the planʼs “Hop” phase, so that it can transitionsmoothly to the successive “Step” and “Jump” phases.

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