Commitment of
Top Management

Sustainability Strategy

FeatureEnvironment

SocialCorporate GovernanceDirectors and the composition and size of the overall
Board of Directors.

Based on its Vision and Mission, MITSUBISHI MOTORS
considers compliance to be of topmost importanceand is making the ongoing reinforcement and improvement of governance a management priority,
in order to meet the expectations of shareholders,customers and all other stakeholders, and to achievesustainable growth and increase in corporate value
over the medium to long term.
In addition, we have put together its basic framework for and views on corporate governance in theform of “Corporate Government Guidelines” and publishes these guidelines on our website.

<Basic Policy>
In order for the Board to objectively and multi-dimensionally deliberate on management policies andexecution of specific matters, and to appropriately
supervise the execution status of operation by Executive Officers, it shall be important that the appropriate number of Directors, internal or outside, withdiversity in terms of knowledge, experience, expertiseand background, engage in vigorous discussions froma variety of perspectives. To this end, candidates for
Directors shall be nominated.

System of Corporate Governance
We have adopted the form of a company with aNomination Committee, etc, as part of its efforts toenhance its corporate governance and clearly separate supervisory and execution function, and in orderto achieve swift execution of business in quick response to environmental changes and to ensure thesoundness and transparency of management throughfurther strengthening of supervision and implementation of more thorough risk management.

Board of Directors and Directors

Policy for the Nomination of Candidates for Directors
and Composition of Members of the Board
The Board makes decisions on important management issues and oversees the execution of business
by Executive Officers.
We have established the following basic policy
regarding the policy for nominating candidates for
MITSUBISHI MOTORS CORPORATION Sustainability Report 2023

ESG Data

Targetl 8.7

Basic Approach and Policies

PDF Corporate Governance Guidelines

GovernanceIn accordance with this policy, the independence anddiversity of the Board shall be ensured as follows.
In order to strengthen the supervisory function of
the Board, the majority of Board members shall be
Outside Directors. Furthermore, in order to fulfill theirduties from an independent and objective standpoint,
at least one-third of the Directors shall be Independent Directors, and consideration shall be given to
their total term of office. In addition, the majority of
the Nomination, Compensation, and Audit Committees, respectively, shall be Outside Directors, and inprinciple, the chairperson of each committee shall be
an Outside Director.
Outside Directors shall be nominated based on
their diverse knowledge, experience, and expertise,
which cannot be obtained from Internal Directors
alone, for example, specialists in law, accounting,finance, etc., persons with management experienceat global companies above a certain size, and persons
with a wealth of knowledge of world affairs or socialand economic trends, etc. Importance shall be placedon their eagerness to devote the necessary time andefforts to understand the business of the Company
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105▶ NextTargetl 16.5as a group, and discuss the direction the Company asa group should take, and to express their opinions to
the management without hesitation. In addition, thediversity of backgrounds such as gender, age, andinternationality shall be also taken into account, as itshall be recognized that multiple perspectives contribute to business promotion and appropriate supervision and auditing.
As for Internal Directors, Executive Officer, President & CEO, and a person who can appropriately
serve as a member of the Audit Committee based on
his or her execution experience of operation at weshall be nominated.
Also, it shall be ensured that the Board is composedof the number of people who can openly and constructively discuss and exchange opinions.
As of June 22, 2023, the Board comprised 13 Members (2 female Members). 11 of the 13 Directors are
Outside Directors with extensive experience and highlevels of insight, and 5 of the Outside Directors are
Independent Outside Directors.
We publish individual Directors’ knowledge, experience and expertise (skill matrix) on our website.
WEB https://www.mitsubishi-motors.com/en/sustainability/
governance/policy_skill.html

Independence Standards and Qualification for Outside Directors
We have established independence standards for
Outside Directors as follows, and we appoint as independent directors those persons who are not at risk of
having a conflict of interest with general shareholders.
<Independence standards and Qualification for Outside Directors>
The Outside Directors of us shall not be any of the following and shall be in a neutral position independent
from our management.
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Commitment of
Top Management

Sustainability Strategy

FeatureEnvironment

SocialGovernance

ESG Data

Targetl 8.7

1. A
 n executive of a major shareholder*1 of MITSUBISHI MOTORS
2. A
 n executive of a major business partner*2 of us,
or of a company for which the Company is a major
business partner, or the parent company or subsidiary of such a company
3. An executive of a major lender to the Company or
the parent company or subsidiary of such a company
4. A person affiliated with an auditing firm that conducts statutory audits of us
5. A consultant, an accounting professional such as acertified public accountant, or a legal professionalsuch as an attorney-at-law who receives a large
amount*4 of monetary consideration or other property other than compensation of corporate officers
from us (in the event such property is received bya corporation, association or other group, then any
person belonging to such group)
6. An executive of a company with which we share a
corporate officer
7. A
 n executive of an organization that is receiving alarge donation or grant from us
8. A
 person to whom any of one through seven has
applied during the past three years
9. A person with a close relative (second degree ofkinship) to whom any of one through seven applies
10. A
 person whose total period in office as an Outside
Director exceeds eight years
11. O ther persons for whom the possibility of a relationship with us appears strong under substantive
and comprehensive consideration of the situation*1 a major shareholder: a shareholder who owns a 10% or greater
share of voting rights*2 a major business partner: a major client of the Company withannual transactions valued at 2% or more of our consolidated
net sales in the most recent fiscal year, or a major supplier to
us with annual transactions valued at 2% or more of the supplier’s consolidated net sales in the most recent fiscal year

MITSUBISHI MOTORS CORPORATION Sustainability Report 2023

Analysis and Evaluation of the Effectiveness of theBoard of Directors
To improve the effectiveness of corporate governance,
we annually evaluate the effectiveness of its Board.
In FY2022, in pursuit of enhancing the oversight capability of the Board, we conducted individual interviewsof all Directors in addition to the questionnaire survey
about the aspects listed below, and the evaluation andanalysis were reported to the Board on March 28, 2023.
In the course of the evaluation this year, we employed
an external consultant for the questionnaire survey andinterviews to ensure in-depth analysis and evaluation
along the latest corporate governance intelligence andsecure objectiveness and transparency in the process.
<Aspects evaluated>
1. Structure and operations of the Board
2. Management and business strategy
3. Corporate ethics and risk management
4. Evaluation of management team and nomination
and remuneration
5. Dialogue with shareholders
6. Committees
As a result, it was confirmed that the Board has
improved on the structure, framework, and operations compared to the FY2021 and is sufficiently
effective in total in its work. The following are theBoard’s strengths recognized through the evaluation:(i) Fostered respect and trust in the executive team’s
managerial efforts(ii) Steady and continuous work to improve its effectiveness and substantive discussions to improve
corporate value(iii) Mutual trust among Directors based on the effective exercise of roles and responsibility by eachof the diverse Outside Directors, with their distinguished personalities, acumen, and experiences.
The evaluation also confirmed improvements inthe following two issues identified in FY2021 throughimplementation of the action plan.
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106▶ NextTargetl 16.5

Issue in FY2021 and Initiative in FY2022 (1)Shift the focus of deliberations and discussions of theBoard to broader matters.
Initiative: E nhanced reporting on matters that underpin
the mid-term business plan, such as products,
technology, new businesses, and other matters.
Issue in FY2021 and Initiative in FY2022 (2)Explore more opportunities to understand deeper thebusiness environment and operations and obtain information about the background of the executive team’s
thoughts and decisionmaking regarding management
matters, which should be the fundamentals for judgments and oversight by the Board.
Initiative: Inception of periodic reporting to the Board regarding business overviews and relevant topics,
enhancement of informal discussions and theunderstanding of issues through continued regular Independent Directors’ meetings, the holding of opportunities for richer communications
between Directors and senior executives, visits
by Directors to domestic and overseas sites,
continued efforts for practical improvements inthe operations of Board meetings, etc.

The FY2022 evaluation concluded that the Board
has developed solid governance base around, among
other things, the structure, framework, and operations and should have more and even richer discussion
about broader-and longer-perspective strategies of us.
Toward the further effectiveness of the above, thefollowing points were identified as key aspects.
(i) Development of a common understanding about
environmental changes and management issues
that the Company faces(ii) F ormulation of a more robust outlook of the futureof the relevant industry’s structure surrounding
automotive and mobility matters and the further
deepening of insights about the MITSUBISHI MOTORS core competencies(iii) T he importance of a greater variety of opportunities for interactive and multilateral communicaBack to Contents ▶▶

Commitment of
Top Management

Sustainability Strategy

FeatureEnvironment

SocialESG Data

GovernanceTargetl 8.7

tions and discussions between the Board and theexecutive teams for the purpose of helping adaptations to forthcoming changes in the world
We will endeavor continuously for more heightened effectiveness of the Board and enhanced corporate governance by incorporating the results ofthis evaluation into the agendas of Board meetings in
FY2023 and other relevant efforts.

Committees

The Board of Directors has the following three statutory
committees, which supervise Directors and Executive Officers together with the Board of Directors. Each committee is composed of a majority of Outside Directors, andthe Chairpersons of each committee are Outside Directors. Through this, a system is in place in which corporate
governance functions in a fair and transparent manner.

General Meeting of Shareholders
Proposals for election/
Dismissal of Directors

Election/Dismissal

Election/
Dismissal

Nomination Committee
5 (including 5 Outside Directors)
Board of Directors
13 (including 11 Outside Directors)

Compensation Committee
5 (including 4 Outside Directors)

Supervision

Election/ Determination ofDismissal compensation

ReportInternal Control
Committee
Supervise and order

Corporate Officers and Employees
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107▶ NextAudit Division

Product Discussion
Meeting

Audit Coordination

Instruction

Executive Officer, President
and Executive Officers
Executive Committee

Coordination

Instruction/report(Specific case suchas misconduct)

Audit

Accounting Auditors

Audit Committee
5 (including 4 Outside Directors)
Delegationof authority

Execution function

MITSUBISHI MOTORS CORPORATION Sustainability Report 2023

Audit Committee
Among other activities, the Audit Committee audits
the execution of duties by Directors and Executive
Officers, supervises the status of the formulation andoperation of the internal control system and prepares audit reports. Additionally, the Audit Committee
conducts internal investigations on matters that theBoard or the Audit Committee deems inappropriate
for the executive side to conduct. The Audit Committee consists of four Outside Directors and one Internal
Director, and an Independent Outside Director (Yoshihiko Nakamura) serves as the chairperson.

Corporate Governance and Business Execution Structures (June 22, 2023)

Supervisory function

Nomination Committee
The Nomination Committee makes decisions on proposals for the appointment and dismissal of Membersof the Board to be proposed to the General Meetingof Shareholders, approves proposals for the appointment and dismissal of Executive Officers proposedby the President to the Board of Directors, and discusses succession planning for MITSUBISHI MOTORS’President. The committee is composed of five Outside
Directors, and an Independent Outside Director (Ms.
Main Kohda) serves as the chairperson.
In FY2022, the Nomination Committee met 10
times. In determining the agenda item for the electionof Directors to be proposed to the General Meeting of
Shareholders, the Nomination Committee prepared alist of candidates and interviewed them for the election of new independent Outside Directors, and deliberated on approval of the proposal for the election of
Executive Officers to be proposed by the President to
the Board of Directors, and on succession planning for
the President, and other matters.

Compensation Committee
The Compensation Committee deliberates and determines the policy regarding determination of remuneration of Directors and Executive Officers, as well as
the details of individual remuneration. The committee
is composed of four Outside Directors and one Internal Director. An Outside Director (Mr. Shunichi Miyanaga) serves as the chairperson.
The Compensation Committee met nine times in
FY2022. The Committee deliberated on the determination of the individual Compensation Plan for Directors and Executive Officers, review of the current
Compensation Plan for Directors, and other matters.

Targetl 16.5

Coordination

Audit
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Commitment of
Top Management

Sustainability Strategy

FeatureEnvironment

SocialGovernance

ESG Data

Targetl 8.7

In FY2022, the Audit Committee met 15 times. The
status of Audit Committee audits outlined at right.

Executive Officers

The Board make decisions on matters that require aresolution of the Board pursuant to laws, regulations orprovisions of the Articles of Incorporation, matters delegated to the Board by a resolution at a General Meetingof Shareholders, and certain material matters related tobusiness management. Executive Officers are given theauthorization to make decisions relating to the execution of business excluding any of the above matters.
Executive Officers are responsible for making decisions on business execution delegated by the Board.
The President is appointed as the head of the executive departments by a resolution of the Board.
As of June 22, 2023, there are 11 Executive Officers(including the President).

Outline of Decision-Making Process for
Business Execution and Various Committees

When executing business, the Executive Officer, Executive Vice President is positioned as the responsible
person with authority and responsibility for businessexecution within the scope of duties, in addition to
the President who is the head of the executive department. In addition, delegation of decision-making
authority is systematized based on the Delegationof Authority Rules, in which items subject to delegation and their scope are defined, and decision-making procedures for major matters are formulated to
speed up business execution and improve the transparency of the decision-making process.
Important matters on management are decided
after deliberation at the Executive Committee, whichis composed of all Executive Officers and chaired by
the President.
Important matters relating to product development projects are decided after deliberation at the
MITSUBISHI MOTORS CORPORATION Sustainability Report 2023

Product Decision Meeting.
Additionally, matters related to internal control
are decided after deliberation at the Internal Control Committee.
Each of these committees are chaired by the
President and the relevant Executive Officers serveas members.

Conflicts of Interest

Transactions between MITSUBISHI MOTORS and Directors or Executive Officers that particularly compete with our business operations or conflict with
our interests require prior resolution from, and afterthe-fact reporting to, the Board in accordance withthe rules of the Board (hereinafter referred to as the“Rules of the Board”). In addition, the Rules of theBoard stipulate that Directors with a special interestin a resolution of the Board shall not participate insuch resolution.
Furthermore, we conduct transactions with related parties, such as its Officers or major shareholders,
based on the validation of multiple related departments and approval of the person in charge, pursuant
to the delegation of authority rules, after we havesufficiently considered the economic rationality toconfirm there is no harm to our interests, which is thesame process we go through with non-related parties.

Status of Audit Committee Audits andInternal Audits
Status of Audit Committee audits

Our Audit Committee gathers information and conducts
organizational audits in relation to the implementation and operation status for internal control systems(including internal controls pertaining to financial reporting), such as those for main affiliates in Japan andBack ◀

108▶ NextTargetl 16.5overseas, status of progress with and operation ofcompliance activities, verification of the appropriatenessof risk evaluations, and risk management frameworks
and the like, through Audit Committee meetings thatare held monthly, in principle, and other meetings with
Internal Audit Divisions, interviews with Executive Officers, and the like, based on audit policy and audit plans.
In the Audit Committee during the fiscal year under review, reports made concerning the audit policies
and audit plans; audit methods; the assignment of audit duties; the status of the improvement and maintenance of the internal control systems; responseto the Guidelines under the amended Whistleblower
Protection Act; audit plans made, audit methods used,
and the suitability of the results of audits performedby the Accounting Auditors; communications in relation to Key Audit Matters (KAM); response to theamendment of the Code of Ethics of the JapaneseInstitute of Certified Public Accountants (JICPA); andthe monthly reports on the status of duties executedby the Full-time Member of the Audit Committee.
In addition to the meetings above, based on its
audit policies and audit plans, the Audit Committee held 6 meetings (approximately 90 minutes per
meeting) with the internal audit divisions during theyear, performed audits, and collected informationon the operating status of internal controls throughthe divisions. The Audit Committee also interviewed
Executive Officers and others 9 times during the year
(approximately 90 minutes per interview) to confirm
how the MMC group’s major subsidiaries and affiliates
in Japan and overseas as well as divisions address issues on the development and operation of the internal control system, compliance, risk management, etc.
In addition to the meetings above, full-time Membersof the Audit Committee attended important meetings
including meetings of Executive Committee; inspected
important approval/decision documents; interviewed
Executive Officers and Corporate Officers; visited andBack to Contents ▶▶

Commitment of
Top Management

Sustainability Strategy

FeatureEnvironment

SocialGovernance

ESG Data

Targetl 8.7

audited, or conducted hearings with MMC’s major business locations and its major subsidiaries and affiliates inJapan and overseas; provided training for and had liaison
meetings with auditors of subsidiaries and affiliates inJapan; and performed the three-pillar audit system (i.e.,internal audits, auditors’ audits, and accounting audits).
The status of duties executed by full-time Members of
the Audit Committee is reported in the meeting of the
Audit Committee (held once a month in principle).
The status of activities carried out by the Audit
Committee is reported to the Board of Directors twicea year. The Audit Committee also exchanges opinionswith Executive Officer, President to communicate its
findings every year.

Status of internal audits

MITSUBISHI MOTORS has established internal audit
departments (the Internal Audit Department and the
Quality Audit Department) in the Internal Audit Division (an independent organization reporting directly to Executive Officer, President & CEO) and thesedepartments systematically conduct internal audits
based on the annual audit plan.
As of the end of March 2023, the Internal Audit
Division consists of 24 members* with specialties,
including those with a variety of managerial experience, certified internal auditors, and eligible internal
auditors. The Internal Audit Department (consisting of
15 members*) conducts audits to determine whether
operational management of the Group is being conducted with transparency using appropriate processes.
The Quality Audit Dept. (6 members*) audits the appropriateness of product quality-related activities by MMC
and subsidiaries and affiliates in Japan and overseas.
The results of the internal audit conducted by theInternal Audit Division are reported to Executive Officer, President & CEO and the Audit Committee.
Besides coordinating meetings with the Audit
Committee six times a year and holding regular meetings with full-time Audit Committee Members oncea month, the Internal Audit Division also exchanges
MITSUBISHI MOTORS CORPORATION Sustainability Report 2023

information at tripartite audit meetings with full-time
Audit Committee Members and Accounting Auditors.
* As of June 30, 2023, the Internal Audit Division consists of 25
members (15 from the Internal Audit Department, 7 from the
Quality Audit Department, and 3 from the Division itself).

Cooperation between the Audit Committee
and internal audit departments

The Audit Committee Members regularly hold meetings with the Internal Audit Division to receive information regarding the auditing system, auditing plans,
and internal audit results within us and at its affiliateddomestic and overseas companies, and to provide
feedback to the Internal Audit Division on the statusof the Audit Committee Members’ audits. Additionally,
the Audit Committee summarizes audit activities it
has conducted, including the details of reports received from the Internal Audit Division, and reports
the results to the Board twice a year.

Items Relating to Takeover Defense
Not applicable.

Executive Remuneration
Basic Views and Policy
MITSUBISHI MOTORS’ Compensation Committee,
which is chaired by an Outside Director, has established the following policy regarding remuneration for
Directors and Executive Officers.
<Basic approach>
1.	The compensation system shall contribute to MMC
group’s sustainable growth and medium- to longterm improvement of corporate value.
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109▶ NextTargetl 16.5

2.	The compensation system shall be linked withcorporate results in order to motivate Executive
Officers to accomplish management strategies andmanagement plans as well as to achieve targeted
corporate results in an appropriate manner.
3.	The compensation levels shall contribute to securing
professionals who measure up to ideal standards for
management personnel that MMC expects for those
responsible for corporate operation to have.
4.	The compensation system shall increase a sharedawareness of profits with shareholders and awareness of shareholder-focused management.
5.	The decision-making process relating to compensation shall be highly transparent and objective.
Based on these policies, the Compensation Committee determines the method calculating remuneration and individual remuneration amounts of thedirectors and executive officers. Remuneration for
FY2022 is contained in the FY2022 Annual Securities
Report (pages 91–96).
FY2022 Annual Securities Report
WEB https://www.mitsubishi-motors.com/content/dam/com/
ir_en/pdf/yuka/2023/yuka20230629e.pdf

From FY2022, based on the recognition that the response to sustainability is one of the crucial issues ofthe MMC group, we added ESG-related items as theindex to determine the Medium-and Long-term Performance-linked Compensation for Executive Officers.
l Environmental indicator:
We have introduced “CO2 emissions from businessactivities” as an indicator for measuring progress inaddressing climate change and other increasingly
environmental issues.
lS ocial indicator:
We have introduced “employee engagement” asan indicator of advancement of employee job
satisfaction and increased initiative through securing diversity and work-life balance, and promoting Human Resources development.

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