In order to realize long-term and stable enhancement of corporate value, ÆON MALL is developing a framework that upgrades the function of corporate governance and allows prompt decision-making.

Corporate Governance Initiatives

Following our basic philosophy of “Customers First,” we aim to boost our participation in community life. Through our lifestyle centers in which we create “surprises, excitement, and fun,” we aim to create “Towns with Vitality” that offer new lifestyles brimming with appeal.

Our partners in creating these vital towns include the local residents, administrations, commercial corporations, and specialty store companies. We are committed to continuing to work with them to help realize rich and stimulating lifestyles for local residents.

Following this basic policy, we shall contribute to the growth of local economies and culture and create shopping malls that serve as essential community centers for the local communities.

We are also working to further enhance our strength as a dedicated mall developer with roots in the retail business through corporate management led by directors with thorough knowledge of the retail business, and to maintain and reinforce sound management through the adoption of an auditing system.

We believe that fulfilling our responsibilities to stakeholders including shareholders and customers as well as business partners, local communities, and employees through corporate activities guided by these initiatives will lead to long-term and stable enhancement of corporate value. To realize that goal, we strive to boost our competitiveness by upgrading the function of corporate governance and achieve prompt decision-making. Under these initiatives, we will move forward to enhance the transparency and efficiency of management, upgrade compliance and risk management, and thereby further improve the corporate governance system.

Corporate Governance Structure

The Board of Directors, chaired by the President, is held at least once a month in order to strengthen the supervisory role of management. Our corporate auditors also attend. The Board of Auditors works closely with the independent auditors and the Management Auditing Department, our internal audit division, mutually exchanging information and opinions as needed, in an effort to enhance both audit effi cacy and effi ciency. Of our 4 corporate auditors, 2 are independent outside auditors.

The Executive Committee, established under the Board of Directors as an advisory body for the President, normally meets once a week, and is mainly comprised of directors of managing director rank or higher and full-time auditors. The Executive Committee enhances our management strategy functions and promotes effi cient decision-making processes.

The Management Auditing Department, made up of seven full-time offi cials, works in close cooperation with the heads of other divisions, and examines and evaluates the effectiveness and effi ciency of internal control over a range of business operations to ensure the smooth management and control of business operations. This department is independent from all business-related executive divisions.

Relationship with ÆON Co., Ltd.

On August 21, 2008, ÆON Co., Ltd., the parent company of ÆON MALL, became a pure holding company. In line with this change, the holding company manages the Group’s 12 main operations, including GMS and other retail store operations, specialty store operations, shopping center development operations, and general fi nancing operations, as well as the respective functional companies. ÆON MALL is considered the core company responsible for the Group’s shopping center development business. ÆON Co., Ltd., either on its own or via affi liated companies, holds 57.43% of the voting rights in ÆON MALL (55.84% direct ownership). However, decisions with respect to the terms and conditions of trade with ÆON Co., Ltd. or its affi liated companies are decided based on economic terms and other factors in the same manner as with ordinary transactions, and require the same approval procedures, including approval of the Board of Directors.

ÆON MALL, as a member of the ÆON Group, is subject to policies stipulated for the entire Group, but makes its own management decisions and maintains a certain degree of autonomy. The business activities of ÆON MALL are not hindered by its relationship with ÆON Co., Ltd. or companies within the ÆON Group.