The UFJ financial group is considering increasing the number of outside directors, including those in charge of ensuring that the group’s operations are in compliance with the law, according to group sources.

The group will include the plan in a program it will submit to the Financial Services Agency on Monday in response to business improvement orders issued by the agency last month, the sources said.

The improvement orders concerned four items, including the concealment of documents by employees of UFJ Bank, the core unit of the group, during regular FSA inspections.

The UFJ Holdings Inc. board currently consists of four inside directors and three outside. The group is thinking of increasing the number of outside directors to four or five, the sources said.

It is rare for a Japanese financial group to have outside directors in equal number or exceeding the number of inside directors.

The directors in charge of compliance will be empowered to report directly to the FSA when illegal activities are found, they said.

Some outside directors will be selected from people with backgrounds that have nothing to do with the group.

The move reflects the group’s efforts to improve corporate governance and regain public trust before a planned merger with Mitsubishi Tokyo Financial Group Inc. next year that would create the world’s biggest banking group in terms of assets.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.