Japanese

March 23, 2000


MOL Introduces Management Restructuring andExecutive Officer Assignment Plan



Mitsui O.S.K. Lines (MOL) has announced a plan to restructure its Board of Directors and introduce an executive officer assignment plan. The restructuring plan will be on the agenda at MOL's annual shareholders meeting in June. A detailed explanation of the plan is attached.


MOL's Management Restructuring and Executive Officers Assignment Plan



1. Introduction
MOL is planning a major management restructuring, with the primary goals of giving the board of directors a more active role in the company and introducing an executive officers assignment plan. The proposal will be on the agenda at MOL's annual shareholder's meeting in June.

2. Background of Management Restructuring
While Japanese business has been changing to meet the needs of global market-driven economies, the conventional "convoy" industrial structure has been collapsing. The companies that survive and succeed in the 21st century will be those with management that can develop better strategies to ensure competitiveness in a free-market environment.

Another issue that has become more important is the transparency of management processes and corporate governance. A total commitment to full disclosure of corporate management and performance is vital to making a company attractive to the investment community and rating agencies. This in turn makes capitalization and financing easier and less costly, and allow the company to take advantage of more favorable trade terms. MOL's Creative and Aggressive Redesigning Committee was organized in 1994 to address the challenges of borderless competition by strengthening MOL's and MOL Group companies' global competitiveness, focusing on investments in energy transport, and creating an organization that can respond quickly to market needs.

To streamline our management, we reduced our Board of Directors from 26 in 1994 to 20 in 1998 (before the merger with Navix Line). In addition, as a result of changes in the Japanese Ship Law, we invited George Hayashi, former President, CEO, and Chairman of American President Lines, to join our Board of Directors - the first non-Japanese ever to serve on the board of a Japanese shipping company. MOL clearly recognizes the need to restructure our management in advance of the full-scale development of an information-oriented society in the 21st century.

3. Objectives
(1) Strengthen corporate governance
Strengthen our corporate management base, maximizing value for shareholders while maintaining transparency.
(2) Strengthen management strategy
Revitalize our management structure, including the Board of Directors, to ensure development of management strategies that succeed in today's competitive, borderless economy.
(3) Establish an efficient, speedy work execution system
Develop a management system that can make faster decisions in response to rapid changes in the business environment.

4. Plans to be Executed
(1) Creating a more active role for the Board of Directors
Position the Board of Directors as the top-level decision-making and supervisory body, to maximize value for shareholders, and to allocate work responsibilities among executive officers.
Major items to be discussed and determined at the meeting of the Board of Directors include:
a) Major management issues, such as the MOL Group's long-term vision, management strategy, and analysis of the business environment.
b) Evaluate business performance, select and appoint candidates for the Board of Directors, and approve executive officers
c) Monitor performance to ensure sound, transparent management.
d) Risk management (country risk, foreign exchange risk, market risk, etc.)
e) Items to be determined based on Japanese commercial laws.

The number of directors will be set at 11 or 12 including outside directors.



2) Introduction of executive officer assignment plan
MOL plans to introduce the executive officer assignment plan to clarify decision-making and work responsibilities. The executive officers will be appointed by the Board of Directors, and entrusted by the President to take responsibility for particular business areas. (Legal issues are currently under consideration.) By transferring more authority to executive officers, MOL can simplify the layers of management and speed up decision making.

3) Invitation of outside directors
MOL will also seek outside directors whose knowledge and experience can ensure more effective management. Two or three outside directors will be appointed, particularly those with proven success in specialized professional areas. By appointing outside directors with no interest in MOL, we can bring objective viewpoints to the board.


4) Restructuring of Managing Directors Committee and Subordinate Committees
MOL plans to abolish its current Managing Directors Committee and establish the Executive Committee as the top decision-making body. The Executive Committee will consist of 12-13 members, mostly internal directors and executive officers in charge of specific activities. This transfer of authority will help us focus on the most essential issues. And we also review committee activities according to the objectives mentioned earlier.