Evaluation of Mhcb's Branch Management Activities

establish a suitable limit index system and seek approval from the Head Office, meeting the requirements for liquidity risk management according to the laws of the host country and of the Head Office. Branches submit periodic reports on the status of liquidity risk management and cash flow risk management to the Market Risk Management Committee and the Capital Asset Management Committee, the Senior Management Committee and the CEO of MHCB on the implementation of liquidity risk management of each branch. Through these reports, relevant departments are responsible for sending necessary feedback instructions to the branches, helping the branches manage risks most effectively, ensuring operational safety for the entire system.

Regarding operational risk management : Operational risks are risks of loss that may occur due to inadequate or incorrect internal processing, caused by people or systems, or from other external events. Operational risks include information technology risks, operational risks, legal risks, human resource risks, physical risks, regulatory change risks, and reputational risks... [28]

Based on the basic measures set by the Head Office, branches establish risk management policies and measures appropriate to their business operations. At the same time, each branch must comply with the operational risk management policies set by MHCB, share information and regulations on operational risks among branches. Branches periodically submit reports to MHCB on the risk management situation and receive further instructions from the Head Office in the branch's management activities to achieve the highest efficiency. See Figure 2.9 below to better understand MHCB's operational risk management diagram for branches.

Thus, through studying MHCB's risk management activities for branches, it can be seen that MHCB attaches great importance to risk management activities from the Head Office to all branches. Although branches are independent and autonomous in their risk management activities, MHCB still builds a system of rules and a system of risk limit indexes for branches to refer to and comply with. System

This risk limit rule and index system is very clear and strict, helping branches as well as the entire banking system to face risks at a minimum level and to control risks at a maximum level.

Board of Directors

CEO

Investigation Management Committee

Senior Management Staff

senior in charge of risk management

Operations Management (Risk Management Department)

Information Technology Risk Management Department

Operational Risk Management Department

................................................................ ....

Departments responsible for

Manage each type of risk

- Establish risk management policies

- Provide risk management directives Report on risk management status

Risk management at branches

Figure 2.9: Operational risk management diagram

Source: website: http://www.mizuho- fg.co.jp/english/company/internal/r_management/operational.html

2.2.2.6. Internal control structure

Internal control is a mandatory part separate from the bank's business activities. Internal control has the function of checking and evaluating important activities in business activities, ensuring that business activities are carried out in accordance with the established regulations and procedures.

MHCB's Internal Control Committee is responsible for monitoring and managing the internal control activities of the branches through the reporting system submitted periodically by the branches. The Internal Control Committee, the CEO, the Head of Internal Control Department and the departments discuss and set out regulations and policies on the content of internal control activities for the entire group. At the same time, MHCB clearly designates the Internal Control Department to be responsible for monitoring and inspecting the internal control activities of the branches operating in the domestic and overseas markets. The branches establish their own Internal Control Department to control the business activities at the branches, ensuring that all branch activities comply with the general regulations of MHCB, Japanese laws, regulations of the Bank of Japan and the laws of the countries where the branches operate. Monthly and quarterly, branches submit reports on internal control activities to the Internal Control Department and higher levels of MHCB leadership and request instructions from the Head Office (if any).

Board of Directors CEO

Internal Control Committee

Departments

Internal control department

Provide guidance on reporting control results and internal solutions

Internal control activities at branches

Figure 2.10: Internal control structure diagram

Source: website: http://www.mizuho-fg.co.jp/english/company/internal/audit.html

Thus, through studying the management activities of MHCB for branches, it can be seen that MHCB's branch management activities also focus on managing the basic branch management criteria of multinational banks as stated in section 1.4. However, each organization, enterprise or corporation has its own branch management models, methods or structures suitable for its specific operations and development goals. MHCB, a multinational bank of stature in Japan and the world, has also built its own branch management method suitable for the development goals of the entire group. MHCB manages all the basic common management criteria of multinational banks through a system of six control structures. These basic common branch management criteria are contained in six specific internal management structures, which have the unique branch management characteristics of MHCB and are described in Figure 2.11 below.

Through this, it can be seen that MHCB does not directly manage and control daily activities of branches but builds a system of control regulations.

Basic internal control for all branches operating around the world to comply with. Or each branch can establish its own internal control regulations system in accordance with the basic internal control rules system of MHCB and in accordance with the specific legal environment, economic environment, politics, culture, society, human resources... and must be approved by the Head Office. In any case, the branches must take responsibility for all activities and results achieved by the branch, but still ensure centralized management and control at the Head Office. The branches summarize the business results and report to the Head Office so that the Head Office can summarize them into a consolidated business report of the entire banking system. MHCB and other banks and member companies submit their consolidated reports to MHFG every quarter, forming a consolidated report for the entire Mizuho Financial Group. Therefore, it can be seen that MHCB's branch management model is both centralized and decentralized. Centralization is reflected in the fact that MHCB establishes a framework of regulations and general policies on all business areas and management activities for branches to refer to and comply with. Decentralization is reflected in the fact that branches set their own goals, build and implement business strategies suitable to the specific operations of each branch in each country.

Branch management activities

- General operations management

- Financial operations management

- Product and service management

- Human resource management

- Technology management

- Risk management

Structure

	Structure		Structure		Structure		Structure		Structure
architecture		bamboo		bamboo		bamboo		bamboo		bamboo
system		check		management		management		management		system
check		control		treatment		governance		reason		system
control		Administration		system		bright		risk		check
the		system		tell		white		round		control
rule		system		honey						internal
determine		protect		information						set
France		guest		believe
regime		row

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Branches around the world

Figure 2.11: Branch management operation diagram of MHCB

Source: website: http://www.mizuho-fg.co.jp/english/company/internal/governent

structure.html

2.3. Evaluation of MHCB's branch management activities

Through the study of MHCB's branch management activities in section 2.2.2, it can be seen that MHCB's branch management activities focus on the basic common branch management activities of multinational banks, with different levels of concentration on each different management criterion through six internal management structures.

Each internal governance structure contains one or all six basic indicators of branch governance and includes a number of other governance indicators not listed in section 1.4. At the same time, the six internal governance structures of MHCB listed in section 2.2.2 have a mixed, intersecting and intertwined relationship, containing the branch governance indicators listed in section 1.4. Therefore, to evaluate the branch governance activities of MHCB, we will evaluate the basic criteria of branch governance in MHCB's governance activities, which are the evaluation of general governance activities, financial governance, product and service governance, human resource governance, technology governance and risk governance of MHCB for branches. Through the evaluation of these governance activities, we also evaluate the governance effectiveness of MHCB for branches through the six internal control structures.

2.3.1. Evaluation of MHCB's general management activities for branches

In section 2.1.2, a brief introduction to the multinational bank Mizuho Corporate Bank, Ltd. (MHCB), we see that MHCB has a fairly large system of branches in Japan and other countries around the world, with large assets and a wide range of operations, so as to ensure the effective business operations of the entire banking system. MHCB has a very clear and tight organizational and management structure. The structure between management levels and departments at the Head Office ensures that the daily management and business operations of the Head Office are carried out smoothly and effectively. At the same time, the organizational structure and management mechanism of MHCB for the branches is a vertical management mechanism, meaning that the departments and divisions of the branches will submit reports in accordance with the bank's regulations to the corresponding departments and committees at the Head Office. For example, the Internal Control Department of the Head Office will be responsible for handling the internal control issues of the Head Office and at the same time managing the internal control issues of the branches, as the Internal Control Departments of the branches periodically or irregularly submit reports to the Head Office. With this vertical management mechanism, it will ensure the effectiveness in the management of all the activities of the branches worldwide, while still ensuring flexibility, not causing stagnation in the management structure of the branches of the Head Office because

Branches operate independently and are responsible for their own business activities. The Head Office only manages the branches in terms of the results achieved. However, the Head Office still clearly understands the operating situation and manages the business activities of the branches through the reporting system from the branches, from which MHCB builds overall business development strategies for the entire MHCB banking system.

Another highlight in MHCB's common branch management activities is that MHCB establishes a unified system of management principles throughout the entire banking system, from the Head Office to the branches, by establishing a vision, mission, core value system, regulations system, operating procedures, internal management regulations system (clearly shown in the six internal management structures stated in section 2.2.2) and building a common brand for the entire banking system. At the same time, between MHCB's branches in countries around the world, there are links between each other in terms of capital, management and common brand to achieve the principles, goals, missions and maximum operating efficiency of each branch and of the entire banking system. However, the relationship between MHCB's branches is also based on economic relationships, market relationships; the relationship between the Head Office and the branches is also an economic relationship. MHCB's branches act on behalf of MHCB in establishing cooperative and business relationships with external partners.

The organizational structure of branches operating in countries around the world is also very clear and scientific. The branches have full departments performing the operational functions of a real bank according to the provisions of the laws of the host country (See the appendix for an introduction to the Hanoi branch, a typical branch of MHCB in the world): from foreign exchange management, credit activities, customer relations, professional departments, human resource management, risk management, internal control, information technology management to simple administrative activities but still ensure that it does not cause cumbersomeness for the management apparatus at the branches. The establishment of additional departments and divisions at the branches is decided by the branches themselves but must still report and request approval from the Head Office. In addition, the branches

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