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(Corrects quote in paragraph 6 to make clear that rules for compensation will be made, not that compensation amounts will be made public)
By Taiga Uranaka and Taro Fuse
TOKYO, July 11 (Reuters) - Mitsubishi UFJ Financial Group (MUFG) may disclose information on so-called special advisors - all former top executives - and clarify the work they do, as part of its efforts to improve corporate governance, sources at the bank with direct knowledge of the matter said.
The step would put the lender among the first of major Japanese firms to review the role of advisors after the government this year called on firms to clarify the status of former executives who stay on company payrolls as consultants.
Prime Minister Shinzo Abe's administration has made corporate governance a key policy plank, keen to shake up a business culture that has often been criticised for putting the interests of executives over shareholders.
A trade ministry report published in March noted there were concerns that advisors at Japanese firms can exert undue influence over management without being held accountable by shareholders, and it urged companies to shed light on their roles.
MUFG, Japan's largest lender by assets, has "less than 10" special advisors at its core banking unit, all of them either a former chairman or president, said one of the sources.
"Given heightened public interest in corporate governance, we have to clarify the role of these advisors and make rules for their compensation schemes. And we plan to make public what they do," the person said, adding that the board plans to reach a conclusion by the end of the financial year ending in March.
The sources declined to be identified as they were not authorised to discuss the matter publicly.
An MUFG spokesman declined to comment.
Other Japanese companies that have acted on the issue of advisors include department store operator J.Front Retailing Co Ltd, which abolished the title of corporate counsel in May.
Others have sought to justify the rationale behind the practice. Takeda Pharmaceutical CEO Christophe Weber wrote to shareholders in June, making a case for appointing retiring chairman Yasuchika Hasegawa as corporate counsel.
The MUFG review is not seeking to do away with advisors, the sources said, adding that they played an important role as they serve on boards of various foundations and attend social functions as well as funerals on behalf of current management. In Japan, it is customary for senior executives to attend funerals of other executives at client companies.
"Top executives are too busy to deal with all this. Advisors are shouldering this burden for us," said an MUFG senior executive.
"We cannot just send anybody. Clients want people with some weight and hence the title of special advisor," he said.
Other corporate governance reforms introduced in Japan over the past two years include guidance from the Tokyo bourse for boards to boost numbers of outside directors and to unwind cross-shareholdings.
Reporting by Taiga Uranaka; Editing by Edwina Gibbs