Governance Section
64

Members of the Board of Directors andAudit & Supervisory Board

63

MITSUBISHI GAS CHEMICAL COMPANY, INC.

67

Outside Directors Roundtable Talk

71

Corporate Governance76

Risk Management

77

ComplianceMembers of the Board of Directors and Audit & Supervisory Board(As of June 30, 2023)

Directors

Toshikiyo Kurai

Masashi Fujii

Nobuhisa Ariyoshi

Representative Director, Chairman

Representative Director, President

Representative Director, Senior Managing Executive Officer
In charge of internal control & risk management,
Administrative & Personnel Division, Finance & Accounting
Division, Information Systems Division and Purchasing &Logistics Division

Attendance of Board of Directors Meetings: 12/12 (FY2022)

Attendance of Board of Directors Meetings: 12/12 (FY2022)

Attendance of Board of Directors Meetings: 12/12 (FY2022)

April 1975
June 2009

Joined MGC
Director, Managing Executive Officer, andPresident of Specialty Chemicals Company
Representative Director, Senior Managing
Executive Officer, Assistant to President, andPresident of Specialty Chemicals Company
President and Representative Director
Chairman and Representative Director(to present)

April 1981
April 2015

April 1984
April 2016

Reason for election: Following his service in important
positions, mainly in the Specialty Chemicals Department,
and his presiding over R&D, manufacturing and generalbusiness in the Inorganic Chemicals Division and theEngineering Plastics Division, he was appointed as Director
in June 2009, and served from June 2013 to March 2019as President and Representative Director, has served from
April 2019 as Chairman and Representative Director, andhas abundant experience and knowledge of MGC’s businessand management control as a whole.

April 2019

June 2012

June 2013
April 2019

June 2015

Joined MGC
Managing Executive Officer, Administrative
Management of LNG Project Team, andPresident of Natural Gas Chemicals
Company
Director, Managing Executive Officer,
Administrative Management of LNG
Project Team, and President of Natural Gas
Chemicals Company
President and Representative Director(to present)

Reason for election: Following his service in important
positions in the Administrative & Personnel and Natural Gas
Chemicals Departments, he was appointed as Director in
June 2015 and presided over the Natural Gas Chemicals
Department, has served from April 2019 as President andRepresentative Director, and has abundant experienceand knowledge of MGC’s business and administration ofmanagement, etc.

June 2018

April 2019

April 2020

April 2022

Joined MGC
Executive Officer, General Manager,
Electronic Materials Division
Director, Managing Executive Officer, incharge of Finance & Accounting Center,
Information Systems Division, andPurchasing & Logistics Center
Director, Managing Executive Officer, Chairmanof Internal Control Promotion Committee, incharge of Compliance, Risk Management,Internal Audit Division, Corporate Planning
Division, Administrative & Personnel Centerand Corporate Communications Division,
General Manager of Tokyo Techno Park
Director, Managing Executive Officer, incharge of internal control & risk management,
Corporate Management Sector
Representative Director, Senior Managing
Executive Officer (to present)

Reason for election: Following his engagement mainlyin the Information & Advanced Materials and Specialty
Chemicals Departments, he served in important positions in
the Administrative & Personnel and Information & Advanced
Materials Departments, was appointed as Director in
June 2018, was in charge of the Corporate Management
Sector and Compliance, and has abundant experienceand knowledge of MGC’s business and administration ofmanagement, etc.

Naruyuki Nagaoka

Motoyasu Kitagawa

Ryozo Yamaguchi

Director, Managing Executive Officer
In charge of Basic Chemicals Business Sector

Director, Managing Executive Officer
In charge of Compliance, responsible for Corporate Planning,in charge of Internal Audit Division, CSR & IR Division

Director, Managing Executive Officer
In charge of Specialty Chemicals Business Sector

Attendance of Board of Directors Meetings: 12/12 (FY2022)

Attendance of Board of Directors Meetings: 12/12 (FY2022)

Attendance of Board of Directors Meetings: 9/9 (FY2022)

April 1985
April 2017

April 1986
April 2019

April 1988
April 2020

June 2019

June 2020

April 2021

Joined MGC
Executive Officer, Manager, Corporate
Planning Division
Managing Executive Officer, in chargeof Corporate Planning and Purchasing &Logistic Center
Director, Managing Executive Officer, incharge of Compliance and Corporate
Planning Sector
Director, Managing Executive Officer, incharge of Basic Chemicals Business Sector(to present)

Reason for election: Following his engagement mainly in the
Natural Gas Chemicals Department and the Administrative& Personnel, he served in important positions in the Natural
Gas Chemicals Department and the Corporate Planning
Division, was appointed as Director in June 2020, and hasabundant experience and knowledge of MGC’s business andadministration of management, etc.

June 2019
April 2021

June 2021

Joined MGC
Executive Officer, General Manager, Organic
Chemicals Division, Natural Gas Chemicals
Company
Executive Officer, Manager, Corporate
Planning Division
Managing Executive Officer, in charge ofCompliance, responsible for Corporate
Planning, in charge of Internal Audit Division,
CSR & IR Division (to present)
Director (to present)

Reason for election: Following his engagement mainly in
the Administrative & Personnel Department and Corporate
Planning Division, he served in important positions in the
Natural Gas Chemicals Department and Corporate Planning
Division, was appointed as Director in June 2021, and hasabundant experience and knowledge of MGC’s business andadministration of management, etc.

April 2021
April 2022

June 2022

Joined MGC
Executive Officer, Manager, Administrative &Personnel Division, Corporate Management
SectorExecutive Officer, in charge of Administrative& Personnel Division
Managing Executive Officer, in charge ofSpecialty Chemicals Business Sector(to present)
Director (to present)

Reason for election: Following his engagement mainly in
the Specialty Chemicals and Administrative & Personnel
Departments, he served in important positions in the
Administrative & Personnel Department, was appointed
as Director in June 2022, and has abundant experienceand knowledge of MGC’s business and administration ofmanagement, etc.

MGC Report 2023

64

Members of the Board of Directors and Audit & Supervisory Board

Ko KedoYoshinori Isahaya

Haruko Hirose

Director, Managing Executive Officer
Responsible for Production Technology,
in charge of Environment Safety and Quality
Assurance Division

Director, Managing Executive Officer
Responsible for Research & Development,in charge of Intellectual Infrastructure

Outside Director Independent

April 1988
April 2015

April 1991
April 2019

June 2018

April 2019
April 2020
April 2021
April 2023

June 2023

Joined MGC
Manager, Planning & Development Division,
Natural Gas Chemicals Company
Manager, Planning & Development Division,
Natural Gas Chemicals Company, andManager, Life Science Division, Natural Gas
Chemicals Company
Executive Officer, Plant Manager, Mizushima
Plant, Aromatic Chemicals Company
Executive Officer, Plant Manager, Mizushima
Plant, Basic Chemicals Business Sector
Executive Officer, in charge of Research &Development
Managing Executive Officer, responsible
for Production Technology, in charge ofEnvironment Safety and Quality Assurance
Division (to present)
Director (to present)

Attendance of Board of Directors Meetings: 12/12 (FY2022)

April 2020
April 2021
April 2023

June 2023

Joined MGC
General Manager, Tokyo ResearchLaboratory, Specialty Chemicals Company
Executive Officer, Vice Manager, Corporate
Planning Division
Executive Officer, in charge of Corporate
Planning
Managing Executive Officer, responsible
for Research & Development, in charge ofIntellectual Infrastructure (to present)
Director (to present)

Reason for election: Following his engagement in R&D ofSpecialty Chemicals, he served in important positions in theSpecialty Chemicals Department and Corporate Planning
Division, and has abundant experience and knowledge of
MGC’s R&D and business management, etc.

Reason for election: Following his engagement mainly in
R&D of Aromatic Chemicals, he served in important positionsin the Natural Gas Chemicals and Aromatic Chemicals
Departments, and has abundant experience and knowledgeof MGC’s R&D and business management, etc.

Reason for election: She has many years of experienceoverseas and insight as a director at internationalorganizations on a global scale. She has served in important
positions at international organizations, etc., and it isdeemed that she would perform her duties as Outside
Director appropriately.

Toru Suzuki

Yasushi Manabe

Kazue Kurihara

Outside Director Independent

Outside Director Independent

Outside Director Independent

Attendance of Board of Directors Meetings: 12/12 (FY2022)

Attendance of Board of Directors Meetings: 12/12 (FY2022)

April 1979
April 2011

April 1979
April 2012

Joined Mitsui & Co., Ltd.
Managing Officer, Performance Chemicals
Business Unit, Mitsui & Co., Ltd.
April 2014
Managing Officer, Mitsui & Co., Ltd. andPresident of Mitsui & Co. Vietnam Ltd.
April 2015
Executive Managing Officer, Mitsui & Co., Ltd.
and President of Mitsui & Co. Vietnam Ltd.
June 2015
Executive Managing Officer, Chief Regional
Representative of Southwest Asia, Mitsui &Co., Ltd., and President of Mitsui & Co. India
Pvt Ltd.
June 2017
Outside Audit & Supervisory Board Member,
Mitsui Sugar Co., Ltd. (currently, Mitsui DM
Sugar Holdings Co., Ltd.)
December 2018 Audit & Supervisory Board Member, NutriCo., Ltd.
June 2020
Outside Director, MGC (to present)
Reason for election: He has many years of experienceoverseas and insight as a manager at a company operating
on a global scale.

65

December 1968 Appointed to the National Personnel
Authority of Japan
January 1992 Director, Bureau of Human Resources
Management of Headquarters (Paris), United
Nations Educational, Scientific and Cultural
Organization (UNESCO)
September 2002 Deputy to the Director General andManaging Director of Field Operations
Division of Headquarters (Vienna),
United Nations Industrial Development
Organization (UNIDO)
November 2006 Japanese Ambassador Extraordinary andPlenipotentiary to Kingdom of Morocco
April 2013
Specially Appointed Professor, Academy
for Global Leadership, Tokyo Institute ofTechnology
May 2014
President, Japan Morocco Association(to present)
June 2016
Outside Director, S&B Foods Inc.
March 2018 Outside Director, Nikkiso Co., Ltd.
(to present)
June 2020
Outside Director, MGC (to present)

April 2013
June 2013
April 2016

April 2017

April 2021
June 2021

Joined Hitachi, Ltd.
General Manager, Sales Division Infra
System Group Infra System, Hitachi, Ltd.
Executive Officer, General Manager Kansai
Area Operation, Hitachi, Ltd.
Outside Audit & Supervisory Board Member,
ShinMaywa Industries, Ltd.
Executive General Manager, Deputy Director,
General Corporate Sales & Marketing Group,
CMO of Industry & Distribution, Water &Urban Business Unit, Hitachi, Ltd.
Vice President and Executive Officer,
Deputy Director, General Corporate Sales& Marketing Group, CMO of Industry &Distribution Business, Water & Urban
Business, Hitachi, Ltd.
Executive Advisor, Yashima Denki Co., Ltd.
(to present)
Outside Director, MGC (to present)

Reason for election: He has many years of experience andinsight as a manager at a company operating on a global
scale.

October 1992 Associate Professor, Department of Applied
Physics, Faculty of Engineering, Nagoya
University
April 1997
Professor, Institute for Chemical
Reaction Science (currently, Institute ofMultidisciplinary Research for Advanced
Materials), Tohoku University
April 2010
Professor, Advanced Institute for Materials
Research and Institute of Multidisciplinary
Research for Advanced Materials, Tohoku
University
April 2016
Professor Emeritus, Tohoku University(to present)
April 2017
Professor, New Industry Creation Hatchery
Center, Tohoku University (to present)
December 2020 Outside Director, Hamamatsu Photonics K.K.
(to present)
April 2021
Research Professor, Tohoku University(to present)
January 2022 Director, SMILEco Measurement Co., Ltd.
(to present)
June 2023
Outside Director, MGC (to present)
Reason for election: She has highly advanced expertise inwide fields of study in chemicals, and it is deemed that she
would provide appropriate supervision and advice to MGC’s
management from such a perspective.

MITSUBISHI GAS CHEMICAL COMPANY, INC.

Audit & Supervisory Board Members

Masamichi Mizukami

Masato Inari

Go Watanabe

Yasuomi Matsuyama

Audit & Supervisory Board Member

Audit & Supervisory Board Member

Outside Audit & Supervisory Board Member

Attendance of Audit & Supervisory
Board Meetings: 14/14 (FY2022)

April 1985
Joined MGC
June 2017
Director, Managing Executive Officer,
President of Aromatic Chemicals
Company
April 2019
Director, Managing Executive Officer, incharge of Production Technology Division,
Environment Safety and Quality Assurance
Division
April 2020
Director, Managing Executive Officer,
in charge of Internal Audit Division,
Environment & Total Production Sector
April 2022
Representative Director, Senior Managing
Executive Officer, responsible for Production
Technology, in charge of Environment Safety
and Quality Assurance Division, Purchasing& Logistics Division
April 2023
Director
June 2023
Audit & Supervisory Board Member(to present)

Independent

Outside Audit & Supervisory Board Member,Part-time Independent

Attendance of Audit & Supervisory
Board Meetings: 9/9 (FY2022)

Attendance of Audit & Supervisory
Board Meetings: 14/14 (FY2022)

April 1982
Joined The Mitsubishi Bank, Ltd.
June 2009
Executive Officer of The Bank ofTokyo-Mitsubishi UFJ, Ltd. (BTMU)May 2012
Managing Executive Officer, Group Head,
Nagoya Corporate Banking Group of BTMU
June 2013
Managing Executive Officer, Chief Executive
Officer for Asia and Oceania of BTMU
July 2016
First Senior Vice President of Nidec
Corporation
August 2018
Senior Managing Executive Officer, Chief
Administrative Office of Nidec Corporation
September 2020
Chairman and Representative Director,
MST Insurance Service Co., Ltd.
June 2021
Outside Director, Mitsubishi HC Capital
Inc. (to present)
June 2022
Outside Audit & Supervisory Board
Member, MGC (to present)

April 1979
Joined Nippon Life Insurance Company
April 2011
Director and Senior Managing Executive
Officer, Nippon Life Insurance Company
June 2013
President and Representative Director,
Seiwa Business Link Co. Ltd.
Outside Audit & Supervisory Board
Member, MGC (to present)
June 2019
President, Nissay Culture Foundation(to present)
President, Tokyo Opera City Cultural
Foundation (to present)

April 1983
Joined MGC
June 2016
Director, Managing Executive Officer,
Chairman of Committee on Future R&D,
in charge of Research & Development
Division and Advanced Business
Development Division
June 2019
Representative Director, Senior Managing
Executive Officer, Chairperson of Internal
Control Promotion Committee, in chargeof Internal Audit Division, Research &Development Division, Advanced Business
Development Division, Business Strategy
Division, General Manager of QOL
Innovation Center Shirakawa
June 2020
Audit & Supervisory Board Member(to present)
Reason for election: He has served inimportant positions in Specialty Chemicals,
Research & Development, and Internal
Control, etc., and has abundant experience
with MGC’s business and corporate
management.

Independent

Reason for election: Following his
appointment as Director in June 2017, heserved in important positions in the Aromatic
Chemicals, Production Technology, andEnvironment Safety and Quality Assurance
Departments, among others, and possesses
abundant experience in MGC's business andcorporate management.

Reason for election: He has many yearsof experience and insight as a manager
at a financial institute and possesses
considerable knowledge of finance andaccounting.

Reason for election: He has abundant
experience and insight as a manager at afinancial institution and in the manufacturingindustry, etc., both in Japan and overseas.

Independent officer as stipulated under Rule 436-2 of the Securities Listing Regulations of the Tokyo Stock Exchange

Expertise and Experience Sought in Directors and Audit & Supervisory Board Members
Production
Business strategy
Corporatetechnology
Sales
management
R&D
MarketIndustry expertise Environment safety
development

Directors
Toshikiyo Kurai
Masashi Fujii
Nobuhisa Ariyoshi
Naruyuki Nagaoka
Motoyasu Kitagawa
Ryozo Yamaguchi
Ko KedoYoshinori Isahaya
Haruko Hirose
Toru Suzuki
Yasushi Manabe
Kazue Kurihara

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Finance
Accounting
Management
planning

Legal
Compliance
Risk management

HR
Labor
Talentdevelopment

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GlobalDiversity
Experience in othersectors●●●●

Audit & Supervisory Board Members
Masamichi Mizukami
Masato Inari
Go Watanabe
Yasuomi Matsuyama

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MGC Report 2023

66

Outside Directors Roundtable Talk

67

Haruko Hirose

Yasushi Manabe

Toru Suzuki

Outside Director

Outside Director

Outside Director

We work to connect the uniquestrength of the MGC Group withnew growth while enhancing its
corporate governance system.

Characteristics of the MGC Group and
Its Unique Challenges

In recent years corporate governance has been
an important focus for publicly listed companies,
and initiatives to enhance these systems
are drawing more attention than ever. In thisroundtable talk we asked our three outside
directors to discuss corporate governance at
MGC. We asked about how they identify theCompany’s current leading issues, what theysuggest to address them, and how they thinkthey should be involved to help make the Boardof Directors more effective. They spoke in depthon these questions.

Manabe: Before joining MGC I was working for anelectronics manufacturer that prioritized technology
development. This is my first time on the management
team of a chemical manufacturer, but I see a common
thread between my previous employer and the MGC
Group in that it is also an R&D-oriented firm focused onhoning its proprietary technologies. Here people in chargeof technology development work with a relatively highdegree of freedom, and I see that MGC has a culture thatencourages this. It is also unique in that it built a chemical
manufacturer using natural gas as the primary ingredient.
MGC is the only chemical maker pursuing an energy
resources business, such as geothermal power generation,
by applying technologies for natural gas extraction. I
think this positioning is a strength through which MGC
can contribute to urgent societal concern about carbon

MITSUBISHI GAS CHEMICAL COMPANY, INC.

MC: In your eyes as outside directors, what special
characteristics does the MGC Group seem to have?
What do you think are its highest management
priorities and unique challenges?

neutrality. MGC is a good corporation with strong technicalfoundations upstream to downstream, and it’s in goodfinancial health. This should be much better known.

Raising the Effectiveness of the Board of
Directors with Years of Management andInternational Experience

Suzuki: I did business with MGC when I was working for a
trading house. From the viewpoint of a business partner, I
was aware of MGC’s open culture. While it is a member ofa tightly knit corporate group, it does business with all sortsof companies, not confined to its group. My impression of
MGC from that time remains the same. I think this natureallows the kind of openness that allows all employees to
speak frankly with one another, without being hampered
by internal boundaries.
I was appointed as an MGC outside director in June
2020, just before the beginning of the three years mostimpacted by the pandemic. So I regret missing themany face-to-face meetings and direct talks that I could
otherwise have had with MGC employees. Ms. Hirose, youcame aboard about the same time as I did. Do you feel thesame way?

MC: In board meetings, when you offer advice andguidance as overseers of MGC management, what do
you think is particularly important?
Manabe: I keep an eye on how the R&D budget is
distributed. Under the current Medium-Term Management
Plan we envision society in around 2050 and create actionplans backcast from that future. To provide productsthat will be needed in the future we envision, we have tocontinuously allocate budget to basic research, along withthe technology development that extends our existing
business. That’s how we cultivate seedlings for the next
generation of growth. Circular carbon methanol is a casein point. Its commercial applications are in sight, and noother firm is touching it. It has strategic significance andhuge market potential. I hope to see more products likethis coming out of MGC.

Hirose: Yes, it was those three pandemic years.
Suzuki: In the fall of 2022 I finally had the opportunity
to visit our plants in person, then the research labs in
2023. On both occasions, I enjoyed talking frankly withthe employees. I’d like to zoom in on MGC to see it as it
is. From my perspective a unique issue for the Company
to address is that while its corporate culture encourages
taking on new challenges and supports efforts to overcome
them, it still isn’t easy enough to question and disagree
on what’s considered a challenge. To ensure that theorganization maintains a robust self-assessment function,
we have to encourage discussion involving multiple
viewpoints, including those opposing one another. To
that end we should never be a lion at home and a mouseoutside, instead remaining constantly aware of third-party
views outside the Company.
Hirose: I always think of MGC as a group of many
excellent, hardworking people, and a rock-solid company
that works seriously on the tasks in front of it. Thatsaid, we should all bear in mind our responsibility toencourage deep, forthright discussion, as extensively andfrequently as possible, till all involved feel it’s sufficient.
Some issues are taken into board meetings after going
through internal business-focused talks. Here at MGC,
however, I feel those cases are less common than inmost international organizations. I’d say this problem
is not unique to MGC, but common to all Japanesefirms. In international negotiations, thorough discussion,
suspending our personal “common sense” because it is
not necessarily shared with the other party, is the only
way to get anywhere. I understand the chemical industry
as an open world where we can discuss and collaborate
with engineers from anywhere on Earth, using science andtechnology as a common language. That’s why we have towork to sharpen our international competitiveness.

Suzuki: I’ve been talking about the importance of exit
strategies and personnel exchanges every chance I get. Ina board discussion about an unprofitable project, I asked
what the exit strategy for it would be. Trading houses
usually maintain clear exit strategies they can review quickly
and flexibly. For manufacturers, however, it takes moretime to get to the exit due to the production facilities andpeople working there. Following business portfolio reform
MGC is now making substantial progress in withdrawing
from or reorganizing unprofitable businesses, and getting
positive results. Going forward we have to direct these
efforts to energizing our people and business even further.
To identify the markets where a proprietary technology
can show its true worth and determine its best applications,it’s important to combine the scientific and humanities
viewpoints as a path to higher-quality conclusions. To
connect social needs with MGC’s technical seeds, I want tofocus on exchanges between sales personnel and technicalemployees, people with backgrounds in the humanities andthose in science, and will keep an eye on the progress.
When I saw the annual All-MGC Poster Presentation
for the first time, I was very impressed with its profitmindedness. This is an opportunity for technical employees
to present their R&D projects, progress and results.
They always provide explanations with profitability after
commercialization in mind. This came as a surprise to me,
in a good way.
Hirose: I want to help raise MGC’s corporate value
by giving objective management advice based on theknowledge and experience I’ve obtained abroad. There
are huge differences between Japan and any given foreigncountry in expressing opinions and the time they take tomake decisions. Japanese companies are in a crucial stage
now in learning about these differences and applying that
understanding to building and executing growth strategies.

MGC Report 2023

68

Outside Directors Roundtable Talk

I want to help raise MGC’s corporate
value by giving objective management
advice based on the knowledge andexperience I’ve obtained abroad.
—Haruko Hirose

MC: How do the proceedings of the board meetings
look to you?
Suzuki: I think it’s important to have board meetings go
beyond finding official consensus to creating opportunities
for deeper discussion, ensuring that nothing is missed inour decision-making processes and verifying the rationalityof the decisions.
Hirose: I think Japanese companies are in a transition
phase in terms of corporate governance reform, andbeginning to apply the knowledge and experience ofus outsiders to raise the effectiveness of the Board of
Directors is an example. I feel it’s very hard to quickly
respond to government recommendations for achieving
quantitative goals, but I think we can come at these issues
with a positive mindset.
Manabe: For sustainable growth it’s important to beaware of capital cost, profitability, share prices and otherquantitative metrics, but we must not neglect MGC’s
unique defining characteristics, which can't be expressedin numbers. From that perspective I’d like to help raiseawareness, in board meetings and on other occasions.

Specific Examples of Reflecting Outside
Directors’ Advice and Recommendations in
Making Decisions
MC: Tell us about the agenda items that led toparticularly active discussion in board meetingsin fiscal 2022.
Suzuki: There was a time when the opinions of board
members split over two projects MGC was working on
abroad. One of them was at a production site that had
expanded a few years before. Due to low selling prices andother factors it hadn’t turned an enough profit for several
years. We outside directors pointed to some overarching
management issues. After discussion our suggestions,
including increasing human resources investment, were69

MITSUBISHI GAS CHEMICAL COMPANY, INC.

accepted. The other was about a production subsidiaryfor basic chemicals that MGC established in Europe. After
broadly discussing the systems for executing an overseas
construction project, including the strength of overseas
contractors and what we should consider carefully about
them, the board decided to proceed with the projectas planned.
Hirose: MGC operates all over the world, with more
overseas sales than domestic sales. In practice, however,
we sometimes struggle to manage those operations. It’s
not easy to make clear distinctions between areas weshould entrust to local managers and those that should
be under strong oversight by Japanese headquarters. As
a result, we risk leaving management struggling with halfmeasures. This is not a problem unique to MGC; many
projects by Japanese companies abroad hit this wall. But
we should not fear failure. What's important is to closely
analyze the cause of failure and avoid repeating the same
mistakes.
MC: Let’s talk about the requirements andappointment of new executives and scenarios forcandidate training, which are important agenda items
for the Compensation and Nominating Committee.

It’s essential for the future of MGC
to increase diversity by actively
appointing women and non-Japanese,
as well as assisting in their careerdevelopment.
—Toru Suzuki

In particular, which points do you think will be more
important in the future?
Hirose: I always think we should train executive candidates
who are confident and comfortable doing business inmarkets worldwide. To do that we first have to give themtime to get away from their turf in Japan and take selftraining trips abroad. I don’t think that people who are
working comfortably, believing the Tokyo head office iswatching over them to help if something bad happens, will
ever truly meet our needs for executive candidates.
Suzuki: I totally agree. I want to add something, and that’s
to develop programs and systems to train locally hired
people as future executives for our foreign subsidiaries.
Speaking from my experience in a trading house, I
think it’s ideal to promote local employees to head local
subsidiaries, even if it may take more time. It’s essential
for the future of MGC to increase diversity by actively
appointing women and non-Japanese, as well as assistingin their career development.
Hirose: To help women employees in their careerdevelopment, eliminating unconscious bias and wrong
beliefs will be a major point.

While paying attention to thequantitative metrics, I hope MGC
will continue to cherish its uniquedefining characteristics, which can’t
be expressed in numbers.
—Yasushi Manabe

Manabe: Speaking from my experience, to selectexecutive candidates from among those in the corebusiness, we should ideally transfer them to subsidiaries
as presidents. That’s because the core business of thecompany usually enjoys favorable market environments
and good customers, which can make the people working
within it too laid-back. Even more ideally, we should findpeople who have led businesses in tough environments
and promote them as executives. They have gone
through hard times in unfavorable environments, so they
understand the difficulties of their employees while they’ve
built an acute sense of the risks ahead.

Integrate Ideas to Resolve Problems andPush the Company to Grow
MC: In concluding our talk, tell us about your hopes
and ambitions for MGC.
Suzuki: I think our employees are our most important
stakeholders. I think a company with happy employees
grows. I’d like MGC to take care of and train people
working in Japan and abroad for the Group, and also makea habit of thoroughly explaining its growth strategy and thelike to them.
Hirose: Let me reemphasize that there should be a systemthat assures tight governance of foreign subsidiaries by theJapanese head office. I’ll be happy to share my experience
with the promotion of diversity and inclusion and employee
development. I hope to see early incorporation of stateof-the-art technologies into products that can help build
a society focused on reducing waste and encouraging
recycling as a new growth field.
Manabe: I agree with you. The key to future growth, I
think, is in carbon neutrality and similar businesses. MGC
has great success potential, and I’m looking forward to ita lot. I’d like MGC to be a major presence in society as itincreases its capital efficiency while increasing the scaleof sales.

MGC Report 2023

70

Corporate Governance

Basic Approach
The Company believes that meeting the expectations of all stakeholders, beginning with our shareholders, means working
to increase corporate value through business activities and contributing to the realization of a sustainable society, with theaim of achieving both social and economic value under its Mission of “creating value to share with society.” To this end, theCompany strives to operate effective corporate governance systems, and continuously reinforce and enhance those systems.

Basic Policies(1) Ensure the rights of, and equality among, shareholders.
(2) Engage in appropriate collaboration with shareholders other than stakeholders.
(3) Conduct appropriate information disclosures and maintain transparency.
(4) Properly carry out the responsibilities of the Board of Directors and other bodies.
(5) Engage in constructive dialogue with shareholders.

Corporate Governance System
As a company with an Audit & Supervisory Board, MGC
has, for the purpose of business execution, established an
executive officer system that clearly separates management
decision-making and supervisory functions from thebusiness execution function. The Board of Directors
decides basic management policies, matters relating toitems stipulated by law and the Company’s Articles ofIncorporation, and other important management matters.
The Board of Directors oversees the execution of business,while executive officers are responsible for directly
managing business affairs. For matters arising in thecourse of business execution that may have a significant
effect on the Company, the Board of Directors makes
its decisions on the basis of multifaceted deliberations,

including deliberations on management policies by theManagement Council and deliberations on plans for
executing specific policies by the Operations Council. The
Board of Directors receives advice from attorneys andother experts when necessary in the course of its decision
making and supervision of business execution.
The Audit & Supervisory Board members also attend
important meetings, such as those held by the Board of
Directors and the Operations Council, conduct audits ofeach division and surveys of subsidiaries, and audit theexecution of business. The members also monitor important
decision-making processes and business execution in orderto ensure reasonable decision making and compliance withlaws and corporate norms.

Basic Information about Corporate Governance System
Organizational Format

Company with an Audit & Supervisory Board

Composition of the Board of Directors

Twelve (of which four are outside directors)

Directors’ term of office

One year

Chair of the Board of Directors

Chairman

Establishment of a voluntary
advisory committee

Compensation and Nominating Committee: six(Chairman, President, four outside directors)

Composition of the Audit & Supervisory Board

Four (of which two are outside Audit & Supervisory Board members)

Number of Independent Directors and Audit &Supervisory Board Members

Six

Business Execution System

Executive officer system

Composition of the Management Council

Eight (Chairman, President, one senior managing executive officer,
five managing executive officers)

Composition of the Operations Council

Twenty-one (All executive officers including the Chairman and President)

Introduction of a Hostile Takeover Defense Plan

71

MITSUBISHI GAS CHEMICAL COMPANY, INC.

None

Corporate Governance, Risk and Sustainability Management Organization Chart
General Meeting of Shareholders
Election/Dismissal
Auditing

Board of Directors
Compensation and
Nominating Committee

Election/Dismissal
Auditing

Crisis Management

Election/Dismissal

Audit & Supervisory
Board
Audit & Supervisory
Board Members

Auditing

Independent Auditors

Supervision

Business Execution

Ad hocorganization

Investigation/Reporting/Auditing

Chairman

Main committees related to internal control

President

Crisis Response
Headquarters

Internal Control and Risk
Management Committee

Sustainability Response

Compliance Committee

Management Council
Operations Council

Sustainability Promotion
CouncilInternal Audit Division
Sustainability Promotion
Committee

Corporate Sectors/Business Sectors
Auditing, management, and guidance through MGC’s internal control system

Group Companies

Activities of Meeting Bodies and Committees

Board of Directors [Meetings held in fiscal 2022: 12]
The Board of Directors decides important matters pertaining to management policies, business, and management based onlaws, regulations, the Company's Articles of Incorporation, and the regulations of the Board. It also receives reports from eachdirector and others on the status of execution of duties, management performance, etc., and supervises the execution of duties
by directors. Candidates for director are nominated by the Board of Directors following consultation with the Compensation and
Nominating Committee, and directors are elected at the annual General Meeting of Shareholders.

Main Agenda Items• Determination of convocation and agenda
of General Meeting of Shareholders• Approval of business reports, financial
statements, etc.
• Determination of candidates for director and
Audit & Supervisory Board member• Selection of Representative Director• Directors’ compensation• Appointment of executive officers• Implementation of interim dividends• Granting of restricted stock• Formulation of Medium-Term Management
Plan• Approval and reporting of competingtransactions• Approval and reporting of conflict-of-interest
transactions• Determining annual policy on establishment andoperation of internal controls, and reporting on
compliance and internal control risk management• Assessing effectiveness of the Board of Directors• Reassess strategic shareholdings

Audit & Supervisory Board [Meetings held in fiscal 2022: 14]
Audit & Supervisory Board members audit management decisions and the status of execution of business from an independent
position, such as by attending meetings of the Board of Directors and other important meetings. Furthermore, the Audit &Supervisory Board endeavors to work with the independent auditors and the Internal Audit Division, and also endeavors toincrease the efficiency of audits through such measures as the assignment of dedicated audit staff.

Main Deliberation Items
The Audit & Supervisory Board formulated audit policies and audit plans, and deliberated the status of the establishment andoperation of internal control systems.

Compensation and Nominating Committee [Meetings held in fiscal 2022: 4]
The Compensation and Nominating Committee functions both to determine executive officer compensation and to nominate
and appoint key members of senior management. The majority of the committee is comprised of independent outside directors.
The Board of Directors is responsible for appointing and dismissing key members of management, including the Chairman andPresident, and for nominating directors and Audit & Supervisory Board members. In making decisions on policies regarding
executive officer compensation and total annual amounts, and in determining allocation of those amounts, the Compensation
and Nominating Committee is consulted prior to those matters being put before the Board of Directors for discussion. Note thatthe appointment, dismissal and nomination of said officers are judged in light of certain selection criteria that include whether
they have the appropriate internal and external work experience and knowledge for the position; whether they have the dignity
and ethical values appropriate to their responsibilities; and whether they have violated any laws, the Articles of Incorporation, or
company rules.

MGC Report 2023

72

Corporate GovernanceInternal Control and Risk Management Committee [Meetings held in fiscal 2022: 3]
As an organization directly under the President, the Internal Control and Risk Management Committee is a committee chaired by
the executive officer in charge of internal control and risk management. It provides direction and supervision for each department
and deliberates on problems that require a companywide response. It makes decisions on matters related to risk management
system policies, measures and plans; matters related to business and operational risk management, as well as matters related to
guidance, direction and oversight incidental thereto; and matters related to guidance, direction and oversight related to business
continuity planning.
For details on risk management, please refer to page 76.

Compliance Committee [Meetings held in fiscal 2022: 2]
As an organization directly under the President, the committee investigates compliance violations pertaining to the Company and
the Group, and formulates, deliberates and recommends corrective measures and preventative measures.
For details on compliance, please refer to page 77.

Management Council [Meetings held in fiscal 2022: 24]
The Management Council deliberates and determines the Group’s Medium-Term Management Plan, management policy, basic
policies on key operations, and so forth. The Board of Directors makes the final decisions on any proposals requiring it to makea resolution.

Operations Council [Meetings held in fiscal 2022: 26]
The Operations Council deliberates and determines the Group’s specific action plans and so on concerning the execution ofserious business matters. The Board of Directors makes the final decisions on any proposals requiring it to make a resolution.

Sustainability Promotion Council [Meetings held in fiscal 2022: 2]
The Sustainability Promotion Council deliberates and determines policies and measures that form the basis for sustainability
management such as identification and management of materiality, and receives reports on the implementation thereof from theSustainability Promotion Committee.

Sustainability Promotion Committee [Meetings held in fiscal 2022: 3]
The Sustainability Promotion Committee confirms the status of implementation of measures in each division, and consult with the
Sustainability Promotion Councils on the necessary measures through periodic reviews.

Assessing the Effectiveness of the Board of
Directors
Every year, we conduct assessments on the effectivenessof the Board of Directors. To assess the effectiveness of
the Board of Directors, a survey is issued to all directors
and Audit & Supervisory Board members, which presents
various kinds of questions using a five-point scale withrespect to the Board of Directors as a meeting, as anorganization, and from an overall perspective. The survey
is also purposed with obtaining opinions from respondents
in the form of separately provided comments to allow
for the obtaining of responses that are unrestricted by
the parameters of the five-point scale. The Board of
Directors then holds discussions based on the aggregate
results and opinions that were received. When deemed
appropriate, we review the content of questions presented
in questionnaires; we remove questions covering areas
where it has been deemed that reasonable levels havebeen met in relation thereto, add new questions, and soon. The survey regarding fiscal 2022 was conducted in
April 2023.
In the results of that survey, the Board of Directors
continues to be assessed highly in terms of its structure.
The results also provide an assessment that appropriate
supervision and information sharing are being carried out,
and that direction is indicated as necessary, with lively

73

MITSUBISHI GAS CHEMICAL COMPANY, INC.

questions, discussions, and exchanges of opinion (including
with outside directors) taking place in relation to various
important management issues, the status of executionof duties by each director, and other matters. As such,
the Company recognizes that the Board of Directors hasachieved a certain level of effectiveness.
Meanwhile, the responses to the survey and thediscussion on the day included opinions indicating roomfor further consideration regarding measures for deepening
the discussion in the Board of Directors. These included
the view that while admirable care is taken in the style,volume, and content of materials and explanation of
proposals for the Board of Directors meetings, they are
somewhat excessive in detail, and the view that the scopeof the items explained should be widened. Other opinions
were also expressed regarding matters such as the themesthat should be subject to deeper discussion in future
Board of Directors meetings, including the recent questionof measures for improving the price-to-book ratio (PBR).
The Board intends to continue discussing these with aview to further increasing its effectiveness. Furthermore,
now that COVID-19 appears to have abated to a degreeand conditions are finally becoming suitable, the Company
aims to actively revive visits to business sites by outside
directors and Audit & Supervisory Board Members tofacilitate their deeper understanding of the status of theCompany’s businesses.
Accordingly, the Board of Directors will undertakea necessary review based on the assessment results,
primarily with respect to elements such as those for which

it was indicated that there exists room for improvement.
In doing so, we will be aiming to ensure a more effective
Board of Directors and continue to go about strengthening
and improving it as an organization.

Introduction of Diverse Perspectives
MGC has developed a global business that ranges widelyfrom basic chemicals to high-performance materials.
Because our management decisions require a highdegree of expertise, the Board of Directors as a whole
strives to maintain a well-balanced diversity of knowledge,
experience, and abilities, centered on those from within the
Company who are deeply familiar with our business andmanagement, with the addition of multiple independent
outside directors who, representing the perspectives ofshareholders and other stakeholders, provide advice andsupervision.
MGC currently has 12 directors (of whom four are
independent outside directors and half of those are
women), which we believe to be generally appropriate insize and effectiveness.
In order to ensure the fair and objective oversightof management, particular attention is paid to the
independence of outside directors and Audit & Supervisory
Board members, in accordance with criteria set by the
Tokyo Stock Exchange regarding independence. MGC
appoints only candidates who have no conflict of interest
with general shareholders.
MGC nominates as independent all outside directors
and Audit & Supervisory Board members who satisfy therequirements for being an independent director or Audit &Supervisory Board member.
For details on the criteria regarding independence of outside
directors and Audit & Supervisory Board members, please refer tothe MGC website.
https://www.mgc.co.jp/eng/corporate/governance.html
For details on the expertise and experience sought in directors andAudit & Supervisory Board members, please refer to page 66.

Compensation of Directors and Audit & Supervisory Board Members
Directors’ Compensation
Compensation to directors of MGC (excluding outside
directors) consists of annual compensation and restricted
stock compensation.
Annual compensation consists of a fixed amount ofbasic compensation based on the individual’s position andresponsibilities, and performance-based compensation thattakes into account various indicators of the Company’s
performance. Compensation is divided into monthly
installments and paid monthly, and a certain percentage isaccumulated annually as a reserved retirement benefit to be
paid at the time of retirement. This amount may be subject
to reduction based on the individual’s performance andother factors. Performance-based compensation is intended
to be an incentive for overall Company performance, andis determined using indicators such as ordinary income,based on actual results, level of achievement, and so on.
In addition, given the nature of MGC’s business, in which
each business reaches profitability through a variety ofprocesses over many years — including research anddevelopment, manufacturing process development andmarket development — annual compensation consists
primarily of basic compensation, with a general guideline ofabout 30% for performance-based compensation.
Restricted stock compensation, on the other hand,is compensation paid to directors once each fiscal year
in the form of grants of MGC stock; directors are granted
a certain number of shares based on their positions andresponsibilities. The purpose of restricting transfers ofthese shares and having recipients hold them for a certain
period of time is to share value with shareholders andprovide an incentive for working toward sustained growthof corporate value.
In addition to these forms of compensation, an amountthat is considered appropriate may be paid as a bonus
upon resolution of the General Meeting of Shareholders.
Note that outside directors, whose position is
independent of business execution, are paid only fixedbasic compensation.
Annual director compensation is determined by the
Board of Directors upon comprehensive consideration ofCompany performance, common standards, employee
salary trends, and so forth, after consultation with theCompensation and Nominating Committee. In addition,
allocation of individual compensation is entrusted to
the President by the Board of Directors, based on thedetermination that the President is the most suitableperson to evaluate each director while having a highlevel view of MGC as a whole. The President makes thesedecisions based on discussions regarding the allocationof compensation by the Compensation and Nominating
Committee.
The above policies are decided upon by the Board of
Directors after consultation with the Compensation and
Nominating Committee, comprised of a majority of outside
directors.

Compensation to Audit & Supervisory Board
Members
Compensation to Audit & Supervisory Board members
consists only of a fixed basic compensation amount withina range stipulated by the General Meeting of Shareholders,which is determined through deliberations by the Audit &Supervisory Board members.
MGC Report 2023

74

Corporate Governance

Composition of Compensation for Directors (Excluding Outside Directors) in Fiscal 2022
(Millions of yen)

Basic compensation (fixed)

Performance-based compensation

Restricted
stock

298

147

37

Total Officer Compensation in Fiscal 2022

Basic

Performance

Restricted Stock

Number ofPeople Receiving
Compensation

482

298

147

37

9

Audit & Supervisory Board Members(excluding outside Audit & Supervisory
Board members)

52

52

—

—

2

Outside Directors and Audit &Supervisory Board Members

75

75

—

—

7

Total

611

426

147

37

18

Position
Directors(excluding outside directors)

Total Amount ofCompensation(millions of yen)

Total Amount of Compensation by Type (millions of yen)

Note: The amount of restricted stock compensation to directors is that of the provision for restricted stock compensation recorded for the fiscal year
under review.

Ensuring the Rights of and Equality among Shareholders
To grow corporate value across the entire Group, MGC
closely monitors the legal and regulatory complianceregimes of its Group companies, including listed
subsidiaries, as their parent company and major
shareholder, and plans to continue to do so.
MGC acquired majority ownership of listed subsidiary
JSP Corporation in the aim of boosting the Group’s
corporate value by effectively realizing greater mutualsynergies in pursuit of growth strategies, including
collaborations involving each other’s domestic andoverseas operational infrastructure, know-how andtechnical information.
Recognizing that the drivers of JSP’s corporate value
creation are management independence backed by anequity market listing and JSP personnel’s autonomy andcreativity, the Company respects JSP’s independence,

expects it to build and implement an effective governanceregime, and will provide assistance as needed.
MGC recognizes that a controlling shareholder of alisted company generally poses a risk of conflicts of interest
with minority shareholders. MGC will not act contrary to
the principle of shareholder equality.
Moreover, an organization serving as an advisory bodyto the Board of Directors, called the Special Committee
on Governance (which is comprised of four independent
outside directors selected through a resolution of the Boardof Directors), has been set up at JSP for the purpose ofenhancing corporate governance by ensuring adequate
protection of the interests of minority shareholders by
ensuring fairness, transparency and objectivity in relation totransactions carried out by JSP with the Company and our
subsidiaries.

Strategic Shareholdings
MGC owns listed equity holdings that it deems beneficial
to Group businesses in pursuit of medium/long-term
growth in corporate value.
The Board of Directors annually reassesses theobjectives and risks of owning each of these equity
holdings, the state of transactions with the investee, andreturns accruing from ownership, including returns from
actual transactions with the investee, relative to earnings
targets with cost of capital factored in. If the Board of
Directors deems MGC’s equity stake in any investee to belarger than appropriate, MGC opportunistically sells down
its equity holdings in the investee.
In fiscal 2022, MGC sold two equity holdings in partand one in its entirety.
When voting its cross-held shares, MGC generally
respects the investee’s management decisions. Undercertain circumstances, however, MGC gives extra

75

MITSUBISHI GAS CHEMICAL COMPANY, INC.

scrutiny to management or shareholder proposals before
deciding whether to vote for or against the proposal. Suchcircumstances include an investee that has incurred losses
for three consecutive years and has questionable prospectsof a turnaround; an investee that has been involved in a
major scandal, has engaged in antisocial conduct or hasotherwise fallen into disrepute with questionable prospectsof rehabilitating its reputation; and other cases in which
MGC deems a vote in favor of a proposal to be adverse
to its overall medium/long-term interests, including theobjectives of its cross-shareholdings in the investee.
Number of issues

Total value onbalance sheet(millions of yen)

Unlisted shares

56

2,602

Shares other thanunlisted shares

37

22,620Risk Management

Basic Approach
At MGC, all business divisions actively assess and prioritize
risk situations and devise risk reduction measures. The
Internal Control and Risk Management Committee, chairedby the executive officer in charge of internal control and risk
management, provides direction and supervision for eachdepartment and deliberates on problems that require acompanywide response. It periodically reports to the Boardof Directors on the state of risk management. While MGC’s
Risk Management Promotion Systembusiness primarily centers on manufacturing, we identify
and evaluate risks associated with business execution
beyond just manufacturing inherent in our operations
and internal control systems. We then take appropriate
measures. In the event that a serious risk is identified, we
set up a special group (Crisis Response Headquarters) toaddress it according to internal rules.

Specific Activities of the Internal Control and
Risk Management Committee (Fiscal 2022)

Board of Directors

Matters discussed

Basic Rules on Internal Control & Risk Management

President

Periodic reports

Internal Control and Risk Management Committee
Chair: Executive officer in charge of internal control and risk management
Vice-chair: Director designated by the President
Members: General Manager of Corporate Planning Division
General Manager of Research & Development Division
General Manager of Administrative & Personnel Division
General Manager of Information Systems Division
General Manager of Environment, Safety & Quality Assurance Division
Observers: Audit & Supervisory Board members
Secretariat(General Affairs Department,
Administrative & Personnel Division)

Risk-supervising departments

Respond to individual risks and crisis situations
as the responsible departments

Risk-related departments

Cooperate with the risk supervising departments;
these departments work toward risk reduction• Review of internal control and risk management
activities in each department• Details of disclosure related to risks in business, etc.
• Response to proposals from Internal Audit Division
based on internal audit results• Overview of annual activities• Policy of next fiscal year

Matters reported• Report on audits of operations of Group companies
by supervising divisions• Report on the results of research on geopolitical risks

Please refer to the Corporate website for details on “Business and Other Risks.”
https://www.mgc.co.jp/eng/ir/policy/risk.html
1. Endogenous Business Risk
2. Overseas Business Risk
3. Joint Venture Risk
4. Product Quality Risk
5. Natural Disaster and Accident Risks

6. Information Security Risk
7. Compliance Risk
8. Human Rights Risk
9. Climate Change Risk
10. Investment Risk

Risk Management of Group Companies

11. Currency Risk
12. Financing and Interest Rate Risks
13. Litigation Risk

Formulating and Implementing BusinessContinuity Plans

While MGC’s approach is based on having Group
companies autonomously manage their own risk
management activities, MGC also surveys and exchanges
information on the status of each company’s efforts, while
asking them to further enhance their risk management.
Further, MGC divisions in charge of each company share
information and address any issues when necessary. Risks
that may have a significant impact are also reviewed by theInternal Control and Risk Management Committee.

Business divisions responsible for important products
and projects at MGC formulate business continuity plans(BCP). To fulfill their obligation to supply core materials thathave a significant impact on customers, each businessdivision implements disaster prevention and mitigation
countermeasures to ensure business is not suspended
in the event of a risk arising, or that the impact of suchsuspension is kept to a minimum. They also develop
manuals and other materials to ensure a reliable, prompt
recovery in the event that the requirements for business
continuity are lost, regardless of the cause. Specifically,
these include implementing plans according to the natureof each product and business for developing multiple
manufacturing sites (which, depending on the product,
may include sites in other countries), buildup of inventory,
and reduction of equipment stoppage risk.
MGC Report 2023

76

Compliance

Basic Approach
MGC has put in place, and is working to strengthen, asystem for practicing compliance with the aim of earning
the trust and understanding of the community.
MGC takes a broad view of compliance, one thatinvolves not only abiding by laws and Company rules
but also conducting fair, transparent, and free businessactivities in acknowledgment of its responsibilities
to society. Based on this understanding, we havesummarized the conduct expected of our executives andemployees in the MGC Corporate Behavior Principles andthe MGC Group Code of Conduct, the contents of which
are reviewed and revised from time to time based on
developments in society at large.
MGC decides policies, measures, and plans relating
to the compliance system in the Internal Control and Risk
Management Committee. In addition, the Compliance
Committee has been set up as an independent bodyreporting directly to the President to deal with individual
cases of compliance violation. The Compliance Committee
comprises the executive officer in charge of compliance(who serves as the chair), a director nominated by the
President (vice-chair), and heads of compliance-related
departments and others (members).
The results of the activities of this committee, which
include the investigation and recognition of violations
and the formulation, deliberation, and recommendationof corrective and preventive measures, are reported to
the President, the Board of Directors, and the Audit &Supervisory Board, with compliance violations being dealt
with according to prescribed internal procedures.
Furthermore, the Compliance Hotline has been set up
to quickly ascertain and correct compliance violations, andcan be used by all the people involved in the MGC Group’sbusiness activities, such as officers and employees of the
MGC Group including those who have retired in the past

77

year, their family members, or partner companies andcustomers. Our In-house Compliance Hotline is staffedby the Compliance Committee Secretariat, while ourExternal Compliance Hotline is available through the officeof specialized attorneys, including female attorneys. These
attorneys also provide advice to the Compliance Committee.
Consultations and whistleblowing brought to theattention of the Hotline and deemed to be potential
compliance violations are investigated by the Compliance
Committee, which takes any required corrective action ormeasures to prevent a recurrence. The results are also
reported back to the party who submitted the original
consultation or whistleblowing.
MGC Compliance Consultation Structure
Board of Directors
President
ReportReportReportAudit &
Supervisory Board

ReportandConsultation*2

Outside Audit &Supervisory
Board Member

Compliance Committee
Compliance Committee
Chair
ReportCompliance Hotline
In-house
Compliance
HotlineCompliance Committee
Secretariat

External
Compliance
Hotline*1

Contracted
attorneys’ officeDirect Report*3

Consultation and Whistleblowing

Hotline Users*1 Coordinated response depending on the case*2 The Outside Audit & Supervisory Board Member is consulted formatters related to MGC officers*3 If a report received by External Compliance Hotline is deemed to bea serious problem related to MGC’s management or management
personnel, or if the response by the Compliance Committee, etc. isinadequate and an appropriate response cannot be expected, or if
the Hotline user refuses to provide information to the Compliance
Committee Secretariat, a direct report can be made to the Outside
Audit & Supervisory Board Member.

Compliance Education

Security Export Control Initiatives

MGC designates every October as “Corporate Ethics
Month,” during which we conduct compliance training for
all employees using our intranet and the President sends
out a notice to all business sites calling for the renewed
promotion of compliance.
Compliance education is also included in gradespecific training, and training is provided using educational
materials suited to each position.
Given an increasing need to respond to complianceissues, such as cartel involvement and providing
improper benefits to foreign public officials, at MGC
Group companies affiliated with our overseas businesses
in emerging countries and elsewhere we are working
to enhance the quality of compliance training for staff
dispatched as officers to overseas affiliates.

The MGC Group Code of Conduct stipulates that exacting
export screening procedures are to be followed, in partto ensure adherence with laws and international treaties
regarding exports, as well as to ensure appropriate control
over the export of cargo and provision of technologythat may relate to the development of weapons of mass
destruction and conventional arms.
Export control subject to screening includes all products
exported by MGC, regardless of whether the transaction
involves direct, indirect, or brokered trade, as well as alltechnology related to the design, manufacturing, and use of
those products. Export screening involves multiple checks bybusiness divisions in charge of products and an independent
export control division, which screen all exports to determine
if cargo and technology restrictions apply, as well as also
checking the final customer, destination, and use.
In addition, we endeavor to maintain and enhance theexport control setup by implementing internal audits andgrade-specific education annually.

MITSUBISHI GAS CHEMICAL COMPANY, INC.