Corporate Governance
CORPORATE GOVERNANCE

MITSUBISHI GAS CHEMICAL COMPANY, INC.

Date last revised: June 25, 2024

Mitsubishi Gas Chemical Company, Inc.

President and Representative Director: Masashi Fujii
Contact: General Affairs Department,
Administrative & Personnel Div.
Tel: 03-3283-5049
Securities code: 4182
https://www.mgc.co.jp/eng

The state of corporate governance at Mitsubishi Gas Chemical Company, Inc. (“the Company”), is as follows.

I

Basic Approach to Corporate Governance and Basic Information on Capital Structure, Company Attributes, etc.

1. Basic Approach(Approach)
The Company believes that meeting the expectations of all stakeholders, beginning with our shareholders, means working toincrease corporate value through business activities and contributing to the realization of a sustainable society, with the aim ofachieving both social and economic value under its Mission of “creating value to share with society.” To this end, the Company
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 and other 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.

[Reasons for Noncompliance with Any of Japan’s Corporate Governance Code’s Principles]
The Company complies with all of the Corporate Governance Code’s principles.

[Disclosures Pursuant to Japan’s Corporate Governance Code] revised[Principle 1.4] (Strategic Shareholdings)
The Company owns listed equity holdings that it deems beneficial to its Group’s businesses in pursuit of medium/long-term growthin its corporate value.
Its Board of Directors annually reassesses the objectives and risks of owning each of these equity holdings, the state oftransactions with the investee and returns 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 the Company’s equity stake in any investee
to be larger than appropriate, the Company opportunistically sells down its equity holdings in the investee.
In FY2023, the Company sold three equity holdings in part and one in its entirety.
When voting its strategically held shares, the Company generally respects the investee’s management decisions. Under certain
circumstances, however, the Company gives extra scrutiny to management or shareholder proposals before deciding whether to votefor or against the proposal. Such circumstances include an investee that has incurred losses for three consecutive years and hasquestionable prospects of a turnaround; an investee that has been involved in a major scandal, has engaged in antisocial conduct or
has otherwise fallen into disrepute and has questionable prospects of rehabilitating its reputation; and other cases in which theCompany deems a vote in favor of a proposal to be adverse to its overall medium/long-term interests, including the objectives of its
strategic shareholdings in the investee.
[Principle 1.7] (Related-Party Transactions)Company transactions involving a conflict of interest as defined in the Companies Act are reported to and approved by the Board of
Directors. Transactions with major shareholders that qualify as related parties are likewise treated as conflict-of-interest transactions
under the Companies Act.
[Supplementary Principle 2.4.1] (Ensuring Diversity in Promotion of Core Human Resources)< Basic Approach to Ensuring Diversity >(1) Women in Management
With Japan’s labor force shrinking in tandem with demographic aging and a falling birthrate, gender-blind appointment of the mostqualified human resources is considered essential to maintaining corporate competitiveness. Additionally, appointment of women tocore roles within organizations is expected to drive reforms in corporate culture by giving full play to new leadership. In light of such,
the Company believes that maximally capitalizing on women’s capabilities and increasing women’s representation in the ranks ofmanagement are essential to its sustained growth.
(2) Foreigners and Mid-Career Hires in Management
The Company values foreigners and mid-career hires who have varied cultures, customs, experiences and skill sets as diverse
human resources that will contribute new ideas and perspectives within its organization. While ramping up hiring of foreigners andmid-career job seekers, the Company recognizes the importance of cultivating individuals’ skills and fostering work environments toenable these diverse human resources to play an active role in management.

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< Voluntary and Measurable Goals for Ensuring Diversity >(1) Women in Management
The Company has designated promotion of diversity and inclusion as a management priority and set the following targets forpromoting more women managers.
Minimum number of women managers: more than 60 by FY2026 and 90 by FY2030(2) Foreigners in Management
The Company is promoting the hire of foreign applicants as diverse human resources ready to immediately play meaningful roles.
As its ranks of foreign hires grow, the Company will promote more of them into management positions (number of foreign employees
as of April 2024: 20).
(3) Mid-Career Hires in Management
The Company is promoting the hire of mid-career applicants as diverse human resources ready to immediately play meaningfulroles. As its ranks of mid-career hires grow, the Company will promote more of them into management positions.
< Workforce Diversity Status >(1) Women in Management
Women managers have been increasing year after year, largely by virtue of more active recruitment of women among both new
graduates and mid-career job seekers, accommodations that support work-family balance and skill development programs. The
Company has been working to appoint women directors, and two women outside directors currently serve on its Board of Directors.
(2) Foreigners in Management
While proactively hiring foreigners, both new graduates from schools in Japan and mid-career hires, the Company is endeavoring toalso foster foreigner-friendly work environments.
(3) Mid-Career Hires in Management
Utilizing various recruitment channels including referrals and others, the Company is hiring mid-career job seekers, including for
mid-level and management roles (it employs 119 mid-career hires as of April 2024).
For more information on the Company’s workforce, see its Sustainability Data Book.
https://www.mgc.co.jp/eng/sustainability/pdf/MGC_sustainability2023_en_25-40.pdf< HR Development and Workplace Environment Policies to Ensure Diversity and Implementation Status Thereof >Based on the idea that the cornerstone of a dynamic, diverse workforce is a shared mindset that respects everyone’s individualityand diverse values and ways of thinking, the Company endeavors to cultivate such a mindset among its employees, largely throughdiversity education, and to develop managers who can capitalize on individuals’ diversity as a strength. Additionally, the Company
helps employees develop careers compatible with their qualifications and aspirations in the aim of cultivating diverse humanresources from a medium/long-term standpoint.
To foster work environments that ensure diversity, the Company has established a D&I Promotion Group within the Administrative &Personnel Division and a cross-organizational Diversity & Inclusion Promotion Expert Committee to promote diversity and inclusion.
The D&I Promotion Group was originally established in August 2019 as the Diversity Promotion Office within the Administrative &Personnel Division’s Personnel Group before being upgraded to a Group in October 2021. Additionally, the Company annuallyformulates Diversity Promotion Activity Plans and promotes D&I activities at all of its sites in the aim of creating a vibrant corporate
culture of prolific idea generation and active engagement across its entire workforce.
Additional information on initiatives to promote diversity and career opportunities for women can be found on the Company’s
website and in its Sustainability Data Book and Integrated Reports.
https://www.mgc.co.jp/eng/csr/society/diversity.html
https://www.mgc.co.jp/eng/sustainability/pdf/MGC_sustainability2023_en_25-40.pdf
https://www.mgc.co.jp/eng/corporate/report.html[Principle 2.6] (Roles of Corporate Pension Funds as Asset Owners)
The Company operates a contractual defined-benefit corporate pension plan.
In doing so, the Company sets reasonable targets and formulates basic asset management policies, including a policy asset
allocation, to manage the plan’s assets through appropriate processes. The Company monitors the pension plan’s portfolio throughan Asset Management Committee that comprises HR and finance staff and meets regularly.
In selecting asset managers, the Company places priority on not only past investment performance but also the content of fundmanagement reports and qualitative assessments of the asset managers’ investment policies and portfolio management staff.
Organizational units involved in running the pension plan such as finance and HR appoint personnel to oversee the plan andendeavor to develop their expertise.
[Principle 3.1] (Full Disclosure)(1) The Company’s Objectives, Management Strategies and Management Plans
Corporate philosophy “MGC Way” (The Company uses MGC as an abbreviation of its name.)
Mission: Creating value to share with society
Vision: An excellent company with uniqueness and presence built on chemistry
Value: Conduct Philosophy
As a Professional Group:
1. Courage that does not shy away from change
2. Aim for lofty goals
3. Perseverance in achieving goals
4. Build team spirit with communication
MGC Corporate Behavior Principles
Sustainability Promotion Principle

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For more details on the MGC Way, MGC Corporate Behavior Principles and Sustainability Promotion Principle, visit the Company’s
website.
“MGC Way” https://www.mgc.co.jp/eng/corporate/mgc_way.html“MGC Corporate Behavior Principles” https://www.mgc.co.jp/eng/corporate/guidelines.html“Sustainability Promotion Principle” https://www.mgc.co.jp/eng/csr/management.html#ac02
The Company is currently engaged in various initiatives under its Grow UP 2026 Medium-Term Management Plan launched in
FY2024.
“Grow UP 2026”
Objective 1: Strengthen the resiliency of our business portfolio
Strategies
Focus on “Uniqueness & Presence”
Build new value through innovation
Restructure businesses requiring intensive management
Objective 2: Promote sustainability management
Strategies
Accelerate initiatives for realizing carbon neutrality
Enhance human capital management
Promote materiality management
For more details on Grow UP 2026, visit the Company’s website.
“Grow UP2026” https://www.mgc.co.jp/eng/ir/policy/medium-term_management_plan.html(2) Basic Views and Guidelines on Corporate GovernanceSee “1. Basic Approach” above.
(3) Policies and Procedures for Setting Compensation
Compensation to directors of the Company (excluding outside directors) consists of annual compensation and restricted stockcompensation.
Annual compensation consists of a fixed basic compensation based on the individual’s position and responsibilities, andperformance-based compensation that takes into account various indicators of the Company’s performance. Compensation is divided
into monthly installments and paid monthly, and a certain percentage is accumulated 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 and other factors.
Performance-based compensation is intended to be an incentive for overall Company performance, and is determined using
indicators such as ordinary income, based on actual results, level of achievement, and so on. In addition, given the nature of theCompany’s business, in which each business reaches profitability through a variety of processes over many years -- including
research and development, manufacturing process development and market development -- annual compensation consists primarilyof basic compensation, with a general guideline of about 30% for performance-based compensation.
Restricted stock compensation is compensation paid to directors once each fiscal year in the form of grants of Company stock;directors are granted a certain number of shares based on their positions and responsibilities. The purpose of restricting transfers ofthese shares and having recipients hold them for a certain period of time is to share value with shareholders and provide an incentive
for working toward sustained growth of corporate value.
In addition to these forms of compensation, an amount that 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 fixed basic compensation.
Annual officer compensation is determined by the Board of Directors upon comprehensive consideration of Company performance,
common standards and employee salary trends, and so forth, and after consultation with the Compensation 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 suitable person to evaluate each director while having a high-level view of the Company
as a whole. The President makes these decisions based on discussions regarding the allocation of compensation by theCompensation and Nominating Committee.
(4) Policies and Procedures for Nominations/Appointments
Before discussing any senior management appointment/dismissal or director or Audit & Supervisory Board Member nominations,
the Board of Directors consults with the majority-independent Compensation and Nominating Committee.
Note that the 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 thedignity and ethical values appropriate to their responsibilities; and whether they have violated any laws, the Articles of Incorporation,or company rules.
(5) Explanations of Individual Appointments
The Company discloses director and Audit & Supervisory Board Member nominations’ rationale in shareholder general meetingreference documents.
https://www.mgc.co.jp/eng/ir/files/240605_notice_e.pdf[Supplementary Principle 3.1.3] (Sustainability and Other Initiatives)< Sustainability Initiatives >For information on the Company’s sustainability policies and initiatives, see the following content under its website’s “Sustainability”
tab: Key Issues (Materiality), Environment (Environmental Management, Pollution Prevention, Chemical Emission Reduction, Waste
Reduction and Resource Recycling, etc.) and Society (Human Resource Management, Work-Style Reforms and Work-Life Balance,
Diversity and Inclusion, Socially Responsible Sourcing, etc.).
Additionally, under its Grow UP 2026 Medium-Term Management Plan, launched in FY2024, the Company has stated Objective 2
as “Promote sustainability management,” and is implementing the following strategies: (1) accelerate initiatives for realizing carbon

3neutrality, (2) enhance human capital management, and (3) promote materiality management. To carry out sustainability management
reliably, the Company has set materiality KPIs as non-financial indicators based on materiality.
For more details, see the Grow UP 2026 Medium-Term Management Plan and content available under the “Sustainability” tab on
the Company’s website.
https://www.mgc.co.jp/eng/sustainability/
https://www.mgc.co.jp/eng/ir/policy/medium-term_management_plan.html< Investments in Human Capital and Intellectual Property >The Company has included information regarding investments in human capital and intellectual property in its Grow UP 2026
Medium-Term Management Plan, including plans for Group workforce by 2026, plans for research staffing at the Company on astandalone basis in pursuit of new/next-generation business creation, R&D expenditure plans, measures to accelerate R&D
leveraging digital technology such as materials informatics and the IP landscape and enhance human capital management, andexamples of utilizing the MGC Commons as an innovation and HR development hub.
For more details, see the Grow UP 2026 Medium-Term Management Plan on the Company’s website.
https://www.mgc.co.jp/eng/ir/policy/medium-term_management_plan.html< Disclosures Based on TCFD Recommendations or Other Framework Equivalent Thereto >In May 2019, the Company also declared its support for the Task Force on Climate-related Financial Disclosures (TCFD).
The Company is assessing the risks and opportunities climate change represents for the Group, and it is working to strengthen
resilience through scenario analysis while also engaging in sound dialogue with its stakeholders.
For more information on disclosures based on TCFD recommendations, see the "Response to Climate Change (Disclosure Basedon the TCFD Recommendations)" on the Company’s website and MGC Report 2023 (Integrated Report).
https://www.mgc.co.jp/eng/sustainability/environment/tcfd.html
https://www.mgc.co.jp/eng/corporate/report.html[Supplementary Principle 4.1.1] (Scope of Delegation to Management)
Matters to be discussed by the Board of Directors are stipulated in the Regulations of the Board of Directors. These include mattersrelating to the General Meeting of Shareholders; matters relating to Directors, other executive officers and the Board of Directors,
etc.; matters relating to calculations, etc.; matters relating to shares, etc.; matters relating to basic management policies, etc.; mattersrelated to the execution of important business; and other matters. Under the supervision of the Board of Directors, the management
team conducts business in line with the Company’s management policies.
[Principle 4.8] (Effective Use of Independent Directors)
The Company currently has four independent outside directors, including two women outside directors, on its Board.
[Principle 4.9] (Independence Standards and Qualifications for Independent Directors)
The Company has set specific disqualification criteria for independent directors and independent Audit & Supervisory Board
Members. For more details on the criteria, see “Independent Directors and Audit & Supervisory Board Members” under “1. Matters
Pertaining to Governance Bodies’ Composition and Organizational Management” in Section II below.
[Supplementary Principle 4.10.1] (Independence of Compensation and Nominating Committee)
The Company has established a Compensation and Nominating Committee to ensure the transparency, objectivity andreasonableness of decision-making processes for placing proposals on officer/director/Audit & Supervisory Board Member
compensation and nominations/appointments on Board of Directors’ meeting agendas. The Compensation and Nominating
Committee functions both to determine executive officer compensation and to nominate and appoint key members of senior
management. It is majority-independent, made up of independent outside directors in addition to the Board’s chairman and thepresident/representative director (two-thirds of its current members are independent outside directors and half of them are women
outside directors). Before voting on proposals pertaining to officers, directors and Audit & Supervisory Board Members’ compensation
or nominations/appointments, the Board consults with the Compensation and Nominating Committee and discusses and deliberates
on the proposal.
[Supplementary Principle 4.11.1] (Board of Directors’ Balanced Composition, Diversity and Size)
The Company has developed a global business that ranges widely from basic chemicals to high-performance materials. Because
its management decisions require a high degree 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 its
business and management, with the addition of multiple independent directors who, representing the perspectives of shareholders
and other stakeholders, provide advice and supervision.
The Company currently has 12 directors (of whom four are independent outside directors, and half of them are women outside
directors), which it believes to be generally appropriate in size and effectiveness.
A skills matrix for the Board of Directors as a whole is appended hereto, summarizing the expertise and experience sought in andactually possessed by directors and Audit & Supervisory Board Members.
The Board of Directors consults with the majority-independent Compensation and Nominating Committee before voting on senior
management, director and Audit & Supervisory Board Member candidates.
[Supplementary Principle 4.11.2] (Directors and Audit & Supervisory Board Members’ Concurrent Positions)
The following directors currently serve elsewhere as a director or an executive advisor. Each of them holds such positions at fewer
than three other companies, a reasonable number in the Company’s assessment.
Director Haruko Hirose: Outside Director, Nikkiso Co., Ltd.
Director Kazue Kurihara: Outside Director, Hamamatsu Photonics K.K.
Audit & Supervisory Board Member Tsuneaki Teshima: Outside Audit & Supervisory Board Member, Keisei Electric Railway Co., Ltd.
* Haruko Hirose’s legal name is Haruko Makinouchi. She is referred to herein by her professional name.

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[Supplementary Principle 4.11.3] (Assessment and Evaluation of Board of Directors’ Effectiveness)
Every year, we conduct assessments on the effectiveness of the Board of Directors. Up until now, we have conducted ourassessments and made improvements based on an internal survey. However, as a new approach starting from the assessment for
FY2023, we have appointed a third-party organization and utilized its expert knowledge in discussion and collating the survey items,
and so forth.
The perspective for the survey were changed from the previous three aspects: “Board of Directors as a meeting,” “Board of
Directors as an organization,” and “Overall perspective,” to five aspects: “Composition and operation of the Board of Directors,”“Management strategy and business strategy,” “Corporate ethics and risk and crisis management,” “Performance monitoring andmanagement team assessment,” and “Dialogue with shareholders, etc.” In April 2023, we conducted a survey of all directors andAudit & Supervisory Board Members, which presented various kinds of questions using a five-point scale, which were revised basedon the changed survey aspects, and requested opinions from a free perspective unrestricted by the parameters of the five-point
scale. The Board of Directors then held discussions based on the aggregate results and opinions that were received.
In the results of that survey, the average score on the five-point scale for all items was above “4: More effective and appropriate
than not.” Moreover, the majority of the assessments were positive. As such, the Company recognizes that the Board of Directors hasachieved a certain level of effectiveness. In particular, as the scores were relatively high for the items “Increasing corporate value
through response to issues related to sustainability,” “Free and open discussion,” and “Composition of the members of the Board of
Directors,” and multiple comments offering a positive assessment of them were observed, these items can be considered to bestrengths of the Company’s Board of Directors.
On the other hand, based on the discussion in the Board of Directors, we will consider our responses to the following three points.
<Provision of information for the Board of Directors>
While we have achieved a certain level of approval for our initiatives to date, as described below, some have pointed out the timelag between the recognition of risk on the front line and the reporting of it to the Board of Directors. We will consider reporting that is
not restricted to regular Board of Directors meetings.
<Provision of information for Directors and Audit & Supervisory Board Members>
Continue to enhance visits to business sites, which we have been promoting since the end of the COVID-19 pandemic, and also
consider in addition holding briefings on the current status of important subsidiaries, etc.
<Strategy monitoring>
To promote opportunities for discussing strategy in the Board of Directors meetings, indicate discussion points in a clear andconcise manner within the reports of the status of execution of duties by directors

Moreover, with regard to issues and opinions pointed out during the evaluation of the previous fiscal year (FY2022), we areconducting the following responses, which we believe have also contributed to the positive assessment.
<Innovative measures to develop deeper discussion in the Board of Directors>
Bring forward advance explanation sessions on important resolution items for outside directors and Audit & Supervisory Board
Members, and share the content of discussions at the explanation sessions with all directors and Audit & Supervisory Board
Members<Themes requiring deeper discussion at the Board of Directors meetings>
Bring up measures to improve the price-to-book-ratio (PBR) as topics for discussion at Board of Directors meetings and discussthem
Accordingly, the Board of Directors will undertake a necessary review based on the assessment results, primarily with respect toelements such as those for which it was indicated that there exists room for improvement. In doing so, we will be aiming to ensure amore effective Board of Directors and continue to go about strengthening and improving it as an organization.
[Supplementary Principle 4.14.2] (Training of Directors and Audit & Supervisory Board Members)
The Company has newly-appointed directors and Audit & Supervisory Board Members attend mandatory seminars outside theCompany covering legal-related matters, particularly in connection with the Companies Act of Japan, in order to enhance theirunderstanding of the roles, responsibilities, and duties of their respective positions.
When deemed necessary, the Company gives directors, Audit & Supervisory Board Members, and other officers opportunities toattend external seminars covering various topics, including compliance, risk management, internal control, and legal issues, andprovides them with relevant books and other materials.
Furthermore, all executive officers and directors overseeing business execution participate in workshops held each year, in which
they discuss challenges and tasks for management in group settings. When appropriate, experts from outside the Company areinvited to give informative lectures on current topics, such as revisions to laws.
In addition, the Company works to improve the efficacy and quality of its auditing by organizing study meetings for members of the
Audit & Supervisory Board and by providing opportunities for them to attend external seminars of their choosing in order to gain
additional knowledge of relevant laws, auditing techniques, financial accounting, and other matters.
[Principle 5.1] (Policy for Constructive Dialogue with Shareholders)
To promote constructive engagement with shareholders and other stakeholders, the Company has established a CSR & IR Division
and appointed an officer in charge of it. In coordination with other organizational units, the CSR & IR Division engages with investors,
holds briefings and provides information via the Company’s website. Important information obtained from such activities is fed back tosenior management as warranted.
To prevent leaks of insider information, the Company has prescribed Insider Trading Prevention Regulations to clearly define andpromote proper management of insider information. When providing information, the CSR & IR Division exercises meticulous care to
avoid divulging insider information.
[Action to Implement Management that is Conscious of Cost of Capital and Stock Price] * English disclosure material is available.
The status of the Company’s action to implement Management that is conscious of cost of capital and stock price is disclosed in its
medium-term management plan presentation materials and so forth.

5

For details, see “ Medium-Term Management Plan Grow UP 2026“ (P52-56) on the Company’s website.
https://www.mgc.co.jp/eng/ir/files/Grow_UP_2026_en.pdf[Status of Engagement in Dialogue with Shareholders, Investors, etc.]
The Company discloses the status of engagement in dialogue with its shareholders, investors, etc., on its website.
Details can be found on the Company’s website under “Investors” in “Management Direction.”
https://www.mgc.co.jp/eng/ir/policy/investor_engagement.html

2. Capital Structure
Foreign ownership percentage[Top 10 Shareholders]

Between 20% and 30%

revised

Name

Shares owned

Ownership
percentage

The Master Trust Bank of Japan, Ltd. (Trust Account)

28,460,400

14.21

Custody Bank of Japan, Ltd. (Trust Account)

18,483,400

9.23

Meiji Yasuda Life Insurance Company

8,797,721

4.39

Nippon Life Insurance Company

5,858,024

2.93

The Norinchukin Bank

5,026,545

2.51

SSBTC CLIENT OMNIBUS ACCOUNT

3,374,507

1.69

National Mutual Insurance Federation of Agricultural Cooperatives

3,235,000

1.62

THE BANK OF NEW YORK MELLON 140042

3,232,897

1.61

AGC Inc.

3,223,800

1.54

The Bank of Yokohama, Ltd.

3,085,427

1.54

Controlling shareholder (excluding
parent company)―――

Parent company

None

Supplemental Explanation revised
A number of large shareholder reports (filed by Nomura Securities Co., Ltd., Mizuho Bank, Ltd. and Mitsubishi UFJ Financial Group,
Inc., et al.) were publicly released in FY2023, but the reports’ filers are not included in the above list of shareholders because theCompany was unable to ascertain numbers of shares beneficially owned at FY2023-end.

3. Company Attributes
Exchange and market division
where shares trade

TSE Prime Market

Fiscal year-end

March

SectorChemicals

Employees as of most recent fiscal
year-end (consolidated basis)

Over 1,000

Consolidated net sales in mostrecent fiscal year

Between ¥100 billion and ¥1,000 billion

Consolidated subsidiaries as of mostrecent fiscal year-end

Between 50 and 99

4. Guidelines on Measures to Protect Minority Shareholders When Transacting with Controlling Shareholder―――

5. Other Special Circumstances that May Materially Affect Corporate Governance revised
To grow corporate value across its entire Group, the Company closely monitors the legal and regulatory compliance regimes of its
Group companies including listed affiliate company as their parent company and major shareholder and plans to continue to do so.
With regard to the listed affiliate JSP Corporation, the Company will maintain a cordial relationship to increase the corporate value of
the Group, while seeking and promoting mutually independent growth strategies.
As a major shareholder of JSP Corporation, the Company will provide support as necessary for the construction and operation of
JSP Corporation’s effective governance structure.
The Company recognizes that a controlling shareholder of a listed company generally poses a risk of conflicts of interest withminority shareholders. The Company will not act contrary to the principle of shareholder equality.

6Moreover, an organization serving as an advisory body to the Board of Directors, called the Special Committee on Governance(which is comprised of four independent outside directors selected through a resolution of the Board of Directors), has been set up at
JSP Corporation for the purpose of enhancing corporate governance by ensuring adequate protection of the interests of minority
shareholders by ensuring fairness, transparency and objectivity in relation to transactions carried out by JSP with the Company andour subsidiaries.

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II

Status of Management Organization and Other Corporate Governance Arrangements Pertaining to Management
Decision-Making, Execution and Oversight

1. Matters Pertaining to Governance Bodies’ Composition and Organizational Management
Organizational format

Company with audit & supervisory board[Matters Pertaining to Directors]
Maximum number of directors per
Articles of Incorporation

15

Term of directorships per Articles ofIncorporation

1 yearChair of the Board of Directors

Chairman (except when Chairman concurrently serves as president also)

Number of directors

12Outside director(s) appointed?

Yes

Number of outside directors

4

Number of outside directors
designated as independent

4

Outside Directors’ Relationship with the Company (1)Relationship with the Company (*)
Name

Background
a

b

c

d

e

f

g

h

Haruko Hirose

Other

Toru Suzuki

From other company△

Yasushi Manabe

From other company△

Kazue Kurihara

Academic

○

*
*

i

j

Available choices to describe director’s relationship with the Company
The ○ symbol denotes a current or recent relationship between the director and the Company; the △ symbol, a past such
relationship.
* The ● symbol denotes a current or recent relationship between a close relative of the director and theCompany; the ▲ symbol, a past such relationship.
a. Executive of the Company or a subsidiary thereofb. Executive or non-executive director of the Company’s parent company
c. Executive of the Company’s sister company
d. Supplier or customer heavily dependent on the Company or an executive thereof
e. Supplier or customer on which the Company is heavily dependent or an executive thereof
f. Consultant, accountant or attorney who is a recipient of substantial monetary or non-monetarycompensation, other than compensation as a director or Audit & Supervisory Board Member, from theCompanyg. Major shareholder of the Company (or an executive of a major corporate shareholder)h. Executive of a supplier or customer of the Company to which choices d, e and f do not apply (applies
only to director (i.e., not close relatives))
i. Executive of a company with which the Company has reciprocally appointed outside directors or Audit& Supervisory Board Members from each other’s executive ranks (applies only to director)
j. Executive of a recipient of a donation from the Company (applies only to director)
k. Other8kOutside Directors’ Relationship with the Company (2) revised
Name

Independent?

Haruko Hirose

Yes

Toru Suzuki

Yes

Yasushi Manabe

Yes

Supplemental Explanation ofRelationship with the Company

Reason appointed

Ms. Haruko Hirose has many years ofexperience overseas and insight asdirector at international organizations
on a global scale, and provides
appropriate supervision and advice to
MGC’s management including actively
expressing her opinions based on theseat the Board of Directors. So, she isexpected to continue to contribute toensuring the validity andWhile there are transactional
appropriateness of MGC’s decisionrelationships between MGC andmaking.
Nikkiso Co., Ltd. where Ms. Haruko
Although she has not been directly
Hirose serves as an outside
involved in corporate management,
director, including the purchase ofother than as Outside Director, sinceequipment, the amount was lessshe has served in important positions atthan 1% of consolidated net sales
an international organization, etc., it isof said company for FY2023.
deemed that she would continue tocontribute to ensuring the validity andappropriateness of MGC’s decisionmaking.
In management’s assessment, Ms.
Hirose and MGC have no special
interests with respect to each other and
Ms. Hirose is capable of fulfilling her
duties impartially and objectively froman independent standpoint.
Although Mr. Toru Suzuki was a
Mr. Toru Suzuki has many years ofbusiness execution manager until
experience overseas and insight as aJune 2017 at Mitsui & Co., Ltd., amanager at a company operating on abusiness partner of MGC, over six
global scale, and provides appropriate
years have passed since his
supervision and advice to MGC’s
retirement. While there aremanagement including activelytransactional relationships between
expressing his opinions based on these
MGC and said company including
at the Board of Directors. So, he is
the sale of products and materials,
expected to continue to contribute to
the amount was less than 1.5% of
ensuring the validity andconsolidated net sales of MGC for
appropriateness of MGC’s decisionFY2023.
making.
Also, while there are transactional
In management’s assessment, Mr.
relationships between MGC andSuzuki and MGC have no special
said company including theinterests with respect to each other andpurchase of materials, the amount
Mr. Suzuki is capable of fulfilling his
was less than 1% of consolidated
duties impartially and objectively fromnet sales of said company for
an independent standpoint.
FY2023.
Although Mr. Yasushi Manabe
was a business execution manager
Mr. Yasushi Manabe has many years
until March 2021 at Hitachi, Ltd., a of experience and insight as a manager
business partner of MGC, and while at a company operating on a global
there are transactional relationships scale, and provides appropriate
between MGC and said company
supervision and advice to MGC’s
including the sale of products, themanagement including actively
amount was less than 1% ofexpressing his opinions based on these
consolidated net sales of MGC forat the Board of Directors. So, he is
FY2023. While there are
expected to continue to contribute totransactional relationships between ensuring the validity and
MGC and said company including
appropriateness of MGC’s decisionequipment maintenance, themaking.
amount was less than 1% of
In management’s assessment, Mr.
consolidated net sales of said
Manabe and MGC have no special
company for FY2023.
interests with respect to each other andAlthough he had been Executive Mr. Manabe is capable of fulfilling his
Advisor until March 2024, Yashima duties impartially and objectively from
Denki Co., Ltd., a business partner an independent standpoint.
of MGC, and while there are9transactional relationships between
MGC and said company including
the purchase of machines, theamount was less than 1% ofconsolidated net sales of said
company for FY2023.

Kazue Kurihara

Yes

Does the Company have an optional
nominating committee and/or
compensation committee or other suchcommittee(s) corresponding thereto?

Dr. Kazue Kurihara has highly
advanced expertise in wide fields ofstudy in chemicals, and provides
appropriate supervision and advice to
MGC’s management including actively
expressing her opinions based on theseat the Board of Directors. So, she isexpected to continue to contribute toensuring the validity andappropriateness of MGC’s decisionmaking.
In management’s assessment, Dr.
Kurihara and MGC have no special
interests with respect to each other and
Dr. Kurihara is capable of fulfilling her
duties impartially and objectively froman independent standpoint.

While there are transactional
relationships between MGC andHamamatsu Photonics K.K. where
Dr. Kazue Kurihara serves as an
outside director, including the saleof products, the amount was lessthan 1% of consolidated net sales
for FY2023.
Also, while there are transactional
relationships between MGC and
Tohoku University, where she
serves as Professor Emeritus,
including payment of consideration
for joint research, the amountduring FY2023 was insignificant,totaling ¥13 million.

Yes

Existence of Optional Committee(s), Composition Thereof and Attributes of Committee Chair(s)Committee nameTotal
members

Full-timemembers

Executive
directors

Outsidedirectors

External
experts

Optional
committee
fulfilling role ofnominating
committee

Compensation and
Nominating
Committee

6

2

2

4

0

0

Executive
director

Optional
committee
fulfilling role ofcompensationcommittee

Compensation and
Nominating
Committee

6

2

2

4

0

0

Executive
director

Other

Chair

Supplemental Explanation revised
The Compensation and Nominating Committee functions both to determine executive officer compensation and to nominate andappoint key members of senior management. A majority of the committee is comprised of independent outside directors.
The Board of Directors is responsible for appointing and dismissing key members of senior management, including the Chairman
and President, and for nominating directors and Audit & Supervisory Board Members. In making decisions on total annual amountsof compensation for executive officers, 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.
In FY2023, the Compensation and Nominating Committee met a total of six times with all of its members in attendance at every
meeting. Matters it discussed and deliberated on in FY2023 include officers/directors/Audit & Supervisory Board Members’ total
annual compensation and the apportionment thereof, senior management appointments, and nominations of director/Audit &Supervisory Board Member candidates.

[Matters Pertaining to Audit & Supervisory Board Members]
Does the Company have Audit &Supervisory Board?

Yes

Maximum number of Audit &Supervisory Board Members per
Articles of Incorporation

5

10

Number of Audit & Supervisory
Board Members

4

Coordination among Audit & Supervisory Board Members, Independent Auditor and Internal Auditing Staff
The Internal Audit Division forwards copies of its internal audit reports to Audit & Supervisory Board Members on an ad hoc basis tohelp them perform their audits more efficiently, holds quarterly reporting meetings with full-time Audit & Supervisory Board Members
and reciprocally shares and discusses audit plans and findings with Audit & Supervisory Board Members. Audit & Supervisory Board
Members are also briefed by the Internal Audit Division on its assessments of the effectiveness of internal controls over financial
reporting and discuss prospective corrective measures with the Internal Audit Division in the aim of improving the reliability of financial
reporting. The Internal Audit Division discusses auditing matters with the independent auditor whenever necessary in addition tomeeting regularly with the independent auditor.
Early in the fiscal year, Audit & Supervisory Board Members are briefed by the independent auditor on its audit plan. They also
receive first-hand input on accounting procedures and internal controls from the independent auditor while accompanying its staff
during audits of the Company’s plants, Group companies and other sites. Additionally, they discuss issues pertaining to quarterly
financial reporting procedures and internal controls with the Independent auditor on a quarterly basis.
Audit & Supervisory Board Members have conferred with the independent auditor and the Company’s executive staff on individual
risks posed by potential KAMs (key audit matters) identified by the independent auditor and received reports on audit status withrespect to such risks. Throughout the fiscal year, Audit & Supervisory Board Members engaged in in-depth discussions with theindependent auditor in connection with the independent auditor’s process of finalizing its KAM selections, taking into accountmanagement impact, materiality and other relevant factors.

Outside Audit & Supervisory Board
member(s) appointed?

Yes

Number of outside Audit &Supervisory Board Members

2

Number of outside Audit &Supervisory Board Members
designated as independent

2

Audit & Supervisory Board Members’ Relationship with the Company (1) revised
Name

Background

Relationship with the Company (*)
a

b

c

d

e

f

g

h

i

j

Go Watanabe

From other company△

Tsuneaki Teshima

From other company

△

*
*

k

l

m

Available choices to describe Audit & Supervisory Board Member’s relationship with the Company
The ○ symbol denotes a current or recent relationship between the Audit & Supervisory Board Member and the Company; the △symbol, a past such relationship.
* The ● symbol denotes a current or recent relationship between a close relative of the Audit & Supervisory Board Member and theCompany; the ▲ symbol, a past such relationship.
a. Executive of the Company or a subsidiary thereofb. Non-executive director or accounting staff member of the Company or a subsidiary thereofc. Executive or non-executive director of the Company’s parent company
d. Audit & Supervisory Board Member of the Company’s parent company
e. Executive of the Company’s sister company
f. Supplier or customer heavily dependent on the Company or an executive thereofg. Supplier or customer on which the Company is heavily dependent or an executive thereofh. Consultant, accountant or attorney who is a recipient of substantial monetary or non-monetarycompensation, other than compensation as a director or Audit & Supervisory Board Member, from theCompanyi. Major shareholder of the Company (or an executive of a major corporate shareholder)j. Executive of a supplier or customer of the Company to which choices f, g and h do not apply (applies
only to Audit & Supervisory Board Member (i.e., not close relatives))
k. Executive of a company with which the Company has reciprocally appointed outside directors or Audit& Supervisory Board Members from each other’s executive ranks (applies only to Audit & Supervisory
Board Member)l. Executive of a recipient of a donation from the Company (applies only to Audit & Supervisory Board
Member)m. Other11

Audit & Supervisory Board Members’ Relationship with Company (2)Name

Independent?

Go Watanabe

Tsuneaki Teshima

revisedSupplemental Explanation ofRelationship with Company

Reason appointed

Yes

Although Mr. Go Watanabe was
Mr. Go Watanabe has abundanta business executive manager until
experience and insight as a manager atJune 2016 at The Bank of Tokyoa financial institution and a
Mitsubishi UFJ (currently MUFG
manufacturing industry etc., both in
Bank, Ltd.), over seven years haveJapan and overseas, and has
passed since his retirement. Whileconsiderable expertise in finance andthere are transactional relationships
accounting. Therefore, he is suited for
between MGC and said company
an outside Audit & Supervisory Board
including the borrowing of funds,
Member to be responsible for ensuring
the amount of borrowings from said
the lawfulness and appropriateness ofcompany was less than 2.4% of
the execution of directors' duties.
consolidated total assets as ofIn management’s assessment, Mr.
March 31, 2024.
Watanabe and MGC have no special
Furthermore, although saidinterests with respect to each other andcompany holds shares in MGC, theMr. Watanabe is capable of fulfilling his
percentage is 1.2% of issued andduties impartially and objectively fromoutstanding shares.
an independent standpoint.

Yes

Although he was a businessexecution manager until July 2018at Nippon Life Insurance Company,over five years have passed since
his retirement. While there aretransactional relationships between
MGC and said company including
the borrowing of funds, the amountof borrowings from said company
was less than 0.6% of consolidated
total assets as of March 31, 2024.
Furthermore, although said
company holds shares in MGC, thepercentage is 2.7% of issued andoutstanding shares.

Mr. Tsuneaki Teshima has many yearsof experience and insight as a manager
at a financial institute, and has
considerable expertise in finance andaccounting. Therefore, he is suited foran outside Audit & Supervisory Board
Member to be responsible for ensuring
the lawfulness and appropriateness ofthe execution of directors' duties.
In management’s assessment, Mr.
Teshima and MGC have no special
interests with respect to each other and
Mr. Teshima is capable of fulfilling his
duties impartially and objectively froman independent standpoint.

[Matters Pertaining to Independent Directors and Audit & Supervisory Board Members]
Number of independent directors
and Audit & Supervisory Board
Members

6

Other Matters Pertaining to Independent Directors and Audit & Supervisory Board Members
The Company nominates as independent all outside directors and Audit & Supervisory Board Members who satisfy therequirements for being an independent director or Audit & Supervisory Board Member.
Candidates are deemed to qualify as an independent director or Audit & Supervisory Board Member as long as none of thefollowing apply:
1. If any of the following applies to the candidate:1) Has been a business execution manager*1 of the Group*2.
2) Is a major shareholder*3 of MGC or is or has been a business execution manager for a major shareholder company within theprevious five years.
3) Is or has been a business execution manager of an important business partner*4 within the previous five years.
4) Has been dispatched from a company or organization that has established a relationship with the Group through the reciprocal
appointment of outside directors and Audit & Supervisory Board Members.
5) Works for or has worked for an auditing firm within the previous five years that has conducted a statutory audit of MGC.
6) Provides or has provided consulting services other than statutory auditing to the Group within the previous three years, forwhich he or she has received high compensation.*5
2. If any of the following applies to a close relation*6 of the candidate:1) Is or has been an important business execution manager*7 of the Group within the previous five years.
2) Is a major shareholder of MGC or a business execution manager for a major shareholder company.
3) Is or has been a business execution manager within the previous five years of an important business partner.
4) Works for or has worked for an auditing firm within the previous five years that has conducted a statutory audit of MGC.
5) Provides or has provided consulting services other than statutory auditing to the Group within the previous three years, forwhich he or she has received high compensation.
3.

The candidate has another important vested interest in the Group and has been reasonably deemed to be unable to fulfill his or
her duties as an independent director or Audit & Supervisory Board Member.

*1 Business execution manager: Either a director overseeing business execution, an executive officer, other officer involved inbusiness execution, or an employee

12*2 The Group: MGC or one of its subsidiaries*3 Major shareholder of MGC: A shareholder currently holding, either directly or indirectly, 10% or more of total shares issued andoutstanding*4 Important business partner: A business partner that has made transactions, including buying and selling, amounting to 2% ormore of consolidated net sales over the previous three consecutive years.
Consolidated net sales pertain to the Group in the event the Group is the seller, or to the partner in the event the Group is thebuyer.
*5 High compensation: In the case of an individual, an annual amount of 10 million yen or more, or in the case of a member ofcompany or organization, compensation exceeding 2% of its consolidated net sales or total revenue*6 Close relation: Either a spouse, first- or second-degree relative, or financial dependent*7 Important business execution manager: Either a director overseeing business execution, an executive officer, or other officer
involved in business execution[Incentives]
Availability of incentives to directors

Adoption of Performance-based Compensation and Other

Supplemental Explanation
For details, see “Disclosure of Policies for Determining Compensation Amounts or Calculation Methods” below.

Eligible stock option grantees
Supplemental Explanation―――[Director Compensation]
Disclosure status (of individual
directors’ compensation)

Not disclosed

Supplemental Explanation revised
Directors’ aggregate FY2023 compensation was ¥524 million.
Their aggregate compensation includes ¥37 million of expensed restricted-stock compensation. Outside directors do not receive
performance-based compensation or restricted-stock compensation.

Does Company have policies fordetermining compensation amounts
or calculation methods?

Yes

Disclosure of Policies for Determining Compensation Amounts for Calculation Methods
Remuneration for the MGC’s Directors, excluding Outside Directors, consists of annual remuneration and restricted stock
remuneration.
The annual remuneration consists of fixed basic remuneration decided in accordance with each Director’s position and duties, inconjunction with performance-based remuneration based on various indicators of corporate performance. As for method payment, theeligible Directors receive annual remuneration paid on a monthly basis, divided into monthly installments, a certain percentage of
which is set aside each month as part of a reserved retirement benefit, which is paid to Directors upon their retirement. MGC may
take action to reduce such amounts depending on a Director’s performance and other grounds. The performance-based
remuneration is determined based on factors that include quantitative financial results and the extent to which targets have beenachieved, using ordinary income and other such indicators, with the aim of furnishing incentive with respect to corporate performance.
Moreover, performance-based remuneration accounts for roughly 30% of annual remuneration, which mainly consists of basic
remuneration. This is a suitable remuneration mix given distinctive characteristics of MGC’s business particularly in terms of its many
years of monetizing respective businesses as a result of having engaged in various initiatives such as R&D, manufacturing processdevelopment, and market development.
The restricted stock remuneration involves granting a certain volume of shares to Directors in alignment with their positions andduties, in a manner whereby remuneration furnished for the sake of granting treasury shares is paid to the Directors each fiscal year
on a lump-sum basis. Such shares are subject to transfer restrictions so that recipients are required maintain holdings for a certain
period of time. This helps encourage a sense of shared value with shareholders and furthermore provides incentive for recipients to
help achieve sustainable growth with respect to MGC’s corporate value.
In addition to these forms of remuneration, MGC may pay an amount considered appropriate as a bonus upon resolution of aGeneral Meeting of Shareholders.
Remuneration paid to Outside Directors who maintain positions of independence from business execution is limited to fixedamounts of basic remuneration.
Total amounts of annual remuneration for Directors shall be determined by the Board of Directors, subsequent to consultation with
the Remuneration and Nominating Committee and after having reviewed comprehensive factors such as corporate performance,
world standards, and employee salary trends. With respect to remuneration allocations on an individual basis, the Board of Directors
has taken into account Remuneration and Nominating Committee discussions involving the President on remuneration allocations,and accordingly deems the President most suitable for evaluating the respective Directors while enlisting a broad-based view of the
MGC overall in that regard.

13

[Support for Outside Directors (Outside Audit & Supervisory Board Members)]
To give part-time outside directors a better understanding of Board of Directors meetings’ agenda items, the Company briefs them
beforehand to directors. Outside directors also engage in discussions with Audit & Supervisory Board Members to share information.
Additionally, outside directors and outside Audit & Supervisory Board Members hold regular discussions solely amongst themselves
to share information.
For newly appointed outside directors and outside Audit & Supervisory Board Members, individual business units provide briefings
on their business and its operations and the Company offers opportunities to tour plants and other sites.
The Secretarial Group and General Affairs Group, the latter of which functions as the Board of Directors’ administrative staff, serveas liaisons between outside directors and the Company. Both have staff whose main role is to communicate and coordinate withoutside directors and assist them with their duties. Additionally, one staff member is assigned exclusively to assist Audit & Supervisory
Board Members, including outside members, with their duties as directed by them. Audit & Supervisory Board Members areauthorized to engage the services of external experts at the Company’s expense.

[Status of Former Presidents/Representative Directors]
Former Presidents/Representative Directors Serving in Advisory Roles
Name

Position/Title

DutiesWakichi Nagano

Special advisor

Honorary title

Akira OhiraSpecial advisor

Honorary title

Hideki Odaka

Special advisor

Honorary title

Kazuo Sakai

Special advisor

Honorary title

Total Number of Former President/Representative Directors
Serving in Advisory Roles

Type ofrole/Condition

End of tenure
as president

TermPart-time,
uncompensatedPart-time,
uncompensatedJune 29, 1988

Lifetime

June 28, 2001

Lifetime

Part-time,
uncompensatedPart-time,
uncompensatedJune 28, 2007

Lifetime

June 25, 2013

Lifetime

4

Other Matters• The Company has special advisors not involved in execution or oversight of its operations. They are appointed by a resolution of
the Board of Directors in accord with internal regulations of Former President/Representative Directors Serving in Advisory
Roles. The position of special advisor is an honorary title bestowed upon former presidents and chairmen, but special advisors
may, if necessary, also provide advice at the president’s request.
• Wakichi Nagano served as chairman and representative director until June 29, 1995, following his tenure aspresident/representative director.
• Akira Ohira served as chairman and representative director until June 28, 2007, following his tenure as president/representative
director.
• Hideki Odaka served as chairman and representative director until June 25, 2013, following his tenure as president/representative
director.
• Kazuo Sakai served as chairman and representative director until March 31, 2019, following his tenure as president/representative
director.

2. Matters Pertaining to Business Execution, Auditing, Oversight, Nomination and Compensation-Setting Functions(Overview of Current Corporate Governance Regime) revised(Business Execution)
The Company has elected to have an Audit & Supervisory Board. The Company 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 to items stipulated by law
and the Company’s Articles of Incorporation, and other important management matters. The Board of Directors oversees theexecution of business, while executive officers are responsible for directly managing business affairs. The Board currently consists of
12 directors, four of whom are independent outside directors, and four Audit & Supervisory Board Members. In FY2023, the Board of
Directors met 13 times with all of its members in attendance at every meeting, exercised management oversight and made decisions
on the aforementioned matters.
Directors are appointed to one-year terms to clearly delineate management responsibilities. Directors who concurrently serve as
non-MGC Group companies’ directors and/or Audit & Supervisory Board Members are limited to a maximum of three directorships or
Audit & Supervisory Board Memberships in principle so they can concentrate sufficiently on the Company’s management.
For matters arising in the course 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 the Management
Council (which met 21 times in FY2023) and deliberations on plans for executing specific policies by the Operations Council (which
met 25 times FY2023). The Management Council has eight members, including the Company’s chairman, president, two senior
managing executive officers and four managing executive officers. The Operations Council comprises all 22 of the Company’s
executive officers, including the chairman and president. The Board of Directors receives advice from attorneys and other experts
when necessary in the course of its decision making and supervision of business execution.
The Company has established an Internal Control and Risk Management Committee chaired by the executive officer in charge ofinternal controls and risk management to properly implement and operate internal controls, both the Company's own and Group
companies’, and to monitor risk management and oversee and provide guidance on priority-setting and formulation of risk mitigation
measures.

14

The Company has established a Compliance Committee chaired by the executive officer in charge of compliance, largely in the aimof dealing with compliance violations on a case-by-case basis. The Compliance Committee investigates compliance violations
involving the Company and its Group companies and deliberates on formulates and makes recommendations on corrective measuresand recurrence-prevention measures. The Company has also established Compliance Hotline as an internal reporting channel topromote early detection and rectification of compliance violations.
In addition, the Company has established the Sustainability Promotion Council as a body to deliberate on and decide importantmatters concerning sustainability management (particularly important matters are resolved by the Board of Directors after suchdeliberations), and receive reports regarding the status of implementation, etc.
In the course of business execution, the Company identifies and assesses various business risks within the execution process andits internal control systems, and devises appropriate risk prevention, avoidance, mitigation and transfer measures. Whenever asevere risk manifests, the Company responds by forming an ad hoc task force in accord with its internal regulations.
(Auditing)(1) Audit & Supervisory Board Members
The Audit & Supervisory Board has four members, including three full-time and two outside members.
Full-time member Masamichi Mizukami has served in important positions in Specialty Chemicals, Research & Development andInternal Control, etc., giving him abundant experience regarding MGC's business as well as corporate management.
Full time outside member Go Watanabe worked for financial institutions for many years and has experience in corporate management
at a manufacturing industry etc., giving him considerable finance, accounting and risk management expertise as well as abundant
experience regarding corporate management both in Japan and overseas.
Full-time member Masato Inari has served in important positions in Basic Chemicals, Production Technology and Environment &Safety, giving him abundant experience regarding MGC's business as well as corporate management.
Outside member Tsuneaki Teshima worked for financial institutions for many years, and he has insight and experience regarding
corporate management in general as a manager, as well as considerable finance and accounting expertise.
One staff member is assigned exclusively to assist Audit & Supervisory Board Members, including outside members, with theirduties as directed by them. Audit & Supervisory Board Members are authorized to engage the services of external experts at theCompany’s expense.
The Audit & Supervisory Board sets auditing policies, assigns auditing duties and formulates audit plans. Audit & Supervisory Board
Members perform their duties in accord with the Company’s audit standards for Audit & Supervisory Board Members.
The Audit & Supervisory Board’s topics includes formulation of auditing policies and audit plans, internal control systems’
implementation/operation status and the reasonableness of the independent auditor’s audit methods and findings. Additionally, theAudit & Supervisory Board endeavors to form audit opinions by sharing individual Audit & Supervisory Board Members’ audit findings.
The three full-time Audit & Supervisory Board Members endeavor to stay informed of important decision-making processes and thestate of business execution through such means as attending important meetings, including Operations Council meetings in addition
to Board of Directors meetings, auditing individual organizational units, surveying subsidiaries and reviewing key documents.
Audit & Supervisory Board Members regularly exchange views with directors, periodically and promptly receive reports on thestatus of business execution and other important matters from directors and office staff, request explanations whenever necessary,and express opinions.
Additionally, the Audit & Supervisory Board Members endeavor to improve audit effectiveness through such means as coordinatingwith the independent auditor and Internal Audit Division and attending Internal Control & Risk Management Committee andCompliance Committee meetings.
The one part-time Audit & Supervisory Board Member’s role includes conferring about and offering opinions on important auditingrelated matters in accord with audit policy set by the Audit & Supervisory Board. Furthermore, all Audit & Supervisory Board Members
have regular exchanges of opinions with the representative director, directors, and outside directors regarding the status of internal
controls, and related matters.
In FY2022, the Audit & Supervisory Board met 14 times.
(2) Independent Auditor
The Company has appointed Crowe Toyo & Co. as its independent auditor in accord with the Companies Act.
In FY2023, the Company was audited by three CPAs, Akio Enokura, Takayuki Kawakubo and Shoichi Ohyama (respectively in theirfirst, sixth and first year of auditing the Company), assisted by a team of 16 others, ten of whom are CPAs.
(3) Internal Audit Division
The Internal Audit Division conducts internal audits of the Company and its Group companies pursuant to fiscal-yearly plans todetermine whether their business is being executed properly, ensure the effectiveness of internal controls and improve management
efficiency. All internal audit reports are reported to the representative director and president and the director in charge of the Internal
Audit Division, and are also reported at the same time to the full-time Audit & Supervisory Board Members. The Board of Directors
receives one regular report per year as well as reports from the director in charge of the Internal Audit Division as necessary.
Moreover, the Internal Audit Division also assesses and reports on the effectiveness of internal controls over financial reporting inaccord with the Financial Instruments and Exchange Act.
The Internal Audit Division is staffed with a total of 14 personnel, including nine internal auditors (three of whom are exclusively
internal auditors; the other six split their time between internal auditing and other duties) and five staff assigned to reporting on
internal controls in accord with the Financial Instruments and Exchange Act.
Audit & Supervisory Board Members, the independent auditor and the Internal Audit Division perform their respective auditing
duties in coordination with each other and in accord with “Coordination among Audit & Supervisory Board Members, Independent
Auditor and Internal Auditing Staff” under “Matters Pertaining to Audit & Supervisory Board Members” in section II(1) above.
(Nominations, Compensation-Setting)
For officer, director and Audit & Supervisory Board Member appointments, the Company selects individuals possessing therequisite qualifications, including work experience, capabilities and accomplishments, in accord with its candidate selection criteria.
The Company pays reasonable compensation to officers, directors and Audit & Supervisory Board Members in consideration for
their services in accord with relevant compensation regulations, subject to an aggregate compensation limit approved byshareholders at a General Meeting of Shareholders.

15

To ensure the transparency, objectivity and reasonableness of the Company’s decision-making processes for directors andexecutive officers’ compensation and director, Audit & Supervisory Board Member and executive officer nominations/appointments,
the Board of Directors consults with the Compensation and Nominating Committee, majority of which is comprised of independent
outside directors, before any compensation or nomination/appointment proposal is placed on a Board of Directors’ meeting agenda.
The Compensation and Nominating Committee comprises independent outside directors in addition to the Board of Directors’chairman and the Company’s president.
The Company has entered into a liability limitation agreement with each of its four outside directors and two outside Audit &Supervisory Board Members, limiting their liability for damages under Article 423(1) of the Companies Act to the statutory maximum
amount stipulated in Article 427(1) of the Companies Act.

3. Rationale for Selecting Current Corporate Governance Regime
The Company has appointed two outside Audit & Supervisory Board Members who have no special interests in the Company andin whom the Company has no special interest. The Company believes they are objectively fulfilling a neutral management oversightfunction through their audits and involvement in important decision-making processes. Additionally, the Company has appointed four
independent outside directors in the aim of enhancing management transparency and impartiality vis-à-vis shareholders by obtaining
appropriate oversight of its management and advice from an outsider’s perspective.
The Company accordingly considers its existing governance regime as stated above to be the best fit for itself in terms of ensuring
management transparency and impartiality.

16

III State of Engagement with Shareholders and Other Stakeholders
1. Initiatives to Promote Attendance at Shareholder General Meetings and Facilitate Shareholder Voting revised
Supplemental explanation

Early transmittal of notices ofshareholder general meetings

The Company strives to send out notices of shareholder general meetings (accessnotices) early to give shareholders more time to decide how to vote at the meeting.
Date of most recent Ordinary General Meeting of Shareholders: June 25, 2024
Date notice of said meeting (access notices) was sent out: June 5, 2024

Scheduling of shareholder general
meetings to avoid most popular
dates

When scheduling shareholder general meetings, the Company strives to avoid themost popular shareholder general meeting dates to maximize attendance.

Electronic voting

The Company has adopted electronic voting to enable shareholders to vote moreconveniently.

Participation in electronic voting
platform or other initiatives to
upgrade voting infrastructure for
institutional investors

The Company participates in an electronic voting platform for institutional
investors.

Notices (abridged) provided in
EnglishThe Company provides notices of shareholder general meetings in English throughan electronic voting platform in addition to publishing them on its website.

Other

The Company takes measures for electronic provision of notices of shareholder
general meetings in accordance with the Companies Act, and publishes them on its
website, etc. In addition, the English versions of the notices of shareholder general
meetings are also published on the Company’s website, etc., as stated above.
Publication dates of notices of most recent Ordinary General Meeting of
Shareholders:Japanese: May 31, 2024 English: June 5, 2024

2. IR Activities

Supplemental explanation

Preparation and disclosure ofdisclosure policies

The Company has prepared disclosure policies and publishedthem on its website.

Periodic briefings for analysts andinstitutional investors

The Company holds earnings briefings for securities analysts
and institutional investors after reporting first-quarter, secondquarter, third-quarter and fourth-quarter earnings. The briefings
feature presentations by the president and other senior
executives on earnings performance and business plans.
Additionally, the Company provides the same information to thegeneral public by publishing videos of the briefings, presentationmaterials distributed to the attendees and Q&A session
transcripts on its website.

Publication of IR materials on
websiteIR materials available on the “Investors” tab of the Company’s
website include summaries of financial results, presentationmaterials from briefings, securities reports, business reports,
integrated reports and timely disclosures.
Japanese: https://www.mgc.co.jp/ir/index.html
English: https://www.mgc.co.jp/eng/ir/index.html

IR organizational unit (staff)

The Company has established a CSR & IR Division as its
organizational unit in charge of IR and assigned staff exclusively
to IR duties. The CSR & IR Division proactively conducts IR
activities under the direction of the officer in charge of IR.

17

In-personpresentations
by seniormanagement?

Yes3. Initiatives Related to Respect for Stakeholder Perspectives
Supplemental explanation
Internal regulations’ provisions on
respect for stakeholder
perspectives

The Company has prescribed MGC Corporate Behavior Principles. It is committed
to respecting, and earning the trust and goodwill of, all stakeholders, including
consumers, suppliers/customers, shareholders/investors, local communities andemployees.

Environmental protection and CSR
activities

The Company believes that addressing management challenges from asustainability promotion perspective drives long-term corporate value creation andsustained growth in society. It has established a Sustainability Promotion
Department to promote sustainability-conscious management. In addition toestablishing the Sustainability Promotion Principle, the Company also designates
management priorities (material issues) that are key to sustainability management
through discussion among senior management.
With respect to environmental protection in particular, the Company proactively
engages in Responsible Care activities to mitigate environmental impacts andensure safety throughout products’ lifecycle from production through disposal.
The Company reports to the public on its activities through MGC Report(Integrated Reports) published annually and its website(https://www.mgc.co.jp/eng/ sustainability /).

Formulation of policies on providing
information to stakeholders

To expeditiously disclose information to shareholders/investors and otherstakeholders with an emphasis on transparency, impartiality and continuity, theCompany has adopted disclosure policies and provides information in accord
therewith.

18

IV Matters Pertaining to Internal Control Systems
1. Basic Approach to Internal Control Systems and State of Implementation Thereof

revisedThe Company’s Board of Directors has passed the resolution below on implementation of internal control systems. The MGC Groupwill implement internal controls in accord with the policies set forth therein.
(Content of Board of Directors’ Resolution)
1.
1)
2)
3)

4)
5)
6)
7)
2.
1)
2)
3)
4)

Systems for Ensuring Duties of Directors and Employees Are Executed in Compliance with Laws, Regulations, and Articles ofIncorporation
The Company shall view compliance as broadly encompassing conformity with laws, regulations, Articles of Incorporation, andinternal rules, as well as the conduct of fair, transparent, and free business based on an awareness of corporate responsibility tosociety, and shall establish MGC Corporate Behavior Principles, Compliance Rules, and MGC Group Code of Conduct.
The officer in charge of Compliance shall be appointed and a Compliance Committee chaired by said officer shall be established
as an organization directly under the President. The Compliance Committee shall investigate compliance violations, and also
discuss, formulate and make recommendation for corrective and preventive measures.
In order to ensure that the Company and its Group companies construct, maintain and operate internal controls appropriately theCompany shall establish Basic Rules on Internal Control & Risk Management. The Internal Control & Risk Management
Committee shall be chaired by the officer in charge of Internal Control & Risk Management and shall be established as anorganization directly under the President. In order to ensure its effectiveness, the Internal Control & Risk Management
Committee shall cooperate with the Compliance Committee and Internal Audit Division.
In order to detect compliance violations of the Company and respective companies of MGC Group and take corrective measures
promptly, Compliance Hotline shall be established as a means of receiving internal reports from officers, employees, theirfamilies, contractors, business partners, and the like.
In order to eliminate antisocial forces, in addition to clarifying MGC Group’s firm stance against such forces in the MGC
Corporate Behavior Principles and the MGC Group Code of Conduct, the Company shall promote its policies in each relevant
department.
In order to ensure the proper performance of duties by directors and employees, an Internal Audit Division shall be established to
conduct internal audits pursuant to the Internal Audit Rules in addition to auditing by Audit & Supervisory Board Members and by
the independent auditor.
The Company shall issue an MGC Compliance Handbook and distribute it to officers and employees to ensure MGC Group's
understanding of the compliance, as well as cultivate awareness of compliance through education and training.
Systems for Ensuring Efficient Execution of Duties by Directors
The Company shall separate the decision-making, supervision, and business execution functions of the management andimplement an Executive Officer system for expeditious decision-making and business execution. At the same time, in theoperating divisions to achieve efficient business management accountability for performance shall be clarified.
In order to make decisions on matters that have material effect on the Company based on multifaceted considerations, aManagement Council shall be established to deliberate on management policies and an Operations Council shall be establishedto deliberate on specific execution plans.
Organization Regulations, Segregation of Duties Rules, and Rules Defining Extent of Authority shall be established to clarify theduties and authorities of directors to ensure efficient and appropriate execution of duties.
Performance shall be monitored based on numerical targets clarified through the Group’s medium-term management plan,annual budget, and the like.

3.

System for Archiving and Managing Information on Execution of Duties by Directors
Information pertaining to the execution of duties by directors shall be archived and managed in accordance with the Document
Control Procedures and other internal rules.

4.
1)

Rules and Other Systems for Managing Risk of Loss
The Company shall establish Internal Control & Risk Management Rules in order to understand and appropriately manage
business risks as MGC Group.
The Internal Control & Risk Management Committee shall identify the status of risk management and provide supervision andinstructions on prioritizing risks and devising reduction measures.
Being a chemical manufacturer, the Company shall engage in responsible care (RC) activities as a voluntary undertaking toensure environmental protection and safety through the life cycle of chemicals from production to disposal.

2)
3)
5.

System for Ensuring Appropriate Execution of Business by MGC Group
While valuing the autonomous management of all Group companies and clarifying the managerial accountability of its Board of
Directors, the Company has established the following systems that include the maintenance of various regulations to ensure theappropriate execution of business within the MGC Group.
Also, regarding the appropriate execution of business within the MGC Group, companies within the Group are controlled throughmethods including the assignment of officers and the exercise of voting rights as required of the nature of the business, degreeof importance, etc.
• In addition to establishing departments responsible for items relating to Group management as well as divisions that supervise
individual Group companies, regulations such as Rules on Subsidiaries and Affiliates are maintained and a reporting system iscreated in order to receive regular and emergency reports from each of the Group companies.
• Regarding Internal Audit Rules, Group companies are also subject to internal audits. Also, regarding Basic Rules on Internal
Control & Risk Management, risk management conducted by Group companies are also subject to these rules, and instructionand education are carried out so that Group companies will maintain and improve appropriate risk management systems.
• The Company establishes the MGC Corporate Behavior Principles and the MGC Group Code of Conduct as basic policies forthe entire Group and seeks from each Group company the maintenance of compliance structures that meet them. Also, Human
Rights Hotline shall be established to address the negative impact of business activities on human rights, including those that
do not result in non-compliance. The Company's Compliance and Human Rights Hotlines are also available to the officers andemployees of each Group companies (including retirees), as well as their families, contractors, business partners, etc.

19• Through medium-term management plans, annual budget, etc. of Group companies, the Company clarifies each company's
performance goals and conducts performance management based on these goals. Regarding important business activities
performed by Group companies, the Company's supervisory division ensures appropriate decision-making throughmanagement discussions, etc.
6. Systems for Ensuring Effective Auditing of Audit & Supervisory Board Members(1) Matters Related to Employees Assisting with Audit & Supervisory Board Members’ Duties
Employees shall be assigned to assist Audit & Supervisory Board Members with their duties pursuant to consultations with Audit& Supervisory Board Members.
(2) Matters Related to Independence from Directors of Employees Assisting with Audit & Supervisory Board Members’ Duties
Employees assigned to assist with the duties of Audit & Supervisory Board Members shall engage full time in said assignmentand shall not be subject to orders and instructions from directors. The prior consent of the Audit & Supervisory Board is required
for their transfer, appraisal, and disciplinary punishment.
(3) Matters Related to Ensuring Effectiveness of Orders Given to Employees Who Assist Audit & Supervisory Board Members in
Their Duties
It is made clear that employees who assist Audit & Supervisory Board Members in their duties are to obey instructions given tothem by Audit & Supervisory Board Members, and employees who possess the aptitude for such duties are nominated.
(4) Matters Related to Reports from Directors and Employees to Audit & Supervisory Board Members
1) In the event directors or employees find violations of laws and regulations or facts and the like that may cause significant
damage to the Company, they must report said violations, facts, and the like to the Audit & Supervisory Board Members inaccordance with laws, regulations, Compliance Rules, and other internal rules.
2) Directors and employees must report regularly, and promptly in the case of important matters, on the execution status ofbusiness operations including internal controls of the Company and supervised Group companies, risk management andimplementation of compliance with the Audit & Supervisory Board Members, as well as promptly conduct investigations andprovide reports in the event Audit & Supervisory Board Members request investigations and reports concerning these statuses.
3) Directors, Audit & Supervisory Board Members, and employees of Group companies will, based on laws and regulations, quickly
conduct surveys and deliver reports in the case that a report is demanded from Audit & Supervisory Board Members.
4) The Compliance Committee must promptly report to Audit & Supervisory Board Members the content of consultations andreports involving the Company or Group companies received through Compliance Hotline.
(5) Matters Related to Treatment of Individuals Who Make Reports, etc. to Audit & Supervisory Board Members
Individuals responsible for aforementioned reports and surveys as well as those who work together with them, etc. shall not be
subject to work reassignment, discrimination, or other unfavorable treatment as a result of that action, and knowledge of thisprohibition will be made well-known.
(6) Matters Related Costs, etc., Resulting from Execution of Audit & Supervisory Board Members' Duties
1) In order to defray costs that occur as the result of the execution of Audit & Supervisory Board Members' duties, an appropriate
budget shall be established each fiscal year based on projected activities.
2) If a request for prepayment or settling of accounts regarding costs necessary for the execution of Audit & Supervisory Board
Members' duties is received, the Company shall promptly comply.
3) Even in cases where costs incurred as the result of the execution of Audit & Supervisory Board Members' duties exceed theamount budgeted for each fiscal year, Audit & Supervisory Board Members and the related directors shall meet and as a rule
make considerations to respond to the necessity of those costs.
(7) Other Systems for Ensuring Effective Auditing of Audit & Supervisory Board Members
1) Representative directors shall arrange for regular exchange of views with Audit & Supervisory Board Members. Further, theInternal Audit Division and the independent auditor shall communicate and deliberate with Audit & Supervisory Board Members
to ensure the effectiveness of Audit & Supervisory Board Members’ operations.
2) Audit & Supervisory Board Members may attend Board of Directors meetings and other important meetings in order tounderstand the decision-making status regarding important matters and the execution status of business operations, in addition
to reviewing important documents and requesting explanations of directors and employees on the execution of business
operations.
3) In the case that the Audit & Supervisory Board requests the use of independent external specialists, the Company shall bearthose costs, excepting cases where their use is deemed not necessary to the execution of Audit & Supervisory Board Members'
duties.

2. Basic Approach to Eradication of Antisocial Forces and State of Implementation Thereof
The Board of Directors has passed a resolution reaffirming the Company’s resolute commitment to eradicating antisocial forces.
This commitment is explicitly embodied in the MGC Corporate Behavior Principles and MGC Group Code of Conduct and clearly
evident both internally and outwardly.
Specifically, the Company has placed general affairs staff in charge of dealing with antisocial forces and appointed personnel incharge of preventing extortion at all of its sites. General affairs staff communicate, consult and otherwise cooperate with law
enforcement and other external specialists, collect information on antisocial forces, raise widespread awareness and promotevigilance as needed, including at Group companies.

20

V

Other
1. Adoption of Takeover Defense Plan
Has Company adopted a takeover
defense plan?

No

Supplemental Explanation―――

2. Other Matters Pertaining to Corporate Governance Regime[Overview of Timely Disclosure Program]
The Company’s internal arrangements for timely disclosure of company information are as follows.
1. Basic Information Disclosure Policies
The Company’s Corporate Behavior Principles and Code of Conduct explicitly mandate appropriate information disclosure toinvestors, suppliers, customers, employees, local communities and other stakeholders to ensure its operations are conducted freely,
fairly and transparently. The Company also promotes universal awareness of appropriate information disclosure among its personnel.
Additionally, the Company has prescribed information disclosure guidelines and procedures in accord with internal regulations andpractices timely disclosure in compliance therewith.
2. Organizational Unit in Charge of Timely Disclosure
The Company has placed its CSR & IR Division in charge of timely disclosure. The CSR & IR Division’s general manager
supervises tasks involved in timely disclosure, including decision-making on timely disclosure matters and preparation of disclosures’text, as the manager responsible for information handling. Timely disclosures are approved by the officer in charge of the CSR & IR
Division before being released.
3. Information Management Regime(Information Pertaining to Decisions)
Decisions on important management matters are made by the Board of Directors, Operations Council or other internal body inaccord with the Company’s internal regulations. All such matters are screened beforehand by the CSR & IR Division, which decides
whether the matter in question meets timely disclosure criteria. If the criteria are met, the CSR & IR Division decides on the content of
the disclosure in consultation with the organizational unit(s) with purview over the matter. Once the matter has been decided upon by
the Board of Directors or other decision-making body, the CSR & IR Division promptly discloses the decision.
(Information Pertaining to Events)
When information arises that presumptively meets timely disclosure criteria, the organizational unit with purview over the matter inquestion immediately reports it to the CSR & IR Division’s general manager. Together with said organizational unit, the CSR & IR
Division decides whether the matter meets timely disclosure criteria. If it does, the CSR & IR Division promptly discloses it.
(Information Pertaining to Financial Reporting)
The CSR & IR Division discloses information pertaining to financial reporting after first consulting with the accounting department
and promptly after the information has been approved by the Board of Directors or other decision-making body.
(Information Pertaining to Subsidiaries)
Information pertaining to a subsidiary, including information pertaining to decisions, events and financial reporting, is reported to the
CSR & IR Division’s general manager by the Company’s internal organizational unit with purview over the subsidiary in question.
Together with said organizational unit, the CSR & IR Division decides whether the information in question meets timely disclosure
criteria. If it does, the CSR & IR Division promptly discloses it.
4. Prevention of Insider Trading
The Company has instituted regulations to prevent insider trading and endeavors to prevent insider trading by promoting thoroughcompliance with the regulations among all personnel.

21Structure of Corporate Governance, Etc.

Expertise and Experience Sought in Directors and Audit & Supervisory Board Members（Skills Matrix）
Corporate
management /Industry
expertise

Production
technology /R&D /Environment
safetyBusinessstrategy /Sales /
Marketdevelopment

Finance /Accounting /Management
planning

Legal /
Compliance /Riskmanagement

HR /Labor /
Talentdevelopment

Global /Diversity /Experience inother sectors

Directors
Toshikiyo Kurai

○

○

○

○

Masashi Fujii○

Nobuhisa Ariyoshi○○

Motoyasu Kitagawa○○

Ryozo Yamaguchi○

Ko Kedo○○○Yoshinori Isahaya

○

○

○

○

Hideaki Akase

○

○

○

Toru Suzuki

○

○

○

Yasushi Manabe

○

○

○

Kazue Kurihara

○

○

○

○

○

○

○

○

○

○

○

○
〇

○

Haruko Hirose

○

○

○

○

Audit & Supervisory Board Members
Masamichi Mizukami○

Go Watanabe○

Masato Inari

○

○

○

○
○

○

○

○
○

Tsuneaki Teshima○○* Up to four high-priority areas of expertise/experience are noted for each individual.
The table above is not exhaustive with respect to the expertise and experience disclosed for each individual.

22○○