Mitsubishi Chemical HoldingsKAITEKI Value for Tomorrow

Corporate Governance

Message from the Chairperson

Creating new value to contribute to a sustainable society

Looking back at the Board meetings held in FY2018
In FY2018, the Board of Directors met 11 times to monitor the progress of the medium-term management plan and discuss the investment in future growth, among other themes. One of the meetings focused on the MCHC Group’s medium- to long-term strategies, featuring in-depth discussions about the Group’s portfolio management, proposed by Director Fredrickson.

The environment surrounding the MCHC Group
Recently, the environment issues such as climate change, depletion of natural resources, plastic waste, aging society, those are affecting people, society and the Earth are growing more serious. In the future, I believe the dominant business model will be providing solutions for a range of environmental and health issues using a combination of goods and services, backed by technological innovation. Various businesses are developing services using data, such as “mobility as a service*1,” and as digital platform providers such as GAFA*2 create new business models, the line between the “manufacturing” and “services” industries is becoming blurred.
For the sustainable development of people, society and the Earth, the MCHC Group has been channeling its innovation capacity on products and services that help solve social issues. Going forward, we plan to strategically categorize the Group’s technologies and data as either internal or open source. This will enable us to proactively collaborate with other companies, venture firms, universities, and public organizations in Japan and abroad to create new value.

Toward realizing KAITEKI
Currently, under the leadership of President Ochi, management is creating an action plan for 2030 by backcasting from our vision of society in the year 2050. This is one of priorities that will be discussed by the Board of Directors.
In FY2019, Chikatomo Hodo, who served as president and chairperson of Accenture Japan Ltd, and Kiyomi Kikuchi, a lawyer with international experience, joined the Board as outside directors. In my capacity as chairperson of the Board of Directors, I will ensure that our discussions encompass various viewpoints and involve active participation of outside directors to improve Board effectiveness. For the realization of KAITEKI, the Board will support the management team in making bold business decisions to achieve higher corporate and shareholder value.

*1 A new concept of transportation where all modes of transportation except private vehicles are connected on the cloud to enable the provision of seamless mobility solutions.

*2 GAFA stands for the four tech giants, Google, Apple, Facebook, and Amazon.

September 2019
Yoshimitsu Kobayashi
Chairperson

Basic Approach to Corporate Governance

The MCHC Group defines KAITEKI as “the sustainable well-being of people, society and our planet Earth”, and has “realizing KAITEKI” as its vison. The MCHC Group will not stop at providing solutions to environmental and social problems, but also aim to contribute to a sustainability in both through our corporate activities.
For Realizing KAITEKI, MCHC shall establish a system to enhance both the soundness and efficiency of business administration, improve the transparency of its business administration through suitable disclosure of information and dialogue with stakeholders, and endeavor to establish a better suitable corporate governance system.
In June, 2015 the Company transitioned to a company with a nominating committee, etc. and has been making efforts to enhance corporate governance by increasing transparency and fairness, strengthening oversight functions and improving agility by accelerating decision-making.

Governance System

MCHC has transitioned to a company with a nominating committee, etc. after receiving approval at the June 2015 General Meeting of Shareholders. This system separates functions for the supervision and execution of business in a bid to enhance management transparency and openness, strengthens management oversight functions, and improves management agility by accelerating decision-making. While management supervision is now undertaken by the Board of Directors and three committees comprised of the Nominating Committee, Audit Committee, and Compensation Committee, corporate executive officers make business decisions and are in charge of business execution.

Roles and Responsibilities

(Board of Directors)

The Board of Directors determines basic management policies, such as medium- term business strategies and annual budgets. As a general rule, corporate executive officers are entrusted with the responsibility of executing operations in accordance with these basic policies, excluding matters that must be legally resolved by the Board of Directors. It primarily supervises the execution of duties by the corporate executive officers.
The Company has appointed directors from inside the company that are well-versed in the group’s wide range of businesses and the three main segments of the Company—performance products, industrial materials, and healthcare, as well as five outside directors — one is a certified public accountant, one is a lawyer, one is experienced in corporate management, one is an expert in socio-economic matters and one is an expert in technology. We aim to factor their diverse opinions into our management decisions and also strengthen our oversight functions.
That being said, the Articles of Incorporation stipulate that there shall be no more than 20 directors at one time. As of June 25, 2019, there are a total of 12 directors (of which three directors are also corporate executive officers), including the five outside directors. Each director services a term of one year. This is to facilitate the establishment of a management structure that can quickly respond to changes in the business environment, and to further clarify the responsibilities and roles of each director.

(Nominating Committee)

The Nominating Committee nominates director candidates and executive officers, and also nominates president candidates for key directly-owned subsidiaries that are not listed companies (Mitsubishi Chemical Corporation., and Life Science Institute, Inc.).
As of June 25, 2019, the Nominating Committee consists of five members including four outside directors.
An outside director serves as the chairperson to enhance the transparency and soundness of the nominating process.

Nominating Committee (as of June 25, 2019)
Outside Directors Inside Director
Chairperson Takayuki Hashimoto
Members Hideko Kunii
Chikatomo Hodo
Kiyomi Kikuchi
Yoshimitsu Kobayashi

(Audit Committee)

The Audit Committee is responsible for auditing the execution of duties by the corporate executive officers and directors and reviewing the Group’s internal control system. As a general rule, the committee meets once a month. As of June 25, 2019, the Audit Committee consists of five members including three outside directors. Together with selecting two full-time members, the Audit Office that performs internal audits and the Internal Control Office that formulates and promotes policies on establishing internal control systems collaborate closely to enhance the audit system administered by the Audit Committee. An inside director who is a full-time member of the Audit Committee serves as the chairperson to ensure the smooth collection of information and sufficient cooperation between divisions.
Management shall set the Office of Audit Committee as a body to assist the Audit Committee’s duties and have it assist in auditing based on the instructions thereof. The appointment (transfer, evaluation, etc.) of employees of the Office of Audit Committee and the development of the budget of the Office of Audit Committee shall be subject to approval of the Audit Committee.
Taigi Ito has considerable knowledge of finance and accounting, as he is qualified as Certified Public Accountant.

Audit Committee (as of June 25, 2019)
Outside Directors Inside Directors
Chairperson Hisao Urata
Members Taigi Ito
Hideko Kunii
Kiyomi Kikuchi
Shigeru Kobayashi

(Compensation Committee)

The Compensation Committee determines the individual amount of compensation for each director and corporate executive officer at the Company. The committee also determines the individual amount of compensation for the presidents of key directly-owned subsidiaries that are non-listed companies (Mitsubishi Chemical Corporation. and Life Science Institute, Inc.).
As of June 25, 2019, the Compensation Committee consists of five members including three outside directors.
An outside director serves as the chairperson to enhance transparency and fairness of the decision-making process.

Compensation Committee (as of June 25, 2019)
Outside Directors Inside Directors
Chairperson Taigi Ito
Members Takayuki Hashimoto
Chikatomo Hodo
Hidefumi Date
Ken Fujiwara

(Corporate Executive officers)

The corporate executive officers decide the execution based on basic management policies (medium term business strategies and annual budgets, etc.).
Regarding important matters in the management of the Group, deliberations are made at the corporate executive officers, which is the council by the corporate executive officers. In addition to determining the division of duties of each corporate executive officer for other matters, we make it appropriate and efficient decision-making by clarifying the authority to decide the corporate executive officer in charge.

(Corporate Executive Officers Committee)

The Corporate Executive Officers Committee is composed of all corporate executive officers, deliberates and decides on important matters concerning the management of the Company and the Company group, and also monitors the Group's business based on the medium-term management plan, annual budget etc.
That being said, the Member of the Audit Committee and Business Companies’ President and CEO can attend the Corporate Executive Officers Committee at any time to express freely.

History of strengthening Corporate Governance

Date Initiatives Objective
June 2006 Introduced Stock-Based Compensation (Stock option) Plans To link director’s remuneration to shareholder value
June 2013 Appointment and inauguration of an outside director To strengthen the system of management supervision
June 2014 Appointment and inauguration of a foreign director To improve diversity in directors
June 2015 Appointment and inauguration of a female director To improve diversity in directors
Transition to a company with a nominating committee, etc. To enhance management transparency and fairness, to strengthen management supervision functions
June 2016 Increase number of outside directors To improve diversity in directors

Standards for Independence of Outside Directors

The Company shall elect those as Outside Directors who do not fall under any of the following and are capable of overseeing the Company’s management from a fair and neutral standpoint, free of a conflict of interest with general shareholders.

1.Related party of the Company
(1)Person engaged in execution of operation of the MCHC Group (Executive Director, Corporate Executive Officer, Executive Officer, Manager, employee, partner, etc. The same shall apply hereafter.)
(2)Person who was engaged in execution of operation of the MCHC Group over the last 10 years

2.Major shareholder
A person who directly or indirectly holds 10% or more of MCHC’s total voting rights or a person engaged in execution of operation of a company that directly or indirectly holds 10% or more of MCHC’s total voting rights

3.Major business partner
(1)A person engaged in execution of operation of a company*1 whose major business partner includes MCHC and Group Operating Companies (Mitsubishi Chemical Corporation, Mitsubishi Tanabe Pharma Corporation, Life Science Institute, Inc., and Taiyo Nippon Sanso Corporation. The same shall apply hereafter.)
(2)A person engaged in execution of operation of a major business partner*2 of MCHC and Group Operating Companies

4.Accounting Auditor
Accounting Auditor of the MCHC Group or an employee thereof

5.Transaction as an individual
A person who receives money and other financial benefits of 10 million yen or more per year from any of MCHC and Group Operating Companies

6.Donation
A person who receives a donation or financial assistance of 10 million yen or more per year from any of MCHC and Group Operating Companies or a person engaged in execution of operation of a company that receives a donation or financial assistance of 10 million yen or more per year from any of MCHC and Group Operating Companies

7.Reciprocal assumption of the position of Director
A person engaged in execution of operation of a company that has elected any of the Directors and employees of the MCHC Group as its Director

8.Close relatives, etc.
(1)Close relatives, etc. of a person engaged in execution of important operations of the MCHC Group (spouse, relatives within the second degree of relationship or any person who shares the same livelihood. The same shall apply hereafter.)
(2)Close relatives, etc. of any person who meets the definition of items 3 through 7 above
(3)A person who met the definition of items 3 through 7 above over the last three years

*1 if the said business partner receives from MCHC and Group Operating Companies an amount equivalent to 2% or more of its annual consolidated net sales in the latest fiscal year, this company shall be considered as the one whose major business partner includes MCHC.

*2 If MCHC and Group Operating Companies receives from the said business partner an amount equivalent to 2% or more of MCHC’s annual consolidated net sales in the latest fiscal year or the said business partner loans to the MCHC Group an amount equivalent to 2% or more of MCHC’s total consolidated assets, the said business partner shall be considered as a major business partner of MCHC.

Reasons for Appointment of Outside Directors

Name Reasons for Appointment
Taigi Ito Mr. Ito served as Deputy Chairperson of the Japanese Institute of Certified Public Accountants, and thus has abundant experience and profound insight as a certified public accountant. During Board of Directors meetings, he provides oversight of overall risk management from an independent and impartial standpoint, while making useful suggestions in relation to matters such as finance and accounting, and portfolio management. As he is expected to continue making contributions to establishing basic management policies and ensuring proper oversight of management by the Board of Directors of MCHC through such initiatives, the Board of Directors elected Mr. Ito as an outside director.
In addition, Mr. Ito satisfies our standards for director independence. We thereby designated Mr. Ito as an independent director in accordance with the regulations stipulated by the Tokyo Stock Exchange.
Hideko Kunii Ms. Kunii has extensive experience in company management and expertise in the information processing domain, as well as profound insight in diversity promotion as a member of the Cabinet Office Gender Equality Promotion Joint Meeting. During Board of Directors meetings, she provides oversight of overall corporate management from an independent and impartial standpoint, while making useful suggestions in relation to matters such as woman’s empowerment promotion, science technology, and IT. As she is expected to continue making contributions to establishing basic management policies and ensuring proper oversight of management by the Board of Directors of MCHC through such initiatives, the Board of Directors elected Ms. Kunii as an outside director.
In addition, Ms. Kunii satisfies our standards for director independence. We thereby designated Ms. Kunii as an independent director in accordance with the regulations stipulated by the Tokyo Stock Exchange.
Takayuki Hashimoto Mr. Hashimoto has extensive experience in corporate management and profound insight into digital business, having served successively as a president and a chairperson of a Japanese subsidiary of a global corporation that provides products and services related to information system. During Board of Directors meetings, he provides oversight of overall corporate management from an independent and impartial standpoint, while making useful suggestions mainly in relation to global management, business strategy, and portfolio management. As he is expected to continue making contributions to establishing basic management policies and ensuring proper oversight of management by the Board of Directors of MCHC through such initiatives, the Board of Directors elected Mr. Hashimoto as an outside director.
In addition, Mr. Hashimoto satisfies our standards for director independence. We thereby designated Mr. Hashimoto as an independent director in accordance with the regulations stipulated by the Tokyo Stock Exchange.
Chikatomo Hodo Mr. Hodo has extensive experience in corporate management and profound insight in digital business successively as a president and a chairperson of a Japanese subsidiary of a global corporation, which provides management consulting and IT services. Making the best of such experience and insights, he is expected to make contributions to establishing basic management policies and ensuring proper oversight of management by the Board of Directors of MCHC from a perspective mainly of management experience, science technology, IT, and globalism, as an independent Outside Director. As such, the Board of Directors elected Mr. Hodo as an outside director.
In addition, Mr. Hodo satisfies our standards for director independence. We thereby designated Mr. Hodo as an independent director in accordance with the regulations stipulated by the Tokyo Stock Exchange.
Kiyomi Kikuchi Ms. Kikuchi has abundant experience working at financial institutions in addition to her profound insight as a lawyer specialized in corporate legal affairs. Making the best of such experience and insight, she is expected to make contributions to establishing basic management policies and ensuring proper oversight of management by the Board of Directors of MCHC from a perspective mainly of domestic and foreign laws and regulations, and legal risk, as an independent Outside Director. As such, the Board of Directors elected Ms. Kikuchi as an outside director.
In addition, Ms. Kikuchi satisfies our standards for director independence. We thereby designated Ms. Kikuchi as an independent director in accordance with the regulations stipulated by the Tokyo Stock Exchange.

Activities by Outside Directors

Name Status of activities Attendance
Takeo Kikkawa During the Board of Directors meetings, he provided input on such matters as risks in the industrial materials domain and the portfolio management, drawing on his profound insight on company management from a view of the business history as well as his experience as an energy industry expert.
At the Nominating Committee, he led meetings as its chair with respect to major agenda items such as senior management turnover and roles expected of Directors, and otherwise fulfilled his assigned duties in part by reporting outcomes of discussions to the Board of Directors. As a member of the Compensation Committee, he provided appropriate input with respect to major agenda items such as compensation levels of senior management and revision of the performance-based compensation system.
Board of Directors meetings
11/11 (100%)
Nominating Committee meetings
5/6 (83%)
Compensation Committee meetings
7/7 (100%)
Taigi Ito During the Board of Directors meetings, he provided input on such matters as finance and accounting as well as the risk management, drawing on his experience and profound insight as a certified public accountant.
At the Audit Committee, he appropriately fulfilled his assigned duties as an outside member of the Audit Committee in terms of conducting audits based on audit plans, focusing on matters such as the development and operations of the internal control system, and intensive auditing regarding the progress of the “APTSIS 20” medium-term management plan during the fiscal year under review. At the Compensation Committee, he led meetings as its chair with respect to major agenda items such as compensation levels of senior management and revision of the performance-based compensation system, and otherwise fulfilled his assigned duties in part by reporting outcomes of discussions to the Board of Directors.
Board of Directors meetings
11/11 (100%)
Audit Committee meetings
13/13 (100%)
Compensation Committee meetings
7/7 (100%)
Kazuhiro Watanabe During the Board of Directors meetings, he provided input on such matters as the internal control and the compliance, drawing on his experience and profound insight as a prosecutor and lawyer.
At the Audit Committee, he appropriately fulfilled his assigned duties as an outside member of the Audit Committee in terms of conducting audits based on audit plans, focusing on matters such as the development and operations of the internal control system, and intensive auditing regarding the progress of the “APTSIS 20” medium-term management plan during the fiscal year under review. At the Compensation Committee, he provided appropriate input to the committee with respect to major agenda items such as compensation levels of senior management and revision of the performance-based compensation system.
Board of Directors meetings
11/11 (100%)
Audit Committee meetings
13/13 (100%)
Compensation Committee meetings
7/7 (100%)
Hideko Kunii During the Board of Directors meetings, she provided input on matters such as woman’s empowerment promotion, science technology, and IT, drawing on her profound insight in diversity promotion as well as her extensive experience in company management and her expertise in the information processing domain.
At the Nominating Committee, she provided appropriate input to the committee with respect to major agenda items such as senior management turnover and roles expected of Directors. At the Audit Committee, she appropriately fulfilled her assigned duties as an outside member of the Audit Committee in terms of conducting audits based on audit plans, focusing on matters such as the development and operations of the internal control system, and intensive auditing regarding the progress of the “APTSIS 20” medium-term management plan during the fiscal year under review.
Board of Directors meetings
11/11 (100%)
Nominating Committee meetings
6/6 (100%)
Audit Committee meetings
13/13 (100%)
Takayuki Hashimoto During Board of Directors meetings, he provided input mainly in relation to global management, business strategy, and portfolio management, drawing on his extensive experience in company management and profound insights into digital business.
At the Nominating Committee, he provided appropriate input to the committee with respect to major agenda items such as senior management turnover and roles expected of Directors.
Board of Directors meetings
11/11 (100%)
Nominating Committee meetings
6/6 (100%)

Policy on Deciding Compensation for senior management

The Compensation system for directors, and that for corporate executive officers shall be different. Compensation is determined by the Compensation Committee based on the following concepts:

Aggregate Amount of Remuneration of Company’s Officers

Category No. of Persons Amount of Remuneration, etc. Paid (in million yen)
Basic
Remuneration
Performance
Remuneration
Total
Directors (inside) 6 223 52 275
Directors (outside) 5 71 - 71
Corporate Executive Officers 7 304 144 448
Sum Total 18 598 196 794

Notes:
1. The total amount of remuneration, etc. MCHC and its subsidiaries paid to officers is shown as the amount of remuneration, etc. paid above.
2. The amount of remuneration, etc. MCHC paid is \343 million to eleven Directors (of which, \71 million to five Outside Directors) and \430 million to seven Corporate Executive Officers.
3. MCHC remunerates Directors who concurrently serve as Corporate Executive Officers for their services as Corporate Executive Officers as Policy on Deciding Remuneration for Directors and Corporate Executive Officers.
4. Performance remuneration to Directors (inside) is cash bonus and stock options paid to the director who concurrently served as Corporate Executive Officer in the previous fiscal year as performance remuneration at the time of standing as a Corporate Executive Officers.
5. Performance remuneration to Corporate Executive Officers is remuneration paid by MCHC based on cash bonus and stock options, and cash bonus paid by subsidiaries of MCHC.
6. At the June 6, 2018 meeting of the Compensation Committee, MCHC decided to introduce a new stock remuneration plan with a board incentive plan (BIP) trust. With the introduction of the plan, stock remuneration-type stock options will no longer be issued from fiscal 2019 (15th Term) onward.

黑粗硬大欧美在线视频-黑粗硬大超爽视频