Corporate Governance

HOMESustainabilityGovernanceCorporate Governance

Basic Concept

Strengthening of Management Base

The Company’s basic approach to corporate governance is to respond to changes in the business environment and aim for continuous improvement of corporate value by making transparent, fair, prompt, and decisive decisions in consideration of the standpoints of shareholders, customers, employees, local communities, and other stakeholders. Based on this concept, the Company is working to speed up management decision-making and clarify management and business execution responsibilities, while strengthening management supervisory functions, compliance, risk management, and internal control systems under a Board of Directors and Audit and Supervisory Committee that include highly independent outside directors.

Corporate Governance Report (Japanese version only)

Corporate Governance Structure

Our Corporate Governance Structure

  • The Board of Directors, consisting of three Directors with extensive knowledge of the Company’s business and three highly independent Outside Directors, deliberates and decides on important matters related to the execution of business operations, including matters related to the Company’s forecast. Once a year, a questionnaire on the effectiveness of the Board of Directors is distributed to all Directors, and the answers are used to analyze and evaluate the effectiveness of the Board.
  • The Company has adopted the Audit and Supervisory Committee system. The Audit and Supervisory Committee consists of three members, including two Outside Directors. The Committee members audit the legality of the execution of duties by the Directors.
  • The Nomination and Compensation Advisory Committee was established as an advisory body to the Board of Directors for the purpose of establishing a system in which Independent Outside Directors are appropriately involved in decision-making regarding Director nominations and remuneration, enhancing the objectivity and transparency of the decision-making process, and further improving corporate governance. Its main role is to respond to the Board of Directors’ consultations regarding the election and dismissal of directors, the selection and dismissal of Representative Directors and Directors with special titles, and the compensation of Directors.

(As of June 20, 2026)

Corporate Governance Structure

Board of Directors

The Board of Directors consists of 10 directors, consisting of seven Outside Directors, in order to strengthen corporate governance (as of June 20, 2025). The Board of Directors meets in principle once a month and additionally whenever necessary to address urgent matters requiring prompt decision-making. The Board makes important decisions regarding the execution of the Company’s business, including matters related to management plans, and is responsible for supervising overall business execution. The Company’s Articles of Incorporation stipulate that the number of Directors shall not exceed 12. In addition, to clarify management responsibility for each fiscal year, the term of office of Directors is one year.

Audit and Supervisory Committee

The Company has adopted the structure of a company with an Audit and Supervisory Committee. The Audit and Supervisory Committee members audit the legality of the execution of duties by Directors. The Committee meets in principle once a month and additionally whenever necessary. The Company has three Outside Directors serving as Audit and Supervisory Committee members, consisting of one full-time member and two part-time members (as of June 20, 2025).

Management Council

The Management Council is composed of Internal Directors, full-time Directors, and heads of each division. It mainly reports on and deliberates matters such as the Company’s management policies and strategies, as well as the progress of business operations, including budget performance. Important matters are thoroughly deliberated in advance at the Management Council before being submitted to the Board of Directors, thereby ensuring thorough and appropriate deliberation in the decision-making process.

Voluntary Committees (as of June 20, 2025)

Nomination and Compensation Advisory Committee

The Nomination and Compensation Advisory Committee is established as an advisory body to the Board of Directors. The committee’s main roles are to provide advice to the Board of Directors on the election and dismissal of Directors, the selection and dismissal of Representative Directors and Directors with special titles, and the remuneration of Directors. The committee consists four Outside Directors, and one internal director. The committee is chaired by an Outside Director elected by mutual vote, and the executive officer in charge of the Corporate Planning Department serves as the secretariat.(As of June 20, 2025)

The Committee met 10 times during the fiscal year. It made proposals to the Board of Directors regarding the management structure and other matters with consideration for diversity, and, based on resolutions of the Board, determined the individual remuneration of Directors (monetary compensation and stock-based compensation).

Main Matters Discussed

  • Monthly monetary compensation for each Director
  • Evaluation of the Board of Directors, taking diversity and the skills matrix into consideration
  • Selection of candidates for the next Board of Directors (Directors, Audit & Supervisory Board Members, and Substitute Audit & Supervisory Board Members), including the selection of new Director candidates
  • Consideration of the transition to a Company with an Audit & Supervisory Committee
  • Review of the executive compensation system (including the addition of incentive plans related to non-financial indicators)

Sustainability Committee

We have positioned the Basic Sustainability Policy at the core of our management, and will contribute to the realization of a sustainable society by responding sensitively to environmental changes and promoting fair corporate activities.

In order to realize medium- and long-term enhancement of corporate value through sustainability management, we established the ESG Committee in June 2022 as a body to compile corporate governance, risk management, strategies, indicators and targets related to ESG and sustainability, formulate action plans, and manage and evaluate the progress of these plans. In August 2023, the committee was merged with the existing Risk Management Committee and reorganized as the Sustainability Committee. The Sustainability Committee consists of nine members, including the President and Representative Director (chairperson), the director in charge of Risk Management, the heads of each department, and Full-time Director and the Internal Audit Office (for guidance and advice as needed) (as of June 19, 2025).

The committee met four times during the current fiscal year to plan and implement sustainability management activities, mainly focusing on the non-financial information themes of climate change and human capital, while also working on the research and development of environmentally friendly cyanide-free products, the development of zinc dendrite inhibitors, the expansion of systems to enable diverse work styles, the development of an educational system to foster proactive and self-driven talent At the same time, the Company worked on the following major themes: the expansion of systems to enable diverse work styles, the development of an education system to foster proactive and self-driven talent, the strengthening of career recruitment, information security measures, the development of a CRM system to enhance customer engagement, the renewal of the public website, and the simultaneous disclosure of information in English and Japanese.

Board of directors

Policy on the Balance of Skills and Other Attributes of the Board of Directors and the Selection of Directors

In order to ensure the effective functioning of the Board of Directors, the Company has long sought to secure an appropriate combination of knowledge, experience and abilities considered necessary by the Company, as well as a suitable balance in terms of years of service, when selecting candidates for Directors, and submits such candidates for approval at the General Meeting of Shareholders.In selecting Director candidates, the Company identifies the skills and other attributes that the Board of Directors should possess in light of the Company’s medium- to long-term management direction. The combination of skills and other attributes held by the Company’s Directors is disclosed in the Notice of Convocation of the General Meeting of Shareholders through the use of a skills matrix.

Activities of the Board of Directors (54th: April 1, 2024 – March 31, 2025)
Name Number of Meetings Attendance
President and Representative Director Tomoyuki Kojima 13 13
Senior Director Motoki Watanabe 13 13
Director and Senior Advisor Masao Watanabe 13 12
Outside Director Yasuhisa Ohata 13 13
Outside Director Isamu Kawashima 13 13
Outside Director Momoe Kuromatsu 13 13
Matters Considered by the Board of Directors

During the fiscal year under review, in accordance with the requirements of the Tokyo Stock Exchange and the Corporate Governance Code, we concentrated our discussions on Initiatives to Implement Management Conscious of Cost of Capital and Stock Price. In particular, we had active discussions, incorporating the opinions of outside experts, on growth strategies for business expansion, reduction of strategic shareholdings as a source of funds for business expansion, and enhancement of shareholder returns, and disclosed them together with the medium-term management plan. We also discussed initiatives for sustainability management and promotion of human capital management from a long-term perspective.

Resolutions Approval
  • Approval of quarterly financial results, approval of annual and semi-annual budgets, appropriation of retained earnings, interim dividends, and revision of earnings forecasts
  • Change of organizational structure (transition to a company with an Audit and Supervisory Committee)
  • Approval of the submission to the general meeting of shareholders of the election of Directors and Corporate Auditors, and approval of the notice of convocation of the ordinary general meeting of shareholders, selection of Representative Directors and Executive Directors, control of Directors, and selection of Nomination and Compensation Advisory Committee members, determination of monthly monetary compensation for each individual Director
  • Establishment of Phase 2 of the Medium-Term Management Plan, policy for reduction of specified investment shareholdings, sale of securities holdings, etc.
  • Response to shareholder proposals, etc., etc.
Reporting Matters
  • Monthly, quarterly, and annual financial reports, confirmation of corporate governance reports, results of evaluation of internal control systems for financial reporting, report on activities of the Sustainability Committee, CDP Climate Change Questionnaire, Evaluation of the effectiveness of the Board of Directors, Status of SR activities, etc.
Evaluation of the Effectiveness of the Board of Directors

Once a year, the Board of Directors analyzes and evaluates the effectiveness of the Board of Directors, considering the self-evaluations of each Director and Corporate Auditor.

A questionnaire was distributed to all Directors and Corporate Auditors regarding the effectiveness of the Board of Directors, and an analysis of the effectiveness of the Board of Directors was conducted based on the responses to the questionnaire. The questionnaire was a combination of a five-point scale and qualitative evaluation based on comments.

The questionnaire covered 11 items, including the role and function of the Board of Directors, its operation, and medium- to long-term management issues. Please refer to our Corporate Governance Report.

The results of the survey indicated that the quality and quantity of discussions through the CX Progress Committee were sufficient. It was also agreed that the evaluation of the implementation should continue after the release of Phase 2 of the Medium-Term Management Plan.

The size and composition of the Board of Directors and the operation of the Board of Directors were rated as appropriate. While the Company is taking appropriate measures with respect to relations with investors and shareholders, there was room for improvement in the dissemination of information. Furthermore, further discussion is needed on measures to enhance corporate value and medium- to long-term management issues, and we plan to increase the weight of these issues in the future.

Officer

Reason for Appointment

Board Member

Position Name Reason for Appointment
Representative Director and President Tomoyuki Kojima Since joining the Company, Tomoyuki Kojima has been involved in the technical, quality assurance, and corporate planning divisions, among others, and has contributed to the Company. The Company believes that he will continue to contribute to the sustainable enhancement of its corporate value, and has therefore appointed him as Director.
Senior Director Motoki Watanabe Motoki Watanabe is expected to contribute to the sustainable improvement of the Company’s corporate value by leveraging the knowledge and experience in finance and accounting that he has cultivated at other companies, as well as his knowledge of risk management and corporate governance in the Company’s management. Accordingly, he was appointed as Director.
Director and Senior Advisor to the Board Masao Watanabe Masao Watanabe has contributed to the Company’s development by leveraging his extensive experience as a corporate executive. The Company believes that he will continue to contribute to the further growth of the Company through his extensive experience, proven track record, strong leadership, and decisiveness, and has therefore appointed him as Director.
Outside Director Yasuhisa Ohata Yasutoshi Ohata has contributed to the Company’s management as an Outside Director by leveraging his broad knowledge and extensive experience in international business, financial business, and corporate management. The Company believes that he will continue to enhance its corporate value over the medium to long term by drawing on his broad knowledge and experience in corporate management and management strategy, while providing independent oversight of management. Accordingly, he was appointed as Outside Director.
Outside Director Isamu Kawashima Isamu Kawashima has contributed to the Company’s management as an Outside Director by leveraging his extensive knowledge and experience in finance and accounting, as well as his extensive management experience as a corporate executive. The Company believes that he will continue to enhance its corporate value over the medium to long term by drawing on his broad knowledge and experience in corporate management and management strategy, while providing independent oversight of management. Accordingly, he was appointed as Outside Director.
Outside Director Momoe Kuromatsu Momoe Kuromatsu has contributed to the Company’s management as an Outside Director by leveraging her extensive knowledge and experience in legal affairs and risk management, as well as her broad experience and expertise in supervision and auditing as an Audit & Supervisory Board Member at other companies. The Company believes that she will continue to enhance its corporate value over the medium to long term by drawing on her broad knowledge and experience in legal affairs and risk management, while providing independent oversight of management. Accordingly, she was appointed as Outside Director.
Outside Director Hiroshi Hayashi Hiroshi Hayashi has contributed to the Company’s management as an Outside Director by leveraging his extensive knowledge and experience in international business, overseas experience, and human resource development, as well as his experience as an Audit & Supervisory Board Member of the Company. The Company believes that he will continue to enhance its corporate value over the medium to long term by drawing on his broad knowledge and experience in international business and human resource development, while providing independent oversight of management. Accordingly, he was appointed as Outside Director.

Audit and Supervisory Committee Member

Position Name Reason for Appointment
Outside Director
(Audit and Supervisory Board Member (Full time))		 Shigeto Tomikuni Shigeto Tomikuni has extensive knowledge and experience in corporate management, management strategy, finance, and accounting. The Company believes that he will contribute to the enhancement of its corporate value over the medium to long term by drawing on this broad knowledge and experience, while providing oversight of management from an independent standpoint as a Full-Time Audit and Supervisory Committee Member, and has therefore appointed him as an Outside Director (Full-Time Audit and Supervisory Committee Member).
Outside Director
(Audit and Supervisory Board Member)		 Masanori Takano Masanori Takano has extensive knowledge and experience in corporate management, management strategy, human resource development, sales, and marketing. The Company believes that he will contribute to the enhancement of its corporate value over the medium to long term by drawing on this broad knowledge and experience, while providing oversight of management from an independent standpoint as an Audit and Supervisory Committee Member. Accordingly, he was appointed as an Outside Director (Audit and Supervisory Committee Member).
Outside Director
(Audit and Supervisory Board Member)		 Yuko Otake Yuko Otake has extensive experience and expertise as a certified public accountant and licensed tax accountant, as well as experience and knowledge as a corporate executive and as an outside director of other companies. The Company believes that she will contribute to the enhancement of its corporate value over the medium to long term by drawing on her broad knowledge and experience in finance, capital markets, and M&A, while providing oversight of management from an independent standpoint as an Audit and Supervisory Committee Member. Accordingly, she was appointed as an Outside Director (Audit and Supervisory Committee Member).
Skill Matrix (as of June 20, 2025)
Kojima Motoki
Watanabe		 Masao
Watanabe		 Ohata Kawashima Kuromatsu Hayashi Tomikuni Takano Otake
Outside Outside Outside Outside Outside Outside Outside
Male Male Male Male Male Female Male Male Male Female
Corporate Management, Management Strategy 〇 〇 〇 〇 〇 〇 〇 〇 〇 〇
Overseas Experience, Global Business 〇 〇 〇 〇 〇 〇
Legal Affairs, Risk Management 〇 〇 〇 〇
Finance, Accounting 〇 〇 〇 〇 〇
Financial and Capital Markets, M&A 〇 〇
Human Resources Development 〇 〇 〇
Sales, Marketing 〇 〇 〇
Technology, Development, Manufacturing, Quality 〇 〇

The items on the skill matrix have been partially reviewed.

Reasons for Selecting the Skills Matrix Items

Skill Reasons for Selection
Corporate Management, Management Strategy The demonstration of strong leadership to uphold the corporate philosophy and develop and execute business strategies for the sustainable improvement of corporate value is particularly required.
Overseas Experience, Global Business The knowledge and experience to understand the economic and cultural aspects of overseas customers, business partners, etc. and negotiate with them to establish and sustain cooperative relationships are required.
Legal Affairs, Risk Management Legal knowledge and experience for the proper risk management of business operations, compliance and the improvement of effectiveness of the Board of Directors are necessary.
Finance, Accounting Knowledge and experience in finance and accounting are required for the reinforcement of a financial base to support the foundation of management and the development of financial strategies to realize both growth investment, and shareholder return.
Financial and Capital Markets, M&A Insight and experience in the financial and capital markets are essential to determine and execute capital allocation to realize management that is conscious of capital cost and share price.
Human Resources Development Knowledge and insight for the arrangement of human resources measures and workplace environment are required to secure and develop human resources, which is the most crucial capital of the Company, and improve their engagement.
Sales, Marketing It is necessary to fully understand the business environment and how to build a relationship with stakeholders, including business partners, and have insight to develop new markets and prepare and execute product planning and sales strategies.
Technology, Development, Manufacturing, Quality The driving force of the growth of a research and development-type company is the technology and development areas to develop products, and the provision of high-quality products and technology support for customers is the lifeblood.
Training

When welcoming Outside Directors to the Company, we provide them with training to acquire the necessary information on the industry to which they belong, the Company’s history, business summary, financial information, and so forth, including a tour of the Company. In order to acquire the knowledge and information necessary to fulfill their expected roles and responsibilities, Directors participate in outside seminars, external organizations, and exchange meetings with other companies. Expense for such training is borne by the Company in accordance with internal regulations upon the request of Directors.

Directors’ Remuneration

Policy

The Company’s policy for determining the amount of remuneration for its Directors or the method for calculating such remuneration is stipulated in the Directors’ remuneration regulations and other internal rules. Directors’ remuneration is determined by the Board of Directors, within the limits approved by the General Meeting of Shareholders, after receiving recommendations from the Nomination and Compensation Advisory Committee. Remuneration for Directors who are Audit & Supervisory Committee Members is determined through discussions among those Directors.

Remuneration Structure (FY2024)

Category
of Directors		 Total Amount
of Remuneration, etc.
(Thousands of Yen)		 Total Amount of Remuneration by Type
(Thousands of Yen)		 Number
of Officers
Covered
Monetary Compensation Share-based Compensation
Basic Performance Restricted Stock-based
Compensation		 Stock Option
Directors (excluding Outside Directors) 97,404 63,078 18,165 14,326 1,835 3
Outside Directors 18,000 18,000 - - - 3
Total 115,404 81,078 18,165 14,326 1,835 6
Audit & Supervisory Board Members
(excluding Outside Audit & Supervisory Board Members)		 - - - - - -
Outside Directors 22,500 22,500 - - - 3
Toal 22,500 22,500 - - - 3

Risk Management

The Company has established the following systems to ensure that the execution of duties by Directors and employees is in compliance with laws, regulations, and the Articles of Incorporation, and to comprehensively identify short- and long-term business-related risks, take all possible countermeasures, and steadily implement risk management.

  • 1 Director will be selected by the Board of Directors as the Director in charge of Risk Management.
  • The Sustainability Committee, consisting of Directors, employees, and compliance officers, has been established to improve and enhance the risk management system.
  • The Sustainability Committee deliberates on important issues with the aim of enhancing corporate value over the medium to long term through sustainability management, and assigns managers to each of the E (Environment), S (Society), G (Corporate Governance), and X (Special Missions) subcommittees. The Company’s Sustainability Subcommittees are responsible for governance, risk management, strategies, indicators, and targets, and formulate, manage, and evaluate the progress of these activities based on the Sustainability Policy.
  • The Sustainability Committee determines who will be responsible for the execution and management of each important risk item, which is determined based on the results of risk assessment by the Sustainability Committee, and determines and implements response policies based on the Risk Management Policy (including the Crisis Management Policy).
  • The Sustainability Committee also reconstructs the BCP (Business Continuity Plan) for raw material procurement, sales, and logistics in anticipation of geopolitical risks as the occasion demands.

Ensure Compliance

We believe that maintaining and strengthening the compliance system (including legal compliance) and the supervisory function over management is fundamental to corporate value and essential to achieving long-term sustainable growth, and have established the following systems

  • The Compliance Officer shall report to the Board of Directors on the status of compliance with ethics and laws and regulations.
  • The Company shall establish and operate an internal reporting system with the General Manager of the Corporate Planning Department and the legal advisor as the reporting contact points.
  • The Internal Audit Office, which is independent from the executive departments and directly reports to the President, will conduct periodic internal audits to ascertain the status of the execution of duties and verify whether they are being performed properly, appropriately, and rationally in compliance with laws, regulations, the Articles of Incorporation, and other relevant laws and regulations. The results of such audits shall be reported to the Board of Directors and the Audit and Supervisory Committee and, as necessary, to the Accounting Auditor.
  • As a business operator handling personal information under the Act on the Protection of Personal Information, we recognize the necessity and importance of protecting personal information and consider it our social responsibility to ensure the protection of personal information. With the aim of ensuring the proper handling of information assets including personal information, we have established a privacy policy and thoroughly protect personal information in terms of organizational safety control measures, personnel safety control measures, physical safety control measures, technical safety control measures, and understanding of the external environment.

Initiatives in the Medium-Term Management Plan

We have established the following as our main goals and specific themes for governance initiatives.

Strengthen Management Monitoring Outside Directors and Executive Divisions will work together to promote corporate governance.
Disseminate Information to Stakeholders and Strengthen Communication We will provide corporate information on our business model, business performance, and business strategy to investors through research firms. At the same time, we will enhance IR activities for institutional investors.
Information Security We maintain an information security environment that addresses the latest cyber attacks and information leak risks.

Click here for information on the Medium-Term Management Plan