Governance
/ Corporate Governance /
Basic Approach to Corporate Governance
As a chemical materials manufacturer that aims to increase our corporate value through efficient and sound corporate management, we position corporate governance as an important management issue in order to become a company that is widely trusted by society.
In addition, we have established “Corporate Governance Policy”; to show our specific direction for strengthening corporate governance, and review it from time to time.
New Japan Chemical’s Corporate Governance
Corporate Governance System
Roles and functions of each institution and committee (as of June 24, 2026)
Board of Directors
Four of the seven directors of the Board of Directors are external directors. External directors possess various backgrounds such as experience in corporate management, finance and accounting expert knowledge, and legal specialization. We ensure that the Board of Directors is able to discuss issues from multiple perspectives.
In principle, the Board of Directors meets once a month, and extraordinary meetings are held as necessary to make decisions on important management matters and to supervise the execution of duties by executive directors and corporate officers.
Nomination & Compensation Committee
As an advisory committee for the Board of Directors, we established the Nomination and Remuneration Advisory Committee, consisting of five directors, including four outside directors, and is chaired by an outside director.
The Board of Directors decide on the appointment and dismissal of Directors and remuneration, etc. based on the reports of the Nomination and Remuneration Advisory Committee.
Audit and Supervisory Committee
The Audit and Supervisory Committee consists of three directors, including two external directors; the one who possess finance and accounting expertise, the one an attorney. Full-time Audit and Supervisory Committee members attend the Board of Directors’ meetings, management meetings as well as other important conferences to effectively audit the management policy, decisions on important matters, and Directors’ execution of operations.
In addition, employees of the Audit Office, who are independent from the Executive Directors, assist the Audit and Supervisory Committee.
Accounting Auditor
We have appointed Ernst&Young ShinNihon LLC. as our Accounting Auditor. The Accounting Auditor conducts appropriate accounting audits in accordance with the audit plan and in accordance with laws and regulations at the interim and fiscal year-end, as well as during the fiscal year, as appropriate. In addition, the Accounting Auditor works closely with the Audit and Supervisory Committee by exchanging audit information as necessary.
Management Meeting
Consisting mainly of Directors and Executive Officers, makes decisions on specific matters related to business execution and deliberates in advance on matters to be resolved by the Board of Directors.
CSR Committee
With the President as the Chairman makes decisions and coordinates activities to promote and strengthen CSR management.
Compliance Committee
Consisting mainly of Executive Officers and presidents of our domestic consolidated subsidiaries, promotes compliance measures, including the effective management and improvement of the internal reporting system.
Governance Strengthening Advancements
In FY2016, we transitioned into a company with an Audit and Supervisory Committee. In addition, in FY2019, we established a Nomination & Compensation Committee, and in FY2020, we increased the ratio of external directors to the majority. In FY2023, we elected one woman board member to improve the diversity in the board of directors.
The Board of Directors Activities
The Board of Directors held 16 meetings in FY2025.
Main activities of The Board of Directors in 2025
| Business Structure Reform | Reviewing each business and production system toward optimizing the business portfolio, and examining the direction of business structure reform in the new medium-term management plan. |
| Cost of Capital | Current status of the company’s cost of equity capital and future response. |
| Improvement of Capital Efficiency | Examining the optimization of capital structure, including the reduction of cross-shareholdings. |
| Direction of Capital Policy | Examining the optimization of shareholder structure and shareholder return measures. |
| Effectiveness of the Board of Directors | Examining strategic reviews from a medium- to long-term perspective and the enhancement of oversight functions. |
Nomination and Compensation Committee Activities
The committee held 4 meetings, in FY2025.
Main activities of Nomination and Compensation Committee in 2025
| Nomination Matters | Nomination of Director candidates (including reappointments) |
| Nomination of Executive Officer candidates (including reappointments) |
| Remuneration Matters | Remuneration amount for Directors |
| Remuneration amount for Executive Officers |
Director Remuneration
In regards to our company’s policy for determining director remuneration, we decide as listed in the following. In the revision of this policy, the Nomination and Compensation Committee is consulted on the draft, and the Board of Directors adopts a resolution based on its report.
Director Remuneration (Excluding Audit and Supervisory Committee Members, and External Directors)
Director remuneration only includes base remuneration. Base remuneration is paid in the monthly prorated amount for 12 months according to the director position and role. However, if we conclude it is not appropriate to pay the amount of base remuneration due to a significant deterioration in the company’s performance, we will reduce the amount. Regarding performance-linked bonuses, we will consider its introduction based on select performance indicators and calculation methods for the amount of remuneration.
Remuneration for Audit and Supervisory Committee Members, and External Directors
From the viewpoint of independency and role, we will only pay the basic remuneration that is established according to the role. The monthly prorated amount will be paid every month for 12 months.
FY2025 Directors Remuneration Total Amount
| Total Amount of Remuneration, etc. （Millions of Yen） |
Number of Eligible Directors （Number of people） |
|
| Directors (Excluding Audit and Supervisory Committee Members) (External Directors) |
124 （12） |
6 （2） |
| Directors (Audit and Supervisory Committee Members) (External Directors) |
30 （12） |
3 （2） |
Evaluation of the Board of Directors efficiency
Every year, we strive to improve the function of the Board of Directors by evaluating the effectiveness of the Board of Directors. For the 8th evaluation, we conducted a questionnaire survey on each director for the Board of Directors meeting held in FY2025, and discussed it at the Board of Directors based on the results.
Results of the evaluation (Target : Board of Directors held in FY2025)
| Evaluation Agenda | Evaluation Summary |
|---|---|
| Board of Directors’ Structure | Diversity regarding gender and background is ensured to a certain extent. From the perspective of facilitating more substantive discussions in a Board where non-executive directors constitute a majority, potential improvements include establishing opportunities for regular reporting by Executive Officers. |
| Board of Directors’ Operations | Although the review of the scope of items submitted to the Board of Directors has progressed to a certain extent, there is room for improvement in Board materials regarding the comprehensiveness and systematic organization of information. |
| Board of Directors’ Discussion | While multifaceted discussions are being held including Outside Directors, enriching discussions on medium- to long-term strategies, plans, and risks remains a future challenge. |
| Provision of information to External Directors | Prior explanations regarding Board agenda items are conducted appropriately for the most part. On the other hand, there is room to further enhance the provision of information on industry trends and company-specific risks. |
Compliance
Based on our management philosophy and CSR policy, we have established a “Code of Conduct” that defines the standards to be observed by the officers and employees of our group in the course of their corporate activities, and we are working to ensure thorough compliance.
By distributing handbooks that explain the Code of Conduct in an easy-to-understand manner and conducting training sessions, we are working to prevent and quickly correct compliance-related problems.
CSR
/ Social Responsibility /
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CSR Policy
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CSR Procurement
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CSR Materiality
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Environment
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Human Resources Initiatives
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Community Relations
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Health and Safety Initiatives
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Quality Assurance Initiatives
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Governance
