Board of Directors

Outside Director Activity Status

In FY2025, Outside Directors not only attended Board of Directors’ meetings, Audit & Supervisory Committee meetings, and Nominating & Compensation Committee meetings, but also undertook the following activities.

• Attended management and executive meetings (September 2025 and March 2026)
• Inspected business sites (Koriyama, Yokohama, Nanyo, and Tsukuba) (September 2025 and other dates)
• Communicated with the Accounting Auditor (July 2025 and other dates)
• Dialogue with next-generation management talent (June 2025 to May 2026). Held five sessions, with a total of 11 participants from among next-generation management candidates
• Attended executive compliance training (March 2026)

Board of Directors Skills Matrix

Seven skills have been selected for the skill matrix of the Board of Directors from the perspective of achieving the Mid-term Management Plan “CODE/CHORD 2030.”

• ・Four skills to perform basic functions as a company: “Corporate management”, “Legal affairs & risk management”, “Finance & accounting”, “Human resources strategy”
• ・Two skills corresponding to the Company’s core trinity (R&D, manufacturing, sales): “Business strategy”, “R&D/technology/manufacturing”
• ・One skill corresponding to the cross-border nature of the Company’s business fields: “Internationality”

* The skills matrix includes the areas expected for each individual. It is not meant to be a comprehensive list of all forms of expertise and experience they may possess.

Reasons for appointment as director

Director

Outside Directors

Criteria for independence of Outside Directors

At Hodogaya Chemical, candidates for independent outside directors are selected based on both the Tokyo Stock Exchange’s independence criteria and their broad professional experience and expertise.
Accordingly, the Company has registered three outside directors as independent officers with the Tokyo Stock Exchange.
If a substitute director who is also an Audit & Supervisory Committee Member is appointed as a director, the Company intends to register him as an independent officer as well.
One of the substitute directors previously worked for a financial institution that is a major lender to Hodogaya Chemical; however, three years have passed since his retirement from that institution, and the Company has determined that this does not affect his independence.
Furthermore, the Company does not have any transactional relationships with the three outside directors.

Status of attendance at meetings of the Board of Directors, Audit & Supervisory Committee, and Nominating & Compensation Committee

* Mr. Matsunaga has attended all meetings held since assuming office in June 2025.

Evaluation of effectiveness of Board of Directors

Hodogaya Chemical transitioned to a company with an Audit & Supervisory Committee in June 2015, delegating decisions on matters other than those requiring exclusive resolution as stipulated in the Companies Act to the President. In other words, the Hodogaya Chemical Board of Directors has adopted a monitoring-focused model emphasizing oversight.
To verify whether this monitoring function is being effectively exercised, the Audit & Supervisory Committee and the Board of Directors conduct evaluations every year based on the following nine evaluation criteria.
As a result, the Board of Directors’ monitoring function is strengthened, and managerial decision-making and business execution are expedited.

Evaluation process

Evaluation Results for FY2025

* Evaluation period: from the conclusion of the 2025 Annual General Meeting of Shareholders to prior to the 2026 Annual General Meeting of Shareholders

Election of Directors and Selection of the Representative Director and President

Hodogaya Chemical positions the election of Directors as one of the most important matters for the Company. The Board of Directors has established selection criteria for candidates for Internal Directors and Outside Directors. The Board of Directors resolves on the selection of Director candidates and the President and CEO based on deliberations by the Nominating ＆ Compensation Committee.

Successor Development Plan

Hodogaya Chemical provides opportunities for personnel who will lead the next generation of management to attend meetings of the Board of Directors and the Management Committee as observers, enabling them to observe management discussions firsthand and develop a management perspective. Executive Officers attend Board of Directors meetings as observers, while General Manager-level personnel attend Management Committee meetings as observers. Depending on the circumstances, they also provide explanations on agenda items and participate in question-and-answer sessions, making these meetings a forum for development that combines practical experience with learning. In addition, as part of its succession plan, the Company regularly holds dialogue sessions between Outside Directors and next-generation management candidates. Through opportunities to gain objective and multifaceted perspectives, the Company seeks to broaden the management perspective of future leaders and build a talent base that supports sustainable enhancement of corporate value.

Training for Directors

Upon assuming office, the Internal Directors of Hodogaya Chemical are provided with training to acquire knowledge of the roles and responsibilities expected of directors, laws and regulations, as well as compliance.
Independent Outside Directors are also provided explanations of Hodogaya Chemical’s business, finances, organization, and other aspects, so that they can fulfill the roles and responsibilities expected of them when they assume office. Thereafter, they deepen their understanding of the Company by visiting domestic and overseas business sites to inspect operations firsthand.
Additionally, training sessions for directors by outside attorneys are held on a regular basis.

Director Compensation Plan

Hodogaya Chemical positions its Directors’ compensation plan as a priority item for corporate governance. The basic requirements in determining the compensation of Directors include: 1. Compensation linked to performance; 2. Incentives to improve corporate value; 3. Linkage to shareholder interests; and 4. Securing and retaining talented personnel. In consideration of the above, individual director compensation is paid to directors within the range approved at the General Meeting of Shareholders. Determinations on the individual compensation of directors (excluding directors who are Audit & Supervisory Committee members) are made by resolution of the Board of Directors at the discretion of representative directors; however, bylaws stipulate that representative directors shall determine compensation amounts after deliberations by the Nominating and Compensation Committee, following the general composition ratio outlined herein. Directors who are Audit & Supervisory Committee members receive only a fixed‑amount base compensation in consideration of the fact that they are not involved with executive functions.

Components of Director Compensation (excluding Outside Directors and Audit & Supervisory Committee Members)

Total Director Compensation, etc. (FY2025)

* Amounts of less than one million yen are truncated.