Board of Directors

Board of Directors Held 10 times in FY2024

To enable thorough discussions based on diverse opinions and prompt, rational decision-making, the Board of Directors consists of members that satisfy the extensive level of experience and education required by the Company. The deliberations for FY2024 are summarized in the table below, focusing on monitoring the progress of the Mid-term Management Plan SPEED 25/30, addressing issues in businesses showing delayed progress, and reviewing the status of sustainability initiatives.

Deliberations	Number of deliberations of the Board of Directors
Deliberations	Resolutions	Reports	Others
Management strategy and businesses	－	11	－
Sustainability	－	3	－
Corporate governance	2	5	－
Financial results, investor relations and finance	10	2	1
Compliance and internal controls	－	4	－
Committee matters	－	－	2
Officers and management executives	11	6	－
Others	－	1	2

Election of Directors

Hodogaya Chemical regards the appointment of Directors as one of its most important management priorities.
The Board of Directors establishes criteria for the selection of candidates for both internal and outside directors, and, based on deliberations by the Nominating and Compensation Committee, resolves on the appointment of director candidates, including the next Chief Executive Officer.
The criteria for internal directors include possessing personal integrity and character befitting a corporate executive, as well as broad experience and insight.
The criteria for outside directors include having cultivated extensive experience and possessing a high level of knowledge and expertise.
Individuals who are deemed to lack the necessary qualifications as directors, or who have caused significantly poor business performance, may be subject to dismissal.
The reasons for nomination of each director candidate, along with their career histories and other relevant information, are disclosed in the reference documents for the General Meeting of Shareholders available on the Company’s website.

Board of Directors Skills Matrix

The following seven skills were selected for the Board of Directors Skills Matrix for achieving the SPEED 25/30 Mid-term Management Plan.

・Four skills to perform the basic functions as a Company: “Corporate management”, “Law & risk management”, “Finance & accounting” and “Human resources strategy”
・Two skills to support the three pillars (Research and Development, Production and Sales) of our Company: “Business strategy” and “R&D, technology and production”
・One skill to support the Company’s business field that extends beyond borders: “International business”

Name	Corporate management	Law & risk management	Finance & accounting	Human resources strategy	Business strategy	R&D, technology and production	International business
Yuto Matsumoto	〇			〇	〇	〇	〇
Norimasa Yokoyama	〇				〇	〇	〇
Shinichi Sato	〇	〇	〇	〇
Shinichi Matsuno	〇			〇	〇	〇
Masaki Sakai (Outside)				〇	〇	〇	〇
Shinobu Fujino (Outside)	〇	〇		〇
Akira Matsunaga (Outside)		〇	〇		〇		〇

* 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

Name	Reasons for appointment
Yuto Matsumoto	After joining the Company in April 1983, he worked in the Research & Development Department, has engaged in operations of sales department including overseas business, and became Representative Director and President of the Company in November 2016. He has extensive experience and knowledge and has been appropriately fulfilling his duties. Therefore, the Company judges that he is qualified as Director of the Company.
Norimasa Yokoyama	Since joining the Company in April 1988, he has engaged in operations of the research & development and production departments. He has extensive experience and knowledge as a Managing Executive Officer, supervising the Research & Development Department of the Group, and has been appropriately fulfilling his duties.Therefore, the Company judges he is qualified as Director of the Company.
Shinichi Sato	Since joining the Company in March 2014, he has engaged in operations of the Internal Control Department and Legal Department of the Group while utilizing his extensive experience and knowledge gained during his time in the banking field. Currently, he supervises internal control, human resources, promotion of sustainability and accounting, and has been appropriately fulfilling his duties. Therefore, the Company judges he is qualified as Director of the Company.
Shinichi Matsuno	Since joining the Company in April 1981, he has been widely involved in the Research & Development, Purchasing, Sales and Corporate Planning Departments and operations of a plant as General Manager, and has a wide range of business experience and knowledge at the Company and Group companies. It is expected that he can take advantage of these for the business activities of the Company and appropriately fulfill his duties. Therefore, the Company judges he is qualified as Director who is an Audit & Supervisory Committee Member.

Outside Directors

Name	Reasons for appointment
Masaki Sakai	He utilizes his extensive knowledge and experience, both that gained since his appointment as a Director who is an Audit & Supervisory Committee Member in June 2019, and that cultivated both in Japan and overseas through his business activities over many years at government ministries. Although he has not been directly involved in corporate management in the past, the Company expects that he will continue to appropriately fulfill his duties for the Company. Therefore, the Company judges he is qualified as Director who is an Audit & Supervisory Committee Member. The Company expects that he will utilize his experience in agriculture, forestry and fishery administration and international business, and fulfill his role of supervising Directors who have been charged with deciding the basic management direction of the Company and executing operations. Furthermore, the Company has submitted notification to Tokyo Stock Exchange that he has been appointed as an independent officer as provided for by the aforementioned exchange.
Shinobu Fujino	She utilizes years of work experience at business corporations, expertise as a career counselor and a wide range of knowledge and experience as an outside director since her appointment as a Director who is an Audit & Supervisory Committee Member in June 2023. Although she has not been directly involved in corporate management in the past, the Company expects that she can continue to appropriately fulfill her duties. Therefore, the Company judges she is qualified as Director who is an Audit & Supervisory Committee Member. The Company expects that she will utilize her wealth of knowledge and experience in human resources development, organizational development and diversity promotion and fulfill her role of supervising Directors who have been charged with deciding the basic management direction of the Company and executing operations. Furthermore, the Company has submitted notification to Tokyo Stock Exchange that she has been appointed as an independent officer as provided for by the aforementioned exchange.
Akira Matsunaga	Although he has not been directly involved in corporate management in the past, the Company expects that he will utilize his extensive knowledge and experience cultivated both in Japan and overseas through his business activities over many years at government ministries, and that he will appropriately fulfill his duties for the Company. Therefore, the Company judges he is qualified as Director who is an Audit & Supervisory Committee Member. The Company expects that he will utilize his experience in industrial and economic administration and international business, and fulfill his role of supervising Directors who have been charged with deciding the basic management direction of the Company and executing operations. Furthermore, the Company has filed a notification with the Tokyo Stock Exchange, designating him as an independent officer in accordance with the Exchange’s requirements.

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.

Outside Director Activity Status

In FY2024, Outside Directors not only attended Board of Directors’ meetings, Audit & Supervisory Committee meetings, and Nominating & Compensation Committee meetings, but also did the following.

・Attended management and executive meetings (September 2024 and March 2025).
・Inspected business sites in South Korea (June 2024).
・Communicated with the Financial Auditor (July 2024 and May 2025)
・Dialogue with next-generation management talent (June 2024 to May 2025). Held six sessions, engaging 11 nextgeneration management talent.
・Attended executive compliance training (February 2025)

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

Number of Company shares held	Number of Board of Directors meetings attended in FY2024	Number of Audit & Supervisory Committee meetings attended in FY2024
代Representative Director, President and CEO Yuto Matsumoto	10/10	ー
Director and Managing Executive Officer Norimasa Yokoyama	ー	ー
Director and Managing Executive Officer Shinichi Sato	7/7^*	ー
Director (Audit & Supervisory Committee Member) Shinichi Matsuno	7/7^*	7/7^*
Outside Director (Audit & Supervisory Committee Member) Masaki Sakai	10/10	10/10
Outside Director (Audit & Supervisory Committee Member) Shinobu Fujino	10/10	9/10
Outside Director (Audit & Supervisory Committee Member) Akira Matsunaga	ー	ー

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 FY2024

Evaluation Standards	Status of Initiatives
1. Election of multiple independent Outside Directors	Implemented. 3 out of 7 directors are independent Outside Directors (42.9%)
2. Narrowing down matters for resolution	Delegated decisions regarding execution of operations other than those that legally require Board of Directors approval to the President based on the General Meeting of Shareholders and Board of Directors resolution In FY2024, resolutions were passed regarding the determination of proposals for the General Meeting of Shareholders, and the appointment of Directors, etc.
3. Establishment of appropriate reporting matters	Set annual report schedule and submitted reports after expanding items to be reported as stipulated in Board of Directors Rules Increased efficiency of operation execution reports by compiling individual ones into a Mid-term Promotion Execution Report Received individual reports and questions and requests from independent Outside Directors, which are separate from resolution and report items
4. Deliberation on agenda items related to personnel affairs and remuneration of Directors	Based on the report by the Nominating & Compensation Committee, a resolution was passed regarding the proposal for the election of Directors to be submitted at the Annual General Meeting of Shareholders in June 2025
5. Provision of proper explanations beforehand to independent Outside Directors	Mailed agenda materials several days prior to the Board of Directors’ meetings and offered preliminary explanations prior to the meetings
6. Preparation of informative and easy-to-understand materials	Continued efforts to create materials with attention to the comprehensiveness and ease of understanding of the information so that Outside Directors can make accurate management decisions
7. Appropriate time management (meeting frequency, time for deliberations, etc.)	Met 11 times in FY2024, with slightly less than 2 hours for each meeting
8. Implementation of effective and efficient organizational audits	Implemented an organizational audit as a Company with an Audit & Supervisory Committee Established the Audit & Supervisory Committee Secretariat as a system to assist the Audit & Supervisory Committee Audit & Supervisory Committee met 11 times in FY2024, with approximately 1 hour for each meeting
9. Follow up and respond to new trends in corporate governance and the best way to operate the Board of Directors	Reported on state of sustainability promotion in August and December 2024 and March 2025 Conducted thorough communication with Audit & Supervisory Committee members regarding the consideration of changing the Financial Auditor (reported in February and March 2025) Implemented a stock split as a measure to address individual shareholders in connection with the reduction of crossshareholdings (reported in February 2025)
Overall Evaluation for FY2024	As outlined in the table above, the Board of Directors satisfies the evaluation standards and achieves the following two items, allowing for the conclusion that the Board of Directors’ functions as intended Expedited managerial decision-making and business execution Enhanced the Board of Directors’ monitoring function
Future Initiatives	Make a thorough investigation of monitoring activities intended to achieve the Mid-term Management Plan SPEED 25/30 Provide more accurate, concise, and understandable Board of Directors’ meeting materials Continued to follow new trends, such as Financial Services Agency and advisory board trends and social trends

* Evaluation period: from the conclusion of the 2024 Annual General Meeting of Shareholders to the commencement of the 2025 Annual General Meeting of Shareholders

Requirements for the Appointment of the President and CEO

Hodogaya Chemical requires the following qualities in selecting the President and CEO, in addition to the qualifications expected of a Director candidate: (1) possesses dignity and integrity befitting the Company’s top management; (2) ability to manage the Company based on concrete facts, with a broad perspective, while recognizing social trends and change of the times; (3) capability to make rational decisions and take full responsibility for them; and (4) commitment to actively engage in the development and promotion of human resources. Based on deliberations of the Nominating and Compensation Committee, the Board of Directors makes the final resolution on the appointment of the President and CEO.

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 offices in Japan and overseas to check on the situation.
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)

Types of Director compensation		Payment method	Composition ratio	Overview of Director compensation
Fixed Compensation		Cash Payment	60%	Compensation is paid based on each director’s performance in fulfilling their duties, leadership, and execution of daily operations.
Performance-Based Compensation	Short-Term Performance-Based Compensation	Cash Payment	25%	Compensation is paid based on the Group’s performance in the previous fiscal year and the individual performance of directors (including not only quantitative performance but also contributions to corporate value).
	Medium- to Long- Term Performance- Based Compensation	Stock Grant	15%	Compensation is paid based on the Group’s medium- to long-term performance (including not only quantitative performance but also contributions to corporate value).
	Medium- to Long- Term Performance- Based Compensation	Stock Grant	15%	* Paying with Company stock as consideration fosters a shared shareholder perspective. Delivering it upon a director’s retirement serves as motivation for the director to enhance the corporate value of our Group during service.

Total Director Compensation, etc. (FY2024)

Type of Director	Total compensation (millions of yen)	Totals of different types of compensation (millions of yen)			No. of applicable Directors
Type of Director	Total compensation (millions of yen)	Base compensation (cash)	Performance‑linked compensation (cash)	Non‑monetary compensation (Company stock)	No. of applicable Directors
Directors (excluding Audit & Supervisory Committee Members) (excluding Outside Directors)	94	63	17	13	4
Directors who are Audit & Supervisory Committee Members (excluding Outside Directors)	15	15	—	—	2
Outside Directors	23	23	—	—	3
Total	133	102	17	13	9

* Amounts are rounded down to the nearest million yen.