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Corporate Governance

Hitachi Chemical’s Basic Views on Corporate Governance are as follows:

In order to achieve a high level of agility, objectivity and transparency in its management, Hitachi Chemical adopts the “company with a nomination committee and other committees” structure that separates executive and supervisory functions. To maximize the advantages of this structure, Hitachi Chemical established an executive framework which enables timely and firm decision-making; it also set up three Board of Directors committees – nomination, compensation and audit committees – with the majority of the members of each committee being outside directors, to exercise appropriate oversight over management.
In addition, Hitachi Chemical formulated the “Hitachi Chemical Corporate Governance Guidelines” to serve the interests of all stakeholders including shareholders.

Basic Policy Regarding Control of the Company

Hitachi Chemical's Basic Management Policy is to focus on developing innovations and providing new values for society at all stages of the value chains across diverse markets based on “Material,” “Process” and “Evaluation” technologies, and aim to achieve sustainable growth and profit, and to maximize its corporate value in cooperation with its stakeholders.

Under this Policy, Hitachi Chemical considers it extremely important to increase its corporate value by effectively performing the corporate governance functions developed by its parent company, Hitachi, Ltd., ensuring sound corporate governance from the viewpoint of shareholders, enhancing communication with all its stakeholders as a listed company, and taking advantages of its strengths to operate its business in a disciplined, highly motivated manner, while at the same time raising necessary funds for the maintenance and expansion of business from the capital market as a listed company.

On the other hand, as a member of the Hitachi Group, Hitachi Chemical is also well aware that continuing to improve cooperation with Hitachi, Ltd. and other Hitachi Group companies and effectively utilizing their brands, and other management resources will be instrumental in enhancing its corporate value. This cooperation covers various business activities, including management information sharing, R&D, and product supply.

Hitachi Chemical ensures at all times that its management plans and corporate governance structure will help maximize its corporate value for all shareholders as well as for its parent company. At the same time, it adheres to a basic policy of maintaining independence in its business operations and transactions in relation to other Hitachi Group companies.

Hitachi Chemicalís Corporate Governance Structure

June 23, 2017

Hitachi Chemicalís Corporate Governance Structure

Board of Directors and Outside Directors

The Board of Directors of Hitachi Chemical, which is composed of eleven Directors including five Outside Directors, holds regular monthly meetings and extraordinary meetings when necessary. In addition to approving the budget and accounts, the Board of Directors uses the monthly and quarterly performance reports received from the Executive Officers to supervise the budget and business results.

In order to further ensure the separation of operational and supervisory functions, the Chairman of the Board does not concurrently hold the post of Executive Officer from concurrently holding the post of Executive Officer, and the number of Directors concurrently serving as Executive Officers is limited to a necessary minimum.

The Outside Directors are corporate executives, experts, and others familiar with Hitachi Chemicalís management conditions and well versed in fields related to the Companyís priority issues.

Audit System

The Audit Committee, assisted by full-time staff independent of the Executive Officers, conducts audits in order to ensure independence. The Auditing Office conducts internal audits ordered by the Chief Executive Officer, and also cooperates with the Audit Committee in conducting audits.

Executive Officers' Meeting

The Executive Officers' Meeting, composed of all Executive Officers, acts as an advisory body to the Chief Executive Officer in order to facilitate multifaceted studies into and decisions on important issues that may affect the management of Hitachi Chemical or the Hitachi Chemical Group. In addition to semimonthly regular meetings, extraordinary meetings are also held when necessary to accelerate decision-making and business operations.

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