Corporate Governance
- Corporate Governance Basic Policies (Amended March 26, 2025)
- Corporate Governance Report(March 31, 2025)
Basic Views on Corporate Governance
Resonac (the “Company”) shall hereby establish the Corporate Governance Basic Policies in order to increase corporate value and shareholders’ common interests through appropriate cooperation with all stakeholders including shareholders.
The Company formulated the Corporate Governance Basic Policies in line with Japan’s Corporate Governance Code and discloses the policies at its website.
Corporate Governance System
The Company, as a pure holding company, specializes in Group strategy and listed company functions. While flexibly responding to business challenges, the Company appropriately allocates its management resources in consideration of the entire Group, for business tie-up, M&A, etc.
The Company introduced a corporate officer system to explicitly divide management oversight and business execution functions, giving authority to Chief X Officers (CXOs) and chiefs of Business Units to execute business. In order to strengthen functional independence, objectivity, and accountability of the Board of Directors, the Company has organized the Nomination Advisory Committee and the Remuneration Advisory Committee as advisory bodies for the Board of Directors. Independent Outside Directors represent the majority of both committees.

Corporate Governance System
Board of Directors
To increase agility of business execution, the Board of Directors delegates part of decisions on important business execution to President and other corporate officers. The Board of Directors mainly focuses on deliberations and decisions concerning basic policies for management, establishment of the internal control system, etc. as well as oversight of execution of duties by Directors and Corporate Officers. We have also established an agile management system to quickly respond to changes in the business environment, and limit the term of office of directors to one year to more clearly define management responsibilities of Directors.
Audit & Supervisory Board
The Company has adopted the Audit & Supervisory Board system. The Audit & Supervisory Board Members attend the Board of Directors’ meetings and other important internal meetings, offering opinions as necessary. They also conduct audits on business execution through on-site investigations, interviews with responsible persons, inspection of important documents, and other appropriate measures, so as to provide suggestions, advice, and recommendations for securing soundness in management. In addition, Standing Statutory Members of the Audit & Supervisory Board concurrently serve as Audit & Supervisory Board Members of the business corporation to enhance audits on Group companies.
Nomination Advisory Committee
The Company has established the Nomination Advisory Committee, advisory bodies to the Board of Directors. Independent Outside Directors represent the majority of its members for the Nomination Advisory Committee. The Committee reports to the Board of Directors after deliberating matters related to election of candidates for Directors.
Remuneration Advisory Committee
The Company has established the Remuneration Advisory Committee, advisory bodies to the Board of Directors. Independent Outside Directors represent the majority of its members for the Remuneration Advisory Committee. The Committee reports to the Board of Directors after deliberating matters related to appointment of senior management, and remuneration of Directors and Corporate Officers, respectively.
Management Committee
The Company and its business corporation Resonac have formed the Integrated Management Committee that gives advice to President on important matters and serves as a body preceding the Board of Directors. For investment matters escalated to the Management Committee, their risks are analyzed and their results and progress are managed through preliminary risk review and assessment by task teams.
Committees and Promotion Councils
Under CXOs in charge of respective functional areas, the Company has established the Risk Management Committee, Compliance Committee, Sustainability Promotion Council, and other committees.
Risk Management Committee
The Committee deliberates on the Group's overall risk management system, the content of risk information to be disclosed externally, and the evaluation of the Group's most important risks and measures to address them. Risk Management
Compliance Committee
The Committee discusses the Company-wide compliance promotion policy, mid-term activity plan, etc., and reports on the progress of the annual plan and the status of issues to be addressed.Compliance
Sustainability Promotion Council
The Promotion Council discusses mid- to long-term strategies, non-financial KPIs, stakeholder engagement, and other issues. For important issues that cross organizational boundaries, projects, etc., are established under the Promotion Council.Sustainability
Internal Audit Department
The Company has organized the Internal Audit Department reporting directly to the President. The Internal Audit Department forms annual internal audit plan under the provisions of the Company’s Internal Audit Rules, audits situations of compliance, conduct of business and internal control system of the Group including affiliated companies, reveals potential risks concerning overall business activities, and reports results of internal audit to the top management, the Board of Directors and the Audit & Supervisory Board.
In addition, the Internal Audit Department cooperates with the Accounts Auditor and Audit & Supervisory Board Members through various measures including periodic briefing session about annual internal audit pan and results of internal audit, while paying attention to each auditing body’s independence.
Accounting audits
The Company concluded an auditing contract with KPMG AZSA, and this audit corporation performs accounting audits for the Company. The Accounting Auditor confirms the annual audit plan with the Audit & Supervisory Board Members and reports the audit results to them. The Accounting Auditor and the Audit & Supervisory Board Members also exchange information and views as required, to promote their cooperation.
Corporate Governance Initiatives
Attendance at Meetings of the Board of Directors and Auditit & Supervisory Board(2024)
- * Marked Directors and Audit & Supervisory Board Member :
Number of attendances after appointment at the Ordinary General Meeting of Shareholders held in March 2024
Board Directors
Audit & Supervisory Board Members
Attendance at Nomination Advisory Committee and Remuneration Advisory Committee(April 2024 - March 2025)
Nomination Advisory Committee
Remuneration Advisory Committee
Approach to the balance and size of the Board of Directors and Audit & Supervisory Board
1. Board of Directors
The Board of Directors shall have a personnel structure giving thoughtful attention to a good balance among specialties, experience, attribute, and other factors, and the size of the Board of Directors shall be set so as to ensure prompt decision-making and appropriate oversight of business execution. In addition, one-third or more of the Board of Directors shall consist of Independent Outside Directors with extensive experience and broad insight in order to secure the appropriateness of business execution and to increase the effectiveness of oversight.
The Board of Directors shall identify the skills necessary to improve its effectiveness, and disclose the status of fulfillment of such skills.
2. Audit & Supervisory Board
The Audit & Supervisory Board shall have a personnel structure that includes Member(s) who has sufficient expertise in financing or accounting. In order to ensure a structure that will increase the effectiveness of audits through independence and advanced information gathering capabilities, Standing Statutory Members of Audit & Supervisory Board shall be appointed and a half or more of the Audit & Supervisory Board shall be Outside Members of Audit & Supervisory Board.
Criteria on the independence of outside directors
The Board of Directors has established independence standards for Outside Directors based on independence criteria stipulated by law and the Tokyo Stock Exchange and selects candidates who meet the standards. See the Attachment of Corporate Governance Basic Policies for the independence standards.
Policies and procedures for determining the remuneration of directors, Audit & Supervisory Board members, and corporate officers
Outline of Director Compensation Scheme
The outline of the Company’s director compensation scheme in and after 2025 is as follows:
1.Basic policy
- A compensation scheme appropriate for recruiting and maintaining excellent human resources inside and outside Japan since the Company aims to become a world-leading chemical company for advanced functional materials
- A compensation scheme that will help motivate efforts to achieve financial goals and increase medium-to-long-term enterprise value, thereby contributing to sustainable growth of the Group
- A transparent, fair and rational process for deciding compensation from the viewpoint of accountability to all stakeholders, including shareholders
- A compensation scheme appropriate for the role and responsibility for supervising the Company’s management from an independent and objective standpoint, and providing advice on management with an awareness of enhancing medium- to long-term corporate value
2.Composition and levels of compensation
- The compensation for executive directors and corporate officers consists of basic compensation (fixed) based on position, etc., Short-Term Incentive (STI) that fluctuates based on business results each financial year, and Long-Term Incentive (LTI) that fluctuates based on medium-to-long-term business results and corporate value. The stock compensation (LTI) will consist of “Performance Share Unit (PSU),” which are granted as Resonac’s common shares based on business results and share price over a three-year period, and “Performance-Linked RS,” in which restricted stock (RS) is granted based on sustainability evaluation each financial year.
- The compensation levels and the proportion of variable compensation (STI and LTI) in total compensation will be set at appropriate amounts and ratios, based on external expert survey of peer company levels (compared to major manufacturing companies with global operations at their core). The proportion of variable compensation will be set higher for higher-ranking positions, considering the greater responsibility for performance and stock price.
- Notwithstanding the above, the compensation for the Chairman of the Board and the Chairperson of the Board of Directors will be set individually according to their respective roles and responsibilities.
- The compensation for Outside Directors consists of basic compensation (fixed) and Restricted Stock (RS). The transfer restrictions on the RS will be lifted upon their resignation.
- An additional allowance will be paid to members and chairpersons of the Remuneration Advisory Committee or the Nomination Advisory Committee, according to their respective roles.
- The amount of RS will be approximately 10% of the base remuneration (excluding allowances for committee members and chairpersons).
- The compensation levels will be set at appropriate amounts, taking into consideration the time and effort each Outside Director is expected to dedicate to fulfilling their expected roles and functions, as well as peer company levels based on external expert surveys (compared to major companies (all industries) with global operations at their core).
Chart 1 Type of compensation and scope of payment