The basic approach to corporate governance of Mitsubishi Materials Corporation is described below.

• We have, based on the Corporate Philosophy of the Group, Our Vision, Our Values, Code of Conduct, Our Commitment and the Basic Policy on Corporate Governance* established by the Board of Directors, developed trust with all stakeholders related to the Company and its subsidiaries, such as shareholders and investors as well as employees, customers, client or supplier companies, creditors and local communities, and also develop our corporate governance.
• Among the governance systems under the Companies Act, we have chosen to be a Company with a Nomination Committee, and by separating supervision and execution, will strengthen the Board of Directors’ management supervisory functions, improve the transparency and fairness of management and accelerate business execution and decision making.
• We acknowledge the enhancement of corporate governance to be one of the most important management issues, and continuously make efforts to improve our corporate governance.

In order to promote the basic policy of “Creating the future through resource circulation” laid out in the Medium-term Management Strategy (FYE March 2027-2029), the Group introduced a business division system in the fiscal year ending March 2027, with the aim of strengthening its management foundation by enhancing resource allocation from a company-wide perspective and consolidating various functions.

The functions and duties of the Board of Directors shall be as follows:

• Upon delegation by shareholders, the Board of Directors shall indicate the direction of its management and make an effort to enhance the Group’s medium- to long-term corporate value by, for example, engaging in freewheeling and constructive discussion on management policies and management reforms.
• The Board of Directors shall determine matters that may have a serious impact on management, such as management policies and management reforms, in accordance with the provisions of laws, the Articles of Incorporation and the Board of Directors Rules.
• The Board of Directors shall accelerate decision-making in business execution by delegating the authority over business execution to an appropriate extent to Executive Officers in accordance with the provisions of the Board of Directors Rules, etc. so that Executive Officers may assume the responsibility and authority to make decisions and execute business in response to changes in the business environment.
• The state of Group governance and the progress of the execution of duties, including the progress of the management strategy, shall be reported by Executive Officers to and supervised by the Board of Directors on a periodic basis.
   

Further, Outside Directors play a role in supervising the appropriateness of Directors and Executive Officers in the execution of their duties from an objective standpoint and in providing a diverse range of values regarding the management of the Company based on expert knowledge and through experience that differs from that of officers who advanced internally, so that the Board of Directors' management supervisory functions would be further strengthened.
A majority of the Board of Directors shall consist of Independent Outside Directors, and the Chair of the  Board shall be a Director who does not concurrently serve as an Executive Officer (including the Executive Officer and President).The Board of Directors is comprised of 10 Directors (including 7 Outside Directors), and the Chair of the Board is performed by Ichiro Sasaki (Independent Outside Director).

The Nomination Committee determines the policy for nomination of candidates for Director and dismissal of Directors and the content of proposals for the appointment and dismissal of Directors to be submitted to the General Meeting of Shareholders. In addition to this, the Committee deliberates on the appointment and dismissal of Executive Officers, etc. in response to inquiries from the Board of Directors and reports back to the Board of Directors thereof. Furthermore, the Committee deliberates on the candidates for the successor of the Executive Officer and President with the development plans and exercises supervision to ensure that the development of successor candidates is performed appropriately. The Committee deliberates on candidates for the next Executive Officer and President in response to the inquiries from the Board of Directors and reports back to the Board.
Majority of the Nomination Committee members shall be Independent Outside Directors, and the Chair shall be performed by an Independent Outside Director. The Nomination Committee is comprised of 3 Directors (All are Outside Directors), and the Chair is Rikako Beppu (Independent Outside Director).

The Audit Committee audits the legality and validity of duties performed by Directors and Executive Officers, via audits either using internal control systems or directly by the Audit Committee member selected by the Audit Committee. Majority of the Audit Committee members shall be Independent Outside Directors, and the Chair shall be performed by an Independent Outside Director. The Audit Committee is comprised of 4 Directors (All are Outside Directors) , and the Chair is Kazuhiko Takeda (Independent Outside Director).

The Remuneration Committee establishes policies for determining individual remuneration for Directors and Executive Officers, and determines the individual remuneration to be received by Directors and Executive Officers based on such policies. Majority of the Remuneration Committee members shall be Independent Outside Directors, and the Chair shall be performed by an Independent Outside Director. The Remuneration Committee is comprised of 3 Directors (All are Outside Directors), and the Chair is Koji Igarashi (Independent Outside Director).

Furthermore, in each committee, the committees will allow Outside Directors other than committee members to participate as observers to eliminate information gaps among Outside Directors, and will also allow the "Executive Officer and President" and others to attend committee meetings as necessary to hear explanations and opinions.

Executive Officers execute business in accordance with the prescribed segregation of duties, based on the delegation of authority from the Board of Directors. The Company has 6 Executive Officers, of which the Executive Officer and President Tetsuya Tanaka, and Managing Executive Officer Kayo Hirano, are elected as Representative Executive Officers upon the decision of the Board of Directors.

Following the delegation of authority from the Board of Directors, the Strategic Management Committee reviews and determines particularly important matters concerning the management of the entire Group. The Strategic Management Committee consists of all Executive Officers. The Executive Officer and President serves as the chairperson of the committee.

Our basic approach to the structure of the Board of Directors, which fulfills the roles of determining the direction of management and exercising supervision over the progress of business execution, is to ensure that it comprises a diverse range of human resources with different expert knowledge, experience, and other qualities. In particular, the Nomination Committee will consider candidates for Outside Director to ensure that they comprise individuals who possess experience and knowledge in corporate management (including in businesses similar to and/or different from the Group’s business) and organizational management, and individuals who possess broad and advanced expert knowledge and extensive experience in relation to finance and accounting, legal affairs, production engineering, research and development, sales and marketing, or international relations, etc.
In light of the basic policy on the structure mentioned above, the Nomination Committee will nominate and select individuals who satisfy the following requirements as candidates for Director, regardless of individual attributes concerning gender, nationality and race, etc.:
 

• An individual of exceptional insight and character;
• An individual with a strong sense of ethics and a law-abiding spirit; and
• An individual who can properly fulfill his or her duties concerning the exercise of supervision over the management of the Company and the determination of the direction of management.
   

Further, with respect to candidates for Independent Outside Director, the Nomination Committee will nominate and select individuals who satisfy the following requirement in addition to the above requirements:
 

• An individual who has no material interest in the Group and who can remain independent.
   

The specific selection of candidate shall be decided after deliberation by the Nomination Committee.

If a Director falls under any of the following events, the Nomination Committee may make a determination on the content of a proposal to be submitted to the General Meeting of Shareholders for the dismissal of that Director.

• If a Director has committed a serious violation of a law, regulation or the Articles of Incorporation
• If a Director has committed an act that is significant misconduct regarding performance of duties
• If a Director lacks the judgment required of the position or significantly lacks the ability to discern facts and circumstances
• If a Director is expected to be unable to attend Board of Directors meetings for a significant period of time

The Company considers that an Outside Director is not independent if he or she falls under any of the conditions listed below in addition to meeting the standards for independence established by Tokyo Stock Exchange, Inc.

In electing Executive Officers responsible for the execution of business tasks, individuals who satisfy the following requirements will be elected, regardless of individual attributes concerning gender, nationality and race, etc.:
 

• An individual of exceptional insight and character;
• An individual with a strong sense of ethics and a law-abiding spirit; and
• An individual well-versed in management and the business activities of the Group.
   

In relation to the election process, CEO will first draft a proposal for the election of Executive Officers after consulting with relevant officers as necessary. CEO will then submit a proposal for the election of Executive Officers to the Board of Directors based on the deliberations and responses to inquiries at the Nomination Committee meeting, and Executive Officers will be elected by resolution of the Board of Directors based on a comprehensive review of the candidates’ personal history, achievements, specialist knowledge, and other capabilities.
In addition, if any event occurs that makes an Executive Officer highly ineligible in light of these standards, the Executive Officer shall be dismissed by resolution of the Board of Directors following a review by the Nomination Committee.

The main expertise and experience possessed by the Directors are shown in the Skill Matrix in Table 1. Table 2 also shows from what perspectives the Directors contribute and provide knowledge to realize the Medium-term Management Strategy (FYE March 2027-2029) based on their respective expertise and experience.

With the aim of creating an attractive remuneration system for outstanding management talent that will drive improvements in the Group’s corporate value from a medium- to long-term viewpoint and establishing remuneration governance that will enable the Company to fulfill its accountability to stakeholders, including shareholders, the Company shall establish a policy on determining the remuneration for Directors and Executive Officers (collectively, “Officers”) and a remuneration system as follows:

Basic remuneration shall be paid in cash as fixed remuneration in accordance with one’s job position.

The annual bonus shall be determined based on the performance evaluation, relative comparison of TSR, and status of achievement of the non-financial target set for each Executive Officer, on a single-year basis.

The specific evaluation items shall be as follows:

1. Build a Work Environment that puts Safety and Health First
2. Respect for Human Rights
3. Promote Diversity, Equity and Inclusion
4. Cultivate Mutual Prosperity with Stakeholders
5. Strengthen Corporate Governance and Risk Management
6. Engage in Fair Business Transactions and Responsible Sourcing
7. Ensure Stable Provision of Safe, Secure, and High Value Added Products
8. Proactive Engagement for the Global Environment

【Calculation Formula】

By deeming the amount payable for achievement of the target (Base Annual Bonus) as 100%, the amount for each individual shall be calculated by using the following calculation formula:
Annual Bonus = Base Annual Bonus by Job Position × Payment Rate Based on Performance Evaluation*

【Evaluation Weight】

The annual bonus amount shall be determined by evaluating the base annual bonus amount corresponding to each position level at a ratio of 60% for single-year performance evaluation (adjusted using consolidated operating profit growth rate compared with other companies), 20% for relative TSR evaluation, and 20% for non-financial evaluation. 

Stock-based compensation shall be a system that utilizes a trust for the purpose of achieving the sharing of a common profit awareness with shareholders. This shall be used as an incentive for improving the medium- to long-term corporate value of the Group and under which the Company’s common shares and cash equivalent to the proceeds from the realization of the Company’s common shares shall be delivered and paid in accordance with one’s job position, upon retirement from the post of Executive Officer. No performance conditions nor stock price conditions shall be set with respect to the shares to be delivered.

Please note that in the case of a non-residents of Japan, different treatment may be applied under laws or for any other relevant circumstances.

• If Executive Officers violate laws and regulations or the duty of care of a good manager, the Company may, upon resolution of the Remuneration Committee, revoke the right to receive an annual bonus or demand that the Executive Officer return the bonus after it has been paid, and revoke the right to receive the shares of the Company’s Stock, etc. or demand the return of an amount equivalent to the accumulated number of points.

For the fiscal year ended March 2026, the individual remuneration, etc. of the Officers was determined in accordance with the Remuneration System for Officers, which is based on the Policy on Determining Remuneration for Officers. The Remuneration Committee therefore determined that the details of the individual remuneration, etc. for the fiscal year ended March 2026 were in line with the Policy on Determining Remuneration for Officers.

For non-financial evaluation, each Executive Officer (excluding CEO) is required to set three target items, one of which is a sustainability issue. Each item is broken down into two or three sub-items. The table below categorizes details of non-financial evaluation items set for the fiscal year ending March 2027 in accordance with the Sustainability Policy, etc.
Since the fiscal year ended March 2024, we have mandated the promotion of Diversity, Equity and Inclusion and in particular, the setting of targets related to the ratio of female managers. Additionally, many Executive Officers set targets related to proactive efforts to protect the global environment.

• Executive Officers’ (other than CEO) evaluation
  At the end of the fiscal year, CEO serves as the primary evaluator of each Executive Officer by considering their progress toward achieving their individual non-financial targets. The Remuneration Committee receives an explanation of the results of this initial evaluation by CEO, then deliberates on appropriateness and determines the final evaluation.
• CEO evaluation
  Given that CEO oversees the entire Company, the Remuneration Committee deliberates on CEO’s performance to determine an evaluation from the perspective of Group-wide management and execution of leadership toward achievement of the Medium-term Management Strategy.

The annual bonus shall be determined based on the evaluations of each portion of 60%, 20% and 20% of the base amount, which depends on one’s job position, in terms of consolidated operating profit (or, in the case of an Executive Officer in charge of business activities, operating earnings from the relevant business sector), relative TSR comparison and non-financial factors, respectively.

【Evaluation Weight】
The annual bonus shall be determined based on the evaluations of each portion of 60%, 20% and 20% of the base amount, which depends on one’s job position, in terms of consolidated operating profit (or, in the case of an Executive Officer in charge of business activities, operating earnings from the relevant business sector), relative TSR comparison and non-financial factors, respectively.

【Target of Consolidated Operating Profit for annual bonus】
With regard to the consolidated operating profit target for the annual bonus, in principle, the consolidated operating profit plan for the current fiscal year in the Mid-term Management Strategy shall be applied (with regard to the operating profit of the business in charge, the consolidated operating profit plan for the relevant business in charge shall be used).
The target and actual values of performance-linked indicators used to calculate bonuses for the fiscal year ended March 2026 are as follows.

The Board of Directors met 21 times in the fiscal year ended March 2026. To ensure the effectiveness of the Board of Directors, the Company requires each Director to make every effort to attend all meetings, and the attendance rate was 100% in the fiscal year ended March 2026. Attendance rates were also 100% for the Nomination Committee (which met 12 times), Audit Committee (17 times), Remuneration Committee (13 times), and Sustainability Committee (10 times).

The term of a Director in the Company is one year. As of July 2026, the average number of years served by active Directors was 2.1 years while the figure for Directors who have resigned in the past five years was 7.1 years.

The Company analyzes and evaluates the effectiveness of the Board of Directors based on the evaluation by each Director on an annual basis. Since the fiscal year ended March 2022, a mandatory third-party evaluation has been conducted once every three years. In the fiscal year ended March 2026, the Company evaluated the effectiveness of the Board of Directors using a self-evaluation method (evaluation by questionnaire).

There was an evaluation of initiatives concerning the following matters taken for further improvement by the Board of Directors in the fiscal year ended March 2026 based on the results of the evaluation of the effectiveness of the Board of Directors in the fiscal year ended March 2025. It was confirmed that although "improvements have been made" in general, "initiatives were not adequate" for a certain matter.

The Board of Directors will keep making efforts to improve the effectiveness toward future.

The Audit Committee consists of four Outside Directors and audits whether the execution of duties by Executive Officers and Directors is conducted legally and appropriately under an appropriate internal control system. In addition, the Audit Committee coordinates with the department in charge of internal audits and the Accounting Auditor and performs systematic and efficient audits, thereby enhancing the overall effectiveness of the three-pillar audit system.
Kazuhiko Takeda, Chair of the Audit Committee, has extensive knowledge of finance and accounting through his experience as CFO at major subsidiaries of listed companies. In addition, the Audit Committee Office has been set up to assist the Audit Committee’s duties. Under the direction of the Audit Committee, the Audit Committee Office collects information necessary for audit activities and reports to the Audit Committee.
In Audit Committee audits, in line with the Audit Committee’s audit plan, the Audit Committee examines the status of the operation of the internal control system, the status of risks and countermeasures in implementing the Medium-term Management Strategy, the status of initiatives to address various sustainability issues, including measures for the enhancement of human capital and ensuring workplace safety, the appropriateness of auditing methods and the results of audits by the Accounting Auditor, as well as other matters.
Accordingly, members of the Audit Committee attend important meetings as appropriate, conduct interviews with Directors, Executive Officers, the department in charge of internal audits, and other departments in charge of internal control concerning progress on the execution of their duties and view important approval documentation, etc. In addition, selected members of the Audit Committee examine operations and assets at the Company headquarters and major business sites and, where necessary, conduct on‑site audits of Group Companies to conduct audits on the state of the execution of duties by Directors and Executive Officers, and provide their observations.
Furthermore, the Audit Committee has a system in place where the Committee communicates and shares information with Auditors of Group Companies using online communication tools in order to ensure the effectiveness and increase the efficiency of the Group’s auditing system. Interviews are also conducted during on-site audits and on other occasions. The contents of these activities are shared with the Audit Committee.

As of June 22, 2026, the Audit Department, which is in charge of internal audits, consists of 15 persons, including the General Manager. It is responsible for conducting internal audit work on the instructions of the responsible Executive Officer in cooperation with the Audit Committee to investigate whether internal control systems are developed and applied in an appropriate manner. It also audits the effectiveness and efficiency of company operations across the Group, the credibility of financial reports, the state of asset preservation and use, the risk management status, and the state of compliance with laws and regulations, and internal rules and standards, based on internal audit plans approved by the responsible Executive Officer and the Audit Committee. Additionally, audits are conducted in close coordination with the Accounting Auditor by sharing information.
The Audit Department regularly reports the results of Company-wide audits to the Executive Officer in charge and the Audit Committee, and the Executive Officer in charge regularly reports those results to the Board of Directors.

The Audit Committee appoints the Accounting Auditor based on the following criteria: (1) expertise, independence, timeliness and appropriateness, quality control and governance systems, (2) ability to respond to the Company's multi-industry and global business developments, (3) efficiency improvement of accounting audit operations, (4) communication with the Audit Committee, management, etc., (5) any applicability to dismissal requirements based on statutory grounds, and (6) the continuous audit period (not to exceed 20 years). The Audit Committee’s policy is to dismiss or not reappoint the Accounting Auditor if a problem is found with these criteria.

In evaluating the Accounting Auditor, the Audit Committee obtains necessary materials and receives reports from Executive Officers, related departments in the Company, and the Accounting Auditor to make a comprehensive evaluation. In addition, within 8 to 10 years after the appointment of the Accounting Auditor, the Audit Committee will discuss and consider conducting an evaluation and selection through a competitive bidding process.

Since the establishment of the Internal Control System Management Committee in January 2006, we have taken steps such as developing a set of basic principles for improving the Group’s internal control systems, and ensuring compliance with the requirements to introduce internal control evaluation and disclosure systems in relation to financial reporting, in an effort to ensure compliance with the Companies Act, the Financial Instruments and Exchange Act, and other relevant legislation, and to establish the optimal internal control systems for both Mitsubishi Materials and the Mitsubishi Materials Group companies.
Regarding evaluations conducted during the fiscal year ended March 2026 on our internal control system for financial reporting, an Internal Control Report was submitted in June 2026 for which we received an unqualified opinion of the auditing firm that the content is appropriate.

The Company has a policy of not acquiring or holding shares (Strategic Share Holdings) other than purely for investment purposes, except when it is required for the business strategy. With regard to the Shares in the Form of Strategic Share Holdings, the appropriateness of such holdings shall be specifically reviewed and examined at a meeting of the Board of Directors on an annual basis. As a result of such reviews and examinations, the Company will reduce any Shares in the Form of Strategic Share Holdings if it is not deemed to be necessary to hold such shares.

As of  March 31, 2026, the Company held three listed stocks (three listed stocks as of April 1, 2025). The amount of Strategic Share Holdings on the balance sheet was approximately ¥8.7 billion for listed stocks, approximately ¥2.1 billion for unlisted stocks, totaling 1.5% of the Company’s consolidated net assets as of March 31, 2026.