State of Each Organization

The Articles of Incorporation set the maximum number of Directors at 15. In appointing Directors, NGK places importance on diversity regardless of gender, age, nationality, or race. We promote diversity in terms of gender and international perspectives by appointing female Directors and Directors with experience in managing overseas subsidiaries. In addition, more than one-third of the Board of Directors consists of independent Outside Directors, thereby ensuring the independence of governance.
When nominating Directors, NGK places emphasis on experience areas defined in the skills matrix—corporate management, sustainability, overseas business and international experience, sales and planning, manufacturing technology and research and development, carbon neutrality, and digital—as well as on professional expertise in finance, legal affairs, compliance and risk management, and human resources and labor management.
The Chair of the Board of Directors is a non-executive Director. Full-time Audit & Supervisory Board Members and Outside Audit & Supervisory Board Members attend meetings of the Board of Directors and, when deemed necessary, state their opinions.

In FY2025, the Board of Directors met 15 times. In accordance with the Companies Act, the Articles of Incorporation, and the Board of Directors Regulations, the Board resolved matters stipulated therein, including the consolidated company-wide budget; strategic plans such as the dissolution, merger, and alliance of the Company; the appointment and dismissal of the Representative Director; approval of business reports and financial statements; the acquisition and disposition of significant assets; and the appointment and dismissal of key personnel.
The Board also supervises the execution of duties by Directors.

In FY2025, the Board of Directors discussed important agenda items in the following categories.

[Medium- to Long-Term Issues and Group Vision]

[Financial Results, Budget, and Finances]

[Sustainability]

[Committee Report]

[Personnel/Human Resources]

[Individual Projects]

Time Allocated to Key Topics

The Audit & Supervisory Board formulates its audit policy and audit plan at the beginning of each fiscal year and identifies key audit focus areas. In FY2026, audits will be conducted in accordance with the following policy.

[Audit Policy]

Taking into account the business environment and other factors, the Audit & Supervisory Board and the Audit & Supervisory Board Members focus on monitoring management risks to ensure that the Company’s internal control systems function appropriately and that the soundness of the corporate group as a whole is maintained.
In addition to reviewing the crisis management framework for a wide range of risks, including natural disasters, they also confirm progress toward the NGK Group Vision and the extent to which it has been communicated and embedded both internally and externally.
Audits are conducted with a focus on risk management in day-to-day operations and the reasonableness of management decision-making. When necessary, individual matters are investigated, and efforts are made to enhance governance.

[Important Audit Items]

The Audit & Supervisory Board consists of four Audit & Supervisory Board Members and met 14 times in FY2025. Each Audit & Supervisory Board Member attends meetings of the Board of Directors and other important meetings, receives reports from Directors and employees, and, when necessary, requests explanations. Through these activities, they audit the decision-making processes of Directors and the execution of their duties.
In addition, they review the establishment and operation of the internal control systems and examine the appropriateness of the audit methods and results of the Independent Auditor.

In FY2025, the Audit & Supervisory Board mainly resolved and received reports on the following matters.

[Resolutions]

[Reports]

NGK has established the Operational Audit Department (20 members as of the end of March 2025). Based on audit plans approved by the Board of Directors, the department audits the operations of NGK and its domestic and overseas group companies and reports the results to the President, the Board of Directors, and the Audit & Supervisory Board.
Internal audits are conducted independently from audits by the Audit & Supervisory Board Members and the Independent Auditor. However, in order to enhance effectiveness and efficiency, audit policies, plans, and results are regularly shared with the Audit & Supervisory Board and the Independent Auditor, and individual reports are provided when necessary.
Audits in specialized fields such as quality, the environment, and occupational health and safety are conducted by the secretariats of the respective committees, and the results are reported to the Board of Directors through those committees.

Our accounting audits consist of financial statement audits and internal control audits conducted by an audit firm in accordance with the Financial Instruments and Exchange Act, as well as audits conducted in accordance with the Companies Act.
In selecting the audit firm, the Audit & Supervisory Board makes its determination based on criteria such as the establishment of systems required under the Company Accounting Regulations, the maintenance of independence, the proper conduct of audits, and the absence of grounds for dismissal. Based on the results of this assessment, NGK has appointed Deloitte Touche Tohmatsu LLC as its audit firm.
In addition, the Audit & Supervisory Board Members and the Audit & Supervisory Board assess not only the appropriateness of the selection criteria but also, through their routine audit activities, whether communication with management, the finance department, and the internal audit department, audits of the Group as a whole, and responses to fraud risks are being conducted appropriately. Based on this assessment, they have concluded that the audit firm is qualified to serve as NGK’s audit firm.

The Nomination and Compensation Advisory Committee has been established as an advisory body to the Board of Directors to ensure fairness and transparency in decisions related to the appointment and compensation of officers.
Based on matters referred by the Board of Directors, the Committee deliberates on the appointment of Directors and Audit & Supervisory Board Members, compensation for Executive Officers, the upper limit of total compensation, and the succession plan for the Chief Executive Officer, and reports its recommendations to the Board of Directors.
The Committee consists of six members (four men and two women), with a majority being independent Outside Directors, and the Chair is also selected from among the independent Outside Directors. To ensure the appropriateness of deliberations, an Outside Audit & Supervisory Board Member attends meetings as an observer.

In FY2025, the Committee met five times and reported its key deliberations to the Board of Directors.

The Management Ethics Committee consists of Outside Directors and an internal Director in charge of compliance, and met five times in FY2025.
The Committee investigates fraud and violations of laws and regulations involving Directors and other officers, and recommends measures to prevent recurrence to the Board of Directors.
In addition, the Committee reviews and proposes measures to the Board of Directors regarding the development of frameworks and activities to ensure compliance with laws and regulations related to competition law and the prevention of corrupt practices.
Furthermore, separate from the helpline system, the Company has established an internal reporting system (hotline) that directly reports to the Committee, thereby strengthening its compliance framework.

The Management Council serves as a forum where Outside Officers and internal Directors exchange views on management issues and where Outside Officers provide advice to management.
In FY2025, the Council met twice and consisted of 12 members (nine men and three women).

The Conference of Outside Directors and Outside Audit & Supervisory Board Members consists solely of Outside Officers and serves as a forum for exchanging views on the Company’s management issues, with the aim of contributing proactively to discussions at the Board of Directors.
In FY2025, the Conference met twice and comprised six members (four men and two women).

This initiative is carried out by Audit & Supervisory Board Members and Outside Directors (eight members in total: six men and two women) with the aim of collecting information from internal stakeholders on the Company’s business environment and challenges.
In FY2025, it was held 13 times.

The Executive Committee is the body that deliberates necessary matters to assist the president in making decisions. It consists of the president, executive vice presidents, group executives of each business group, the group executive of Corporate NV Creation, the group executive of Corporate R&D, the group executive of Corporate Manufacturing Engineering, directors in charge of each department, and full-time Audit & Supervisory Board members, as well as corporate officers, committee chairs, general managers and division heads designated by the president. Fifteen committee members are male and one is female.

In light of the fact that Directors and Audit & Supervisory Board Members owe a duty of due care as mandatees of the Company, the Company provides training based on the following policy to ensure that they can fully fulfill their responsibilities as management professionals or supervisors of business execution.