Corporate Governance

An overview of corporate governance.

AGC Group Corporate Governance Basic Policy  last up date: 27 March, 2026
Corporate Governance Report  last up date: 27 March, 2026

• AGCʼs Basic Approach to Corporate Governance
• The Four Pillars of Corporate Governance Initiatives
• Compensation System

AGCʼs Basic Approach to Corporate Governance

Under the AGC Group Philosophy “Look Beyond” , the AGC Group (comprising the Company and its subsidiaries) sets out “Our Purpose,” “Our Shared Values,” and “Our Spirit.” “Our Purpose” expresses the reason why we exist and the value we want to provide: “AGC, an everyday essential part of our world.”
The AGC Group creates additional value by providing safety, security, and comfort to society, creating new value and functions for customers and business partners and building trust with them, enhancing job satisfaction among employees, increasing the Group’s corporate value for investors, and building a better future for the coming generations. By delivering meaningful value for diverse stakeholders, the AGC Group seeks to achieve sustainable growth and increase corporate value over the medium to long term.
Corporate governance is a vital management foundation to realize these objectives, and the AGC Group is committed to continually pursuing an optimal corporate governance model for the Group.

The pillars of the AGC Group’s corporate governance initiatives are as follows:

• The Company respects the rights and equal treatment of shareholders and promotes constructive dialogue with them.
• The AGC Group promotes cooperation with a diverse range of stakeholders (including shareholders, investors, customers, business partners, employees, future generations, and local communities) and endeavors to build relationships of trust.
• The AGC Group ensures appropriate disclosure of information to stakeholders and ensures transparency in such disclosure.
• The Board of Directors and the Audit & Supervisory Committee of the Company (hereinafter, the “Board” and the “Audit & Supervisory Committee,” respectively) serve as the core of the corporate governance framework, make timely and decisive decisions, and exercise effective oversight and audit functions.

The Four Pillars of Corporate Governance Initiatives

Relationship with Shareholders

AGC Inc. respects the rights and equal treatment of shareholders and promotes constructive dialogue with them.

Investors ”To our Investors”
Investors "Corporate Bond and Rating Information"

Relationships with Diverse Stakeholders

The AGC Group promotes cooperation with a diverse range of stakeholders—including shareholders and investors, customers, business partners, employees, future generations, and local communities—and endeavors to build relationships of trust.

AGC Group Charter of Corporate Behavior
Management Policy AGC plus 2.0
Stakeholder Engagement
Sustainability

Information Disclosure and Communication

The AGC Group ensures appropriate disclosure of information to stakeholders and ensures transparency in such disclosure.

Disclosure Policy
Investors
Stakeholder Engagement

Corporate Governance Structure

The Board of Directors and the Audit & Supervisory Committee of AGC Inc. serve as the core of the corporate governance framework, make timely and decisive decisions, and exercise effective oversight and audit functions.

The AGC Group's Corporate Governance Structure(Outline)

Approach to the Corporate Governance Framework

• As a company with an Audit & Supervisory Committee, AGC Inc. clearly separates the functions of management oversight and management execution: oversight is exercised by the Board of Directors, while management execution is undertaken by the President and CEO and other Executive Officers. The Audit & Supervisory Committee, as an independent body entrusted by shareholders, is responsible for audit and oversight functions in respect of the directors.
• Toward the realization of value creation, the Board of Directors defines its roles as setting the overall direction of management from a long-term perspective, encouraging appropriate risk-taking by management, and overseeing the realization of value creation, including evaluating the chief executive. The Board establishes a framework to maximize the effectiveness of these roles.
• The Board of Directors comprises a majority of independent directors and, in principle, is chaired by an independent director, thereby ensuring objectivity and transparency in its deliberations.
• The Board of Directors establishes voluntary advisory bodies—the Nominating Committee and the Compensation Committee—each comprising a majority of independent directors. These committees deliberate on matters including the appointment and dismissal (including succession planning) and remuneration of directors (excluding directors who are Audit & Supervisory Committee Members), directors who are Audit & Supervisory Committee Members, and Executive Officers, including the President and CEO, thereby ensuring objectivity, transparency, and accountability in decision-making procedures.
• By substantially delegating decision-making authority for management execution to the President and CEO and other Executive Officers, the Board of Directors focuses on oversight of management execution while ensuring agility in management execution by the President and CEO and other Executive Officers.
• In management execution, the Company adopts an in-house company system that clearly divides management into Group Corporate functions and business execution functions, thereby clarifying the scope of responsibilities and authorities, accelerating decision-making, and improving management efficiency. In addition, as advisory bodies to the President and CEO, the Company establishes a Management Committee, a Sustainability Committee, and an HR Committee (Human Capital Committee), which deliberate on matters relating to decision-making in management execution within the AGC Group and monitor business execution.
• The Audit & Supervisory Committee audits the performance of duties by directors (excluding directors who are Audit & Supervisory Committee Members) and contributes to the oversight function in respect of those directors. The Audit & Supervisory Committee and the Board of Directors establish a framework to maximize the effectiveness of these audit and oversight functions.

Oversight and Audit Framework

• Directors and the Board of Directors
  • Composition of the Board of Directors
    • The Company’s Board of Directors consists of no more than 15 directors. At present, the Board comprises a total of 10 directors, including six independent directors.
    • To ensure the independence of outside directors, in addition to the requirements for outside directors under the Companies Act, the Company has established its own Standards for Independence of Outside Officers, which are applied as the criteria for appointing outside directors. While transactional relationships exist between the Company and the companies to which outside directors belong, prices and other transaction terms are determined in the same manner as general commercial transactions.
    • In principle, the chairperson of the Board of Directors is an outside director.
  • Appointment of Directors
    • Directors are appointed at the general meeting of shareholders. The appointment of directors requires the attendance of shareholders holding at least one-third of the voting rights exercisable by shareholders entitled to vote. Cumulative voting is not adopted.
  • Term of Office of Directors
    • The term of office of directors is one year.
  • Meetings of the Board of Directors
    • In fiscal year 2025, a total of 14 meetings of the Board of Directors were held.
  • Remuneration
    • The total amounts of monthly remuneration, bonuses, and share-based compensation for directors are disclosed in the Business Report.
    • The remuneration system consists of fixed compensation (monthly remuneration) and variable compensation (bonuses and share-based compensation).
    • For directors who also serve as Executive Officers and for Executive Officers, remuneration consists of monthly remuneration, bonuses, and share-based compensation. For directors who do not serve concurrently as Executive Officers (including outside directors), remuneration consists of monthly remuneration and share-based compensation.
    • There is no retirement allowance system.
• Nominating Committee
  • Composition
    • The Nominating Committee comprises a total of four directors, including three independent directors, with independent directors constituting a majority of the committee members.
    • The chairperson of the Nominating Committee is an independent director.
    • Members of the Audit & Supervisory Committee may attend meetings of the Nominating Committee as observers.
  • Meetings of the Nominating Committee
    • In fiscal year 2025, a total of 13 meetings of the Nominating Committee were held.
• Compensation Committee
  • Composition
    • The Compensation Committee comprises a total of four directors, including three independent directors, with independent directors constituting a majority of the committee members.
    • The chairperson of the Compensation Committee is an independent director.
    • Members of the Audit & Supervisory Committee may attend meetings of the Compensation Committee as observers.
  • Meetings of the Compensation Committee
    • In fiscal year 2025, a total of six meetings of the Compensation Committee were held.
• Audit & Supervisory Committee
  • Composition of the Audit & Supervisory Committee
    • The Audit and Supervisory Committee comprises a total of four directors, including three independent directors.
  • Appointment of Directors Who Are Audit & Supervisory Committee Members
    • Directors who are Audit & Supervisory Committee Members are appointed at the general meeting of shareholders.
    • The Audit & Supervisory Committee selects full-time Audit & Supervisory Committee Members by resolution. At present, there are two full-time Audit & Supervisory Committee Members.
  • Term of Office of Directors Who Are Audit & Supervisory Committee Members
    • The term of office of directors who are Audit & Supervisory Committee Members is two years.
  • Establishment of the Audit & Supervisory Committee Office
    • The Company has established an Audit & Supervisory Committee Office as an organization to assist the Audit & Supervisory Committee in the performance of its duties.
  • Independence of Staff of the Audit & Supervisory Committee Office from Executive Directors
    • Personnel transfers and performance evaluations of staff of the Audit & Supervisory Committee Office require the consent of the Audit & Supervisory Committee.
  • Meetings of the Audit & Supervisory Committee (the Board of Corporate Auditors in Fiscal Year 2025)
    • In fiscal year 2025, a total of 14 meetings of the Board of Corporate Auditors were held.
  • Remuneration (Remuneration of Corporate Auditors in Fiscal Year 2025)
    • Remuneration for Corporate Auditors consists solely of monthly remuneration, and the total amount is disclosed in the Business Report.
• External Auditor
  • Appointment of the External Auditor
    • The External Auditor is appointed at the general meeting of shareholders.
    • The current External Auditor is KPMG AZSA LLC.
  • Audit Fees
    • In fiscal year 2025, fees paid to KPMG AZSA LLC, the External Auditor of the Company and its domestic consolidated subsidiaries, for services as defined in Article 2, paragraph 1 of the Certified Public Accountants Act (Act No. 103 of 1948) amounted to ¥240 million.
      In addition, fees for services other than those specified above—namely, agreed-upon procedures—amounted to ¥7 million.
      • • Amounts are shown in units of millions of yen, with figures less than one million yen rounded down.

Introduction of Executives

Introduction of Executives

Compensation System

Amount of Compensation, etc. for the Directors and Audit & Supervisory Board Members Regarding this Business year

Policy for Determining Compensation and Other Emoluments for Officers

• Basic Principles of the Remuneration System

  The Company has established the following basic principles governing overall officer remuneration:

  • The remuneration system should be capable of attracting, retaining, and rewarding diverse and talented individuals in order to build and enhance competitive advantage./li>
  • The remuneration system should promote the sustainable enhancement of corporate value and enable the sharing of interests between shareholders and management.
  • The remuneration system should incentivize the achievement of performance targets under management strategies aimed at the sustainable development of the Group.
  • The process for determining the remuneration system should be objective and highly transparent.
• Composition of Remuneration
  • Remuneration consists of fixed compensation (monthly remuneration) and variable compensation (bonuses and share‑based compensation (*1)). These components are applied in accordance with position and role, as described below.

    Classification	Fixed compensation	Variable compensation
    	Monthly compensation	Bonuses	Stock compensation
    			Performance-linked component	Fixed component(*2)
    Directors who serve concurrently as Executive Officers, and Executive Officers	○	○	○	○
    Directors who do not concurrently serve as Executive Officers,(excluding Directors who are Audit and Supervisory Committee Members)	○	－	－	○
    Directors who do not concurrently serve as Executive Officers (who are Audit and Supervisory Committee Members)	○	－	－	－

    • (*1) Where an individual eligible for share‑based compensation is a non‑resident of Japan, shares will not be granted, and an amount equivalent thereto may be paid in cash as a bonus.
    • (*2) The fixed portion of share‑based compensation is not linked to the Company’s business performance.
  • With respect to directors, the proportion of each component of total remuneration, based on the standard payment amount, is generally as illustrated in the figure below (*3).
    Of these components, variable compensation reflects the contents set forth below in “(3) Structure of Variable Compensation.
    
    • (*3) In cases not falling under any of the above categories, the matter shall be deliberated by the Compensation Committee and resolved by the Board of Directors.
    • (*4) Variable compensation consists of the total of bonuses and the amount of share‑based compensation granted for one fiscal year.
• Structure of Variable Compensation

  In order to achieve the sustainable development of the AGC Group and enhance corporate value, variable compensation is designed to reflect a balanced perspective across the short, medium, and long term, taking into consideration the appropriate balance among these time horizons.

  • Bonuses
    • Bonuses are designed to further enhance motivation to achieve single‑year performance targets. Amounts are varied according to position and role, based on consolidated performance indicators for the relevant fiscal year.
    • With respect to performance indicators, in light of the importance of enhancing business profitability and asset efficiency while generating cash, operating profit margin on operating assets (*5) and cash flow are used.
    • The bonus payout rate varies depending on the degree of achievement against the target for operating profit margin on operating assets and the year‑on‑year improvement in cash flow. In addition, overall Company performance, the strengthening of non‑financial capital, progress in portfolio transformation, and individual performance are also taken into account. As a result, the payout rate generally ranges from 0% to 200% of the standard payment amount.
      The final determination is made by resolution of the Board of Directors following deliberation by the Compensation Committee.
    • The bonus payment period covers the period from the start date to the end date of the relevant fiscal year, and bonuses corresponding to that period are paid after the conclusion of the ordinary general meeting of shareholders held immediately following the end of the fiscal year.
      • (*5) Operating profit margin on operating assets = Operating profit÷Operating assets

    [Results for the Fiscal Year Ended December 31, 2025]

    • With respect to the operating profit margin on operating assets indicator, the actual result was 5.4% (adjusted value) against a target of 6.9%.
    • The cash flow indicator showed an increase compared with the previous fiscal year.
    • Based on the above two indicators and the Company‑wide special evaluation, bonuses for directors who concurrently serve as Executive Officers were paid at 100% of the standard payment amount.

    [Targets for the Fiscal Year Ending December 31, 2026]

    • With respect to performance indicators, in light of the importance of enhancing business profitability and asset efficiency while generating cash, the Company adopts operating profit margin on operating assets and cash flow as the relevant indicators.
  • Share‑based Compensation
    • Share‑based compensation is intended to enhance motivation to contribute to the medium‑ to long‑term enhancement of corporate value, promote the sharing of interests with shareholders, and increase incentives to achieve performance targets under the Medium‑Term Management Plan (hereinafter, the “Medium‑Term Plan”).
    • This system consists of a performance‑linked portion, under which Company shares, etc. are granted in amounts that vary according to position and role as well as consolidated performance indicators under the Medium‑Term Plan, and a fixed portion, under which a fixed number of Company shares, etc. are granted according to position and role.
    • The performance indicators adopted under this system comprise five indicators: (1) ROE and (2) EBITDA as financial indicators; (3) relative TSR (relative to TOPIX) as a share price indicator; and (4) GHG emissions per unit of sales and (5) employee engagement as non‑financial indicators.

      (Performance Indicators)

      Category	Performance Indicators	Reason for Selection	Weight
      Financial Indicators	ROE	Important Performance Objectives for Long-term and Medium-term Plan Periods	30％
      	EBITDA	To improve cash generation capacity and profitability	30％
      Stock Price Indicator	Relative TSR (vs TOPIX)	More profit sharing with shareholders	20％
      Non-Financial Indicators	GHG Emissions per unit of sales	Aiming to contribute to the realization of a sustainable global environment	10％
      	Employee Engagement	Aiming for the growth of the company through the growth of each employee and the exercise of his or her abilities.	10％

    • The performance‑linked portion varies, in principle, within a range of 0% to 200% of the standard payment amount, depending on the degree of achievement against the targets for each performance indicator. The final determination is made by resolution of the Board of Directors following deliberation by the Compensation Committee.
      The degree of achievement against targets is calculated as follows:
      • a. Financial indicators: Calculated as a weighted average of the degree of achievement against the targets for each fiscal year during the Medium‑Term Management Plan period, using the prescribed weighting ratios (*6).
      • b. Share price and non‑financial indicators: Calculated based on the degree of achievement against the targets at the end of the Medium‑Term Management Plan period.
    • Officers are required to continuously hold the Company shares acquired through this system until their retirement, after the end of the Medium‑Term Management Plan period.
    • (*6) First fiscal year: 25%; second fiscal year: 25%; final fiscal year: 50%

    [Results for the Fiscal Year Ended December 31, 2025]

    • With respect to ROE, against a target of 8.4% for the fiscal year ending December 31, 2026, which is the final year of the Medium‑Term Management Plan (as initially set at the time of formulation of the Plan), the actual result for the fiscal year ended December 31, 2025, the second year of the Plan, was 4.7%.
    • With respect to EBITDA, against a target of ¥441.0 billion for the fiscal year ending December 31, 2026, which is the final year of the Medium‑Term Management Plan (as initially set at the time of formulation of the Plan), the actual result for the fiscal year ended December 31, 2025, the second year of the Plan, was ¥307.3 billion (calculated on a simplified basis as operating profit plus depreciation and amortization).
• Remuneration Levels

  With respect to remuneration levels, the Company analyzes and compares remuneration data for major manufacturing companies based on survey data conducted by third‑party institutions, and verifies the appropriateness of such levels through deliberation by the voluntary Compensation Committee.

• Method for Determining Remuneration

  Based on the “1. Basic Principles of the Remuneration System,” the voluntary Compensation Committee—comprising a majority of independent outside directors and chaired by an independent outside director—deliberates on and makes recommendations regarding the remuneration system and remuneration levels for directors and Executive Officers.
  Remuneration for directors is resolved by the Board of Directors within the limits of the total amount of remuneration approved in advance by the general meeting of shareholders.
  In addition, the Compensation Committee verifies the results of remuneration payments. Through these processes, the Company enhances the objectivity and transparency of the remuneration determination process.

  [Reference]
  The limits and composition of remuneration for directors are as follows:

  • With respect to monthly remuneration and bonuses for directors who are not Audit & Supervisory Committee Members, it was resolved at the 101st Ordinary General Meeting of Shareholders held on March 27, 2026 that the total annual amount shall not exceed ¥750 million, of which the portion for outside directors shall not exceed ¥88 million per year.
    Bonuses are paid only to directors who concurrently serve as Executive Officers.
  • With respect to share‑based compensation for directors who are not Audit & Supervisory Committee Members and for Executive Officers (excluding non‑residents of Japan), it was resolved at the 97th Ordinary General Meeting of Shareholders held on March 30, 2022 and the 101st Ordinary General Meeting of Shareholders held on March 27, 2026 that, for each Medium‑Term Management Plan period (three fiscal years), the Company may contribute funds to a trust in an amount not exceeding ¥2.25 billion in total (of which the portion for outside directors shall not exceed ¥25 million), and that the maximum number of Company shares (including shares subject to cash settlement) to be delivered, etc. through such trust shall not exceed 495,000 shares in total (of which the portion for outside directors shall not exceed 6,000 shares).
  • With respect to monthly remuneration for directors who are Audit & Supervisory Committee Members, it was resolved at the 101st Ordinary General Meeting of Shareholders held on March 27, 2026 that the total annual amount shall not exceed ¥150 million.
• Method for Determining This Policy

  This policy is deliberated and proposed by the Compensation Committee and resolved by the Board of Directors.