Initiatives to Strengthen Corporate Governance

1 Realizing quick, highly transparent management

Hitachi transitioned to a Company with Committee System (now called a Company with Nominating Committee, etc.) in June 2003.

Major Aims

Make management highly transparent by demarcating responsibilities for management oversight and those for the execution of business operations

Composition of Each Committee (June 2018)

2 Accelerating global management and strengthening oversight function

Increased number of independent outside directors including non-Japanese directors; independent outside directors became majority in June 2012.

Major Aims

Reflect global, diverse viewpoints in management, further strengthen oversight function

Composition of Board of Directors

3 Appropriate implementation of the Corporate Governance Code

Implementing all of the principles of the Corporate Governance Code
(based on form prior to June 2018 revision)

Analysis and Evaluation of the Effectiveness of the Board of Directors

The Company implements an evaluation of the effectiveness of the Board as a whole each year, in a continuous effort to maintain and improve the Board's function.

Evaluation process

In evaluating the effectiveness of the Board of Directors in the fiscal year ended March 31, 2018, questionnaires were distributed to all Board members. Each member carried out a self-assessment of the Board regarding its composition, Corporate Governance Foundation for Value Creation 61 operation, contribution to the Company, activities of the three committees, support systems for the Board, etc. In addition, the Board's effectiveness was discussed at a meeting by independent outside directors. Based on the results of these evaluations and discussions, the Board analyzed and evaluated its effectiveness as a whole while considering a comparison with results for the fiscal year ended March 31, 2017 and measures taken for improvement and confirmed the policy on approaches to further improvement of the Board's effectiveness.

Results of evaluation and future initiatives

The Board assessed that its members are diverse and make use of their knowledge and expertise to speak out, having vigorous discussions especially on matters related to business strategies such as the mid-term management plan toward mid/long-term corporate value growth. The Board, therefore, concluded that the effectiveness of the Board as a whole was being maintained.
With the aim to maintain and improve its functions, the Board confirmed that it will make efforts to further contribute to the determination of Hitachi's mid/long-term strategic direction and succession planning for the CEO, etc. It was also confirmed that the Company will make efforts to strengthen support for the Board's operations including the enhancement of information provision to make Board discussions more effective.

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