Chapter 1 General Provisions

(Basic Ideas of Corporate Governance)
Article 1 (1) MITSUBISHI STEEL MFG. CO., LTD. ( "Company " hereinafter) shall recognize as an urgent matter the establishment of a corporate culture capable of responding to any changes in the business environment and set as a basic management policy sustainable and global development paths by fostering competitive businesses. Based on this policy, the Company shall set forth the Mitsubishi Steel Group Code of Conduct. All executives and employees shall abide by this Code of Conduct and work to maximize corporate value. The Company shall also further strengthen the functions of the Board of Directors and the Board of Corporate Auditors and work to enhance corporate competitiveness, secure prompt and reasonable decision-making, and achieve highly transparent and sound management.
  1. 2.The Company shall strive to enrich corporate governance in line with the following basic ideas:
    1. (1)respect for shareholder rights and equality;
    2. (2)consideration for the interests of stakeholders, including shareholders, and appropriate joint efforts with stakeholders;
    3. (3)disclosing corporate information in a timely and appropriate manner to secure transparency and engaging in constructive dialogue with shareholders and investors to help increase corporate value over the medium- and long-term; and
    4. (4)providing opportunities for independent outside directors to share information and exchange opinions, thereby strengthening the Board of Directors' supervision of operations.
  2. 3.This Basic Policy shall be considered second to applicable laws and regulations and the articles of incorporation but take precedence over the Company's rules, etc.
  3. 4.The Company shall seek at all times to achieve ideal corporate governance and continuously strive to strengthen related efforts.

Chapter 2 Securing of Shareholder Rights and Equality

(Exercise of Rights by Shareholder)
Article 2 (1) The Company shall take appropriate action to secure shareholder rights substantially and seek to develop an environment that allows shareholders to appropriately exercise their rights. In addition, the Company shall secure substantial equality on behalf of its shareholders.
  1. 2.The Company shall strive to ensure that shareholder rights, including voting rights at a shareholders meeting, are secured substantially. In addition, in securing equality, the Company shall take appropriate action while giving all due consideration to minority shareholders.
  2. 3.The Company shall recognize that shareholders meetings are opportunities for constructive dialogue with shareholders and develop an appropriate environment for the exercise of rights at shareholders meetings from the perspective of the shareholders.
  3. 4.If the Board of Directors recognizes the existence of a specific agenda submitted by the Company that was not rejected by vote at a shareholders meeting but associated with a significant number of dissenting votes, it shall review the reasons for the opposition and the cause of such notable dissent and duly consider the need for dialogue with shareholders and other actions.
(Shareholders Meeting)
Article 3 (1) The Company shall provide accurate information deemed to contribute to sound decision-making by shareholders at shareholders meetings, as needed.
  1. 2.The Company shall strive to issue notices of annual shareholders meetings at the earliest possible date to allow shareholders sufficient time to consider the agendas for the shareholders meetings and appropriately exercise their right to vote. The Company shall also make public said notices on the websites of the Tokyo Stock Exchange and the Company before issuing them.
  2. 3.The Company shall set forth dates of shareholders meetings to further the goal of providing accurate information, thereby enriching constructive dialogue with shareholders.
  3. 4.The Company shall strive to develop an environment that allows all shareholders, including those unable to attend shareholders meetings, to appropriately exercise their right to vote. For example, the Company shall make public English translations of notices of shareholders meetings and implement a platform that allows electronic voting.
  4. 5.If an institutional investor, etc. holding shares under the name of a trust bank, etc. wishes to exercise his or her right to vote, etc. at a shareholders meeting on behalf of the trust bank, etc., the Company shall determine a response thereto based on consultations with the trust bank and attorneys at law, etc.
(Basic Principles of Capital Policy)
Article 4 The Company shall set forth the Basic Principles of Capital Policy as follows at a Board of Directors meeting in light of the fact that trends in capital policy may significantly affect shareholder interests.
Basic Principles of Capital Policy

The Company shall duly prepare for risks while maintaining a strong financial basis and taking steps to enable growth investment for sustainable growth. The Company shall work to improve capital efficiency by strengthening management of cash flows and balance sheets and seek to return profits to shareholders by enhancing corporate value in the medium- and long- term.

(Basic Policy for Cross-holding of Shares and for Exercise of Voting Rights Associated with Cross-shareholdings)
Article 5 (1) The Company shall establish and disclose a Basic Policy for Cross-holding of Listed Shares and a Basic Policy for Exercise of Voting Rights Associated with Cross-shareholdings as follows at a Board of Directors meeting.
Basic Policy for Cross-holding of Listed Shares and Basic Policy for Exercise of Voting Rights Associated with Cross-shareholdings

For major cross-held shares, the Board of Directors shall verify the economic rationality thereof. Based on the results of the verification, the Company may hold cross-held shares for the purpose of strengthening ties to the other company. Additionally, regarding the exercise of voting rights for cross-held shares, the Company shall fully examine on a case-by-case basis whether a specific agenda advances the corporate value of the relevant company and whether the agenda may damage the Company's corporate value and determine whether to approve the agenda on that basis.

  1. 2.The Company shall verify the medium- and long-term economic rationality and future prospects for major cross-held shares every year at a Board of Directors meeting after considering returns on and risks associated with the shares. The Company shall also confirm the goals and rationality of the cross-holdings based on the results of verification.
(Protecting Shareholder Rights)
Article 6 (1) In introducing and putting into practice anti-takeover measures, the Company shall consider the need and reasons therefor and ensure appropriate measures. The Company shall also provide sufficient explanation to shareholders.
  1. 2.If the Company's shares are put to tender offer, the Company shall clearly explain the Board of Directors' current stance thereto (including the nature of counter-proposals, if any) and take due care not to unjustly preclude shareholder rights to sell off their holdings in response to the tender offer.
  2. 3.In implementing a capital policy (including capital increase and MBO) that changes or significantly dilutes control, the Company shall consider the need and reasons therefor so as to avoid unjustly harming existing shareholders and secure appropriate procedures. The Company shall also provide sufficient explanation to shareholders.

Chapter 3 Respect for Stakeholders

(CSR)
Article 7 (1) The Company shall establish the Basic Policy for CSR as follows:
Basic Policy for CSR

The Company shall seek to become a more trusted company by fulfilling its own social mission based on the Corporate Philosophy and Mitsubishi Steel Group Code of Conduct. The Company shall also seek to help achieve a sustainable society through dialogue with stakeholders, including customers, customer companies, shareholders, employees, and communities.

  1. 2.The Board of Directors shall recognize its response to problems concerning sustainability as an important part of risk management and take appropriate action to work on such problems vigorously and actively.
(Appropriate Cooperation with Stakeholders)
Article 8 (1) The Company shall recognize that sustainable growth and the creation of medium- and long-term corporate value result from providing necessary resources and from the contributions of customers, communities, and other stakeholders, and work to achieve appropriate joint efforts. The Company shall also work to foster corporate culture and a climate that demonstrates respect for the rights and positions of stakeholders and sound business ethics.
  1. 2.The Company shall engage in business under the Corporate Philosophy in light of its social responsibilities and in consideration of its stakeholders, thereby improving medium- and long-term corporate value.
  2. 3.The Company shall separately establish the Mitsubishi Steel Group Code of Conduct at a Board of Directors meeting to ensure that the directors, corporate auditors, fellow employees (employees treated as executive officers), and employees act at all times in an ethical manner. The Company shall review the status of the implementation of said Code of Conduct on a regular basis.
(Relationship to Stakeholders)
Article 9 (1) The Company shall seek to achieve diversity, including active hiring of women in the Company, based on the recognition that the existence of a diversity of perspectives and values reflecting different experiences, skills, and attributions in the Company offer a source of strength in securing the Company's sustainable growth.
  1. 2.The directors and corporate auditors of the Company shall recognize their own fiduciary responsibilities to shareholders and act in the interests of the Company and in the common interests of the shareholders while seeking to promote appropriate joint efforts with stakeholders.
  2. 3.The Company shall strive to further strengthen the whistleblowing system to ensure that employees, etc. may report on illegal or inappropriate actions committed during the course of the Company's business activities and that the reported information and doubts are objectively verified and appropriately applied. The Board of Directors shall supervise the status of the operation of this system. Moreover, the Company shall establish an outside report reception desk independent of management personnel and clearly specify in the whistleblowing regulations that the identity of any person providing such information will remain secret and that such person will not be unfavorably treated as a result.

Chapter 4 Securing Transparency Based on Appropriate Information Disclosure and Dialogue with Shareholders and Investors

(Information Disclosure and Transparency)
Article 10 (1) The Company shall appropriately disclose financial and nonfinancial information, including information about business challenges, risks, and governance, based on laws and regulations. The Company shall also work proactively to provide information other than disclosures as required by laws and regulations.
  1. 2.The Board of Directors shall work to ensure that the information disclosed and provided is accurate, easy-to-understand, and highly useful in light of the fact that such information serves as the basis for constructive dialogue with shareholders and investors.
(Enrichment of Information Disclosure)
Article 11 (1) The Company shall disclose and make public the following matters, etc., in addition to appropriate disclosure required by laws and regulations:
  1. (1)the Corporate Philosophy and the management plan;
  2. (2)the Basic Policy for Corporate Governance;
  3. (3)policy and procedures for determining compensation for directors;
  4. (4) policy and procedures for appointing candidates for the positions of directors and corporate auditors; and
  5. (5)explanations concerning the election and appointment of individual candidates for the positions of directors and corporate auditors.
  1. 2.The information shall be disclosed in a manner that it is easy to understand and is of high added value to users.
  2. 3.From the perspective of information disclosure to overseas investors, the Company shall strive to disclose and provide information in English within a reasonable scope.
(Response to Accounting Auditor)
Article 12 (1) The Company shall take appropriate action to ensure appropriate audits in light of the accounting auditor's duty to shareholders and investors.
  1. 2.The Board of Corporate Auditors shall take the following actions to secure appropriate audits by the accounting auditor:
    1. (1)formulating standards for the appropriate selection and evaluation of the accounting auditor; and
    2. (2)confirming the independency and expertise of implementation of the accounting audit of the Company by the accounting auditor.
  2. 3.The Board of Directors and the Board of Corporate Auditors shall take the following actions to secure appropriate audits by the accounting auditor:
    1. (1)securing sufficient audit times for high-quality audits;
    2. (2)securing access (interview, etc.) to the President by the accounting auditor;
    3. (3)securing adequate joint efforts among the accounting auditor and corporate auditors, internal audit department, and outside directors; and
    4. (4)establishing a system to respond in cases in which the accounting auditor detects fraud or other improprieties and requests appropriate action or points out flaws, problems, or other issues.
(Dialogue with Shareholders and Investors)
Article 13 (1) The Company shall engage in constructive dialogue with shareholders and investors for the purpose of contributing to sustainable growth and improvements in medium- and long-term corporate value.
  1. 2.The directors shall listen to the interests and concerns of the shareholders and investors through the dialogue established in the preceding paragraph and work to obtain understanding of its management policies by explaining them explicitly and clearly. The directors shall also work to achieve a balanced understanding of stakeholder viewpoints and take appropriate action based on such understanding.
  2. 3.The Board of Directors shall establish and make public the Basic Policy for Dialogue with Shareholders and Investors.
  3. 4.The Company shall strive to grasp its own shareholder composition once a year or, as needed, twice a year.

Chapter 5 Corporate Governance System

Section 1 Directors and Board of Directors

(Duties of the Board of Directors)
Article 14 The Board of Directors shall have the following duties in light of its responsibilities to shareholders, thereby promoting the Company's sustainable growth, improving medium- and long-term corporate value, and strengthening earning capacity and capital efficiency, etc.:
  1. (1)providing broad-brush oversight, such as basic management policies;
  2. (2)developing an environment that supports appropriate risk-taking by the President; and
  3. (3)conducting highly effective supervision of the directors' execution of operations from an independent and objective perspective.
(Roles of the Board of Directors)
Article 15 (1) The Board of Directors shall engage in constructive discussions on medium-term management plans, etc. while seeking to establish the Company's basic management policies, etc. as among its major duties. The Board of Directors shall also make decisions on the execution of important operations in light of said policies.
  1. 2.The Board of Directors shall suggest the delegation of some of the matters to be resolved at a shareholders meeting to the Board of Directors, in accordance with the provisions of laws and regulations, with the goal of securing the flexibility and expertise for management decisions.
  2. 3.The Board of Directors shall appropriately delegate to the directors decision-making involving the execution of operations other than matters to be resolved at a Board of Directors meeting, in accordance with the provisions of laws and regulations and the Company's own rules, thereby appropriately exercising its management supervision functions.
  3. 4.The Board of Directors shall make its best efforts to realize the medium-term management plan based on the recognition that said plan is among its commitments to shareholders. The Board of Directors shall also confirm and analyze the status of work to achieve its goals, explain such work to shareholders, and reflect the results of the analysis in next and subsequent plans.
  4. 5.The Board of Directors shall conduct appropriate supervision of the procedures for the election of a successor to the President in light of basic management policies, etc.
  5. 6.The Board of Directors shall consider the development of an environment that supports appropriate risk-taking as among its major duties and hold multifaceted and sufficient discussions on the directors' suggestions from an independent and objective perspective.
  6. 7.The Board of Directors shall appropriately implement the election and dismissal of directors, fellow employees (employees treated as executive officers), division chiefs, and those above the level of general manager in light of performance evaluations, etc. in accordance with fair and highly transparent procedures.
  7. 8.The Board of Directors shall consider the implementation of the highly effective supervision of directors from an independent and objective perspective as among its major duties and appropriately evaluate the performance, etc. of the directors and reflect the results of said evaluation in compensation for directors.
  8. 9.The Board of Directors shall engage in supervision to ensure timely and accurate information disclosure.
  9. 10.The Board of Directors shall appropriately develop and establish compliance, internal controls (including internal controls on financial reporting), and risk management systems, and exercise supervision to confirm that they are appropriately implemented.
  10. 11.The Board of Directors shall elect one or more persons with knowledge of finance and accounting matters as a candidate for the position of corporate auditor.
  11. 12.If a transaction (transaction between related parties) involves a director, fellow employee (an employee treated as an executive officer), major shareholder (shareholding ratio 10% or higher), etc., the Board of Directors shall implement suitable monitoring (including approval of transactions) in accordance with established procedures to prevent the transaction from damaging Company interests or the common interests of shareholders.
  12. 13.The Board of Directors shall appropriately manage conflicts of any interest that may arise between the Company and related parties, such as directors, fellow employees (employees treated as executive directors), and major shareholders.
(Composition of the Board of Directors)
Article 16 (1) The Board of Directors shall be composed of individuals having appropriate knowledge, experience, and abilities necessary to effectively fulfill its roles and duties in a balanced manner. The Board of Directors shall strive to achieve both diversity and optimal size.
  1. 2.The Board of Directors shall implement and disclose the ideas set forth in paragraph (1) as follows:
Balance, Diversity, and Size of Board of Directors

The Board of Directors shall be of the minimum necessary size and structure needed to promptly and efficiently conduct decision-making. In addition, in principle, fairness and transparency in deciding the execution of operations shall be secured by electing two or more outside directors.

(Policy on the Appointment of Candidates for the Positions of Directors and Corporate Auditors)
Article 17 The Board of Directors shall establish a Policy on the Appointment of Candidates for the Positions of Directors and Corporate Auditors as follows:
Policy on the Appointment of Candidates for the Positions of Directors and Corporate Auditors

In appointing a candidate for the position of director or corporate auditor, the Board of Directors shall appoint persons capable of contributing to sustainable and global development through the cultivation of competitive businesses and also capable of making contributions to maximizing the Company's corporate value in the medium- and long-term, in accordance with the Company's management policy.

(Operation of the Board of Directors)
Article 18 (1) A Board of Directors meeting shall be an opportunity for unrestricted and constructive discussion and exchange of opinions, including raising of problems by outside directors.
  1. 2.The Board of Directors shall promote vital deliberations while securing the following handling of meetings:
    1. (1)ensuring that materials for a Board of Directors meeting are in principle distributed before the meeting;
    2. (2)providing materials other than those for a Board of Directors meeting at a meeting of the Governance Committee;
    3. (3)determining the annual schedule of Board of Directors meetings and matters anticipated to be deliberated on;
    4. (4)setting the number of items to be deliberated on and the frequency of Board of Directors meetings in an appropriate manner; and
    5. (5)securing sufficient deliberation time.
(Evaluating the Effectiveness of the Board of Directors)
Article 19 (1) The Board of Directors shall promote improvements in its function through the analysis and evaluation of the effectiveness of the Board of Directors as a whole.
  1. 2.The Board of Directors shall engage in the analysis and evaluation of the effectiveness of the Board of Directors as a whole every year in reference to each director's self-evaluation, etc. and disclose an overview of the results thereof.
(Independent Outside Directors)
Article 20 (1) The Company shall in principle elect two or more independent outside directors assigned roles and responsibilities that will contribute to the Company's sustainable growth and improve medium- and long-term corporate value.
  1. 2.The Board of Directors shall strive to select persons capable of contributing to candid, active, and constructive discussion at the Board of Directors meetings as candidates for the position of independent outside directors.
  2. 3.The Company shall adopt independence standards that focus on ensuring the substantial independence of independent outside directors in light of the independence standards set by the Tokyo Stock Exchange.
  3. 4.The independent outside directors shall be expected to fulfill the following roles and duties:
    1. (1)giving advice on management policies and management improvements based on their own knowledge to further the goals of promoting the Company's sustainable growth and improving medium- and long-term corporate value;
    2. (2)supervising management through important decision-making at the Board of Directors meetings;
    3. (3)supervising conflicts of interest between the Company and directors, fellow employees (employees treated as executive officers), major shareholders, etc.; and
    4. (4) reflecting the opinions of stakeholders, including minor shareholders, at the Board of Directors meetings in a position independent of directors, fellow employees (employees treated as executive officers), and major shareholders.

Section 2 Corporate Auditors and Board of Corporate Auditors

(Duties of Corporate Auditors and Board of Corporate Auditors)
Article 21 (1) In fulfilling roles and duties, such as audits of the directors' execution of duties, the election and dismissal of accounting auditors, and the exercise of authority for audit fees, the corporate auditors and the Board of Corporate Auditors shall make appropriate determinations from an independent and objective perspective in light of their responsibilities to shareholders.
  1. 2.The corporate auditors and the Board of Corporate Auditors shall actively and vigorously exercise their authority beyond operational audits and accounting audits and appropriately express their opinions to the directors at the Board of Directors meetings.
  2. 3.The Board of Corporate Auditors shall enhance its effectiveness by combining the characteristics of the outside corporate auditors and full-time corporate auditors in an organic manner so that both can sufficiently fulfill their own roles and duties.
  3. 4.The corporate auditors or the Board of Corporate Auditors shall secure joint efforts with the outside directors to strengthen the outside directors' ability to gather information.

Section 3 Governance Committee

(Governance Committee)
Article 22 (1) The Company shall establish a Governance Committee consisting of the independent outside directors as a subordinate organization of the Board of Directors for the purpose of exchanging information and sharing recognition, etc. among the independent directors, holding meetings of the Governance Committee, as needed. The corporate auditors may also attend meetings of said Committee, as needed.
  1. 2.The members of the Governance Committee shall solicit explanations concerning matters related to the Company's business and governance, etc. from directors, fellow employees (employees treated as executive officers), business division chiefs, division chiefs of the business support departments, etc. and freely discuss on those matters.
  2. 3.The independent outside directors shall promote joint efforts with the directors and the corporate auditors or the Board of Corporate Auditors through the actions of the Governance Committee.
  3. 4.The Company shall devise methods for ensuring the accurate provision of necessary information through operation of the Governance Committee.
  4. 5.In electing candidates for the positions of directors and corporate auditors at a Board of Directors meeting, the Company shall prepare a personnel proposal in light of Article 16, paragraph (2) and Article 17 and obtain the approval by resolution of the Board of Directors after receiving advice from the independent outside directors at a meeting of the Governance Committee; provided, however, that for candidates for the position of corporate auditors, the Company shall also obtain the consent of the Board of Corporate Auditors.
  5. 6. In determining compensation for a director at a Board of Directors meeting, the Company shall prepare compensation proposals in light of Article 23 and obtain the approval by resolution of the Board of Directors after receiving advice from the independent outside directors at a meeting of the Governance Committee.
  6. 7.The Governance Committee shall establish a secretariat, which will duly prepare and retain minutes.

Section 4 Compensation System

(Compensation for Directors, etc.)
Article 23 Compensation for directors, etc. shall reflect the Company's performance and potential risks and incorporate incentives to contribute to the sound entrepreneurship. Appropriate compensation ratios that reflect performance and ratios between cash compensation and share-based compensation shall also be set.

Section 5 Support System for Directors and Corporate Auditors and Provision of Information, etc.

(Support System and Provision of Information)
Article 24 (1) The Company shall establish a Governance Committee for the outside directors and allocate corporate auditor staff for the corporate auditors for the purpose of administrative support.
  1. 2.The directors and corporate auditors shall proactively solicit information required for the effective fulfillment of their roles and duties and ask the Company to provide additional information, as needed.
  2. 3.The directors, including outside directors, may ask the Company to provide additional information if they deem necessary for the Company's transparent, fair, prompt, and decisive decision-making. In addition, corporate auditors, including outside corporate auditors, shall appropriately carry out information acquisition efforts, including exercising their investigative authority under laws and regulations.
  3. 4.The directors and corporate auditors may solicit advice from outside experts at the Company's expense if they deem necessary.
  4. 5.The Board of Directors and the Board of Corporate Auditors shall determine whether the smooth and effective provision of information requested by the directors and corporate auditors has been achieved.
  5. 6.The Company shall secure joint efforts among the internal audit department, directors, and corporate auditors.
(Concurrent Service)
Article 25 The directors and corporate auditors, including outside directors and outside corporate auditors, shall divert the time and labor necessary to appropriately fulfill their roles and duties to the operations of the directors and the corporate auditors. If the director or the corporate auditor also serves as director of another listed company, the number of companies for which he/she serves as director shall in principle not exceed three, including the Company. The Company shall disclose the status of the concurrent service of a director or corporate auditor on an annual basis.
(Training for Directors and Corporate Auditors)
Article 26 (1) The directors and corporate auditors, including newly appointed directors and corporate auditors, shall deepen their understanding of roles and duties and seek to acquire all necessary knowledge and ensure the appropriate renewal thereof, etc.
  1. 2.To support such efforts, the Company shall provide training opportunities appropriate for the individual directors and corporate auditors and provide support for associated expenses.
  2. 3.The Board of Directors shall determine whether the Company is taking appropriate action as set forth in the preceding paragraph.
  3. 4.Directors and corporate auditors, including outside directors and outside corporate auditors, shall be provided opportunities to acquire or renew necessary knowledge concerning the Company's business, finance, organization, etc. at the time of or after taking office for the purpose of fulfilling required roles and duties (including legal responsibilities).
  4. 5.The Company shall establish and disclose a Basic Policy for Training of Directors and Corporate Auditors as follows:
Basic Policy for Training of Directors and Corporate Auditors

The Company shall establish a Basic Policy for Training of Directors and Corporate Auditors as follows to ensure that directors and corporate auditors can fulfill their responsibilities as commissioned by the shareholders and as required by law.

  1. 1.When the director or the corporate auditor takes office, the Company shall provide him/her with an opportunity to sufficiently grasp the roles and duties required and provide him/her with general training opportunities concerning corporate management in light of his or her management duties related to improving corporate value.
  2. 2.When the director or the corporate auditor, including the outside director and the outside corporate auditor, takes office, the Company shall provide him/her with opportunities to deepen his/her understanding of the Company group, including explanation of necessary knowledge concerning the business, finance, organization, etc. of the Company group and visits to its factories.
  3. 3.After directors and corporate auditors take office, the Company shall continue to provide training opportunities appropriate for the individual directors and corporate auditors, such as lectures by outside experts, and provide support for associated expenses.