Strengthening the Corporate Governance Structures --Establishment of New Committees and Expansion of the Whistle-blowing System

December 21, 2015

NGK INSULATORS, LTD. (President Taku Oshima; Headquarters: Nagoya, Japan) today announced that it has decided to further strengthen and enhance its corporate governance structures by establishing new committees to bolster the supervision and monitoring functions of the Board of Directors, and by expanding the whistle-blowing system.

1. Establishment of new committees

To strengthen its corporate governance structures, NGK has established the Business Ethics Committee, which will monitor for any fraudulent practices that could have a material impact on management, and the Nomination and Compensation Advisory Committee, which will give opinions on the appointment of personnel who will serve as corporate officers, as well as their compensation. Each of the committees will comprise a majority of external directors, and will report directly to the Board of Directors.

In addition, to further enhance the supervision and monitoring functions of the Board of Directors by external directors, NGK has established the Corporate Council, in which the external directors, the representative directors, and other corporate officers exchange opinions freely; the Conference of Outside Directors and Outside Audit & Supervisory Board Members, at which external directors exclusively exchange opinions about management issues of NGK; and the Hearing convened by Audit & Supervisory Board Members and Outside Directors, which provides information to its members from internal sources regarding the business environment and issues surrounding NGK.

2. Expansion of the Whistle-blowing System

NGK has a whistle-blowing system, the Helpline, for providing consultation or receiving reports from employees relating to any improper behavior that infringes on laws, internal rules, or corporate ethics. In addition, NGK has now established a new whistle-blowing system, the Hotline, for handling matters that could have a material impact on management. The Hotline is operated by outside lawyers who receive internal reports from employees and report them to the Business Ethics Committee. Through these two whistleblowing systems, NGK will make its corporate governance even more effective.

As a member of the global business community, NGK is making best efforts to ensure the legality of its business activities and the transparency of its management. It will build and maintain an organizational scheme capable of promptly responding to changes in the business environment, and fair management systems that emphasize shareholders. To this end, NGK will continue to comprehensively realize better corporate governance structures.

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