Corporate Governance

Basic Stance

To achieve success in global competition and realize sustainable growth, we believe it is important to build corporate governance system that support this. To that end, we have built a structure which utilizes to the maximum the worldwide resources we possess and have worked to incorporate a wide range of opinions to strengthen our management foundation and technology base, establishing a governance structure capable of ensuring that we attain global-level earnings power. We have established the Corporate Governance Guidelines* and outlined the corporate governance structures that we have developed and reinforced to date, in advance of other companies.

Hybrid Governance Structures

We have enhanced the independence of the Board of Directors and strengthened its supervisory function by having outside directors make up the majority of the board, while ensuring an auditing function by the Audit & Supervisory Board, which is independent of the Board of Directors. We have also established a Nomination Committee and a Compensation Committee, both of which are chaired by outside directors, and in which outside directors make up the majority of each. Furthermore, we have also introduced a Corporate Officer system, and through the appropriate delegation of authority, we are working to establish a strong management execution system with quick decision-making and agile business execution. In this way, we have established an effective, hybrid type of governance system that utilizes the advantages of the Audit & Supervisory Board system and also incorporates elements of the Company with Three Committees.

Changes in Corporate Governance

Composition and Status of the Activities of the Nomination Committee and Compensation Committee

Director Compensation System

To further strengthen the link with improving corporate value and performance over the medium to long term, we have adopted the following compensation system for inside directors.
Compensation for outside directors consists of Fixed Basic Compensation and Non-performance-linked Compensation, while compensation for Audit & Supervisory Board Members consists solely of Fixed Basic Compensation in light of their primary role of auditing and supervising management.

Overview of the Director Compensation System

Composition of CEO Compensation

Message from the Compensation Committee Chairperson

Michio Sasaki
Outside Director
Former Compensation Committee Chairperson

From fiscal year 2025, we replaced annual performance linked compensation (cash compensation) for inside directors with short-term performance-linked compensation (cash compensation) and medium- to long-term performance-linked compensation (stock-based compensation). This created a more competitive compensation system by increasing the proportion of stock-based compensation and further strengthening the link to medium- to long-term improvements in corporate value and performance. Over the past year, we verified KPIs for performance evaluation centered on the financial aspects of short-term performance-linked compensation; evaluated missions established at the start of the year (non-financial performance evaluation); and verified interim progress of quantitative KPIs (three-year) for medium- to long-term performance-linked compensation. We also discussed revising the base amount of medium- to long-term performance-linked compensation , taking into account competitor benchmarking and compensation competitiveness, and the revision was approved by the Board of Directors.

Succession Plan

Our Nomination Committee Activity Guidelines define the required qualities and qualifications of the CEO and corporate directors (figure below), and the criteria that serve as starting points for considering the appointment or dismissal of the CEO. Regarding the development of CEO successors, we have formed a pool of candidates for the next generation of management personnel in accordance with the TEL Succession Plan, and we are working on the development of successor candidates under the supervision of the CEO, and in accordance with the Group’s management mission. Attended by the representative directors, members of the Nomination Committee, the executive officer in charge of human resources, and others, the Top Management Review Meeting functions in coordination with the Nomination Committee and the Board of Directors to advance the identification of specific successor candidates, their development plans, and the implementation of those plans. It is our policy that, while the CEO is involved in promoting human resources development at the levels that could yield successor candidates, the CEO is not involved in the actual process of nominating specific candidates from the pool of successor candidates.

Succession Plan Framework

Provision of Information to Outside Officers

To improve the effectiveness of the Board of Directors, we use a dedicated information-sharing tool to share important information, including materials for Board of Directors meetings and other relevant information as appropriate. We also provide outside officers with individual advance briefings on agenda items for Board of Directors meetings and, as necessary, opportunities to receive detailed explanations of individual matters, thereby ensuring appropriate information sharing.
We provide newly appointed outside officers with opportunities to receive briefings from relevant divisions on our management strategies and business operations (a total of 10 briefings were held in fiscal year 2026), helping them deepen their understanding of the Company.
In fiscal year 2026, we also visited the Fujii Office and Hosaka Office (Yamanashi) and the Tohoku Office (Iwate) of Tokyo Electron Technology Solutions together with outside officers. By touring the manufacturing sites and providing opportunities for dialogue with employees working on-site, we deepen their understanding of semiconductor production equipment and contribute to constructive discussions at Board of Directors meetings.

Site Visit to Tokyo Electron Technology Solutions
Fujii Office (Yamanashi)

Evaluation of the Effectiveness of the Board of Directors

Reflecting on the activities of the Board of Directors during fiscal 2026, we conducted a self-evaluation in light of the analysis by external experts based on questionnaires and individual interviews, following extensive discussion at meetings for the exchange of opinions between outside directors and outside Audit & Supervisory Board members and at meetings of the Board of Directors.

Fiscal year 2026 Main Topics for the Board of Directors and Off-site Meetings

Skills Matrix

We will realize medium- to long-term profit expansion and continuous corporate value enhancement through each corporate director and Audit & Supervisory Board member, who have demonstrated their skills in Global Business, Governance, Sustainability, and others listed below as determined by the Nomination Committee and the Board of Directors.

Definition of Expected Skills and Reasons for Nomination

Message from the Chairman of the Board of Directors

Kazushi Tahara
Corporate Director
Chairman of the Board of Directors

Tokyo Electron’s Vision is to be “A company filled with dreams and vitality that contributes to technological innovation in semiconductors.”
Since becoming Chairman of the Board of Directors in June 2025, I have been continuously working to establish and strengthen our corporate governance structure to realize this Vision. During this time, I have maintained a focus on ensuring fair and transparent management, and on anticipating and responding to various evolving global risks from a medium- to long-term perspective.
Evaluations of the effectiveness of the Board of Directors in fiscal year 2025 identified four challenges as necessary initiatives. They were: “Aligning the supervisory and executive sides on the role and desired state of the Board of Directors in line with the Company’s growth and future direction”; “Further deepening ongoing discussions on the Company’s governance structure, including its organizational design”; “Accelerating initiatives for executive succession planning”; and “Reviewing the Corporate Officer system comprehensively and considering the future direction of the executive structure.” In fiscal year 2026, we discussed these challenges in a variety of forums, including the Board of Directors, the Nomination Committee, off-site meetings, and open discussions with outside officers after meetings of the Board of Directors. While we have seen some progress toward improvement through these discussions, we have become aware of new issues as a result. In fiscal year 2027, based on our awareness of these issues, we will further deepen discussions on taking Tokyo Electron’s corporate governance to the next level and translate them into concrete action.
We will preserve our strength of an open, flat, and transparent corporate culture, even within the Board of Directors. Through open and agile discussions and the best possible decision-making, we will ensure that the Board of Directors operates effectively to meet the expectations of capital markets, drive sustainable growth, and enhance medium- to long-term corporate value.

Messages from Newly Appointed Executives

Hiroshi Ishida
Newly Appointed Representative Director

Tokyo Electron has grown by emphasizing technological capabilities and translating them into semiconductor production equipment. Based on the strong relationships of trust we have built with our customers over many years, we have conducted marketing activities and continuously pursued sophisticated, high-value-added technological innovation.
As long as the semiconductor market continues to grow, we will continue concentrating our business on semiconductors while placing even greater emphasis on areas that need even more complex technological innovation. Our aim is to contribute to the development of the industry while achieving ongoing enhancement of corporate value.
In addition, our human resources are our greatest asset. Going forward, we will focus more closely on securing and fostering outstanding talent while developing organizational structures that enable each and every employee to contribute more than ever to high value creation. By supporting employees’ development and growth, we will enhance their morale and ability to execute, further strengthen the foundations of trust with customers and increase our success rate in technological development.
With the increasingly complex nature of technological challenges that come with an expanding semiconductor market, we aim to strengthen both our technological capabilities and our human resources to deliver ongoing business growth and contribute to society.

Messages from Newly Appointed Executives

Shinichi Hayashi
Newly Appointed Corporate Director

Since joining Tokyo Electron Kyushu, I have spent over 20 years engaged in the development of coater/developer. Since becoming president, I have also continued to be involved in the development and production of cleaning systems and 3D integration systems. Although I have experienced countless challenges and failures, I have always remained focused on meeting the expectations of customers. 
Innovation emerges from combining a wide range of ideas, concerns, failures, and experiences. And we have developed an environment that fosters this kind of innovation. We now boast an extensive product lineup unmatched by other companies, an integrated development and production framework, an open corporate culture that provides opportunities to take on challenges, and the ability to adapt to customer needs and changing markets.  
Going forward, I will work with other members of the Board of Directors to support the company in various ways, including further strengthening ties across development and production as ONE TEL, maintaining and enhancing a climate of challenge within the company, and creating numerous differentiated technologies that take advantage of our strengths.  
In this way, I will contribute to technological innovation in semiconductors and help achieve sustainable growth and medium- to long-term corporate value enhancement.

Messages from Newly Appointed Executives

Jenifer Rogers
Newly appointed Outside Director

I am truly honored to have been appointed by the shareholders as an outside director of Tokyo Electron, a global company playing a critical role in the semiconductor production equipment industry.  
Semiconductors are an essential foundation for many industries, and their importance is expected to continue growing with the advancement of generative AI and technological innovation. In a market environment shaped by ongoing change and geopolitical developments, TEL’s global role is becoming increasingly significant, and efforts to support sustainable growth are more important than ever.  
Having worked in six countries over the course of my career, I have driven business from a global perspective while leading diverse teams. From this experience, I believe that maintaining competitiveness requires not only an accurate grasp of geopolitical and financial risks but also the ability to identify opportunities and implement change swiftly.  
Drawing on my experience on the global stage, my knowledge of the financial industry and my legal and regulatory compliance background, I hope to contribute to sustainable company growth and to help meet the expectations of shareholders and stakeholders.

Engagement with Capital Markets

Our management actively engages in IR (Investor Relations) and SR (Shareholder Relations) activities to contribute to our sustainable growth and increase corporate value over the medium- to long-term.
In terms of IR activities, the CEO and executives in charge present at quarterly earnings briefings, the Medium-term Management Plan briefings and IR Day to share our business strategies and growth story with stakeholders and institutional investors. We have a dedicated IR Department to promote deeper discussions with our investors, and we provide the opinions shared in these dialogues as feedback to management to help increase our corporate value. In fiscal year 2024, we established the IR branch in New York, which increased opportunities for face-to-face dialogue with investors in North America, and we continue to work on increasing awareness of our company and Japan’s semiconductor production equipment industry. Furthermore, the items of interest to investors in fiscal year 2026, which we determined through our investor dialogues, were, in addition to market trends and business performance overviews, leading-edge technology, competitiveness, and geopolitical risk.
As a part of our SR activities, company executives play a central role in constructive dialogue with our major investors and proxy advisory firms. In addition to explaining the Shareholders’ Meeting agenda in advance, we engage in repeated dialogue throughout the year on a wide range of topics, such as corporate governance and sustainability initiatives, which include the environment, human rights, and human capital. We continue to deepen mutual understanding while maintaining our efforts to improve disclosure.
Opinions gathered from dialogues with investors through our IR and SR activities are regularly reported to management and the Board of Directors.

Main Activities

Fiscal year 2026

Road show: IR activities presented directly to shareholders and investors

SEMICON West, SEMICON Japan, etc.

Audit & Supervisory Board Activities

Each Audit & Supervisory Board member audits the overall business execution of corporate directors in compliance with the audit standards established by the Audit & Supervisory Board, and in accordance with the audit policies and plans.

Status of Main Activities in Fiscal year 2026

Management meetings are held twice a year, in spring and fall, to share and instill management policies, business strategies, and medium-term management plans. Meetings are attended by general managers and above from Tokyo Electron, and executive officers and above from affiliated companies. Outside Audit & Supervisory Board members also attend meetings on a voluntary basis.

2 Outside Audit & Supervisory Board members participate once each half (twice a year).

Group Audit & Supervisory Board Member Liaison Meetings

Group Audit & Supervisory Board Member liaison meetings are held three times a year at our locations across Japan to strengthen cooperation between the Audit & Supervisory Board members of each Group company in Japan. At the meetings, we have shared our audit policies and plans, each company has reported the results of internal audits, and members have exchanged information on internal control evaluations (J-SOX), governance, compliance, and information security. In addition, most recently, members have toured Tokyo Electron Miyagi (December 2025) and Tokyo Electron’s TEL Digital Design Square in Sapporo (June 2026), where they held discussions with local employees.

Tour of TEL Digital Design Square

Message from the Chairperson of the Audit & Supervisory Board

Yutaka Nanasawa
Audit & Supervisory Board Member

Group Audit & Supervisory Board Member liaison meetings are held three times a year at our locations across Japan to strengthen cooperation between the Audit & Supervisory Board members of each Group company in Japan. At the meetings, we have shared our audit policies and plans, each company has reported the results of internal audits, and members have exchanged information on internal control evaluations (J-SOX), governance, compliance, and information security. In addition, most recently, members have toured Tokyo Electron Miyagi (December 2025) and Tokyo Electron’s TEL Digital Design Square in Sapporo (June 2026), where they held discussions with local employees.

Message from an Outside Audit & Supervisory Board Member

Ryota Miura
Outside Audit & Supervisory Board Member

Within the Audit & Supervisory Board, we employ a range of channels for gathering information from diverse sources and layers of management. They include regular reports from internal administration divisions, including finance and accounting, legal and compliance, intellectual property, and internal audit; exchange opinions with representative directors, auditing firms, and Audit & Supervisory Board members of Group companies; and exchange opinions with outside directors at off-site meetings. We have created an effective audit system through cooperation with full-time Audit & Supervisory Board members who have extensive knowledge of matters within the Company, and outside Audit & Supervisory Board members who have expertise drawing from their own careers. Last year as well, various incidents occurred. We hope to continue developing systems that prevent problems before they occur, while also building mechanisms that ensure rapid first responses and prevent expansion if problems do occur.