Basic Views on Corporate GovernanceThis is an English translation of Basic Views on Corporate Governance including Disclosure Based on the Principlesof the Corporate Governance Code (Excerpt from the Corporate Governance Report filed with the Tokyo Stock
Exchange on June 28, 2024).

Last Update: June 28, 2024
TDK Corporation
Representative Director
President & CEO
Noboru Saito
Contact: IR&SR Group+81-3-6778-1068
Securities Code: 6762
https://www.tdk.com/en/index.html
The status of the corporate governance of TDK Corporation (“TDK”) is as mentioned below.

I Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other
Basic Information
1. Basic Views [Update]
The basic views to achieve sustainable corporate growth and increase of corporate value over mediumto long-term of the corporate group of TDK (the “TDK Group”) are as follows:(1) Based on the founding spirit “Contribute to culture and industry through creativity” as the
Corporate Motto of TDK, which was established in 1935 as an entrepreneurial venture to industrializea magnetic material called ferrite invented at Tokyo Institute of Technology, TDK unremittingly
pursues originality and increases corporate value through supplies of new value(products and services)
created through the promotion of innovation.
(2) TDK strives to build satisfaction, trust, and support among all stakeholders, including shareholders,customers, suppliers, employees and communities, among others, continues to be helpful to the society
by contributing to the resolution of social issues, and contributes to the development of a moresustainable society.
(3) TDK clearly declares as the “TDK Charter of Corporate Behavior” that TDK will continue torespect human rights; comply with relevant laws, regulations, and international rules; and carry out its
social responsibility with a strong sense of ethics, domestically and overseas. All Directors, Audit &Supervisory Board Members, Corporate Officers and employees constituting the TDK Group seek to1behave in strict compliance with the “Corporate Standards of Business Conduct” prescribed by the“TDK Code of Conduct”.
(4) TDK aims to achieve its management targets and further improve corporate value through thecreation of products by adhering to the Corporate Motto. At the same time, TDK strives to foster asound corporate culture and sincerely conducts business activities, always aware of its place as amember of society.
(5) TDK will be accountable to stakeholders through proactive, comprehensive, accurate, timely,
impartial, and consistent disclosure of information.
(6) Board members consisting of Directors and Audit & Supervisory Board Members and theexecutive side such as Corporate Officers, based on their respective responsibilities, endeavor toward
the common purpose of achieving sustainable corporate growth and increasing the medium- to longterm corporate value of the TDK Group. The philosophy and culture shared by the Board of Directors
to achieve this purpose are as follows.
“TDK's Board Culture”①Board members and the executive side build and maintain a relationship of deep mutual trust and asound tension.
②Board members and the executive side achieve both the delegation of authority to encourage prompt
and autonomous decision-making and the transparency in business execution (Empowerment &Transparency).
③Based on the premise that discussions at the Board of Directors meetings should be essential
discussions that contribute to corporate value, Board members actively and diversely make remarks
and engage in discussions from each member’s standpoint and from a broad point of view,
regardless of whether they are inside or outside members or whether they are Directors or Audit &Supervisory Board Members.
④The executive side takes the opinions of the Board of Directors sincerely as an opportunity to
improve management and implements necessary measures. Directors and Audit & Supervisory
Board Members supervise and audit from an objective standpoint. Through these efforts, they aim
to further improve the TDK Group’s corporate value.
TDK has established “TDK Basic Policy on Corporate Governance” as its basic views and policy
regarding corporate governance of TDK, which is posted on the website of TDK.
■TDK Basic Policy on Corporate Governancehttps://www.tdk.com/en/ir/tdk_management_policy/governance/index.html[Reasons for Non-compliance with the Principles of the Corporate Governance Code]
TDK implements all principles in accordance with those established in the Corporate GovernanceCode.
2[Disclosure Based on the Principles of the Corporate Governance Code] [Update][Principle 1-4 Cross-Shareholdings]
TDK’s basic policy regarding cross-shareholdings is to consistently enhance corporate value of the
TDK Group through such shareholdings and TDK holds shares of other companies for the purpose ofeither (1) strategic shareholding for the development of its business or (2) maintenance andimprovement of business relationships.
As to cross-shareholdings, TDK verifies the rationality of continuous holding of such shares and thenumber of such shares, etc. stock by stock every year at the Board of Directors meetings, etc. basedon the purpose of such shareholding, situation of transactions, profitability relative to the cost of capital,
financial condition, etc., and if the necessity to hold shares of a particular stock has decreased, TDK
discusses and negotiates with the issuing company of the stock and promotes the reduction throughsale, etc. of such shares.
In exercising voting rights as to its cross-shareholdings, TDK determines to approve or disapprovewith full respect for the issuing company’s management policies, etc. and considering whether the
proposal is appropriate in light of the purpose of strategic shareholding for the development of
TDK’s business or maintenance and improvement of business relationships, whether the proposal cancontinuously increase the corporate value of TDK, the issuing company’s social responsibilities,
whether there is any act which may harm the trust of shareholders, etc.

Also, TDK conducts a

dialogue with the issuing company regarding the content of the proposal, etc. as appropriate.
[Principle 1-7 Related Party Transactions]
The TDK Group stipulates in the “TDK Code of Conduct” that directors, officers and employees of
the TDK Group should avoid any situations that may involve or even appear to involve conflicts
between their personal interests and the interests of the TDK Group, and in case that any such situation
may arise, each of them must provide prompt and full reports in writing to his or her supervisor or
manager. At the same time, Directors are prohibited from conducting any transactions for the benefitof him/herself or any third parties without an approval from TDK under the Regulations of the
Directors’ Business.
Directors and Corporate Officers are required to give prior notice to the Board of Directors regarding
their conflicts of interest transactions. Also, the Board of Directors reinforces monitoring by inspecting
transactions between TDK and Director, Audit & Supervisory Board Member or any of his/her relative
within the second degree through “Confirmation on Disclosure Information of Directors and Audit &Supervisory Board Members” once a year and attempting to assess actual conditions of othercompanies at which Director or Audit & Supervisory Board Member holds any concurrent position.
Further, the Audit & Supervisory Board regularly confirms conflicts of interest issues with Directors
and Corporate Officers.
3The TDK Group has no shareholders which fall under major shareholders, etc.
[Supplementary Principle 2-4-1 Setting and Disclosure of Policies and Goals for Ensuring Diversity]
The TDK Group comprises numerous affiliated companies with business operations around the globe.
TDK believes that diversity among our employees is the driving force towards success, and thatcreating an environment where they can showcase their abilities is crucial for innovative creativity
and corporate growth. With this in mind, TDK has established the “TDK Diversity & Inclusion Policy”
and is promoting the securing and utilization of diverse human resources.
Currently, the ratio of foreign employees in the TDK Group as a whole is approximately 90%. 50% of
TDK's Corporate Officers are foreign nationals, and TDK will continue this policy in the future.
TDK has opened its doors to a wide range of mid-career hires, with approximately 25% of all
employees being mid-career hires, and in recent years, mid-career hires have accounted forapproximately 46% of new hires.
The percentage of mid-career hires in management positions is approximately 27%.
On the other hand, the ratio of female managers at TDK is low, which TDK recognizes as one of the
major issues. In order to improve this situation, TDK has established a dedicated department with themission of promoting the advancement of women in 2020, and has set a target of 15% for the ratio of
women in management positions in FY2035, and has begun specific, long-term initiatives.
< The ratio of female managers at TDK >FY20202.3%
FY2021
3.2%
FY2022
3.8%
FY2035 Target 15%
These policies and initiatives are posted on TDK’s website.
■TDK Sustainability Website "Diversity & Inclusion”
https://www.tdk.com/en/sustainability2023/social/diversity-inclusion[Principle 2-6 Roles of Corporate Pension Funds as Asset Owners]
TDK manages corporate pension funds through TDK Pension Fund (the “Fund”).
TDK selects and allocates to the Fund human resources who have appropriate credentials for managing
corporate pension funds and contributes to a proper management system. Also, TDK has establisheda structure in which the Fund and labor union, etc. collaboratively control and supervise themanagement of corporate pension funds in order to manage conflicts of interest which may arise
between corporate pension beneficiaries and TDK appropriately.
The Fund establishes a policy asset mix and manages corporate pension funds from a medium- tolong-term perspective applying advice from management consultants, in order to secure earnings over4the long term for ensuring that pension benefits are paid to the beneficiaries into the future.
The Fund conducts comprehensive evaluations of the asset managers, including not only quantitativeevaluation of their performance, etc. but also qualitative evaluation of their investment policy,
operational process, compliance, etc., through quarterly regular management reporting meetings.
[Principle 3-1 Full Disclosure](1) Company objectives (e.g., business principles), business strategies and business plans
TDK was established in 1935 as an entrepreneurial venture to industrialize a magnetic material called
ferrite invented at Tokyo Institute of Technology. Based on TDK’s founding spirit “Contribute toculture and industry through creativity” as its Corporate Motto, TDK unremittingly pursues originality
and increases corporate value through supplies of new value (products and services) created throughthe promotion of innovation.
TDK strives to build satisfaction, trust, and support among all stakeholders, including shareholders,Customers, suppliers, employees and communities, among others, continues to be helpful to thesociety by contributing to the resolution of social issues, and contributes to the development of a moresustainable society.
TDK has formulated its medium- and long-term management strategy and a three-year, medium-term
management plan based on the above-mentioned management policy.
The details are posted on the website of TDK.
■TDK’s Corporate Motto
https://www.tdk.com/en/about_tdk/corporate_motto/index.html■TDK’s Management Policy (Including Medium- and Long-Term Management Strategy and ThreeYear, Medium-Term Management Plan)
https://www.tdk.com/en/ir/tdk_management_policy/index.html(2) Basic views and guidelines on corporate governance based on each of the principles of the Code
TDK has established “TDK Basic Policy on Corporate Governance” as its basic views and policy
regarding corporate governance of TDK, which is posted on the website of TDK.
■TDK Basic Policy on Corporate Governancehttps://www.tdk.com/en/ir/tdk_management_policy/governance/index.html(3) Board policies and procedures in determining the remuneration of the senior management anddirectors“Policies in determining the remuneration of Directors and Corporate Officers”
TDK designed its remuneration system for the purpose of promoting as much as possible behavior on
5the part of Directors and Corporate Officers geared towards enhancing corporate results and stock
value and constantly increasing the corporate value of the overall TDK Group by constantly pursuing
the formulation of a competitive remuneration system to secure diverse and excellent human resourcesthat focuses on linkage with short-term as well as medium- to long-term results.
The remuneration of Directors and Corporate Officers is comprised of (i) basic remuneration, (ii)results-linked bonus as a short-term performance linkage system and (iii) stock-linked compensation(RSU and PSU) as a medium- to long-term performance linkage system.
Results-linked bonus is designed to fluctuate in accordance with the consolidated operating results ina single year and the degree of attainment against target values in the business of which each Directoror Corporate Officer is in charge. As to a part of stock-linked compensation (PSU), TDK uses someconsolidated performance indicators from the Medium-Term Plan, and adopts a system where theallocation ratio to be delivered fluctuates based on the degree of achievement of the targets, for the
purpose of further increasing the linkage between remuneration for Directors and Corporate Officers
and TDK’s medium- to long-term performance and corporate value.
The guideline for the ratio of remuneration by type is as provided below.
Basic Remuneration: Results-Linked Bonus: Stock-Linked Compensation
1: approximately 0.6-1.0: approximately 0.8-1.6 (assuming 100% achievement of performance targets
etc.)“Procedures in determining the remuneration of Directors and Corporate Officers”
TDK has in place a Compensation Advisory Committee acting as an advisory body to the Board of
Directors, which is chaired by an Independent Outside Director and of which a majority of themembers are composed of Independent Outside Directors. The Committee examines the remuneration
system and the level of remuneration pertaining to Directors and Corporate Officers of TDK, submits
a report to the Board of Directors, and thereby contributes to the securement of transparency of the
remuneration decision-making process and appropriateness of individual remunerations in light ofcorporate business performance, individual performance and general industry standards, among otherfactors.
The remuneration of Directors and Corporate Officers of TDK is discussed by the Compensation
Advisory Committee and then resolved by the Board of Directors.
The details are posted on the website of TDK.
■Policies and Procedures in Determining the Remuneration of Directors and Corporate Officers of
TDK
https://www.tdk.com/en/ir/tdk_management_policy/governance/remuneration/index.html(4) Board policies and procedures in the appointment/dismissal of the senior management and thenomination of director and audit & supervisory board member candidates
6

TDK has in place a Nomination Advisory Committee as an advisory body to the Board of Directors
which is chaired by an Independent Outside Director and of which a majority of the members arecomposed of Independent Outside Directors.
This Nomination Advisory Committee discusses the conditions expected with regard to nominations
for the posts of Director, Audit & Supervisory Board Member and Corporate Officer and makes
nominations. In this way, it helps ensure the appropriateness of the elections of Directors, Audit &Supervisory Board Members and Corporate Officers, and the transparency of the decision-making
process.
The independence of Outside Directors and Outside Audit & Supervisory Board Members isdetermined in accordance with the “Items to be verified regarding independence” established by TDK.
The Nomination Advisory Committee deliberates on the appropriateness of the policy, etc. fornomination of Directors and Corporate Officers on an annual basis and determines on the eligibilityof Directors and Corporate Officers when they are newly appointed or reappointed.

Also, thestandards and procedures for dismissal of Directors and Corporate Officers during their term of office
are provided in the Regulations of the Directors’ Business and the Regulations of the Corporate
Officers’ Business.
(5) Explanations with respect to the individual appointments/dismissals of the senior management andthe nominations of director and audit & supervisory board member candidates based on (4)As to the explanations with respect to the individual appointments of Directors and Audit &Supervisory Board Members, please see the Notice of Convocation of Shareholders Meeting postedon the website of TDK.
■Notice of Convocation of the 128th Ordinary General Meeting of Shareholders
https://www.tdk.com/en/ir/ir_events/general/index.html[Supplementary Principle 3-1-3 Disclosure of Initiatives on Sustainability](1) Initiatives on sustainability
TDK's sustainability initiatives are comprehensively disclosed on its website.
■TDK Sustainability Website
https://www.tdk.com/en/sustainability/index.html(2) Investment in human capital and intellectual property
In its Integrated Report, TDK discloses comprehensive information on its management strategies andissues based on the corporate value creation cycle, and explains its investments, etc. in human capitaland intellectual property.
■TDK Integrated Reporthttps://www.tdk.com/en/ir/ir_library/annual/index.html
7TDK disclose our intellectual property strategy and others on our company website.
■TDK Intellectual Property
https://www.tdk.com/en/about_tdk/intellectual_property/index.html(3) Initiatives on climate change
TDK discloses the status of its climate change initiatives on its website in accordance with theframework of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.
■Initiatives on climate change
https://www.tdk.com/en/sustainability2023/environmental_responsibility/climate-action[Supplementary Principle 4-1-1 Roles and Responsibilities of the Board (1) (Scope and Content of the
Matters Delegated to the Management]
TDK stipulates matters to be resolved or reported at the Meeting of the Board of Directors in its
Regulations of the Board of Directors. Such matters include management policies, business plans, andimportant corporate acquisitions. Particular delegations of business execution authorities are stipulated
in the Job Authority Regulations and the scope of the matters delegated is clarified thereby.
While matters required to be resolved at the Meeting of the Board of Directors under applicable laws
and regulations or the Articles of Incorporation and decisions on important business execution shallbe resolved at the Meeting of the Board of Directors, certain matters are delegated to the management(Corporate Officers) under the Job Authority Regulations to accelerate decision-making according tochanges in the business environment.
[Principle 4-8 Effective Use of Independent Outside Directors]
TDK’s basic policy is to elect Independent Outside Directors which account for half or more of the
Directors, and at present, four out of seven Directors are Independent Outside Directors.
Independent Outside Directors advise on TDK’s business in general from an independent standpoint
based on their abundance of experience and broad perspective, and play a role to enhance the functionof management decision-making and supervision.
Also, an Independent Outside Director serves as chair of the Board of Directors as part of TDK’s
efforts to enhance corporate governance.
Further, TDK has in place the Nomination Advisory Committee, the Compensation Advisory
Committee and the Corporate governance committee, as advisory bodies to the Board of Directors toenhance independence, objectivity and accountability of the function of the Board of Directors
regarding nomination and compensation of Directors and Corporate Officers. In addition, it is TDK’s
policy that each Committee is chaired by an Independent Outside Director and that more than half ofthe members of each Committee are composed of Independent Outside Directors. The Corporate
Governance Committee consists of 4 independent outside directors and 2 internal directors, along with8

1 executive officers.
[Principle 4-9 Independence Standards and Qualification for Independent Outside Directors]
In order to secure the independence of Outside Directors and Outside Audit & Supervisory Board
Members TDK invites, TDK has established the “Items to be verified regarding independence” of
TDK with reference to such criteria as Rule 436-2 of the Securities Listing Regulation regarding
securing Independent Directors/Audit & Supervisory Board Members and Rule III. 5. (3)-2 of the
Guidelines Concerning Listed Company Compliance, both of which are stipulated by Tokyo Stock
Exchange, Inc. The outline of these items is as follows.
■Items to be verified regarding independence(1) In cases where the relevant Outside Director/Audit & Supervisory Board Member is a person
concerned with the TDK Group
An Outside Director/Audit & Supervisory Board Member shall be judged not to be independent if
either of the following cases applies to them at present or has applied to them during the past ten
years.
(i) A Director of TDK or a subsidiary of TDK (except Outside Directors)(ii) An Audit & Supervisory Board Member of TDK or a subsidiary of TDK (except Outside Audit &Supervisory Board Members)(iii) A Corporate Officer of TDK or a subsidiary of TDK(iv) An employee of TDK or a subsidiary of TDK(2) In cases where the relevant Outside Director/Audit & Supervisory Board Member has a business
relationship with TDK
An Outside Director/Audit & Supervisory Board Member shall be judged not to be independent if
they are at present, or have been during the past three years, a party with a business relationship with
TDK as described in (i) below, or a person who executes business for such a party, or if (ii) below
applies to them at present or has applied to them during the past three years.
(i) Where it is recognized, objectively and reasonably, that such business relationship is necessary for,or has a substantial influence on, the continued operation of the TDK Group or the other party to suchbusiness relationship (where there is a high degree of dependence in the relationship, where therelationship is the source of 2% or more of consolidated net sales, or where the other party to therelationship receives money or other assets from the TDK Group other than remuneration for
Director/Audit & Supervisory Board Member)(ii) Where it is recognized within the TDK Group that the relevant Outside Director/Audit &Supervisory Board Member is involved in a business relationship with the other party to such business
relationship9(3) In cases where the relevant Outside Director/Audit & Supervisory Board Member is a consultant,an accounting professional or a law professional
An Outside Director/Audit & Supervisory Board Member shall be judged not to be independent if anyof the following cases applies to such person at present or has applied to such person during the past
three years.
(i)Where it is recognized, objectively and reasonably, that the relevant Outside Director/Audit &Supervisory Board Member (including candidates for such position; the same shall apply hereinafter)
cannot perform duties as an Independent Director/Audit & Supervisory Board Member because theyreceive money or other assets from the TDK Group other than remuneration for Director/Audit &Supervisory Board Member (where there is a high degree of dependence)(ii)Where it is recognized, objectively and reasonably, that the relevant Outside Director/Audit &Supervisory Board Member cannot perform duties as an Independent Director/Audit & Supervisory
Board Member because an organization to which such person belongs (hereinafter the “Relevant
Organization”) receives money or other assets from the TDK Group other than remuneration for
Director/Audit & Supervisory Board Member (where this income is equivalent to 2% or more of total
consolidated net sales)(iii)Where the TDK Group has a high degree of dependence on a professional or a Relevant
Organization, such as a case where services, etc., rendered by such parties are essential to the corporate
management of the TDK Group or it would be difficult to find an alternative provider of the same
services, etc.
(iv)Where it is recognized within the TDK Group that the relevant Outside Director/Audit &Supervisory Board Member is involved in the services, etc., provided by the Relevant Organization(4) In the case of a close relative of the relevant Outside Director/Audit & Supervisory Board Member
An Outside Director/Audit & Supervisory Board Member shall be judged not to be independent if
either of the following cases applies to their close relative (meaning a relative within the second degreeof kinship (as defined under Japanese law)) at present or has applied to them during the past three
years.
(i)A person to whom (2) or (3) above applies (except persons without material significance)(ii)A person who executes business for TDK or a subsidiary of TDK (except persons without material
significance)
As to qualification of Outside Director/Audit & Supervisory Board Member, reasons for nomination
as a candidate for Outside Director/Audit & Supervisory Board Member are stipulated in the proposal
regarding the election of Directors/Audit & Supervisory Board Members in the Notice of Convocationof Ordinary General Meeting of Shareholders.
[Supplementary Principle 4-10-1 Nomination and Compensation Advisory Committees]
10

TDK has in place a Nomination Advisory Committee and a Compensation Advisory Committee acting
as advisory bodies to the Board of Directors, which are chaired by an Independent Outside Director
and of which a majority of the members are composed of Independent Outside Directors. Eachcommittee considers gender and other aspects of diversity and skills in its deliberations. In addition,
the Nomination Advisory Committee deliberates on succession planning and considers candidates,
and the status of such deliberations is shared with the Board of Directors.
TDK discloses its policies on the independence of the composition of committees, their authorities,
roles, activities, etc. in its Basic Policy on Corporate Governance, Annual Securities Report (Status of
Corporate Governance, etc.) and Integrated Report.
■TDK Basic Policy on Corporate Governancehttps://www.tdk.com/en/ir/tdk_management_policy/governance/index.html■Annual Securities Reporthttps://www.tdk.com/en/ir/ir_library/report/index.html■TDK Integrated Reporthttps://www.tdk.com/en/ir/ir_library/annual/index.html[Supplementary Principle 4-11-1 Preconditions for Board of Directors and Audit & Supervisory Board
Effectiveness (View on Balance, Diversity and Appropriate Board Size)]
TDK’s basic policy is to have a small number of Directors to expedite the management decisionmaking, TDK established “TDK Basic Policy on Corporate Governance”. The policy request to electIndependent Outside Directors which account for half or more of the Directors. The number of Directors

shall be an appropriate number no more than ten in accordance with the Articles of Incorporation andcurrently seven Directors are in office.
The number of Audit & Supervisory Board Members shall be no more than five in accordance with
the Articles of Incorporation and currently five Audit & Supervisory Board Members are in office.
As to the current Board composition, the total number of the Directors and Audit & Supervisory Board
Members is twelve, out of which seven are Outside Directors or Outside Audit & Supervisory Board
Members.
Directors are examined and nominated by the Nomination Advisory Committee based on the balanceamong knowledge, experience, skills, etc. as well as the diversity so that they can fulfill their roles andresponsibilities effectively.
Thus far, Outside Directors have been elected among human resources who have diverse experienceand expertise such as corporate managers, lawyers, etc. and Outside Audit & Supervisory Board
Members have been elected among human resources who have diverse experience and expertise suchas corporate managers, lawyers, accountants, etc.
TDK stipulates in the “TDK Basic Policy on Corporate Governance” that, with respect to the11composition of the Board of Directors, based on the belief that diversity is essential to innovation,
TDK should ensure both diversity in terms of gender, internationality, work experience, age, etc., andan appropriate size of the Board.
The skill matrix is disclosed in the Notice of Convocation of Shareholders Meeting.
■Notice of Convocation of the 128th Ordinary General Meeting of Shareholders
https://www.tdk.com/en/ir/ir_events/general/index.html■Securities Reports
https://www.tdk.com/en/ir/ir_library/report/index.html[Supplementary Principle 4-11-2 Preconditions for Board of Directors and Audit & Supervisory Board
Effectiveness (Disclosure regarding Concurrent Duties of Directors and Audit & Supervisory Board
Members)]
TDK stipulates in the "TDK Basic Policy on Corporate Governance" that each Director and Audit &Supervisory Board Member should limit the number of important concurrent positions of othercompanies to no more than three companies, excluding TDK.
TDK confirms positions of directors, audit & supervisory board members or the management held atother companies by Directors and Audit & Supervisory Board Members and approves them byresolution at the Meeting of the Board of Directors every term.
Further, positions held at other companies by Outside Directors and Outside Audit & Supervisory
Board Members are also confirmed by the Nomination Advisory Committee every term.
Important concurrent positions held at other companies by Directors and Audit & Supervisory Board
Members are disclosed in the Notice of Convocation of Shareholders Meeting and Annual Securities
Report.
■Notice of Convocation of the 128th Ordinary General Meeting of Shareholders
https://www.tdk.com/en/ir/ir_events/general/index.html■Securities Reports
https://www.tdk.com/en/ir/ir_library/report/index.html[Supplementary Principle 4-11-3 Preconditions for Board of Directors and Audit & Supervisory Board
Effectiveness (Analysis and Evaluation of Effectiveness and Disclosure of a Summary of their
Results)]
TDK conducts an evaluation of the effectiveness of the Board of Directors each year in order to verify
whether the functions expected of the Board of Directors are properly performed and enhance suchfunctions.
Also, TDK requests a third-party evaluation institution to evaluate the effectiveness of the Board of12

Directors periodically (about once every three years) in order to verify it from the neutral and objective
standpoint.
Given that a third-party evaluation organization conducted a survey in the fiscal year ended March
2022, in the Board of Directors evaluation for the fiscal year ended March 2024, the Corporate
Governance Committee (Chair: Shigenao Ishiguro, Chairman & Director who is not also a Corporate
Officer) conducted the initial evaluation from a neutral standpoint, and after discussions by the Boardof Directors, the Board of Directors conducted the final evaluation.
■Evaluation Process(1) The Corporate Governance Committee (composed of Directors, including Outside Directors, andCorporate Officer (General Manager of Corporate Strategy HQ)) reviewed and deliberated themethod and schedule for evaluating the effectiveness this time (September 2023). The contentsof the review and deliberation were also shared with the Board of Directors (October 2023 Boardof Directors meeting).
(2) The Corporate Governance Committee conducted an effectiveness evaluation questionnaire(anonymous form) for all seven Directors and all five Audit & Supervisory Board Members(November-December 2023).
[Questionnaire Items (Major Items)]① Role and function of the Board of Directors (questions and free answers)② Size and composition of the Board of Directors (questions and free answers)③ Operation of the Board of Directors (questions and free answers)④ Composition and role of the Nomination Advisory Committee (questions and free answers)⑤ Operation of the Nomination Advisory Committee (questions and free answers)⑥ Composition and role of the Compensation Advisory Committee (questions and freeanswers)⑦ Operation of the Compensation Advisory Committee (questions and free answers)⑧ Composition and role of the Corporate Governance Committee (questions and free answers)⑨ Operation of the Corporate Governance Committee (questions and free answers)⑩ Support system for Outside Directors (questions and free answers)⑪ Role of the Audit & Supervisory Board Members and expectations of the Audit &Supervisory Board Members (questions and free answers)⑫ Relationship with investors and shareholders (questions and free answers)⑬ Governance structure of TDK and effectiveness of the Board of Directors in general (freeanswers)⑭ Self-evaluation by Directors and Audit & Supervisory Board Members (free answers)*The survey is multifaceted, with detailed sub-items underneath the major items described above.
While certain question items are not changed in the effective evaluation questionnaire in order13

to enable continuous measurement each year, the other question items are reviewed each year
in order to enhance the quality of the evaluation. Also, many “free comment fields” are provided
in order to collect different and various opinions and suggestions without regard to thequestionnaire items.
(3) The Corporate Governance Committee compiled the results of the above questionnaire andidentified common problems and issues. The Corporate Governance Committee made an interim
report on the results to the Board of Directors and the Board of Directors deliberated the results(December 2023 Board of Directors meeting).
(4) The Chair of the Corporate Governance Committee conducted individual interviews (with all
Directors and all Audit & Supervisory Board Members), focusing on the key issues identified by
the above questionnaire (December 2023-January 2024).
(5) The Corporate Governance Committee compiled the opinions gathered from the questionnaire andinterviews in an anonymous form, reviewed and deliberated based on them, and compiled theminto a primary evaluation (Marth 2024).
Also, the results of the primary evaluation were reported to the Board of Directors and the Boardof Directors deliberated several times, taking the results into consideration, and finalized theevaluation (March and April 2024 Board of Directors meetings).
■Primary Evaluation by the Corporate Governance Committee
The results of the primary evaluation by the Corporate Governance Committee are as follows.
(1) Summary of Evaluation Results① Highly effective and evolving from year to year.
⚫

The penetration of board culture is leading to further revitalization in the Board of
Directors⚫

Delegation of authority to the executive side and ensuring transparency are progressing.

⚫

“Open Board”activities are enhancing engagement with employees.

⚫

Board members, regardless of their positions as internal or outside directors or Audit &Supervisory board members, are providing frank opinions from a broad perspective,
aiming for further advancement.

⚫

The Board of Directors is continuously working to spiral up governance through PDCA
measures to address issues identified in the Board evaluation.

⚫

The Board of Directors of TDK engages in high-level discussions while maintaining a
deep relationship of trust and healthy tension between the internal and external membersof the Board of Directors.

② The current institutional design is functioning effectively.
⚫

TDK’s institutional design (company with Audit & Supervisory Board) and its various
bodies (Board of Directors, Audit & Supervisory Board, Nomination Advisory Committee,
14Compensation Advisory Committee and Corporate Governance Committee) are
functioning effectively.
⚫

The size, composition, and qualifications of the various bodies (Board of Directors, Audit& Supervisory Board, Nomination Advisory Committee, Compensation Advisory
Committee and Corporate Governance Committee) are well balanced and appropriate.

⚫

The Independent Outside Director chairs the Board of Directors and contributes tofacilitating fair and active discussions from a neutral standpoint.

③ Active and substantive discussions are held at the Board of Directors meetings.
⚫

Based on the annual operational policy of the Board of Directors, discussions are being
focused.

⚫

Active participation in discussions is taking place without distinction between internal andoutside members or between Directors and Audit & Supervisory Board Members.

⚫

Discussions are held on medium- to long-term management plans, governance structure,and management issues, etc.

The content of these discussions contributes to thesustainable growth of the company and improvement of its corporate value.
⚫

The discussions of the Board of Directors are reflected in business plans and measures,and ultimately lead to improvement in the quality of management.

(2) Progress in addressing issues identified in the effectiveness evaluation of the previous fiscal year
The following issues reported in the previous fiscal year were addressed in the annual plan of theBoard of Directors, and efforts for improvement were recognized.
① Further evolution of board discussions
Based on the operational policy of the Board of Directors for the T128, discussions are being
focused. The Corporate Governance Committee has formulated the operational policy (keydiscussion items) for the T128 Board of Directors, aiming to focus the discussions on morecomprehensive and medium- to long-term themes. The board operations are conducted basedon this policy.
<Operational Policy for the T128 Board of Directors>
Basic policy for board operations:
Directors and Audit & Supervisory Board Members and the executive side
endeavor toward the common purpose of achieving sustainable corporate growthand increasing the medium- to long-term corporate value of the TDK Group. T128
represents the final year of the current medium-term management plan and the year for
formulating a new medium-term plan starting from T129. Therefore, the Board of Directors will
provide supervision and advice from various perspectives to ensure the formulation of a planthat is highly feasible and compelling to stakeholders.
15T128 Key discussion items:
1. Review of the long-term plan and discussion on the new medium-term management plan.
2. Discussion on strengthening stakeholder engagement.
3. Discussion on the next management structure.
Furthermore, based on the discussions on delegation of authority in the Corporate GovernanceCommittee, the revision of the Regulations on Decision-Making Authority (Board Approval
Criteria) was carried out in the July 2023 Board of Directors meeting to promote delegation of
authority to the executive side. Additionally, the executive side ensured effective discussions in
the Board of Directors by providing appropriate information sharing to board members,
including orientation sessions for new directors, site visits, holding board meetings outside theheadquarters, and inviting them to technology exhibitions and internal events.
②

Strengthening engagement with stakeholders:
In order to enhance the improvement of our group's corporate value and deepen stakeholders'
understanding of our growth potential and competitive advantage, the board of directors
provided supervision and advice from various perspectives towards the development of a
medium-term management plan that is highly feasible and appealing to stakeholders.
Specifically, starting from August 2023, multiple discussions were held in the board of directors
and other venues (off-site meetings) regarding our long-term vision and the medium-term
management plan derived from it through backcasting. Progress reports and deliberations on themedium-term management plan "Value Creation 2023" were received from the entire company
and each business division, leading to the decision on the new medium-term management plan
(T129 to T131) in the March 2024 board of directors meeting.
Furthermore, the Board of Directors conducted multiple discussions on branding and PR
strategies to promote enhanced communication with stakeholders by the executive side. The
executive side made efforts to strengthen information dissemination through the integrated
report and planned and held new IR events, achieving certain results. Additionally, the Board of
Directors initiated activities called "Open Board" to enhance engagement with employees. This
included holding board meetings in the Akita region with panel discussions involving local
employees, discussions between outside directors and employees in the Narita region, andmessages from directors to employees, aiming to facilitate interaction and information sharing
between the Board of Directors and employees.

③

Responding to Rapidly Changing Market Trends:
To enhance the ability to respond to market trends on a global scale, including marketing16strategies and geopolitical and geo-economic risks, the Board of Directors received reports on
global market trends in anticipation of formulating the new medium-term management plan.
Discussions on market changes were conducted in the reports from the major business divisions
in each board of directors meeting. Multiple discussions were also held on group risk
management, and external experts were invited to give lectures on geopolitical and geoeconomic risks, targeting board members and the executive management team.
■Final Evaluation by the Board of Directors(1) Results of the Effectiveness Evaluation (Conclusion)
In this evaluation, the Board of Directors considered the effectiveness of the Board of Directors tobe the “appropriate fulfillment of the roles and functions (management supervision, decisions onimportant matters, etc.) expected of the Board of Directors in realizing the company's sustainablegrowth” and conducted an evaluation in terms of whether there is a mechanism to guarantee this,whether appropriate deliberations and active and substantive discussions take place, and whether the
results of these deliberations and discussions lead to improved management.
Based on the primary evaluation by the Corporate Governance Committee, the Board of Directors,
as a result of conducting deliberations several times, confirmed that the effectiveness of the Board of
Directors and its Advisory Committees (Nomination Advisory Committee and Compensation
Advisory Committee) was sufficiently secured in terms of their size and composition, the content of
the agenda items and deliberations, the status of discussions, their reflection in management, etc.
In addition, the Board of Directors confirmed that it continues to enhance its effectiveness bymaking improvements based on the results of the Board of Directors evaluation in the previous fiscal
year.
(2) Future Issues
As a result of the effective evaluation of the Board of Directors this time, the following three items
are recognized as the main issues that the Board of Directors should address in the future:①

Decision-making for Achieving the Medium-Term Management Plan in the Board of Directors:
To monitor the execution of our medium-term management plan (T129 to T131) and support its
achievement, the board of directors needs to deepen discussions on important elements of the plan,such as "business portfolio strategy" and "risk management at the management level," and makenecessary decisions accordingly.
Specifically, in the "business portfolio strategy," continuous evaluation and optimization of thebusiness portfolio (with a focus on core businesses, creation of next-generation pillar businesses,
and addressing challenging businesses) are important. In terms of "risk management at the
management level," the Board of Directors has been discussing group risk management, and there
is a need to continue improving the risk heat map and engage in in-depth discussions from the17perspective of major risk response policies, identified risks, and necessary countermeasures.
② Strengthening Engagement Activities with Stakeholders:
To contribute to the improvement of corporate value through the Board of Directors, it isimportant to further strengthen stakeholder engagement activities. In the previous term, efforts
were focused on engagement activities between the Board of Directors and internal stakeholders(employees) through initiatives such as the "Open Board" activities. In the current term, while
continuing the "Open Board," the scope will be expanded to include external stakeholders(investors, shareholders, etc.) and communicate our pre-financial capital (sources of future cash
flow: human capital, organizational capabilities, technological capabilities, customer base, etc.)
and potential. Additionally, discussions on enhancing our PR and brand strength will be
conducted in the Board of Directors to promote stronger communication with stakeholders by the
executive side.
③ Pursuing an Optimal Governance Structure in the Medium-Term Management Plan Period:
In formulating our medium-term management plan (T129 to T131), we conducted planning basedon the backcasting from our long-term vision, "TDK Transformation ~ Acceleratingtransformation for a sustainable future." In order to further enhance effectiveness, the Board of
Directors itself needs to transform into an optimal form. This includes verifying the skill matrix,
formalizing the nomination process, and inviting directors with the necessary skills. Additionally,in pursuit of further improvement in governance functions, transitioning to a majority of
independent outside directors and seeking an optimal governance structure will be important.
Going forward, TDK will continue to improve the effectiveness of the Board of Directors in order toachieve its sustained growth and enhance its corporate value.
[Supplementary Principle 4-14-2 Training for Directors and Audit & Supervisory Board Members]
TDK properly provides Directors and Audit & Supervisory Board Members (including Outside
Directors and Outside Audit & Supervisory Board Members) with opportunities for training(acquisition of necessary knowledge, appropriate updates, etc.) in order to ensure that they canappropriately fulfill their expected roles and responsibilities. The contents of the training are as follows.
(1) TDK properly provides Directors and Audit & Supervisory Board Members with opportunities togain knowledge about TDK through visits to bases, factory tours, explanations about businessconditions, etc. Also, TDK arranges external training services, etc. to provide Directors and Audit &Supervisory Board Members with basic knowledge of laws and regulations, etc. related to their duties.
(2) TDK conducts a session to brief newly appointed Outside Directors and newly appointed Outside
Audit & Supervisory Board Members on TDK’s business, organization, governance, finances and the18content of its Medium-Term Plan upon their assuming office.
[Principle 5-1 Policy for Constructive Dialogue with Shareholders]
TDK’s policy is to make efforts to gain understanding regarding the financial conditions andmanagement strategy, etc. of the TDK Group through constructive dialogue with shareholders and to
take the following measures to achieve sustained growth and improve medium- to long-term corporate
value of the TDK Group by reflecting valuable input from shareholders to the management.
(1) Appointing a member of the management or a Director regarding dialogue with shareholders
Representative Director, President & CEO, Corporate Officer in charge of accounting and other senior
management members have constant dialogues with investors, including, among others, domestic andoverseas shareholders, and explain to them about management strategy of the TDK Group in principle,
and other Directors (including Outside Directors) and Audit & Supervisory Board Members also
respond to such dialogues to a reasonable extent.
(2) Measures to ensure positive coordination between internal departments
The department in charge of IR plays a central role in regularly exchanging information andcooperating among Corporate Officers in charge and other related persons of relevant departments.
(3) Measures to promote general investor meetings and other IR activities
In addition to regular quarterly financial results briefings, TDK holds medium- to long-term businessstrategy meetings when the Medium-Term Plan is updated and promotes understanding of investors.
TDK promotes disclosure of information as well by publishing a part of the materials on the website
of TDK.
(4) Measures to relay to the senior management and the Board of Directors
Situations of dialogues with shareholders and investors are relayed to the Board of Directors at eachquarterly financial closing, and feedback is provided to the management.
(5) Measures to control insider information when conducting such dialogue
TDK has established the Detailed Rules for Insider Trading Prevention as its internal rule and manage
insider information properly by fully enforcing the said Rules and conducting educational activities.
[Status of Dialogue with Shareholders, etc.](1) Main Respondents to Dialogue with Shareholders]
Representative Director, President & CEO, the Director in charge of accounting, and senior
management engage in ongoing dialogue with shareholders and other investors in Japan and overseas.
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In addition, the IR/SR Group, a department dedicated to investor and shareholder relations, takes thelead in conducting dialogues with numerous investors and shareholders.
(2) Overview of shareholders with whom dialogue has been held
With regard to the overview of shareholders, TDK conducts dialogues with shareholders and investorsof various investment styles, such as growth and value, mainly institutional investors with active
management in Japan and overseas.

In addition, TDK conducts dialogues with a wide range of

personnel, including fund managers, portfolio managers, sell-side and buy-side analysts, ESG
managers, and those in charge of exercising voting rights.
(3) Main themes of dialogue and shareholder interests
The main themes of dialogue and issues of interest to shareholders include management policy,
recognition of issues, financial strategies, progress in individual business strategies, progress in nonfinancial initiatives including ESG, and responses to geopolitical risks.

TDK is engaged in aconstructive and active dialogue about these issues.
(4) Status of feedback of shareholder opinions and concerns to the management and the Board of
Directors
The IR/SR group organizes the numerous opinions obtained and issues identified in dialogue withshareholders and investors, and reports quarterly to the Board of Directors, thereby strengthening
feedback to the company.
(5) Details of matters incorporated based on feedback, if any
TDK is enhancing disclosure of information to meet the disclosure needs of shareholders and investors.
Specifically, TDK is promoting the enhancement of information management of non-financial
activities so that TDK can appropriately communicate how non-financial activities contribute to theincrease of corporate value. At the 128th Ordinary General Meeting of Shareholders held on June 21,2024, a partial amendment proposal regarding the introduction of a retrospective stock-based
compensation system was approved. This revised system includes a comprehensive evaluation
mechanism that incorporates indicators related to the environment, society, and stock price. The
purpose of this amendment is to share the benefits and risks of stock price fluctuations withshareholders, as well as to enhance the motivation to contribute to medium-term performance
improvement and increase corporate value.
Details on the status of dialogue with shareholders is published in the Integrated Report.
■TDK Integrated Reporthttps://www.tdk.com/ja/ir/ir_library/annual/index.html[Implementation of Management Conscious of Cost of Capital and Stock Price]
In the medium-term management plan, TDK have set Return on Invested Capital (ROIC) as one of theoverall management objectives. We aim to achieve results that surpass the plan through the reliable20execution of growth strategies in key businesses, portfolio strategies including addressing challenges
in certain businesses, and strengthening pre-financial capital.
As of the end of March 2024, the target ROIC is 5.3% (with a Weighted Average Cost of Capital,
WACC, of 7%).
As of the end of March 2027, the target ROIC is 8% or higher.
Long-term vision, the target ROIC is 12% or higher.
In business portfolio management, TDK have set a minimum hurdle rate of 10% for return on invested
capital. TDK will concentrate management resources on businesses that exceed this rate or are
expected to have future growth. For "priority monitoring businesses" that fall below the hurdle rateand have concerns about future growth, TDK will conduct appropriate monitoring and implement
prompt measures for turnaround. Additionally, from the perspective of being the best owner, TDK willconsider the competitiveness and sustainability of businesses, even if they are profitable in terms ofoperating profit margin, and strengthen proactive portfolio management.
Through these initiatives, TDK aim to improve the return on invested capital for the entire company,
secure a constant investment capacity for allocating resources to growth areas, and enhance the balanceof the business portfolio by improving opportunities for optimal investment in growth businesses.
The above information is disclosed in the Integrated Report.
■TDK Integrated Reporthttps://www.tdk.com/ja/ir/ir_library/annual/index.html

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