TOKYO ELECTRON ANNUAL REPORT 2020

PAGE8CONTENTS

To Our Stakeholders

Business Overview
and Financial Highlights

Interview with the CEO

Review of Operations
and Business Outlook

Message from the Chairman of the Board

Message from the Chairman of the Board

Board Effectiveness and Governance Quality Formthe Foundation of Shareholder Value Enhancement
Five years have passed since the introduction of Japan’s
Corporate Governance Code, and companies are now focusing
their governance on further enhancing board effectiveness inorder to increase shareholder value on an ongoing basis. Using
the Audit & Supervisory Board System, Tokyo Electron seeks toratio of outside directors on the Board. In fiscal 2021,
we continue to benefit from the advice of our incumbent
outside directors: Mr. Charles Ditmars Lake II, an American
national and executive at an American life insurance company; Mr. Michio Sasaki, who served for many years as pres-implement aggressive governance based on fast, bold decision
making in order to attain world-class profitability and capitalefficiency while also reinforcing careful, prudent governance toensure management transparency and fairness.
In fiscal 2020, we continued to create numerous opportunities for our corporate directors and Audit & Supervisory
Board members to discuss a wide range of important matters beyond the Board of Directors meeting agenda items.
Some discussions focused on initiatives going forward,
based on a shared awareness that, in addition to reinforcing corporate governance, we must build a world-class,integrated governance, risk management and compliance(GRC) system covering the entire Group, including overseas
sites. Considering the medium term, we shared information
about progress toward the targets of the financial model
under the medium-term management plan, as well as theremaining hurdles. From a long-term perspective, we deliberated business areas where we can leverage Tokyo
Electron’s strengths and the Company’s future direction.
We also actively discussed CSR initiatives related to ESG
issues and the Sustainable Development Goals, considering
the growing importance of non-financial value. Going­forward, we will continue discussions aimed at growth overthe medium to long term in order to enhance the effectiveness of the Board of Directors in its roles of establishingmanagement strategy and vision and making major operational decisions based on strategic direction.
To enhance management transparency and fairness, infiscal 2020 an outside director was appointed to chair theCompensation Committee, further enhancing the committee’s independence. Looking at the composition of theBoard of Directors, we made progress in terms of theBoard’s gender diversity and discussed the appropriate

ident of Keyence, a corporation well known for being highly
profitable; and Ms. Makiko Eda, Chief Representative Officer
at World Economic Forum Japan. We have also welcomed
two new outside Audit & Supervisory Board members,
Mr. Masataka Hama, who brings wide-ranging insight into
global capital markets, and Mr. Ryota Miura, who boasts
a wealth of experience as an attorney at law, primarily in thearea of corporate law. The addition of these two members
has further enhanced the Company’s audit functions. Our
sixteen corporate directors and Audit & Supervisory Boardmembers (including six outside members) engage in brisk,
open and constructive discussion based on their diverse
insights and experience with a strong awareness of Tokyo
Electron’s corporate culture, further enhancing the­effectiveness of the Board of Directors.
The importance of data and networks is growing, driven
by the adoption of IoT, AI and 5G, as well as the growing
use of remote work arrangements and teleconferencing asa result of the spread of COVID-19. These changes in­lifestyles and business rely on semiconductors and FPDs,
which are in turn taking on ever greater roles. Accordingly,
the production equipment market, in which Tokyo Electron
operates, is expected to continue expanding. As chairman,
I will continue doing my utmost to contribute to sustainable growth and the medium- to long-term enhancementof shareholder value in this growing market.

Tetsuo Tsuneishi
Corporate Director
Chairman of the Board

Corporate GovernanceCorporate Governance

Financial Section
Investor Information

Directors, Audit & Supervisory Board Members and Executive Officers