PAGETOKYO ELECTRON ANNUAL REPORT 201610CONTENTS

To Our Stakeholders

Business Overview

Message from the Chairman of the Board

Medium-term Management PlanInterview with the CEO

Corporate Governance

CSR Operations

Review of Operations
and Business Outlook

Sustainability

Financial Section

Corporate Data

Directors, Audit & Supervisory Board Members and Executive Officers

Message from the Chairman of the Board

Proactive Governance for Sustainable Growth
Achieving Both Effective Decision Making and Oversight
Corporate governance has been growing in signiﬁcance since 2001, when a major U.S.
scandal involving corporate accounting fraud brought the issue to the public consciousness. In Japan, the Tokyo Stock Exchange’s Corporate Governance Code came into effectlast year. Under this new set of governance principles, all listed companies must disclose
their overall approach, speciﬁc measures and future policy with regard to each of thecode’s recommendations on a “comply or explain” basis. Our related disclosure is detailedon Tokyo Electron’s website. I invite all our stakeholders to take a look.
At Tokyo Electron, we aim to maintain and enhance our competitiveness at the cutting-edge of the global electronics and semiconductor industries. We will consider multiple
perspectives, spanning short to long horizons, to signiﬁcantly increase shareholder value
and achieve continued growth. Effective corporate governance is essential to achieving
these goals. Governance must comprise management structures, including the Board of
Directors and executive systems, that facilitate optimal, timely discussions and decision
making in light of changing conditions in relevant markets and beyond. As I see it, thebasic systems for increasing corporate value as quickly as possible form the foundation ofcorporate governance. However, Tokyo Electron does not rely solely on such systems. Inaddition, we strive to maintain a corporate culture in which employees act with initiative
and ambition and all stakeholders are treated with honesty and fairness. Tokyo Electron
has fostered this culture since its founding. It is both a source of pride and a notable element of the Company’s corporate governance.
Tokyo Electron was among the earliest companies in Japan to establish highly independent nomination and compensation committees within its Board of Directors. We have alsoestablished a ﬁve-member Audit & Supervisory Board that is independent of the Board ofDirectors, creating a robust governance system. Furthermore, the Board of Directors comprises directors who serve concurrently as executive officers, directors who do not, and outside directors. Those who are concurrently executive officers bring expertise necessary tonavigate the particularities of the semiconductor and display industries. Their business execution is overseen and supported by the non-executive directors, who offer rich experiencein these industries. And Tokyo Electron’s outside directors possess rich management experience at other companies, not limited to the industries in which Tokyo Electron operates. IJJune 2016

believe that our board is unique, reﬂecting the increased emphasis on diversity in recentyears, and its composition enables strong corporate governance.
As chairman of the board, I will continue do my utmost to make the Board ofDirectors even more effective, striving to maintain and strengthen optimal governanceTetsuo Tsuneishi

that facilitates timely, appropriate business execution and oversight while emphasizing

Chairman of the Board

vigorous discussion and swift decision making.

Sustainability