Corporate Governance
The TEL Group is strengthening its corporate governance as well as improving andreinforcing internal control systems and risk management structures with the aim of
maximizing its corporate value.
Corporate Governance Policies
The TEL Group is striving to strengthen its corporate

Internal Control and Risk Management
Systems

governance through a variety of measures in order to

To strengthen the internal control and risk management

maximize corporate value and enhance shareholder

systems of the TEL Group more effectively, Tokyo Electron issatisfaction. We are endeavoring to establish and operate

implementing practical measures in line with the basic policy

optimal and highly effective structures of governance that arefor internal control systems in the Tokyo Electron Group

based on our three basic principles for reinforcing corporate

decided by the Board of Directors. Tokyo Electron has also

governance.

appointed a Chief Internal Control Director and a Compliance

Basic Principles of Corporate Governance
1. Ensure the transparency and soundness of business operations
2. Facilitate quick decision-making and the efficient executionof business operations
3. Disclose information in a timely and suitable manner& Internal Control Executive Officer. Under them the Company
has established the Risk Management & Internal Control
Department, which evaluates and analyzes risks that could
affect the TEL Group and works to reduce risks by promoting
the necessary measures.

Corporate Governance Framework

In addition, the Global Audit Center was established as an

Tokyo Electron uses the statutory auditor system based on theinternal audit organization that overseas the internal auditing

Company Law, and has also established its own Nomination

activities of the entire group’s domestic and overseas bases,

Committee1 and Compensation Committee2 inside theas well as their compliance and systems. When necessary,

Board of Directors in order to increase the transparency

the Global Audit Center also provides guidance to operating

and objectivity of management. Tokyo Electron has also

divisions.

adopted the executive officer system to separate the businessexecution function from the Board of Directors. In addition,
the Company has been disclosing the individual remunerations

Framework for Corporate Governance, Internal
Control System and Risk Management Systemof representative directors since 1999 in recognition of theAnnual Shareholders’ Meeting

importance of managerial transparency for shareholders.
1 Nomination Committee: nominates candidates for directorships and CEO
and submits these nominations to the Board of Directors
2 Compensation Committee: prepares a draft remuneration plan for the
Chairman and the President and CEO and submits the draft to the Boardof Directors

Board ofDirectors

Board of Directors

Compensation
Committee
Nomination
Committee
Chief Business
Ethics Director
Chief Internal
Control Director

Statutory Independent
Auditors
Auditors

The Board of Directors consists of 12 members, two of whomare external directors. In order to ensure that the Company
can respond quickly to changing business conditions, and to
office for directors is set at one year. During fiscal 2010, theBoard of Directors met on 12 Occasions.

Representative
Directors

Request for
improvement/Report

Request for
improvement

more clearly define management accountability, the term ofCompliance & Internal
Control Executive Officer

The Company has four statutory auditors, two of whom
are outside auditors. The statutory auditors not only attend
meetings of the Board of Directors, the Management Meetingand other important business meetings, but also conduct
operations audits and accounting audits, and evaluate risk
management, in addition to auditing the performance of
duties by directors. During fiscal 2010, the board of statutory
auditors met seven times.

12

TOKYO ELECTRON

Environmental and Social Report 2010

Committees• Ethics Committee• Information Security
Committee• Export Trade Control
Committee
Risk Management &Internal Control Dept.
Request for
improvement/
ReportReportAudit and
improvement
reports

Executive
Officers

ReportBoard of Statutory Auditors

Confirm the progress ofimprovements andgive instructions

Request for
improvement

Internal
Audit Dept.
(GlobalAudit Center)

Audit

Monitoring

Administrative Depts.

Check andbalanceBusiness Depts.