Management Report
Corporate GovernanceC o r p o r a t e

The TEL Group is strengthening its corporate governance as well as
improving and reinforcing its internal control system and risk
management system with the aim of maximizing its corporate value.

G o v e r n a n c e

The TEL Group is striving to strengthen its corporate
governance through a variety of measures in order to maximize
corporate value and enhance shareholder satisfaction. We areendeavoring to establish and operate optimal and highly
effective structures of governance that are based on our threebasic principles for reinforcing corporate governance.

Corporate Governance Framework
Tokyo Electron uses the statutory auditor system based on theCompanies Act of Japan, and has established its own

P o l i c i e s

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■ Diagram of the Corporate Governance Framework,
Internal Control System and Risk Management System
Annual Shareholders’ Meeting

Nomination Committee 1 and Compensation Committee 2 in order
to increase the transparency and objectivity of management.
Tokyo Electron has also adopted the executive officer system tostreamline the decision-making process. In addition, Tokyo
Electron has been disclosing the individual remunerations ofCompensation Committee
Board of Nomination Committee
Directors Chief Business Ethics Director
Chief Internal Control Director

Statutory
Auditors

IndependentAuditors

representative directors since 1999 in recognition of theimportance of managerial transparency for shareholders.
1 Nomination Committee: This committee nominates candidates for directors to be selected
at the annual shareholders’ meeting, and nominates a candidate for CEO to be selected by
the Board, which it submits at the Board meeting for approval.
2 Compensation Committee: This committee proposes the remuneration to be paid torepresentative directors at the Board meeting for approval.

Board of Directors

Representative
Directors

Request for
improvement/Report

Request for
improvement
Compliance & Internal
Control Executive Officer

are outside directors. In order to ensure that Tokyo Electron can
respond quickly to changing business conditions, and to moreclearly define management accountability, the term of office fordirectors is set at one year. During fiscal 2011, the Board ofDirectors met on 11 occasions.

Board of Statutory Auditors
Tokyo Electron has four statutory auditors, two of whom areoutside auditors. The statutory auditors not only attend
meetings of the Board of Directors, the Management Meeting

ReportExecutive Officers

The Board of Directors consists of 15 members, two of whom

Confirm the progress ofimprovements andgive instructions
Audit andimprovement
reports
Internal Audit Dept.
(Global Audit Center)

ReportCommittees• Ethics Committee• Information Security
Committee• Export Trade Control
Committee

Request for
improvement
Audit

Risk Management &Internal Control Dept.
Request forimprovement/
ReportMonitoring

Administrative Depts.

Checks and balances

Business Depts.

and other important business meetings, but also conduct
operations audits and accounting audits, and evaluate risk

Tokyo Electron has also appointed a Chief Internal Control

management, in addition to auditing the performance of duties

Director and a Compliance & Internal Control Executive Officer.

by directors. During fiscal 2011, the board of statutory auditors

Under them, Tokyo Electron has established the Risk

met six times.

Management & Internal Control Department, which evaluates

Internal Control and Risk Management
Systems

12and analyzes risks that could affect the TEL Group and works toreduce risks by promoting the necessary measures.
In addition, the Global Audit Center, as an internal audit

To strengthen the internal control and risk management systems

organization, oversees the internal auditing activities of theof the TEL Group more effectively, Tokyo Electron isentire group’s domestic and overseas bases, as well as theirimplementing practical measures in line with the Fundamental

compliance and systems. When necessary, the Global Audit

Policies Concerning Internal Controls within the TEL Group.

Center also provides guidance to operating divisions.