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Corporate governance

Basic approach to corporate governance

To increase the value of the company and gain the trust and support of the stakeholders including shareholders, customers, clients, and local communities, it is essential to establish a management structure that emphasizes sound management and allows for prompt and precise response to sudden changes in the management environment.

Corporate governance structure

Ferrotec Holdings is a company with a board of company auditors. As of July 1st, 2021, The Board of Directors of Ferrotec is chaired by Mr. He Xian Han, Representative Director, President, and Group CEO, and consists of nine members (including three outside directors): Akira Yamamura, Representative Director, and Chairman; Takeru Yamamura, Representative Director and Vice President; Hiroo Wakagi, Director; Takanori Suzuki, Director; Eiji Miyanaga, Director; Kuniaki Yanagisawa, Outside Director; Tatsuo Okada, Outside Director; and Iku Shimooka, Outside Director. In addition to the regular monthly meetings of the Board of Directors, extraordinary meetings of the Board of Directors are held on a flexible basis whenever important matters arise. The Board of Directors passes resolutions on important matters in accordance with the Board of Directors Rules, together with matters stipulated in laws and rules and the Articles of Incorporation, and supervises the status of business execution by each Director. All corporate auditors attend the Board of Directors' meetings and are able to monitor the status of business execution by the directors. The term of office of the directors is set at one year so that the company can promptly respond to changes in the business environment.

In terms of business execution, we currently have 9 executive officers (8 males and 1 female, including 4 directors (4 males)) who are responsible for their respective duties and divisions to clearly define the roles of divisions in business execution. The Executive Officers' Meeting is held every month to deliberate on important matters, including those to be discussed at the Board of Directors' Meeting.

Basic concepts and current status of internal control systems

Ferrotec has established a basic policy for the establishment of an internal control system and has formulated various rules for all business operations, including “Compliance Guidelines”, “Rules on Duties and Authorities”, “Rules on Division of Duties”, “Internal Information Management Rules”, “Rules on Disclosure of Important Information”, “Rules on Management of Trade Secrets”, “Rules on Management of Confidential Information on Business Partners”, “Basic Rules on Protection of Personal Information”, “Policy on Response to Antisocial Forces”, “Rules on Business Continuity Management in the Event of Disasters”, “Security Export Management Rules”, “Risk Management Rules”, and “Internal Reporting Rules” to clarify the roles and responsibilities of each organization. Furthermore, in accordance with the amendment to the Corporation Law enacted on May 1, 2015, Ferrotec has revised its basic policy for the establishment of internal control systems, implemented internal checks based on the management control organization and other corporate governance systems for business execution and supervision, and developed a risk management system. With the legal advisory contract with Goto Law Office, we receive legal advice as necessary in the course of business. We also undergo accounting audits from EY Ernst & Young ShinNihon LLC, our accounting auditor, based on the audit contract, and receive reports on matters that are pointed out during and after the audit.

Chronological table of corporate governance

Board member Auditor
Fiscal year Item In-house External Foreign nationality Total Ratio of external member In-house External
2001 Jun 22nd A foreigner takes up a post as a board member 5 0 1 6 0% 1 3
2006 May 27th The basic policy of the internal control system is established 5 1 1 7 14% 1 2
2007 Jun 28th Retirement bonuses system for directors is abolished Contracts for Limitation of Liability conclusion system for non-executive directors and auditors is introduced 6 1 1 8 13% 1 2
2008 Apr 29th Compliance guideline is established 6 1 1 8 13% 0 3
2008 Oct 29th Internal control committee is established, provision is established 6 1 1 8 13% 0 3
2009 Jun 30th 1 year of director's term of office is introduced Compensation committee is established 6 2 1 9 22% 0 3
2011 Jun 32nd A woman takes up a post as a corporate officer for the first time 3 3 1 7 43% 0 4
2013 May 34th Independent officer assignment standard is established 3 3 1 7 43% 0 3
2015 Jul 36th The corporate governance report is submitted 6 2 1 9 22% 0 3
2018 Mar 38th Effectiveness of the board is evaluated by an external agency 5 2 1 8 25% 0 3
2019 Jun 40th Share-based payment system with restriction on transfer is introduced 5 2 1 8 25% 1 2
2020 Jan 40th Risk management commission is set up, provision is established 5 2 1 8 25% 1 2
2021 Jun 42th First Female Director elected on the board 6 3 1 9 33% 1 2