Our Basic Policy
ROHM Group strives to pursue the best possible corporate governance in order to achieve our company Mission and the Basic Management Policy.
In addition, based on the recognition that the company is supported by stakeholders including its customers, business partners, employees, shareholders, investors, and local communities, we believe that corporate management and actions must be rooted in fairness, soundness and transparency. Moreover, based on an accurate understanding of the cost capital of the company from a stakeholder perspective, we stated the basic idea of the corporate governance is to maximize sustainable corporate growth and medium to long term corporate value. We are working to enhance corporate governance in accordance with the following basic policy.
- Properly cooperate with all stakeholders including shareholders, and to address and to deal with ESG (environmental, social, and governance) issues.
- To respect the rights of shareholders, secure their equal treatment, and engage in constructive dialog with shareholders who share the mid-to-long term perspective.
- To disclose corporate information in a timely and appropriate manner as a part of ensuring our transparency.
- To make the roles and responsibilities of the Board of Directors clear, hold meetings of the Board of Directors in a timely and appropriate manner, facilitate decision-making processes, and ensure that outside officers proactively express their views from an independent and objective standpoint and that the Board of Directors oversees the execution of business.
Based on these views, the "Corporate Governance Policy" and "Corporate Governance Report" are established and published.
Corporate Governance System
In order to strengthen the supervisory function of the Board of Directors, further promote corporate governance and improve and improve corporate value, we made a transition to a Company with an Audit and Supervisory Committee from a Company with the Board of Auditors via the resolution of the 61st ordinary general shareholders meeting held on 27th June 2019.
The Board of Directors
In the semiconductor and electronic component industry, the most effective way of making prompt and accurate decisions is to retain Directors (Members of the Boards) who are versed in operations and technologies, and have extensive experience in executive authorities and supervision.
The Board of Directors consists of 11 directors (including 5 independent Outside Directors), and The Audit and Supervisory Committee consists of 4 directors. Therefore, more than one third of the Board of Directors is independent Outside Director. The Board of Directors make swift and decisive decisions by constructive discussion under fair and transparent management.
In addition, we take into consideration the diversity of the members of the Board of Directors in establishing selection criteria for Directors.
In order to complement functions of the Board of Directors and establish a more flexible management structure which can appropriately and swiftly respond to the rapidly, we have introduced Corporate Officer System since Sep 2019.
Moreover, to assist the President’s decision-making, we have established the Executive Meeting consists of Corporate Officers and we deliberate matters of major importance to the Management of ROHM group.
Independent Outside Director
As standards of independence Outside Directors, we enacted and disclosed the “Independence Standards for Outside Officers”. Furthermore, we have designated all five of Outside Directors as independent Outside Directors pursuant to the requirement for outside director in Companies Act and the rules of the Tokyo Stock Exchange, and reported that information to the Exchange.
The Audit and Supervisory Committee
The Audit and Supervisory Committee establish audit policies, standards, and plans.
Additionally, by visiting each division of ROHM and Group companies, inspection of business and financial status of ROHM and utilizing the Internal Control System through cooperation with Internal Audit Division which is independent from business execution, the Audit and Supervisory Committee audit legality and appropriateness of Directors’ business executions.
The Audit and Supervisory Committee consists of four members (all four of Directors are independent Outside Directors), all members are appointed by the criteria that require appropriate experience and skills as well as necessary knowledge on financial, accounting and the law. To support the Audit and Supervisory Committee’s duty, we establish a secretariat of the Committee comprised of staffs with necessary competencies.
Internal Audit Division
Internal Audit Division check the status of the Formulation and the Operation of the Internal Control System, whether or not in-house rules are well observed, and whether not ROHM’s assets are secured by holding meeting with the individual divisions of ROHM and its affiliates at home and abroad, inspecting documents and reports, and others. The contents of audits are reported to ROHM’s Internal Audit Division as needed, and Opinion are exchanged on matters that require improvement regarding internal control.
The Director Remuneration Council /The Officer Nomination Council
To improve independence, objectivity and transparency of the Appointment and the Remuneration of Directors, we established the Director Remuneration Council and the Officer Nomination Council and a majority of the member shall be independent Outside Directors, as an advisory body to the Board of Directors. The president acts as chairman of the councils in both council, and they consist of 5 members.
The Director Remuneration Council member discuss the Remuneration System and the Remuneration based on the system, and the Council submits basis reports for Remuneration of Directors who are not the Audit and the Supervisory Committee member to the Board of Directors. On the other hand, it submits basis reports for Remuneration of Directors who are the Audit and the Supervisory Committee member to the Committee.
The Officer Nomination Council discusses the appointment/dismissals of the President, Director with title, and Corporate Officer with title (excluding Senior Corporate Officer) and submits basis reports to the Board of Directors.
CSR Committee and various specialist committees
ROHM Group considers CSR to be a key point for sustainable management and has had a CSR Committee chaired by the President since 2011. The objective of this committee is to achieve rapid decision-making in response to both the long-term outlook and the present problems and to the demands from the wide variety of stakeholders. The CSR Committee is comprised of all the directors, including the external directors, and also the heads of the departments with equivalent authority. The various specialist committees beneath the CSR Committee report and discuss the CSR related activity situation and activity plans in order to rotate the PDCA cycle for the CSR management and strengthen the CSR management system.
Regarding executive remuneration, by distinguishing directors who are not the Audit and Supervisory Committee members and who are, each limit on total remuneration is established at the ordinary general shareholders meeting. Remuneration for each director who is not the Audit and Supervisory Committee is determined by the Board of Directors on the basis of the report of The Director Remuneration Council.
ROHM introduced a new officer compensation system made up of performance linked compensation that varies according to consolidated sales and consolidated operating income in the most recent fiscal year, along with fixed amounts of fixed compensation and restricted stock compensation in order to clarify the management responsibility of directors (excluding directors who are Audit and Supervisory Committee members and outside directors) and to function as a healthy incentive aimed at sustained growth.
This restricted stock compensation system for directors have been passed in the 62nd Ordinary General Shareholders Meeting held on June 26th, 2020 for the purpose of sharing value with shareholders.
In order to clarify management responsibilities, Remunerations of Directors who are given that their oversight capacity must be performed independently of the execution of business, remuneration for independent Outside Directors consists only of fixed remuneration.
Additionally, stock option plan for Directors is not introduced, and retirement benefit payment system for retiring Directors was abolished.
[The Mar 2020] Remunerations of Directors
|Director Category||Total Remuneration (Million JPY)||Total Remuneration by Type (Million JPY)||Number of Directors (Target)|
|Fixed Remuneration||Performance-linked Remuneration|
|Director (Excluding Outside Directors)||285||122||163||9|
he table above includes one director and three outside officers who retired at the conclusion of the 61st Ordinary General Shareholders Meeting held on June 27th, 2019 and one director who retired due to passing away on January 15th, 2020.
*The amount of remuneration paid to Directors does not include the amount of employee salaries paid to employee Directors.
Assessment and Evaluation for Effectiveness of the Board of Directors
Each Director is given a questionnaire evaluating the effectiveness of the Board of Directors, and the Board of Directors holds discussions based on these questionnaires' results to analyze and assess the effectiveness of the Board.
Overview of results and future actions
The Board of Directors as a whole was deemed to be generally effective as a result of confirming that decision-making is conducted appropriately through the determination of important business execution in meetings held with an appropriate schedule and frequency, that the process and results of past resolutions are reported appropriately, and that consideration is given to the exchange of information and exchange of opinions among outside directors and the appropriate acquisition of internal and external information.
However, we recognize that there is room for further improvement in the timing of distribution of materials, ensuring adequate time for discussion, and the compensation system for inside directors functioning as a healthy incentive for sustained growth.
We will continue to strive to further improve the effectiveness of the Board of Directors by referring to the results of the above evaluation.
Basic Policy on Cross-shareholdings of Listed Companies
To achieve sustainable corporate growth and increase corporate value over the mid- to long-term of the ROHM Group, we believe that cross-shareholding of our major business partners in order to maintain strong business relationships with them is an important way.
With this end in view, annually the Board of Directors quantitatively and qualitatively examines each of cross-shareholdings in terms of economic rationality, the benefits of holding and other factors. And shares unneeded to continue holding will be gradually reduced.