Corporate Governance

Why SUMCO Tackles Corporate Governance

SUMCO recognizes that it is a critical management challenge to fulfill its mandate from shareholders by achieving sustainable growth and improving corporate value in the medium-to-long-term, while building and maintaining positive relationships with other stakeholders. Based on this recognition, SUMCO pursues a range of measures related to corporate governance, such as reinforcing the auditing and supervisory functions of the Board of Directors, ensuring efficiency in how Directors execute their duties and improving internal controls within the SUMCO Group, in order to achieve swift management decision-making and to ensure transparency and fairness in the execution of business.

Basic Stance on Corporate Governance Structure

SUMCO is organized as a company with an Audit and Supervisory Committee. By adopting this system, the effectiveness of supervision and auditing has been enhanced through audits conducted by Directors who are Audit and Supervisory Committee Members and have voting rights at Board of Directors meetings. In addition, the effectiveness of internal controls has been enhanced through audits conducted in cooperation with the Internal Audit Department.

Corporate Governance Structure

Corporate Governance Structure

Board of Directors

SUMCO's Board of Directors comprises internal Directors with a proven record of performance in their respective areas of responsibility and outstanding management abilities, along with Outside Directors with expert knowledge and extensive experience, based on the basic stance of the Company to ensure an overall balance and diversity in knowledge, experience and capabilities of the Directors. The Board of Directors comprises five Directors (except for Directors who are Audit & Supervisory Committee Members; one of whom is an Independent Outside Director) and five Directors who are members of the Audit & Supervisory Committee (four of whom are Independent Outside Directors).
In accordance with legal statutes, the Articles of Incorporation and the Rules of the Board of Directors, the Board of Directors makes decisions on management strategy, management plans, and other such important matters relating to business. It receives reports from every Director on the status of the execution of duties and it exercises supervision of compliance, internal controls, risk management, and important business execution at affiliated companies. With the participation of Independent Outside Directors, the Board of Directors also engages in the free exchange of opinions regarding the appropriate evaluation of company performance and related matters, and reflects that evaluation in the personnel administration of senior management members.
It is also our basic company policy that matters relating to financial results and so on, matters relating to management plans, and the execution of other such important operations should be decided after adequate discussion by the Board of Directors, including the Independent Outside Directors. For this reason, the Articles of Incorporation do not stipulate that decisions on the execution of important business can be delegated to each Director.
The effectiveness of the Board of Directors is evaluated each year in order to continually enhance the effectiveness of corporate governance.
In fiscal year 2021, the Board of Directors met 16 times to discuss important matters concerning management, address issues identified in the Board of Directors effectiveness evaluation conducted in the previous fiscal year, and discuss the compensation policy and method for determining compensation of Directors (except for Directors who are Members of the Audit & Supervisory Committee) and the amount of compensation for individuals.



Directors

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Position in the Company Name Skills (expertise, experience, capability, etc.)
possessed by each Director
Corporate
Management
Finance/
Accounting
Legal Affairs/
Compliance
Sales/
Marketing
Internationality/
Globality
Technology/
Manufacturing/
IT
Human Resources Management/
Human Resources Development
Director*1
Chairman of the Board
Mayuki
Hashimoto
Director*1 Michiharu
Takii
Director*1 Toshihiro
Awa
Director*1 Jiro
Ryuta
Director*2 Akane
Kato
Director
Full-time Audit and Supervisory Committee member
Fumio
Inoue
Director*2
Audit and Supervisory Committee member
Hitoshi
Tanaka
Director*2
Audit and Supervisory Committee member
Masahiro
Mitomi
Director*2
Audit and Supervisory Committee member
Shinichiro
Ota
Director*2
Audit and Supervisory Committee member
Masahiko
Sue
  • *1Representative Director
  • *2Independent Outside Director

Independent Outside Directors

SUMCO has appointed five Independent Outside Directors. One is a person with expert knowledge of human resource development and organizational operation as well as experience in corporate management; one is an attorney; one is a certified public accountant and management consultant who has considerable knowledge and experience in finance and accounting; one is a person with wide experience and knowledge cultivated through experience in the public sector as well as many years of experience in corporate management; and one is a person with expert knowledge and experiences in data science, etc., cultivated through experience in the public sector and education fields.
Each Outside Director satisfies SUMCO's "Criteria of Independence" established in accordance with Tokyo Stock Exchange standards on the independence of Independent Directors, and has been verified to be free of potential conflicts of interest with general shareholders.
In an effort to ensure the sustained growth of the SUMCO Group and increase its corporate value over the medium-to-long-term, the Independent Outside Directors provide advice on important matters related to management based on their own individual knowledge and take the perspective of minority shareholders and other stakeholders in supervising management. They participate in the appointment of candidates for Director and other important decision-making by the Board of Directors, and supervise business execution by the Board of Directors, senior management and others as well as conflicts of interest between the Company and senior management and others.

Audit and Supervisory Committee

The Company's Audit and Supervisory Committee is made up of five Directors who are Audit and Supervisory Committee Members (four, a majority, of whom are Independent Outside Directors). In order to ensure the effectiveness of Audit and Supervisory Committee activities, permanent Audit and Supervisory Committee Members are put in place by mutual voting among Audit and Supervisory Committee Members. In addition, it is the Company's basic policy to take steps to ensure that at least one Audit and Supervisory Committee Member has considerable knowledge and experience pertaining to finance and accounting. Currently, this is Mr. Masahiro Mitomi, who is also a certified public accountant. Additionally, the Company has established the Audit and Supervisory Committee Office and assigns staff to support the activities of the Committee and facilitate the smooth performance of its audit and supervisory functions.
The Audit and Supervisory Committee exercises its statutory right of investigation and audits the Directors' execution of their duties from the viewpoints of appropriateness and conformance with laws and regulations and the Articles of Incorporation by inspecting and confirming the status of compliance with laws and regulations, Articles of Incorporation, and so on, and by monitoring and otherwise supervising the development of and operational status of the system of internal controls, including the internal control of financial reporting.

Nomination and Remuneration Committee

In an effort to further enhance its corporate governance, SUMCO has established a Nomination and Compensation Committee composed of two Representative Directors (Directors Mayuki Hashimoto and Michiharu Takii) and three Independent Outside Directors (Directors Hitoshi Tanaka, Masahiro Mitomi and Shinichiro Ota) to serve as a discretionary advisory body for the Board of Directors. The Nomination and Compensation Committee receives requests from the Board of Directors for advice on the process for selection of candidate Directors and Executive Officers of the Company, their qualifications, the reasons for their designation, the structure of remuneration for Directors (excluding Directors who are Audit and Supervisory Committee Members) and Executive Officers, and related matters. The committee deliberates on the appropriateness and other aspects of the matter referred, including the perspectives of gender and other diversity as well as expert knowledge and experience, and, also taking evaluations of the Company’s performance into account, delivers its advice. The Board of Directors, receiving the findings of the Nomination and Compensation Committee, designates candidate Directors and Executive Officers, and decides on the remuneration for Directors (excluding Directors who are Audit and Supervisory Committee Members) and Executive Officers, and related matters.
The Nomination and Compensation Committee convened two times in fiscal year 2021, with full attendance each time. The main activities undertaken by the Nomination and Compensation Committee are as follows:

  • Deliberation over the selection of candidate Directors and personnel matters concerning Executive Officers
  • Deliberation over the systems for compensation of Directors (excluding Directors who are Audit and Supervisory Committee Members) and Executive Officers
  • Deliberation concerning the individual compensation amounts of Directors (excluding Directors who are Audit and Supervisory Committee Members)
Message from an Outside Director

PhotoPhoto

Outside Director
Akane Kato

  • Nov. 1984 Joined ALL NIPPON AIRWAYS CO., LTD.
  • Jul. 1994 Instructor, Inflight Services Training Dept., Inflight Services Center, ALL NIPPON AIRWAYS CO., LTD.
  • Jul. 2007 Chief, Training Div., ANA Learning Co., Ltd. (the current ANA Business Solutions Co., Ltd.)
  • Apr. 2012 Manager of VIP Service Dept., Tokyo Airport Branch, ALL NIPPON AIRWAYS CO., LTD. (the current ANA AIRPORTSERVICES CO., LTD.)
  • Jul. 2014 Representative Director of AKANE IDENTITIES INC. (present post)
  • Jun. 2016 Outside Director of SAN-EI Corporation
  • Apr. 2018 Part-time Lecturer of Toho College of Music
  • Aug. 2019 Registered as a Career Consultant
  • Mar. 2020 Outside Director of the Company (present post)

Fiscal year 2020, when I was appointed as an outside director, began in an unprecedented environment in which the first priority was preventing COVID-19 infection. With the effects of the pandemic continuing to this day, causing many kinds of uncertainty in the global economy, employment, and livelihood itself, the semiconductor industry has an important role to play in supporting the “new normal” that life has become.
SUMCO moved quickly to ready the Company for the pandemic. In my judgment, the management has united to maximize leading-edge product development, production, and profitability, steering the Company toward sustainable administration. In such ways the Company is very much oriented toward the goal in the SUMCO Vision of becoming Deficit-Resistant Even during Economic Downturns.
At the same time, a close eye needs to be kept on trends in M&A involving the world’s silicon wafer manufacturing companies, and the rapid advance of technology innovation. To continue building a greater competitive advantage, fulfilling the role of the World’s Best in Technology, management and front-line employees will need to redouble their efforts in close coordination.
During the current fiscal year as well, with the aim of further growth toward Empower Employee Awareness of Profit on the foundation of mutual understanding, accepting of diverse work styles and values, I would like to fulfill my role of passing along the voices of stakeholders.

PhotoPhoto

Outside Director
Hitoshi Tanaka

  • Apr. 1976 Registered as Attorney at Law Joined
    Narutomi Law Office (the current Marunouchi Minami Law Office)
  • Oct. 2003 Representative of Narutomi Law Office (present post)
  • Apr. 2005 Outside Corporate Auditor of the Company
  • Jun. 2014 Outside Director of TOKYO ENERGY & SYSTEMS INC. (present post)
  • Mar. 2016 Outside Director (Audit and Supervisory Committee Member) of the Company (present post)

Owing to the COVID-19 pandemic, many meetings including those of the Board of Directors have had to be held online. With online meetings, if the main screen is used to show materials, the expressions of the speakers and participants are not readily made out; and if faces are shown instead, the materials cannot be seen, making for an inconvenient situation. In face-to-face meetings, mutual understanding is facilitated by being able not only to understand what is said, but to pay attention to the expressions on the faces of meeting participants and to their body language.
Efforts are being made to reduce the inconvenience of online meetings to a certain extent, such as by being sure to send and examine materials in advance and making it easier to discern the expressions of participants on the screen. To help overcome the deficiency in mutual understanding from not being able to hold face-to-face meetings, monthly sessions are held for explanations by senior management to outside directors on Company issues and questions raised by outside directors, ensuring that candid exchanges of views take place. These sessions are not only useful for communicating views, but are excellent opportunities for outside directors to learn about the Company’s situation, and I believe are highly effective in helping us to fulfill our role.
It is my hope that as the number of COVID-19 cases declines and the vaccination program is rolled out, the Company will be better able to carry out its business. For my part, I will be watching these developments carefully.

Board of Directors/Audit & Supervisory Committee Meetings in Fiscal Year 2021

Board of Directors
Name Times Attended/
Times Held
Attendance
Mayuki Hashimoto 16/16 100%
Michiharu Takii 16/16 100%
Hisashi Furuya 16/16 100%
Kazuo Hiramoto 16/16 100%
Akane Kato(*1) 16/16 100%
Fumio Inoue 13/13 100%
Hitoshi Tanaka(*1) 16/16 100%
Masahiro Mitomi(*1) 16/16 100%
Shinichiro Ota(*1) 15/16 94%
Akio Fuwa(*1) 16/16 100%
Hiroshi Yoshikawa(*2) 3/3 100%
Atsuro Fujii(*2) 3/3 100%
Audit & Supervisory Committee
Name Times Attended/
Times Held
Attendance
Fumio Inoue 10/10 100%
Hitoshi Tanaka(*1) 13/13 100%
Masahiro Mitomi(*1) 13/13 100%
Shinichiro Ota(*1) 12/13 92%
Akio Fuwa(*1) 13/13 100%
Hiroshi Yoshikawa(*2) 3/3 100%
Atsuro Fujii(*2) 3/3 100%

  • (*1)Independent Outside Director
  • (*2)Retired from the position of Director as of March 25, 2021

Executive Remuneration

Matters regarding policy regarding amounts of remuneration and other payments to officers and determination of calculation method

Details of the Remuneration Policy

The Company employs a system where the remuneration of Directors (excluding non-Executive Directors) are determined with a view to encouraging them to contribute to the improvement of business results and the enhancement of corporate value. Remuneration for the Directors are within the total amount determined by resolution of the General Meeting of Shareholders, and comprises a fixed remuneration level based on their office and rank, and a factor linked to the Company’s most recent business results. The Company regularly reviews the remuneration level to reflect the long-term performance. The Company has not adopted a system of using its stock as a payment of remuneration for Directors, but pursues management that seeks to urge the Directors to contribute to the improvement of business results and enhancement of the corporate value over the medium- to long-term by encouraging the acquisition and holding of the Company’s stocks through the Officers Shareholding Association.
SUMCO has judged that it is appropriate to use the semi-annual net-income attributable to owners of the parent as an index for remuneration linked to the Company’s business results and finalizes the amount in accordance with the calculation method and taking into account the individual assessment.
In addition, a policy on determination of the ratio of fixed remuneration to performance-linked remuneration paid to Directors (excluding non-Executive Directors) was resolved at the meeting of the Board of Directors held on February 19, 2021.
The results of the index pertaining to performance-linked remuneration of Directors (excluding non-Executive Directors) for fiscal year 2021 are 16,373 million yen in total for the first and second quarters and 24,747 million yen for the third and fourth quarters.
The Directors who are Audit and Supervisory Committee Members receive only a fixed remuneration from the perspective of ensuring the appropriate conduct of their duties such as auditing and the supervision of the execution of business operations. The remuneration is determined through deliberations of the Audit and Supervisory Committee Members within the total amount determined by resolution of the General Meeting of Shareholders, and takes into account the role and duties of each such Director and whether he or she is a full-time or part-time member.

Remuneration Determination Process

The amounts of remuneration and other payments to Directors (excluding Directors who are Audit and Supervisory Committee Members) and their calculation methods are discussed by the Nomination and Compensation Committee comprising two representative Directors and three Independent Outside Directors and finalized with the resolution by the Board of Directors. The Nomination and Compensation Committee, in response to the consultations by the Board of Directors, discusses the appropriateness of the compensation structure, etc. of the Company’s Directors (excluding Directors who are Audit and Supervisory Committee Members) and Executive Officers, and submits a report to the Board of Directors also taking into consideration an evaluation of the Company’s business results. Upon receiving the report from the Nomination and Compensation Committee, the Board of Directors determines remuneration and other payments to Directors (excluding Directors who are Audit and Supervisory Committee Members) and Executive Officers.
In fiscal year 2021, after discussions and considerations by the three Nomination and Compensation Committee meetings in accordance with the above procedures, the Board of Directors meeting held on February 19, 2021 resolved on the policy and determination method of remuneration and other payments to Directors as recommended by the Nomination and Compensation Committee, and the Board of Directors meetings held on June 24 and December 24 approved the individual amounts taking into consideration the semi-annual business results.

Amount of remuneration in the recent fiscal year (disclosure by officer category)

Remuneration for Directors for fiscal year 2021
Officer category Number of
officers
Total amount of remuneration and other
payments by type (thousands of yen)
Total amount of remuneration and other payments
(thousands of yen)
Basic remuneration Performance-linked remuneration
Directors [excluding Directors who are Audit and Supervisory Committee Members]
(of which, Outside Directors)
5
(1)
268,008
(9,600)
66,819
(-)
334,827
(9,600)
Directors who are Audit and Supervisory Committee Members
(of which, Outside Directors)
7
(4)
77,280
(38,400)
-
(-)
77,280
(38,400)
Total
(of which, Outside Directors)
12
(5)
345,288
(48,000)
66,819
(-)
412,107
(48,000)
(Notes)
  1. The upper limit of the total remuneration for all Directors (excluding Directors who are Audit and Supervisory Committee Members) is 460 million yen annually (excluding employee salary) pursuant to the resolution at the 17th Ordinary General Meeting of Shareholders held on March 29, 2016.
  2. The upper limit of the total remuneration for all Directors who are Audit and Supervisory Committee Members is 110 million yen annually pursuant to the resolution at the 17th Ordinary General Meeting of Shareholders held on March 29, 2016.
  3. As of the end of fiscal year 2021, there were five (5) Directors (excluding Directors who are Audit and Supervisory Committee Members) and five (5) Directors who are Audit and Supervisory Committee Members.