Corporate Governance

Corporate Governance

Basic Views on Corporate Governance

The Group considers corporate governance to be a key management mechanism for transparent, fair, prompt and resolute decision-making, and all Group companies are thus actively committed to improving corporate governance. As part of our Group's corporate governance, we are enhancing internal control by proactively undertaking activities to advance compliance and risk management and we are expanding/strengthening the management oversight functions of our board of directors and the audit functions of our Audit and Supervisory Committee Members. These steps will enable us to construct a transparent corporate governance system worthy of the trust of shareholders and other stakeholders and fulfill our corporate social responsibilities, and will help us improve our corporate value through sustained growth.

Overview of the Corporate Governance Structure

We have adopted a governance structure of a Company with Audit and Supervisory Committee. To ensure fair and transparent company management, six (6) Outside Directors attend Board of Directors meetings and there provide advice on company management. For fair and transparent procedures applied to nominate and to determine their compensation, the Company has Nomination/Remuneration Committee. A Senior Management System has been introduced to permit rapid management decision-making and quicker execution of operations, which can clarify each role for Executive Directors and Senior Executive Officers and can get the right person in the right place with flexibility and mobility. The Audit and Supervisory Committee has also been given robust check-and-balance functions to help them monitor decision-making by the Board of Directors and the execution of operations by representative Directors.

Chart of IBIDEN Group's Internal Control System

Chart of IBIDEN Group's Internal Control System

Efforts to Enhance Corporate Governance

Currently, the Electronics and Ceramics Operations, which are both our main businesses, are confronted with a rapidly changing business environment. With the aim of streamlining management, expediting decision-making, and reinforcing audit and supervisory functions, we have worked on corporate governance enhancement, including institutional design change in FY2017.
In April 2022, the Company moved to the Prime Market of the Tokyo Stock Exchange, which requires a higher level of governance structure. We will continue our efforts to further improve the system, such as increasing the female ratio in the Board of Directors.

Overall Balance of Knowledge, Experience and Skill, Diversity, and Size of the Board of Directors

In selecting Director candidates, to allocate a right person to right work, as a comprehensive deliberation, the sufficient number of the Board of Directors Members that enables the Board of Directors to make eligible and prompt decision and overall balance of knowledge, experience and skill with diversity including gender, internationality, career and age among the members of the Board of Directors are considered while referring to the reports by the Nomination/Remuneration Committee. Besides, we disclose the skill set required for the Board of Directors of the Company.

the skill matrix and skill set(PDF/56KB)

Efforts to Strengthen the Functions of Audit and Supervisory Committee Members

Audit and Supervisory Committee Members attend Board of Directors meetings and other important meetings and audit Directors' execution of their duties, while full-time Audit and Supervisory Committee Members collaborate with internal audit departments and the Accounting Auditor in conducting audits and investigations of the Company and its subsidiaries in accordance with all applicable laws, regulations and rules. We have appropriately ensured the performance of the above functions through the presence of three (3) Outside Audit and Supervisory Committee Members with a considerable level of expertise in finance, accounting, governance, etc.

Posting of Information on Securing Independent Directors

Our company adopts a principle of ensuring that outside directors account for one-third or more of the Board of Directors so that they can contribute to appropriate corporate governance at the Company and offer advice on our standards of conduct. The Company has determined that Mr. Yamaguchi, Mr. Mita and Ms. Asai as Outside Directors and Mr. Kato, Mr. Horie and Ms. Yabu as Outside Audit and Supervisory Committee Members present no potential conflict of interest with general shareholders and, convinced that we can count on them to contribute to appropriate corporate governance at the Company and to offer advice on our standards of conduct, we have assigned them as Independent Directors.

Evaluation of Effectiveness of Board of Directors

The Company conducts annual analysis and evaluation on the effectiveness of the Board of Directors, in order to improve the function of the Board of Directors as a whole, through a continuous process of reviewing whether the Board of Directors is functioning effectively as a whole and taking appropriate measures such as rectifying problems and enhancing strengths based on the result of such review. We discuss the results at the Board of Directors meetings and disclose the summary thereof.

Policy for the Development of Next Generation Management Executives

For the development of next generation management executives, we newly established a Senior Management system in FY2020. We position employees in Senior Management positions as next generation management executive candidates, and have these employees participate in Executive training. In addition, by developing the educational program for employees in Senior Management positions, we will develop human resources in a planned way.

Policy on Cross-Shareholding

Our basic policy when engaging in investment for purposes other than pure investment is to verify the need for holding each individual stock from the perspective of its importance in implementing our business strategy and strengthening business alliances for the sake of improving our corporate value over the medium-to-long term. Meanwhile, the Company is aiming to reduce cross-shareholdings by appropriately selling those shares deemed unnecessary. Furthermore, the Company verifies the benefits and risks of holding listed shares for cross-shareholding purposes along with profitability in light of capital costs and other factors at the Board of Directors on an annual basis. Regarding the shares that are deemed necessary to be held by the Company, we disclose the purpose of such holding in Securities Reports.

Corporate Governance Report

Corporate Governance Report 2023 (December 25, 2023 / PDF836KB)

Compensation of the Senior Management and Directors

Board Policies and Procedures in Determining the Compensation of the Senior Management and Corporate Directors

Based on the corporate philosophy, the Company has designed its officers' compensation system in a way that clarifies management responsibilities while also providing an incentive toward improving our corporate value over the medium-to long term through sustained growth.
The remuneration for the Company's Corporate Directors who are not Audit and Supervisory Committee Members and Senior Executive Officers comprises (1) a fixed monthly remuneration, (2) bonuses, as performance-linked remuneration, and (3) stock compensation, at a ratio of roughly 50%, 35%, and 15%, respectively. The monthly remuneration for Corporate Directors who are not Audit and Supervisory Committee Members is calculated within the limits approved by the general meeting of shareholders, based on the remuneration table provided in the internal regulations according to their job positions, with broad consideration to their job responsibilities and external remuneration survey data, among others. The Board of Directors has resolved to subsequently re-entrust the determination of such remuneration to President & CEO (Takeshi Aoki, mainly in charge of overseeing overall business execution), who is best qualified to make a comprehensive assessment of each recipient including their job performance, in accordance with deliberations and reports by the Nomination/Remuneration Committee on individual payment amounts. In addition, bonuses are paid in cash once a year after the end of each fiscal year within the scope of a total amount based on a prescribed formula approved by the general meeting of shareholders. The amount allocated to each individual is determined based on the degree of contribution to the Company's operations made by each Corporate Director who is not an Audit and Supervisory Committee Member. The Board of Directors has resolved to subsequently re-entrust the determination of such bonuses to President & CEO, who is best qualified to make a final assessment on the degree of contribution to the Company's operating results made by each recipient, in accordance with deliberations and reports by the Nomination/Remuneration Committee on individual payment amounts.
The monthly remuneration for Senior Executive Officers is calculated based on the remuneration table provided in internal regulations according to their job positions, with broad consideration to the suitable balance with Corporate Directors who are not Audit and Supervisory Committee Members, evaluation of their individual job performance, and external remuneration survey data. The Board of Directors has resolved to entrust the determination of such remuneration to President & CEO in accordance with deliberations and reports by the Nomination/Remuneration Committee. In addition, bonuses are calculated based on the degree of contribution to the Company's operating results made by each Senior Executive Officer, and the Board of Directors has resolved to entrust the determination of such bonuses to President & CEO in accordance with deliberations and reports by the Nomination/Remuneration Committee.

 

Amount of compensation, etc., of Directors (FY2022)

(Millions of yen)

PositionNumber of recipientsTotal remuneration paidTotal amount of remuneration by type
Basic remunerationBonusSharebased payment
Director who are not Audit and Supervisory Committee MembersDirectors 5 441 182 186 72
Outside Directors 3 37 37 - -
Subtotal 8 479 220 186 72
Director who are Audit and Supervisory Committee MembersDirectors 2 53 53 - -
Outside Directors 3 37 37 - -
Subtotal 5 90 90 - -
Total 13 570 311 186 72

1. The basic remuneration for Directors who are not Audit and Supervisory Committee Members was approved at not more than 30 million yen per month at the 164th Ordinary General Meeting of Shareholders held on June 16, 2017. Of the total, the amount for Outside Directors (of whom there were three (3) at the time of the resolution) accounts for 5 million yen or less, with the remaining 25 million yen or less paid to the other Directors (of whom there were four (4) at the time of the resolution).

2. At the 164th Ordinary General Meeting of Shareholders held on June 16, 2017, the total amount of bonuses to be paid to Corporate Directors who are not Audit and Supervisory Committee Members (of whom there were four (4) at the time of the resolution) was resolved to be the sum of 0.5% of the profit attributable to owners of parent for each fiscal year and 1.6% of the annual dividends for such fiscal year (provided, however, that the sum shall not exceed 440 million yen annually, with any amount less than 1 million yen resulting from the calculation to be rounded off). As performance indicators for the calculation of the total amount of bonuses, profit attributable to owners of parent and the total amount of annual dividends have been adopted, as indicators that function as incentives toward the Group's sustained growth and the enhancement of corporate value, while also being linked to the interests of shareholders.

3. With regard to stock compensation for Corporate Directors who are not Audit and Supervisory Committee Members, a resolution was passed at the 164th Ordinary General Meeting of Shareholders held on June 16, 2017, to introduce a stock compensation plan using a trust for a period of three years, with the amount of cash contribution during the trust period limited up to 270 million yen, for Corporate Directors who are not Audit and Supervisory Committee Members (of whom there were four (4) at the time of the resolution), in order to clarify the link between the Company's stock value and the remuneration for Directors, and thereby elevate their awareness of contributing to improving medium-to-long-term operating results and increasing corporate value. Under the plan, points are granted according to the amount of payment calculated using a formula provided in internal regulations on the basis of the recipients' position and the amount of monthly remuneration and bonus for the previous fiscal year, converted at one point to one share (provided, however, that the total number of points to be granted is limited to 100,000 points per fiscal year), and shares are granted accordingly to the recipients at the time of their retirement.

4. At the 164th Ordinary General Meeting of Shareholders held on June 16, 2017, the total amount of bonuses to be paid to Corporate Directors who are not Audit and Supervisory Committee Members (of whom there were four (4) At the 164th Ordinary General Meeting of Shareholders held on June 16, 2017, the amount of remuneration for Director who are Audit and Supervisory Committee Members (of whom there were five (5) at the time of the resolution) was resolved to be not more than 13 million yen per month.

Timely disclosure, Communication with Shareholders and Investors

Relationships with Stakeholders and Timely Disclosure

Aiming to improve its corporate value, and based on our mission to meet our shareholders, our company group believes that we must fulfill our responsibilities to respective stakeholders other than shareholders, such as employees, business partners, investors, local residents, and local communities.
Based on the Disclosure Regulations, which are intended to promote stakeholders' understanding of the Group and to facilitate proper assessments of the Group, we disclose in a fair, timely, and appropriate manner with decisions on management-related information related to the Group.
In addition to making every effort to comply with the Financial Instruments and Exchange Act and relevant rules, as well as the stock exchange's regulations, we maintain our social credibility in the securities market through education for employees and strict management regarding regulations on insider trading in accordance with the Insider Trading Guidelines.

Communication with Shareholders and Investors

The Company issued approximately 140 million shares and had about 31,969 shareholders as of March 31, 2023. We held a general meeting of shareholders in the multi-purpose hall in the IBIDEN Headquarters Building on June 15, 2023. We have sought to establish a more open environment by adopting the voting rights exercise platform from fiscal year 2006 and making possible the exercise of voting rights via the Internet and smart phones, etc., for shareholders who are unable to attend the meeting. (The ratio of voting rights exercised at the 170th Ordinary General Meeting of Shareholders: 86.46%). In addition, to ensure prompt disclosure, the Notice of Ordinary General Meeting of Shareholders added elements of business report is available in our website and platform by a week before mailing it to shareholders. We will continue to promote prompt disclosure such as on our website before mailing. Furthermore, in consideration of shareholders who are unable to attend General Meetings of Shareholders at the venue due to the COVID-19 pandemic, we have introduced livestreaming of General Meetings of Shareholders on our website for shareholders and investors since last year.
As for other IR activities, we hold periodic briefings for analysts and institutional investors after the announcement of business results for the full year and those for the interim term, and release materials for the briefings on our website. The opinions of shareholders ascertained through dialogue are fed back to the Board of Directors, the President & CEO, and relevant Directors and sections as necessary to share and utilize the information.

Concept of our capital policies

Currently, we are enjoying improved profitability as a result of full-fledged operation of facilities that were built during the period of the previous medium-term management plan or before, and also as a result of the further streamlining of business operations and progressing of structural reforms. Consequently, ROE rose from 12.1% in FY2021 to 13.3% in FY2022.
For shareholder returns, our approach to capital allocation for the time being will be to prioritize capital investment for IC package substrates in preparation for business expansion, but we comprehensively examine the balance between retaining sufficient earnings for investment in the business and long-term steady dividend payments to shareholders. The annual dividend per share for FY2022 was ¥50(including a commemorative dividend), an increase of ¥10 from FY2021.