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Our Basic Policy
ROHM constantly pursues the best corporate governance in order to realize its objectives and policies, such as the Company Mission and the Basic Management Policy. Based on the recognition that ROHM is supported by all stakeholders, we believe that corporate operations and actions must be rooted in fairness, soundness, and transparency.
Based on our basic policy of maximizing sustainable corporate growth and medium- to long-term corporate value based on an accurate understanding of our company's capital costs from the standpoint of our stakeholders, we are working to enhance corporate governance.
- 1. To properly cooperate with all stakeholders, including shareholders, and appropriately consider and respond to issues in sustainability management, including ESG (Environmental, Social, and Governance) factors.
- 2. 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.
- 3. To disclose corporate information in a timely and appropriate manner as a part of ensuring our transparency.
- 4. 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.
Basic Policy
Based on these views, We have established and published the Corporate Governance Policy and Corporate Governance Report.
Reforming and Enhancing Governance
ROHM considers corporate governance to be one of the most important management issues and has been working to reform and strengthen it. We have strengthened our supervisory function by transitioning to a company with the Audit and Supervisory Committee system and introducing the Executive Officer System and created an organization that enables flexible decision-making. In addition, we have established the EHSS General Committee, which oversees the operations of eight management systems related to sustainability, and are building an executive governance system. Furthermore, to ensure objectivity and transparency while promoting diversity on the Board of Directors, we are striving to strengthen governance by electing half of the Board as independent outside directors.
Medium-term Targets and Achievements
| Enhancing Corporate Governance | ||||
|---|---|---|---|---|
|
[Background and Challenges for Activities]
For corporate activities to comply with the rules of society and meet the expectations of diverse stakeholders, it is necessary to enhance corporate governance with the aim of strengthening competitiveness while ensuring management transparency. To this end, it is essential to clarify the roles and responsibilities of the Board of Directors and other bodies, to make swift decisions, and to promote the separation of management execution and supervision by utilizing outside directors from an independent and objective standpoint, thereby strengthening the monitoring and supervisory functions of the Board of Directors. ROHM Group aims to strengthen corporate governance, achieve sustainable growth, and increase corporate and shareholder value. |
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| Theme |
Targets (Target Year: FY2025） |
Targets for FY2023 | FY2023 Results | Targets for FY2024 |
| Secure diversity of the Board of Directors | Increase the female or foreign national officer ratio at Head Office to 10% | Maintain or increase the percentage of female and non-Japanese directors on the Board of Directors | Maintained 23% in total ・Percentage of female directors: 15% ・Percentage of non-Japanese directors: 8% |
Maintain or increase the percentage of female and non-Japanese directors on the Board of Directors |
| Review of compensation system to improve medium-to long-term corporate value |
|
Maintain or increase the percentage of independent outside directors on the Board of Directors | 54% | Discussion on the ideal form of board of directors to enhance medium- to long-term corporate value |
|
Conduct a comprehensive review of the balance and level of the compensation structure, including the directors' shareholding ratio and the holding period of the company's shares | Continued director remuneration council discussions on the structure of remuneration and the form of Board members' hold of the Company's shares | Continued comprehensive discussions at the director remuneration council, including the remuneration system and the desirable form of stock ownership by the Board members | |
| Secure the effectiveness of management | Evaluate the effectiveness of the Board of Directors once every three years | Continue to provide support by an external organization for the effectiveness evaluation | The target was achieved in FY2022 with the start of the introduction of external institutional evaluation. In order to further improve the effectiveness of the evaluation, the use of an external organization will be continued in the effectiveness evaluation to be conducted in March 2024. In addition, the scope of support will be expanded to the stage of setting evaluation questionnaires to ensure further transparency and objectivity in the evaluation results | Continue to utilize support from external organizations in the effectiveness evaluation, and improve quality, not only by reviewing questionnaire methods and question content, but also by considering how to utilize external organizations |
Corporate Governance System
ROHM has established an appropriate governance system based on the ROHM Corporate Governance Policy to ensure fairness and transparency in management.
From April 2024, the Board of Directors is chaired by an outside director, in order to promote the separation of supervision and execution by the Board of Directors and to ensure the effectiveness of supervision over management.
We are also continuously strengthening governance by establishing the Officer Nomination Council and the Director Remuneration Council as advisory bodies to the Board of Directors, and by strengthening the executive side through the Executive Meeting which serves as a supporting body for the President's decision-making.
❶Board of Directors
The Board of Directors provides strategic corporate direction under a transparent and fair system in order to achieve sustainable growth for the company and improve its corporate value. It makes management decisions based on the diverse experience and expertise of its members, and also supervises business execution. It is chaired by an independent outside director.
❷Audit and Supervisory Committee
The audit and supervisory committee establishes audit policies, standards and plans, and audits the legality and appropriateness of the execution of duties by the Board of Directors, while ensuring a reporting line that allows for direct reporting from the internal audit division, which is independent of the business execution division, in the event of any irregularities by directors. It also conducts audits of the entire group in cooperation with the internal audit department.
❸Executive Meeting
The Executive Meeting, consisting of corporate officers, deliberates important matters related to the management of the ROHM Group, such as the execution of strategies related to the business portfolio and the allocation of management resources such as human capital management, promotion of focused businesses, and strengthening of the sales structure. In this way, the Executive Meeting assists the President and Representative Director in decision-making.
❹Director Remuneration Council
The Director Remuneration Council discusses the remuneration system for directors and the remuneration of each director based on this system, and reports the results of discussions to the Board of Directors and the Audit and Supervisory Committee. It is chaired by an independent outside director.
❺Officer Nomination Council
The Officer Nomination Council discusses the appointment and dismissal of the Company's President and any director or corporate officer with titles, as well as the nomination of director candidates, and reports the results of discussions to the Board of Directors. It is chaired by an independent outside director.
❻Sustainability Management Committee
The Sustainability Management Committee decides on sustainability policies, aims, and long-term targets, applies these in the EHSS General Committee, and builds a framework for their implementation. It also deliberates important matters related to the sustainability management issues of the ROHM Group and coordinates with the Board of Directors to ensure appropriate decision-making.
Initiatives to Enhance the Board of Directors
We believe it is important for the Board of Directors to fully fulfill its functions and strengthen governance in order to sustainably increase ROHM‘s corporate value.
Since 2016, when we introduced the Evaluation of the Board of Directors' Effectiveness, we have conducted an annual survey of all directors on the effectiveness of the Board of Directors. The results of the survey are used by the Board of Directors to analyze and evaluate the effectiveness of the Board of Directors.
In FY2022, we introduced the analysis and evaluation of third-party assessments utilizing an external organization in order to ensure both objectivity and effectiveness of the evaluation, and from FY 2023, in addition to analysis and evaluation of questionnaire results, we will expand support to include setting and reviewing questionnaire items and using and tabulating web systems to further ensure objectivity.
Based on the results of these analyses and evaluations, we are striving to improve the effectiveness of the Board of Directors by discussing issues and future initiatives to improve the effectiveness of the Board of Directors.
Remuneration
Policy for Determining Remuneration
ROHM's basic policy is to make the remuneration of directors a system that shares value with shareholders, and to set the remuneration of individual directors at an appropriate level based on their respective responsibilities, in order to clarify their management responsibility and fully function as a sound incentive for the company's sustainable growth and enhancement of corporate value over the medium to long term. ROHM’s basic policy is to set the remuneration of individual directors at an appropriate level based on their respective responsibilities.
Specifically, the compensation for executive directors consists of a fixed monetary compensation, performance-linked remuneratuib, and stock-based remuneration as non-monetary remuneration. The remuneration for independent outside directors and non-executive directors is fixed remuneration only, from the perspective of assuming a supervisory function independent from the execution of business.
In addition, we have established a policy regarding the ownership of our own shares from the perspective of further increasing our willingness to contribute to the sustainable enhancement of corporate value and strengthening the sharing of value with our shareholders and other stakeholders.
Directors' Stock Ownership Policy
The company recommends that executive directors hold the company's shares as follows.
President and Representative Director
The President and Representative Director shall hold a number of shares equivalent to 3.0 times the monetary remuneration (fixed remuneration) by either the date ton which two years have elapsed since the enactment of this section (June 27, 2026) or the date on which five years have elapsed since their assumption of the position, whichever is later.
Other Executive Directors
Other executive directors shall hold a number of shares equal to 1.0 times the amount of stock remuneration (fixed remuneration) by either the date on which two years have elapsed since the enactment of this section (June 27, 2026) or the date on which five years have elapsed since their assumption of the position, whichever is later.
Total Amount of Remuneration for Directors in FY2023
| Category | Total Remuneration (Million JPY) |
Total Remuneration by Type (Million JPY) | Number of Directors (Target) | ||
|---|---|---|---|---|---|
| Fixed Remuneration | Performance-linked Remuneration | Non-monetary Remuneration | |||
| Director (Outside Directors) |
369 （49） |
253 （49） |
81 （-） |
33 （-） |
9 （4） |
| Directors (Audit Committee Members) (Outside Directors) |
88 （58） |
88 （58） |
- （-） |
- （-） |
7 （6） |
| Total (Outside Directors) |
457 （107） |
341 （107） |
81 （-） |
33 （-） |
16 （10） |
The amount of remuneration, etc. of Directors does not include the amount of employee salaries of Directors who concurrently serve as employees.
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