Corporate Governance Report

Last Update: October 29, 2021

TAIYO YUDEN CO., LTD. Shoichi Tosaka President and Chief Executive Officer Contact: 03-6757-8310 Securities Code: 6976

https://www.yuden.co.jp/ut/

The corporate governance of TAIYO YUDEN CO., LTD. (the "Company") is described below.

  1. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and

Other Basic Information

1. Basic Views Update

The TAIYO YUDEN Group (the "Group") is committed to corporate social responsibilities and the mission of management to develop businesses on an ongoing basis while fulfilling sociality, public interest and public nature of the Group from a global viewpoint to put into practice and realize "Mission", "Management philosophy" and "Vision".

Based on the views, the Company has been established Basic Policy of Corporate Governance, and emphasizes transparency and fairness of corporate management, the Company is making efforts to enhance corporate governance under the supervision of the Board of Directors, including the development of structures and mechanisms that enable timely and appropriate information disclosure, thorough compliance, and speedy decision making and execution of duties.

Mission

Stronger and more socially aware through the wonders of science

Management Philosophy Employee Well-being Betterment of Local Communities

Responsibility to Provide Returns to Shareholders

Vision

To be an excellent company that enjoys the trust and highest regard from all stakeholders

Basic Policy for Corporate Governance https://www.yuden.co.jp/ut/ir/management/governance/

[Reasons for Non-compliance with the Principles of the Corporate Governance Code]

Update

[Supplemental Principles 2-4-1: Ensuring diversity in the promotion to core human resources]

In order to realize the "employee well-being", an objective of our management philosophy, the Company recognizes the "value of being different" so that individual employees are motivated to exercise their abilities in order to perform well. As also, the Company is working to promote diversity that brings together unique individuals as an important management issue.

As for the appointment of female managerial positions, the Company has disclosed the results. However, as the ratio of candidates for managerial positions to the total number of employees is small, the Company has not yet established measurable numerical targets.

We will continue to strengthen recruitment to secure candidates for managerial positions for the population,

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and work to support career development and promote activities.

[Disclosure Based on the Principles of the Corporate Governance Code]

Update

[Principles 1-4:Cross-Shareholdings]

Policies for holding and reducing cross-shareholdings and standards for exercising voting rights for cross- shareholdings and individual verification of the appropriateness of holdings are listed in Chapter 2, 4-(1). (2).

(3) of the "Basic Policy for Corporate Governance".

[Principle 1-7: Create appropriate procedures and frameworks for transactions between related parties]

Our policy regarding transactions between related parties is described in Chapter 3, 3-(1)-(2) of the article "Basic Policy for Corporate Governance" on the Company's website.

[Principles 2-6: Roles of Corporate Pension Fund as Asset Owner] The Company has no corporate pension system.

The Company shall implement a defined contribution corporate pension plan to build stable assets for employees, and shall provide education and training regarding asset management.

[Principle 3-1: Full disclosure]

1.Our mission, management philosophy, vision, management strategy and business plans are disclosed in the financial statement briefing materials, integrated reports and on the Company's website.

2.Our fundamental concepts of corporate governance as well as basic policies are disclosed in the financial reports and corporate governance reports and on the Company's website.

3.Policies and procedures for the Board to determine director remuneration are disclosed in the financial reports and the notice of convocation of the General Meeting of Shareholders.

4.Policies and procedures for the nomination of candidates for Director and Audit & Supervisory Board Member are disclosed in the financial reports and corporate governance reports.

5.Individual reasons regarding the selection of candidates for Director and Audit & Supervisory Board Member are disclosed in the notice of convocation of the General Meeting of Shareholders.

6. Policies and procedures for appointment and dismissal of Officers are disclosed in the notice of convocation of the General Meeting of Shareholders.

[Supplemental Principles 3-1-3: Initiatives on sustainability]

The Company has formulated the "Medium-term Management Plan 2025," which is scheduled to start in Fiscal 2021. The Company aim to increase corporate value by increasing both economic and social value, and set KPI(numerical targets) related to economic and social value after clarifying the Materiality(important issues). The initiatives to achieve the targets are disclosed in the integrated reports and on the Company's website.

[Supplemental Principle 4-1-1: Scope of delegation to the management]

A synopsis of the scope of delegation to the management can be found in Chapter 5, Section 2, 2-(1). (2). (3) of the article "Basic Policy for Corporate Governance" on the Company's website.

[Principles 4-9: Independence Criteria and Qualification for Outside Director]

The Board of Directors shall select candidates for Independent Outside Director based on the "Officer Appointment and Dismissal Standards" and the "Standards for the Independence of Outside Directors/Outside Audit & Supervisory Board Members," and shall clearly state the reasons for their appointment in a notice of convocation of the General Meeting of Shareholders when proposing candidates at a General Meeting of Shareholders. The "Standards for the Independence of Outside Directors/Outside Audit & Supervisory Board Members" shall be disclosed on the Company's website.

[Supplemental Principles 4-10-1: The mandates and roles of the Nomination Committee and the Remuneration Committee]

To strengthen the independence and objectivity of the functions of the Board of Directors concerning the nomination and remuneration for Directors and Operating Officers and to fulfill its accountability, the Company has established two voluntary advisory panels: Nomination Committee and Remuneration Committee.

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Each committee is composed of the President and Chief Executive Officer, all Independent Outside Directors, and an Audit & Supervisory Board Member, with the majority of Independent Outside Directors. In addition, each committee is chaired by an Independent Outside Director to ensure the objectivity of deliberation. The mandates and roles of each committee can be found in "Supplementary Explanation" of "Voluntary Establishment of Committee(s) Corresponding to Nomination Committee or Remuneration Committee" on this report.

[Supplemental Principle 4-11-1: Ensuring effectiveness of the Board of Directors]

The concepts regarding the balance of knowledge, experience and skills of the Board (as a whole) as well as its size are described in Chapter 5, Section 2, 3-(2) of the article "Basic Policy for Corporate Governance" on the Company's website. The skills matrix of the Board of Directors of the Company is disclosed in the notice of convocation of the General Meeting of Shareholders and the integrated reports.

[Supplemental Principle 4-11-2: Posts held concurrently by Outside Directors and Outside Audit & Supervisory Board Members]

Directors concurrently holding other positions are discussed in Chapter 5, Section 5, 2-(1). (2) of the article "Basic Policy for Corporate Governance" on the Company's website. Important concurrent posts held by Outside Directors are disclosed in the notice of convocation of the General Meeting of Shareholders, financial statements, and corporate governance reports.

[Supplemental Principle 4-11-3: Analysis and assessment regarding the effectiveness of the Board as a whole] 1.Questionnaire

Method of Evaluation Self-evaluation by questionnaire survey

The Company conducts the deeper identification of issues by a multiple-choice method (to choose issues on which sufficient discussion has not been conducted at Board of Directors meetings) and a questionnaire on strengths and weaknesses of the Board of Directors.

Implementation period February 2021 Subjects

Directors and Audit & Supervisory Board Members (including Outside Officers) Evaluation items

  1. The operation (7 questions) and composition (1 question) of the Board of Directors, 2) Management strategies (3 questions) and sustainable growth initiatives (2 questions), 3) Corporate ethics and risk management (2 questions), monitoring (1 question), and dialogue with shareholders (1 question), 4) Nomination Committee and Remuneration Committee (3 questions), 5) Provision of information (1 question)

2. Analysis/Evaluation

Analysis and evaluation meetings were conducted first separately by Operating Officers and Non-operating Officers based on the results of the questionnaire with Directors and Audit & Supervisory Board Members, and then a discussion is conducted at a Board of Directors meeting based on the results of those meetings.

We employed an external organization and received advice on the question design, analysis, possible response measure, etc. to improve the objectivity and the transparency of evaluation.

3. Evaluation results

The external organization commented favorably that the Company is working seriously on the evaluation of the effectiveness of the Board of Directors and is striving to improve its corporate value further by steadily identifying issues and implementing measures to address them. In particular, the external organization's evaluation improved significantly on items on which the Company implemented measures based on issues identified in the previous year, and the external organization commented that the measures have been effective. Regarding "Medium-term plan and long-term management strategies (what we should become in

10 years)" and "Human resource development and strategies," which were among the issues identified in the

previous year, the Company held discussion forums of Directors including Outside Directors separately from Board of Directors meetings and has formulated a new medium-term management plan based on the discussion there. Regarding "Revision of the risk map," the Company modified the corporate governance structure to establish the Risk Management Subcommittee, which is responsible for the management of risk map, under the Internal Control Committee in order to revamp and strengthen the risk management structure itself.

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The effectiveness of the Board of Directors has generally been ensured.

4. For Further Improvement of Effectiveness

The following three issues were identified as a result of the effectiveness evaluation of the Board of Directors in the current fiscal year. The Board of Directors will endeavor to enhance the effectiveness of the Board of Directors and further strengthen corporate governance by continuing to address these matters systematically.

  • "Enhancement of opportunities for corporate officers to acquire knowledge and skills"
  • "Effective use of digital technologies"
  • "Initiatives on sustainability"

[Supplementary principles 4-14-2: Principles for Training of Directors and Audit & Supervisory Board Members]

Principles for training of Directors and Audit & Supervisory Board Members are listed in Chapter 5, Section 5, 3-(4) of the "Basic Policy for Corporate Governance" on the Company's website.

[Principles 5-1: Policies for Constructive Dialogue with Shareholders]

The Company shall designate a Director in charge of IR and conduct IR activities to promote a constructive dialogue with shareholders and investors.

The Company shall also report to the Board of Directors any opinions and requests from shareholders and investors collected through IR activities.

Specifically, the following activities are to be included in the Company's organizational structure.

  1. Strengthening collaboration between the management of the IR department and other departments through the Director responsible for IR.
  2. Results briefings with securities analysts and institutional investors (quarterly).
  3. Handling group meetings and individual meetings with major foreign and domestic individual investors.
  4. Explanations to major investors regarding General Meeting of Shareholders proposals.
  5. Publishing consolidated reports to enhance the understanding of the Company's mid- and long-term value creation.
  6. Conducting investigations of shareholder findings through external survey organizations.

For fairness in the disclosure of information and to prevent leaks of inside information, the information disclosed in dialogues with major shareholders and investors shall be within the bounds previously determined for disclosure.

2. Capital Structure

Update

Foreign Shareholding Ratio

more than 30%

[Status of Major Shareholders]

Update

Name / Company Name

Number of Shares

Percentage (%)

Owned

The Master Trust Bank of Japan, Ltd. (Trust Account)

34,206,100

27.23

Custody Bank of Japan, Ltd. (Trust Account)

13,607,600

10.83

Custody Bank of Japan, Ltd. (Securities Investment Trust Account)

3,614,900

2.87

GOVERNMENT OF NORWAY

2,345,043

1.86

The Iyo Bank, Ltd.

2,000,100

1.59

Sumitomo Mitsui Banking Corporation

2,000,000

1.59

Sato Traffic Orphan Welfare Fund

1,916,640

1.52

JP MORGAN CHASE BANK 385632

1,777,381

1.41

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BBH BOSTON CUSTODIAN FOR NEXT GENERATION

1,766,400

1.40

CONNECTIVITY FUND A SERIES TRUST 620818

STATE STREET BANK WEST CLIENT - TREATY 505234

1,740,600

1.38

Controlling Shareholder (except for Parent

Company)

Parent Company

None

Supplementary Explanation Update

  1. The information above concerns large shareholders as of September 30, 2021.
  2. The Company holds 4,631,227 shares of treasury shares (3.61% of total shares outstanding) but is excluded from the major shareholders listed above.
  3. The following Statement of Large-Volume Holdings (including the Change Report) is available for public inspection. However, the table above does not include the portion of the Company's actual holdings that cannot be confirmed as of March 31, 2021.

Large holder

Submitted

submission

number of

share certificate

documents

date

share

holding ratio

certificates,

etc. held

Asset Management One Co., Ltd.

Change report

May 12, 2021

8,055,700

6.19%(

as

of

and 1 other company

April 30, 2021)

Sumitomo Mitsui

DS Asset

Change report

May 12, 2021

5,632,725

4.33%(

as

of

Management Company, Limited

April 30, 2021)

and 2 other companies

3. Corporate Attributes

Listed Stock Market and Market Section

Tokyo Stock Exchange

First Section

Fiscal Year-End

March

Type of Business

Electric Appliances

Number of Employees (consolidated) as of the

More than 1000

End of the Previous Fiscal Year

Sales (consolidated) as

of the End of the

From ¥100 billion to less than ¥1 trillion /

Previous Fiscal Year

Number of Consolidated Subsidiaries as of the

From 10 to less than 50

End of the Previous Fiscal Year

  1. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder
  2. Other Special Circumstances which may have Material Impact on Corporate Governance

None

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Taiyo Yuden Co. Ltd. published this content on 29 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 October 2021 01:17:05 UTC.