January 7, 2021
METI hereby announces that TDK Corporation (listed on the first section of the Tokyo Stock Exchange (TSE); securities code: 6762) was selected as the winner of the METI Minister’s Award for Corporate Governance of the Year 2020, which is an award program organized by the Japan Association of Corporate Directors (JACD) and supported by the Ministry of Economy, Trade and Industry (METI), the Financial Services Agency, the Ministry of Justice, the Tokyo Metropolitan Government and the Japan Exchange Group, Inc.
Aiming to advance corporate governance reform from the stage of formality to the stage of substantiality, one of Japan’s growth strategies, the TSE revised the Corporate Governance Code in June 2018 and METI revised the Practical Guidelines for Corporate Governance Systems (CGS Guidelines) in September 2018.
In light of these revisions, it is considered important to broadly convey to the public leading efforts of companies whose achievements should be recognized, thereby promoting corporate governance reform. The award program targets companies that effectively supervise company plans, mainly by an independent executive appointment committee, concerning, in particular, a succession plan for presidents and CEOs, which is fundamental for corporate governance. To this end, the METI Minister’s Award was created two years age in the Corporate Governance of the Year program.
In the 2020 program, as a result of examination based on the guidelines for selecting the METI Minister’s Award (see the Appendix), TDK Corporation (listed on the TSE first section; securities code: 6762) was selected as the winner of the award.
2. Reasons for selecting the company
The company was selected as the winner of the award for its outstanding achievements as described below.
Aiming to effectively supervise a succession plan for appointment and succession of the president, the company established an advisory committee for appointment of the president, the majority of which consists of independent outside directors with one of those directors acting as the chair. In addition, it has been activating discussions at the board meeting by introducing third-party perspectives, as seen in the inclusion of the committee as a target of the third-party’s periodic appraisal of the board of directors. Furthermore, the company has enhanced the transparency of the succession plan for appointment and succession of the president, as seen in the disclosures of progress in the activities of the committee and the results of the third-party’s assessment thereof in its corporate governance report, integrated report and other documents.
In appointing the incumbent president in 2016, the members of the committee and an outside expert organization, led by then-chair of the committee, held multiple interviews with presidency candidates in order to select a person with the ability to ensure the company’s sustainable growth. Objectively, they decided on the qualifications of these candidates. Even after this, they have been effectively assessing achievements by the president. Also, the company has been advancing preparations of a succession plan by placing eyes on the future, as seen in the president’s exercising of leadership to start a mid-to-long term program for proactive development of candidate executive officers.
After his inauguration, the incumbent president thoroughly communicated and shared information with independent outside directors in parallel with advancing global business management from mid-to-long term viewpoints. As a result, the company succeeded in achieving a high level of performance, as seen in an increase in total shareholders return (TSR) performance of the company which exceeds average levels of the related industry.
3. Commendation ceremony (tentative)
Date and time: January 18 (Mon.), 2021; from 15:00
Venue: Peacock Room (West), Imperial Hotel Tokyo
1. This event may be postponed or canceled in accordance with the guidelines by the government of Japan and the Tokyo Metropolitan Government.
2. For more information on the commendation ceremony, contact JACD, the organizer of the event.
Division in Charge
Corporate System Division, Economic and Industrial Policy Bureau