We continue our efforts to further improve the transparency and supervisory function of management for stronger corporate governance in order to realize our corporate philosophy.
In strengthening our corporate governance, our basic policies are to protect shareholder rights and ensure their equal treatment, cooperate appropriately with non-shareholder stakeholders, ensure proper information disclosure and transparency, execute the duties of the Board of Directors,band engage in dialogue with shareholders.
Corporate Governance Framework
Fuji Electric’s corporate governance framework consists of the Board of Directors, which performs the functions of management supervision and making important decisions, and the Audit & Supervisory Board, which performs the function of management audits, ensuring that the framework guarantees objectivity and neutrality.
The Company actively appoints Outside Directors and Audit & Supervisory Board Members that satisfy the requirements for independence, endeavors to strengthen management supervisory and auditing functions, and has established the Nomination and Remuneration Committee comprising a majority of Outside Directors as an advisory body to the Board of Directors, and the majority of its members and its chairman are Outside Directors.
In addition, in order to clarify the roles of management and execution, we have introduced an executive officer system to clarify the responsibilities for each business. In order to continue strengthening our operating platform as a company with sustainable growth, in fiscal 2022 we appointed a Chairman of the Board and CEO and President and COO. We are endeavoring to build an effective corporate governance framework by establishing the Executive Committee, which discusses and reports on important matters related to management as an advisory body to the Chairman of the Board and CEO and President and COO, as well as other committees tasked with planning and promoting key business strategy issues and key external issues, such as legal compliance.
Supervisory and Auditing Bodies
FY2024 Results
Board of Directors
Role : Management supervision and decision-making Chairman / Committee Chairman :Chairman of the Board and CEO, Michihiro Kitazawa
Main Topics of Discussion, Review, and Deliberation :
■ Management strategy, sustainability, and governance (management plans and business strategies, SDG issues, statuses of compliance and risk management initiatives, etc.)
■ Financial results and financial affairs (monthly, quarterly, and annual results and forecasts; risks of loss; content of external disclosures, etc.)
■ Dividends from surplus (dividend policy, dividend payout ratio policy, policy on explanations to stakeholders, etc.)
■ Cross-shareholdings (policy on holding and selling, rationale for holding, etc.)
■ Organizational changes and personnel reassignments (purpose and details, division of executive roles, skill matrix, etc.)
Number of meetings per year : 13
Nomination and Remuneration Committee
Role : Advisory body to the Board of Directors Chairman / Committee Chairman :Outside Director, Toshihito Tamba
Main Topics of Discussion, Review, and Deliberation :
■ Advisory matters
・Policy on the composition of the Board of Directors
・Policy and criteria for the appointment or dismissal of Directors, the President and Chairman of the Board of Directors, and Audit & Supervisory Board Members
・Appointment and dismissal of Directors, the President and Chairman of the Board of Directors, and Audit & Supervisory Board Members
・Matters related to the formulation and implementation of a succession plan for the President and Chairman of the Board of Directors
・Policies and criteria for the remuneration of Directors and Audit & Supervisory Board Members
・Details of remuneration for Directors and Audit & Supervisory Board Members
◆ In fiscal 2024, the following matters were deliberated on and reported to the Board of Directors:
・Personnel affairs and remuneration, etc. for Directors and Audit & Supervisory Board Members
・Introduction of a share-based remuneration plan
Main Topics of Discussion, Review, and Deliberation :
■ Offering of opinions at meetings of the Board of Directors, Executive Committee, Fuji Electric Compliance Promotion Committee, and other important committees
■ Review of important approval documents, etc.
■ Holding of meetings with the President and COO
■ Receipt of explanations on the status of operational execution from Directors, internal auditing divisions, etc.
■ Investigation of the statuses of operations and assets, etc. of the Company and its affiliate companies
■ Review of the audit methods and results of the Accounting Auditors
Number of meetings per year : 8
Business Execution Bodies
FY2024 Results
Executive Committee
Role : Advisory body to the Chairman of the Board and CEO and the President and COO, deliberation and reporting on important matters concerning management Members :Chairman of the Board and CEO, President and COO, Executive Officers, Standing Audit & Supervisory Board Members
Number of meetings per year : 24(twice a month)
SDGs Promotion Committee
(Sustainability Committee from 2025)
Role : Deliberation on issues related to the promotion of the environment, human rights and human resource empowerment, and CSR procurement; evaluation of measures Members : Senior Managing Executive Officer, Managing Executive Officers, and Executive Officers
Number of meetings per year : 2
Fuji Electric Compliance
Promotion Committee
Role : Ensuring thorough compliance with laws, regulations, and social norms applicable to Fuji Electric Members : President Executive Officer, Senior Managing Executive Officers, Managing Executive Officers, Executive Officers, Standing Audit & Supervisory Board Members, attorneys
Number of meetings per year : 2
Health & Safety Promotion Committee
Role : Drafting and deliberation of Fuji Electric’s health and safety policy, and promotion of safety management Members : General Manager, Human Resources and General Affairs Office; General Managers of major production and sales bases in Japan
Number of meetings per year : 1
Skills Development Committee
Role : Promoting cross-functional skills development for Fuji Electric as a whole Members : General Manager, Human Resources and General Affairs Office; general managers of business divisions; Corporate General Manager, Production & Procurement Group; Corporate General Manager, Corporate R&D Headquarters
Number of meetings per year : 2
Production Technology Committee
Role : Deciding on and ensuring thorough communication of policies for improving Fuji Electric’s production technology capabilities Members : Corporate General Manager, Production & Procurement Group; general managers of business divisions; Corporate General Manager, Corporate R&D Headquarters
Number of meetings per year : 2
Technology Development Committee
Role : Promoting taking on the challenge of new technologies and their commercialization, and the development of products that match market trends; leading company-wide research by formulating policies, selecting themes, and following up according to implementation status Members : Corporate General Manager, Corporate R&D Headquarters; Senior Managing Executive Officer; general managers of business divisions; Corporate General Manager, Power Electronics Sales Group
Number of meetings per year : 2
International Standardization Committee
Role : Deciding on and promoting policies for advancing international standardization Members : General managers of business divisions; Corporate General Manager, Power Electronics Sales Group
Number of meetings per year : 2
List of Officers (As of June 25, 2025)
The Directors and Audit & Supervisory Board Members are selected based on a balance of qualifications, experience, and diversity of the Board of Directors as a whole. The term of office of directors is set to one year in order to clarify management responsibilities for the fiscal year and to create a management structure that can respond quickly to changes in the business environment.
Directors
Persons with the qualifications, experience, and other attributes required to execute the Company’s management policies are appointed as Standing Directors. Outside Directors are appointed from among persons equipped with the insight and experience required to make multilateral business decisions who also have an understanding of Fuji Electric’s management, including managers at listed corporations and experts in academic fields deeply related to our business.
In addition, regarding the insight and experience required for the Board of Directors of Fuji Electric, in light of the Management Policies of Fuji Electric, including “contribute to the creation of a sustainable society through our energy and environment businesses,” and our business characteristics, we have defined the seven fields of “business management,” “finance and accounting,” “global business,” “environment and society,” “R&D, technology, manufacturing, and DX,” “corporate governance, legal matters, and risks” and “marketing and industry.”
Areas expected to Director by the Company
Business Management
Finance and Accounting
Global Business
Environment and Society
R&D, Technology, Manufacturing, and DX
Corporate Governance, Legal Matters, and Risks
Marketing and Industry
Michihiro Kitazawa
Representative Director
Chairman of the Board
Chief Executive Officer
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Shiro Kondo
Representative Director
President and
Chief Operating Officer
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Toshihito Tamba
Outside Director
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Yukari Tominaga
Outside Director
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Yukihiro Tachifuji
Outside Director
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Tomonari Yashiro
Outside Director
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Toru Hosen
Director
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Hiroshi Tetsutani
Director
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Masashi Kawano
Director
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Yoshitada
Miyoshi
Director
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Audit & Supervisory Board Members
Standing Audit & Supervisory Board Members are appointed by persons who are familiar with the Company’s operations in general and possess expert knowledge and experience. Outside Audit & Supervisory Board Members are appointed by persons equipped with the expert knowledge and experience required to undertake audits, including corporate managers, persons with experience as an auditor of a listed company, legal experts, and accounting experts.
Junichi Matsumoto
Standing Audit & Supervisory Board Member
Chairman of the Audit & Supervisory Board
Jun Ohashi
Standing Audit & Supervisory Board Member
Hirohiko Takaoka
Outside Audit & Supervisory Board Member
Yuko Katsuta
Outside Audit & Supervisory Board Member
Partner, ITN Partners
Outside Director, Ferrotec Corporation
Noriyuki Uematsu
Outside Audit & Supervisory Board Member
Managing Director, Uematsu Certified Public Accountants Office
Representative Director, SU Consultant Co. Ltd.
Outside Audit & Supervisory Board Member, Cybozu, Inc.
Outside Audit & Supervisory Board Member, GEOLIVE Group Corporation
Independence Criteria for Outside Directors and Audit & Supervisory Board Members
Fuji Electric judges applicable candidates to be fully independent from the Company when they do not meet any of the requirements stipulated under the independence criteria established by the Company, in addition to the criteria for independence stipulated by domestic financial exchanges, including the Tokyo Stock Exchange.
Activities of Outside Directors and Audit & Supervisory Board Members in Fiscal 2024
To strengthen our management supervisory and auditing functions, and to ensure the validity and appropriateness of our important decisions, the Directors and Audit & Supervisory Board Members play the proper roles as stated below.
Outside Directors
Name
Status of Attendance at Board of Directors Meetings (Meetings Attended/Meetings Held)
Status of Attendance at Nomination and Remuneration Committee (Meetings Attended/Meetings Held)
Main Activities
Toshihito Tamba
13/13
2/2
Board of Directors
Mr. Tamba offered opinions as necessary on all areas of Fuji Electric’s management, including on the following matters, based on his professional standpoint and considerable insight as an experienced manager at listed companies.
Formulation of a business plan taking into account changes in the market environment
Appropriate ways to carry out IR activities
Nomination and Remuneration Committee
As the committee chairman, Mr. Tamba led the supervisory function in appointment of candidates for Directors and Audit & Supervisory Board Members of the Company and the process of determining remunerations for Directors and Audit & Supervisory Board Members from an objective and neutral standpoint.
Yukari
Tominaga
13/13
2/2
Board of Directors
Ms. Tominaga offered opinions as necessary on all areas of Fuji Electric’s management, including on the following matters, based on her abundant experience and considerable insight pertaining to corporate management.
How to promote the active participation of diverse human resources
Initiatives for expansion of the IT solutions business
Nomination and Remuneration Committee
Ms. Tominaga carried out the supervisory function in appointment of candidates for Directors and Audit & Supervisory Board Members and the process of determining remunerations for Directors and Audit & Supervisory Board Members from an objective and neutral standpoint.
Yukihiro
Tachifuji
13/13
2/2
Board of Directors
Mr. Hayashi offered opinions as necessary on all areas of Fuji Electric’s management, including on the following matters, based on his professional standpoint and considerable insight about the environment, transportation, and urban sustainable development fields that are closely related to the Company’s management policies.
Initiatives to achieve decarbonization
How to expand the overseas businesses
Nomination and Remuneration Committee
Mr. Hayashi carried out the supervisory function in appointment of candidates for Directors and Audit & Supervisory Board Members and the process of determining remunerations for Directors and Audit & Supervisory Board Members from an objective and neutral standpoint.
Tomonari
Yashiro
13/13
2/2
Board of Directors
Ms. Tominaga offered opinions as necessary on all areas of Fuji Electric’s management, including on the following matters, based on her abundant experience and considerable insight pertaining to corporate management.
How to promote the active participation of diverse human resources
Initiatives for expansion of the IT solutions business
Outside Audit & Supervisory Board Members
Name
Status of Attendance at Board of Directors Meetings (Meetings Attended/Meetings Held)
Status of Attendance at Audit & Supervisory Board Meetings
(Meetings Attended/Meetings Held)
Main Activities
Hirohiko Takaoka
13/13
9/9
Board of Directors
Mr. Takaoka confirmed and offered opinions as necessary concerning agenda items and the status of Fuji Electric’s business activities based on his extensive experience and considerable insight as an experienced Full-time Audit & Supervisory Board Member and any other type of executive of listed companies.
Audit & Supervisory Board
Mr. Takaoka confirmed and offered opinions on the legal compliance of the overall business activities of Fuji Electric.
Yuko Katsuta
13/13
8/8
Board of Directors
Ms. Katsuta confirmed and offered opinions as necessary concerning agenda items and the status of Fuji Electric’s business activities based on her expert knowledge as an attorney.
Audit & Supervisory Board
Ms. Katsuta confirmed and offered opinions on the legal compliance of the overall business activities of Fuji Electric.
Noriyuki Uematsu
10/10
6/6
Board of Directors
Mr. Uematsu confirmed the content of proposals and the status of Fuji Electric’s business activities as well as offered necessary opinions as appropriate based on his expert knowledge as a certified public accountant.
Audit & Supervisory Board
Mr. Uematsu confirmed matters as appropriate and offered opinions from the perspective of ensuring legal compliance for overall business activities.
Initiatives to Improve the Board of Directors’ Effectiveness
Training for Directors and Audit & Supervisory Board Members
Before taking office, Standing Directors and Audit & Supervisory Board Members undergo compliance training, which also encompasses legal and taxation matters. They are also provided opportunities after taking office to acquire necessary knowledge on an ongoing basis.
Before taking office, Outside Directors and Audit & Supervisory Board Members are briefed on the state of the Company and the roles they are expected to perform. After taking office, they have the chance to deepen their understanding of the Company through presentations on the strategies for business, R&D, and other operations, inspections of business bases, and other ways.
Outside Directors and Audit & Supervisory Board Members touring the Chiba Factory
Evaluation of Effectiveness of the Board of Directors
We conduct the evaluation of the effectiveness of the Board of Directors with the use of a third-party survey once a year in order to verify whether the Board of Directors is properly fulfilling its expected roles and functions and to facilitate further improvements thereof. Furthermore, in order to deeply examine the survey results, individual interviews of the Directors and Audit & Supervisory Board Members are regularly implemented by the internal Board of Directors secretariat. Through all of these processes, we earned mostly positive assessments, thereby assuring the overall effectiveness of the Board of Directors.
The results of the surveys and interviews are discussed and reported in the Board of Directors, and issues that require improvement are shared with everyone.
Method of Evaluation of Effectiveness of the Board of Directors
■ Main question categories
1.
Board of Directors make-up, administration, discussions, and monitoring functions
2.
Support structure and training for Directors and Audit & Supervisory Board Members
3.
Dialogue with shareholders
4.
Initiatives implemented by Directors and Audit & Supervisory Board Members themselves
Results of Initiatives to Address the Major Issues Identified in the Fiscal 2024 Effectiveness Evaluation, the Main Opinions and Requests of Outside Directors and Audit & Supervisory Board Members, and the Policies on Initiatives in Fiscal 2025
Major Issues
Results of Initiatives in FY2024
Major Opinions of the Outside Directors and Audit & Supervisory Board Members on the Initiatives for FY2024
Policies for Major Initiatives in FY2025
Discussion of important medium- to long-term issues that contribute to corporate value enhancement
Discussion of medium- to long-term issues that contribute to corporate value enhancement
Medium-Term Management Plan
Human resource strategy (human resource cultivation, promoting active participation of diverse human resources, etc.)
Key SDG issues
The Medium-Term Management Plan has been discussed sufficiently. We would like more opportunities to discuss our medium- to long-term vision and strategic themes (such as human resource measures, R&D measures, and manufacturing measures).
Continue to work to enhance opportunities to report on and discuss medium- to long-term issues that contribute to corporate value enhancement.
Human resource measures
R&D measures
Manufacturing measures
Enhancement of the reporting required for monitoring important decisions and business execution
Progress reports on operations from each division
Continued reporting on Executive Committee agenda items
Semiconductor investment (plans, results and progress)
Business transformation projects
Making Fuji Electric Engineering & Construction Co., Ltd. into a wholly owned subsidiary
In addition to ad hoc reporting on individual cases, there is an opportunity to receive an explanation once a year on the implementation status of the compliance program, which covers matters related to
internal controls such as those compliance, occupational safety, and quality issues.
However, to strengthen monitoring, we would like to receive reports twice a year, on a semi-annual basis.
Continue to work to enhance opportunities for each division to report on and discuss the status of business execution.
Implementation status of the compliance program
Semiconductor investment-related matters
Business transformation projects
Business strategies of major subsidiaries
Remuneration for Directors and Audit & Supervisory Board Members
Process of determining remuneration
The Nomination and Remuneration Committee discusses the validity of the policies, criteria, and levels of remuneration in light of changes in the operating environment, objective external data, and other matters and then reports to the Directors, and then the Board of Directors resolves on the policy for the final decisions respecting the details of the committee’s report.
The decision on remuneration amounts for individual Directors is left to the discretion of Michihiro Kitazawa, Representative Director, Chairman of the Board and CEO, butwithin the limit resolved at the General Meeting of Shareholders and with reference to the details of the committee’s report.
Policy regarding decisions on remuneration
We have established a remuneration system and remuneration levels that are deemed appropriate for their respective duties and in accordance with shareholder mandates, giving due consideration to the aims of securing and maintaining competent personnel and providing incentives for the improvement of business performance.
We routinely verify that the system and levels are appropriate or whether they need reviewing in light of changes in the operating environment or objective external data.
Classification-Based Remuneration System
Classification
Remuneration System
Standing Directors
As Standing Directors are responsible for improving consolidated performance each fiscal year and enhancing corporate value over the medium to long term, their remuneration, etc. shall be structured and managed as follows.
(1) Base remuneration
A predetermined fixed amount corresponding to their position is paid at the set time each month.
(2) Performance-linked remuneration
i. Annual bonus
The amount paid is determined based on the consolidated ratio of operating profit to net sales for the previous fiscal year, which is set as an important target in the Medium-Term Management Plan as well as by comprehensively considering consolidated performance (net sales, operating profit, profit, dividend amount, etc.). The bonus is paid at the set time each year only when a dividend from surplus is paid to shareholders. To more clearly link the total amount paid with the consolidated performance each fiscal year, the total amount is set at no more than 1.0% of the consolidated profit for the business year preceding the payment date.
ii. Share-based remuneration
To more clearly link remuneration with the value of the Company’s shares, the amount paid is determined based on the consolidated ratio of profit to net sales for the previous fiscal year as well as by comprehensively considering consolidated performance (net sales, operating profit, profit, dividend amount, etc.). In addition, the Company’s shares corresponding to the above payment amount are granted at the set time each year only when a dividend from surplus is paid to shareholders, and the total number of shares granted per business year is capped at 42,000.
For fiscal 2024 performance, the consolidated operating profit ratio was 10.5% and the consolidated profit ratio
was 8.2%. The annual bonus comprised approximately 37.6% of remuneration, while share-based compensation
comprised approximately 27.0%.
Standing Audit & Supervisory Board Members
Outside Directors and Audit & Supervisory Board Members
A predetermined amount is paid monthly at a certain time according to their position as base remuneration.
For details such as the total amount of remuneration, etc. by classification, the total amount by remuneration type and the number of applicable officers, please refer to “Remuneration, etc. of Officers” in the annual securities report. (Japanese only)
Audit & Supervisory Board Members and Internal Audits
Overall picture of strengthening collaboration between audit functions
We ensure the effectiveness of audits by strengthening cooperation between the statutory auditing function (Audit & Supervisory Board Members and Accounting Auditors) and the internal auditing function (the Internal Audit Office). In addition, to strengthen audits across the entire Group, we collaborate with Audit & Supervisory Board Members and the Internal Audit Office of subsidiaries that are considered large companies under the Companies Act of Japan.
Framework for Strengthening Collaboration between Audit Functions
Audits by the Audit & Supervisory Board Members
Audit & Supervisory Board Members conduct audits with a focus on strengthening the compliance of overseas subsidiaries, ensuring strict compliance with quality control and safety control rules, and monitoring the operational status of disclosures.
The Audit & Supervisory Board reviews audit policies and plans, the appropriateness of Accounting Auditors’ auditing methods and results, and the assessments of Accounting Auditors. In addition, important matters are reported from the Standing Audit & Supervisory Board Member to the Outside Audit & Supervisory Board Members, and active communication takes place.
Internal audits
As a general rule, every second year the internal auditing divisions as bodies directly under the President and COO perform the following audits on Fuji Electric’s business divisions and subsidiaries so as to comprehensively cover the entire organization in accordance with the Internal Auditing Rules. Regarding issues pointed out, we confirm the state of progress every quarter and implement follow-up audits as required.
In fiscal 2024, we conducted on-site audits at 45 bases, or about 50% of the audit bases. No risks or inadequacies with the potential to seriously affect management were discovered.
Type of Audit
Main Tasks
Organizational management
Evaluating the appropriateness of management and administration (development of regulations, approval procedures, performance management, etc.)
Risk management
Evaluating the effectiveness of risk management systems and risk response
Compliance
Checking for compliance with laws and regulations based on the Fuji Electric Compliance Program and confirming legal compliance
Business execution
Evaluating the appropriateness, efficiency, and effectiveness of business execution
(booking of sales and purchases, investments, cash flow, etc.)
Accounting
Evaluating the appropriateness of cost accounting and the soundness of assets and liabilities
Policy on Cross-Shareholding
Fuji Electric holds listed shares as a matter of policy in order to maintain and strengthen relations with its investee companies. Our basic policy is to reduce cross-shareholdings. Even in cases where we recognize a certain rationality in holding these cross-shareholdings, we will reduce them while paying attention to the impact on management and business.
Based on the above policy, we have reduced the number of different listed stocks we held from 102 as of the end of fiscal 2018 to 6 as of the end of fiscal 2023. In fiscal 2024, we reduced the number of shares we held in some of these stocks.
The Board of Directors periodically evaluates the rationality of shareholding in light of whether it is necessary to maintain and strengthen relations with the investee companies and of the comparison of capital cost and return. The details of the review are disclosed.
The voting rights that come with cross-shareholding are exercised after considering all relevant factors, including whether the proposed action will help the issuing company to establish an appropriate corporate governance framework and to increase its medium- to long-term corporate value, and what impact the action will have on Fuji Electric. We also have dialogue regarding the details of the proposal, among others, with the issuing company as necessary.
Number of Cross-Shareholdings and Balance Sheet Value
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In addition to the above, there are shares deemed to be held by the Company (at the end of fiscal 2018: 2.5 billion yen; at the end of fiscal 2019: 2.2 billion yen; at the end of fiscal 2020: 2.2 billion yen; at the end of fiscal 2021: 1.9 billion yen; at the end of fiscal 2022: 2.4 billion yen; at the end of fiscal 2023: 0.7 billion yen; at the end of fiscal 2024: 0.3 billion yen). The value of shares deemed to be held is calculated by multiplying the number of shares held by the market price as of the end of the applicable fiscal year. The total amount of cross-shareholdings (including shares deemed to be held by the Company) at the end of fiscal 2024 was 88.2 billion yen (12.1% of consolidated net assets).
