Corporate Governance and Tax Matters

Basic Stance/Policy

Based on its management philosophy of “providing innovative products to the world and generating new trends to contribute to the creation of an affluent society,” THK’s basic stance toward corporate governance is to improve corporate value over the medium to long term. From the perspective of “corporate value maximization,” this entails raising management transparency to all stakeholders, including shareholders, while at the same time conducting appropriate and efficient management.

Corporate Governance Framework

Based on our CSR policy, which consists of our Corporate Philosophy, Corporate Basic Policies, and Action Charter, we improve the transparency of THK Group operations for all stakeholders, including shareholders, as well as conduct appropriate and efficient management with the aim of maximizing our corporate value. Furthermore, we work toward achieving our fundamental policy of attaining sustainable growth and improving our corporate value over the medium to long term based on appropriate cooperation with all of our stakeholders.

For our institutional design, in conjunction with our establishment of an Audit and Supervisory Committee, we also instituted a non-mandatory Nominee Advisory Committee and a Remuneration Advisory Committee, with half of the members of both committees being outside directors to ensure further transparency and fairness in management personnel and remuneration. We have also introduced an executive officer system. In doing so, THK has strengthened the auditing functions of the Board of Directors in addition to bringing greater speed and efficiency to management-related decision-making and the management of corporate affairs. Furthermore, over one-third of the Board of Directors comprises independent outside directors in order to enhance the neutrality and objectivity of management.

Sixteen Board of Directors meetings were held this year, and as in the previous year, some members attended via video conference as a precaution for the coronavirus, depending on the circumstances.

Tax Matters

Basic Policy

The THK Group appropriately files tax returns and pays taxes in accordance with both international tax regulations and the laws of each country and region in which it does business.

Tax Risks

In addition to closely reviewing any transaction that may incur tax risks, we handle such matters appropriately by seeking advice from outside experts and consulting with the relevant tax authorities. Furthermore, we seek to control tax risks by utilizing advance pricing agreements (APA).

Our Relationship with Tax Authorities

The THK Group strives to maintain a relationship of trust with tax authorities by disclosing required information in good faith.

Ensuring Transparency

The THK Group appropriately discloses information in accordance with each country’s laws and disclosure standards. Furthermore, we submit a Master File as well as a Country-by-Country Report in accordance with Japanese tax rules.

Structure of the Board of Directors

THK’s Board of Directors comprises a total of eight directors—including one outside director—who are not members of the Audit and Supervisory Committee, in addition to three outside directors who are Audit and Supervisory Committee members. The Board of Directors makes decisions on important matters of general management and carries out the oversight of directors and executive officers in the execution of their duties. There are also four outside directors whose independence meets the evaluation criteria stipulated by the Tokyo Stock Exchange and THK. With over a third of the directors being outside directors who possess specialized professional knowledge and qualifications related to corporate accounting or general management, this structure has further enhanced management neutrality, legality, and validity while improving the board’s management oversight function.

Directors (As of March 19, 2022)

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President and CEO	-	Akihiro Teramachi
Executive Vice President and CIO	-	Toshihiro Teramachi
Executive Vice President and CFO	-	Hiroshi Imano
Director and Senior Managing Executive Officer	Senior General Manager of Industrial Machinery Headquarters	Takashi Teramachi
Director and Senior Managing Executive Officer	Senior General Manager of Automotive & Transportation Headquarters	Nobuyuki Maki
Director and Managing Executive Officer	General Manager of Industrial Machinery Headquarters Senior General Manager of Sales Division, Industrial Machinery Headquarters	Junji Shimomaki
Director	(In charge of Quality Assurance, Risk Management, and Production Engineering)	Junichi Sakai
Outside Director	-	Masaaki Kainosho
Outside Director	-	Junko Kai
Outside Director	(Audit and Supervisory Committee Member)	Masakatsu Hioki
Outside Director	(Audit and Supervisory Committee Member)	Tomitoshi Omura
Outside Director	(Audit and Supervisory Committee Member)	Yoshiki Ueda

Executive Officers (As of March 19, 2022)

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Managing Executive Officer	Appointive Officer to President in Charge of China	Takashi Okubo
Managing Executive Officer	Special Appointive Officer to Head of Industrial Machinery Headquarters	Masaki Sugita
Managing Executive Officer	Special Appointive Officer to President	Tetsuya Hayashida
Managing Executive Officer	Executive Vice Chairman of THK (CHINA) CO., LTD. President of THK (CHINA) CO., LTD.	Naoki Kinoshita
Managing Executive Officer	General Manager of IMT Division, Industrial Machinery Headquarters	Takanobu Hoshino
Managing Executive Officer	Senior General Manager of Production Division, Industrial Machinery Headquarters	Akihiko Kambe
Managing Executive Officer	Senior General Manager of Engineering Division, Industrial Machinery Headquarters	Kaoru Hoshide
Managing Executive Officer	General Manager of Automotive & Transportation Headquarters Director and Executive Vice Chairman of THK RHYTHM CO., LTD.	Masato Sawada
Managing Executive Officer	Representative Director and President of THK Europe B.V. Representative Director and President of THK GmbH Representative Director and President of THK France S.A.S. Representative Director and President of THK Manufacturing of Europe S.A.S. Representative Director and President of THK Manufacturing of Ireland Ltd.	Toshiki Matsuda
Managing Executive Officer	President of THK Holdings of America, L.L.C. President of THK America, Inc.	Nobufumi Sato
Executive Officer	General Manager of Sales Division, Industrial Machinery Headquarters General Manager of International Sales Division, Sales Division, Industrial Machinery Headquarters	Yukio Yamada
Executive Officer	Deputy Senior General Manager of Production Division, Industrial Machinery Headquarters General Manager of Production Engineering Department, Production Division, Industrial Machinery Headquarters General Manager of Global Procurement Department, Production Division, Industrial Machinery Headquarters	Takehiro Nakanishi
Executive Officer	Head of The President’s Office Head of Corporate Planning Department, Corporate Strategy Headquarters	Masaki Kimura
Executive Officer	General Manager of Finance & Accounting Department, Corporate Strategy Headquarters	Kenji Nakane
Executive Officer	Head of IOT Innovation Division	Takuya Sakamoto
Executive Officer	Deputy General Manager of Corporate Strategy Headquarters	Yasutoshi Hoshino
Executive Officer	Head of Product Planning Department, Industrial Machinery Headquarters Head of Engineering and Development Department, Engineering Division, Industrial Machinery Headquarters Head of Solution Development Unit, IOT Innovation Division Head of Engineering Division, THK (CHINA) CO., LTD.	Katsuya Iida
Executive Officer	President of THK NIIGATA CO., LTD.	Toshihiro Takahashi
Executive Officer	Representative Director and President of THK RHYTHM CO., LTD.	Akira Furihata