Corporate Governance

As of January 31, 2025

Understanding that sustainable growth requires us to have the confidence of our stakeholders, we are striving to establish a transparent corporate governance structure to maintain sound corporate management.

Our Basic View

We place considerable importance on ensuring that we fulfill our social responsibilities, such as legal compliance, timely disclosure of significant information, development of high-quality products that make full use of our original technology, thorough quality control, and environmental protection. Our management team and employees recognize that sincerely responding to the expectations of society with our original high-tech technology and earning the trust of society will lead to the continuous growth of MegaChips Group.

Governance Structure

Board of Directors

The Board of Directors consists of ten directors elected at the Annual General Meeting of Shareholders, four of whom are outside directors* to ensure objectivity and transparency in management.

The Board of Directors is positioned as a supervisory body that decides on business strategies and business execution, with the Articles of Incorporation stipulating the term of office of directors to be one year in order to quickly respond to changes in the business environment.

In addition, we have introduced an executive officer system to revitalize the Board of Directors by separating the decision-making and supervision from business execution.

Board policy

MegaChips group aims to achieve our mission: “Prosper together with customers by utilizing our system solutions.” Therefore, we believe that the Board of Directors should fulfill the following roles, and by doing so, we strive for the sustainable development of our company.

Establishment of Basic Management Policies
The Board of Directors establishes basic management policies based on the company’s long-term strategy, vision, and target, while ensuring transparency and reliability.
Governance and Supervision
The Board of Directors supervises management’s operational execution and maintains appropriate governance structures to ensure the company’s transparency and reliability.
Risk Management
The Board of Directors assesses the risks faced by the company, establishes an appropriate risk management system, and ensures the stable operation of the company.
Promotion of Diversity and Inclusion
The Board of Directors ensures diversity in terms of gender, nationality, work history, and age, incorporating perspectives to enhance competitiveness and innovation.
Promotion of Sustainable Growth
The Board of Directors promotes management that takes factors of the environment, society, and governance into consideration to achieve sustainable growth for the company.
Succession Planning and Human Resource Development
The Board of Directors promotes the growth of next-generation leaders and supports talent development to ensure the company's sustainable growth.

Auditors and the Board of Auditors

The Company has a Board of Auditors. Three* of the Company's four Auditors appointed at General Meetings of Shareholders are outside auditors and we emphasize the independence of auditors from directors.

Each Auditor audits to determine whether or not the decisions that the Board of Directors makes on basic management policies, important matters for the Company, and execution of operations are being made appropriately.

The Board of Auditors monitors the compliance of executed tasks with laws, the Articles of Incorporation, and internal regulations to determine their legality. Each of the Auditors decides on the division of roles through discussions and conducts audits from a professional perspective, with their respective roles covering areas including legal matters, intellectual property, financial accounting, taxation, and general management.

*No Outside Directors nor Outside Auditors have been employed by the Company prior to their current appointments. The Company has no personnel, financial, technical, trade or any other relationship with any company for which any Outside Directors or Outside Auditors, or any of their close relatives, has served as an officer or an employee over the last ten years.

Corporate Governance Structure

Internal Control System

MegaChips has developed and operates an internal control system based on the “MegaChips Basic Policy on Internal Control System” determined by the Board of Directors. The Board of Directors periodically checks and monitors the operational status of the internal control system. In the execution of business, we are moving forward with management that emphasizes corporate governance by thoroughly developing and implementing internal rules and enhancing the internal audit system.

The President and CEO is responsible for the development, operation, and supervision of the internal control system based on the “MegaChips Basic Policy on Internal Control System” and reports to stakeholders in accordance with legal requirements.

We strive to ensure the appropriateness of its operations by applying its internal control system to the entire MegaChips Group, including its subsidiaries. Each subsidiary periodically reports to the Company on the status of its business execution, financial conditions, and the like, and the Company's Board of Directors and Management Meeting confirm the appropriateness of the business operations. In addition, the Internal Auditing Dept. conducts operational audits on a regular basis and strives to identify compliance issues and problems from the perspective of business efficiency.

In accordance with the internal control reporting system based on the Financial Instruments and Exchange Act, the Company evaluates the developmental and operational condition of the internal control system and reports to the President and CEO and, when necessary, recommends improvements to those responsible for each operation.

For the fiscal year of 2023, the Company received an unqualified opinion from its Accounting Auditors.