Through responsible corporate governance, we ensure our Board can effectively deliver long-term benefits to Lam and its stakeholders.
Sound governance is the foundation of our success. Our corporate governance program establishes clear processes, priorities, and responsibilities that support the company’s business and ESG goals.
The highest levels of our leadership are involved in our governance approach. Our Board of Directors aims to foster and maintain responsible and effective corporate governance practices to enhance the company’s success while mitigating risks. With an eye toward continuous improvement, our Board and management periodically review and update the company’s corporate governance policies and procedures.
Ensuring Board effectiveness
As part of the Board’s commitment to responsible corporate governance, we have developed several practices to ensure Board effectiveness:
Across Lam, we integrate ESG principles into day-to-day operations. Key elements of our ESG governance program include:
- Our Board oversees our ESG strategy with focus areas distributed among its three committees. The Nominating and Governance Committee oversees ESG priorities including climate-related goals, the Compensation and Human Resources Committee oversees workforce-related issues and matters related to human capital management, and the Audit Committee oversees our programs for Ethics & Compliance and Information Security.
- Our ESG Executive Steering Committee manages our ESG strategy and consists of our chief executive officer (CEO) and members of the CEO staff. The committee regularly engages our Board around Lam’s ESG strategy, working to gain goal alignment and report on the company’s progress. The committee also approves and supports ESG initiatives proposed by our ESG leadership team. Additionally, in 2021, we formed a new net zero leadership team that works with units across our business to drive progress toward our net zero goals.
- Our topic-specific working groups execute and track key ESG initiatives across various areas of our business. With a focus on areas ranging from product design to employee engagement to environmental health and safety, these teams collaborate across regions and functions to drive and accelerate Lam’s ESG progress.
Lam's ESG governance program at a glance
Our Board’s Nominating and Governance Committee—which is responsible for recommending Board nominees to independent directors—actively seeks qualified candidates who reflect diverse backgrounds, skills, and experiences.
Our Corporate Governance Guidelines define diverse backgrounds to include diversity in terms of geography, gender identity, LGBTQ+ identity, age, ethnicity, race, and classification as a member of an underrepresented minority. When identifying potential director candidates outside the company, we draw from this diverse pool and instruct any third-party search firms retained for a related search to include such candidates for consideration.
Lam’s entire value chain is powered by innovation. Our company and customers succeed by accelerating the development of novel and disruptive ideas. This makes our ability to safeguard the intellectual privacy and data of our employees, customers, and suppliers essential. By investing in our Information Security program, we seek to retain our customers’, suppliers’, and employees’ trust and maintain our company’s competitive edge.
Our Information Security program includes three pillars:
- Product security and engineering to enhance security as we develop products and applications.
- Governance, risk and compliance, and identity access management for internal and external users and access control.
- Security Operations Center through which we detect, analyze, and respond to potential cybersecurity threats.
Our chief information security officer leads our Information Security program and regularly provides updates to the Board. We continually work to improve our program by collaborating with world-class industry peers, global security researchers, and internal groups to focus on business resiliency, engineering, manufacturing, IT, and more.
Lam holds ISO 27001 certification for information security at our corporate headquarters. We screen our suppliers for information security controls in order to protect our information, as well as that of our suppliers.
Our employees play a critical role in protecting and preserving data and information, so we work to educate them on strategies to avoid cyber threats and phishing schemes. Our employees participate in a mandatory, annual information security training. We also conduct periodic tests with our user population to reinforce best information security practices.
Our business relies on sound public policy, as well as the ability to proactively manage a shifting regulatory environment. Lam’s Global Governance Affairs (GGA) group engages key legislative and regulatory stakeholders at the local, state, federal, and international levels to help inform sound public policy and support the continuity of our industry and business. We pursue a collaborative approach to policy engagement, working alongside our customers, suppliers, and industry peers with a focus on the following issues:
- Business operations
- Export control policy
- Research and development
Management and governance
Our GGA group is led by our vice president of global trade and government affairs, who briefs Lam’s Nominating and Governance Committee and each Board meeting. Our lobbying and political activities are governed by our Global Standards of Business Conduct, as well as our Political Activity and Government Affairs Policy. As a matter of company policy, Lam makes no direct political contributions of any kind to political parties or candidates, nor does Lam engage in indirect political spending, such as through its supply chain, consultants, or third-party political organizations such as 501(c)(4) entities.
The National Association of Manufacturers, the Semiconductor Industry Association, SEMI, and the Semiconductor Climate Consortium are just a few of the business and trade associations with which we engage. Some portion of our trade association dues may be used by the associations for political advocacy efforts, however, Lam does not engage in undisclosed political spending, such as contributions above the cost of our membership dues to trade or business associations for political activities. Lam has established its political action committee (PAC), Leading American Microelectronics Political Action Committee (LAMPAC), as another means of engagement and advocacy. For more details, please refer to our Public Policy Engagement and Political Activity statement.
Global taxation management and governance
Our approach to global taxation is to consistently seek to comply with all legal, regulatory, and internal control requirements. Through this approach, we support our business and commercial strategy while ensuring that we use our best efforts to:
- Adhere to all applicable global tax laws, filings, and reporting disclosures.
- Account for tax risks in accordance with the applicable accounting standards and have internal controls in place over our tax reporting processes.
- Align our transfer pricing policies with the guidelines of the Organization of Economic Co-operation and Development, and with all jurisdictions in which we operate.
- Apply the “arm’s length” principle when conducting intercompany transactions.
Bottom Management and governance
Caution Regarding Forward-Looking Statements
Statements made on our Company webpage that are not of historical fact are forward-looking statements and are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, but are not limited to: our goal to be net zero by 2050, our ESG strategy and related goals, our renewable energy goals, our continued commitment to business integrity, the strength and effectiveness of our ethics and compliance framework, our environmental footprint, sustainability in our industry, our social impacts, our inclusion and diversity initiatives, and the sustainability of our products and operations. Some factors that may affect these forward-looking statements include: trade regulations, export controls, trade disputes, and other geopolitical tensions may inhibit our ability to sell our products; business, political and/or regulatory conditions in the consumer electronics industry, the semiconductor industry, and the overall economy may deteriorate or change; the actions of our customers and competitors may be inconsistent with our expectations; supply chain cost increases and other inflationary pressures have impacted and are expected to continue to impact our profitability; supply chain disruptions have limited and are expected to limit our ability to meet demand for our products; the severity, magnitude, and duration of the COVID-19 pandemic (and the related governmental, public health, business, and community responses to it), and its impacts on our business, results of operations, and financial condition, are evolving and are highly uncertain and unpredictable; and widespread outbreaks of illness may impact our operations and revenue in affected areas; as well as the other risks and uncertainties that are described in the documents filed or furnished by us with the Securities and Exchange Commission, including specifically the Risk Factors described in our most recent annual report on Form 10-K and our quarterly report on Form 10-Q. These uncertainties and changes could materially affect the forward-looking statements and cause actual results to vary from expectations in a material way. The Company undertakes no obligation to update any forward-looking statements.