Corporate Governance

The Group’s vision is to become one of Japan’s global biotechnology champions. The Group continues to build management system to support further business expansion and recognize that building an effective corporate governance system is an important management priority to enhance its corporate value over the medium to long term. For this reason, the Group utilizes outside directors and establishes cooperation between the Audit Committee, the external auditor and the Internal Audit Department, to support the strategic management and oversight functions of the Board of Directors. At the same time, the Group is striving to increase the integrity and transparency of management and further improve its corporate governance by fulfilling its accountability to various stakeholders, including shareholders, employees, business partners, customers, creditors, consumers and local communities.

 

Corporate Governance System

  • Overview of Corporate Governance System and Reason for Adoption of the System
    The Company has adopted the “company with nomination committee, etc.” system in order to strengthen Board oversight, increase transparency and speed up the decision-making of management, among other aspects.

    Under this system, the Company has clearly separated the oversight function and business execution function of management and has largely delegated business execution authority to its executive officers. It judges this system to be appropriate to increase management efficiency and strengthen the oversight of management.

  • Board of Directors and Executive Officers
    The Board of Directors comprises six directors (including five outside directors). The Board sets basic management policies, supervises the execution of duties by executive officers and directors, and deliberates on management strategies to realize sustainable growth and add corporate value. One of the directors serve concurrently as representative executive officers.

    The Company’s Articles of Incorporation stipulate that there may be no more than ten directors. Furthermore, the Articles of Incorporation stipulate that a resolution to elect a director must be made by a majority vote where shareholders holding at least one-third of the voting rights of the shareholders eligible to exercise voting rights are present, furthermore that a resolution to elect a director may not be made by cumulative voting.

    There are six executive officers, including one representative executive officers, who receive authority from the Board of Directors to make decisions on the Company’s business execution and to carry them out.

  • Outside Directors
    The Company has five outside directors. There are no personal, capital, or transactional relationships or other special interests between the outside directors and the Company.

    In electing the outside directors, the Company recognizes the importance of ensuring the effectiveness of corporate governance and ensuring independence from the management team. Based on their career histories and relationships to the Company, the Company determines that each outside director can ensure adequate independence to execute their duties as an outside director from an independent standpoint. The Company has designated Ms. Julia Gregory, Mr. Kuniaki Kaga, Mr. David Roblin and Mr. Noriaki Nagai as independent directors in accordance with the stipulation of Tokyo Stock Exchange, Inc. as they are outside directors who have no business relationship with the Company.

 

Committees

The Company has a Nomination Committee, a Compensation Committee and an Audit Committee. An overview of the committees is as follows.

Nomination Committee
The Nomination Committee comprises two outside directors and one director serving concurrently as a representative executive officer. The Nomination Committee sets the remuneration policy for directors and executive officers, and, based on that policy determines their individual remuneration in view of performance and other contributions to the company.

Compensation Committee
The Compensation Committee comprises three outside directors and one director serving concurrently as a representative executive officer. The committee meets once a year, in principle, to decide on the compensation for each individual director and executive officer after considering their results, performance and other contributions to the Company, and taking the Company’s operating environment into account.

Audit Committee
The Audit Committee comprises three outside directors and meets once every three months, in principle. The Board of Directors and Executive Officers are responsible for the appointment and dismissal of external auditors and for overseeing the execution of their duties. The Audit Committee does not have full-time members but it works closely with the Internal Audit Department.

Other Matters

Decision-Making Body for Dividend of Surplus
With regard to matters such as the dividend of surplus stipulated in the items under Article 459, Paragraph 1 of the Companies Act, the Company’s Articles of Incorporation stipulate that in order to enable flexible decision-making the Board of Directors shall decide on these matters without a resolution from the General Meeting of Shareholders, except in cases where it is otherwise stipulated by laws and regulations.

Interim Dividend
In accordance with the provisions of Article 454, Paragraph 5 of the Companies Act, the Company stipulates in the Articles of Incorporation that interim dividends can be paid by resolution of the Board of Directors, with June 30 as the base date each year. This is to enable flexible return of profits to shareholders.

Matters Requiring a Special Resolution of the General Meeting of Shareholders
With regard to special resolutions of the General Meeting of Shareholders stipulated in Article 309, Paragraph 2 of the Companies Act, to ensure smooth operation of the General Meeting of Shareholders, the Company’s Articles of Incorporation stipulate that these resolutions must be made by a vote of at least two-thirds where shareholders holding at least one-third of the voting rights of the shareholders eligible to exercise voting rights are present.

Acquisition of Treasury Shares
To enable execution of flexible capital policies in response to changes in the management environment, the Company’s Articles of Incorporation stipulate that the Company may acquire its own stock from market exchanges by resolution of the Board of Directors, in accordance with the provision of Article 165, Paragraph 2 of the Companies Act.