Home > Investor Relations > Message from President > Corporate Governance

Message from President

Corporate Governance

Basic Policy of Corporate Governance

The Seikagaku Corporation views corporate governance as an area of utmost management priority, and endeavors to gather information accurately, speed up decision-making, and better supervise the level of business execution. We are profoundly aware of our social mission and responsibilities as a pharmaceutical company, and are committed to always earning the confidence of stakeholders, including our shareholders. In addition to establishing internal controls, such as for compliance and risk management, we are enhancing our corporate governance through mutual collaboration among departments within the company in order to create a management environment that meets the expectations of society.

Seikagaku Corporation applies a Board of Corporate Auditors system. Therefore, Seikagaku has the shareholders’ meeting, the Board of Directors, and the Board of Corporate Auditors. Considering the scale of the Company and its specialization in pharmaceuticals, the Board of Directors (including one outside director) supervises the directors in carrying out their duties, and the Board of Corporate Auditors works closely with an internal audit department and an accounting firm to conduct audits and provide supervision. This framework, which is summarized below, is considered to be the most effective and appropriate approach to corporate governance at Seikagaku.

Concrete Approach and Measures for Corporate Governance

<<Board of Directors>>

The Board of Directors of Seikagaku Corporation holds regular monthly meetings to carry out tasks stipulated in the Articles of Incorporation, make decisions on important business, and supervise the performance of business operations. If necessary, additional meetings of the Board of Directors are convened.
The term of office for directors is one year with the aim of creating a management structure that would be able to adapt quickly and flexibly to changes in the business environment.
There is one outside director in the Board of Directors, who acts as an “Independent Director” under the TSE regulation in order to enhance the supervisory functions of the Board. The outside director functions in a supervisory role, by providing a fair outside perspective on management and utilizing the director’s professional experience. Through the Board of Directors, the outside director receives reports on internal and financial audits, in addition to receiving audit reports from the auditors.

<<Business Operations>>

Seikagaku introduced a managing officer system. Under this system, executive functions are separated from the Board of Directors, the functions of which are now limited to decision-making and the supervision of business operations.
To speed up decision-making processes, we hold weekly Management Committee meetings. At the meetings, full-time directors and managing officers confer to ensure that all concerned parties are fully informed about management issues.
Seikagaku established the Risk Management Committee in April 2008, with the aim of strengthening the internal control framework. The Committee, chaired by the director in charge of administration comprises primarily directors and managing officers of various functions.

<<Audit framework>>

In June 2007, Seikagaku further strengthened the audit framework by appointing one additional outside corporate auditor, bringing the total number of corporate auditors to five. All three outside corporate auditors, including one auditor with expertise in finance and accounting, are “Independent Auditors” under the TSE regulation.
In order to enhance the level of supervision, the full-time auditors participate as observers in the Risk Management Committee and the Compliance Committee, which are both part of the internal control framework, in addition to participating in the Management Committee.
The full-time auditors play a central role in communicating whenever necessary with the internal audit departments. This ensures that information is shared between the Board of Corporate Auditors and the internal audit departments, to effectively enhance the supervisory functions of the Board of Auditors.
The outside auditors share information with the full-time auditors, in order to provide suitable supervision from a fair perspective and utilizing their professional experience

<<Internal audit and accounting framework>>

Internal audits include audits performed by the Audit Department, as well as quality audits and GCP audits, which are carried out by the Quality Assurance Dept. and the Regulatory Affairs Dept., respectively. These audits verify that all departments are conducting their operations in an appropriate manner.
Seikagaku employs Deloitte Touche Tohmatsu LLC as the accounting firm. The firm performs audits on the Company as the need arises, including during the course of the fiscal year in addition to at the fiscal closing.
The certified public accountants responsible for carrying out financial audit duties for Seikagaku are Mr. Hideki Yonezawa and Ms. Keiko Hayashi of Deloitte Touche Tohmatsu LLC. Four certified public accountants and four assistant certified public accountants are employed to assist with execution of the financial auditing duties.

<<Compliance>>

Seikagaku has instituted a compliance program, based on the management beliefs and code of conduct outlined in the corporate principles, in order to act as a socially ethical company and achieve compliance with the stringent regulations that surround the pharmaceutical industry. We have also established the Compliance Committee, which is chaired by the President and shares the same members as the Management Committee.
The Seikagaku Compliance Program Handbook has been compiled and distributed to increase the awareness and understanding of managing officers and employees. There are also company-wide educational programs on a variety of topics, including insider trading and sexual/power harassment, etc.

(As of March 31, 2010)

PageTop