Basic Policy of Corporate Governance
Seikagaku Corporation views corporate governance as a core area of management priority, and endeavors to gather information accurately and adequately, speed up decision-making, and strengthen the supervisory function 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 control system, 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.
Concrete Approach and Measures for Corporate Governance
Our corporate governance framework is summarized as below.
- The Board holds regular monthly meetings to make decisions on tasks stipulated in laws, the Articles of Incorporation and rules for the Board, such as basic management policy, mid-term management plan, annual management plan, and election of executive vice president. The Board decides on important business, and supervise the performance of business operations. If necessary, additional meetings of the Board are convened.
- The term of office for members of the Board 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.
- The Board comprises four full-time and two outside members. We enhance management oversight from an independent standpoint by appointing outside members of the Board to one-third of the Board seats.
- The outside members of the Board are responsible for oversight from an objective standpoint, a perspective that incorporates the common interests of shareholders, and is based on expert knowledge and insights into corporate management. The outside members of the Board also attend meetings held among the President & CEO, Audit & Supervisory Board members, and officers in charge to share views of the Company’s business issues and the external environment.
- All two outside members of the Board are reported to the Tokyo Stock Exchange, Inc. as Independent Officers.
- The documents and supplemental materials on the agenda are generally distributed to the members three days before the date of the Board meetings in order to ensure review time for ample discussions.
- The Board consults with the Nomination and Remuneration Committee, which consists of the President & CEO and all Outside members of the Board, in determining matters concerning compensation and candidates for members of the Board, and makes decisions based on the advice received.
- The Outside Officers meeting, comprising the outside members of the Board and outside Audit & Supervisory Board members, analyzes and evaluates the effectiveness of the Board periodically. After reporting the results to the Board, the secretariat works to improve the management of the Board.
- The Audit & Supervisory Board comprises five members, two full-time and three outside members, and each member audits the Board Board members’ execution of duties.
- Out of five members, each one of full-time members and outside members have considerable knowledge of finance and accounting.
- The outside members take the role of supervision of the Board members’ execution of duties from an objective standpoint, a perspective that incorporates the common interests of shareholders, based on expert knowledge and insights into corporate management.
- All three outside Audit & Supervisory Board members are reported to the Tokyo Stock Exchange, Inc. as independent officers.
- To strengthen the oversight function, Audit & Supervisory Board members attend the Board, and the full-time Audit & Supervisory Board members attend important meetings of the Management Committee, Compliance Promotion Committee, Risk Management Committee, and other management bodies and receive reports concerning the status of management and business execution.
- The Audit & Supervisory Board increases audit effectiveness and efficiency by holding regular meetings with the President & CEO and the Audit Department, and by interviewing members of the Board in charge and subsidiary officers, etc. according to an annual program.
- The Audit & Supervisory Board members is putting 10 times of information exchanges with the accounting auditor during the current period, and hear from the accounting auditors about the annual audit plan of the accounting auditor and the results of the accounting audit, etc. and exchange views.
- Seikagaku operates an executive vice president system for enhancing the corporate governance. Under this system, executive functions are separated from the Board, the functions of which are limited to decision-making and the supervision of business operations. Seikagaku endeavors to build up an internal system, which is quickly able to respond to changes in the management environment, by improving the flexibility and efficiency of executive functions, expanding the executive vice president system, and promoting the transfer of authority.
- Seikagaku holds weekly Management Committee meetings. The Committee, composed of full-time members of the Board and executive vice presidents, confers and decides agendas of executive functions they have been tasked for implementation by the Board, based on the basic policy of the Board.
- In addition to the social ethics code, in order to comply with strict laws and regulations of the pharmaceutical industry, Seikagaku has established a compliance program (including the SKK Group Compliance Code of Conduct) based on the Creed and the Guidelines for Our Activities as defined in our Core Values. The Seikagaku Compliance Program Handbook is compiled and distributed to increase the awareness and understanding of employees.
- The Compliance Committee is chaired by the President & CEO and shares the same members as the Management Committee. There are also various programs to promote compliance on a company-wide basis. And Seikagaku has implemented various measures to enhance effectiveness.
- To appropriately manage business risks and take risk prevention measures, , Seikagaku has established a Risk Management Committee, chaired by a Board member in charge of administration and comprising the executive vice presidents in charge of various departments.
- Seikagaku defined in company’s stipulating the rules for regularly reporting important events, such as compliance and risk status, in addition to financial condition, ensuring adequate and efficient operation of subsidiaries.
- Seikagaku ensures that management decision and daily business execution are in compliance with laws and regulations by receiving advice and instructions from outside lawyers.