Sustainability

The Company and the Group are committed to enhancing the corporate governance as one of the most important managerial tasks, because we recognize that it is important to enhance the auditing and supervisory functions concerning corporate management, achieve full compliance, and improve the transparency of management so that we can sincerely fulfill our responsibilities towards various stakeholders, including customers, business partners, shareholders, employees, and government entities, and enhance our corporate value as sustainable companies.

The Company has adopted an Audit and Supervisory Committee governance structure from the perspective of further enhancing corporate governance by strengthening the supervisory functions of the Board of Directors, thereby promoting the improvement of the corporate value on a mid-to long-term basis through the enhancement of the functions of outside directors who do not execute operations by themselves.
Among nine directors the Company appointed three directors as outside directors (all of Audit and Supervisory Committee members), who aim to strengthen the management supervision function.

In order to achieve efficient and prompt group operations, the Company appoints Independent outside directors who have diverse viewpoints, experiences, and high-level skills, including business executives. At the Board of Directors, these members hold discussions based on their individual knowledge, experiences, and abilities, make legal and managerial decisions, and supervise business execution. The Company’s Board of Directors consists of 9 persons (of which 3 Outside Directors who are the Audit and Supervisory Committee Members). As a general rule, the Company holds regular meetings of the Board of Directors every month, and by holding special meetings of the Board of Directors as needed, the Company ensures the proper execution of operations and makes swift decisions.

The Audit and Supervisory Committee receives reports mainly from directors concerning the execution of operations and checks important decision-making documents. Directors who are Audit and Supervisory Committee Members conduct strict audits by conducting investigations of the status of business and assets in accordance with the audit policy and the division of duties.

In order to realize efficient decision making at meetings of the Board of Directors, the Company has established the Group Management Committee consisting of directors and corporate officers as well as directors and corporate officers of the Group companies, as an organization tasked with deliberating in advance the proposals that are to be submitted to the Board of Directors, and holds regular meetings every month. The Company ensures the proper execution of operations by thoroughly deliberating on relevant issues at this Group Management Committee.

In order to strengthen the independence and objectivity, the Company has established the voluntary Nomination and Compensation Committee as advisory committees to the Board of Directors. Committee is chaired by an outside director and the majority members of committee are outside directors.

We have in place the Investment Committee, an advisory committee to the Board of Directors, to examine investment proposals before selecting them. The Investment Committee is comprised of members from finance, legal, sales, pharmaceutical affairs, and other divisions as well as of external experts. It is chaired by the Representative Director.

The Company has established the Sustainability Promotion Committee as an advisory committee to the Board of Directors. The Committee is responsible for to identifying materialities (important issues), including matters related to climate change, and deliberates on our sustainability strategy, which involves, among other things, our actions for the Environment (E), Social (S), Governance (G), digital transformation (DX); and conducting action planning, target setting, progress control, and effectiveness assessment based on the Sustainability Policy. The Committee is comprised of members from sales, logistics, pharmaceutical affairs, and administration functions. It is chaired by the Senior Executive Managing Director and COO.

The Company has established the "Management Strategy Committee" for the purpose of considering important management strategies and business strategies, etc., connected with the Company and the Group toward sustained enhancement of corporate value.
In consideration of the purpose of the Committee and to utilize the external perspectives, the Committee consists of two independent outside directors, two outside experts and four internal directors, totaling eight members.

The company has established the Governance Enhancement Special Committee as an advisory committee to the Board of Directors to further strengthen the Group's governance, including compliance and risk management. The Committee consists of members independent of the Company to verify the internal control organization and provide advice and recommendations on governance from an objective and professional standpoint.

The Company is faithfully committed to the Basic Policy on Internal Control System to ensure the legality and efficiency of its business operations and undertake risk management practices. It also revises this policy as appropriate in response to changes in the socioeconomic climate and other aspects of the environment surrounding the Company so as to improve and enhance the policy.
Arrangements for ensuring proper operations of subsidiaries involve the Management Rules of the Affiliated Companies. Under the rules, we assess the business conditions of major subsidiaries and hold prior consultations on important matters as part of our efforts to improve management efficiency and ensure operational propriety as a corporate group.
We make efforts to increase intra-group coordination. For example, we allow directors of subsidiaries to attend the regular meetings of major meeting bodies of the Company and to receive reports on the execution of duties. We also build up information on the managerial status of the Group. Moreover, we share compliance practices in the meetings of the Group Compliance Risk Management Committee.