Basic Principles / Corporate Governance Structure | Corporate Governance | Management Strategies and Policies

Basic Principles

The Company always pursues and continually works to enhance the best corporate governance practices in line with the following basic principles:

We will strive to effectively secure the rights of shareholders and will ensure shareholder equality.
We will strive to cooperate fully with stakeholders and will foster a corporate culture and climate that respects the ethics of sound business practices.
We will provide full disclosure of the Company's financial, management, and other information to ensure transparency.
The Board of Directors will establish an environment where bold management decisions are made based on corporate strategies and will conduct highly effective supervision of directors and managers.
We will engage in constructive dialogue with shareholders.

Corporate Governance Basic Policy

Corporate Governance Reforms in Recent Years

The Company separates management and execution through the corporate officer system. Corporate Officers execute business operations, enabling Board Members to concentrate on their management and supervisory functions. The Board of Directors makes decisions on management strategy policies and important management matters and supervises the execution of business operations. As a company with an Audit & Supervisory Board, Audit & Supervisory Board members and the Audit & Supervisory Board audit the execution of duties by members of the Board of Directors from a standpoint independent of the Board of Directors. In addition, the Group Nomination Committee and the Group Remuneration Committee have been established as advisory bodies to the Board of Directors, to enhance the fairness and objectivity of the deliberation process regarding the nomination and remuneration of officers.

Corporate Governance Structure

Board of Directors

The Board of Directors meets basically once a month and also holds special meetings as needed. It makes decisions on business execution policies and other important matters concerning business operations and supervises the execution of business operations.

Key items discussed by the Board of Directors and their details

Management policy and management strategy
Business plans and budgets, quarterly business execution status, important contract conclusions, matters related to Group companies, etc.
Capital policy and shareholder returns
Dividends, disposal of Company assets, etc.
Governance and sustainability
Various committee matters, evaluation of effectiveness of the Board of Directors, etc.
Internal control and risk management
Reporting on status of internal controls and compliance system
Other
Organizational changes, personnel transfers, rule changes, general shareholders' meetings, etc.

Board of Directors and Management Council Deliberation Time

Number of the Board of Directors held

Fiscal Year	FY2021	FY2022	FY2023
Number of the Board of Directors held	17	16	15

Number of Members of the Board of Directors and Outside Directors

Fiscal Year	FY2018	FY2019	FY2020	FY2021	FY2022	FY2023	FY2024
Total number of members of the Board of Directors	9	9	6	8	8	8	9
Of which, total number of the Outside Directors	3	3	3	3	3	3	4

※Figures up to FY2020 are those of ASKA Pharmaceutical Co., Ltd.

Number and Ratio of female Board Members

Fiscal Year	FY2018	FY2019	FY2020	FY2021	FY2022	FY2023	FY2024
Number of female Board Members	0	0	0	1	1	1	2
Ratio of female Board Members	0	0	0	12.5	12.5	12.5	22.2

※Figures up to FY2020 are those of ASKA Pharmaceutical Co., Ltd.

Management Council

Management Council meetings are held basically once a month to deliberate/make decisions on management-related issues, and to examine important issues including management policies and strategies.

Business Strategy Meeting of the Group

To ensure the appropriateness of business operations, the Company has established a supervisory department responsible for managing subsidiaries in an integrated manner. The Company also holds the Business Strategy Meeting of the Group four times a year to share information.

Group Nomination Committee and Group Remuneration Committee

The Group Nomination Committee and Group Remuneration Committee have been established as advisory committees independent from the Board of Directors in order to enhance the fairness and objectivity of the deliberation process regarding the nomination and compensation of Board Members.
Each committee is composed of representative directors, senior managing members of the Board of Directors or higher with special titles, and Outside Directors. The majority of committee members are Outside Directors, and the committee is chaired by an Outside Director to ensure independence.

Key items discussed by Group Nomination Committee and Group Remuneration Committee and their details

Group Nomination Committee

Discussion on the procedures for the election of directors
Decision on the contents of the report to the Board of Directors

Group Remuneration Committee

Identifying issues and items to consider for remunerations for Board Members and exchanging opinions
Discussion on the amount of remuneration for Board Members
Decision on the contents of the report to the Board of Directors

Auditing Structure

We have adopted a company with an Audit & Supervisory Board structure in order to audit the execution of duties by members of the Board of Directors from a standpoint independent of the Board of Directors. The Audit & Supervisory Board, consisting of four members including two outside Audit & Supervisory Board members, meets once a month in principle to discuss and resolve important matters related to audits and to confirm matters to be discussed at Board of Directors meetings in advance.
For external audits, the Company has concluded an audit and quarterly review contract with Seiyo Audit Corporation as its accounting auditor.
For internal audits, we have established an Audit Department, which conducts audits of Group companies from a fair and independent standpoint. Furthermore, the Audit Department evaluates the status of internal control systems regarding financial reporting and its operation.

ESG Committee

The ESG Committee has identified 11 material issues from the perspective of relevance to the Group’s business and social contribution, and it has established a Company-wide action plan and KPIs for each of them. In particular, we believe that contribution to women’s health and contribution to animal health are two material issues in which we can demonstrate our strengths and originality.
In addition, we consider climate change issues to be one of the management issues that affect our business, and we disclose information on climate change in line with TCFD recommendations.
As a company involved in life-related issues, and as a member of society and the community, the Group broadly contributes to society by promoting ESG (environmental, social, and governance) initiatives, thereby contributing to the achievement of the SDGs (sustainable development goals).

Group Compliance Promotion Committee

The Group has established a Group Compliance Promotion Committee within the Holdings to recognize and respond to risks that may have a significant impact on Group management and to promote a compliance system that ensures strict adherence to laws, regulations, and corporate ethics, and to oversee this system.

Succession Planning

The Company views succession planning as an important management issue. To ensure that the process is transparent, fair, and objective, screening of potential leadership successors is spearheaded by the Group Nomination Committee, which is chaired by an Outside Director, and of which Outside Directors make up the majority. The Group Nomination Committee determines the selection criteria for top management positions and makes recommendations based on extensive debate over a range of candidate attributes including experience, accomplishments, personality, skills and aptitude, and performance in an interview. The Group Nomination Committee also devises training for leadership candidates to ensure that the Company achieves sustained growth and fulfills its responsibility to society.

Selection Criteria for Top Management Positions

Personality attributes	Persistence, incisiveness, ability to make decisions and execute Moral character, charisma, integrity
Skills	Business planning ability Capacity to communicate a vision and strength in organizational development Reform-oriented leadership Strength in human resource development

Nomination Process

Skill Matrix

	Name	Position	Corpo rate manage ment	R & D Intelle ctual property	Sales Marke ting	Medi cine Pharm acy	Finance Account ing	Legal Risk manage ment	Sus taina bility ESG
Members of the Board of Directors	Takashi Yamaguchi	President, Member of the Board of Directors, Representative Director	●	●		●
	Atsushi Maruo	Senior Managing Member of the Board of Directors, Representative Director	●				●	●	●
	Sohta Yamaguchi	Senior Managing Member of the Board of Directors, Representative Director	●	●			●	●
	Maiko Mori	Member of the Board of Directors, Executive Corporate Officer		●		●		●
	Fumiyoshi Yamaguchi	Member of the Board of Directors, Executive Corporate Officer	●		●				●
	Yasunori Yoshimura	Member of the Board of Directors, Outside Director		●		●			●
	Minoru Awabayashi	Member of the Board of Directors, Outside Director	●		●		●	●
	Yasuji Enokido	Member of the Board of Directors, Outside Director	●		●		●	●
	Kanae Karita	Member of the Board of Directors, Outside Director		●		●			●
Audit & Supervisory Board Members	Yuichiro Fukui	Audit & Supervisory Board Member	●		●		●
	Kunihiro Gunji	Audit & Supervisory Board Member		●	●	●		●
	Takao Kimura	Outside Audit & Supervisory Board Member		●		●		●
	Keiko Fukuchi	Outside Audit & Supervisory Board Member					●	●	●

Note: Highly professional skills that the Members of the Board of Directors and Audit & Supervisory Board Members possess and which are expected of Members of the Board of Directors and Audit & Supervisory Board Members for achieving the medium-term management plan are indicated.

Reason for selection of skills

Skill item	Reason for selection of skills
Corporate management	Amid major changes in the business environment, we need directors with extensive knowledge, experience, and achievements in not only the medical and pharmaceutical industries but also in general corporate management to formulate and promote a medium- to long-term sustainable growth strategy for us to realize our Group’s goal of becoming a total healthcare company with a strong foundation as a specialty pharma company.
R&D / Intellectual property	To continue creating products that meet unmet medical needs, it is essential that we strengthen our R&D capabilities through open innovation and globalize intellectual property activities. We need directors who have strong knowledge, experience, and achievements in the fields of R&D and intellectual property to promote these activities.
Sales / Marketing	Amid the rapidly changing environment surrounding medical care and animal health businesses, we need directors who have strong knowledge, experience, and achievements in sales and marketing fields to continue providing patients and healthcare professionals with information on the proper use of drugs and products.
Medicine / Pharmacy	In order to realize the Group’s goal of becoming a total healthcare company, we need directors who have strong knowledge, experience, and achievements in the fields of medicine and pharmacy to widely contribute to human and animal health which ranges from prevention, testing, diagnosis to treatment, and prognosis management.
Finance / Accounting	In addition to accurate financial reporting, we need directors who have strong knowledge, experience, and achievements in the finance and accounting fields to formulate and promote a financial and capital strategy that balances ensuring a stable financial base and improving capital efficiency, and achieves appropriate shareholder returns.
Legal / Risk management	The establishment of an appropriate governance system is the foundation for sustainable corporate value improvement. To promote a compliance system that ensures thorough compliance with laws and corporate ethics, we need directors who have strong knowledge, experience, and achievements in legal and risk management.
Sustainability / ESG	With sustainability at the core of our management, the Group aims to enhance corporate value by not only maximizing our economic value but also by increasing our social value. To achieve this, we need directors who have strong knowledge, experience, and achievements in the sustainability and ESG fields.

Attendance status of Board of Directors, Audit & Supervisory Board・and other committees (FY2023)

Board of Directors

Position	Name	Attendance
President, Member of the Board of Directors, Representative Director	◎Takashi Yamaguchi	87% (13/15)
Senior Managing Member of the Board of Directors, Representative Director	Atsushi Maruo	100% (15/15)
Senior Managing Member of the Board of Directors, Representative Director	Sohta Yamaguchi	100% (15/15)
Member of the Board of Directors, Executive Corporate Officer	Maiko Mori	100% (15/15)
Member of the Board of Directors, Executive Corporate Officer	Fumiyoshi Yamaguchi	100% (15/15)
Member of the Board of Directors (Outside Director)	Yasunori Yoshimura	100% (15/15)
Member of the Board of Directors (Outside Director)	Minoru Awabayashi	100% (10/10)
Member of the Board of Directors (Outside Director)	Yasuji Enokido	100% (10/10)
Member of the Board of Directors (Outside Director)	Kanae Karita	(newly appointed FY2024)
Audit & Supervisory Board Member	Ikuo Kumano	87% (13/15)
Audit & Supervisory Board Member	Yuichiro Fukui	100% (15/15)
Audit & Supervisory Board Member	Kunihiro Gunji	(newly appointed FY2024)
Outside Audit & Supervisory Board Member	Takao Kimura	100% (15/15)
Outside Audit & Supervisory Board Member	Keiko Fukuchi	100% (15/15)

◎: Chairman

Audit & Supervisory Board

Position	Name	Attendance
Audit & Supervisory Board Member	◎Ikuo Kumano	89% (16/18)
Audit & Supervisory Board Member	Yuichiro Fukui	100% (18/18)
Audit & Supervisory Board Member	Kunihiro Gunji	(newly appointed FY2024)
Outside Audit & Supervisory Board Member	Takao Kimura	100% (18/18)
Outside Audit & Supervisory Board Member	Keiko Fukuchi	100% (18/18)

◎: Chairman

Group Nomination Committee

Position	Name	Attendance
Member of the Board of Directors (Outside Director)	◎Yasunori Yoshimura	100% (2/2)
Member of the Board of Directors (Outside Director)	Minoru Awabayashi	100% (1/1)
Member of the Board of Directors (Outside Director)	Yasuji Enokido	100% (1/1)
Senior Managing Member of the Board of Directors, Representative Director	Sohta Yamaguchi	100% (2/2)
Senior Managing Member of the Board of Directors, Representative Director	Atsushi Maruo	100% (1/1)

◎: Chairman

Group Remuneration Committee

Position	Name	Attendance
Member of the Board of Directors (Outside Director)	◎Yasunori Yoshimura	100% (2/2)
Member of the Board of Directors (Outside Director)	Minoru Awabayashi	100% (1/1)
Member of the Board of Directors (Outside Director)	Yasuji Enokido	100% (1/1)
Senior Managing Member of the Board of Directors, Representative Director	Sohta Yamaguchi	100% (2/2)
Senior Managing Member of the Board of Directors, Representative Director	Atsushi Maruo	100% (1/1)

◎: Chairman

ESG Committee

Position	Name	Attendance
Senior Managing Member of the Board of Directors, Representative Director	◎Atsushi Maruo	100% (2/2)
Senior Managing Member of the Board of Directors, Representative Director	Sohta Yamaguchi	100% (2/2)
Member of the Board of Directors, Executive Corporate Officer	Fumiyoshi Yamaguchi	100% (2/2)

◎: Chairman
* Only board members are listed.

Group Compliance Promotion Committee

Position	Name	Attendance
Senior Managing Member of the Board of Directors, Representative Director	◎Atsushi Maruo	100% (2/2)
Member of the Board of Directors, Executive Corporate Officer	Maiko Mori	100% (2/2)
Member of the Board of Directors, Executive Corporate Officer	Fumiyoshi Yamaguchi	100% (2/2)

◎: Chairman
* Only board members are listed.

Evaluations of the Effectiveness of the Board of Directors

To ascertain the current status of and further improve the effectiveness of the Board of Directors, each year the Company conducts a questionnaire survey of all members of the Board of Directors and the Audit & Supervisory Board.

Implementation Guidelines

Target	Board Members (All eight Board of Directors members and all four Audit & Supervisory Board members)
Evaluation method	Conduct a questionnaire survey of target group (five-rating scores and free-form answers; anonymous) Analyze content of answers Provide feedback to the Board of Directors Work to further enhance functions of the Board of Directors
Main items of the survey	Composition of the Board of Directors, Operation of the Board of Directors, Content of deliberations by the Board of Directors, and System for supporting the Board of Directors

(Results of Questionnaire Survey of the Board of Directors)

We evaluated and analyzed the results of the questionnaire survey. As scores were extremely high across the board and moreover no adverse opinions were expressed, we confirmed that the Board of Directors is functioning properly and that the effectiveness of the Board of Directors as a whole has been ensured.

(Items yielding high scores)

Scores were extremely high for the Board of Directors’ size and composition and frequency of meetings. Respondents expressed especially positive opinions concerning the Board of Directors’ active discussions concerning strategic cross-shareholdings over the past year to gradually reduce such holdings.

(Items yielding lower scores)

In comparison with other items, scores were slightly lower with regard to “training for directors,” an area in which we will work even harder to further enhance effectiveness.

Cross-Shareholdings Policy

The Company will cross-shareholdings that it judges will contribute to the maintenance and improvement of the Group's corporate value from the perspective of business expansion and the maintenance and strengthening of business relationships. However, the Board of Directors will examine and verify the corporate performance and financial conditions of each shareholder, management indicators of profitability and growth potential, and the comparison between the benefits of holding the shares and the cost of capital, and will reduce the number of shares held if the significance of holding such shares is not necessarily sufficient, based on the results of dialogue with the shareholder. The Board of Directors will examine and review the comparison of the cost of capital and other factors.

Criteria for the Exercise of Voting Rights in relation to Cross-Shareholdings

Cross-shareholdings shall be voted in accordance with the following policy.

The Company shall make a comprehensive judgment as to whether or not the shares will contribute to the maintenance and improvement of the corporate value of the Group by examining the corporate performance, financial condition, and stance on returning profits to shareholders, while taking into account the business relationship with the shareholder.
Exercise voting rights for proposals that are deemed problematic in terms of their efforts to enhance corporate value and shareholder returns by taking into consideration the results of dialogue with the counterparties and other factors, and by considering how such proposals will contribute to improving such problems.

Countermeasures for Takeovers

The Company has not introduced any countermeasures for takeovers.

Tax Policy

The Group will comply with all tax-related laws and regulations pertaining to Group operations.
The Group will ensure tax transparency and proper tax payment.

Human Rights

Human Rights Policy

As a signatory to the United Nations Global Compact (hereinafter referred to as "UN Global Compact"), ASKA Pharmaceutical Holdings Group (hereinafter referred to as "Group") agrees with the Ten Principles in the four areas (human rights, labor, environment, and anti-corruption) of the UN Global Compact and will implement them under the responsibility of top management itself.

Scope of Application

This policy applies to all officers and employees of the Group. The Group will require all domestic and overseas stakeholders involved in its business activities, including those in the supply chain, to have a similar understanding of the policy.

Prohibition of discrimination

The Group prohibits discrimination and harassment of any kind on the basis of race, nationality, ethnicity, social status, gender, disability, health status, age, skin color, religion, creed or ideology, sexual orientation or gender identity.

Respect for freedom of association and the right to collective bargaining

In accordance with applicable laws and regulations, the Group will respect the freedom of association and the right to collective bargaining of its employees, guarantee the rights of its employees, and maintain and promote sound and good labor-management relations without discrimination.

Improvement of working environment and wages

The Group will comply with laws and regulations, manage working hours appropriately, grant days off, vacations, etc., and strive to maintain a workplace environment that allows the Group's employees to work in a safe and secure condition. Moreover, the Group will comply with legal requirements regarding statutory benefits and deductions, overtime, etc. in each region, and ensure that the amount of wages exceeds the statutory minimum wage standards.

Prohibition of forced labor

The Group does not tolerate any form of forced labor, human trafficking, and child labor.

Whistle-blower system

As a system to reflect the voices of employees regarding unfair discrimination and harassment in the workplace, sexual harassment, and power harassment in compliance practice, the Group has established a whistle-blower office, the “ASKA Pharmaceutical Holdings’ compliance consulting desk,” and a new contact point for consultation and reporting of compliance-related matters involving its officers, “Audit & Supervisory Board member consulting desk.” It is staffed by ASKA Pharmaceutical Holdings’ Audit & Supervisory Board members. Anonymous reporting is also accepted, and all cases are handled appropriately. In accordance with the spirit of the Whistleblower Protection Act, the Group protects whistleblowers and ensures that compliance-related matters are collected, investigated, and corrective measures are taken in a timely and appropriate manner.

Human rights education

In order to realize a company and society free of all forms of discrimination, the Group provides training on the importance of respect for human rights and compliance, and promotes the creation of a workplace where each employee can maximize his or her abilities while protecting the dignity of others.

Human rights due diligence

As a system to reflect the voices of employees regarding unfair discrimination and harassment in the workplace, sexual harassment, and power harassment in compliance practice, the Group has established a whistle-blower office, the “ASKA Pharmaceutical Holdings’ compliance consulting desk,” and a new contact point for consultation and reporting of compliance-related matters involving its officers, “Audit & Supervisory Board member consulting desk.” It is staffed by ASKA Pharmaceutical Holdings’ Audit & Supervisory Board members.

Human rights promotion system

Corporate Governance Basic Policy

Corporate Governance Structure

Our Basic Policy for Sustainability / ESG Promotion System

Respect for Human Rights

The Company's Charter of Corporate Behavior stipulates that the Company shall "respect human rights and comply with all laws, regulations, codes of conduct, and the spirit of such laws and regulations, whether in Japan or overseas, and act with the highest ethical standards and social conscience.” The CSR guiding principles state that the Company respects the human rights of all people affected by its corporate activities, respects the diversity of its employees, and fosters a safe and comfortable corporate culture. To realize a discrimination-free society and business in all forms, the Company provides training on the importance of respect for human rights and compliance and promotes the creation of a workplace where each employee can maximize his or her potential while protecting the dignity of all employees.

Favorable Labor-Management Relations

The Company also focuses on its relationship with the labor union, and by holding and responding to many labor-management discussions on various issues related to working conditions and the working environment, as well as various issues related to work styles in support of the next generation, the Company guarantees employee rights and maintains and promotes sound and healthy labor-management relations.

Prevention of Harassment in the Workplace

The Company believes that unjust discrimination, harassment, sexual harassment, and power harassment in the workplace are important issues related to human rights violations in the sense that they violate the right to work in a comfortable work environment and are extremely despicable behaviors. To prevent and eliminate such harassment, the Company takes necessary care in employment management and conducts employee training. In particular, the Company ensures that executives and managers acquire correct knowledge and raise their awareness of harassment prevention through the use of guidebooks and more specific examples in their training on harassment.

Dialogue with Shareholders

In order to realize sustainable growth and medium- to long-term improvement of corporate value, the Company considers it essential to obtain appropriate evaluation and trust from shareholders and investors, and shall engage in dialogue with shareholders and investors in a rational and continuous manner. In addition, through IR activities, the Company shall strive to enhance shareholders' and investors' understanding of the Company's management strategies, etc. by appropriately disclosing and explaining the Company's management strategies, business performance, financial conditions, capital policies, etc. to shareholders and investors.

The Company shall appoint a director in charge from among its directors to promote constructive dialogue with shareholders and investors, including IR activities. The Director in Charge shall be responsible for overall dialogue with shareholders and investors, and shall strive to realize constructive dialogue.

In addition to the director in charge, the actual dialogue will be conducted by a designated person based on the shareholder/investor's wishes and the main concerns of the meeting, but the department in charge will assist the interlocutor in cooperation with the respective departments in order to provide accurate information.

In order to make the dialogue more constructive and meaningful, we will continue to work on appropriate information dissemination and enhancement of disclosure content and means of dialogue and provide feedback on the content of the dialogue to the Board of Directors through the director in charge, as necessary.

In addition, when engaging in dialogue, the Company shall also strive to appropriately manage insider information by, for example, not selectively disclosing undisclosed material information to specific persons in accordance with the "Public Relations Regulations" separately established.

Disclosure Policy

Stakeholder Outcomes/Impact