Basic Principles / Corporate Governance Structure

Basic Principles

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

1. We will strive to effectively secure the rights of shareholders and will ensure shareholder equality.
2. We will strive to cooperate fully with stakeholders and will foster a corporate culture and climate that respects the ethics of sound business practices.
3. We will provide full disclosure of the Company's financial, management, and other information to ensure transparency.
4. 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.
5. We will engage in constructive dialogue with shareholders.

• Corporate Governance Basic Policy

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

• Important management agreements
• Disposition of important company property
• Personnel change
• Organizational revision
• Compensation for Board Members
• Accounts and budget, General Meeting of Shareholders
• Work rules and corporate regulations
• Projects related to Group subsidiaries

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.

Skill Matrix

Note: Indicates up to three skills in which the members of the Board of Directors and Audit & Supervisory Board members possess particularly high expertise and which are expected of members of the Board of Directors and Audit & Supervisory Board members

Reason for selection of skills

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

Board of Directors

*◎: Chairman

Audit & Supervisory Board

*◎: Chairman

Group Nomination Committee

*◎: Chairman

Group Remuneration Committee

*◎: Chairman

ESG Committee

*◎: Chairman

Group Compliance Promotion Committee

*◎: Chairman

Evaluations of the Effectiveness of the Board of Directors

Each year, the Company conducts a questionnaire survey of all members of the Board of Directors and Audit & Supervisory Board members in order to evaluate the current status of the effectiveness of the Board of Directors and to further improve it. Based on the results of the questionnaire, we have evaluated and analyzed the results and confirmed that the Board of Directors is functioning properly and that the effectiveness of the Board of Directors as a whole has been ensured.

Implementation Guidelines

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.

1. 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.
2. 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.

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.

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.

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.

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.

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

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.