Corporate Governance

The Nippon Kayaku Group Corporate Governance and Internal Control System

Fundamental Approach to Corporate Governance

The Nippon Kayaku Group recognizes the vital importance of preserving business transparency through greater checks and balances, and of timely, impartial information disclosure to investors and shareholders to gain the trust of society. To that end, we have put in place an autonomous corporate governance system.

Corporate Governance System

Through decision-making by the council system of our Board of Directors and the corporate auditor system, the Nippon Kayaku Group believes that its system of corporate governance effectively supports management functions.

We have introduced the executive director system, which clearly separates management's decision-making and supervisory functions from business execution functions, enabling each of these functions to be reinforced, and ensuring that appropriate decision making and punctual business execution take place. In addition, we have also elected independent Outside Directors in order to enhance the supervisory functions over those executing daily operations. Audit & Supervisory Board Members attend various important internal meetings, including meetings of the Board of Directors, and communicate with the Internal Audit Department in monitoring and supervising the execution of duties of the Directors from an independent perspective.

Summary of Internal Control Systems

Internal control systems(Schema)

Internal Control System and Corporate Auditor Audits

The Internal Audit Department has been established separate from the Audit & Supervisory Board and is directly managed by the president in order to perform internal audit that help prevent improprieties and errors before they happen, improve business operations, and protect company assets. This department performs business audit on all Nippon Kayaku Group companies in accordance with the fiscal year plan.

Audit & Supervisory Board Members attend board of director meetings and other important company deliberations, and performs business execution audits to oversee and monitor directors' execution of duties from an independent perspective, in accordance with the audit policy, audit plan, and assignment of duties decided by the Audit & Supervisory Board.

Corporate Governance

Initiatives to prevent corruption and anti-competitive behavior

The Nippon Kayaku Group established the Nippon Kayaku Group Charter of Conduct and Code of Conduct※1 in 2011 to define the scope of conduct that should be observed and practiced by the Company's executives and employees in carrying out business activities. Chapter 1 of the Code of Conduct sets forth detailed standards of conduct for business operation. Also, to have CSR procurement practices that aim for mutually sustainable development with our business partners, in addition to observing laws and social norms, we have drawn up detailed guidelines with respect to compliance, human rights, labor, health and safety, and other areas, and we are sponsoring study sessions and briefings on these guidelines. We have also created the Nippon Kayaku Code of Practice in response to the JPMA Code of Practice※2 (hereinafter, JPMA Code) created by the Japan Pharmaceutical Manufacturers Association, which went into effect on April 1, 2013, and builds on its previous Promotion Code for Prescription Drugs. Not only our Pharmaceutical Group, but all of Nippon Kayaku's executives and employees (including those of our domestic subsidiaries) strive to be trusted by society, and are mindful that our stakeholders always desire high ethical standards and transparency in our activities.

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