Sustainability

Governance Structure

At Hisamitsu Pharmaceutical, we will reinforce our corporate governance, while enhancing our corporate value by ensuring further management transparency and legal compliance and continuing risk management. As a good corporate citizen, we intend to strengthen the relationships of trust we have with our stakeholders.

Corporate Governance Structure

At Hisamitsu Pharmaceutical, we are striving to further improve our corporate governance structure as a mechanism for making transparent, fair, prompt, and decisive decisions. As a company with Board of Corporate Auditors, we have nine Directors (including three Outside Directors) and four Corporate Auditors (including two Outside Corporate Auditors), constituting the Board of Directors and the Board of Corporate Auditors, respectively. The Board of Directors is composed in consideration of diversity and each member’s ability, experience, and insight. Each term is set as one year for the purpose of further clarifying directorial management responsibility and creating a management structure that enables appropriate responses to changes in the business environment. Management decisions are made based on discussions by the Management Advisory Board, comprising the main Directors, Executive Officers, etc. as needed, whereas particularly important agendas are deliberated and decided by the Board of Directors. Additionally, the Executive Officer system is introduced in order to enhance the speed, transparency, and strategic quality of management decisions. Moreover, the Nomination and Remuneration Committee has been established as an advisory body for the Board of Directors. With Outside Directors accounting for half of the membership, the committee has been designed to make management even more transparent and objective. To perform even fairer audits, our Corporate Auditors attend board meetings, hold meetings of the Board of Corporate Auditors on a regular basis, and conduct audits in cooperation with the Internal Auditing Department and an accounting auditor, thereby striving to reinforce the entire corporate group’s audit structure.

Corporate Governance Structure system

List of officers ・ ・ ・ As of May 25, 2023

Directors

Corporate auditors

Executive officers

Management Advisory Board

Management decisions are made based on discussions by the Management Advisory Board, comprising the main Directors, Executive Officers, etc. as needed, whereas particularly important agendas are deliberated and decided by the Board of Directors.

Skill matrix

Decision Policy on Remuneration, etc.
of Individual Directors

Hisamitsu Pharmaceutical's Board of Directors established the following policy for determining the content of remuneration, etc. of individual directors at its meeting held on February 18, 2021.The Company's Basic Policy for the remuneration of Directors shall be that the remuneration system is linked to shareholder returns in order to function as a sufficient incentive to continuously increase corporate value, and when determining the remuneration of individual Directors, the level of remuneration is appropriate considering the responsibilities of each position. Specifically, the remuneration for the Executive Director consists of a basic remuneration as a fixed remuneration, a performance-linked remuneration, and stock remuneration; the Outside Director, who is responsible for the supervisory function, is paid only the basic remuneration in consideration of their duties. The Nomination and Remuneration Committee shall consider the proportion of remuneration for each type of executive Director based on the remuneration levels of companies of similar business and employee sizes to the Company and enterprises in relevant industries. The standard ratio for each type of remuneration, etc. shall be 50%:30%:20% for Basic Remuneration: Performance-linked Remuneration, etc.: Non-monetary remuneration, etc. (when 100% is achieved for the performance indicators).

FY2022 Total amount of remuneration, etc. for Directors and Corporate Auditors

Effectiveness Assessment of the Board of Directors

Hisamitsu Pharmaceutical regularly verifies whether the Board of Directors as a whole is functioning properly, and based on the assessment results, it is aimed that the entire Board of Directors functions better through an ongoing process of taking appropriate action to correct problems and build on its strengths.

Internal Control System

Hisamitsu Pharmaceutical is working to build an organizational structure that enables prompt response to changes in the management environment while enhancing corporate governance based on the Internal Control Regulations (Basic Policy for Internal Control) resolved by the Board of Directors. We are working on the compliance with laws with regard to our activities, spread of corporate ethics, thorough observation of compliance, and improvement of management transparency.

Internal Audit

We have established the Internal Auditing Department as an internal audit body with staff members assigned exclusively for internal audits. From the perspectives of the effectiveness, appropriateness, legal compliance, etc. of business operations, the department audits our company and other group companies in terms of the execution of operations. Moreover, the Board of Corporate Auditors and the Internal Auditing Department cooperate in picking out high-risk operations and operational processes and conducting audits for high-risk themes. They also perform audits for our business risk management, employees’ annual paid leave uptake, and stress inspections. They report the results of such audits not only to the Board of Directors and the Board of Corporate Auditors, but also to the department heads and the Director in charge. If necessary, they also provide instructions for improving internal control and offer support and advice for action toward such improvement. Furthermore, they regularly conduct audits of group companies in order to maintain a sound operating environment through support and advice for decision making, accounting, and other important procedures.

Accounting audit

Having signed an audit contract with KPMG AZSA LLC as an accounting auditor, we provide an environment where audits can be conducted from a fair standpoint, such as by providing accurate management information. Our audits have been performed by two designated partners/lead engagement partners, eight certified public accountants, and seven support members. All of the accounting auditors have been working on the company's audits for less than seven years. We have no special interests with KPMG AZSA LLC or the designated limited liability partners/lead engagement partners.