Corporate Governance | Management Information | KYOWA EXEO CORPORATION

Corporate Governance

Corporate Governance

The KYOWA EXEO Group aims to maintain the full trust of shareholders and all other stakeholders by operating with integrity and a high standard of transparency, and we recognize that constructing and maintaining management structure and systems with effective functioning of corporate governance is an important management issue. Our basic policy is to regularly assess frameworks appropriate to the KYOWA EXEO Group for monitoring management in light of changes in social conditions, legislative systems, and other developments, and also to work for continual improvement to ensure even stronger corporate governance.

KYOWA EXEO's Corporate Governance System

KYOWA EXEO's Corporate Governance System

Board of Directors
The Board of Directors, which comprises 12 members (as of fiscal 2018), supervises major decisions and execution of business.
Board of Corporate Auditors
We have adopted a system of corporate auditors, with a Board of Corporate Auditors including external auditors. In line with auditing guidelines and audit plans, corporate auditors attend Board meetings and other important meetings, hear from the directors and others on the directors’ execution of their professional duties, and audit the business and the assets of the main offices and subsidiaries.
Three Committees
The Nomination Committee, Internal Control Committee, and Compensation Committee have been established to ensure thorough corporate governance. The Nomination Committee holds deliberations that include the selection of candidate directors, the role of the Internal Control Committee includes supervision of the operational progress of directors, and the Compensation Committee holds deliberations that include the remuneration and bonuses of directors. The three committees report to the Board of Directors as needed.

Audit System, Executive Officers System

Financial Auditing
Kudan Audit Corporation has been nominated as the financial auditor. This company carries out audits every quarter and at the end of the fiscal year in accordance with the Company Law and the Financial Instruments and Exchange Law, and also carries out audits during the fiscal year as appropriate.
Internal Auditing
The Audit Division carries out audits of all divisions of KYOWA EXEO and of Group subsidiary companies, concentrating on business audits. The Audit Division receives guidance and advice from legal experts.
Executive Officers System
We have adopted an executive officer system in order to separate management decision-making and supervisory functions from implementation functions. As well as allowing further enhancement of corporate governance, this ensures speedy and accurate decision-making and implementation.

Basic Policy on Internal Control Systems

Since the enforcement of the Companies Act in May 2006, the basic policy on internal control systems has been resolved and revised by the Board of Directors.

In order to realize its corporate philosophy, the KYOWA EXEO Group is dedicated to carrying out business management in which every director and employee of the Group shows sincerity and transparency. The systems in place to ensure that KYOWA EXEO conducts its business in an appropriate fashion are outlined below.

1. System to ensure that directors and employees carry out their duties in accordance with laws and ordinances, and in line with the Articles of Incorporation

KYOWA EXEO shall make compliance with laws and ordinances, social norms, and corporate ethics a top priority, and shall draw up a compliance program as a framework to ensure that compliance is unwavering. The directors shall personally adhere to this program, and at the same time shall ensure that all employees are fully aware of it. All employees shall be sincere in carrying out their duties in accordance with this program.

In addition, a system of internal reporting shall be put in place to minimize compliance-related risk and ensure prompt resolution of any issues that arise.

KYOWA EXEO shall take a resolute stance at organizational level, in full cooperation with lawyers, the police, and other agents, against any antisocial influence or organization that poses a threat to the order or safety of society.
2. System for storage and management of information relating to the directors’ execution of their duties

Information relating to the directors’ execution of their duties shall be appropriately stored and managed, in accordance with the regulations on management of documents and records. In addition, if a request to inspect such information is made by an auditor, the person stipulated by these regulations to be in charge of management of documents shall promptly submit the information.
3. Regulations and other systems regarding management of risk of loss

A risk management system headed by the President shall be put in place and fully implemented in accordance with the regulations on risk management. The division in charge of risk management shall assess the status of risk detection, risk evaluation, and risk counter-measures from each division of the company, and shall implement risk management.

The internal Audit Division shall conduct audits from an independent standpoint.
4. System to ensure that directors execute their duties efficiently

The President shall stipulate objectives for the company as a whole that are to be shared by directors and employees, and shall ensure that these objectives spread throughout the company. The President shall also formulate specific measures toward achieving these objectives for each division, with the consent of the Board of Directors. The President and other directors shall make use of meetings across the whole organization to exchange information and give instructions and support to ensure smooth execution of duties.

Internal systems shall be used to monitor the progress of business plans, and the Board of Directors shall carry out regular reviews.

The internal Audit Division shall conduct audits from an independent standpoint.
5. System to ensure appropriate business of the corporate group

A division responsible for controlling Group business shall be set up to ensure appropriate business of Group companies, and shall work to ensure smooth business operations through meetings of Group company presidents and other measures.

The internal Audit Division shall conduct audits of the effectiveness and appropriateness of the business of each Group company from an independent standpoint.

A framework shall be put in place to regularly and continuously evaluate systems for appropriate reporting and their operational status, in accordance with the basic policy on internal controls relating to financial reports, to ensure the reliability and appropriateness of Group company financial reports.
6. Employees placed at the request of the auditors to assist them with their duties

If the auditors place employees to assist them in their duties, a dedicated organization shall be put in place for these employees, independent of the execution of regular business.
7. Executive independence of employees referred to in the preceding item

Personnel changes, personnel evaluation, or disciplinary measures of the assistants referred to above shall be carried out with the consent of the Board of Corporate Auditors.
8. System for directors or employees to report to auditors
    System for other reports to auditors

Directors and employees shall report to the Board of Corporate Auditors in a timely and appropriate fashion, in accordance with the regulations for reporting to the Board of Corporate Auditors.
9. Other systems to ensure that audits are carried out efficiently by the auditors

Auditors shall be guaranteed opportunities to interview directors and employees, and regular meetings for exchanges of opinions will be held between the President and the auditors.

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