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Corporate Governance

Basic Philosophy

The Company has stipulated its human health care (hhc) mission in its Articles of Incorporation and endeavors to share this mission with its shareholders. To realize hhc, the Company recognizes that it must carry out company policies with a long-term perspective, and that putting forward such policies is only possible with the trust of its shareholders. Accordingly, the Company is working to enhance its corporate governance, gain the trust of its shareholders, and ensure that the Company's shares are secure over the long term for shareholders.
To effectively carry out corporate governance, the Company has established a system designed to stimulate corporate vitality, ensure fair management, and increase the transparency of management. The Company strives to continuously enhance management practices related to corporate governance, and to this end, adopted the Company with Committees System in June 2004.
Central to the Company's corporate governance is the clear separation between the functions of supervision and operation that makes the most of the Company with a Nomination Committee, etc. System. In order to ensure this separation, Outside Directors with independence and neutrality are appointed. By having the Board of Directors delegate business decision-making exclusively to Corporate Officers, the Company ensures the increased mobility and flexibility of Corporate Officers involved in operations, as well as autonomy in establishing internal controls, thereby increasing management dynamism. Entrusted by the Company's shareholders, the Board of Directors, in which the majority of members are Outside Directors, focuses on overall supervision activities to ensure objectivity and fairness in management.

A summary chart of the Company's corporate governance system is shown below.

Corporate Governance System Board of Directors Nomination Committee Audit Committee Compensation Committee

Basic Framework of Corporate Governance

The Company respects the rights of all our shareholders and as the essence of corporate governance is to ensure fair and transparent management and to enhance corporate vitality, the Company aims to achieve good corporate governance on the following basis:

  1. (1)Shareholder Relations:
    The Company shall:
    1. (i)
      Respect the rights of all shareholders;
    2. (ii)
      Ensure the equality of all shareholders;
    3. (iii)
      Develop positive and smooth relations with the Company's stakeholders including all shareholders; and
    4. (iv)
      Ensure transparency by properly disclosing Company information.
  2. (2)Corporate Governance System
    1. (i)
      The Company has adopted a Company with a Nomination Committee, etc. System.
    2. (ii)
      The Board of Directors (“the Board”) shall delegate to the Corporate Officers broad powers of decision-making for business execution, to the extent permitted by the laws and regulations, and it shall exercise the function of management oversight.
    3. (iii)
      The majority of the Board shall be independent and neutral Outside Directors.
    4. (iv)
      The Representative Corporate Officer and CEO shall be the only Director who is concurrently a Corporate Officer.
    5. (v)
      To clarify the management oversight function, the positions of the Chair of the Board and the Representative Corporate Officer and CEO shall be separated and performed by different people.
    6. (vi)
      The Nomination Committee and the Compensation Committee shall be entirely composed of Outside Directors, and the majority of the Audit Committee shall consist of Outside Directors.
    7. (vii)
      Each of the Chairs of the Nomination Committee, the Audit Committee and the Compensation Committee shall be appointed from the Outside Directors.
    8. (viii)
      The internal control system and its operation shall be implemented to ensure the credibility of financial reports is enhanced.

Based on this basic framework, the Board of Directors of the Company has developed and disclosed the Corporate Governance Guidelines with a view to achieving the best possible corporate governance. The guidelines are reviewed regularly and applied strictly.