Always aiming for the best corporate governance, the Company strives continually to enhance it as well. The Company believes that the focus of corporate governance is to respect the rights of all our shareholders, ensure the fairness and transparency of management, and enhance corporate vitality. The Company strives to enhance corporate governance by stipulating the following basic points of view and code of conduct in its “Corporate Governance Guidelines” and implementing the Guidelines accordingly.
Eisai's Corporate Governance System
Features of Eisai's Corporate Governance
- Clear Separation of the Functions between Oversight of Management and the Execution of Business
The central aspect of the Company’s corporate governance is the clear separation of the oversight of management and the execution of business by fully utilizing the fact that it is a company with a nomination committee, etc., system.The Board of Directors with outside directors making up the majority is able to enhance the vitality of and devote its attention to management by entrusting a large portion of the decision-making authority over business execution to corporate officers to the extent permitted by laws and regulations. In accordance with the Companies Act, the Board of Directors has passed resolutions on rules for the Systems for Ensuring Proper Business Operations to establish specific internal controls that should be established and operated by corporate officers. (For more on the Status of Establishment and Operation of Systems for Ensuring Proper Business Operations, see pages 72 through 74.) In addition to the items set forth in the rules, corporate officers work to enhance and operate the internal controls within the scope of their responsibilities to secure autonomy and increase the speed and flexibility of business execution.Under this structure, the Board of Directors also checks the status of execution of duties by corporate officers and inspects the appropriateness of the status of internal controls, such as the business execution and decision-making processes, from the perspectives of shareholders and society.Furthermore, in order to achieve a clear separation between the oversight of management and theexecution of business, the Company has established that the chair of the Company’s Board ofDirectors be an outside director and that the Representative Corporate Officer and CEO be the onlyindividual to concurrently serve as a corporate officer and a director.
- A Sustained, Autonomous Mechanism for Enhancement of Corporate Governance Centered on Outside Directors
The presence of 7 independent outside directors, who account for the majority of the Board of Directors, supports the effectiveness of the Company’s corporate governance structure. The Company has established and is operating a mechanism to enhance sustained, autonomous corporate governance centered on outside directors, including (1) a system of electing neutral and independent outside directors by a Nomination Committee, (2) operating the Board of Directors, etc., through the leadership of a chair who is an outside director, (3) an Outside Directors Meeting for broad discussion of corporate governance, including consideration of a succession plan, etc., and (4) corporate governance evaluations that drive the Plan-Do-Check-Act (PDCA) cycle of the Board of Directors and each committee. We will continue to work to enhance the content of each of those efforts.
FY2018 Efforts Related to Corporate Governance
- Dialogue with Outside Directors and Investors
Up to this point as well, the Company has conducted meetings between institutional investors and outside directors in Japan and overseas. Outside directors visited multiple institutional investors and carried out dialogues with them between January and February 2018. A Meeting for Exchange of Opinions between Institutional Investors and Outside Directors was held in September 2018. All 7 outside directors attended to carry out dialogue with about 50 institutional investors. Exchanges of opinion were carried out from various perspectives in regard to the Company’s efforts related to corporate governance. Furthermore, in response to requests from institutional investors, meetings for exchanging opinions have been carried out with the participation of several outside directors. The knowledge gained through such dialogue is used in the discussions held by the Board of Directors, etc. The Outside Directors Meeting has confirmed that outside directors will continue to carry out dialogue with investors in order to deepen mutual understanding of corporate governance efforts aimed at increasing corporate value.
- Implementation of Outside Director Interaction with Patients, Various Training Sessions, Etc.
In order to deepen the understanding of the Company’s business activities and business environment, enhance deliberations by the Board of Directors, and fully utilize the oversight function, outside directors plan and carry out various training sessions as well as opportunities to interact with operational divisions (corporate officers, employees, etc.).
a) Participation in Socialization Programs with Patients
To deepen their understanding and implementation of the Company’s Corporate Philosophy of hhc, outside directors also take part in socialization programs (hhc activities) in which they spend time with patients.
<Content of the Socialization Programs>
・ Tour of a facility housing the elderly with dementia or requiring nursing care, and dialogue with residents
・ Tour of a facility for people with physical and intellectual disabilities and dialogue with facility users
・ Hosting of a lecture by dementia with Lewy bodies patients and the implementation of group work by lecture participants
In FY2018, all outside directors participated at least once in these hhc activities.
b) Communication with Corporate Officers and Employees
A meeting was held with the corporate officer assigned to the EMEA region as part of informationsharing related to the state of enterprise risk management efforts and understanding the state of the management of global risks. A meeting was held between outside directors and assigned corporate officers in order to deepen outside directors’ understanding of the Company’s business activities and
business environment. Opportunities for information-sharing and discussion between outside directors and young employees were held at locations such as the Tsukuba Research Laboratories and the
c）Training Sessions for Outside Directors
Newly-appointed outside directors undergo training sessions prior to taking office, on topics that include an outline of the Company, the Corporate Philosophy, the Company’s financial condition and corporate governance. Explanations are also provided on various rules and regulations concerning officers.
After taking office, briefings on such topics as the Company’s business activities, trends in the pharmaceutical industry, and the Company’s business environment are made by assigned corporate officers at an early stage to deepen outside directors’ understanding of the Company. Tours of business offices and other training are also carried out. With the objective of updating their knowledge, directors other than those who have been newly appointed also participate on a voluntary basis.
d) Compliance Training
Compliance training for officers is carried out twice a year, during the first and second half of the year, and outside directors also participate in this training.
- Information Sharing and Discussion Regarding the Succession Planン
a）View Regarding Selection of the Chief Executive Officer (CEO)
The Company positions the selection of the CEO as one of the most important decisions to be made by the Board of Directors. The CEO’s duty is to exhibit strong leadership while also nurturing the next CEO. The Company believes that having outside directors participate in this process with such recognition and having them offer advice, etc., increases the objectivity of the CEO’s proposal of successor candidates. It rationally ensures the fairness of the CEO selection process as the Board of Directors.
b）Procedures Regarding CEO Selection
Even after becoming a company with a nomination committee, etc., system in 2004, discussions had been repeated under a consistently optimal corporate governance system regarding the CEO succession process. In FY2016, with consideration given to the previous background, discussions were held at an Outside Directors Meeting on ideal information sharing by the Board of Directors in relation to a succession plan formulated by the CEO and preparations for unexpected situations, and succession procedures, etc., were set out as rules. The outline of the procedures are as follows.1) Sharing of Information on the Succession Plan(a) Information on the succession plan proposed by the CEO is shared 2 times a year at the Outside Directors Meeting.(b) The CEO and inside directors also participate in this Outside Directors Meeting, and information on the succession plan is shared among all directors.2) Discussion on the Succession Plan(a) The criteria for evaluating candidates are expected to change in accordance with the business environment, etc. For this reason, criteria will be set appropriately when the CEO proposes candidates.(b) The CEO will evaluate candidates on the criteria that has been set, and present evaluation results in the succession plan.(c) Outside directors provide advice on the succession plan. The CEO considers the advice provided by outside directors, and reflects it in the succession plan as appropriate.
c）Preparations for Unexpected Situations
Circumstances, such as unforeseen accidents, that necessitate the sudden selection of a new CEO by the Board of Directors are also possible. Contingency plans for such unexpected situations are also confirmed when considering the aforementioned succession plan.
- Implementation of Corporate Governance Evaluation
The effectiveness of the Board of Directors’ management oversight function is evaluated each year at the Outside Directors Meeting. If any issues related to the operation of the Board of Directors, etc., are identified, a request and proposal for improvement are submitted to the Board of Directors and operational divisions. In the corporate governance evaluation, the status of the activities of the Board of Directors, etc., is inspected and evaluated based on the corporate governance evaluation carried out in the previous fiscal year, issues are identified for the next fiscal year, and improvement measures are presented, thereby implementing the Plan-Do-Check-Act (PDCA) cycle. Beginning in FY2017, we have an outside organization review our processes and results once every 3 years to ensure the appropriateness and suitability of corporate governance evaluations on a continued and periodical basis.
Compliance with the Corporate Governance Code
Eisai ensures full compliance with all 73 principles of the Corporate Governance Code adopted by the Tokyo Stock Exchange in June 2015. The eleven principles that require the disclosure of information are detailed in the Corporate Governance Report. In addition, the Corporate Governance Report discloses the Company's audit system, compensation for directors and corporate officers (e.g. procedure for determining the compensation calculation method), internal control system and requirements concerning the independence and neutrality of outside directors.