Eisai has pursued the best corporate governance practices and has remained committed to the improvement of this governance forthe purpose of fulfilling hhc, the company's corporate philosophy. Since June 2000, Eisai has appointed directors from outside the company, and in June 2004, Eisai revised its Articles of Incorporation at the Annual General Shareholders' Meeting and adopted the Company with Committees System (currently, Company with a Nomination Committee, etc., System). At the same time, the number of outside directors has been increased to account for the majority of the Board of Directors. This is intended to ensure the fairness and transparency of our business management and, as a consequence, the management supervision function has been strengthened.
Eisai remains committed to the sustainable improvement of its corporate governance in pursuit of increasing the benefits to stakeholders including patients, customers, shareholders and employees.
Eisai's Corporate Governance System
Features of Eisai's Corporate Governance
- Clear Separation of the Functions between Supervision of Management and the Execution of Business
The core aspect of Eisai's corporate governance system is the clear separation of the supervision of management and the execution of business through which maximum benefit is obtained from Eisai's status as a Company with a Nomination Committee, etc., System. Eisai has established that the Chair of Board of Directors be an outside director and that the CEO is the only director serving concurrently as a corporate officer to achieve this goal.
The Board of Directors is able to devote its attention to management by entrusting a large portion of decision-making authority to corporate officers. This enables corporate officers to increase the effectiveness and flexibility of business execution and to enhance the dynamics of management, as well as ensuring autonomy by establishing internal controls.
The corporate officers fulfill their accountability by making reports to the Board of Directors on the status of the execution of their assigned activities, both quarterly and upon request. Based on the reports from the corporate officers, the Board of Directors keeps up-to-date on matters such as the progress of our business plans, the current status and issues of our operations, labor management, occupational health and safety, efforts for environmental protection and the status of efforts to meet compliance requirements such as the prevention of corrupt acts and bribery. In this way, the Board supervises the execution of operations. Under this system, along with checking the status of execution of operations, the Board of Directors also inspects the status of internal controls such as business execution and decision-making processes from the perspective of shareholders and society.
- Ensuring the Independence and Neutrality of Outside Directors
The presence of seven independent and neutral outside directors, who account for the majority of the members of the Board of Directors, supports the effective operation of Eisai's corporate governance system. Eisai's Nomination Committee is composed exclusively of outside directors. The Nomination Committee strictly applies the "Requirements for the Independenceand Neutrality of Outside Directors", stipulated by the Committee, for the selection of candidates for outside directors.
- Diversity of Outside Directors
The Nomination Committee emphasizes composing Board of Directors with directors who have diverse expertise, experience and backgrounds. The expectation is that by doing so, the Board of Directors will contribute to the enhancement ofcorporate value by providing oversight of the efficiency, appropriateness, etc., of management from the viewpoint of a wide range of stakeholders.
- Initiatives for the Continuous Enhancement of Corporate Governance
- a)Outside Directors Meeting
The outside directors meeting (with only outside directors in attendance) is held on a regular basis. The meeting provides outside directors with valuable opportunities to interact, communicate at a more profound level, and make discussions atthe Board of Directors, etc., more dynamic and productive. At outside directors meetings, participants freely discuss corporate governance and business-related matters. Their discussions may be reported to the Board of Directors or the corporate officers as necessary.
Outside directors' meeting reviews the effectiveness of the Board of Directors' management supervision function on an annual basis. If any issues in the operation of the Board of Directors, etc., are identified, improvements are proposed to the Board of Directors.
- b)Corporate governance review
The Board of Directors discusses the effectiveness of its management supervision function on an annual basis and also reviews the Corporate Governance Guideline and rules relating to internal control. The results of the self-review are summarized as the corporate governance review.
Formulated by the Board of Directors, the Corporate Governance Guideline is the code of conduct in terms of Eisai's corporate governance. Eleven directors review the duties of the Board of Directors defined in the guideline, the performances of the chair of the Board of Directors, company directors, outside directors, the Nomination Committee, Audit Committee and Compensation Committee, outside directors' meetings and the operations of the Board of Directors and committees. The results of the review are summarized at the outside directors’ meeting for resolutions by the Board of Directors.The outside directors, who are independent from the management and well-informed about the activities of Eisai's Board of Directors, discuss and summarize the results of the review submitted by Eisai's directors. This ensures greater accuracy and objectivity of the review.
The results of the fiscal 2016 corporate governance review are stated in the Notice of Convocation of the 105th Ordinary General Meeting of Shareholders.
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.