- Dialogue with stakeholders
- The CEO succession plan
- Implementation of Corporate Governance Evaluation
- Execution of Various Training Sessions, etc.
Dialogue with stakeholders
In FY2024, we engaged in the following dialogues with the Company’s key stakeholders, namely, patients and the people in the daily living domain, shareholders and institutional investors, and employees. At its meeting held at the end of the fiscal year, the hhc Governance Committee reflected on these dialogues and discussed how to incorporate their results into the oversight function of the Board of Directors.
Dialogue with patients and the people in the daily living domain
- We visited a community-based small-scale multifunctional facility that provides day service (regular visits), at-home care, and short stays all in one. We engaged in conversations and non-verbal communication with users. We also received concrete explanations from those involved in operations and caregiving about the facility's characteristics and daily interactions with users, including patients with dementia. This experience renewed our strong awareness of the Company’s social mission to address Alzheimer’s disease. Through this dialogue, we deepened our understanding of the importance of empathizing with the emotions of patients and the people in the daily living domain, as well as our Corporate Concept of hhc and its implementation.
Dialogue with institutional investors
- In FY2024, we also conducted one-on-one dialogues with institutional investors to have deeper discussions aimed at enhancing our management oversight function. We used a web conferencing system to share information and exchange opinions with 11 companies (8 domestic, 3 overseas), mainly financial analysts and fund managers.
- We were able to have in-depth exchanges of opinions on management issues and the expectations of institutional investors for outside directors. The feedback and knowledge gained from these dialogues are utilized in discussions at meetings of the Board of Directors and in improving our management oversight function.
Dialogue with employees
- We visited the Kashima Plant, EDCS. We received an overview of the Kashima Plant, and an explanation of research and development activities related to active pharmaceutical ingredients (APIs), initiatives and issues related to stable API supply for commercial production, and quality control efforts focused on data digitization and test automation. Following a Q&A session, we toured the plant and deepened our understanding of this API base with both R&D and commercial production functions.
- We visited Tsukuba Research Laboratories. We received explanations on the history of new drug discovery, the R&D framework, and the concept of the grand design of Tsukuba Research Laboratories. We also learned about the open facility layout designed for fluid movement and the expectations for value creation through new styles of communication. We received briefings from leaders responsible for executing drug discovery activities—from hypothesis building to approval—on current projects, strategies, and issues of each research function. We deepened our understanding of drug discovery research activities and the organizational structure. During interaction with young leaders, opinions were shared on the current situation and perceived issues. Each director offered comments on their expectations for the organization and employees, as well as advice based on their experiences. A lively discussion took place, followed by a lab tour.
- We visited the Kawashima Industrial Park. We received an overview of the Kawashima Industrial Park, commercial production, and formulation research activities. As part of the activity briefing, we were given explanations on quality control issues and future prospects for ensuring the global stable supply of LEQEMBI, as well as on the development of the autoinjector formulation of lecanemab. This was followed by a Q&A session and exchange of opinions. We then toured the formulation and packaging processes. We also visited the newest injection formulation building and research building, Eisai Medicine Innovation Technology Solutions (EMITS), and the Naito Museum of Pharmaceutical Science and Industry. We deepened our understanding of the Company’s production system and formulation research.
- Following our visit to the Tokyo Communication Office (CO) in FY2023, we visited the Omiya CO, which covers all of Saitama Prefecture. We received explanations on the treatment process for LEQEMBI, the status and issues of information provision activities, and the overall situation in Saitama Prefecture. We were also briefed on strategic planning tailored to regional characteristics for further contribution to patients through LEQEMBI, efforts to establish a pathway from diagnosis to treatment, and regional issues and activities aimed at overcoming them. Through Q&A and exchange of opinions, we deepened our understanding of Eisai Japan's MR activities.
The CEO succession plan
Selection of a CEO is a resolution item for the Board of Directors. To ensure the fairness, appropriateness, and smoothness of resolutions at Board of Directors meetings, the Company continues to discuss CEO succession plans within the hhc Governance Committee, which is composed of 7 outside directors.
View Regarding Selection of the Chief Executive Officer (CEO)
The Company considers the selection of the Chief Executive Officer (CEO) to be one of the most important decisions to be made by the Board of Directors. In particular, independent outside directors play a crucial role in appropriately exercising oversight over the succession plan formulated by the CEO. They also provide advice and guidance in nurturing potential future CEOs, thus enhancing the objectivity of CEO candidate proposals by the CEO himself and ensuring the fairness of CEO selection resolutions in Board of Directors meetings in a reasonable manner.
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Procedures Regarding CEO Selection
The Company has established rules, including procedures, for sharing information between the CEO and directors regarding the succession plan formulated by the CEO and for preparing for unforeseen events. The outline of the procedures is as follows.
- 1）Sharing of Information and discussing about the Succession Plan
- - Information and discussing about the succession plan proposed by the CEO is shared in meetings of the hhc Governance Committee.
- The CEO and inside directors also participate in the hhc Governance Committee, and informationand discussing on the succession plan is shared among all directors.
- 2）Discussion on the Succession Plan
- - Criteria for evaluating candidates are expected to change in accordance with the business environment and other factors. For this reason, criteria will be set appropriately when the CEO proposes candidates.
- - The CEO evaluates candidates on the criteria that have been set, and presents evaluation results in the succession plan.
- - Directors provide advice on the succession plan. The CEO considers the advice provided by directors, and reflects it in the succession plan as appropriate.
Preparations for Unexpected Situations
Situations, 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
Evaluation Mechanism of the Company’s Corporate Governance
In the corporate governance evaluation, the Plan-Do-Check-Act (PDCA) cycle is implemented by inspecting and evaluating the status of the activities of the Board of Directors and other management councils based on the recognition of issues in the previous fiscal year, identifying issues for the next fiscal year, and presenting improvement measures.
Corporate Governance Evaluation System focusing on improving the effectiveness of the Board of Directors
Corporate Governance Evaluation Results
- On April 23, 2026, the Board of Directors discussed the results of the Self-Review of the Corporate Governance Principles, Self-Review of Internal Control Regulations, and the hhc Governance Committee-compiled Board of Directors evaluation, and passed a resolution on the FY2025 Corporate Governance Evaluation.
- 1) Corporate Governance Evaluation Results
In regard to the Corporate Governance Principles and Internal Control Regulations, no evidence was found of any operation, etc., that deviates from the rules. It was confirmed that the directors and corporate officers, etc., are performing their duties appropriately to improve corporate governance. In addition, with respect to the Board of Directors evaluation, the state of responses in FY2025 to the issues identified in the FY2024 Board of Directors evaluation as issues for FY2025 was checked and evaluated, and the issues, etc., for the next fiscal year were recognized. - 2) Major Initiatives for FY2026
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- Board of Directors
・Continuously oversee progress from both quantitative and qualitative perspectives to confirm whether plans based on the strategies for each of the most important items in the 3-year plan beginning in FY2026 are being steadily executed.
・Request reports concerning the medium- to long-term product development pipeline, portfolio strategy, and growth investments that serve as the sources of corporate value. - hhc Governance Committee
・Continue ongoing discussions on CEO succession as an important issue. In these discussions, the Committee will place importance on objectivity and continue its deliberations in order to fulfill its accountability to stakeholders.
・Expand opportunities for candid dialogue with corporate officers, further cultivate relationships of trust through mutual communication, and thereby enhance the effectiveness of the management oversight function.
Overview of Board of Directors Evaluation
- Board of Directors
| Specific Status of Initiatives in FY2025 (Plan (Prepare), Do (Execute) & Check (Evaluate)) | |
|---|---|
| Role and Operating Status of the Board of Directors | |
| ① Enhancing the effectiveness of management oversight by the Board of Directors | ・ Environments that make it possible to observe key meetings of the operational divisions were maintained. ・ The hhc Governance Committee continued to conduct reviews of Board of Directors meetings, requested necessary responses from operational divisions, and followed up on them. |
| ② Improving the transparency and ease of understanding of information disclosure | ・ The Board of Directors continued to confirm the materials for financial results presentation. ・ The process in the operational divisions regarding the timing of financial results disclosure was improved. |
| ③ Ensuring processes for important decision-making matters | ・ With regard to the 3-year plan and business plans, a process was ensured whereby they were deliberated multiple times before being finalized, and resolutions were made after revisions based on matters pointed out. |
| ④ Improving the quality of discussions at Board of Directors meetings |
・ Utilized advance briefings in a group format and opportunities for individual explanations, and strove to improve the quality of discussion at Board of Directors meetings. ・ In some cases, sufficient time for discussion could not be secured due to the large number of agenda items and more active discussions. |
| ⑤ Improving agenda design and operational efficiency | ・ The annual agenda items were considered and decided by the hhc Governance Committee based on the FY2025 action plan. ・ Although there continues to be room for improvement in the early submission of agenda items, operational efficiency was improved by organizing matters submitted for deliberation and reviewing the format of report items, etc. |
| Activities of Outside Directors and the hhc Governance Committee | |
| ① Continued consideration of the CEO succession plan | ・ Regarding the succession plan, ongoing discussions and consideration continued as an important issue, and dialogues with candidates, etc., were conducted multiple times. |
| ② Dialogues with stakeholders | ・ Broad dialogues were conducted with diverse stakeholders, including patients and the people in the daily living domain, shareholders, and employees, and activities were conducted to channel reflections on those dialogues into policy for activities in the next fiscal year. |
| ③ Securing opportunities for free discussion | ・ Free discussion without setting a theme was conducted. |
| Nomination, Audit, and Compensation Committees, and Other Initiatives | |
| ① Nomination Committee | ・ Consideration was given to director appointment simulations aimed at achieving a 30% ratio of female directors and to selecting medical and pharmacological experts as outside director candidates. ・ Regarding the review of the company with a nomination committee, etc., system, the current direction of revisions and the function of the Company’s Nomination Committee were confirmed. |
| ② Audit Committee | ・ The Audit Committee strengthened the organization of discussion points and the sharing of important information, and advanced new initiatives to improve operational efficiency. |
| ③ Compensation Committee | ・ The officer compensation system implemented in FY2023 was reviewed, and the status of its operation and the evaluation process were inspected. |
| ④ Oversight of important themes related to risk management, internal control, and overall corporate governance | ・ Reports were received on the status of the development and operation of internal control and important risks, and the Board of Directors shared its recognition of them. ・ Reports were received from operational divisions on important governance related topics such as respect for human rights, sustainability, and human capital. |
| Issues for FY2026 (Action) | |
|---|---|
| Role and Operating Status of the Board of Directors | |
| ① In order for the Board of Directors to conduct optimal decision-making, directors will continue to observe key meetings of the operational divisions, and advance briefings in a group format, the hhc Governance Committee, etc., will be utilized effectively. |
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| ② Reports will continue to be requested to the Board of Directors regarding the disclosure of important information related to corporate management, thereby improving the transparency of management and fulfilling accountability to stakeholders. | |
| ③ For the Board of Directors and the hhc Governance Committee, annual agenda items for the next fiscal year will be decided during the current fiscal year, and efforts will be made to enhance substantive discussions through planned deliberations. |
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| Activities of Outside Directors and the hhc Governance Committee | |
| ① Utilize the diverse perspectives obtained through dialogue with key stakeholders (patients and the people in the daily living domain, shareholders, and employees) to realize highly effective management oversight. | |
| ② Continue to consider the future approach and timing for CEO succession. In addition, periodically confirm the status of the development of candidates and the status of establishing the management team structure that supports the candidates. | |
| ③ Continue reviews of Board of Directors meetings to improve the effectiveness of the Board of Directors. | |
| ④ Establish opportunities for free discussion to share new perspectives on management oversight. | |
| ⑤ With regard to corporate governance evaluation, conduct a review by an external organization once every 3 years, ensure the appropriateness of evaluation results, and maintain and improve the objectivity, adequacy, etc., of evaluation methods. | |
| Nomination, Audit, and Compensation Committees, and Other Initiatives | |
| ① The Nomination Committee will continue to consider board succession from a future-oriented perspective and matters related to selecting medical and pharmacological experts as outside director candidates, including the roles expected of them. | |
| ② The Audit Committee will further deepen collaboration with the internal audit division and continue to pursue improvements in audit quality and the realization of efficient audits. In addition, the Committee will continue to consider how to provide information effectively to the Board of Directors. | |
| ③ The Compensation Committee will begin a fundamental review of the officer compensation system introduced in 2023, and will consider incorporating performance indicators (KPIs) in the 3-year plan into performance-based compensation for the corporate officer compensation system. | |
| ④ Various issues being considered by the Nomination, Audit, and Compensation Committees will be shared with the hhc Governance Committee in a timely manner as necessary, and efforts will be made to eliminate information gaps. | |
| ⑤ From the perspective of enhancing the effectiveness of internal control and risk management, the timely and appropriate sharing of risk information will continue, and the risk map will be reviewed regularly. Furthermore, reports on cybersecurity will be requested from operational divisions for ongoing oversight. | |
| ⑥ From the perspective of medium- to long-term value creation, reports will be requested from operational divisions on important initiatives, including social impact, and responses to sustainability, etc. | |
| ⑦ Training sessions on corporate governance will be planned to obtain the latest information and enhance the knowledge and understanding of officers. |
Execution of Various Training Sessions, etc.
In order to deepen the understanding of the Company’s business activities and business environment further, 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.).
Training Sessions for Outside Directors
Communication with Corporate Officers
- Training for newly appointed outside directors was based on face-to-face briefings, with corporate officers providing individual explanations of their areas of responsibility and sharing information on the Company’s business contents and activities. Lively discussions were also held.
- In addition to the face-to-face briefings, these training sessions also utilized web conferences. Outside directors other than newly appointed directors also participated on a voluntary basis. In addition, by filming the corporate officers’ briefings and Q&A sessions, we have made the sessions available for on-demand viewing by directors