Basic Policy on Corporate Governance
Mochida Pharmaceutical strives to increase Mochida Pharmaceutical Group's corporate value by placing the fulfillment of corporate governance and the reinforcement of compliance at the axis of Group management, to better respond to our stakeholders' trust and expectations. As part of Mochida Pharmaceutical Group policy on reinforcing corporate governance, important management decisions are discussed thoroughly by the Management Policy Meeting, if necessary, and are then made through discussion by the Board of Executive Managing Officers and the Board of Group Management, both of which meet on a weekly basis. Mochida Pharmaceutical's Board of Directors includes Outside Directors, and the executive officer system has also been introduced to clearly separate the functions of the Board of Directors into management decision-making and the supervision of business operations so as to expedite management decision-making and business operations. For the purpose of strengthening objectivity and accountability for the nomination of Members of the Board, Executive Officers and Audit & Supervisory Board Members and for the determination of remuneration for Members of the Board and Executive Officers, Mochida Pharmaceutical has established the Nomination and Compensation Advisory Committee, a majority of which comprises Outside Directors, as a voluntary advisory body to Representative Directors, and our corporate decisions on such nomination and compensation are made in light of the opinions of said Committee.
Company Governance Structure
Mochida Pharmaceutical has established a Board of Directors (including outside directors) and an Audit Committee (including outside auditors) as its statutory bodies under the Companies Act.
The reasons for adopting this governance structure, considering the company's scale and business operations, are as follows: (1) To ensure efficient management while securing a system where management oversight functions appropriately, it is deemed most suitable at this time to have a Board of Directors of an appropriate size, consisting of internal directors who are familiar with Mochida Pharmaceutical's business operations and internal affairs, as well as outside directors with extensive knowledge and experience in their respective fields, responsible for making management decisions; and (2) the corporate governance system that includes audit roles played by outside auditors is essential for effective management oversight.
Efforts in Internal Control
Since the enforcement of the Companies Act in May 2006, we have established a basic policy for constructing and maintaining an internal control system. This basic policy has been partially revised in May 2010 (to strengthen the mechanisms and systems for company-wide risk management, including the establishment of a Risk Management Committee), in April 2015 (to enhance and specify the policies related to the appropriate conduct of the entire group's operations in response to the amended Companies Act and its enforcement regulations, as well as the system supporting the audits conducted by auditors), and in April 2023 (to reflect revisions to internal regulations regarding our group's compliance system). We have built and are operating our internal control system accordingly.
Furthermore, to comply with the internal control reporting system established under the Financial Instruments and Exchange Act, we have formulated internal control regulations related to financial reporting and are committed to ensuring the reliability of financial reports.