Outside Directors

Number of Outside Directors

The Company has three outside directors, all of whom are Audit & Supervisory Committee members.

Personal, Capital, and Business Relationships and Other Interests of Outside Directors with the Company

Outside director Tomoki Matsubayashi owns 79 shares of the Company’s stock; however, outside of that, he does not have any personal, capital, or business relationship or other interest with the Company. Mr. Matsubayashi in the past worked as an attorney at the law firm Tanabe & Partners. While Tanabe & Partners is one of the legal advisors to the Company, there are no facts that Mr. Tomonori Matsubayashi was involved in any legal consultation services for the Company since his inauguration as an officer of the Company.

Outside director Koichiro Ito, who is a certified public accountant, does not have any personal, capital, or business relationship or other interest with the Company.

Outside director Tadaharu Goto owns 4,142 shares of the Company’s stock; however, outside of that, he does not have any personal, capital, or business relationship or other interest with the Company. Also, while there is a business relationship with respect to assistance for recruiting activities with the Ministry of Health and Welfare (currently the Ministry of Health, Labour and Welfare), where he worked at previously, there has not been any instance of a transaction between the Company and the above ministry directly involving Mr. Goto.

Function and Role of Outside Directors in Corporate Governance

The function and role of outside directors in corporate governance is to participate in the Company’s important decision making from an independent and more wide-reaching perspective based on their backgrounds, knowledge, and experience, which differ from those who originated from within the Company. The outside directors also verify the decision-making process, provide advice, and carry out effective audits of the Company’s management. Furthermore, all of the Company’s outside directors are Audit & Supervisory Committee members, who carry out the audits required of them as committee members.
Additionally, the outside directors do not have any personal relationships with the Company or business transactions involving the Company’s directors. For capital relationships as well, the outside directors are not major shareholders and are required to not have any conflicts of interest with general shareholders. The Company believes that the current three individuals meet these conditions, and therefore their independence from the Company has been secured.

Outside director Tomoki Matsubayashi has spent many years working as an attorney and possesses a wealth of knowledge and extensive experience as a legal expert.Outside director Koichiro Ito has worked a long period of time as a certified public accountant as well as a tax accountant and possesses an abundance of knowledge and a wide range of experience as an accounting and tax expert. Outside director Tadaharu Goto has a deep understanding of the Company’s business from his time at the Ministry of Health and Welfare as well from his current position as the director general at the Japan Pharmaceutical Manufacturers Association, which he has held for a long period of time.

The Company’s view regarding the status of selection of Outside Directors

The Company believes the current Outside Directors are fulfilling their expected functions and roles in performing objective and appropriate monitoring and supervision, based on their high degree of independence and specialized knowledge, and that they are making a large contribution to the efficacy of the Company’s corporate governance.

Audits by the Outside Directors and Mutual Cooperation with the Internal Audit Department, Accounting Auditors, and Internal Control Department

The Audit & Supervisory Committee cooperates with the Internal Audit Department to conduct audits. The Audit & Supervisory Committee also receives quarterly reports from the accounting auditors on the results of accounting audits. Moreover, the Committee holds meetings with the accounting auditors on a timely basis to exchange opinions and information, thereby working to realize mutual cooperation.

In addition to assisting in the duties of the Audit & Supervisory Committee, the Internal Audit Department holds monthly meetings with the Audit & Supervisory Committee, where reports are made on the results and progress of audits, including the Audit Plan, and opinions and information are exchanged. The Internal Audit Department also reports on the operational status of the Company’s internal reporting system. In these ways, the department aims to achieve mutual cooperation with the Audit & Supervisory Committee. Moreover, the department exchanges opinions and information related to internal controls and governance based on the Financial Instruments and Exchange Act with accounting auditors. In doing so, the department facilitates close cooperation in order to improve the efficacy and efficiency of audits.

Also, the Internal Control Department evaluates issues raised by these various types of audits and makes efforts to implement the necessary response.