Exhibit Number | ||
1. |
TAKEDA PHARMACEUTICAL COMPANY LIMITED | ||||||
Date: July 16, 2019 | By: | /s/ Takashi Okubo | ||||
Takashi Okubo Global Head of Investor Relations |
I. | Basic Views on Corporate Governance and Basic Information on Capital Structure, Corporate Profile and Other Matters |
1. | Basic Views |
(1) | Company objectives, business strategies, and business plans |
a. | Company objectives and business strategies…Principle 3.1 (i) |
b. | Business plans …Principle 3.1 (i) |
c. | Basic views and guidelines on corporate governance… Principle 3.1 (ii) |
(2) | Securing the Rights and Equal Treatment of Shareholders |
d. | General shareholder meeting |
• | The Company sends a notice of convocation of its Ordinary General Meeting of Shareholders three weeks prior to the day of the meeting and discloses it on its website so that shareholders have sufficient time to review the agenda of the meeting. |
• | The Company translates the full text of the notice of convocation into English. The Company utilizes an electronic platform for voting so that institutional and foreign investors can execute their voting rights easily. |
e. | Cross-Shareholdings…Principle 1.4 |
• | The Company only holds a minimum number of shares of other companies with which it has business relationships. About such shareholdings, the Company assesses whether or not each shareholding contributes to the corporate value of the Company group by considering the Company’s mid-to-long term business strategy, and comparing benefits of such ownership (dividends, business transactions, expected returns from strategic alliance, etc.) with the Company's cost of capital. As a result of the review, the Company divests shares from applicable shareholdings that are deemed to be of little significance after taking the financial strategy and market environment into consideration. |
• | The Company makes a decision on the exercise of voting rights regarding cross-shareholding after comprehensively reviewing whether the proposal makes a positive contribution to shareholder value as well as the value of issuing companies. The Company will object to any proposals that are deemed detrimental to shareholder value or corporate governance of issuing companies. |
f. | Related Party Transactions…Principle 1.7 |
• | The Company investigates the existence of related party transactions such as transactions involving Directors and their close relatives through methods including seeking direct confirmation from Directors. |
• | The Company has procedures that comply with the provisions of the Companies Act on competitive and conflict-of-interest transactions by the Director. In addition, the transactions by the Director’s close family members and by Takeda Executive Team member (TET) and his/her close family members require the approval of the Board of Directors. |
• | Transactions such as investments in, and loans and guaranties provided to subsidiaries/affiliated companies require the approval of Business Review Committee or other decision-making bodies depending on the amount of the investment, loan, or guarantee. |
• | In addition to the above, the Company will investigate any unusual transactions between the Company and affiliated companies and undertake in advance the accounting, consider the disclosure of such transactions, confirm whether the value of the transaction is significant, and, where the amounts are significant, monitor the content and conditions of such transactions on a quarterly basis. |
• | As stipulated in the Financial Instruments and Exchange Act, the Company considers any shareholder who holds 10% or more of the voting rights of all shareholders (excluding those specified by the Cabinet Office Ordinance) as a “major shareholder”. Although the Company has no "major shareholders" at present, the Company will apply the above procedures to any “major shareholders” in the future. |
(3) | Appropriate Cooperation with Stakeholders Other Than Shareholders |
• | The Company takes into account the interests of various stakeholders including patients, customers, employees, clients, creditors, local communities, and shareholders in order to improve long-term corporate value. |
(4) | Ensuring Appropriate Information Disclosure and Transparency |
• | The Company makes timely and appropriate disclosures in a fair, detailed, and understandable manner to keep all shareholders informed in accordance with applicable laws including the Companies Act, the Financial Instruments and Exchange |
• | The Company promptly discloses financial and non-financial information including ESG (Environment, Social and Governance) information beneficial to stakeholders such as shareholders in addition to the information required by laws and regulations. |
(5) | Responsibilities of the Board |
g. | Roles of the Board… Supplementary Principle 4.1.1 |
• | The Board focuses on discussing and resolving of strategic or particularly important matters such as the establishment of and amendments to the Company group’s corporate philosophy as well as important management policies and plans such as mid- to long-term strategies and corporate plans. In addition, the Board delegates responsibilities for decision-making regarding some of the important business decisions to the management under the Company's Articles of Incorporation. The Board of Directors Bylaws specify the matters for resolution by the Board. In addition to deliberation and resolution of the matters, the Board is responsible for the supervision of business executed by Directors. |
• | As to the aforementioned matters delegated to the management, specifically, they are delegated to the Business Review Committee (which is responsible for general management matters), the Portfolio Review Committee (which is responsible for R&D and product-related matters), and the Risk, Ethics and Compliance Committee (which is responsible for risk management, business ethics and compliance matters) respectively. The Board supervises the management's execution of these matters through the reports of the aforementioned committees. |
• | Matters not requiring the approval of the aforementioned committees are delegated to the TET (which consists of the President & CEO and the function heads of the Takeda Group who report directly to the President & CEO) based on Takeda Group’s Management Policy (T-MAP) and Takeda aims for agile and efficient decision-making across the group. |
h. | Composition of the board…Supplementary Principle 4.11.1 |
• | In order to strengthen supervisory functions and further deliver objectivity and transparency through the deliberations, Independent External Directors comprise a majority of the Board of Directors of the Company. The Company has sixteen Directors (including four Directors who are Audit and Supervisory Committee Members), of which 11 are Independent External Directors (including three Independent External Directors who are Audit and Supervisory Committee Members) at the time of writing. The Board is chaired by an Independent External Director. |
• | The Company makes appropriate Director appointments, and constitutes the Board based on the following principles: |
◦ | Appoint individuals from inside and outside the Company irrespective of nationality or gender who can contribute to the balance of knowledge, experience, and capacity needed for governance of the Company's global operations. |
◦ | The Board shall be a size that allows effective and agile decision-making and appropriate supervision of management (the Company's Articles of Incorporation limit the maximum number of Directors who are not Audit and Supervisory Committee Members to 12 and Directors who are Audit and Supervisory Committee Members to four). |
i. | Policies and procedures in the nomination of directors… Principle 3.1 (iv), (v) |
• | The Company nominates candidates for Directors who are not Audit and Supervisory Committee Members (excluding candidates for External Directors) considering, among |
• | The Company nominates candidates for Directors who are Audit and Supervisory Committee Members (excluding candidates for External Directors) among those who have outstanding integrity and assume a firm attitude in carrying out duties in all circumstances and have a wide range of expertise and/or knowledge that guarantees sound audit for Takeda's global operations. |
• | The board of directors selects candidates for members of the Board of Directors. The Nomination Committee (advisory committee to the Board of Directors) chaired by an External Director with the majority of members being External Members, ensures the appropriateness of the candidate. Candidates for External Directors are elected based on the “Internal criteria for independence of External Directors (Refer to II.1. Independent Directors)”. Candidates for Directors who are Audit and Supervisory Committee Members are nominated by the Board of Directors, after obtaining agreement of Audit and Supervisory Committee. |
• | Regarding the reappointment of director candidates, the Company has internal rules that define the criteria for not re-appointing the current directors and if the criteria are met, the Board of Directors will determine that such director will not be reappointed as a candidate after consultation and recommendation with the Nomination Committee. |
• | The profiles and reasoning of individual appointments of nominated Director candidates are disclosed in the "Notice of Convocation of Ordinary General Meeting of Shareholders" and the Securities Report. |
j. | Remuneration of the Directors, etc. … Principle 3.1 (iii) |
• | Please refer to the “Policies determining the amount of remuneration or the method for calculating remuneration” in Part II section 1 of this report. |
k. | Independent Directors… Principle 4.9, Supplementary Principle 4.11.2 |
• | The Company has established its “Internal criteria for independence of External Directors” to ensure such Directors are of a character that we believe is truly important for realizing the common interests of the shareholders. |
• | Please refer to the "Internal Criteria for Independence of External Directors of the Company" under the title of “Independent Directors” in Part II section 1 of this report. |
• | Concurrent director positions of External Directors at other organizations are stated in the “Notice of Convocation of Ordinary General Meeting of Shareholders” and the Securities Report. In addition, the Company believes the concurrent holding of these positions does not prevent External Directors from allocating sufficient time and attention to perform the roles and duties of their offices. |
l. | Director Training… Supplementary Principle 4.14.2 |
• | The Company provides necessary information about the Company (Takeda-ism, governance, business strategies etc.), industry trends and legal responsibilities (duty of care, duty of loyalty etc.) to Directors when they take office. Also, the Company conducted the training to the Directors regarding the applicable laws and regulations for listing on the New York Stock Exchange, the Company’s compliance program and the Corporate Integrity Agreement concluded by Shire and the Office of Inspector General in the United States, etc. The Company continues to provide useful information and learning opportunities etc. even after Directors take office. |
• | In addition to continually providing information about Takeda and the pharmaceutical industry to External Directors, the Company also provides study sessions and site visits as appropriate. |
• | The Company bears the expenses for all training. |
m. | Board Effectiveness… Supplementary Principle 4.11.3 |
• | An evaluation of the performance and effectiveness of the Board of Directors is conducted at least once a year in principle by third party organizations in such a way that the individual opinions of the Directors are easily obtained. All Directors individually complete a questionnaire and/or are individually interviewed. Based on the results of the evaluation, the Board of Directors analyzes and evaluates the effectiveness thereof and acts on any opportunities for improvement. |
(6) | Dialogue with Shareholders… Principle 5.1 |
• | Takeda has a structure in place to continue "purposeful dialogue" with shareholders on topics including corporate governance, measures addressing environmental and social issues, corporate strategy, capital policy, business performance, and business risk from a long-term perspective with transparency and fairness, which enables the Company to build strong relationships of trust with its shareholders who share with the company the common interest of realizing "sustainable growth of corporate value". |
◦ | The Chief Financial Officer (CFO) is responsible for overall engagement with shareholders, and the Global Head of Investor Relations (IR) in the Global Finance department is accountable for operational IR activities. When planning and conducting meetings with shareholders, the Head of IR determines the meeting style and Takeda participants (which may include the President & CEO, the CFO, or other senior management), taking into consideration the objectives and impact of the meeting, and the characteristics of each shareholder. |
◦ | The IR team promotes dialogue with shareholders by collecting necessary information from various internal divisions such as finance, R&D, and commercial, and devising ways of effective communication to shareholders through close collaboration with these divisions. |
◦ | Takeda continues to enhance activities aiming to deepen the shareholders' understanding about topics including the Company's management policy, corporate governance, measures addressing environmental and social issues, strategies, and current business status. With respect to engagement with institutional investors, in addition to one-on-one meetings, Takeda holds quarterly earnings conferences and hosts IR Day events that focus on topics of high shareholder interest. Information about these events is disclosed to individual investors through postings on the IR section of corporate website, and Takeda also holds company presentation meetings specifically for individual investors. Presentation video and a message from the President & CEO are also posted on the website. |
◦ | Shareholders' interests and concerns which are raised during dialogue with the Company are shared with the senior management and are utilized for business analysis and for considering the optimal way of disclosing information. |
◦ | When engaging in communication with shareholders, Takeda appropriately manages insider information in compliance with internal rules, and fairly and timely discloses that information. In advance of earnings announcements, Takeda implements a "silent period", during which no communication with shareholders regarding earnings information is permitted. |
(7) | Company's measures for Corporate Pension Funds as the Managing Organization... Principle 2.6 |
• | Takeda Pharmaceutical Pension Association is administered by the designated or selected expert staff mainly in the areas of HR and Finance, who are knowledgeable about corporate pension and pension fund management. Insights and consulting services from external professionals are taken into consideration in pension fund management policy, as securing long-term pension payment for employees is critically important. In addition, pension fund investment is practically managed by external consigned institutions so that conflicts of interest which could arise between pension fund beneficiaries and companies are appropriately managed, as the Company shall not be involved with directing pension fund investment or exercising the voting rights. Company is mindful of potential impact to financial conditions as well as of maximizing benefits for participants and beneficiaries in Takeda’s corporate pension program, periodically monitoring the pension fund condition in the asset management committee or flexibly changing the portfolio strategy. |
• | In operating the Corporate Pension Funds, the Company carefully considers the importance that pension fund management plays in potentially impacting employees’ stable asset formation and the company’s financial conditions. The Company continues to strengthen its system to fulfil its responsibilities as an asset owner. |
2. | Capital Structure |
Name / Company Name | Number of Shares Owned | Percentage (%) |
THE BANK OF NEW YORK MELLON AS DEPOSITARY BANK FOR DEPOSITARY RECEIPT HOLDERS | 118,250,244 | 7.56 |
The Master Trust Bank of Japan, Ltd. (Trust account) | 109,549,100 | 7.00 |
Japan Trustee Services Bank, Ltd. (Trust account) | 85,405,000 | 5.46 |
Nippon Life Insurance Company | 35,360,385 | 2.26 |
Japan Trustee Services Bank, Ltd. (Trust account 5) | 34,260,400 | 2.19 |
JP Morgan Chase Bank 380055 | 30,324,364 | 1.94 |
SSBTC CLIENT OMNIBUS ACCOUNT | 26,787,230 | 1.71 |
State Street Bank West Client-Treaty 505234 | 24,672,918 | 1.58 |
STATE STREET BANK AND TRUST COMPANY 505001 | 23,775,434 | 1.52 |
Japan Trustee Services Bank, Ltd. (Trust account 1) | 22,797,800 | 1.46 |
3. | Corporate Attributes |
Listed Stock Market and Market Section | Tokyo 1st Section, Nagoya 1st Section, Sapporo Existing Market, Fukuoka Existing Market |
Fiscal Year-End | End of March |
Type of Business | Pharmaceuticals |
Number of Employees (consolidated) as of the End of the Previous Fiscal Year | More than 1,000 persons |
Sales (consolidated) as of the End of the Previous Fiscal Year | More than 1 trillion Yen |
Number of Consolidated Subsidiaries as of the End of the Previous Fiscal Year | 300 companies or more |
4. | Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder |
5. | Other Special Circumstances which may have Material Impact on Corporate Governance |
II. | Business Management Organization and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversight in Management |
1. | Organizational Composition and Operation Update |
Maximum Number of Directors Stipulated in Articles of Incorporation | 16 persons |
Term of Office Stipulated in Articles of Incorporation (Directors who are members of the Audit and Supervisory Committee) | 2 years |
Term of Office Stipulated in Articles of Incorporation (Directors who are NOT members of the Audit and Supervisory Committee) | 1 year |
Chair of the Board Meeting | Independent External Director |
Number of Directors | 16 persons |
Election of External Directors | Elected |
Number of External Directors | 11 persons |
Number of Independent Directors | 11 persons |
Name | Attribute | Relationship with the Company (*1) | ||||||||||
a | b | c | d | e | f | g | h | i | j | k | ||
Masahiro Sakane | Coming from another company | |||||||||||
Olivier Bohuon | Coming from another company | |||||||||||
Ian Clark | Coming from another company | |||||||||||
Yoshiaki Fujimori | Coming from another company | |||||||||||
Steven Gillis | Coming from another company | |||||||||||
Toshiyuki Shiga | Coming from another company | |||||||||||
Jean-Luc Butel | Coming from another company | |||||||||||
Shiro Kuniya | Attorney-at-law | X | ||||||||||
Koji Hatsukawa | Certified public accountant | |||||||||||
Emiko Higashi | Coming from another company | |||||||||||
Michel Orsinger | Coming from another company |
Name | Designation as Independent Director | Supplementary Explanation of the Relationship | Reasons for Appointment (If designated as Independent Director, reasons for designation) |
Masahiro Sakane | Yes | N/A | Mr. Masahiro Sakane has been appointed as an External Director as of June 2014. He proactively expresses his opinions at the Board of Directors meetings by leveraging his ample experience as company top management. He facilitates Board of Directors meetings as the chairperson since June 2017 as well as leads meetings by External Directors, which contributes to the making of fair and appropriate decisions and securing sound management in the Company. He attended 12 of the 12 meetings of the Board of Directors in the fiscal year 2018. His ownership of the Company’s share is immaterial (as of June 2019), and there are no personnel, capital, business or other special relationship between him and the Company. The Company deemed that he is highly independent and designated him as an Independent Director of the Company because there is no risk of conflict with the interests of the Company’s general shareholders as he executes his duties as an External Director. |
Olivier Bohuon | Yes | N/A | Mr. Olivier Bohuon served as an External Director of Shire and has sufficient expertise in Shire's portfolio and its related therapeutic areas. Previously, he has held key positions in healthcare companies in Europe and the U.S. and has a deep insight into the management of global healthcare businesses based on his ample experience. He has remarkable expertise in the area of marketing in the overall healthcare business. He has been appointed as an External Director as of January 2019. He contributes to the making of fair and appropriate decisions and securing sound management in the Company. After his appointment, he attended 1 of the 2 meetings of the Board of Directors in the fiscal year 2018. There are no personnel, capital, business or other special relationship between him and the Company. The Company deemed that he is highly independent and designated him as an Independent Director of the Company because there is no risk of conflict with the interests of the Company’s general shareholders as he executes his duties as an External Director. |
Ian Clark | Yes | N/A | Mr. Ian Clark served as an External Director of Shire and has sufficient expertise in Shire's portfolio and its related therapeutic areas. Previously, he has held key positions in healthcare companies in Europe and the U.S. and has a deep insight into the management of global healthcare businesses based on his ample experience. He has remarkable expertise in marketing in the area of oncology and the operation of the science and technology division of a healthcare company. He has been appointed as an External Director as of January 2019. He contributes to the making of fair and appropriate decisions and securing sound management in the Company. After his appointment, he attended 1 of the 2 meetings of the Board of Directors in the fiscal year 2018. There are no personnel, capital, business or other special relationship between him and the Company. The Company deemed that he is highly independent and designated him as an Independent Director of the Company because there is no risk of conflict with the interests of the Company’s general shareholders as he executes his duties as an External Director. |
Yoshiaki Fujimori | Yes | N/A | Mr. Yoshiaki Fujimori has been appointed as an External Director as of June 2016. He proactively expresses his opinions at the Board of Directors meetings by leveraging his ample experience as company top management, which contributes to the making of fair and appropriate decisions and securing sound management in the Company. He attended 12 of the 12 meetings of the Board of Directors in the fiscal year 2018. His ownership of the Company’s share is immaterial (as of June 2019), and there are no personnel, capital, business or other special relationship between him and the Company. The Company deemed that he is highly independent and designated him as an Independent Director of the Company because there is no risk of conflict with the interests of the Company’s general shareholders as he executes his duties as an External Director. |
Steven Gillis | Yes | N/A | Mr. Steven Gillis served as an External Director of Shire and has sufficient expertise in Shire's portfolio and its related therapeutic areas. Previously, he has held key positions in healthcare companies in Europe and the U.S. and has a deep insight into the management of global healthcare businesses based on his ample experience. He has remarkable expertise, with a Ph.D. in Biological Sciences, in the area of healthcare businesses for immunological therapy. He has been appointed as an External Director as of January 2019. He contributes to the making of fair and appropriate decisions and securing sound management in the Company. After his appointment, he attended 2 of the 2 meetings of the Board of Directors in the fiscal year 2018. There are no personnel, capital, business or other special relationship between him and the Company. The Company deemed that he is highly independent and designated him as an Independent Director of the Company because there is no risk of conflict with the interests of the Company’s general shareholders as he executes his duties as an External Director. |
Toshiyuki Shiga | Yes | N/A | Mr. Toshiyuki Shiga has been appointed as an External Director as of June 2016. He proactively expresses his opinions at the Board of Directors meetings by leveraging his ample experience as company top management as well as his expertise in general industries in Japan, which contributes to the making of fair and appropriate decisions and securing sound management in the Company. He attended 12 of the 12 meetings of the Board of Directors in FY18. His ownership of the Company’s share is immaterial (as of June 2019), and there are no personnel, capital, business or other special relationship between him and the Company. The Company deemed that he is highly independent and designated him as an Independent Director of the Company because there is no risk of conflict with the interests of the Company’s general shareholders as he executes his duties as an External Director. |
Jean-Luc Butel | Yes | N/A | Mr. Jean-Luc Butel has served as an External Director who is an Audit and Supervisory Committee Member since June 2016 and been appointed as an External Director who is not an Audit and Supervisory Committee Member since June 2019. He proactively expresses his opinions at the Board of Directors meetings by leveraging his ample experience as top management of major western healthcare companies, which contributes to the making of fair and appropriate decisions and securing sound management in the Company. He attended 9 of the 10 meetings of the Board of Directors in FY18. He didn’t join 2 extraordinary meetings of Board of Directors, they were held only for discussing the acquisition of Shire, in order to avoid a conflict of interest as he was a shareholder of Shire. There are no personnel, capital, business or other special relationship between him and the Company. The Company deemed that he is highly independent and designated him as an Independent Director of the Company because there is no risk of conflict with the interests of the Company’s general shareholders as he executes his duties as an External Director. |
Shiro Kuniya | Yes | The Company receives advice, etc., on legal matters as needed from other lawyers working at Oh-Ebashi LPC & Partners, the law firm where Shiro Kuniya works concurrently, but the proportion of the annual value of those transactions to the sales of the Company and of Oh-Ebashi LPC & Partners is less than 1% in both cases. In addition, there is no advisory contract between the Company and Oh-Ebashi LPC & Partners. | Mr. Shiro Kuniya has served as External Corporate Auditor since June 2013 and an External Director who is the Head of Audit and Supervisory Committee since June 2016, and been appointed as an External Director who is not an Audit and Supervisory Committee Member since June 2019. He proactively expresses his opinions at the Board of Directors meetings by leveraging wide-ranging experience and expertise in the area of corporate and international legal affairs as a lawyer, which contributes to the making of fair and appropriate decisions and securing sound management in the Company. He attended 12 of the 12 meetings of the Board of Directors in FY18. His ownership of the Company’s share is immaterial (as of June 2019), and there are no personnel, capital, business or other special relationship between him and the Company. The Company deemed that he is highly independent and designated him as an Independent Director of the Company because there is no risk of conflict with the interests of the Company’s general shareholders as he executes his duties as an External Director. |
Koji Hatsukawa | Yes | N/A | Mr. Koji Hatsukawa has wide-ranging experience and expertise in the area of corporate finance and accounting as a certified public accountant. He has served as an External Director who is an Audit and Supervisory Committee Member since June 2016, and an External Director who is the Head of Audit and Supervisory Committee since June 2019. He has contributed in the realization of the mission of Audit and Supervisory Committee: to ensure the sound and continuous growth of the Company, realize the creation of mid-and long-term corporate value, and establish a good corporate governance system that accommodates society’s trust. He attended 12 of the 12 meetings of the Board of Directors in FY18. His ownership of the Company’s share is immaterial (as of June 2019), and there are no personnel, capital, business or other special relationship between him and the Company. The Company deemed that he is highly independent and designated him as an Independent Director of the Company because there is no risk of conflict with the interests of the Company’s general shareholders as he executes his duties as an External Director. |
Emiko Higashi | Yes | N/A | Ms. Emiko Higashi has been appointed as an External Director who is not an Audit and Supervisory Committee Member as of June 2016. She proactively expresses her opinions at the Board of Directors meetings by leveraging her ample experience and wide expertise on healthcare, technology and financial industries, which contributes to the making of fair and appropriate decisions and securing sound management in the Company. She attended 12 of the 12 meetings of the Board of Directors in the fiscal year 2018. She has served as an External Director who is an Audit and Supervisory Committee Member since June 2019. The Company believes her contribution in the realization of the mission of Audit and Supervisory Committee: to ensure the sound and continuous growth of the Company, realize the creation of mid-and long-term corporate value, and establish a good corporate governance system that accommodates society’s trust. There are no personnel, capital, business or other special relationship between her and the Company. The Company deemed that she is highly independent and designated her as an Independent Director of the Company because there is no risk of conflict with the interests of the Company’s general shareholders as she executes her duties as an External Director. |
Michel Orsinger | Yes | N/A | Mr. Michel Orsinger has been appointed as an External Director who is not an Audit and Supervisory Committee Member as of June 2016. He proactively expresses his opinions at the Board of Directors meetings by leveraging his ample experience as top management of major western healthcare companies, which contributes to the making of fair and appropriate decisions and securing sound management in the Company. He attended 12 of the 12 meetings of the Board of Directors in FY18. He has served as an External Director who is an Audit and Supervisory Committee Member since June 2019. The Company believes his contribution in the realization of the mission of Audit and Supervisory Committee: to ensure the sound and continuous growth of the Company, realize the creation of mid-and long-term corporate value, and establish a good corporate governance system that accommodates society’s trust. There are no personnel, capital, business or other special relationship between him and the Company. The Company deemed that he is highly independent and designated him as an Independent Director of the Company because there is no risk of conflict with the interests of the Company’s general shareholders as he executes his duties as an External Director. |
Name | Nomination Committee |
Number | 5 |
Chairperson | External Director |
Member | 4 External Directors |
Name | Compensation Committee |
Number | 4 |
Chairperson | External Director |
Member | 3 External Directors |
• | Nomination Committee: Masahiro Sakane (Chairperson), Jean-Luc Butel, Steven Gillis, Toshiyuki Shiga, Michel Orsinger (Christophe Weber participates in the committee as an observer.) |
• | Compensation Committee: Emiko Higashi (Chairperson), Olivier Bohuon, Ian Clark and Yoshiaki Fujimori |
All Committee Members | Full-time Members | Internal Directors | External Directors | Chairperson | |
Audit and Supervisory Committee | 4 | 1 | 1 | 3 | External Director |
Appointment of Directors and/or Staff to Support the Audit and Supervisory Committee | Appointed |
Number of Independent Directors | 11 persons |
(1) | He/She has advanced insights based on the experience of corporate management; |
(2) | He/She has a high level of knowledge in the area requiring high expertise such as accounting and law; |
(3) | He/She is well versed in the pharmaceutical and/or global business; and |
(4) | He/She has advanced linguistic skill and/or broad experience which enable him/her to understand diverse values and to actively participate in discussion with others. |
Incentive Policies for Directors | Adoption of performance-based remuneration system |
Disclosure of Individual Directors’ Remuneration | Partially disclosed individually |
(a) | Stock compensation granted to Directors who are neither External Directors nor Audit and Supervisory Committee Members (excluding Directors residing overseas) |
(b) | Stock compensation granted to External Directors who are not Audit and Supervisory Committee Members |
(Note1) | Basic Compensation includes the grossed up amount paid for residence and pension allowances for the relevant officer. (112million JPY) |
(Note2) | Compensation expense related to the long-term incentive plan is recognized over multiple fiscal years, depending on the length of the period eligible for earning compensation. The described amount shows expenses during the fiscal year ended 31st March, 2019. |
(Note3) | The amount recognized as an expense during the fiscal year, representing stock incentive plan (Board Incentive Plan) grants awarded in fiscal years 2015- 2018. |
(Note4) | The amount shows the salary and other amounts earned as the President, Japan Pharma Business Unit etc. This employee portion of the bonus amount is not included in the limit outlined in the proposal "Payment of Bonuses to Directors who are not Audit and Supervisory Committee Members" as approved at the 143th General Meeting of Shareholders held on 27th June, 2019. |
(Note5) | The amount recognized as an expense during the fiscal year, representing stock incentive plan (Board Incentive Plan) grants awarded in fiscal years 2015-2018 |
(Note6) | It shows the salary and other amounts earned as the President, Research and Development of Takeda Pharmaceuticals International, Inc. |
(Note7) | The amount recognized as an expense during the fiscal year, representing stock incentive plan (Employee Stock Ownership Plan) grants awarded in fiscal years 2015-2018. |
(Note8) | Amounts of local retirement plan contributions and other additional benefits paid by Takeda Pharmaceuticals International, Inc. during the fiscal year, as well as the amount equal to taxes on such amounts. |
Policies determining the amount of remuneration or the method for calculating remuneration | Exist |
Name | Title/ Position | Duties | Work Form/ Conditions (Full-time/ Part-time, Remunerated or not etc.) | Date of retirement as President etc. | Term |
- | - | - | - | - | - |
Total Number of Corporate Counselors, Advisors, etc., who have formerly served in posts such as Representative Director and President, etc., of the Company | 0 person |
• | The Company does not have Corporate Counselor. Mr. Hasegawa resigned the position of Corporate Counselor and retired the Company on 27th June, 2019. |
• | The Company abolished the advisor system in July 2017. |
2. | Matters on Functions of Business Execution, Auditing, Oversight, Nomination and Remuneration Decisions (Overview of Current Corporate Governance System) Update |
3. | Reasons for Adoption of Current Corporate Governance System |
III. | Implementation of Measures for Shareholders and Other Stakeholders |
1. | Measures to Vitalize the General Shareholder Meetings and Smooth Exercise of Voting Rights |
Early Notification of General Shareholder Meeting | The notice is dispatched three weeks prior to the day of the meeting. In addition, Takeda strives to disclose the notice earlier than the dispatch of it on the Company website and other websites, including that of the administrator of the shareholder’s register, Mitsubishi UFJ Trust and Banking Corporation. |
Scheduling Annual General Shareholder Meetings Avoiding the Peak Day | Takeda avoids to its General Meeting of Shareholders on a date that set by many Japanese companies. However, the meeting date is decided by the availability of venue as well as administrative schedule. |
Allowing Electronic Exercise of Voting Rights | Takeda shareholders have been able to exercise voting rights by electronic means since the General Meeting of Shareholders held in June 2007. |
Participation in Electronic Voting Platform | Takeda has been utilizing the electronic voting platform operated by Investors Communications Japan, Inc. (ICJ) since the General Meeting of Shareholders held in June 2007. |
Providing Convocation Notice in English | To encourage shareholders to vote, Takeda publishes the Japanese and English versions of the notice of convocation on its website and other websites, including that of the administrator of the shareholder’s register, Mitsubishi UFJ Trust and Banking Corporation. |
Other | Takeda organizes the General Meeting of Shareholders using presentation materials in a format that is easy for shareholders to understand, including the use of slide and video presentations by the President & CEO to explain performance and business policies. |
2. | IR Activities |
Supplementary Explanations | Presentation made by senior management | |
Preparation and Publication of Disclosure Policy | The disclosure of final accounts and quarter accounts require an approval from Board of Directors and other disclosure materials require an approval from Business Review Committee. The Company has established "Rules for Global External Communications" as a basic rule for information disclosure, and "Global Press Release and Related Materials Approval Standard Operating Procedure" that specify the functions within Takeda with responsibility for press release disclosure, and the relevant communication channels and procedures, respectively. |
Regular Investor Briefings for Individual Investors | During fiscal year 2018, Takeda’s department responsible for IR organized company presentations aimed at retail investors. Such presentations were held five times across Japan with support from securities companies and the securities exchange. | No |
Regular Investor Briefings for Analysts and Institutional Investors | In principle, Takeda holds earnings release conferences twice a year on the same days as the full-year and second quarter results announcement. These events include financial results and a Q&A session in which participants can address questions directly to senior management. Conference calls are held when the quarterly results for the first and third quarters are released. These also include presentations of results and the opportunity to question senior management directly. | Yes |
Regular Investor Briefings for Overseas Investors | Conference calls are held in English on the release of the quarterly and annual results. Conference call participants have the opportunity to ask questions to senior management directly. R&D Days were held in September 2018 in Tokyo and in October 2018 in Boston, which provided an overview of Takeda's R&D strategy and key pipeline in development. Takeda invited overseas investors to these events, provided conference call lines, and streamed live and on-demand webcast. | Yes |
Posting of IR Materials on Website | URL: https://www.takeda.com/ Materials available on the website: Quarterly financial statements, supplemental information of pipeline, presentation materials used in earnings release conferences, sustainable value reports, notices of convocation of ordinary general meetings of shareholders, IR conference materials, notices of resolutions, and others. | |
Establishment of Department and/or Manager in Charge of IR | Department responsible for IR: Global Finance, IR |
3. | Measures to Ensure Due Respect for Stakeholders Update |
Supplemental Explanation | |
Stipulation of Internal Rules for Respecting the Position of Stakeholders | Takeda’s mission of “striving towards Better Health and Brighter Future for people worldwide through leading innovation in medicine” expresses a commitment to make a positive contribution to patients and healthcare professionals through pharmaceuticals. The Takeda's Values, which encompasses Takeda-ism and its four key priorities (Patient, Trust, Reputation, Business), clearly indicate the Company’s emphasis on the importance addressing needs of variety of its stakeholders including patients. Moreover, the Takeda Global Code of Conduct provides ethical guidelines for employees to respect the perspectives of stakeholders. |
Implementation of Environmental Activities, CSR Activities etc. | Environmental protection activities: Takeda engages in these activities from a medium to long-term perspective, based on “Global Policy on EHS”. The Company’s ongoing efforts to address environmental issues include setting specific targets of “Environmental Action Plan” for global warming countermeasures and waste reduction with a focus on the production and research facilities of Group companies worldwide. CSR activities: A dedicated CSR team within the Corporate Communications & Public Affairs emphasizes the importance of patient centricity, based on international CSR-related principles and standards such as the Sustainable Development Goals (SDGs) and the United Nations Global Compact. |
Development of Policies on Information Provision to Stakeholders | The Company has established "Rules for Global External Communications" as a basic rule for information disclosure, and "Global Press Release and Related Materials Approval Standard Operating Procedure" that specify the functions within Takeda with responsibility for press release disclosure, and the relevant communication channels and procedures, respectively. |
Other | The Company will continue to actively appoint diverse members, irrespective of nationality or gender, to the Company’s Board of Directors (fifteen males and one female), with the aim of strengthening systems further so that the Company can reflect viewpoints from multiple perspectives in management decisions. Furthermore, TET consists of diverse members irrespective of nationality or gender (thirteen males and seven females) and takes part in discussions and decision-making on management strategies and other important management and operational matters with respecting the perspectives of various stakeholders. The Company established a Global Diversity and Inclusion (D&I) statement. In Japan, in order to drive forward D&I, the Company mainly focuses on "Employee diversity" "Career diversity and ownership of own careers" and "Work style diversity". The Company is introducing and promoting a flexible way of working such as teleworking and the executives delivered messages about flexible workstyles to the employees. As the examples of the indices reflecting the results, the ratio of women in managerial positions in fiscal year 2017 was 8.9%, rising to 10.2% in fiscal year 2018 and the ratio of male employees taking paternity leave remained at high level (72.5% in fiscal year 2018). The Company began initiatives to donate to Company-designated NPO proportionately to the Company's annual paid leave usage rate. The Company has already achieved the Japanese government target ‘‘70% at 2020’’ (74.2% in fiscal year 2018). The Company is promoting active employment of disabled persons mainly in L.I. Takeda, Ltd., a special subsidiary company, etc. The employment rate of disabled persons is 2.6% as of 1st June, 2019. |
IV. | Matters Related to the Internal Control System |
• | Basic Views on Internal Control System and the Progress of System Development |
• | The Company shares its “Corporate Philosophy,” which comprises its “Mission,” “Vision,” “Values” and “Strategic Roadmap” within the entire Takeda Group and puts an effort to promote the creation of a disciplined and sound corporate culture. Based on the abovementioned |
(i) | Systems that ensure the appropriateness of operations in the Takeda Group |
• | As a “Company with Audit and Supervisory Committee (“ASC”),” a system that enables ASC to effectively perform its duties relating to audit and supervision shall be established and the composition and diversity of the External Directors in the Board of Directors shall be enhanced. Under the appropriate audit and supervision thereof, the Board of Directors shall make highly transparent and objective decisions and, by resolution, delegate authority to the Directors and expedite the management of business. |
• | The objectivity and fairness of the appointment of Directors and the compensation paid to them shall be ensured by voluntarily establishing a Nomination Committee and Compensation Committee, as advisory bodies for the Board of Directors, wherein an External Director will serve as the chairperson and external committee members will constitute a majority, respectively. By appointing one or more Directors who are ASC Members as members of such committees, the effectiveness of the ASC’s function of supervising the appointment, etc. of Directors who are not ASC Members and the compensation, etc. paid to them shall be enhanced. By resolution of the Board of Directors, the authority to decide the amount of individual remuneration of Internal Directors who are not ASC Members shall be delegated to the Compensation Committee, through which we have realized a more transparent process in determining individual remuneration. |
• | Under the system above, the Board of Directors will (i) decide on the most important matters for the business operation of the Takeda Group, including matters relating to Basic Management Policy and matters relating to internal control, including compliance and risk management, and (ii) discuss business strategy, and monitor and supervise the execution of operations. |
• | To strengthen its global business management system, the Company shall establish the TET, which will consist of the President & CEO and the members who manage and supervise each function of the Takeda Group, and also establish a Business Review Committee (which will be responsible for general management matters), a Portfolio Review Committee (which will be responsible for R&D and product related matters), and a Risk, Ethics & Compliance Committee (which will be responsible for risk management, business ethics and compliance matters). These committees will review important matters that will ensure systems through which faster and more flexible work execution and deeper cooperation among the various functions can take place. |
• | By resolution of the Board of Directors, decision making authority on matters of important business execution shall be partially delegated to the Directors through decision-making bodies such as the Business Review Committee, Portfolio Review Committee, and Risk, Ethics & Compliance Committee; the Company shall make flexible and efficient decisions. |
• | The Company shall clarify the roles and responsibilities of each function based on the T-MAP, which summarizes the business management systems, decision-making systems and operational rules and other important management rules of the Takeda Group. With regard to certain material items, the Company shall oblige each function to propose or report them to the decision making bodies, including the Board of Directors, depending on the materiality of those items. Concurrently, the Company shall delegate a certain level of decision making authority to the President & CEO or to other TET members, and such decision-making authority shall be exercised under |
• | In order to manage and supervise the entire Takeda Group in a cross-sectoral and unified manner, the Company shall maintain Global Policies, etc. (Global Policies mean the rules applied to employees of three or more TET organizations) for the respective operations of specialized functions. |
• | With regard to risk management and management of a crisis that has occurred in the Takeda Group, the “Global Risk Management Policy,” and the “Global Crisis Management Policy” respectively lay out the structure of the risk management system including BCP (Business Continuity Plan)s and the crisis management systems of the Takeda Group. |
• | The Global Ethics & Compliance division and other divisions in charge of compliance shall disseminate the “Takeda Global Code of Conduct” to all group companies and develop and disseminate compliance programs for all group companies based on that code under the system to promote compliance globally. The Global Ethics & Compliance division shall establish a mechanism with monitoring capabilities to ensure that the Takeda Group's business activities are in compliance with laws and internal rules. In addition, the Global Ethics & Compliance division and other divisions in charge of compliance shall periodically report to the Risk, Ethics & Compliance Committee and ASC, and report to the Board of Directors as necessary, on the compliance related affairs of the Takeda Group, including those reported through the internal reporting system for whistleblowers. |
• | The Group Internal Audit (“GIA”) shall conduct a regular internal audit of each function of the Company and each group company based on the “Group Internal Audit Charter” and report the results thereof to the President & CEO, Board of Directors, and ASC. |
• | The Global Finance division shall conduct an evaluation of the status of the development and implementation of the internal control systems for securing the reliability of financial reporting based on the Japanese Financial Instruments and Exchange Act and Cabinet Office Ordinance and the U.S. Sarbanes-Oxley Act. The Global Finance division shall also manage the processes of (i) testing of internal controls over the financial reporting and (ii) implementation of any improvement plans in response to warnings or recommendations. |
• | The Global Quality division shall formulate global quality assurance policies, etc., relating to research, development, manufacturing, and post-marketing safety measures and then audit, monitor, and supervise compliance therewith regularly or as necessary. |
• | The Corporate EHS establishes the "Global Policy and Guideline on EHS", etc. and conducts audits regularly or as necessary. Also, it provides support and advice to reduce risks regarding the environment, occupational health and safety. |
(ii) | System for retention and management of information in connection with the execution of the duties of Directors |
• | The minutes of the meetings of the Board of Directors, requests for and approvals of managerial decisions, and other information concerning the execution of the duties of Directors shall be appropriately retained and controlled in keeping with the term, method and place of retention designated for each category of information, as determined in accordance with the “Policy on Document Control,” in either hard copy or electromagnetic record, and to facilitate ease of inspection. |
(iii) | Risk management rules and other systems |
• | Based on the “Global Risk Management Policy”, Enterprise Risk Management (ERM) shall be conducted through a five-step approach, which is the identification, |
• | In order to prevent and respond to emergency situations, the Company shall establish crisis management systems through the appointment of persons who will be in charge of crisis management, site heads who will lead the incident site and those who will be in charge of site incident management, and shall establish a crisis management committee under the “Policy on Crisis Management.” |
(iv) | System that ensures the duties of Directors are executed efficiently |
• | A system that ensures the duties of Directors are executed appropriately and efficiently shall be safeguarded through the “Bylaws of Board of Directors” and other internal company regulations relating to authorities and rules for decision-making. |
(v) | Systems that ensure Directors and employees comply with laws and regulations and the Company’s Articles of Incorporation in executing their duties |
• | In accordance with the “Compliance Promotion Rule” that provides for the basic policies and procedures in relation to the implementation of the compliance program for the ethical and legal requirements of the Company, an Ethics & Compliance Officer position, Compliance Promotion Committee and Compliance Secretariat shall be established to promote the compliance policy of the Company. |
• | The Company has established procedures for the receipt, retention, investigation and treatment of concerns and complaints notified through the internal reporting system related to any violations of laws and regulations, Takeda’s Global Code of Conduct, policies or SOPs, including concerns and complaints related to the Company’s accounting, internal accounting controls, or auditing matters. The Company has also established procedures for the confidential, anonymous submission by Takeda employees of all concerns and complaints. |
(vi) | System that ensures the audits by the Audit and Supervisory Committee are conducted effectively |
• | Full-time ASC Members shall be appointed, and an ASC Office, which will be composed of full-time staff, shall be established to provide secretariat assistance to the ASC Members in the performance of their duties and functions. |
• | The ASC shall make efforts to secure the independence of the ASC Office from the person in charge of executing the business, and the effectiveness of instructions from the ASC and personnel matters with respect to the members of the ASC Office shall be handled by agreement between the Directors and ASC. |
• | A Director shall inform the ASC of those matters concerning the Company’s basic management policy and plans, and of material matters including the ones involving subsidiaries and affiliated companies (provided, however, that this shall not apply if the ASC Members attend the meeting of the Board of Directors or any other meeting at which such matter is discussed). |
• | If a Director becomes aware of a fact that might cause material damage to the Takeda Group, such Director shall, without delay, give notice of such fact to the ASC. |
• | The ASC shall appoint ASC Members who will have the authority to request Directors and employees to report on matters relating to the performance of their duties and investigate the status of the operations and assets of the Company. |
• | Based on the status of development and operation of the internal control system, the ASC shall have close communications with the internal audit division, internal control promotion division and Accounting Auditor, to which the ASC shall have the authority to give instructions, and it shall enhance the effectiveness and efficiency of the audit by conducting a systematic audit utilizing the information derived therefrom. |
• | The ASC Members shall request the Company to reimburse their costs for performing their duties, and submit a budget to the Company every year. |
• | The ASC shall make proposals or state its opinions to the Board of Directors, as necessary, with respect to systems that ensure that any person who makes a report to the ASC and the internal audit divisions, etc., including a report made through the internal reporting system for whistleblowers, would not be subject to any discriminatory treatment on the grounds of such reporting and that the anonymity and confidentiality of such reporting is maintained. |
• | The Company has built and maintains close cooperative relationships with the supervising police station and specialist external bodies, to proactively collect information on antisocial forces. |
• | The Company disseminates information on antisocial forces to relevant divisions in the Company and also to employees as necessary during internal training, etc., in order to implement activities to prevent any damage from antisocial forces. |
V. | Other |
Adoption of Anti-Takeover Measures | Not Adopted |
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