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Corporate Governance

Fundamental Approach

As a company complying with social responsibility, Kyowa Hakko Kirin is taking measures to enhance its corporate governance to drive sustainable growth and raise medium- and long-term corporate value. These measures are based on Kyowa Hakko Kirin's Mid-term Business Plan and its corporate philosophy of "Contributing to the health and well-being of people worldwide by creating new value with the pursuit of advances in life sciences and technology." They include the establishment of structures to ensure fair and transparent decision making, timely and decisive execution of management duties, and appropriate monitoring and supervisory functions.

Kyowa Hakko Kirin believes that cooperation with stakeholders is essential for achieving the goals of its medium-term business plan and is committed to proactive and constructive dialogue with shareholders and investors, and the timely and sustained disclosure of transparent and fair information. Kyowa Hakko Kirin respects the situation of each stakeholder and pledges to execute in good faith its obligation to clearly explain information to shareholders and investors.

As a consolidated subsidiary of Kirin Holdings Company, Limited, Kyowa Hakko Kirin will comply with the management policy of the parent company while continuing to pursue a management approach that ensures its independence.

Fundamental Structure

Kyowa Hakko Kirin has selected to have a auditĀ & supervisory board, in which the auditors supervises the execution of business carried by the Board of Directors, which is the final decision-making body of the company, thereby enhancing the transparency and objectivity of the management of the company through monitoring and verification of the process and the content of the decisions made.
In addition, Kyowa Hakko Kirin has further enhanced the transparency of our management by voluntarily installing a "Nomination Consultative Committee" and "Remuneration Consultative Committee," as well as adopting a hybrid governance system that allows a balance between further enhancing the transparency of management and maintaining necessary executive and supervisory functions.

Directors and Board of Directors

The Board of Directors of Kyowa Hakko Kirin oversees decisions made on important management issues and the administration of business management; the balance between the knowledge, experience, ability, and insight of directors has led to the realization of a system that is transparent. Furthermore, by leveraging the objective and professional viewpoints of outside directors, the board aims to make appropriate decisions and fulfill its supervisory function. The selection process and procedures for candidates to the Board of Directors are deliberated on in the Nomination Consultative Committee and determined by the Board of Directors.

Audit & Supervisory Board Members and the Audit & Supervisory Board

The audit & supervisory board members and the Audit & Supervisory Board, as an independent body that receives a mandate from shareholders, monitor and verify the situation that the soundness of the management toward the Group's sustainable growth and the improvement of corporate value over the medium to long term are consolidated by conducting audits of the execution of the duties of the Board of Directors.
The audit & supervisory board members, by capitalizing on the full-time auditors' abilities to gather information within the Group and their independence, actively deliver their opinions to the Board of Directors as well as make efforts to develop the system to ensure the effectiveness of audits by each audit & supervisory board member.

Account Auditing and Legal Compliance

Kyowa Hakko Kirin's financial statements are prepared in conformity with generally accepted accounting principles and practices prevailing in Japan. Audits are conducted by accounting auditors to ensure appropriate presentation, etc. Kyowa Hakko Kirin gives the highest priority to legal compliance with regard to problems that arise in the course of operational execution, and when necessary it receives appropriate advice from third parties, such as attorneys.

Risk Management System and Compliance Program

In accordance with the Kyowa Hakko Kirin Group Compliance Policy and Kyowa Hakko Kirin Group Risk Management Policy, we promote compliance in good faith and secure a system to make appropriate responses to risks. Moreover, to address the variety of risks that may affect management, a number of in-house committees have been established to strengthen risk management and enhance corporate governance. These committees regularly report on their activities to the Board of Directors. An overview of each committee is provided below.

Group CSR Committee

The Group CSR Committee discusses and makes decisions related to group-wide strategy and policy for matters of CSR such as risk management (including compliance and information security), environmental conservation and corporate value creation.

Group Information Disclosure Committee

The Group Information Disclosure Committee discusses and makes decisions on fundamental communications policies and key information-disclosure issues in a comprehensive manner.

Group Quality Assurance Committee

The Group Quality Assurance Committee discusses and makes decisions concerning quality assurance policies.

Group Financial Management Committee

The Group Financial Management Committee discusses and makes decisions on efficient financial activities and their associated risks.

Internal Auditing

Kyowa Hakko Kirin has established the Internal Audit Department, which impartially and independently audits and reports on the status of the Group's operational execution with regard to the decision making process, risk management system and risk control activities from the perspectives of compliance with laws and regulations, and of efficient management. In addition, the department provides advice and proposals regarding improvements and increased efficiency.

Corporate Ethics

To clarify the Group's approach to compliance with corporate ethics in the conduct of business activities, Kyowa Hakko Kirin has established the Kyowa Hakko Kirin Group Compliance Policy and Kyowa Hakko Kirin Group Code of Conduct, and is working to ensure awareness of these guidelines among Group companies and all Group employees.

Internal Control System

Based on the basic policy of the parent company Kirin Holdings, Kyowa Hakko Kirin has established a "Basic Policy on the Internal Control System" to ensure the appropriateness of operations; the maintenance and operation of the system based on this basic policy is confirmed by the Board of Directors and externally reported.

Last update: July 9, 2015

Executive Compensation to Directors and Audit & Supervisory Board Members

Remuneration for the directors of the board and audit & supervisory board members has been determined necessary to secure human resources appropriate for the management of the company, and act as a base to motivate officers to contribute to the company through the regular performance of duties. Remuneration specifically consists of performance linked base compensation as a short-term incentive and stock options as medium-to-long-term incentive. This remuneration is deliberated on by the Remuneration Consultative Committee and decided on by the Board of Directors.

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