Corporate Governance

To ensure the trust of all of our stakeholders and increase our corporate value, ONO PHARMACEUTICAL believes it is vital not only to comply with laws and regulations but also to enforce management transparency and strengthen corporate governance.

Corporate Governance Structure

As part of our endeavors to bolster corporate governance, ONO has adopted an organizational framework with a Corporate Auditor (or Board of Corporate Auditors) whose task is to focus on enhancing the functions of the Board of Directors and the Board of Corporate Auditors.

Corporate Governance Structure

Corporate Governance Structure

œ Board of Directors

When selecting board members, we take into consideration their knowledge, experience, and proficiency, so that the Board of Directors as a whole can incorporate a good balance of perspectives into its technical and comprehensive management decisions. The term of office for each director is limited to one year. This serves to clarify their responsibility towards shareholders, and it allows the board to respond flexibly to changes in the management environment.
The number of directors and the structure of the board are determined in a way that is optimally suited to enforcing management transparency, enhancing corporate governance, and expediting the decision-making process. Presently, the board consists of seven members, including two outside directors. The board holds a meeting every month in principle to deliberate and make decisions on important management issues and to assess how each board member is conducting his or her duties.

œ Board of Auditors

To maintain a strong auditing function, the Board of Auditors comprises two independent outside auditors along with two full-time auditors who have expert knowledge on our business operations and who are highly skilled in collecting auditing information. These full-time and outside auditors work together to achieve high auditing efficiency.
The Board of Auditors holds a meeting every month in principle. Working with the internal auditing department to enforce auditing efficiency, the Board of Corporate Auditors endeavors to improve its functions of the management oversight by enhancing the effectiveness of audits in cooperation with the accounting auditor.

œ Outside Directors / Outside Auditors

The outside directors have profound and extensive knowledge of corporate management. From an independent and objective standpoint, they oversee our business operations and take part in our decision-making process. They also help to enhance the functions of the board by serving as members of the Director Appointment Committee and the Executive Compensation Committee. As experts in law and corporate accounting, the outside auditors carry out their duties from an independent and objective standpoint to ensure that our management remains sound and strong. We have already informed the Tokyo Stock Exchange that these outside directors and auditors are acting as independent members of the board who have no personal affiliations with ONO, nor any capital ties, business relations, or other connections to the company. The outside directors attended all meetings of the Board of Directors held during FY2017, and the outside auditors attended all meetings of the Board of Directors and the Board of Auditors held during FY2017, to provide us with useful indications and opinions for our business management based on their knowledge and professional perspectives.

œ Operational Management Structure

For the improved efficiency and accuracy of our decision making and business operations, we hold Management Strategy Meetings attended by the president, board members, corporate officers in charge of each division, and managers of relevant departments. At these meetings, we take a multifaceted approach to addressing important management issues, including those that are to be deliberated on at board meetings. We have also introduced a corporate officer system to enforce the execution of business operations in each department.
Auditors are obliged to attend Management Strategy Meetings and inspect their minutes, as these meetings are also subject to auditing.

Internal Control System

We have laid out our operational system in compliance with the corporate governance guidelines set out by the board of directors. Implementation of the system is inspected regularly by the Internal Auditing Department (Business Audit Department). Results are reported to the board of directors with the aim of constantly improving the system.
Furthermore, we adopt a firm stance of fighting against any antisocial forces or organizations that may threaten social order or security.

Corporate Governance Code

We follow all principles of the corporate governance code stipulated by the Tokyo Stock Exchange (general principles that respectively specify the five issues of securing the rights and equal treatment of shareholders, appropriate cooperation with stakeholders other than shareholders, ensuring appropriate information disclosure and transparency, responsibilities of the board, and dialogue with shareholders, as well as the principles that embody the general principles and supplementary principles). Through the assessment of the effectiveness of the Board of Directors and other measures, we will continuously develop and improve our system in a way to make it more suitable for our business operations from such perspectives as the management efficiency, soundness, and transparency.

Risk Management

We work to identify potential major risks to prevent them from occurring, and we have a structure in place to ensure that appropriate actions are taken in case of their occurrence.

œ Rules on the management of the risk of loss and other systems

  • 1. We manage risks related to compliance, product quality and safety, safety and health, the environment, disasters, information security, and other issues on the basis of respective internal rules and through the preparation and distribution of procedures in the relevant sections, as well as through training and other measures.
  • 2. Cross-organizational risks and risks deemed to have a significant impact on management are monitored and addressed at a meeting attended by the president and representative director, the directors and corporate officers in charge, and the managers of relevant divisions. In case of unexpected risks, the president calls a meeting of the Emergency Response Committee to solve problems promptly.
  • 3. Risks specific to a division are addressed by that division through the preparation of handling procedures, which are reviewed constantly in accordance with changes in the business environment.

œ Structure to ensure proper business operations of the corporate group composed of ONO and its subsidiaries

We provide consultation and guidelines for our group companies with regard to their legal compliance and risk management. While respecting their autonomy, we request that each company provides us with regular business reports and consult with us on important business issues in advance.

Business Continuity Plan (BCP)

We conducted a fundamental review of the BCP developed to address an emergency such as a natural disaster or serious accident in 2016 to enhance the system. According to the instructions of the Emergency Response Committee chaired by the president, we have organized the Crisis Management Headquarters and established a structure designed to minimize the impact of an emergency on mission-critical operations, so that we can continue business activities or recover promptly and resume them if they are suspended. The BCM Committee, which is chaired by the Executive Director of Corporate Management Division and in charge of business continuity management (BCM), and the Management Office have been formed to maintain and strengthen our abilities to respond to crisis and continue our business operations, and promote relevant management activities during normal times.

We have installed systems prepared for disasters such as emergency generators and duplicate power service in our head office building, the Tokyo Building, and all of our plants and research institutions. Furthermore, to prepare for earthquakes, we have introduced seismic isolation systems in our head office building, the Tokyo Building, and the Minase Research Institute. As we have transferred some of the Osaka Head Officefs functions to the Tokyo Building, we can use resources such as internal systems and inventories at either base in the event of natural disasters in one area. The development of our two-base system prevent us from stopping our business activities and improves our ability to continue our business operations.

Business Continuity Plan

Information Disclosure

As specified in our Codes of Conduct, we strive to establish transparent corporate management and recognize the importance of taking various opportunities to disclose information on our business activities in a timely and appropriate manner. We actively conduct investor relations (IR) activities based on a policy of pursuing accuracy, promptness, fairness, and impartiality.
We disclose financial results and other timely disclosure information on our website and at the same time through TDnet, the timely disclosure network of the Tokyo Stock Exchange. Information that is not subject to the timely disclosure rules is also disclosed swiftly through our website and by other means.
For securities analysts and institutional investors, we proactively hold individual meetings and phone conferences in addition to financial results briefings or conference calls at the time of each quarterly statement. In FY2017, we held such meetings about 250 times in total. We also participate diligently in investor conferences sponsored by entities including securities firms in order to deepen individual investorsf understanding of our business activities and management strategy.
Our website contains an IR library that provides useful current and past data, including flash reports and development progress updates, as well as financial highlights for the last five years. Also, we endeavor to convey our corporate information to a wider range of people in an easy-to-understand manner by issuing business reports (shareholder newsletters) and corporate reports. We will continue to make efforts to disclose information more accurately and more promptly.