03

Corporate
Governance

As a company that protects the health of people around the world,the Eiken Group practices compliance activities to achieve harmony
between fair and appropriate management on the one hand andthe demands of society on the other. By accurately recognizing,assessing and coping with the risks that can impede theenforcement of management philosophy or the improvement in
the corporate value, the Eiken Group fulfills the social responsibility
as a company, and implement strengthening and improvement of
its corporate governance system.

INDEX

Value Creation Story

Our Strategy

Corporate Governance

Our Profile

Basic Policy on Corporate Governance
Eiken Chemical recognizes that enhancing corporate governance with a strong focus on theshareholders’ perspective is one of its most important management issues, for the purposes

Corporate governance structure (as of June 30, 2023)
General Meeting of
Shareholdersof enhancing management soundness, speed and transparency and improving corporate
value, and carries out activities to these ends. For this reason, the Company is organized as a

= InsideElection/
Dismissal= Outside“company with nominating and other committees,” maintaining separation of the executive
and supervisory functions of management. Important matters related to basic management

Supervisory function

policy are decided through the deliberations of the Board of Directors, while execution ofbusiness is conducted swiftly and smoothly based on in-house rules and regulations andthrough an appropriate chain of instruction and command.

2

Board of Directors
Executive: 2

Non-executive: 6

Nominating
Committee

1Compensation
Committee

1

Audit
Committee

1

Election/
Dismissal

Accounting
Auditor

Audit

Roles

Number of meetings(FY ended Mar. 31, 2023)

Delegates occupational authority within the scope of laws andBoard ofDirectors

ReportExecutive function

regulations to the Executive Officers, and focuses on making decisions
on important matters related to basic management policies such as

Sustainability
Committee

Meeting of Shareholders, in light of the standards for nomination andDetermines policies for the determination of individual compensation
for Directors and Executive Officers, as well as individual

9compensation.

Determines matters related to basic policies and implementation plans

Audit
Committee

for audits and the content and other matters related to proposals forthe election and dismissal of the Accounting Auditor and the nonreappointment of the Accounting Auditor to be submitted to theGeneral Meeting of Shareholders.

Executive Officers

Audit

3
Whistleblower
contact

Risk Management &Compliance Committee

ReportStakeholders

7

dismissal of Directors.

Compensation
Committee

Joint Audit
Meeting

Business Divisions

Determines the content and other matters related to proposals forthe election and dismissal of Directors to be submitted to the General

Internal Audit
Department

Management
MeetingCEO15

the medium-term management plan and management policies, andsupervising the status of business execution.

Nominating
Committee

Supervision
Election/
Dismissal

7

Point 1
Transparency ofmanagement

Point 2
Independence ofBoard of Directors

Point 3
Effectiveness of
audit

Transitioned to a company
structure with committees(now referred to as company withnominating and other committees)in 2005

Outside Directors have accounted
for the majority of the Board
since 2015

• Holds joint audit meetings between
the Audit Committee, Internal
Audit Department, and various
other departments• Five of the eight Directors are
independent Outside Directors• Three committees have been
established• Chaired by a Director not serving
concurrently as an Executive
Officer• The Audit Committee holds
periodic reviews with the
Accounting Auditor• The three committees are chairedby Outside Directors• Separation of supervision andexecution• The three committee chairpersons
are Outside Directors• Evaluations of effectiveness are
conducted

EIKEN CHEMICAL Integrated Report 2023

47

INDEX

Value Creation Story

Our Strategy

Corporate Governance

Our Profile

Approach to Composition of Board of Directors/Diversity of Skills
Materialities and KPIs

The composition of the Board of Directors of Eiken Chemical is well balanced in terms ofknowledge, skills and experience in global business and sustainability, as required to achieve
the Company’s management policy and management plans based on the management
vision. Its members were selected with an emphasis on diversity, including diversity ofgender, nationality, professional background and age. Nominees for Inside Director arechosen for their ability to fulfill the roles of deciding important matters of corporate
management and supervision of Executive Officers in the execution of their duties.
Outside Directors are nominated for highly specialized knowledge, skills and abundance ofexperience that cannot be obtained from Inside Directors alone. Each Director is expected toleverage his or her capabilities born of experience to maximum effect to decide importantmatters of basic management policy and supervise the execution of duties.
The Board of Directors appoints Executive Officers in consideration of executive-officer
selection criteria, following consultation with the Nominating Committee regarding eachcandidate.

Promoting executive diversity
Directors

Executive Officers

Female Directors as share of Directors

Female Executive Officers as share of Executive Officers

End of June
2023

FY2024target

FY2030targetEnd of June
2023

FY2024target

FY2030target

12.5%

20%

30%

-%

-%

30%

Foreign-national Directors as share of Directors

Foreign-national Executive Officers as share of Executive Officers

End of June
2023

FY2024target

FY2030targetEnd of June
2023

FY2024target

FY2030target

-%

-%

20%

-%

-%

20%

F or details of the standards for nomination of Directors, the standards for the independence of Outside
Directors, and the reasons for nominating each candidate, please refer to the Annual Securities Report.

https://www.eiken.co.jp/uploads/85th_AnnualSecuritiesReport.pdf
Committee affiliation
Nominating
Committee

Chairman and Director

Morifumi Wada

Director, President & CEO

Tsugunori Notomi

Director, Senior Vice President
and Executive Officer

Hajime Watari

Independent Outside Director

Yukiya Hakozaki

Independent Outside Director

Kiyoshi Ishii

Independent Outside Director

Kiyomi Nakamura

Independent Outside Director

Akira Fujiyoshi

Independent Outside Director

Naoki Matsutake

Compensation
Committee

Composition of the Board of Directors

Skill matrix
Audit
Committee

Corporate
management

Globalbusiness

Technology/
Innovation

Production/
SCM

Finance/
Accounting

Law/Riskmanagement

OutsideDirector ratio

Non-executive
Director ratio(5 of 8)(6 of 8)

62.5%

75.0%

Change in Outside Director Ratio over Time
Chairperson
Chairperson
Chairperson*1 The skill matrix indicates the specialization, experience, etc. expected of each Director.
*2 In addition to providing specialization, experience and so forth, all Directors are expected to manage with focus on sustainability.
*3 Morifumi Wada does not serve concurrently as Executive Officer.

62.5%

62.5%

2018

2023

42.9%

2013

*Each data point represents the status at the conclusion of the General
Meeting of Shareholders for each year.

EIKEN CHEMICAL Integrated Report 2023

48

INDEX

Value Creation Story

Our Strategy

Corporate Governance

Our Profile

Evaluation of the Effectiveness of the Board of Directors
With the aim of obtaining objective confirmation that the Board of Directors is functioning
appropriately and being managed effectively, as well as bringing about improvements as
required in issues raised, the Company has conducted an analysis and evaluation of theeffectiveness of the Board of Directors, an overview of which is presented here.

Step 1

SurveyQuestionnaire distributed to all Directors

Evaluation method

Step 4

All Directors are requested to fill in the questionnaire by using their name and commenting freely.

Improvements

Initiatives/policies executed inaccordance with decisions

M ain questionnaire items

Step 2Analysis/evaluation

Questionnaire responses summarized

Step 3

Discussion

Initiative/policies deliberated anddiscussed based on results of evaluation(1) Composition of Board of Directors (2) Management of Board of Directors(3) Status of monitoring/supervision, etc. of Board of Directors

Overview of FY ended Mar. 31, 2023 evaluation of effectiveness

Issues outstanding and future initiatives

The following findings show that the Board of Directors is functioning appropriately and is fully effective.
(1) The proportions of Inside and Outside Directors on the Board of Directors as it is currently constituted areappropriate, and there is a good balance of experience and knowledge.

In order to increase the effectiveness of discussions, we will provide opportunities to provide information and todeliberate agenda items hitherto insufficient, such as information related to production and research sites to which
visits have not been possible as a result of COVID-19, and sustainability management initiatives.

(2) Improvements are being made to materials for the Board of Directors and to the content of explanations
provided, both of which were raised as issues.
(3) Standardized information on business execution is now provided sufficiently.

Corporate governance initiatives undertaken in the past

2001-2005

2006-20102011-20152016-2020

2021-

2001

2007

2015

2016

2021

 omplete revision to the Business CodeCof Conduct
2002
Launch of the whistleblower system
2003
Compliance Committee established2005
 ransitioned to a company structureTwith committees (now referred to ascompany with nominating and othercommittees) eginning of performance-based pay
B(stock options)2009
EIKEN WAY establishedBasic policy on corporate governance tandards for the Independence ofS
Outside Directors

EIKEN ROAD MAP 2009 established utside Directors account for majority
Oof Board of Directors

 isk Management & ComplianceR
Committee establishedTraining/facilities inspections provided
to Outside Directors

 valuations of the effectiveness of theE
Board of Directors begin
2018
Standards for Nomination of Directors

Director skill matrix presented
2022
EIKEN ROAD MAP 2030 formulated
Sustainability Committee establishedGlobal Code of Conduct established2019
EIKEN ROAD MAP 2019 established2020
I nitiation of discussions between
Outside Directors and Executive Officers

EIKEN CHEMICAL Integrated Report 2023

49

INDEX

Value Creation Story

Our Strategy

Corporate Governance

Our Profile

Executive Remuneration
Basic policy

Specific policies

Eiken Chemical is organized as a company with nominating and other committees. The Company

Remuneration for Directors and Executive Officers up to FY2022 consisted of fixed pay, performance-

determines remuneration for Directors and Executive Officers on an individual basis in accordance withbased pay, and share-based remuneration stock options. In FY2023 the Company will introduce

the resolutions of the Compensation Committee, a majority of whose members are Outside Directors. To“remuneration through transfer-restricted shares” instead of the previous stock options with the

incentivize executives to bolster the Company’s business results and contribute to shareholder value, theobjective of aligning the perspectives of Directors (excluding Outside Directors) and Executive Officers

criteria for determining remuneration are decided in consideration of each executive’s responsibilities

with those of shareholders over the long term, and thus raising the awareness of sustainable increases inbased on factors such as rank and executive duties, the Company’s business results, the management

shareholder value and corporate value.

environment and industry norms.

The specific details are as follows. For Outside Directors, whose position is independent of business

The amount of remuneration, etc. paid to executives of the Company in FY2022 was fully discussed andperformance, pay is not lined to performance and consists of fixed pay only.

decided at a meeting of the Compensation Committee held on June 17, 2022.

Compensation structure (FY2023 onward)
Those eligible
Type

Fixed

Outside Directors

Directors other than
Outside Directors

Executive Officers

Fixed pay

Performancebased pay

No

Remuneration
through transferrestricted shares

No

No

Payment
methodReflects assessmentof individual

Overview

Cash• F ixed consideration for duties performed•A certain amount paid monthly in accordance with the rank and details of theduties of each Director or Executive Officer

No

Cash

• I ncentive to achieve sustainable improvements
in business results•E ncourages specific initiatives aimed atrebuilding the business foundation andachieving sustainability targets•T otal amount decided through an evaluation of the extent to which targets forconsolidated net sales and operating profit have been achieved for the fiscal year
in question, of the extent of year-on-year improvement, and of ROE, which is afocus management indicator for the Company•E xecutive Officers are assessed on the extent to which they achieve individual
targets set for their areas of responsibility, with additional evaluation criteria that
include the extent to which they achieve strategic targets for sustainable growththat cannot be measured in terms of financial performance figures

Yes

Shares• Clarification of the link between remuneration,and business results and shareholder value• Improvements in corporate value, sharing of therisk/returns experienced by shareholders• Common shares allotted in accordance with the rank of the individual and detailsof their duties

No

Variable

Evaluation indicators for performance-based pay
Evaluation indicator

PurposeTotal amount of remuneration, etc. for FY2022 (based on the compensation structure before changes)

FY2021

FY2022

Targets

Results

Targets

Results

Consolidated net sales(Million yen)

40,40042,99640,00043,271

Consolidated operating profit(Million yen)

6,370

8,387

4,540

7,457

ROE (%)

11.5

14.3

7.8

12.1

Executive category

Total remuneration(Million yen)Amount by type of remuneration (Million yen)Fixed pay

Performance-based pay

Stock options

Of which non-monetary
remuneration, etc.

Number of
executives ofeach type

Directors(excluding Outside Directors)

26

26

–

–

–

3

Executive Officers

308

115

129

63

63

11

Outside Directors

54

54

–

–

–

6

*1 For the three Executive Officers serving concurrently as Directors, the remuneration amount was categorized into remuneration as Director and remuneration as
Executive Officer, before being included in the respective amounts for remuneration.
*2 The amount paid to Executive Officers does not include the portion of employee salary paid to those who work concurrently as employees.
*3 The total amount of non-monetary remuneration for Executive Officers includes ¥63 million in expenses for share-based remuneration stock options.

EIKEN CHEMICAL Integrated Report 2023

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INDEX

Value Creation Story

Our Strategy

Corporate Governance

Our Profile

Compliance/Risk Management
Compliance/risk management structure

Basic approach to compliance

The Eiken Group has established a Compliance Policy, Risk Management Policy, and a Eiken GroupDue to our involvement with life and the provision of products and services for protecting the health

Global Code of Conduct as a code of behavior based on social norms. A Risk Management & Complianceof people all over the world, the Eiken Group strives to achieve fair and appropriate management andCommittee with members drawn from Executive Officers has been set up, underneath which has been

maintain harmony with societal demands through the implementation of compliance activities.

established at each division a Risk Management & Compliance Promotion Committee which promotes

Materialities and KPIs

compliance activities as well as identifying and managing risks.
The Eiken Group has also set up contact points for whistleblower reports to respond to reports from
employees and offer advice. In addition, external reports and requests for advice can be sent via the“Contact us” section of the Company’s website.

Rate of uptake ofcompliance training

Number of serious
compliance infringements

FY2022 actual

FY2022 actual

100%

0

Rate of implementation of anticorruption
due diligence at business partners*
FY2022 actual

FY2024 target

FY2030 target

100%

100%

100%

*Among business partners who account for a designated proportion of total transaction value (70% for buyers, 90% forsuppliers), the rate of implementation (response rate) is the upper 50% by transaction value for FY2022, the upper 90% for
FY2024, and 100% in FY2030

EIKEN CHEMICAL CO., LTD.
Board of Directors
President & CEO
Risk Management & Compliance Committee

Emergency Headquarters

Main initiatives for compliance activities (FY2022 actual)

Secretariat of the Committee
Nasu Division

Nogi Division

Headquarters

Risk Management &Compliance Promotion
Committee

Risk Management &Compliance Promotion
Committee

Risk Management &Compliance Promotion
Committee

Month
Details
implemented

May
July

Employees

Whistleblower contact
Compliance program

EIKEN CHINA CO., LTD.
Board of Directors
President
Risk Management &Compliance Committee

Scope

Education and training

Whistleblower contact

GeneralGlobal Code of Conduct (human rights)

All employees

Whistleblower system

All employees

Pharmaceutical regulations (compliance with laws
and regulations/domestic applications, etc.)

All employees/
Relevant departments

Augustknowledge of overseas legal systems/contracts

Relevant departments

October

Fair competition rules

Relevant departments

November

Act against Delay in Payment of Subcontract
Proceeds, etc. to Subcontractors

Relevant departments

DecemberHarassment prevention

All employees

January

Information management

All employees

As required

Training for newly joined employees/mid-career hires

Newly joined employees

April-June

Regular checking of regulations

Department responsible

Monthly

Issuing of “Compliance Newsletter”

April

Issuing of materials, etc. to explain compliance policy

AugustEmployee satisfaction surveys

All employees

NovemberCompliance awareness surveys

All employees

Other
Raising awareness/disseminating

For details of other policies related to compliance, please see the Company’s website.

https://www.eiken.co.jp/en/sustainability/governance/compliance/

Monitoring/surveying

EIKEN CHEMICAL Integrated Report 2023

51

INDEX

Value Creation Story

Our Strategy

Corporate Governance

Our Profile

Compliance/Risk Management
Basic approach to risk management
Materialities and KPIs

By accurately recognizing, assessing and coping with the risks that can impede the enforcement ofmanagement philosophy or the improvement in the corporate value, the Eiken Group fulfills thesocial responsibility as a company, and implement strengthening and improvement of its corporate
governance system.

For details of other policies related to risk management, please see the Company’s website.

Number of BCP (Business Continuity Plan) training sessions

Number of information security management training sessions

FY2022 actual*

FY2024 target

FY2030 target

FY2022 actual*

FY2024 target

FY2030 target

1

1

2

5

3

4

*Division power failure response training

https://www.eiken.co.jp/en/sustainability/governance/risk_management/*Information management training sessions, 2 targetedemail attack training sessions, and 2 safety confirmation
system training sessions

Main business risks that could affect financial position or operating results
Item

Hypothetical risks

Response

Overseas operations• Delays in regulatory approval or delays, interruptions, or suspensions of colorectal
cancer screening programs caused by changes in the economy and businessconditions of countries or regions, pandemics, geopolitical risks, and other factors•D elays in recovering investments in EIKEN CHINA CO., LTD., which is theoverseas consolidated subsidiary of the Company, due to changes in the market
environment and delays in the progress of the business, etc.

In addition to gathering and analyzing information about the global market (primarily through the Overseas
Planning and Sales Office) in order to plan, draft proposals, and promote business in such a way as to reflect
the trends in various countries, the Eiken Group works to strengthen its global expansion through suchmeasures as selection of appropriate sales agents. EIKEN CHINA CO., LTD. plays the central role in the Chinese
business, and with support from Eiken’s Chinese Business Division it works to plan, draft proposals for, andpromote the business in order to improve operating results.

New businesses, products,
and technologies• Delays in recovering investments and loss of opportunities for commercialization
caused by delays or interruptions to research and development•W eak sales resulting from mismatches, etc. caused by changing market trends

The Eiken Group seeks to strengthen its planning and development of new businesses, products, andtechnologies based on medical needs and from a medium- to long-term perspective. To this end it hasestablished strategies to address changes in the business environment in the EIKEN ROAD MAP 2030 and theMedium-Term Management Plan, and is strategically promoting new products and technologies, the progressof which is managed by the Management Meeting, the Board of Directors, and other entities.

Medical systems
and pharmaceuticalregulations, etc.

• Impact on product prices and on the ways in which products are used, causedby changes in the medical systems and pharmaceutical regulations in various
countries

The Eiken Group sells its products in accordance with the pharmaceutical regulations, etc. of each country
or region, makes efforts to quickly identify trends in the respective medical systems and pharmaceuticalregulations, and seeks to respond appropriately and in a timely manner.

Stable supply of products• Damage to the plants or facilities of the Eiken Group or its suppliers caused bynatural disasters such as a large-scale earthquake, wind or water damage, or
major accidents such as fire
• L ong-term suspension of operations caused by pandemics or geopolitical risks

In addition to securing safe inventories of products in order to avoid such risks, the Eiken Group takes othermeasures such as procuring from multiple sources, in addition to which it has drawn up business continuity
plans and works continuously to improve its ability to respond to such situations. The Company has also
obtained certification as an Organization Contributing to National Resilience (Resilience Certification) from the
Cabinet Secretariat National Resilience Promotion Office.

• Delays in responding to information technology innovation•S ystem failures/communication failures caused by accidents, etc.
• F ailures or information leaks, etc. caused by computer viruses

The Eiken Group has introduced various IT systems to enhance operational efficiency, and is working to
improve its business processes. In addition to putting appropriate cyber security countermeasures in place, it
has introduced measures to prevent leaks of information caused by carelessness through the implementationof a variety of educational and training programs, such as drills for responding to targeted email attacks.

IT systems

EIKEN CHEMICAL Integrated Report 2023

52

INDEX

Value Creation Story

Our Strategy

Corporate Governance

Our Profile

Executives (Directors, Executive Officers) (As of June 27, 2023)
Director

Executive Officer
President & CEO

Tsugunori Notomi
Member of
the Audit Committee

Member of the Compensation Committee,
Member of the Nominating Committee

Outside Independent Member of the Compensation Committee,
Member of the Nominating Committee

Morifumi Wada

Tsugunori Notomi

Hajime Watari

Yukiya Hakozaki

Chairman and Director

Director, President & CEO

Director, Senior Vice President and Executive Officer

Director

1978 Joined the Company
2006 E xecutive Officer of the Company
2007 G eneral Manager, Nogi Plant, and General
Manager, Togane Plant,
Production Division of the Company
2011 Vice President and Executive Officer of the Company
Director of the Company
2012 General Manager, Sales Division of the Company
2014 President and CEO of the Company
2021 Chairman and CEO of the Company
2022 Chairman and Director of the Company (to present)
2023 Outside Director of ORGANO CORPORATION(to present)

1981 Joined the Company
2009 G eneral Manager, Biochemical ResearchLaboratory, R&D Division of the Company
Executive Officer of the Company
2018 General Manager, R&D Division of the Company
Director of the Company (to present)
Vice President and Executive Officer of the Company
2020 General Manager, R&D Division, and General
Manager, Production Division of the Company
Senior Vice President and Executive Officer of
the Company
2021 President & CEO of the Company (to present)

1985 Joined the Company
2013 G eneral Manager, Strategic Planning & Business
Development Department, Corporate Strategy
Office of the Company
2014 G eneral Manager, Overseas Sales Office, Sales
Division of the Company
2015 E xecutive Officer of the Company
2016 G eneral Manager, Global Sales & Business
Development Division of the Company
2020 G eneral Manager, Business Management Division,and General Manager, Global Business Divisionof the Company
Director of the Company (to present)
Vice President and Executive Officer of the Company
2021 Senior Vice President and Executive Officer of theCompany (to present)
2022 General Manager, Business Management Divisionof the Company (to present)

1983 Japan Self Defense Forces Fuji Hospital
1987 M edical Director Gastroenterological Medicine,Japan Self Defense Forces Central Hospital
1997 S ection Chief, Research and Examination
Department, General Manager, Endoscope Office,Japan Self Defense Forces Central Hospital
2000 D irector, First Section, Department of Internal Medicine
and Chief of Health Care Center, JSDF Hanshin Hospital
2004 Medical officer, Overseeing and Directing
Department, JGSDF Western Army
2006 Head, Internal Medicine, First Section, Self Defense
Forces Central Hospital (Medical treatment secretary)2014 R etired
President, Genkikai-Yokohama Hospital (Medical
Corporation)2015 Outside Director of the Company (to present)2017 Visiting Professor, Tokyo Metropolitan University(to present)
2021 Advisor, Medical corporation Reiju medock
General Examination Clinic

Senior Vice President and Executive Officer

Hajime Watari
General Manager, Business Management Division

Vice President and Executive Officer

Naomichi Harada
General Manager, Sales Division

Hidetoshi Kanda
General Manager, R&D Division and General Manager,
Fundamental Research Laboratory, R&D Division

Executive Officer

Shinya Sadamoto
General Manager, President’s OfficeMichitoshi Doi
General Manager, Production Division and General
Manager, Production Management OfficeOutside Independent

Chairperson of the Nominating Committee,
Member of the Compensation Committee

Outside Independent

Chairperson of
the Audit Committee

Outside Independent

Chairperson of the Compensation Committee,
Member of the Audit Committee

Outside Independent

Member of
the Audit Committee

Kiyoshi Ishii

Kiyomi Nakamura

Akira Fujiyoshi

Naoki Matsutake

Director

Director

Director

Director

1977 Joined Ishikawajima-Harima Heavy Industries Co.,
Ltd. (currently IHI Corporation)2005 A ssociate Director, Division Director, Defense
System Business Division, Aero Engine & SpaceBusiness Headquarters, Ishikawajima-Harima
Heavy Industries, Co., Ltd.
2007 E xecutive Officer, Vice President, Aero Engine& Space Business Headquarters, and Division
Director, Defense System Business Division,
Ishikawajima-Harima Heavy Industries Co., Ltd.
2008 S enior Managing Director, Ai Eichi Ai AEROSPACE
Co., Ltd. (currently IHI AEROSPACE Co., Ltd.)
President, Ai Eichi Ai AEROSPACE Co., Ltd.
2012 Chairman, IHI AEROSPACE Co., Ltd. (part-time)
President, and Chief Executive Officer, MEISEIELECTRIC CO., LTD.
2019 Outside Director of the Company (to present)
2020 Outside Director, Kyowa Seiki Co., Ltd. (to present)

1998 Registered as attorney-at-law
Joined Takao Ono Law Office (currently ONO
SOGO LEGAL PROFESSION CORPORATION)
2008 Partner, Akitoshi Ishimoto Law Office2019 Outside Director of the Company (to present)
2020 Outside Director, Nippon Beet Sugar
Manufacturing Co., Ltd. (to present)
2022 Partner, HORIZON LAW OFFICE (to present)

1976 Joined Eisai Co., Ltd. (R&D)
1988 S econded to Eisai America, Inc., U.S. subsidiaryof Eisai Co., Ltd.
1997 Seconded to Eisai Research Institute of Boston Inc.,
U.S. subsidiary of Eisai Co., Ltd.
2000 General Manager, Planning Group, Research andDevelopment Planning Department of Eisai Co., Ltd.
2003 G eneral Manager, IR Group, Public Relations
Department of Eisai Co., Ltd.
2006 C orporate Officer in charge of Corporate
Communications and IR of Eisai Co., Ltd.
2009 D irector, Member of the Audit Committee of
Eisai Co., Ltd.
2014 A dviser of Eisai Co., Ltd.
2017 Independent Director, SEMBA CORPORATION
2019 E xternal Auditor & Supervisor, Heartseed Inc.
(to present)
2020 O utside Director of the Company (to present)

1987 Registered as Certified Public Accountant
1993 R epresentative Director, Kazu Corporation Co.,
Ltd. (to present)
2003 C orporate Auditor, BP Castrol K.K.
2016 O utside Director (Audit and Supervisory
Committee Member), BP Castrol K.K. (to present)
2023 Outside Director of the Company (to present)

Tetsuya Takahashi
General Manager, Sales Promotion Office, Sales Division

Yasuyoshi Mori
General Manager, Overseas Planning and Sales Office andGeneral Manager, Chinese Business Division, Sales Division

Yuji Segawa
General Manager, Marketing Office, Sales Division

Hiroyasu Furuhashi
General Manager, Nogi Plant, Production Division andGeneral Manager, Quality Assurance Office

EIKEN CHEMICAL Integrated Report 2023

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INDEX

Value Creation Story

Our Strategy

Corporate Governance

Our Profile

Messages from Outside Directors

Chairperson of
the Nominating Committee

Roles and views of the committee

The Nominating Committee consists of two Outside Directors

fully into account, and by creating a skill matrix so that the Boardand one Inside Director, for a total of three members, withof Directors can perform its supervisory function with access to

Outside Director Kiyoshi Ishii serving as Chairperson. The

diverse perspectives. With regard to the election or dismissal

Nominating Committee determines the content of proposals forof the Chief Executive Officer, candidates are considered in

the election and dismissal of Directors to be submitted to theadvance by the Nominating Committee, and the results are

General Meeting of Shareholders, based on the Standards forput on the agenda of the Board of Directors. The provision ofNomination of Directors.

supervision and advice in selecting and developing a successor

Outside Directors who are independent from business execution

to the Chief Executive Officer has also been designated as

account for the majority of all Directors, and it is important toan important mission of the Nominating Committee going

continue selecting appropriate Outside Directors going forward.

forward. Through the activities described above, the Nominating

When selecting candidates for Outside Director, we consider

Committee will strive to enhance corporate governance, which iswhich individuals to select to ensure that the composition of

the foundation of the sustainable growth of the Company.

Directors is balanced by taking neutrality and independence

Activities and outcomes in FY2022, and prospects and aspirations going forward

As we work to achieve the EIKENROAD MAP 2030, we are making
every effort to enhance corporate
governance, which is thefoundation of sustainable growth.
Kiyoshi Ishii
Chairperson of the Nominating Committee

The Nominating Committee met seven times in FY2022, and theWith the objective of achieving further growth, the Company

main outcomes of its activities were as follows.

announced the EIKEN ROAD MAP 2030 in April 2022. Ultimately,

The committee simulated the future appointment andit is people who will turn this plan into reality. We recognize

retirement of Outside Directors, and based on the results, thethat the most important element in achieving growth is thecommittee partially revised the internal rules regarding thenurturing not only of a future Chief Executive Officer but also

retirement age and term of office of Outside Directors, fromof a top management team that can drive this plan forward.

the viewpoint of continuity of the Board of Directors andHowever, due to the Company’s past recruitment practices the

securing human resources. After confirming that there are nocomposition by age is skewed, and I believe it will be important

issues with the independence and neutrality of the candidate

to discover personnel for management from among the mid-for new Outside Director and four candidates for reelection aslevel and younger employee groups, which are relatively large.

Outside Directors for FY ending Mar. 31, 2024, and that they

Also, as we have been focusing on nurturing highly specialized

are well-balanced in terms of the skill matrix, the committee

talents, I feel that there continue to be few educational

decided eight candidates for the Board of Directors, including

opportunities for management personnel. Taking these issues

the reelection of three Inside Directors. In addition to putting a

into account, the Nominating Committee will actively supervise

candidate for Chief Executive Officer on the agenda of the Boardand offer advice on the development of the top managementof Directors, we exchanged opinions with the Board of Directors

team through the use of educational activities, systematicand the Chief Executive Officer regarding the selection androtation, and other measures.

training of successor candidates for Chief Executive Officer.

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INDEX

Value Creation Story

Our Strategy

Corporate Governance

Our Profile

Messages from Outside Directors

Chairperson of
the Audit Committee

Roles and views of the committee

The Audit Committee consists of three Outside Directors

internal control systems of each company and responds to(one of which is a holder of a Certified Public Accountant

related issues as appropriate. Members of the Audit Committee

qualification) and one Inside Director, for a total of four

attend important meetings such as those of the Board ofmembers. The committee determines matters related to basic

Directors in order to maintain an understanding of the state ofpolicy and execution plans for audits, as well as the content ofbusiness execution, and express their opinions as necessary. In

proposals and other matters related to the election or dismissal

addition, at Joint Audit Meetings (held four times in FY2022),of the Accounting Auditor, or the non-reappointment of theit received reports from various departments to ensure the

Accounting Auditor, for submission to the General Meeting

effectiveness of auditing. In order to assist in the duties of theof Shareholders. In order to ensure the proper conduct of the

Audit Committee, the Audit Committee Secretariat has been

operations by the Eiken Group, which is formed of the Company

established, the work of which is performed by three individuals

and its subsidiary, the Audit Committee also supervises thefrom the Internal Audit Department.

Activities and outcomes in FY2022, and prospects and aspirations going forward

In order to enhance corporate
value and justify the trust ofsociety, we will forge ahead withaudits to achieve even morerobust governance.
Kiyomi Nakamura
Chairperson of the Audit Committee

The Audit Committee met seven times in FY2022. We confirmed

Going forward, the Audit Committee will continue to workthat governance and risk management are functioning properly

in cooperation with the Internal Audit Department and theby receiving regular reports from the Business Management

Accounting Auditor to further increase the effectiveness ofDivision, Production Division, quality control departments, andaudits and to improve the audit system, thus justifying theother departments in accordance with the Joint Audit Meeting

trust placed in us by society, and enhancing corporate value.

Rules, as well as through quarterly opinion exchanges with

Committee members will also continue to attend important

the Chief Executive Officer and information exchange with themeetings and express opinions as required, in order to maintainAccounting Auditor.

their understanding of the status of business execution, as well

In addition to verifying the economic rationale for importantas ensuring the effectiveness of audits by receiving reports

investment projects with the Internal Audit Department,from various divisions at Joint Audit Meetings, and continuing

which serves as the secretariat to the Audit Committee, we

to forge ahead with audits to achieve even more robust

audited the development and operation of internal control

governance.

systems, and conducted business audits. The Audit Committee

In order to advocate more vigorous governance as the Eiken

also investigated and analyzed risks surrounding the businessGroup seeks to move forward with global management,

environment, shared information with executive departments

we believe we should strengthen the system from a global

and the Board of Directors, and endeavored to strengthen

perspective, conducting audits that involve closer cooperation

governance by confirming a system to respond immediately toand enhanced information sharing between the Audit

the emergence of risks.

Committee and overseas divisions.

EIKEN CHEMICAL Integrated Report 2023

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INDEX

Value Creation Story

Our Strategy

Corporate Governance

Our Profile

Messages from Outside Directors

Chairperson of
the Compensation Committee

The committee will continuously workon improvements aimed at achieving
the management framework“EIKEN ROAD MAP 2030” and theMedium-Term Management Plan.
Akira Fujiyoshi
Chairperson of the Compensation Committee

Roles and views of the committee

The Compensation Committee consists of two Outside Directors

the human resources that will be the driving force to overcome

and one Inside Director, for a total of three members, withthese challenges and achieve continuous growth are becoming

an Outside Director serving as Chairperson. The committee

increasingly important. The committee recognizes that there isdetermines policies for remuneration of Directors and Executive

a constant need to develop candidates for the next generation

Officers, as well as individual remuneration.

of Executive Officers and to make the executive remuneration

The committee decides Executive Officer remuneration, withstructure attractive among competitive human resources

the focus to incentivize them to bolster the Company’s businessmarket.

results and further improvement to shareholder value, in

From FY2023 onward, the committee will make continuous

consideration of each executive’s level and responsibilities, theimprovements in remuneration structure to make it more

Company’s business results, the management environment

competitive and to encourage Executives’ proactive efforts

and social standards. The current renumeration structure forin changing Company’s business by fair evaluation of their

Executive Officers consists of fixed pay, performance-based pay,achievements. The Company has been engaging withand stock options, while Outside Directors receive only fixed pay.

sustainability management more closely since FY2021. We will

The business environment in which the Company operates

also consider appropriately reflecting in remuneration the results

has become increasingly difficult due to the transformationof activities aimed at achieving sustainability managementof social activities resulting from the spread of COVID-19, andtargets.

Activities and outcomes in FY2022, and prospects and aspirations going forward

In FY2022, the Compensation Committee met nine times andsingle fiscal year, but should be objectives for the realization

focused on two key themes.

of the management framework “EIKEN ROAD MAP 2030”
and the achievement of the Medium-Term Management Plan.

a Changing from stock options to restricted stock

Therefore, the committee decided to clarify medium- and long-

The committee has been continuously investigating better

term objectives, predominantly focused on necessary reform inremuneration structures for aligning Executive Officers’

operation, that should be addressed by Executive Officers. With

perspective with that of shareholders on raising share price andregard to evaluations, the committee has put in place a process

corporate value other than under the stock option plan, and has

for determining performance-based pay, whereby evaluations

resolved to replace the stock options with restricted stock. The

by the Board of Directors will be conducted in addition to self-change is in effect from FY2023.

assessments by Executive Officers. The final assessment is madeby the Compensation Committee. The revisions are intendedb I mprovements to setting objectives of Executive Officers
and evaluation process
The committee believe that the objectives set by the Executive

to raise the motivation of Executive Officers to work towardmedium- to long-term reforms and to provide rewards based on
the results of their efforts.

Officers should not be limited to those to be achieved in a

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