Foundation for Value Creation

Corporate Governance/Compliance/Risk Management
ASKA Pharmaceutical Holdings (the “Company”) aims for sustainable growth and improvement of corporate
value over the medium to long term for itself and its Group companies and is continuously working to build
and strengthen the best and most effective corporate governance structure as the basis for achieving this aim.

Business Strategy Meeting of the Group

Basic Principles 
We always pursue and continually work to maintain the best corporate governance in line with the following basic
principles.
1. We will strive to effectively secure the rights of shareholders and will ensure shareholder equality.
2. We will strive to cooperate fully with stakeholders and will foster a corporate culture and climate that respects the
ethics of sound business practices.
3. We will appropriately disclose the Company’s financial, management, and other information to ensure transparency.
4. The Board of Directors will establish an environment where bold management decisions are made based on corporate
strategies and will conduct highly effective supervision of directors.
5. We will engage in constructive dialogue with shareholders.
The full text of the Basic Principles is available on the Company’s website.
https://www.aska-pharma-hd.co.jp/english/invest/governance/#anc1

Corporate Governance Structure 
Under the Company’s corporate officer system, Corporate Officers execute business and members of the Board of
Directors concentrate on management and supervision functions.

Group Nomination Committee and Group
Remuneration Committee
The Group Nomination Committee and Group Remuneration
Committee have been established as advisory committees
independent from the Board of Directors in order to enhance
the fairness and objectivity of the deliberation process regarding
the nomination and compensation of Board Members.
Each committee is composed of representative directors,
senior managing members of the Board of Directors or higher
with special titles, and Outside Directors. The majority ofcommittee members are Outside Directors, and the committee ischaired by an Outside Director to ensure independence.

Group Nomination Committee:• Discussion on the procedures for the election of directors
 ecision on the contents of the report to the Board of Directors•DAppointment/Dismissal

Appointment/Dismissal
AdviceAudit &
Supervisory
Board

Audit

Board ofDirectors

Findings

Cooperation

ReportAudit
Department
Internal Audit• Identifying issues and items to consider for remuneration for
Board Members and exchanging opinions

 iscussion on the amount of remuneration for Board Members•D ecision on the contents of the report to the Board of Directors•D
AdviceReportInstruction

Group Remuneration Committee:

Group Nomination
Committee
Group Remuneration
Committee
ESG Committee

Management Supervision

Compliance
Promotion
Committee

Consultation

We have adopted a company with an Audit & Supervisory Board
structure in order to audit the execution of duties by members

Representative
Directors
Management Council

Direction andSupervision

Business Strategy Meetingof the Group

AdviceConsultation

Corporate Officers

Operating Departments

Report/ProposalAuditing Structure

Report/Proposal

Corporate Lawyer

Appointment/Dismissal

Accounting Auditor

To ensure the appropriateness of business operations, theCompany has established a supervisory department responsible
for managing Group companies in an integrated manner. The
Company also holds the Business Strategy Meeting of the Groupfour times a year to share information.

Key Items Discussed by the Group Nomination
Committee and Group Remuneration Committee

General Meeting of Shareholders

Audit

Management Council
Management Council meetings are held basically once a monthto deliberate/make decisions on management-related issues, andto examine important issues including management policies
and strategies.

Group Companies
ASKA Animal Health Co., Ltd.

ASKA Pharmaceutical Co., Ltd.

ASKA Pharma Medical Co., Ltd.

of the Board of Directors from a standpoint independent of theBoard of Directors. The Audit & Supervisory Board, consisting offour members including two outside Audit & Supervisory Board
members, meets once a month in principle to discuss and resolve
important matters related to audits and to confirm matters to be
discussed at Board of Directors meetings in advance.
For external audits, the Company has concluded an audit andquarterly review contract with Seiyo Audit Corporation as its
accounting auditor.
For internal audits, we have established an Audit Department,
which conducts audits of Group companies from a fair andindependent standpoint. Furthermore, the Audit Department
evaluates the status of internal control systems regarding
financial reporting and its operation.

Outside Directors
We appoint at least two independent Outside Directors to theBoard of Directors. They satisfy the Standards for the Independenceof Outside Directors and provide guidance and advice to ourmanagement as appropriate utilizing their wealth of independent
insight and knowledge.
Currently, we believe we have established an optimal
governance structure with three independent Outside Directors
as members of the Board of Directors.

ESG Committee
The ESG Committee has identified 11 material issues from theperspective of relevance to the Group’s business and social
contribution, and it has established a Company-wide action plan
and KPIs for each of them. In particular, we believe that
contribution to women’s health and contribution to animal healthare two material issues that are characteristic of our business andin which we can demonstrate our strengths and originality.
See pages 16-17 for details

In addition, we consider climate change issues to be one of
the management issues that affect our business, and we disclose
information on climate change in line with TCFD recommendations.
As a company involved in life-related issues, and as a memberof society and the community, the Group broadly contributes tosociety by promoting ESG (environmental, social, and governance)
initiatives, thereby contributing to the achievement of the SDGs
(sustainable development goals).

Evaluations of the Effectiveness of the Board of Directors To grasp the current status of and make further
improvement in the effectiveness of the Board of
Directors, we conduct questionnaires of all directors andall Audit & Supervisory Board members annually. Afterevaluating and analyzing the results of the questionnaire,
we confirm that the Board of Directors of the Company

is functioning properly and that the effectiveness of theentire Board of Directors has been ensured.
Based on the results of this evaluation, we will further
enhance the functions of the Board of Directors andstrive to improve the effectiveness of the Board of
Directors in the future.

Implementation Guidelines (FY2022)
Board of Directors
The Board of Directors meets basically once amonth and also holds special meetings as needed.
It makes decisions on business execution policies
and other important matters concerning business
operations and supervises the execution ofbusiness operations.

46

ASKA HD REPORT 2023

Key Items Discussed by the Board of Directors• I mportant management agreements• Disposition of important Company• Compensation for Board Members• Accounts and budget, General• Personnel change• Organizational revision• Work rules and corporate regulations• P rojects related to Group companies

property

Meeting of Shareholders• Target group• Evaluation method

Board Members (All eight Membersof the Board of Directors and all four
Audit & Supervisory Board members)

1. C onduct a questionnaire survey of target group(five-rating scores and free form answers;
anonymous)
2. Analyze contents of answers
3. Provide feedback to the Board of Directors
4. W ork to further enhance functions of the Boardof Directors• Main items of the survey• Composition of the Board of Directors• Operation of the Board of Directors• Contents of deliberations at theBoard of Directors• System for supporting the Boardof Directors

ASKA HD REPORT 2023

47

Foundation for Value Creation

Skill Matrix Experience, knowledge, and expertise1

Membersof theBoard ofDirectors

Meeting body attended and attendance status2

Name

Years ofservice

Inside/OutsideGenderTakashi
Yamaguchi

2 years and3 months

InsideMale

Responsible for the entire Group management
Member of the Board of Directors, Representative Director,
Chairman of the Board of ASKA Pharmaceutical Co., Ltd.

100%
(16/16)

Atsushi Maruo

2 years and3 months

InsideMaleMember of the Board of Directors, Vice Chairman of the Board of
ASKA Pharmaceutical Co., Ltd.

(15/16)

Sohta
Yamaguchi

2 years and3 months

InsideMale

President, Member of the Board of Directors, Representative Director of
ASKA Pharmaceutical Co., Ltd.

100%

Maiko Mori

1 yearInsideFemaleMember of the Board of Directors, Executive Corporate Officer, Division Director of
Quality & Safety Assurance Division of ASKA Pharmaceutical Co., Ltd.

100%

Fumiyoshi
Yamaguchi

1 yearInsideMale

President, Member of the Board of Directors, Representative Director of
ASKA Animal Health Co., Ltd.

100%

100%

(11/11)

(2/2)

100%
(1/1)

Yasunori
Yoshimura

2 years and3 months

OutsideMale

Representative Director of YOSHIMURA BIOETHIC INSTITUTE
Outside Board Member (Audit & Supervisory Committee Member) of Pan PacificInternational Holdings Corporation
Professor Emeritus of Keio University
Vice President of Fukushima Medical University

MinoruAwabayashi

Newlyappointed

OutsideMale

Senior Vice President of Takenaka Partners Corp.

—3

Yasuji
EnokidoNewly
appointed

OutsideMale

CEO of So-En Corporation—3

2 years

InsideMale

Audit & Supervisory Board Member of ASKA Animal Health Co., Ltd.

Ikuo Kumano

2 years
Audit & Yuichiro Fukui
Supervisory
2 years andBoard
Takao Kimura
3 months
Members

Keiko Fukuchi

2 years and3 months

InsideCorporate
management

R&D /Intellectual
property

Sales /
Marketing

Medical /Pharmacy
expertise

Finance /Accounting

Legal / Risk
management

Sustainability /
ESG

Male

Responsibilities in the Company andimportant concurrent positions

Audit & Supervisory Board Member of ASKA Pharmaceutical Co., Ltd.

OutsideMale

Representative Partner of TK Pharma Partners LLC.

OutsideFemaleRepresentative of Fukuchi Keiko Tax Accountant OfficeOutside Director (Audit and Supervisory Committee Member)of KAWADA TECHNOLOGIES, INC.
Outside Auditor of KAWADA INDUSTRIES, INC.

Board ofDirectors

Audit &
Supervisory
Board

Group
Nomination
CommitteeGroup
Remuneration
Committee

100%
(1/1)

100%
(1/1)

94%

ESG
Committee

100%
(2/2)

100%
(1/1)

(16/16)

100%
(1/1)

(1/2)

100%
(1/1)

100%

100%
(1/1)

100%
(1/1)

—

—

—

—

—

—

—

—

—

—

100%
(1/1)

100%
(1/1)

100%
(1/1)

100%
(1/1)

(16/16)(16/16)

100%

100%
(1/1)

50%

(11/11)

100%

Group
Compliance
Promotion
Committee

100%(19/19)100%(16/16)(19/19)

100%

100%

(16/16)(19/19)

100%

100%

(16/16)(19/19)Notes: 1. Indicates up to three skills in which the members of the Board of Directors and Audit & Supervisory Board members possess particularly high expertise and which are
expected of members of the Board of Directors and Audit & Supervisory Board members.
2. indicates the chairman for each committee.
3. Number of meetings attended in FY2022 are not shown as they are newly appointed directors.

Compensation for Board Members 

Reasons for Selection of Skills
Skill items

Reasons for selection of skills

Corporate
management

Amid major changes and mounting uncertainty in the business environment, we must formulate and promote a medium- to longterm sustainable growth strategy that will enable us to realize the Group’s goal of becoming a total healthcare company with astrong foundation as a specialty pharma company. For this, we need directors with extensive knowledge, experience, and a trackrecord of achievements in not only the medical and pharmaceutical industries but also in general corporate management.

R&D / Intellectual
property

To continue creating products that meet unmet medical needs, it is essential that we strengthen our R&D capabilities throughopen innovation and globalize intellectual property activities. We need directors who have strong knowledge, experience, and a
track record of achievements in the fields of R&D and intellectual property to promote these activities.

Sales / Marketing

The business environments for medical care and animal health are rapidly changing. Against this background, we must continue
providing information on the proper use of drugs and products by using digital-driven sales and marketing strategies. For this, weneed directors who have strong knowledge, experience, and a track record of achievements in sales and marketing.
In order to realize the Group’s goal of becoming a total healthcare company, we need directors who have strong knowledge,

Medical / Pharmacy
experience, and a track record of achievements in the fields of medicine and pharmacy to widely contribute to human and animal
expertise
health, which ranges from prevention, testing, diagnosis to treatment, and prognosis.

48

Finance /Accounting

In addition to accurate financial reporting, we need directors who have strong knowledge, experience, and a track record ofachievements in the finance and accounting fields to formulate and promote a financial and capital strategy that balances
ensuring a stable financial base and improving capital efficiency, and achieves appropriate shareholder returns.

Legal / Risk
management

The establishment of an appropriate governance system is the foundation for sustainable corporate value improvement. To
promote a compliance system that ensures thorough compliance with laws and corporate ethics, we need directors who havestrong knowledge, experience, and a track record of achievements in legal and risk management.

Sustainability /ESG

The Group is committed to sustainable management, aiming to enhance corporate value not only by maximizing our economic
value but also by increasing our social value. To achieve this, we need directors who have strong knowledge, experience, and a
track record of achievements in the sustainability and ESG fields.

ASKA HD REPORT 2023

P olicies on Determining the Details of Compensation,etc. for Each Individual Member of the Board of Directors
The Group Remuneration Committee deliberates on the
remuneration for members of the Board of Directors while
ensuring transparency, fairness, and objectivity. Design ofthe remuneration system and the specific amount of
remuneration are determined by the Board of Directors.
Remuneration for members of the Board of Directors
excluding Outside Directors of the Board of Directors, shallbe designed to contribute to continued increases in corporate
value. Specifically, it shall consist of base salary as well as aperformance-based bonus serving as short-term incentive, anda share compensation system serving as medium- to long-term
incentive. In order to ensure supervision of management that isfully functional from an independent stance, remuneration for
Outside Directors shall consist of base salary only, without
short-term or medium- to long-term incentive.
Base salary
Basic remuneration for members of the Board of Directors
shall be an annual base salary. Its amount shall be
determined based on position (rank), responsibilities, andterm of office. It shall be paid on a monthly basis.

Performance-based bonus
Performance-based bonus for members of the Board of
Directors (excluding Outside Directors) shall be paid at a
certain time each year. The amount of bonus to be paid tomembers of the Board of Directors with special titles shallbe determined by multiplying the annual base salary by abonus calculation coefficient defined for each position (rank)
and a payment coefficient based on the Company’s businessperformance (operating profit, etc.) for the previous fiscal
year. For members of the Board of Directors who also serve
as employees of the Company, the incentive provided shallbe calculated by incorporating the performance-based
bonus into the bonuses provided to them as employees.
Restricted share compensation
For the purpose of providing incentives to sustainably
increase the Company’s corporate value, as well as for the
purpose of further promoting value sharing with theshareholders, restricted shares shall be granted at a certain
time each year within the scope of the maximum amountand maximum number of shares approved at the General
Meeting of Shareholders. The number of restricted shares tobe granted to individual members of the Board of Directors
shall be determined in consideration of their position (rank),
responsibilities, term of office, and other factors.
ASKA HD REPORT 2023

49

Foundation for Value Creation

 olicy on Determining the Proportion of Each TypeP
of Remuneration, etc.
Based on the belief that it is important for management towork with a medium- to long-term perspective, the proportionof base salary, performance-based bonus, and restricted sharecompensation shall be configured with emphasis on the level andstability of basic remuneration (base salary) with additional
consideration of improvement in single-year business performanceand the pursuit of shareholder interests.

The proportion of each type of remuneration for members of
the Board of Directors (excluding Outside Directors) is not fixed
because the amount of remuneration is determined according tobusiness performance in each fiscal year. However, the proportionof base salary, performance-based bonus, and restricted sharecompensation fits roughly in the following scope:
Base salary: 55-70%, Performance-based bonus: 15-30%,
Restricted share compensation: 10-15%

 otal Amount of Compensation, etc. by Board Member Classification, Total Amount by Type of Compensation, etc.,Tand the Number of Target Board Members in FY2022
Total amount by type of compensation, etc. (Millions of yen)Classification

Total amount ofcompensation, etc.
(Millions of yen)

Base salary

Performance- (Persons)based bonus

Restricted sharecompensation

Number of target
Board Members(Persons)

Members of the Boardof Directors(Outside Directors)

30
(30)

30
(30)

—
(—)

—
(—)

3
(3)

Audit & Supervisory
Board Members(Outside Audit &Supervisory
Board Members)

50
(13)

50
(13)

—
(—)

—
(—)

4
(2)

Total (Outside
Board Members)

81
(44)

81
(44)

—
(—)

—
(—)

7
(5)

Compliance 
Basic Principles
We have established a department to promote and supportcompliance within each Group company and developed thenecessary internal systems, and rules and regulations. The
structure we have created facilitates the prompt handling ofcases, the formulation of measures to prevent violations andother measures. This means that Board Members and employees
can engage in corporate activities with peace of mind.
To increase awareness of compliance of employees of theGroup, we are conducting compliance education for each job
level while working to grasp the level of employee awarenessthrough questionnaire surveys and to identify points for
improvement. In FY2022, we worked to further ensurecompliance by conducting training and problem solving basedon actual situations upon our understanding of the current
situation and by identifying problems from the results of thecompliance awareness survey. The Group Compliance Promotion
Committee has been established to supervise the Group’s efforts
toward recognizing and responding to risks that could have asignificant impact on Group management and promoting acompliance system that thoroughly complies with laws andcorporate ethics.

ASKA HD REPORT 2023

• ASKA Pharmaceutical Holdings
Structure of the Compliance Consulting DesksGroup Compliance Promotion Committee(Chairman = Group Compliance Manager)

Notes:
1. T he amount of compensation or the like for members of the Board of Directors does not include the portion of employees’ salary paid to members of the Board of Directors who also serve as
employees of the Company.
2. T he number of target Board Members is the number of Board Members paid remuneration by the Company. In addition to the above, the total amount of compensation, etc. received by fivemembers of the Board of Directors of the Company from Group companies (ASKA Pharmaceutical Co., Ltd. and ASKA Animal Health Co., Ltd.) was ¥282 million.
3. T he performance index for performance-based remuneration, etc. is operating profit, which was ¥5,108 million for FY2022. This index was chosen because it is an important indicator ofachievement of management goals. Therefore, it was determined to be an appropriate index for performance-based remuneration.
4. N
 on-monetary remuneration, etc. is in the form of Company shares.
5. B ased on the resolution of the Extraordinary General Meeting of Shareholders held on June 24, 2021, the upper limit on compensation for members of the Board of Directors was set at ¥500
million per year (including ¥70 million for Outside Directors and excluding the portion of employee salary paid to members of the Board of Directors who also serve as employees of the Company).
The number of members of the Board of Directors at the end of the Extraordinary General Meeting of Shareholders was six (including three Outside Directors). Separate from this compensation,
the upper limit on restricted share compensation was set at ¥100 million per year based on the resolution of the Extraordinary General Meeting of Shareholders held on June 24, 2021. The numberof members of the Board of Directors at the end of the Extraordinary General Meeting of Shareholders was three (excluding Outside Directors).
6. B ased on the resolution of the Extraordinary General Meeting of Shareholders held on June 24, 2021, the upper limit on compensation for Audit & Supervisory Board members was set at ¥150
million per year. The number of Audit & Supervisory Board members at the end of the Extraordinary General Meeting of Shareholders was four.

50

June 1, 2022. This contact point, which is independent fromsenior management, is intended to lower the psychologicalhurdle for Board Members and employees for consultation andreporting of compliance-related matters involving senior
management, and to ensure that investigations and corrective
measures are carried out in a timely and appropriate manner.
Reporting can be also done anonymously, and all cases arehandled appropriately. In addition, we have enhanced thewhistle-blower system by securing two people to be in chargeof the external contact point (corporate lawyer’s office).
In accordance with the spirit of the Whistleblower Protection
Act, we operate this system to protect whistle-blowers as wellas to ensure that compliance-related matters are reported,
investigated, and corrected in a timely and appropriate manner.

• Group Compliance Promotion StructureGroup Compliance Manager

Group Compliance
Promotion Officer

Representative director orsenior member of theBoard of Directors
Members of the Board of Directors(Corporate Officers) who have been
appointed within each company,
reporting to the Group
Compliance Manager

External
consulting deskInternal
consulting desk

Attorneys

Legal Affairs &Regulatory ComplianceDepartment(Group Compliance
Secretariat)

Audit & Supervisory
Board member
consulting desk*
Audit & Supervisory
Board members of
ASKA Pharmaceutical
Holdings

Whistle-blower*C ontact point for consultation and reporting of compliance-related matters involving
Board Members of the Group

Code of Practice
As a responsible life-related company that handles pharmaceuticals,
ASKA Pharmaceutical recognizes the need to ensure a high levelof ethics and transparency in its corporate activities. Based on
this recognition, in FY2013 we established the ASKA Pharmaceutical
Code of Practice as a code of conduct for all Board Members
and employees and their interactions with researchers, medical
professionals, patient groups, etc., and we are implementing
corporate activities that can be understood by society by ensuringthat all Board Members and employees are fully aware of
the code.

Intellectual Property
Intellectual property rights include patent rights, utility modelrights, design rights, and trademark rights, which protect
creations through intellectual creative activities. We respect therights of third parties and cooperate with relevant departments
to formalize and protect intellectual property rights throughout
the Company. In addition to protecting rights related to newly

developed products, we maximize value by utilizing intellectual
property rights to extend the lifecycle of existing products,
including new dosage formulations.
Moreover, we are promoting the globalization of ourintellectual property activities, and have established a systemthat enables us to collect and utilize intellectual property
information overseas, and are working to strengthen cooperation
with our partner companies in terms of intellectual property.
With the growing importance of intellectual property, we willfurther contribute to our business growth through these efforts.

Initiatives of the Group in Industry-related Norms(Transparency Guidelines, Guidelines for Sales
Information Provision Activities, etc.)
With the recognition that ASKA’s corporate activities related toprescription pharmaceuticals are conducted under the public
medical insurance system, we are fulfilling our accountability tosociety by ensuring transparency in the provision of funds to
medical professionals, medical institutions, patient groups, andothers. In accordance with the Transparency Guideline for theRelationship between Corporate Activities and Medical
Institutions and the Transparency Guideline for the Relationshipbetween Corporate Activities and Patient Groups, in FY2023 wewill continue with disclosure of information on FY2022’s
provision of funds to medical professionals, medical institutions,and patient organizations.
In addition, the Guidelines for Provision of Sales Information
on Prescription Drugs (the “Guidelines”) were established by
the Ministry of Health, Labour and Welfare to promote theproper use of prescription pharmaceuticals. They are aimed atpreventing inappropriate promotional activities (such asrecommending off-label use, slandering other companies, andproviding misleading information on efficacy and safety). In
addition, from 2019 the Guidelines made it the responsibility ofmanagement to establish the internal systems necessary for
appropriate sales information provision activities and to educate
employees. In FY2022, the department supervising sales
information provision activities, as the lead department,
reviewed materials used by medical representatives (MRs) toensure that they are properly prepared, and also checked thepromotional activities of MRs and others, and with regard to the
behaviors that could have been taken as a violation of the
Guidelines, the information was shared with the parties
concerned as well as the relevant promotion department toraise awareness and prevent violations. In addition, we
continuously remind MRs and others of the importance ofcompliance with the Guidelines and other industry-related
norms during training sessions.
As a life-related company, we will continue to work to further
improve our ethics, transparency, and credibility while conducting
activities to deepen the understanding of medical institutions
and medical professionals.

Whistle-blower System
As a system to reflect the voices of employees in compliancepractice, we have established a whistle-blower office (the ASKA
Pharmaceutical Holdings’ compliance consulting desk), andhave promoted awareness of the desk through education andtraining programs.
In addition to the existing internal and external contact points,
we also established a new contact point staffed by ASKA
Pharmaceutical Holdings’ Audit & Supervisory Board members(Audit & Supervisory Board member consulting desk) for
consultation and reporting of compliance-related matters
involving Board Members of the Group, in connection with theenforcement of the revised Whistleblower Protection Act on

Risk Management 
Basic Policy
In order to deal with risks that may affect the business activitiesof the Group, we have established the Group Business Risk
Management Rules and are implementing a risk management
system with classifications based on characteristics and risks.
Each department prepares and operates procedure manuals andsystematically works to resolve issues through annual risk
assessments and the formulation, implementation, and evaluationof countermeasures based on the results of those assessments.

Business Continuity Plan (BCP)
In order to ensure a stable supply of pharmaceuticals and otherproducts, we have formulated two types of BCP, one for natural
disasters such as large-scale earthquakes and tsunamis, and theother for the spread of infectious diseases such as the novel
influenza, and are working to establish a system that will enable
us to quickly restore our business activities. Going forward, we
will continue to enhance our preparedness for anticipated risks,
conduct employee awareness activities, and further improve ourcrisis management system.
ASKA HD REPORT 2023

51