Takeda's mission is to “strive towards Better Health and Brighter Future for people worldwide through leading innovation in medicine.” In line with this mission, Takeda is establishing a management framework appropriate for a R&D-driven biopharmaceutical company that operates on a global scale. We are strengthening internal controls, including rigorous compliance and risk management, and establishing a structure that will allow rapid decision-making that is also sound and transparent. Through these efforts, we will further improve our corporate governance, thereby maximizing corporate value.
At Takeda, the Board of Directors determines the fundamental policies for the Group, and Takeda Executive Team (TET) executes management and business operations in accordance with their decisions. Transparency of the Board of Directors is achieved through audits conducted by the Audit and Supervisory Committee. The External Directors ensure optimal business execution free of the pharmaceutical industry mindset. Moreover, in order to respond to management tasks that continue to diversify, the Company shall establish the TET consisting of President & CEO and members who manage and supervise each function of the Takeda Group, and also establish the Business Review Committee (which is responsible for general management matters), the Portfolio Review Committee (which is responsible for R&D and products related matters), and the Risk, Ethics & Compliance Committee (which is responsible for risk management, business ethics and compliance matters) that review important matters to ensure agility and flexibility of business execution and deeper cooperation among the various functions.
Schematic Diagram of Takeda's Corporate Governance System, Including the Internal Control System
Takeda has given its Board of Directors the primary functions of observing and overseeing business execution as well as decision-making for strategic or particularly important matters regarding company management. The Board of Directors consists of 16 Directors (including one female), including 11 External Directors, eight Japanese and eight non-Japanese, and meets in principle eight times per year to make resolutions and receive reports on important matters regarding management.
Furthermore, Takeda has a Nomination Committee and a Compensation Committee as advisory committees of the board. The Nomination Committee consists of 1 Outside Director as a Chairman, 4 Outside Directors and 1 Internal Director as an Observer, and the Compensation Committee consists of 1 Outside Director as a Chairman, 3 Outside Director. Together, the committees serve to ensure transparency and objectivity in decision-making processes and results relating to personnel matters for internal directors (appropriate standards and procedures for appointment and reappointment, and having and administering appropriate succession plans) and to the compensation system (appropriate levels of compensation for the directors, appropriate performance targets within the director bonus system, and appropriate bonuses based on business results).
With respects to all risk factors including major potential risk for the Company, the person(s) in charge of each function shall control and manage such risk factors in each area under his/her charge using qualitative and quantitative criteria in designing and implementing mid-range and annual plans, and shall take all necessary measures or remedies available to avoid and minimize such risk factors, depending on the degree and content of the risk the Company is exposed to, in compliance with the countermeasures to cope therewith and any contingency plans.
Takeda is a "Company with Audit and Supervisory Committee" as defined in Japan's Companies Act. Audit and Supervisory Committee consists of 1 Outside Director as a Chairman, 2 Outside Directors and 1 Internal Director. The Audit and Supervisory Committee closely cooperates with divisions responsible for the internal control function such as compliance, risk management and accounting/finance, etc. and utilize information from the Division to enable effective audits and supervision by the Audit and Supervisory Committee. In addition, KPMG AZSA & Co. serves as the accounting auditor.
The clawback policy provides that in the event of a significant restatement of financial results or significant misconduct, the independent external members of Takeda’s Board of Directors may require Takeda to recoup incentive compensation. This would include all or a portion of the compensation received by any member of the Takeda Executive Team, any Internal Director on the Takeda’s Board of Directors, and any other individual designated by the independent external members of Takeda’s Board of Directors within the fiscal year, and the three prior fiscal years, that the need for a significant restatement of financial results or significant misconduct was discovered.
The policy will take effect on April 1, 2020 and apply to short-term incentive compensation beginning with the Fiscal Year 2020 performance year and long-term incentive granted in Fiscal Year 2020 and continue to apply for all subsequent periods.