Basic Policy for Corporate Governance
The aim of the Basic Policy for Corporate Governance of MEDICAL & BIOLOGICAL LABORATORIES CO., LTD. (the “Company”) is to establish a management system that functions efficiently and transparently in today’s rapidly changing business environment.
- Company Organization and Current Status
- The Board of Directors shall, in principle, hold a Board of Directors Meeting once a month and hold additional meetings as necessary for decision-making concerning the execution of important Company business, to oversee the execution of duties by the CEO and other Directors, and to ensure that Company operations are carried out properly.
- The Company has adopted a Board of Corporate Auditors System. The Board of Corporate Auditors plays a central role in monitoring management and provides auditing by collaborating with accounting auditors and the Internal Audit Department to establish and carry out effective auditing. Corporate Auditors may monitor Directors’ execution of duties sufficiently by attending Board of Directors Meetings and other important meetings.
- The Board of Directors consists of six Directors, of whom one is an Outside Director, and three Board of Corporate Auditors, of whom two are Outside Corporate Auditors. The Outside Director, who is familiar with bio-venture business practices, monitors the Company’s business execution from an independent third-party perspective. To strengthen the management monitoring function, the Outside Corporate Auditors, who are certified public accountants or qualified lawyers with a professional viewpoint, monitor the Company in cooperation with the Corporate Auditor who has expertise concerning the Company’s business.
Basic Policy for Internal Control Systems and its Current Status
The Company shall establish internal control systems to ensure appropriate operations of the Company (the “Internal Control Systems”) in accordance with the Companies Act of Japan and the Company Law Enforcement Regulations, as follows:
(1)Systems to ensure compliance with laws, regulations, and the Articles of Incorporation in the execution of duties by Directors, Company employees, and Company subsidiaries
- The Company shall establish internal rules related to compliance, including “Corporate Ethical Standards”, “Corporate Code of Conduct”, and “Compliance Regulations”, to secure compliance with laws, regulations and Articles of Incorporation, and to foster a sense of ethics concerning the execution of duties by Directors and Company employees. The Company shall disseminate the above rules to all Executive Officers and Company employees.
- The Company shall establish an Internal Control Committee to promote the verification of, and compliance with, laws and regulations particularly relevant to Company business.
- The Company shall establish a whistleblowing system and a compliance hotline for people working at the Company and its subsidiaries, to facilitate the appropriate handling of whistleblowers’ reports on actions that could be viewed as breaching laws or manifesting an equivalent wrongdoing.
- The Internal Audit Department shall periodically conduct an audit of the Company concerning the execution of duties, to verify the status of compliance with laws, regulations, Articles of Incorporation and internal rules, and shall report the results to the President and Corporate Auditors.
(2)Systems governing the storage and management of information concerning the execution of duties by Directors
The Company shall establish document management rules for the recording and storage of important information related to the execution of duties by Directors, in the form of paper documents or by electronic means, to enable inspection by Directors and Corporate Auditors at any time.
(3)Rules and other systems governing the management of various risks of Company and subsidiary losses
- Various risks related to Company operations shall be handled by the responsible department of the Company and its subsidiaries. As necessary, the responsible Director shall appropriately take countermeasures and manage various risks, including the review of risk management rules, establishment of related regulations and guidelines, provision of risk-management training, and preparation of related manuals. For management of risks that may affect the Company’s business activities negatively and severely, the responsible Director shall manage such risks by implementing countermeasures as discussed during, and approved in, an Executive Officers Meeting or Board of Directors Meeting.
- Companywide risks such as disaster risks shall be handled by the General Affairs Department, both internally and externally.
- The Company shall establish an Internal Control Committee to verify the status of various risks and improve risk management.
(4)Systems to ensure the effective execution of duties by Directors
- The Company shall hold Board of Directors Meetings monthly. Additionally, the Company shall hold Executive Officers Meetings monthly to enable sufficient discussion concerning important management issues and facilitate quick managerial decision-making. The Executive Officers Meetings shall consist of Directors, full-time Corporate Auditors, and other employees who play a significant role in Company operations.
- The Company shall establish systems to ensure that duties are executed effectively and appropriately in accordance with internal rules on authority and decision-making.
- Each fiscal year, the Company shall formulate a mid-term business plan and the Board of Directors shall be authorized to provide approval for such plans. During the year, progress concerning operating results shall be reviewed on monthly and quarterly bases. The responsible Director shall provide forward-looking reports and suggest measures for improving business performance to the Board of Directors based on the analysis results.
(5)Systems to ensure the appropriateness of operations by the Corporate Group consisting of the Company and its subsidiaries
- Board of Directors shall appoint a responsible Director to ensure that operations by the Company’s subsidiaries are carried out appropriately. The Director shall ensure the effective operation of the Internal Control System by supporting and providing advice concerning systems for financial reporting, compliance, and risk management to persons in charge at subsidiaries.
- The responsible Director shall analyze the financial results of each subsidiary quarterly and report them to the Board of Directors of the Company.
- The Internal Audit Department shall implement an internal audit of both the Company and its subsidiaries, and report the details to the Corporate Auditors and the responsible Directors.
(6)Matters concerning employees who assist Corporate Auditors upon request, their independence from Directors, and ensuring effective communication from Corporate Auditors to such employees
- Corporate Auditors may provide necessary instructions for auditing to Internal Audit Department employees. Upon consultation with Corporate Auditors, the Internal Audit Department shall implement an internal audit concerning matters requested by Corporate Auditors and report the results to the Board of Corporate Auditors.
- Transfers, evaluations, and disciplinary measures applied to Internal Audit Department employees shall be carried out with the consent of the Board of Corporate Auditors.
(7)Systems for reporting to Corporate Auditors; Applicable to Directors and Company employees, Applicable to Directors, Corporate Auditors, and employees of its subsidiaries, and other matters on reporting to Corporate Auditors
- Directors and employees shall promptly report to the Board of Corporate Auditors if there are matters that caused or may cause serious damage to the Company or its subsidiaries, if illegal or dishonest actions perpetrated by Directors or employees are detected, or if there are other conditions requiring reports to the Board of Corporate Auditors. Notwithstanding the foregoing, the Board of Corporate Auditors may ask Directors and employees to report as necessary at any time.
- The Company shall establish a system to ensure that no disadvantage to Executive Officers or employees of the Company or its subsidiaries occurs due to whistleblowing to Corporate Auditors.
(8)Other Systems to ensure the effective implementation of audits by Corporate Auditors
- The Board of Corporate Auditors shall periodically meet with the Company’s accounting auditors and President to exchange views.
- If necessary, the Board of Corporate Auditors may consult with lawyers or certified public accountants to ask for advice from experts concerning auditing. For expenses or debts incurred from a Corporate Auditor’s execution of duties, the Company shall respect the views of the Corporate Auditor and bear such expenses or debts promptly and appropriately.
Basic Policy for Elimination of Antisocial Forces and its Current Status
The Company shall take a resolute attitude at the company level toward any antisocial forces, based on the following systems. In addition, the Company maintains normal contacts and associations with external specialized organizations, to acquire appropriate advice and cooperation to cope with antisocial forces.
(1)Establishment of Internal Rules, etc.
The Company shall clearly state, “We maintain a resolute attitude toward any antisocial forces that threaten the safety of the social order or sound corporate activities and shall never offer illegal inducements to such forces, irrespective of the pretext.” in its Corporate Code of Conduct. The Company strives to eliminate any antisocial forces involvement in its business, and categorically rejects any request from antisocial forces. In addition, the Company is developing internal rules to safeguard a rigorous implementation of this policy.
(2)Establishment of Internal Systems
- The General Affairs Department is in charge of efforts to eliminate antisocial forces and the Manager of the General Affairs Department is the person in charge of handling issues concerning the prevention of unjust claims.
- Through collaboration with external specialized organizations, the Company collects and manages information concerning antisocial forces. The gathered information is managed by the General Affairs Department and distributed to the related departments.
- The Company has developed manuals on how to respond appropriately to contacts from antisocial forces.
- As part of training, the Company provides briefings on compliance and internal rules targeting all Company employees. During such training, participants also obtain tips on how to respond appropriately to antisocial forces.