Corporate Governance
The Takara Group works to fulfill its social responsibility as a good corporate citizen and to gain the confidence of all of its stakeholders based on the concept of “contributing to the creation of a vital society and a healthy lifestyle through our fermentation technology and biotechnology in a way that achieves harmony with nature.”
In turn, the Group believes that it can persistently increase corporate value. Recognizing these aims, the Group is renewing its initiatives to bolster corporate governance practices as one of its leading priorities.
In turn, the Group believes that it can persistently increase corporate value. Recognizing these aims, the Group is renewing its initiatives to bolster corporate governance practices as one of its leading priorities.
Underlying Corporate Governance Basic Concept
The Group is focusing on increasing corporate value through four principal means:
| 1. | Accelerating growth by delegating authority and providing autonomy to each Group company, thereby enabling them to increase their own corporate value; |
| 2. | Maintaining a business climate for the disclosure of reports on individual Group companies and the free exchange of ideas about management policies and business strategies through regularly scheduled meetings and other activities, thereby further increasing corporate value of the Group as a whole; |
| 3. | Complying with rules and ordinances, maintaining ethical principles and promoting a sound corporate governance system for the Group in order to fulfill its overall corporate social responsibilities; and |
| 4. | Disclosing accurate information consistently and in an open and timely manner as well as maintaining an internal network for disclosure to increase business transparency. |
The Audit Environment
As of June 26, 2009, the Company's Board of Directors was composed of nine directors (including one external director), and the number of corporate auditors totaled five, including three external corporate auditors. The corporate auditors analyze the Board's executive actions through participation in important meetings attended by the directors and other personnel as well as through analysis of operations, financial assets and key documents.
Moreover, corporate auditors regularly exchange opinions concerning auditing plans, auditing policies and auditing practices and conditions with auditing personnel; receive explanations of the auditing system from auditing personnel; and monitor auditing and financial conditions through on-site inventory and other methods of observation in conjunction with auditing personnel.
The Audit Division, which is responsible for conducting internal audits, works to maintain the appropriateness of executives' duties by deciding on policies necessary for enacting internal audits. In addition, the Audit Division exchanges opinions with corporate auditors on auditing plans, important items for auditing and other matters. Internal audit reports on findings may be submitted to the president and corporate auditors at any time.
Moreover, corporate auditors regularly exchange opinions concerning auditing plans, auditing policies and auditing practices and conditions with auditing personnel; receive explanations of the auditing system from auditing personnel; and monitor auditing and financial conditions through on-site inventory and other methods of observation in conjunction with auditing personnel.
The Audit Division, which is responsible for conducting internal audits, works to maintain the appropriateness of executives' duties by deciding on policies necessary for enacting internal audits. In addition, the Audit Division exchanges opinions with corporate auditors on auditing plans, important items for auditing and other matters. Internal audit reports on findings may be submitted to the president and corporate auditors at any time.
Activities with Important Repercussions for Corporate Governance
Policies concerning our publicly traded subsidiary Takara Bio Inc.
Takara Holdings Inc. is a parent company of Takara Bio Inc., holding 70.9% of the voting rights of Takara Bio (Tokyo Stock Exchange Mothers; Securities code number: 4974) as of March 31, 2009. The relationship between the Company and Takara Bio is outlined below.
1) Listed subsidiary Takara Bio
On April 1, 2002, Takara Bio was spun off from the parent company as a wholly owned subsidiary. Subsequently, the parent company's share of voting rights was reduced to its current level through third-party capital increases, public subscriptions, the issue of bonds with warrants and other corporate actions.
Takara Holdings is a pure holding company comprising 34 subsidiaries and six affiliates. Takara Bio is positioned as the subsidiary specializing in biotechnology and promoting biotechnology-related businesses for the Group.
2) Holding company management of Group companies
The holding company establishes and maintains official rules and regulations for overseeing Group companies from its vantage point as the manager of consolidated activities, however, its goal is to facilitate independence and autonomy among Group companies in order to maximize the corporate value of the overall Group.
Takara Bio abides by these rules and regulations and receives reports on decisions and other actions of the Board of Directors, but is not required to seek the approval of the Board before enacting policies and operates independently of the holding company.
In addition, the holding company holds meetings for formulating Group strategies and biotechnology-related policies and other purposes, and representative directors, officers and executives of Takara Bio attend these meetings.
These meetings are held to debate policies for the Group as a whole and disseminate information between Group companies, and to ensure that the autonomy and independence of Takara Bio are not impinged upon.
Policies concerning the large-scale acquisition of Company shares and other assets (for preventing takeovers)
At the Board of Directors' meeting held on May 15, 2006, the holding company enacted policies concerning the large-scale acquisition of Company shares and other assets (for the prevention of takeovers) with the aim of maintaining and increasing corporate value and promoting the common interests of shareholders.
However, believing that policies better reflecting the opinion of shareholders are needed for optimizing common shareholder interests, the Board of Directors revised its policies for preventing takeovers.
The Board determined at its meeting held on May 15, 2007 that in the future it would introduce measures for preventing takeovers at its general shareholders' meeting after conferring with shareholders, and that decisions regarding actions in this regard would be made at general shareholders' meetings as a rule.
For details, see our web site: http://www.takara.co.jp/ (Japanese language only); official company accounts; and the Management's Discussion and Analysis section of the annual report.
At the 96th General Shareholders' Meeting held on June 28, 2007, measures for preventing takeovers were introduced and approved.
Takara Holdings Inc. is a parent company of Takara Bio Inc., holding 70.9% of the voting rights of Takara Bio (Tokyo Stock Exchange Mothers; Securities code number: 4974) as of March 31, 2009. The relationship between the Company and Takara Bio is outlined below.
1) Listed subsidiary Takara Bio
On April 1, 2002, Takara Bio was spun off from the parent company as a wholly owned subsidiary. Subsequently, the parent company's share of voting rights was reduced to its current level through third-party capital increases, public subscriptions, the issue of bonds with warrants and other corporate actions.
Takara Holdings is a pure holding company comprising 34 subsidiaries and six affiliates. Takara Bio is positioned as the subsidiary specializing in biotechnology and promoting biotechnology-related businesses for the Group.
2) Holding company management of Group companies
The holding company establishes and maintains official rules and regulations for overseeing Group companies from its vantage point as the manager of consolidated activities, however, its goal is to facilitate independence and autonomy among Group companies in order to maximize the corporate value of the overall Group.
Takara Bio abides by these rules and regulations and receives reports on decisions and other actions of the Board of Directors, but is not required to seek the approval of the Board before enacting policies and operates independently of the holding company.
In addition, the holding company holds meetings for formulating Group strategies and biotechnology-related policies and other purposes, and representative directors, officers and executives of Takara Bio attend these meetings.
These meetings are held to debate policies for the Group as a whole and disseminate information between Group companies, and to ensure that the autonomy and independence of Takara Bio are not impinged upon.
Policies concerning the large-scale acquisition of Company shares and other assets (for preventing takeovers)
At the Board of Directors' meeting held on May 15, 2006, the holding company enacted policies concerning the large-scale acquisition of Company shares and other assets (for the prevention of takeovers) with the aim of maintaining and increasing corporate value and promoting the common interests of shareholders.
However, believing that policies better reflecting the opinion of shareholders are needed for optimizing common shareholder interests, the Board of Directors revised its policies for preventing takeovers.
The Board determined at its meeting held on May 15, 2007 that in the future it would introduce measures for preventing takeovers at its general shareholders' meeting after conferring with shareholders, and that decisions regarding actions in this regard would be made at general shareholders' meetings as a rule.
For details, see our web site: http://www.takara.co.jp/ (Japanese language only); official company accounts; and the Management's Discussion and Analysis section of the annual report.
At the 96th General Shareholders' Meeting held on June 28, 2007, measures for preventing takeovers were introduced and approved.
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| *1 | Consultation and coordination committee for the “mother” business segment (alcoholic beverages and seasonings) |
| *2 | Coordination committee for the biomedical business |
| *3 | Strategic committee for the health foods business |