current page

Corporate Governance Policy

Basic Stance

Terumo's corporate mission is "Contributing to Society through Healthcare". Guided by its mission, Terumo provides valuable products and services to achieve sustainable growth, maximize long-term corporate value and meet the expectations of its worldwide stakeholders, including its customers, shareholders, associates, business partners and communities. To embody its corporate mission, Terumo articulated Five Statements, i.e. open management, enhanced value, safety and reliability, respect for our associates, and corporate citizenship. These statements govern the actions and decisions made by all Terumo associates.

Based on its corporate mission and Five Statements, Terumo has established the TERUMO Corporate Governance Guideline. It is intended to promote timely decision-making while maintaining transparency and objectivity in management. Terumo continuously strives to earn the understanding and trust of its internal and external stakeholders by recognizing its accountability to its stakeholders and promoting dialog and other means of communication with its shareholders.

Informed by Corporate Governance Code, Terumo has developed a global platform for its activities as a good corporate citizen. Terumo strives diligently to foster a corporate culture of "a highly motivating and challenging workplace with open and candid communication," because Terumo believes a culture of this nature is essential to effective corporate governance.

Corporate Governance Structure

Terumo adopted the organizational design of a "Company with an Audit/Supervisory Committee" in order to enhance the functions of audit and supervision over the Board of Directors and Directors, further strengthen its corporate governance framework, and to enhance its mid- and long-term corporate value.

In addition, Terumo has established the Corporate Governance Committee, Nomination Committee, Internal Control Committee, and Risk Management Committee as discretionary bodies that serve to enhance the transparency and objectivity of management.

Based on the TERUMO Corporate Governance Guideline established by the Board of Directors, the board may have up to 15 directors, excluding members of the Audit/Supervisory Committee. Directors who are members of the Audit/Supervisory Committee may number up to five, over half of whom must be external members, and 20% or more of the Board of Directors should be independent directors. Independent directors must meet the requirement in the Director Independence Standards established by Terumo. "Independent Directors Notifications of the appointment" have been submitted to the Tokyo Stock Exchange for all of independent directors, except one for whom a notification has not been submitted, in accordance with the rules of the firm he serves.

Corporate Governance Structure

  • - Audit/Supervisory Committee members are directors, and have voting rights in the BOD meeting.
  • - Audit/Supervisory Committee serves for the function of auditing and supervising the directors and the BOD.
  •  The majority of Audit/Supervisory Committee is constituted by independent directors.

Board of Directors

The Board of Directors presently consists of 15 members (including members of the Audit/Supervisory Committee), five of whom are independent directors. Two directors (one internal and one independent) are women, and one (internal) is from outside Japan (elected at the 101st Annual General Meeting of Shareholders convened on June 24, 2016). When the Company appoints independent directors, it should consider diversity of the members including different backgrounds, professional fields and gender based on the guideline for the appointment of independent directors.

Directors and Board of Directors 

(1) Roles

  • The Board shall strive for optimal decision-making of basic management policies with the goal of maximizing corporate value.
  • To expedite decision-making processes, the Board may delegate certain duties or responsibilities which are executed based on basic management policies decided at the Board to directors and/or executive officers. The Board shall monitor the execution of any such duties or responsibilities so delegated.
  • The Board shall oversee the nomination process of the President's successor as one of its important obligations for maintaining and improving corporate governance and sound management.

(2) Members

  • The Board shall consist of no more than 15 persons, excluding the Audit/Supervisory Committee members.
  • Terumo shall strive to have independent directors account for approximately twenty percent (20%) or more of the Board membership.
  • Considering that, from the standpoint of corporate governance, the execution of business operations and supervisory oversight should be separated, the Chairman shall serve as the chair in principle; provided, however, that if no Chairman has been appointed, the Nomination Committee shall propose a candidate for chair, considering the actual situation of possible candidates based on the above standpoint and the Board of Directors shall appoint such candidate as the chair for the Board of Directors meeting.

Audit/Supervisory Committee

The Audit/Supervisory Committee is comprised of three members, two of whom are independent directors. To enhance the audit and supervisory function, the Audit/Supervisory Committee Office has been established, and is staffed with full-time personnel, as a support organization for the Audit/Supervisory Committee.

Audit/Supervisory Committee Members and the Audit/Supervisory Committee

(1) Roles

The Audit/Supervisory Committee shall audit and supervise the execution of duties by directors and executive officers to ensure the appropriate, reasonable, and efficient operation of the Terumo Group. To fulfill its audit and supervisory duties, the Audit/Supervisory Committee may provide direct instructions to the Internal Control, Internal Audit and Legal and Compliance Departments. Such activities of the Committee shall include any of the following:

  • Attend, provide objective and fair opinions and exercise voting rights at the Board of Directors meetings.
  • Attend and provide objective and fair opinions at other important Terumo Group meetings.
  • Prepare audit reports.
  • Establish and revise audit policies, methods for investigating and reviewing the Company's operations and assets, and other matters related to exercising the authority of the Audit/Supervisory Committee.

(2) Members

  • The Audit/Supervisory Committee shall consist of no more than five (5) directors.
  • Terumo shall have independent directors represent a majority of Committee membership.
  • The member of the Audit/Supervisory Committee shall elect one of the Committee members to serve as the chair of the Committee.

Corporate Governance Committee, Nomination Committee, Internal Control Committee, and Risk Management Committee

Terumo has also established the Corporate Governance Committee, Nomination Committee, Internal Control Committee, and Risk Management Committee as discretionary bodies that serve to enhance the transparency and objectivity of management.

Corporate Governance Committee 

(1) Roles

The Corporate Governance Committee shall, as an advisory body to the Board of Directors, discuss the matters listed below and provide advice to the Board with the goals of maintaining and improving the Terumo Group's business integrity and corporate governance practices.

  1. Basic matters concerning Corporate Governance.
  2. Important matters concerning the establishment, design and operation of the Corporate Governance system.
  3. Matters concerning the selection and dismissal of directors and executive officers.
  4. Matters concerning the compensation structure for directors and executive officers.
  5. Other matters which the Board of Directors requests the Committee to consider, or matters the Committee deems necessary to carry out the purposes of the Committee.
The deliberations of the Committee shall be reported to the Board of Directors as appropriate. In this regard, however, those matters related to the Audit/Supervisory Committee in (c) and (d) above shall not violate the provisions of Articles 344 and 361 of the Companies Act. With regard to matters concerning successors to the President and Chairman, the Nomination Committee shall conduct deliberations.

(2) Members

  • The Committee shall consist of a maximum of six (6) directors selected by the Board of Directors from among the directors.
  • Terumo shall have independent directors account for at least half of the Members of the Committee.
  • At least one of the Representative Directors shall be a member of the Committee.
  • The member of the Corporate Governance Committee shall elect one of the independent directors serving on the Committee to serve as the chair of the Committee. However, if the chair is unable to act, one of other independent directors elected by a majority vote of the Committee members shall act in the chair's place.

Nomination Committee 

(1) Roles

The Nomination Committee shall deliberate on the matters concerning successors to the President and Chairman of Terumo Corporation. This is one of the most important corporate governance duties for the Board.

(2) Members

  • The Committee shall be comprised of members of the Board selected by the Board.
  • Independent directors (at least three (3) but not more than five (5) independent directors) shall account for a majority of the members of the Committee.
  • The chair shall be elected from among the independent directors by a two-thirds majority vote of the Committee members.

Internal Control Committee 

(1) Roles

The Internal Control Committee shall design and operate the Terumo Group's internal control system in accordance with the Company's "Internal Control System Design Basic Policy".

(2) Members

  • The Committee shall be comprised of Terumo Corporation's Representative Directors, Directors ranked Managing Executive Officer or above, Expert Panels Chairpersons, Internal Control Department Managers, and external legal counsels.
  • Audit/Supervisory Committee members may attend and speak at the meetings of the Committee.
  • The chair shall be the President and Representative Director.

Risk Management Committee 

(1) Roles

The Risk Management Committee shall design and operate the Terumo Group's risk management system based on risk identification, assessment, analysis and prioritization across the entire organization.

(2) Members

  • The Committee shall be comprised of executive officers ranked Managing Executive Officer or above, Internal Control Department Managers, General Managers of Departments responsible for main corporate functions, and designated person from the chair.
  • Audit/Supervisory Committee members may attend and speak at the meetings of the Committee.
  • The chair shall be the President and Representative Director.

Internal Controls

In accordance with Japan's Companies Act, Terumo Corporation's Board of Directors has approved the “Internal Control System Design Basic Policy”, and the Company promotes the establishment of an internal control system within the Terumo Group.

Executive Compensation

Compensation for directors (excluding non-executive directors) consists of a fixed portion, bonus, and stock options. Compensation for independent directors and internal directors who are not executive officers (non-executive directors) consists of only a fixed amount. The process for determining compensation is described in the table below.

Compensation for directors, and related matters, are disclosed within operations reports posted on Terumo Corporation's website.

Process for Determining Compensation for Directors

Category Determination Process
Fixed
Compensation
Within the compensation limit approved at the 100th Annual General Meeting of Shareholders, compensation for directors, excluding members of the Audit/Supervisory Committee, is decided by resolution of the Board of Directors, and compensation for Audit/Supervisory Committee members is decided in an Audit/Supervisory Committee meeting.
Bonus In light of factors such as each year's business results and business environment, bonus amounts are approved by resolution of the Board of Directors, within the director compensation limit mentioned above.
Stock Options Decisions on stock options are made by Board of Directors resolutions, within the compensation limit mentioned above.

Standards for payments of fixed compensation, (excluding Audit/Supervisory Committee members), bonus, and stock options are considered by the Corporate Governance Committee in light of information including that which is provided by an outside research organization on comparable standards used at other companies and resolved by the Board of Directors.

Timely Disclosure of Information

Terumo aims to be a company that is trusted throughout society. Emphasizing transparency, fairness, and continuity, we make information disclosures to shareholders, other investors, customers and other stakeholders as required by the Financial Instruments and Exchange Act and the Tokyo Stock Exchange's timely disclosure rules. We also engage in timely and proactive disclosures of information that we believe to be effective in enhancing understanding of our company.

System for Timely Disclosures

In line with our Corporate Governance Policy, we have established the Disclosure Subcommittee to determine how proposed disclosures should be handled. Positioned under the Internal Control Committee, the Disclosure Committee makes its decisions based on considerations of necessity, disclosure timing, and matters of legality and propriety concerning the documentation proposed for disclosure.

Disclosure Subcommittee

(1) Subcommittee Structure
The Disclosure Subcommittee is composed of the heads of the Corporate Communication Department, Strategic Planning Department, Secretarial Office, and Internal Control Department. The head of the Corporate Communication Department chairs the subcommittee and convenes meetings, as necessary. If the chair determines it is necessary to do so, people who are not subcommittee members may also be asked to attend.
The Corporate Communication Department acts as the administrative section of the subcommittee, performing disclosure procedures, and taking and archiving meeting minutes.

(2) Subcommittee Role and Disclosure Procedures
When the heads of units and those responsible for the management of subsidiaries (together referred to as “responsible managers” below) have information that has resulted from business activities and could become subject to disclosure as an agenda item for the Board of Directors, Executive Management meeting, or Internal Control Committee (together referred to as “committee scheduled to meet” below) , that information is submitted to the Disclosure Subcommittee.
The Disclosure Subcommittee then considers the necessity, disclosure timing, and matters of legality and propriety concerning the information proposed for disclosure, and then instructs the responsible managers and the subcommittee's administrative section on the necessary action.
The committee scheduled to meet then deliberates the agenda and renders a final decision on disclosure.

Corporate Governance Report

Corporate Governance Report has been submitted to the Tokyo Stock Exchange.


Return to page top