The Takeda Board of Directors focuses on discussing and resolving strategic or particularly important matters such as the establishment of and amendments to the company’s corporate philosophy, as well as important management policies and plans such as mid- to long-term strategies and corporate plans. The Board of Directors Bylaws specify the matters for resolution by the Board of Directors. In addition to deliberation and resolution of the matters, the Board of Directors is responsible for the supervision of business executed by directors.
The Board of Directors has 16 directors, including 11 who are independent, external directors. The Board of Directors is chaired by an Independent External Director. The Board of Director meetings are chaired by an Independent External Director in order to be able to make the best decisions. The Board of Directors consists of directors from inside and outside the company, irrespective of nationality or gender, who can contribute to the balance of knowledge, experience and capability needed for governance of the company’s global operations. TET members are diverse in nationality and gender (12 men and six women) and consider the perspective of many other stakeholders in their discussions and decision-making.
The Audit and Supervisory Committee ensures its independency and effectiveness, in line with “Rules of Audit and Supervisory Committee’s Audit, etc.” This Committee conducts audits of directors’ performance of duties and performs any other duties stipulated in applicable laws and regulations and in Takeda’s Articles of Incorporation.
The Nomination Committee and the Compensation Committee serve as advisory bodies to the Board of Directors. These committees serve to ensure transparency and objectivity in decision-making processes and results relating to personnel matters for directors. The majority of each committee’s members must be external members (in FY2020, both the Nomination Committee and Compensation Committee are composed entirely of external members). Additionally, at least one director who is an Audit and Supervisory Committee member must be assigned to each committee. Directors are appointed and reappointed based on proper qualifications and procedures, and succession plans are in place. The Compensation Committee reviews the goals and results of performance-linked compensation, the company’s incentive-based KPIs and targets, the amount of compensation for directors and the public disclosure of compensation, etc., and the committee further provides guidance to the Board of Directors. The Nomination Committee reviews directors’ candidates and the succession plan of directors’ candidates, and the committee further provides guidance to the Board of Directors.
The Group Internal Audit, Quality Audit, and the Corporate EHS (environment, health and safety) groups in the Global Manufacturing & Supply division conduct regular internal audits of their areas of focus for the Takeda organization using their respective guiding documents, the Group Internal Audit Charter and Global Policy on EHS.
We strive to provide competitive total compensation to the TET and our colleagues around the world. We aim to reward purposeful performance and deliver on our commitments to patients, colleagues and shareholders. We structured our KPIs for both the short- and long-term incentive plans for FY2019, aligning rewards for the CEO, the TET and our colleagues to the most critical business priorities for the company. Our total rewards philosophy pushes us to achieve:
We aim to achieve these objectives through a combination of three primary components of our executive compensation structure: A base salary, short-term incentive (STI) and long-term equity incentives (LTI). The mix of compensation for our TET makes sure we link executive compensation with individual, executive group and company performance. A substantial portion of the target pay for executives is performance-based. The annual STI and LTI payouts are contingent upon company performance, with the STI factoring in performance over a one-year period and LTI performance share unit (PSU) compensation factoring in performance over a three-year period.
Takeda is committed to regular, ongoing engagement with shareholders to make sure that we continue to understand shareholder feedback about our compensation program and incorporate that feedback into the compensation decision-making process. In FY2019 Takeda had more than 750 meetings and conference calls with shareholders, investors and analysts, with their feedback helping inform the Compensation Committee’s continuous assessment of the program design and ongoing discussions with shareholders.
To be best-in-class, we must attract diverse and highly skilled business leaders to serve on our Board of Directors. Compensation for our directors must be competitive on a global basis. The Compensation Committee, comprised of external directors, advises the Board of Directors on pay practices for the Board of Directors, including internal directors and defines the President and CEO compensation. Compensation for external directors and those who serve on the Audit and Supervisory Committee consists of base compensation, which is paid in a fixed amount, and stock compensation. Equity pay is designed to strengthen the links between compensation, company performance and share price, and to reinforce the commitment to increasing corporate value in the mid- and long-term.
Just as we do with our business activities, we aim to create as many positive impacts as possible in our sustainability efforts. This requires a disciplined approach in choosing which initiatives to take on and making sure they are carried out effectively. There are four steps in our sustainability governance process:
Important sustainability-related matters receive consideration from Takeda’s top leadership. Typically, these matters are elevated to Takeda’s Business Review Committee (BRC), the Takeda Executive Team (TET) or the Board of Directors.
Sustainability is an important factor in our business decisions. For example, we identify any impacts, or potential impacts, that our business activities might have on society and the environment. Relevant divisions lead efforts to take appropriate measures to manage these impacts and to sustain corporate value.
Material issues are shared with the Takeda Sustainability Network, consisting of a cross-functional team of leaders throughout the company who work to make progress toward our goals.
A dedicated team within Takeda’s Corporate Affairs function helps communicate sustainability-related information, referencing the United Nations Global Compact (UNGC) Advanced Level criteria, Global Reporting Initiative (GRI) Standards, the International Integrated Reporting Council (IIRC), Sustainable Accounting Standards Board (SASB) guidelines and others.