Basic Approach

To expedite business operations and clarify executive responsibilities, Chugai has adopted an executive officer system to keep decision-making on management issues of primary importance separate from business execution. The Board of Directors is in charge of the former, while executive officers are entrusted by the board with the authority to conduct the latter. While the Board of Directors is in charge of decision-making with respect to the most important managerial matters, other decisions on business operations are made at organizations such as the Executive Committee. The Chief Executive Officer (CEO) has ultimate responsibility for making decisions on Company-wide management strategies and important matters concerning business execution

Board of Directors

The Board of Directors makes decisions on management issues of primary importance and receives quarterly reports on the state of business execution as well as reports on key decisions made at the Executive Committee. It is also responsible for oversight of the execution of business operations. The Board consists of nine directors including three independent outside directors. In 2024, the Board of Directors convened 12 times.

Expertise and Experience of Directors and Audit & Supervisory Board Members (As of April 1, 2025)

Executive Committee

The Executive Committee makes decisions on Company-wide management strategy and important matters concerning business execution. It consists of executive directors, including the CEO, and key executive officers. In addition, the Corporate Communications Committee, Risk Management Committee, Compliance Committee and Sustainability Committee have been established under the Executive Committee.

Appointment Committee, Compensation Committee, and Special Committee

As an advisory body to the Board of Directors, the Appointment Committee deliberates on the selection of Director candidates, succession plan for Executive Directors, including CEO, and dismissal of Directors. The Appointment Committee consists of one internal committee member and three or more outside committee members, including at least one Independent Outside Director. The Board of Directors appoints the internal committee member from Representative Directors and / or persons with past experience as such Representative Directors, and outside committee members from Non-Executive Directors including Independent Outside Directors, and /or persons with past experience as such Non-Executive Directors.

As an advisory body to the Board of Directors, the Compensation Committee deliberates on remuneration policy and the remuneration of individual directors. It consists of three or more outside committee members, including at least one Independent Outside Director, and the outside committee members are appointed by the Board of Directors from Non-Executive Directors including Independent Outside Directors, and / or persons with past experience as such Non-Executive Directors.

The Special Committee deliberates and reviews significant transactions and conduct, etc. that may generate a conflict of interests between Roche and minority shareholders, from the perspectives of necessity and rationality of the transaction, as well as the appropriateness and fairness of the transaction conditions and other aspects, and provides an answer and report to the Board of Directors. Depending on the importance of a transaction, the Special Committee deliberates matters to be placed on the board agenda for a resolution before the Board of Directors meeting, and receives regular reports on matters decided by the Executive Committee. To ensure the independence and objectivity of the Special Committee, it has a composition of at least three members, comprising independent outside directors or independent outside Audit & Supervisory Board members, with the members being selected by the Board of Directors.

Chugai’s Corporate Governance System (As of April 1, 2025)

In accordance with our strategic alliance, Chugai’s parent company Roche and Chugai have agreed to cooperate to maintain Chugai’s common stock listing on the Prime Market of the Tokyo Stock Exchange (TSE). Chugai conducts autonomous management as an independently listed company. Autonomy and diversity are key to generating innovation, and we believe that maintaining this kind of independent management brings diversity to the Roche Group, and that the pharmaceuticals we create as a result contribute to all stakeholders, including patients and minority shareholders. Chugai recognizes that the various benefits from being listed - such as its solid credit rating, flexible fund procurement, name recognition, and social presence - are supported by the understanding of shareholders other than Roche, i.e., minority shareholders and investors who are potential shareholders. That is why in its business dealings with Roche, Chugai conducts all transactions fairly using third-party prices. Furthermore, the Special Committee was established in March 2022 to deliberate and review significant transactions and conduct, etc. that may generate a conflict of interest between Roche and minority shareholders. Chugai is working to gain the latter’s trust by ensuring due consideration of their interests. In the six meetings of the Special Committee held in 2024, the committee did not recognize any transactions for harming the interests of minority shareholders.