Sumitomo Dainippon Pharma : Dec. 08, 2021 ESG Meeting (Discussion with Investors) transcript(PDF/4,740KB)

Summary of ESG Meeting for FY2021

[Date]	December 8, 2021	14:00 - 15:44 (104 minutes)
[Venue]	Tokyo Head Office, Live stream and conference call
[Number of Speakers]	10
	Masayo Tada	Member, Board of Directors, Chairman
	Hiroshi Nomura	Representative Director, President and CEO
	Toru Kimura	Member, Board of Directors, Representative
		Director, Executive Vice President, Senior
		Executive Officer and CSO
	Yutaka Atomi	Member, Board of Directors (Outside),
		Professor, Emeritus President of Kyorin
		University
	Saeko Arai	Member, Board of Directors (Outside)
	Nobuhiro Endo	Member, Board of Directors (Outside),
		Chairman of NEC Corporation
	Minoru Usui	Member, Board of Directors (Outside),
		Chairman of Seiko Epson Corporation
	Atsuko Higuchi	Executive Officer in Charge of Corporate
		Governance, Corporate Communications,
		Human Resources
	Mariko Mishiro	CEO of RIDEAL
	Miwako Harada	Senior Director, Corporate Communications

Presentation

Harada: We will now begin the FY2021 ESG meeting by Sumitomo Dainippon Pharma.

Thank you very much for taking time out of your busy schedule to join us today. This is our company's fourth ESG presentation. In addition to holding this event at the Tokyo Head Office, we will also hold the event via live streaming and conference call.

I'd like to mention a few things before we get started. Today's presentation will follow the presentation materials posted on our website.

The presentation will be followed by a panel discussion and then time for your questions. As was the case last year, the panel discussion will be coordinated by Mariko Mishiro, CEO of RIDEAL.

In the panel discussion, in addition to the discussion by our panelists, we would like to have a dialogue format to receive comments from the audience. We look forward to your active participation from the floor or from your phone line if you are participating remotely.

For any other topics beside those in the discussion, please feel free to ask any questions you may have during the Q&A session.

I would now like to introduce the speakers for today's session. Mr. Tada, Chairman; Mr. Nomura, Representative Director, President and CEO; Professor Atomi, Outside Director and Emeritus President of Kyorin University; Ms. Arai, Outside Director and Representative Director of Accuray; Mr. Endo, Outside Director and Chairman of NEC Corporation; Mr. Usui, Outside Director and Chairman of Seiko Epson Corporation; Mr. Kimura, Senior Executive Officer and Chief Scientific Officer; Ms. Higuchi, Executive Officer in Charge of Corporate Governance, Corporate Communications and Human Resources; Ms. Mishiro of RIDEAL; and myself, Harada of Corporate Communications, the moderator for today. Thank you.

First, Mr. Nomura will discuss the application for selection for the Prime Market and actions relating to the Revised Corporate Governance Code. Thank you very much, Mr. Nomura.

Nomura: I'm Nomura, the Company President. Thank you very much for taking time out of your very busy schedule to attend our ESG meeting and opinion exchange meeting today.

Thank you very much for your continued interest in our company's management. I would also like to take this opportunity to thank you for your valuable comments and suggestions.

As today's meeting is also primarily an exchange of opinions, I would like to receive your frank opinions. I look forward to working with you.

Thank you.

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This is the application for selection for the Prime Market.

I am pleased to report that at the Board of Directors' meeting held at the end of last month, a resolution was passed to apply for selection by the Prime Market.

In the future, in terms of the high level of governance required of a listed company in the prime market, we will continue to work on compliance with the revised Corporate Governance Code and other measures. We will also promote constructive dialogue with investors in order to achieve sustained growth and increase corporate value over the med‐ to long‐term.

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I would also like to talk about actions relating to the revised Corporate Governance Code.

We have been working on this area since FY2015 to improve the effectiveness of the Board of Directors.

There were 3 issues that we faced in this project last year.

There was interest in more discussion on improving our corporate value in the med‐ to long‐term. This was the theme of last year's meeting. Last year, the Board of Directors took time to delve into various med‐ to long‐term issues that we are facing. We have discussed this issue 4 times. Many of the fruits of those discussions have made it into our revision of the mid‐term business plan.

In the survey, another topic that came up was the future makeup of the Board of Directors. We are working on this independently from the revised code, which also talks about skills sets.

We had discussions on this topic at 2 meetings in the previous fiscal year. We discussed the expertise and perspectives required of Board Members. In terms of ensuring the diversity of the Board of Directors, there is a need for female directors and foreign directors. There were also discussions about how to develop internal candidates for the Board of Directors.

In addition, to further improve the quality of deliberations at Board of Directors meetings, since our Board of Directors meetings cover a variety of major themes related to the Company's business, it is necessary to have a process of reading and reviewing the materials in advance. We have taken measures to establish a system that enables outside directors and corporate auditors to do this.

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One of the key issues for FY2021 is to further enhance discussions on risk management. The term "risk management" is quite broad, and we need to delve a little deeper into the individual risks inherent in compliance, information management, and the pharmaceutical business itself.

We would like to devote as much time as possible to these important agenda items, so we have slightly changed the criteria for importance and narrowed down the agenda to those items that can be discussed at the Board of Directors meetings. We are working on optimizing the number of topics and the time for deliberation as much as possible.

This is for the training of directors and auditors, but since there are many people who are not necessarily experts in the pharmaceutical industry, we would like to have them learn about the drug pricing systems and insurance systems in various countries, especially in Japan, the US and China, where we do business.

We will also ask outside consultants to explain to us how we can strengthen country risk profiles in the regions where we operate. In addition, I would like to provide training to the Board of Directors on the current status of our DX activities. We are currently working on these projects.

This is being undertaken in relation to the revised Corporate Governance Code.

As for the necessary skills of the Board of Directors, our basic policy in the Corporate Governance Code is to promote policies and procedures for the election of the Board of Directors. It is very simple at present, and we have just revised the Code to make it more detailed.

There are 7 items covering knowledge, experience, and abilities that directors and the Board of Corporate Auditors should have as a whole.

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