Otsuka Holdings formulates and implements business strategies for the entire Group as its holding company, and endeavors to strengthen corporate governance.
The Otsuka Group consists of companies engaged in several businesses, including pharmaceuticals, nutraceuticals, consumer products, and other businesses around the world. The Group’s six main operating companies are direct subsidiaries of Otsuka Holdings, and each takes operational responsibility for its respective business area.
Otsuka Holdings has adopted an operating officer system in which operating officers oversee business operations and the Board of Directors, whose members are elected at the general meeting of shareholders, make business decisions and supervise subsequent execution. This system ensures management transparency and efficiency of business operation.

Board of Directors

The Board of Directors of Otsuka Holdings meets once a month, and serves as a venue for passing resolutions on important proposals and other important matters stipulated in Japan’s Companies Act, and also for reporting on and discussing the business affairs of each of the directors. There were 10 directors as of June 29, 2011.

Statutory Auditors

Statutory auditors attend meetings of the Board of Directors, as well as other important company meetings. In accordance with the auditing guidelines and auditing plan established at the monthly meetings of the Board of Statutory Auditors, the auditors meet with the president, directors, and department heads and conduct on-site audits to audit the operational businesses of the directors. There were four statutory auditors of which three are outside auditors as of June 29, 2011.

● Otsuka Holdings organization and corporate governance framework

The Otsuka Holdings Board of Directors has passed a resolution regarding a system for ensuring the appropriateness of business activities, calling for the development of the type of internal control system required by Japan’s Companies Act and related regulations, to cover the entire Otsuka Group.

Internal Controls for Financial Reporting

The Group has operated internal controls since prior to becoming a public company, in view of the size of the company and importance of acting in a socially responsible manner. The Internal Control Department, which reports directly to the president, has been operating an internal control system for financial reporting since fiscal 2008, and is responsible for issuing internal control reports.