Governance

The Company's corporate governance is as follows.

In accordance with the AIN Group’s Code of Conduct, our officers and employees comply with all laws, regulations and the Articles of Incorporation, and also strive to follow a sound and ethical approach in all corporate activities, recognizing that they are engaged in a business that involves people’s health.
The Group has established a Compliance Committee to manage all aspects of compliance at Group companies.
The committee is tasked with improving compliance by ensuring the Group’s operations comply with laws andregulations, the Articles of Incorporation, and internal rules.

We have established the AIN Group’s Code of Conduct shared by all officers and employees of the Group in order to incorporate compliance practices into specific actions and to adhere to a sound corporate culture.
We have clarified 14 items in the Code of Conduct, including striving for corporate activities with common sense and ethics, always caring about the perspective of customers and patients and giving top priority to meeting their expectations, and correctly understanding and complying with laws and regulations related to business.

Bribery and corruption in corporate activities not only impede fair business dealings but can also serve as sources of funding for antisocial forces. Therefore, regulations in both Japan and overseas are being strengthened in recent years against bribery and corruption. To further strengthen such bribery and corruption prevention activities, we have formulated the AIN Group Anti-Bribery and Anti-Corruption Policy, which applies to all Group companies.

Furthermore, every year we conduct compliance training, including anti-corruption training, for all officers and employees.
We will continue to strive to maintain high ethical standards and engage in sensible and ethical corporate activities.

The Group has formulated the AIN Group Tax Policy, recognizing that it is an important responsibility to comply with laws and　regulations in taxation and to contribute to the community and society through accurate tax payments. We will continue to ensure tax transparency and strive to minimize tax payment risks.

The Group primarily operates a dispensing pharmacy business and cosmetic and drug store business, and based on the nature of these businesses, which both support people’s health, the Company recognizes that it is essential to continue sound and transparent business activities that place the utmost importance on compliance. The Company has established the Compliance Committee for the purpose of establishing, disseminating, and ensuring the entrenchment of the Group's compliance system, and its composition is based on a resolution by the Board of Directors.
The Compliance Committee holds regular meetings once every six months, and also holds irregular meetings as needed. It deliberates and considers matters such as the Group's policies and measures related to the promotion of compliance, measures to prevent recurrence of serious compliance violations, and policies for handling individual reports, and reports or submits its views to the Board of Directors.
In addition, from the viewpoint of protecting whistleblowers, a “compliance hotline” contact point for whistleblowers has been established as a contact point for whistleblowers by delegation to an external organization, and as necessary, the Compliance Committee obtains legal assessments, views, etc., from external attorneys, including when responding to reports, and engages in deliberations and consideration.
At present, the Compliance Committee is chaired by the President and Representative Director, with a Representative Senior Managing Director as vice chair (in charge of operational support), and Representative Senior Managing Directors, the director in charge of risk management, and the standing corporate auditor as members. Its secretariat is the Risk Management Office. Furthermore, when deliberating and considering individual reports, depending on the content of the report, related officers and the Presidents of related Group companies, as well as other officers and employees designated by the chair or vice chair of the committee as equivalent responsible persons participate in meetings of the committee as extraordinary members.

The Internal Audit Office, as an organization independent from business management that is under the direct control of the President, conducts audits on each of the departments, pharmacies, and stores of all Group companies on an annual basis. Based on the results of audits, the Internal Audit Office provides advice and suggestions for improvement and performs follow-up audits on the implementation of improvement measures to ensure thorough compliance with relevant laws and internal rules and regulations, as well as to strengthen quality and safety. The results of internal audits are also reported to the Board of Directors and the Board of Corporate Auditors, and we continue to work on improving the internal control system across the entire organization, including the Group companies.

We have set up a whistleblower contact point (compliance hotline) that employees can make reports if they discover any violations of laws, regulations, contracts, or our Code of Conduct, or if they experience or witness workplace harassment. To protect the privacy of whistleblowers and to make it easier for people to report issues, we have entrusted the operation of the whistleblower contact point to an external third-party organization.

• Whistleblower confidentiality
  

  Even if whistleblowers report under their real name, their requests for privacy are strictly observed.

• Reporting of results and follow-up regarding retaliation
  

  The results of the investigation are reported to the whistleblower, and roughly a month after completely addressing the issue, the whistleblower will be contacted to confirm that there has been no retaliation.

Compliance-related education for all officers and employees of the Group is conducted every year. In addition, anti-harassment training is conducted separately for managers and above in an effort to prevent harassment. Moreover, educational training aimed at dissemination and enhanced awareness of the code of conduct is conducted regularly, and teaching materials and case studies are always posted on our intranet to improve compliance awareness.

The Group is a company mainly operating in the dispensing pharmacy business and the cosmetic and drug store business, both of which are responsible for people’s health. For this reason, we recognize that it is essential to continue sound and transparent business activities with the highest priority on compliance. We aim to ensure our sustainable growth and fulfill our social responsibility as a company by conducting appropriate risk management.

The Group mainly operates in the dispensing pharmacy business, which dispenses drugs based on prescriptions, and the cosmetics and drug store business focusing on the sale of pharmaceuticals and cosmetics. As both of the businesses are involved in people’s health, we recognize our significant social responsibility. In addition to aiming for increased corporate earnings and shareholder value through proactive store openings accompanying the separation of medical and dispensary services, we consider it our mission to continuously improve the safety and professionalism of our operations as a company involved in people’s lives.
Therefore, our basic management policy is to eliminate business risks such as dispensing errors and create pharmacies that patients can visit with confidence, while emphasizing proactive business expansion according to market conditions, thereby fulfilling our social mission.

The Company has formulated Risk Management Regulations and Risk Management Guidelines for risk management of the whole Group.
The Company has established the Risk Management Committee for the purpose of achieving unified risk management from a group-wide perspective and preventing the overlooking of new risk events arising from changes in the business environment, and thereby achieving comprehensive risk management. The Company also receives advice as appropriate from attorneys and other external experts in risks surrounding companies while managing the formulation and implementation of company-wide risk management, and also mainly reviews risk items and assessments and manages progress in each department responsible for risk. At present, the Risk Management Committee is chaired by the President and Representative Director, with the director in charge of risk management as vice chair, and Presidents of core Group companies and managers of each department in charge of risk as members. Its secretariat consists of the Division Manager of the Risk Management Office, the Division Manager of Operational Support, Department Manager of the Administrative, Division Manager of the Corporate Planning, and Department Manager of the Sustainability Management.
A department in charge of risk is determined for each risk category and these departments oversee all aspects of risk management related to their respective assigned risks. With regard to risk management related to serious risks for the risks that they oversee, etc., these departments also formulate policies, action plans, etc., for the prevention of crises, etc., as well as measures to be taken in the event of an emergency by formulating response manuals, etc. in normal times. These departments work to ensure that these policies and plans are disseminated, and periodically inspect and track the status of their implementation in each division and operating company.The Internal Audit Office also conducts on-site audits to examine compliance and effectiveness.
To ensure the continuity of the Group’s operations, the Company has formulated a Group business continuity plan (BCP) for times of crisis, which is actively disseminated to all officers and employees of the Group.

Below are the major risks that we recognize as having the potential to affect the AIN Group’s business performance, financial position, and stock price. Forward-looking statements contained herein are based on the views of the Group as at the end of the previous fiscal year.

The Group, as a company engaged in medical-related business, considers the trust of customers and patients as the utmost priority and believes that it is our extremely important responsibility to properly protect and manage personal information in accordance with the principle of respect for the individual’s personality.
To this end, each Group company has declared the establishment, implementation, and maintenance of a Personal Information Protection Policy. In addition, AIN PHARMACIEZ INC., our main business company, acquired the PrivacyMark in the health, medical, and welfare field in February 2008. The PrivacyMark is awarded by the JIPDEC to businesses that have established a system for appropriate protection of personal information in compliance with JIS Q 15001 (Personal Information Protection Management System - Requirements).

The AIN Group primarily operates dispensing pharmacy business and cosmetic and drug store businesses. In both of these businesses, the Company recognizes that it is an extremely important responsibility to address information security in order to protect information assets held by the AIN Group, including information received from customers and patients, from all threats and to achieve appropriate safety management. Based on this recognition, we take steps to establish and ensure compliance with our internal security system, and we have established an internal security management system for the purpose of developing as a company trusted by society.

The Group has established an information system manager selected by the President and Representative Director, and is working to strengthen and enforce the information security system. The information system manager communicates with the senior management team in the planning and implementation of information security strategies and promotes these strategies. The manager also ensures the development and operation of regulations related to confidential information management, information system management, and information security measures, etc., in the Group, implements safety measures, and supervises education and other matters.
In addition, the manager collects and organizes information on information security risks, and provides instructions concerning preventive measures to each division. When an information risk occurs, if the impact of the risk is extremely serious, the Emergency Countermeasures Headquarters formulates and implements emergency measures for information security.