Compliance / Risk management

Compliance and risk management serve as the foundation of our business activities, and we pursue integrated management across the Group. As for compliance, with the aim of achieving sustainable growth and improving corporate value, we have built a three-lines-of-defense framework, where the Risk and Compliance Department, as an executive function, and the Internal Audit Office, as an audit function, fulfill their roles respectively while also working in close cooperation. We have also built a robust information management framework, led by the Risk and Compliance Department, to ensure the protection of information as a key management resource. And to promote effective risk management throughout the entire Group, we are working to strengthen a system that enables the Group to manage and respond to risks in an organizational, systematic, and autonomous manner.

We established the Suzuken Corporate Ethics Charter and Corporate Ethics Charter Guidelines to clarify the basic code of conduct that each and every employee should practice in a proactive and independent manner.

Group executives, executive officers, associate directors, trustees, and employees learn about compliance via e-learning and other means every year as part of efforts to instill the idea of compliance. After training, each person pledges to always remain cognizant of the fact that compliance comes first and to avoid any violations. We also hold workplace discussions relating to compliance.

We set a 100% participation rate in compliance training as a KPI under our materiality goals, and we achieved that goal again in FY2024. We also hold workplace workshops on compliance.

We have established a Risk Management and Compliance Committee, under the supervision of the Board of Directors, to carry out risk management comprehensively across the organization. Under this committee, the following working-level committees have been established: the Business Segment Risk Management Practices Committee and the Risk Management and Compliance Practices Committee to effectively and efficiently manage risks; the Review and Supervisory Practices Committee for Sales Information Provision Activities, to more effectively carry out its role in reviewing and supervising the entire Group’s sales information provision activities; and the Antimonopoly Act Compliance Expert Committee, to manage risk and implement compliance promotion measures specific to the Antimonopoly Act. In FY2025, the Group established an Information Security Practices Committee to strengthen the effectiveness of information security across the entire Group, and the committee is monitoring operations on an ongoing basis. In addition to these committees, we operate the Corporate Ethics Hotline, an internal reporting system that helps ensure the integrity of conduct by directors, executive officers, associate directors, trustees, and employees of Suzuken and its subsidiaries.

Moreover, as part of our Business Continuity Plan (BCP) for times of disaster such as major earthquakes, we have established a disaster response system and conduct regular drills to ensure timely and appropriate action. As a company involved in social infrastructure, we strive to build cooperative relationships with medical facilities and other stakeholders. To fulfill this responsibility, we are continuously working to build a highly effective framework.

A criminal complaint was lodged against the Company alleging violations of the Antimonopoly Law in the submission of a bid to the Japan Community Health care Organization (JCHO). In June 2021, the Tokyo District Court issued a ruling ordering us to pay a fine for the violation, and we received a cease and desist order and an order for payment of surcharge the Japan Fair Trade Commission in March 2022.

Additionally, in March 2023, the Company's subsidiary, Shoyaku Co., Ltd., received a cease and desist order and an order for payment of a surcharge from the Japan Fair Trade Commission in regard to suspected violations of the Antimonopoly Act in the submission of a bid to the National Hospital Organization (NHO).

The Company and Shoyaku both accept with all seriousness and sincerity what has occurred and are cooperating fully with the Japan Fair Trade Commission’s investigation. We will do our utmost to regain trust by thoroughly implementing compliance measures aimed at preventing recurrence.

The Corporate Ethics Hotline has been established to supplement legal and regulatory compliance systems. The Group employees and those involved in the Group’s business activities must report through the Corporate Ethics Hotline when they become aware that an act of violation of a law, regulation or the Articles of Incorporation, or any action that would damage the Group brand has been conducted or is about to be conducted at the Company and the Group companies.

Through this internal reporting system, risks are detected at an early stage and corrective measures are promptly taken.

The Pharmaceutical Affairs Supervisory Department, which reports directly to the president, engages in management and oversight of matters concerning pharmaceutical laws and regulations, and of the provision of pharmaceutical information. The office focuses on helping supervising pharmacists working in pharmacies and other locations comply with the Law on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices, Guidelines for Prescription Drug Marketing Information Provision, and other regulatory and best-practice provisions. It also works to improve quality by promoting compliance with GDP Guidelines. Working with Group companies, the office helps to strengthen compliance.

In our Corporate Ethics Charter Guidelines, we have established fair, just, and transparent transactions and equal relationships, together with compliance with relevant laws and regulations, as our standards of conduct. We are committed to preventing bribery and other types of improprieties. Along with compliance training aimed at instilling the importance of compliance among executives, executive officers, associate directors, trustees, and employees, we also regularly conduct training on anti-bribery laws in other countries.

Based on our awareness that a company is a public organ of society, and in accordance with highest ethical standards, Suzuken has a strong commitment to fulfilling its social responsibilities. We are resolutely opposed to anti-social forces and groups that threaten public order and safety.

Our Corporate Ethics Charter and Corporate Ethics Charter Guidelines, which are important standards of conduct, define the proper attitude and specific measures for dealing with improper or illegal demands from anti-social forces and groups. Through education and training via internal communication systems and other channels, we make all directors, executive officers, counselors , trustees, and employees aware of how to deal with these demands.

The Risk Management and Compliance Committee, which builds and manages close relationships with external expert organizations and includes the risk managers of subsidiaries among its members, studies risks associated with the Suzuken Group. This committee shares information about anti-social forces obtained from external specialized organizations and other sources so that everyone can be alert. To prevent any damages in the event that an anti-social element becomes a customer or shareholder and makes improper or unjust demands, we will endeavor to conduct appropriate corporate surveys and promptly collect information about anti-social forces from specialized external organizations and other sources.

Information that is collected, accumulated, transferred, or provided is an asset of extreme importance for business activities. To properly protect these information assets and respond to risks, the Group has established its Information Security Policy. We are also systematically implementing information security measures to ensure the proper operational management, development, and use of information systems and networks, and are enhancing employee awareness through regular training. The information security organization is led by the Compliance Department and is composed of the Board of Directors, the chief information security officer, the Risk Management and Compliance Committee, and other participants. The organization works to protect information assets against improper use and abuse and strives to strengthen information security, including cybersecurity, to minimize potential losses.

As part of these strengthening measures, on April 1, 2025, we established the Information Security Practices Committee as a working-level body under the Risk Management and Compliance Committee, which in turn reports to the Board of Directors. The committee comprises the heads of the planning departments of each headquarters and is responsible for promoting controls and initiatives that reflect the business characteristics of each Group company. Looking ahead, we will continue to build on efforts to gain a comprehensive grasp of, manage, and enhance security levels across the Group.