The business climate has changed dramatically. Traditional management practices are no longer sufficient to compete in the increasingly global market. In this new environment, we believe that corporate governance is a major management issue for growing long-term corporate value, and an internal check on business activities. Against this backdrop, XEBIO has been working on management structure and corporate governance reforms since the year 2000.

We employ a system of corporate auditors. As of March 2007, the XEBIO board of directors consists of eight Directors (two of whom are External Directors), four Auditors (two External Auditors), and three Operating Officers. By reducing Directors terms from two years to one, we have increased the clarity of management responsibility.
Our management council is made up of our Directors and Operating Officers. The council meets weekly to discuss important issues related to our Basic Management Policy. In addition, we have newly created investigative committees to examine human resources, wages, asset management, and investing. These committees report to the board of directors and management council.

Our risk management system addresses both financial and legal matters. Regular meetings of our internal and external auditors monitor the former, and our external counsel provides advice and guidance on the latter. We have also put into place an internal system to ensure that both employees and executives are in compliance with relevant laws and ordinances, internal rules, and ethical standards.