Management SectionExternal Director Interview
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- External Director Interview
What kind of ambitions do you have as an external director?
In 2018, Shiseido appointed me as an external director. I have done extensive research on the Companies Act, the Financial Instruments and Exchange Act, financial legislation, and various other laws, and my particular field of expertise is corporate governance-related issues. In 2014, an amendment was made to the Companies Act, which drew attention to the significant issue of improving the corporate governance of Japanese companies, including encouraging Japanese companies to establish an external director system. At that time, I was serving as the chairman of the Legislative Council Corporate Law Subcommittee of the Ministry of Justice and was given the task of preparing the original draft for the amendment.
With this kind of expertise and background, I have always felt that I could help Japanese companies improve their corporate governance by serving as an external director. I therefore was happy to take on the position of external director at Shiseido. To fulfill my duties in earnest as an external director, I will take on this role exclusively for the Company.
By helping Shiseido further improve its corporate governance, I will assist the Company in improving its corporate value and shareholder value. In addition, I hope to play a role in realizing Shiseido’s corporate philosophy of contributing to society and the world through the provision of beauty across the globe.
What kind of role do you believe you should play as an external director?
From the perspective of corporate governance, I believe my role should entail several things. First and foremost, I need to represent the interests of the shareholders, who appointed me as an external director, and help the Company select outstanding managers. I also need to oversee and support these managers with the aim of maximizing shareholder value and corporate value. In these terms, thanks to the efforts of the managerial ranks working under President Masahiko Uotani, Shiseido was able to increase its net sales from 1,005.0 billion yen to 1,094.8 billion yen and its operating profit from 80.4 billion yen to 108.4 billion yen in only a year’s time.
In addition, the Company has been actively promoting investments geared toward the future. For example, not only did Shiseido open the Global Innovation Center, it also decided to establish the Nasu Factory, the Osaka Ibaraki Factory, and the Fukuoka Kurume Factory. When the construction plans for these factories were decided at meetings of the Board of Directors, the go-ahead for construction was given after consenting to the management’s detailed account of the importance of constructing these facilities, along with other factors including their profitability, payment of capital, and responsiveness to drastic changes in the business environment. In light of these efforts, I believe that Shiseido’s management is currently heading in the right direction, and I hope to monitor and support that management going forward.
I think the reason the Company has been able to head in such a direction is due to the ability of those in the managerial ranks to enhance the motivation of employees and bring out their full potential. However, when a company’s management pursues dramatic reforms, conflicts can potentially arise between management and its employees, business partners, and sometimes even the customers.
I would say my second most important role as an external director is to listen earnestly to the opinions of stakeholders other than the shareholders, such as Shiseido’s employees, business partners, and customers, and make sure that those opinions are reflected in the decisions of the Board of Directors. In fact, one of the most important duties of an external director is to reflect the opinions of all parties affiliated with Shiseido, not just the shareholders, as well as the perspective of society as a whole, in the Company’s management.
How are you working to fulfill your duties as an external director?
I have served as a member of the Ministry of Justice’s Legislative Council and the Financial Services Agency’s Financial System Council. I have also served on various other government councils, and this has allowed me to witness firsthand the kind of demands that society as a whole has of corporations. I want to draw on this experience in my discussions with Shiseido’s management to help the Company realize even better management.
From that perspective, I believe what society demands most of Japanese corporations is to enhance their international competitiveness and profitability. In that sense, I think that Shiseido’s efforts to reform its management, improve its brand power, and actively invest in the establishment of new factories highlight the fact that it is heading in the right direction. So, as an external director, I want to support the Company’s management so that it continues to head down this path.
The second thing that society demands of Japanese corporations is to respond to the opinions of their employees, business partners and other affiliated parties, and customers, as well as to reflect the values of society in their management through such efforts as the establishment of eco-friendly management and the promotion of active roles for women. To ensure that Shiseido can meet these kinds of social demands, and to assist the Company in boosting its international competitiveness, brand power, and profitability, I fully support Shiseido’s efforts to reform its management. At the same time, I participate in a variety of in-house events and utilize every opportunity possible to exchange information with relevant parties both inside and outside the Company. I also strive to make sure that the opinions of all affiliated parties and customers are reflected in Shiseido’s management, and that such management embodies the values of society as a whole.
What are your aspirations for the future?
Shiseido has been achieving remarkable progress through outstanding teamwork between its management and its employees. As an external director, I aim to support that progress as I work to help the Company realize its corporate philosophy.