Last update: March 23, 2021
Chief Financial Officer (CFO) and Head of Education Research Center, Hitotsubashi University. Professor Emeritus, Hitotsubashi University. Specially Appointed Professor, Chuo Graduate School of Strategic Management, Chuo University. Fields of speciality include accounting, economics with marketing and branding, corporate governance, corporate value management, and ESG (environment, society, governance). Published "Ito Review" in 2014 under a project of the Ministry of Economy, Trade and Industry. Chairman of TCFD Consortium, established on May 27, 2019. Outside Director at Seven & i Holdings since May 2014.
At times, apply the brakes. At times, give a supportive push forward. That's the role of an Outside Director.
Whether a Board of Directors functions well depends on an attitude-the inclination of internal Directors, including the President, to listen to the opinions of Outside Directors. This attitude fosters the idea that constructive comments can also come from Outside Directors and boosts motivation from both internal and external perspectives. In the last few years, the Board of Directors at Seven & i Holdings has enhanced discussions, balancing urgency with openness and creating an extremely good environment for conversation.
In the discussion process, when the situation arises, Outside Directors tend to take a position that puts the brakes on a decision to execute a strategy. But I believe there are times when management has to slow things down and other times when management might need encouragement to move forward. In my experience, companies seeking growth must consider various factors. Growth is not simply taking risks. As a leader in Japan's retail industry, the Seven & i Group cannot avoid taking risk when pursuing growth, but at the same time, management must consider how best to minimize inherent risk. The recent acquisition of Speedway by 7-Eleven, Inc., is a good example. Before making the final decision, the Board of Directors carefully ran through the acquisition process, looking beyond such components as acquisition price and post-merger integration in repeated discussions from various angles.
We Outside Directors participate in the Board of Directors' meetings as representatives of the Company's shareholders. I am strongly aware that my involvement in discussions must at all times be driven by a mandate to serve shareholders.
Strategically address ESG, human resources development, and digital transformation, balancing corporate value and social value
The Seven & i Group seeks to use governance reform to continuously improve corporate value. Improvements have been made on advisory committees to the Company's Board of Directors, including separating the Nomination and Compensation Committee into the Nomination Committee and the Compensation Committee. In addition, medium- and long-term and non-financial perspectives have been added to key components for determining the compensation of Directors, and CO2 emissions have been introduced to KPIs for stock-linked compensation to balance corporate value and social value. This approach is characteristic of Seven & i Holdings' efforts.
The Board of Directors has long pursued discussions on the human resources portfolio and succession plans, and 2020 was no different. Seven & i Holdings implemented an employee engagement survey to better understand employees' attitudes toward work and their perception of the Company from emotional and philosophical perspectives. A vital function of the holding company is to identify the ideas held by each and every employee and know what makes every person tick. The accumulated information should certainly have a direct and positive impact on succession plans.
Digital transformation strategies-a complement to human resources strategies-are also vital. I would emphasize that digital transformation-often abbreviated "DX"-is fundamentally different from digitalization. DX, more than just digitalization, has the potential to vastly improve experience value for stakeholders, including customers and employees. It changes the corporate culture, as well. A company may embrace digitalization, but without a change in corporate culture, the effort is pointless. Finally, DX can eliminate various organizational barriers, between management and employees, between divisions, and between operating companies. This is the power of DX.
Strive to improve Group governance in truest sense of best owner
The new medium-term management plan is undergoing additional discussion, but organically connecting Group companies and creating a unique business model are important elements. Conversations between Seven & i Holdings and its operating companies are essential to this process, and management must remember to take a self-questioning perspective to ensure that the Company is the best owner-in the truest sense-for every operating company. As for restructuring the Group and reshuffling the business portfolio, the emphasis must be on Seven & i Holdings' ability to make stellar management decisions that utilize and expand the business resources of every company. In other words, those who call the shots at Seven & i Holdings, who know the unique purpose of each operating company, must ask themselves if their decisions will serve the underlying purpose of enhancing familiarity among respective customers and stakeholders.
For management strategies to be successful, it is essential that they align with human resources strategies. Do human resources fit with the business models we are aiming for five or 10 years down the road, and following that, can the Group remain sustainable? We Outside Directors have a duty to supervise management from an external perspective and offer opinions across a broad spectrum, addressing environmental issues and social issues of global scale, not simply say "that's life" or "these are the times we live in." We would not be properly fulfilling our responsibilities if we did that. Going forward, we must draw attention to issues-a balance of macroperspectives and microperspectives-on everything from what are global trends to what motivates employees.
Professor Emeritus, the University of Tokyo. President and Representative, Tsukio Research Institute. Areas of speciality are media policy and system engineering. Held posts as professor in the Department of Architecture, School of Engineering, Nagoya University, and in the Department of Industry Mechanical Engineering, Faculty of Engineering, and the Graduate School of Frontier Science, the University of Tokyo. From December 2002, was responsible for the national government's IT policy as Vice-Minister for Policy Coordination, Ministry of Internal Affairs and Communications. Saw and heard about the current status of issues affecting the natural environment around the world and participated in regional plans to achieve a sustainable society. Became Outside Director at Seven & i Holdings in May 2014.
Management that looks ahead 10, 20 years to address social concerns
Two big issues loom before all companies, not just Seven & i Holdings. One is the response to the information society. The Seven & i Group has accumulated an enormous amount of customer information across various business formats, from convenience stores to retail operations and restaurants, and the consolidation and effective utilization of this data, underpinned by long-term strategies, will shape the image that defines the Company-and by extension, the Group-10 or 20 years down the road. The Group DX Strategy & Planning Division, set up in April 2020, promotes DX across the Group. I believe that an emphasis on DX to create new corporate value will enable Seven & i Holdings to capitalize on huge growth opportunities Groupwide in Japan and also as a global retailer.
The other issue is the environment. The investment world is keen on ESG investment, and in the future, the extent of a company's efforts to contribute to a better global environment will become a bigger deciding factor in how society measures corporate worth. Global warming is accelerating as an issue of concern for all humanity, and companies must address environmental issues seriously and deliver results or risk a backlash. A key role I play as an Outside Director is to encourage management to take a longer view in setting corporate direction and in drafting strategies. Unlike internal Directors, who have ready access to daily management information, we Outside Directors have to take a wider perspective and push the organization toward its future goals and addressing social issues that warrant discussion. This is the vital role that Outside Directors must fulfill.
Joined National Police Agency (1974), Superintendent General, Tokyo Metropolitan Police Department (2008), Deputy Chief Cabinet Secretary for Crisis Management (2011), and Special Advisor to the Cabinet. Currently, Chief Security Officer for the Tokyo Organising Committee of the Olympic and Paralympic Games. Has broad, high-level insight and expertise in organizational management and risk management. Became Outside Director at Seven & i Holdings in May 2014.
Defensive perspective important for successfully guiding offensive strategies
My field of speciality is crisis management, and I believe organizations require imagination and preparation to successfully manage crises. Corporate management is not the same as crisis management, but even in a business context, this idea of imagination and preparation is crucial. Thorough execution hinges on the quality of information gathering and discussion processes. The information gathered and the discussions based on that information are vital components of good corporate governance. The Board of Directors at Seven & i Holdings is committed to sharing information and assumes that all discussions will naturally bear fruit. This perspective has also enabled the Company to establish a good governance structure.
Crisis management generally implies a defensive approach, but in the corporate sense, crisis management goes beyond being conservative. It requires knowing how rigid the defensive stance should be to avoid inhibiting the success of growth-oriented strategies. For example, the Speedway acquisition announced in August 2020 assumed various risks, including COVID-19, which at that time was perceived as a global threat, in addition to extreme weather, other environmental issues, and the growing trend toward electric vehicles. These risks were tracked and carefully discussed to properly respond to whatever might arise.
In pursuing growth, a company may find that crises and uncertainties become leapfrog opportunities that radically shift the growth trajectory in an unexpectedly stellar direction. I want Seven & i Holdings to exercise its creativity, design business models not previously thought possible and a fresh image for convenience stores, and promote imagination and preparation that look far into the future.
Drove development at Tokyo Electron Limited for many years, as Representative Director and President, then Representative Director and Chairman of the Board, and then Corporate Director and Corporate Advisor. Has broad, high-level expertise in many areas, including international corporate management, business management, and finance and accounting. Served as Chairman of Semiconductor Equipment and Materials International (SEMI) Board of Directors and as Chairman of the Semiconductor Equipment Association of Japan. In 2015, received the SEMI Sales and Marketing Excellence Award, in memory of Bob Graham. Became Outside Director at Seven & i Holdings in May 2018.
Combine global network and DX strategy, and define vision for major growth
Seven & i Holdings is vigorously engaged in governance reform. Internal Directors listen to the opinions of Outside Directors and are very conscious of the need to welcome input with all due sincerity. Consequently, I feel the Board of Directors is steadily evolving into a structure capable of more productive discussions with stakeholders and society in mind.
As an Outside Director, I bring experience in globalization, primarily globalization for an operating company. My goal is to convey information on events and other situations of importance worldwide to the Board of Directors and encourage its application to management processes throughout the Seven & i Group.
Since assuming the position of Outside Director, I have commented on DX whenever the occasion arose. I see DX not merely as a tool to promote efficiency but as a tool to enhance corporate value. Seven & i Holdings must go beyond just anticipating technology and achieve a unique brand of DX that will differentiate it from other companies. Specifically, while vigorously expanding its presence overseas, the Seven & i Group should have decisive strategies with a global perspective. In addition, the Group's strengths lie in various formats, not just convenience stores and supermarkets but also restaurants and specialty stores. Using DX to connect these different formats will reinforce relationships laterally, broadening the capabilities of every business. Going forward, I expect Seven & i Holdings to adeptly combine its global network and unique DX strategy, create a new style of retailing and new value, and define a vision for even greater growth.
Representative Director and President, WITAN ACTEN Co., Ltd., a marketing consulting firm. Has gained rich insights and experience, especially in marketing and brand strategies, through positions as Professor at Ritsumeikan University Graduate School of Management, Marketing Manager at U.S.-based Estee Lauder Co., Ltd., and General Manager, Direct Marketing Department, Time Life Books Division, Time Inc. Became Outside Audit & Supervisory Board Member at Seven & i Holdings in May 2014 and Outside Director of the Company in May 2019.
Raising customer satisfaction begins with raising employee satisfaction
COVID-19 marked a turning point, establishing the retail sector as an essential industry and heightening the importance of the industry's social mission to protect employees and support customers' daily life. But I believe this sort of development was actually unfolding even before the pandemic. For retailing and other service-oriented sectors to raise customer satisfaction, they must first achieve a higher level of employee satisfaction. When companies vigorously invest in human capital and create motivating work environments, employees typically acquire a brighter outlook on life. The end results are higher customer value and, by extension, higher corporate value. Some social issues-namely, the low birthrate and the labor shortage-are likely to get worse, and DX is part of the coping mechanism for all companies. DX does not eliminate workers. Rather, when routine work previously done by people is shifted to machines, employees can be concentrated into jobs that are done only by humans. When employees are involved in ideas to raise customer satisfaction, work becomes much more enjoyable. The philosophy that guides the Seven & i Group includes the phrase "Responding to Change," and while identifying trends is important so too is always remembering that it is people who increase customer satisfaction.
In 2020, Seven & i Holdings introduced a CO2 emissions indicator-its first non-financial indicator-into KPIs for compensation of Directors. Going forward, management must continue to explore the possible inclusion of other evaluation criteria that address changes in society and issues of concern to shareholders and investors. For my part, as an Outside Director, I am eager to learn and broaden my perspective to develop and make responsible comments at Board meetings.