Maximizing corporate value by balancing effective governance
with agile management

I recognize that in addition to “supervising execution of duties by directors” as stipulated by the Companies Act, an equally important role of external directors is to work toward enhancing corporate value. The Company has set forth the “Beyond Carrier” strategy and positioned the acceleration of its growth as a leading AI company as a key agenda item for the Board of Directors. The Board of Directors, including external directors, is responsible for discussing strategies for new business fields, including AI, and presenting these strategies to shareholders in a clear and accessible manner. Additionally, because the Company has a parent company, protecting the interests of minority shareholders is also an important responsibility.

In June 2024, external directors came to comprise a majority of the Board of Directors, further enhancing its diversity. The current external directors are experts in a wide range of fields, including global management, AI and technology, accounting, finance, legal affairs, and the promotion of women in the workforce. This diverse background allows for active discussions from multiple perspectives, even on specialized and cutting-edge issues such as AI governance and security, where established solutions do not yet exist. I believe this is extremely important for advancing business while taking on risks.

Our relationship with our parent company, SoftBank Group Corp., brings strategic opportunities to the Company, such as our partnership with U.S.-based OpenAI. However, because both companies are listed, when conducting transactions with SoftBank Group Corp., we must ensure thorough governance that protects the interests of our minority shareholders, with a particular focus on conflicts of interest. When dealing with matters involving SoftBank Group Corp., we must negotiate contract terms from the perspective of SoftBank's growth and risks. Furthermore, especially with respect to matters concerning OpenAI, I believe it is necessary to not only consider conflicts of interest but also to carefully review the balance of risk and return in a field where business models have not yet been established, and make the best decisions to maximize our corporate value.
With respect to LY, while the Company is its parent, we must also be mindful that LY has responsibilities to its own minority shareholders. After I was appointed as an external director, there was an information security incident at LY, which caused concern not only among shareholders but also customers. Regarding this issue, I believe that as the parent company, we have a responsibility to ensure and strengthen the security of our Group companies. On the business side, I think it is important to continue working together on initiatives such as AI.
The Company had established a Special Committee, consisting solely of external directors, to deliberate important matters where conflicts of interest could be a concern, such as transactions with the parent company or mergers and acquisitions. In June 2024, because external directors came to comprise a majority of the Board of Directors, it was determined that this function could be sufficiently fulfilled by the Board of Directors in accordance with the Corporate Governance Code, and the Special Committee was abolished. However, because I believed a forum for independent external directors alone to consider the interests of minority shareholders was extremely important, I proposed maintaining such an independent venue. As a result of this proposal, the “Independent External Directors' Meeting” was newly established. This new meeting effectively takes over the role of the Special Committee, and it is a mechanism that further strengthens the governance functions of external directors.

Since being appointed as an external director, I have served as an advisor to the Company's Committee for the Promotion of Women in the Workforce. The Company has a goal of increasing the ratio of women in management positions to 20% or more by the end of FY2035. To achieve this goal, a strong commitment from top management is extremely important. At the Company, President & CEO Miyakawa serves as the chair of the Committee for the Promotion of Women in the Workforce and communicates a clear message. I also find it distinctive that the Company analyzes data and surveys in detail and identifies issues based on that analysis. As a result of data analysis, issues have been identified, such as a difference in the promotion rate to management positions despite no gender bias in the personnel evaluation itself, and this has led to countermeasures.
Furthermore, a structural issue seen not only at the Company but across Japanese society is that the percentage of women who wish to become managers is lower than that of men. This is likely due to time constraints from household chores and childcare, as well as a sense of anxiety that “I may not be able to do the job.” In response to this, the Company is strengthening its mentoring system, providing opportunities for women who are not yet managers to learn from mentors in management positions about how to do the job and the rewards it brings. As a result of these efforts, women are now aiming for promotions while raising children, even in job categories where there were previously few women in management positions. I am confident that if the Company promotes workstyle reforms and a shift in mindset among managers, enabling them to eliminate unconscious bias and assign and support challenging tasks, it will be fully capable of achieving its goal.

The Company's corporate culture has two characteristics. The first is “the management's commitment to achieving goals, and the frontline sales capabilities that support it.” The management team has a strong determination to achieve the targets of the Mid-term Plan without fail, even in a challenging external environment, and progress is reviewed by the Board of Directors. This “ability to see goals through to completion” has permeated every employee, which encourages proactive behavior. These execution capabilities are supported by the frontline sales capabilities that accurately identify customer issues and continue to provide value. In a Consumer segment meeting I attended at the beginning of the fiscal year, the Company-wide goals discussed by the Board of Directors were broken down into departmental goals, with the background and significance also shared. As a result, employees do not simply pursue the immediate numerical targets but act with a management mindset and a sense of ownership.
The second characteristic is “speed.” In a rapidly changing business environment, quick decision-making is essential to seize opportunities. Despite being a large corporation, the Company has built a system that allows for decision-making at a speed that exceeds that of a startup, and it leverages its agility to adapt to change. At the same time, it is important to have a mechanism that ensures thorough risk assessment. I have been working to ensure that sufficient information, including risk-related information, is provided before Board of Directors meetings to facilitate earlier discussions. I believe that balancing agile decision-making with the supervision function, and optimizing the balance between risk-taking and risk management will lead to improved corporate value.

For growth from FY2026 and beyond, I expect the full-scale promotion of the “Beyond Carrier” strategy, particularly the expansion of AI-related businesses. Since business models in the AI field are still not established, it is important to present to shareholders a concrete path to profitability. Additionally, because large-scale AI investments may take time to generate returns, we must continuously review the appropriate balance between growth investment and shareholder returns. Drawing on my expertise as a lawyer, I will fulfill my duties as an external director by ensuring that the Company can boldly advance new businesses while taking on risks, from the perspectives of AI governance, security, contract terms, and other legal and risk management aspects.