ON THE COVER

Pumpkin Yayoi Kusama
Benesse Art Site Naoshima is the collective namefor the art-related activities we conduct inconjunction with the Fukutake Foundation on
the islands of Naoshima, Teshima, and Inujima in
the Seto Inland Sea. We have been promoting
the ongoing activities as an approach toBenesse=well-being, our motto embodying theBenesse Group’s corporate philosophy.

Empowering lifelong growth

Benesse Report 2023

Benesse Holdings, Inc.
Investor Relations Department
1-34, Ochiai, Tama-shi, Tokyo 206-0033, Japan
Phone: +81-42-357-3656
Email: tokyoir@mail.benesse.co.jp
URL: https://www.benesse-hd.co.jp/en/

Benesse Group Corporate Philosophy

bene (well) + esse (being)

Benesse (Well-being)
W hat is “Benesse”? T he hea r t of Benesse is enjoy i ng t he process of mov i ng for wa rd

bene (well) + esse (being)

Benesse (Well-being)

step by step, w it h resolve, towa rd t he rea l i z at ion of you r d rea ms a nd a spi rat ions.
Benesse empowers people to solve issues for t hemselves a nd to enjoy l i fe to t he f u l l
at e ver y st a ge by of fer i ng t hem t he tools a nd suppor t t hey need to create wel l-bei ng.
We a i m to be a g loba l ly respec ted cor porate g roup t hat is suppor ted by a nd
i nd ispensable to c u stomers , com mu n it ies , a nd societ y.
We w i l l cont r ibute posit ively to societ y now a nd i n t he f ut u re.
* Benesse is a word coined from the Latin words “bene” (well) and “esse” (being).

Benesse Group Principles
T he Benesse Group is a g loba l cor porat ion w it h a people- or iented c u lt u re.
We bel ie ve t hat before we become good bu si ness people, we mu stl ive a s responsible members of societ y a nd t hat a l l of ou r ac t ions shou ld
lead to “Benesse” (Wel l-bei ng). I n order to ach ie ve t h is ,we ad here to t he fol low i ng pr i nciples a nd prom ises.

O u r Pr i n c i p l e s
Act sincerely; Build trust; Pursue challenges and innovation

Pr o m i s e t o o u r :01

Benesse Report 2023

Customers

We develop and maintain long-term relationships with our customers by offering themtruly valuable solutions to their present and future needs.

Colleagues

We value teamwork, people development, fairness, and active participation in theworkplace.

Business Partners

We foster mutual trust and growth with our business partners, thus creating the bestvalue for our customers.

Community andSociety

We aim to create an environment in our communities where people of all ages can enjoy
life through our services.

Shareholders

We seek to grow and develop in a way that earns our shareholders’ long-term trust.

Benesse Report 2023

02

Benesse
Group
PurposeBenesse Group Purpose

Anybody can enjoy lifelong growth.
Toward a world in which everyone
can live their own life.
Benesse will continue to aim forthese ideals.
Based on the corporate philosophy of “Benesse=well-being,”
we have announced our Group’s purpose as our management mission.

We are an earnest and tireless advocate of the potential of people collectively and individually.
Against a background of rapidly changing social conditions, we will persist in pursuing a worldin which each person can live in a way that is true to themselves,
while looking to the future, globalization, and social systems.

We are eager to take on new challenges to realize such a world,
and are committed to solving various social issues associated with the different stages of life.
The Group’s purpose is what guides our passion and commitment.

03

Benesse Report 2023

Benesse Report 202304

Benesse Report 2023: background theme

Pumpkin Yayoi Kusama ©YAYOI KUSAMA

BenesseArt Site
Naoshima

Benesse Art Site Naoshima＝
Place for lifelong growth
We established the Group’s purpose in April 2023, and the Transformation
Business Plan aimed to achieve the Group's purpose in May the same year.
Benesse Report 2023 is centered on the new Group’s purpose
and Naoshima, a place where we put our corporate philosophy of“Benesse=well-being” into practice.

Inujima

Naoshima

05 Benesse Report 2023

Teshima

Benesse Report 2023

06

Benesse’s history of growing instep with people and society
1990sFounding (1955 onward)

2000s onward

Founder Tetsuhiko Fukutake’s
strong belief in education

Diversifying businesses under the“Benesse” banner

Evolving education and nursing carebusinesses

Announcing the Transformation
Business Plan in 2023

▶ Began in Okayama as a business providing simulated exams for highschool students and correspondence courses that were theprecursor to today’s Shinkenzemi. By releasing products that
embodied new concepts and expanding our enrollments, we laid
the groundwork for the corespondence education business before
the market appeared in Japan.

▶ In 1995, the company was renamed Benesse Corporation.

▶ Expanded the education business even further through measures
such as growing the school and teacher support business andbringing prep school operators into the Group.

▶ In 2023, announced the Group’s purpose.

▶ Taking note of trends related to demographic aging and theincreasing number of two-income households, entered the nursing
care and childcare business, and published Tamago Club and Hiyoko
Club, magazines on pregnancy, childbirth, and parenting.

Right: Fukutake no kokoro: hitosuji no michi, abook created to compile the founder’s thoughts.
His spirit has been passed down to today as theCompany’s DNA.

1962

Education(now Shinken Simulated Exams).

Correspondence Education
1969 Launched
Seminar for senior high school students

1988 (now Kodomo Challenge).

1990

Launched Shinkenzemi Preschool Courses

1989 Launched preschool courses in Taiwan.

▶ In the education business, further increased
utilization of digital technology and pursued
individualized learning support services.

2000

2010

Ochanomizu Seminar Co., Ltd. as
2006 Acquired
a subsidiary, thereby entering the prep2012 Acquired UP Inc. as a subsidiary.
Minerva Intelligence Co., Ltd. (now2014 Acquired
Benesse BE studio Inc.) as a subsidiary.

2003

Introduced proficiency-based educational
materials to Shinkenzemi courses.

school business.
Launched preschool courses in China.

2006Tokyo Individualized Educational
2007 Acquired
Institute, Inc. as a subsidiary.

(now Shinkenzemi Senior High School Courses).

Correspondence Education
1972 Launched
Seminar for junior high school students(now Shinkenzemi Junior High School Courses).

“Shinkenzemi Junior High School2008 Launched
Course +i,” the next-generation version.

Shinkenzemi Elementary
1980 Launched
School Cources.
Correspondence
Education Seminar(first issue)

Shogo Challenge (first issue)

Shinkenzemi Preschool Course (first issue)

Lifestyles

Tamago Club and Hiyoko Club, magazines on
1993 Launchedpregnancy, childbirth, and parenting.

1996 Launched lifestyle magazine THANK YOU!
Tamago Club (first issue)

Hiyoko Club (first issue)▶ In 2023, announced the Transformation Business Plan, an upgradeof the Medium-Term Management Plan made in response to majorchanges in the business environment.

▶ Worked to regain the trust lost due toa leak of personal information, andimplemented thoroughgoing measures toprevent the occurrence of similar incidents.

New company brand logo and character

Founded in 1955
Launched Kansai Simulated Exams
for senior high school students▶ Made a full-scale entry into the elderly
housing business, with the nursing carebusiness growing into our second pillar.

▶ Launched overseas expansion and thelanguage business against the
backdrop of increasing globalization.

Left: Tetsuhiko Fukutake, who established
Fukutake Publishing Co., Ltd. after engaging in a
number of jobs including elementary school
teacher.

2009

Established Tokyo Educational Institute Co.,
Ltd. to take over the business of Tetsuryokukai.

2011

Benesse Corporation opened a representative
office in Indonesia.

2020

a business and2023 Concluded
capital alliance agreement with
SkyHive Technologies Inc.

Waris Co., Ltd. as a2023 Acquired
subsidiary.

2015 Established Benesse i-Career Co., Ltd.
a comprehensive business alliance2015 Concluded
agreement with US-based Udemy, Inc.
Classi Corp. and EDUCOM Corporation as2019 Acquired
subsidiaries.

a business and capital alliance2019 Concluded
2002 Launched Inu no Kimochi (pet magazine).
agreement with CoDMON, Inc. and started theChildcare Documentation service.
2004 Launched Tamahiyo no Uchiiwai (gift shopping site).
2004 Launched Neko no Kimochi (pet magazine).

THANK YOU! (first issue)

1995 Launched the Home Helper Level 2 Training Course.
1997 Opened Benesse Home Clara Okayama.

Nursing care/childcare07

2020s onward

Benesse Care Corporation to2000 Establishedprovide nursing care services. Acquired
Shinkoukai Co., Ltd. as a subsidiary.

the Group’s nursing care2003 Consolidated
service companies to form Benesse Style
Care Co., Ltd.

2010 Acquired Bon Sejour Corporation as a subsidiary.
Bon Sejour Corporation into Benesse
2012 Merged
Style Care Co., Ltd.

Proto Medical Care
2021 AcquiredCo., Ltd. (now Heart Medical

Care Co., Ltd.) as a subsidiary.

Benesse Palette Co., Ltd. to provide
2013 Establishedmeal delivery services.
Benesse Senior Support Co., Ltd. to2014 Establishedoperate a nursing care consultation service.

Benesse Report 2023

Benesse Report 2023

08

Benesse’s strengths for growing
in step with people and society

Brand Intellectual capital
Strong brands

Teaching materials
and methods

for childcare, education,and nursing carefor instilling the ability to learn

Expertise in developing andgrading simulated exams
Unique nursing care methods and mechanisms

Multifaceted surveys and research in the education field

Material Productive/human capital
Prep schools
and classrooms

Nursing homes &elderly houses

Employees(consolidated)

DX human resources

09 Benesse Report 2023

Network Social capital

2,204

locations352
17,000locations

Approx.

Approx.

1,200

Cumulativeenrollments in
Shinkenzemi/
learning data
Students taking
Shinkenzemi Simulated
Exams and otherexams/test data

Online education
platform Udemy
users in Japan

Nursing homeresidents

Approx.

18.31

Approx.

More than

9.10

1.40

Approx.

millionmillionmillion17,000Benesse Report 2023

10

CONTENTS
51

At a Glance

68

Benesse Group Purpose

53

Education Business in Japan

79

05

Benesse Report 2023: background theme

58

07

Benesse’s History

09

Benesse’s Strengths

11

Contents

01

Benesse Group Corporate Philosophy & Principles

03

01
CHAPTER

Supporting lifelong
growth to forge a new
futureOur Vision andBusiness Strategies
What future does the Benesse Groupenvision for itself, and how is the Groupaiming to achieve that vision?
In this chapter we describe the medium- tolong-term vision and strategies that theGroup is pursuing for value creation.

15

Benesse’s Value Creation Process

17

CEO Message

23

CSO Message

27

CFO Message

30

Financial Highlights

31

CDXO Message

82

02
CHAPTER

37
39
41
42
43
44
46
48

11

Benesse Report 2023

Special Feature: Benesse Art Site Naoshima

Supporting lifelong growth
to shape the next era
Materiality
While analyzing the dramatic changes of
the current era, we held repeateddiscussions to identify our materiality inorder to resolutely make it through to thenext era. New endeavors of the Benesse
Group have already begun.

Special Feature: University and Working
Adult Business

61

Kids & Family Business

63

Nursing Care and Childcare Business

03
CHAPTER

Empowering people topursue lifelong growthin the age of the
100-year life
How We Create Value
Reviewing and enhancing each of theactivities, and taking on new challenges
proactively, the Benesse Group continues
to create new value in order to support
each person in pursuing their goals at
each stage of life.

Corporate GovernanceCommunication with Shareholders
and Investors

80

Investor Information

81

Group Information

04
CHAPTERFor greater lifelong
growth potential
Enhancing Operational
Resources
In order to achieve sustainable growthwith all stakeholders, the Benesse Group is
continuing to enhance the effectiveness of
its corporate governance toward
solidifying its management foundationand further increasing its corporate value.

Revision of Materiality
Toward the Achievement of our Purpose
Supporting Diversified and Multilayered
Learning Experiences to Provide
Motivational Education Services
Supporting Sustainable Corporate
Growth and Personal Career
Development through Learning
Experiences
Respecting the Unique Individuality of theElderly while Resolving Structural Nursing
Care Issues
Nurturing Organizations and People as
Drivers of Transformation
Preserving a Sustainable Global
Environment
Non-Financial Information

Editorial Policy
We publish this report to help investors and other stakeholders understand the Benesse Group’s medium- to long-term strategies and initiatives for creating
value, based on our FY2021-2025 Medium-Term Management Plan, “Evolve core businesses & Expand into new fields” (released in November 2020) and on theTransformation Business Plan, which is an update of the Management Plan. In editing the report, we have kept in mind the reporting frameworks of theInternational Integrated Reporting Council and the Guidance for Collaborative Value Creation issued by the Ministry of Economy, Trade and Industry (METI),
limiting the content to items of particular importance while striving to structure the report in a way that is concise and easy to understand.
More detailed investor-relations information and information related to environmental, social, and governance (ESG) matters is published on our website.

●Period covered

Note regarding forward-looking statements

This report covers primarily activities carried out in fiscal 2022 (i.e., from April 2022 throughto March 2023), though it also includes some information on initiatives from prior to that
period and activities taking place after April 2023. The organization names and the job titles
used are current as of June 24, 2023.

This report includes statements regarding current plans, forecast, strategies, etc.
Any of these statements that are not historical facts are forecasts of future
performance; these statements are based on the judgment that the Company has
formed using the information currently available, so they involve risks anduncertainties. Please be aware that, for a variety of reasons, actual performance may
differ from current forecasts.

●Activities covered
The report covers the activities of Benesse Holdings, Inc, and its consolidated subsidiaries. If
the discussion at any point references any other particular scope of coverage, this will be
indicated on the pages concerned.

Benesse Report 2023

12

Vision & Strategy

01
CHAPTER

Supporting lifelong growth
to forge a new future
Our Vision and Business Strategies
What future does the Benesse Group envision for itself, and how is
the Group aiming to achieve that vision?
In this chapter we describe the medium- to long-term vision andstrategies that the Group is pursuing for value creation.

13

Benesse Report 2023

Benesse Report 2023

14

CHAPTER

01 Our Vision and Business Strategies

Benesse’s Value Creation Process
We seek sustainable growth for both the Benesse Group and society by bringing people “Benesse = well-being” through ourbusiness and social activities, and continuously creating new value that helps solve social problems.

INPUT (FY2022)

Transformation Business Plan

Financial capital

541.5
152.3 billion yen

Total assets

billion yen

Shareholders’equityProductive capital

2,204

Prep schools
and classrooms

locations(Total for Tokyo Individualized Educational
Institute, UP, Ochanomizu Seminar, Tetsuryokukai,
Benesse BE studio, and StudyHacker)

352 locations

Nursing homes

Human capital
Employees(consolidated)

Approx.

17,000Digitaltransformation
Approx.
(DX) human resources

Strong brands for childcare, education, andnursing care
Teaching materials and methods for instillingthe ability to learn
Expertise in developing and grading
simulated exams
Unique nursing care methods andmechanisms
Multifaceted surveys and research in the
education field

Social capital
Cumulative enrollments in Shinkenzemi /learning data
Approx.
millionmembers
Students taking Shinken Simulated
Exams and other exams / test data

18.31

9.10 million people

Approx.

Number of Udemy users in Japan
More thanpeople1.40 million(as of June 2023)

Approx.

15

17,000 people

Benesse Report 2023

Financial key
performance indicator (KPI)

Transformationof core businesses(Core Education)

Operating income*
FY2025

Transformationof core businesses(Core Nursing Care)

Return on equity (ROE)FY2025

1,200Intellectual capital

Nursing home residents

Portfolio strategy

Materiality (See page 37 for details.)

Challenges for
new growth(New Fields)

32 billion+ yen

10%+
Sales growth in New
Fields
FY2022–2025

Doubled as of FY2025

Toward the achievement of our purpose

Supporting diversified andmultilayered learning experiences
to provide motivational education
services
Supporting sustainable corporate
growth and personal careerdevelopment through learning
experiences
Respecting the unique individualityof the elderly while resolving
structural nursing care issues

Achievement of the Benesse
Group’s Purpose

Anybody can enjoy lifelong
growth.
Toward a world in which
everyone can live theirown life.
Benesse will continue to aim
for these ideals.

(Relative to FY2022)+
Management systemtransformation
Corporate transformation
Promotion of DX
mainly through theGroup-wideorganization DIP*
*DIP: Digital Innovation Partners

Portfolio structure
vision for FY2028:
Well-balanced profit
generation from threepillars:
Core Education,
Core Nursing Care,and New Fields

Foundation that underpins the above

Nurturing organizations and people asdrivers of transformation
Preserving a sustainable global
environment
Cultivating a corporate culture
conductive to serving society andcustomers with integrity*Goodwill from future M&As are excluded.

Benesse Report 2023

16

CEO MESSAGE
We will boldly undertakea transformation toachieve growth hand inhand with employees.

Hitoshi Kobayashi

CHAPTERbusiness, we launched a local subsidiary in India to start theschool education support business in the country. Also, we
improved our profitability by selling the Berlitz business,
which had been a management issue for many years.
Moreover, we established Digital Innovation Partners (DIP)
as a Group-wide organization to promote digitalization for
the further development of each of our businesses, andhave been steadily implementing relevant measures. For
fiscal 2022, we recovered our operating income to nearly
the pre-COVID-19 fiscal 2019 level by posting income of
20.6 billion yen. Although operating income is still below its
record high, the Group has proved that it can make a profitof 20 billion yen or more even when it faces difficulties in
its core businesses, such as the Shinkenzemi and Komodo
Challenge businesses. Indeed, the Group has a businessportfolio that helps secure this profit level.
According to the explanations that I have given above,
you might wonder why it was necessary for the Group toreview the Medium-Term Management Plan. The reason
is that the market growth rate of the education businesswill decline due to a decrease in the birthrate, although
the business is still providing the Group with a major
source of revenue. We need to think about how to build
a robust revenue base for 10 years in the future while we
still have enough earning power in the business. To meetthis requirement, we conducted examinations from a new
viewpoint and new angle, rather than regarding the future
as an extension of the present, and this led us to review
and update the Management Plan.

Representative Director and President, CEO

Helping individuals to lead their own
lives

Announcement of the Transformation
Business Plan
In May 2023, the Benesse Group announced theTransformation Business Plan for fiscal 2028, which is
aimed at increasing its corporate value on a mediumto long-term basis. For the Medium-Term Management
Plan that was released in November 2020, we completed
phase 1 of the plan, or its first two years, in March of thisyear. Also, back in May 2022, we updated some of thefinancial KPIs set under the Management Plan. Then, we
formulated the Transformation Business Plan as an updateof the Management Plan in view of changes to the businessenvironment surrounding the Company and its businesses.
In the Medium-Term Management Plan, we aimed to17

Benesse Report 2023

achieve a V-shaped recovery from the business impact of
COVID-19 and increase our operating income for fiscal 2022
to exceed the 21.2 billion yen we had posted in fiscal 2019,
before the outbreak of the pandemic. For core businesses,
we were unable to make a recovery as planned in thenursing care business and the Kodomo Challenge businessin China. However, we were able to achieve a V-shaped
recovery in the education business in Japan by exceeding
the profit that we had posted for 2019, before the outbreakof COVID-19. Also, in New Fields, we newly established the
University and Working Adult Business Company, and inparticular, we have been steadily expanding the Udemy
business. Further, to speed up our growth in the university
and working adult field, we invested in two companies,
one of which joined the Group. For the overseas education

The Benesse Group has long been widely recognized
as a leading enterprise in the educational field, and has
steadily achieved growth based on its unique businessmodel. However, the numbers of enrollments and students
registered with Shinkenzemi and Kodomo Challenge havebeen decreasing. This raises concerns about the growthpotential of the Group to some people, and our stock pricehas been halved compared with its record high for the recent
decade. What should we do to increase the expectationsof our stakeholders, including our investors, for the Group’s
long-term growth and gain their medium- to long-term
support? How should we help Group employees, who arefacing a range of challenges, to demonstrate their passion
and potential for their jobs? We held many discussions tofind the answers to these questions for ourselves, and these
efforts culminated in the formulation of the Transformation
Business Plan. Based on the Group’s purpose, we will makefull use of our strength and expand our business domains inline with the strategies set in the Plan, which are not simple
extensions of our conventional management strategies that
focus on the education business.
As implied by the term Benesse (well-being),
which we uphold in our corporate philosophy, theentire Group is committed to supporting individuals
in leading their own lives at each life stage from birth
to the last moment. However, we were trapped in apast of successfully achieving growth by conducting
a unique education business, and we also needed to

01 Our Vision and Business Strategies

respond to a personal information leak that occurredfrom within the Group. Under these circumstances,
we tended to take a narrow view and focus on
the immediate results of our work, although wewere aware of the importance of implementing
our corporate philosophy. On the other hand, thepandemic caused a range of social issues to surface,
and the business environment surrounding theGroup is continuing to change dramatically. We canno longer deal with such changes only by making
improvements to our existing businesses. We should
be bold enough to break the business model that wehave built, regarding it as a precondition to meet ourcustomers’ needs on a continual basis. We must haveenough courage to break away from our past successto be a corporate group that can continue to win
public support and trust in a very steady manner. To
this end, we will promote our own evolution in linewith the Group’s purpose and the Transformation
Business Plan.

Embodiment of the corporate philosophy
through business operations
The Benesse Group includes Benesse Style Care, a company
engaged in the nursing care business. In 2000, I wastransferred to the predecessor of this company (Benesse
Care) to serve as one of its directors. At that time, many
people both inside and outside the Group objected to theGroup’s engagement in the nursing care business, and I
was surprised and embarrassed at my own transfer to thecompany. However, when I visited a nursing home operated
by the company as director, I was impressed with theattitude of the company’s staff. They were embodying ourcorporate philosophy by being committed to supporting
residents of the home in leading their own lives beyond
the framework of their jobs. I was so inspired by them that
I involuntarily exclaimed, “Amazing!” I strongly rememberthat to this day. Now there are many companies operatingin the nursing care business. At that time, however, very
few companies were doing the business and the quality ofthe services provided by these companies was generally
not very high. But the staff of Benesse Care was thoroughly
devoted to helping residents of the home to lead their own
lives while also striving to meet the needs of their families.
Both the residents and staff of the nursing home that I
visited looked happy. This experience led me to uphold theidea that we can offer the ideal service by helping our users
to continue living their own lives. When starting to provide
welfare and nursing care services, you usually employ
people who have experience in the industry. However, wehave been proactively employing people who have diverse
experience in fields other than the welfare and nursing careindustry, in order to provide individual customers with theideal service that truly fits their individual needs. I think thisis an unusual practice in the industry.
It is essential for the Group to 1) achieve businessgrowth, 2) contribute to solving social issues, and 3) help
its users continue to live their own lives. In order to do
all of these three good things as our unique initiative,
I believe it is important to help all Benesse Group

Benesse Report 2023

18

CEO MESSAGE

employees to have the self-confidence that they canembody the corporate vision and philosophy throughtheir own jobs, as already demonstrated by our staff thatengages in the nursing care business.

Grasping new business opportunities
at the turning point of school education
Education is one of our main businesses, and we havealready taken measures to respond in a timely manner
to changes in the field’s business environment, including
shortening the time required for the creation of teachingmaterials. I regard 2025 as a turning point for school
education in Japan, which is undergoing various changes
including those related to children’s motivation for learning,
their parents’ values, the guiding principles adopted at
educational facilities, and the university admission system.
In December 2019, the Japanese Ministry of Education,
Culture, Sports, Science and Technology announced its
intention to promote the introduction of ICT to schools
under its GIGA School Program. While the introduction of a“one device to one student” policy was planned for the endof fiscal 2023, it was implemented under the program three
years earlier than planned to meet the need for online
education caused by the pandemic.
Starting in 2025, students will receive new replacement
devices under the Next GIGA Program formulated as thesecond phase of the Ministry’s aforementioned initiative.
Also, school administration support systems will be updated
to cloud-based systems, the assessment of students
through computer-based testing (CBT) will expand, andthe application and effective use of educational data will
be further promoted. On the other hand, we face threats
and risks, including the reduction of the budget allocatedby local governments to software applications and theshrinkage of the out-of-school learning market following
the spread of devices. While keeping these challenges inmind, we should further promote the transformation of
our education business in fiscal 2026 and onward to grasp

19

Benesse Report 2023

CHAPTERnew opportunities provided by the need to reduce theadditional burdens imposed on teachers, and also narrow
regional gaps in terms of education and increase the device
possession rate. To this end, we will take the following three
approaches.
First, we will take a Bring Your Own Device (BYOD)
approach mainly in the Shinkenzemi business, thereby
transforming it into a next-generation business model witha focus on serving more diverse households and children
in the business. As the second approach, we will help
schools shift to cloud-based school administration. We will
make more effective use of relevant data to help schools
provide a new type of education, thereby contributing to
the reduction of burdens imposed on their teachers. Thirdand last, we will promote CBT for educational assessments.
The Benesse Group has unique expertise and know-how
in educational assessments. Accordingly, we can provide
schools with the services that will help them to promote
daily learning, show them education courses that match
individual students, and support their students in taking
intra-year entrance exams. We will expand the use of
CBT in these services to promptly find more business
opportunities.
The Benesse Group has accumulated know-how and aproven track record in the creation of paper-based teachingmaterials that are useful for children. Now, amidst the rapid
progress of digitalization, we need to do more than simple
digitalization. Specifically, we need to take advantageof the features of digital media to create new teachingmaterials that will give children more motivation to learn.
For the creation of such materials, the Group is focusing on
reskilling Group employees. In addition to acquiring new
skills, Group employees are required to make efforts to viewthings beyond the scope and framework of the Group’s
conventional businesses.

01 Our Vision and Business Strategies

Left: Final screening session for the B-Stage internal proposal system Upper right: Benesse Group’s monthly morning meeting held to promote transformation
Lower right: President’s roundtable meeting report in the online in-house newsletter

Involving employees for speediertransformation
It is not easy for us to dramatically change the Shinkenzemi
and Shinken Simulated Exams businesses, which have longprovided us with a great driving force for growth based on
the quite unique business models. We have a total of morethan two million enrollments in the businesses, and we
require great courage to adopt the opinions of people whoare not registered members of the services while continuing
to meet the expectations of the members. It would also be
difficult for each of our employees to search for new businessideas from a broader perspective while performing their
daily operations. I therefore decided to provide employeeswith special opportunities to get inspired and think deeply,
including establishing the B-Stage internal proposal system.
In fiscal 2022, the number of proposals made under thesystem reached 3,427, almost doubling from that in fiscal
2021 (1,782). Although many companies have their own
in-house proposal systems, it seems rare for the numberof proposals made under such a system to double in thesecond year. But we have achieved it, which is attributable to
the great efforts made by the secretariat. Also, the heads ofthe in-house companies steadily responded to all proposals
and ideas submitted by employees, including minor ones, ina very sincere manner. Due to these two factors, employees
felt more encouraged to make proposals under the system,
which in turn increased the number of entries.
The Benesse Group has established a CXO-based system,
placing importance on cross-organizational functions,but it still has a vertical organizational structure. However,through the B-Stage system, it has been clearly revealed
that employees working onsite have a range of ideas andthoughts regardless of their affiliation in the Group, and thisis indeed a great finding for us. Of course, we need to do
more than just encourage employees to make proposals.
It is also important for the management side to respond totheir proposals in a sincere manner, and I have asked theheads of the in-house companies to avoid simply ignoring
any proposals. Under the B-Stage system, which is now
three years old, we ask employees to make proposals in
two separate divisions, which we call the “free competition”
and “compulsory competition” divisions. In the compulsory
competition, we solicit proposals in the business domains
important for the Group’s sustainable growth as describedin the Transformation Business Plan. We will examine each of
the submitted proposals in consideration of its business sizeand social impact.

Building a corporate culture that
promotes the growth of both theCompany and employees
Since joining the Company in 1985, I have been achieving
self-growth with the growth of the Company. The Company
respects the opinions of employees, and it used to be
included in the job of the president to read all employees’
daily reports by noon the next day and then give comments
to the reports written with a red pen, just like a teacher does
for their students. Also, at the end of each year, employees
used to write a letter to the president to describe thechallenges that they want to embrace and propose their
new ideas. The president would read all the letters during
New Year’s vacation, which must have been time- andlabor-consuming. However, thanks to this culture, onsite
employees felt a sense of unity with the management teamand were highly motivated. As the Company went throughthe growth phase and faced changes in the businessenvironment, this culture was unfortunately lost. I would
like to bring back this culture to the Company. In your daily
operations, you might feel uneasy as you cannot boost
revenue as planned. But I want all employees to embracechallenges with self-confidence to help the Benesse Group

Benesse Report 2023

20

CEO MESSAGE

CHAPTER

01 Our Vision and Business Strategies

planned for all the measures, but I am determined to build a
corporate culture that encourages all employees and officers
to boldly promote transformation on a full scale.
I am also committed to further promoting meaningful
dialogue between the Group and its shareholders, investors
and other stakeholders, and would like to ask all our
stakeholders for their continued support for the Group.

Conclusion
What the Group should aim for is thus summarized in theTransformation Business Plan. The Group’s purpose and the
purpose set for each business have been gradually shared
more widely across the Group. Fiscal 2023 is the first year of
the Plan, and is an important year in achieving the targets
set for 2025 and 2028, which are milestone years under thePlan. If we fail to implement measures as planned in the firstyear, it will be quite difficult for us to complete the plan by
the deadline. It is of course difficult to make achievements as▶Goals of the Transformation Business Plan and Outline of the Plan

Goals of the Transformation Business Planpush ahead with measures to compete in a more robust
manner. When onsite employees do not feel enoughmotivation or passion for their work, no management
plans will function well, even if they are excellent plans.
This has been proven in the Group’s history. I have learned
that the insights, creative measures, and passion of onsite
employees provide a driving force for the Group to
increase corporate value, and this should be a part of ourcorporate culture. For our customers, not the words of the
management, but those of onsite employees and staff
members are what matter. All officers and employees mustclearly recognize this fact.
However, I do not mean to say that onsite employees
are allowed to do only what they want to do. In orderto please our customers, we need to inspire them andencourage their self-confidence, and their needs change
constantly. In particular, children are placed in a dramaticallychanging environment, and there are children who havelost their self-confidence or motivation for learning. For the
onsite staff to help these children out of such a situation,
the staff members need to change themselves, even bydiscarding their past successful experiences. All officers andemployees must understand the fact that these changes
revitalize our sites. As I often say, Benesse can maximize its
strength by helping its sites demonstrate their respective
strength. I would like to have more opportunities tocommunicate this directly to more employees.

Never making my own limits theGroup’s limits
I am strongly committed to transforming our business incooperation with onsite employees. However, I do notthink that I can lead the entire Group’s transformation on
my own. In other words, I should never make my own limits
the Group’s limits. I have therefore rebuilt and enhanced
the CXO system as part of the management and corporatetransformation process. The Benesse Group had highly
professional administrative departments even before
the establishment of the system. However, for the Groupto transform its business portfolio and urge employees
to embrace new challenges in their respective businessfields, the administrative departments need to work incooperation with the upper management team while
understanding the challenges embraced by the onsite
staff. However, if the administrative staff need to ask me
to check everything, they will be unable to work speedily
to make reforms in a timely manner, and this implies therisk of making my own limits the Group’s limits. On theother hand, there have been more cases in which advice
and support need to be given to onsite employees from a
broader perspective rather than focusing on one specificbusiness area. In consideration of these facts, I have beenleading the organization of a cross-departmental meetingfor the administrative staff since fiscal 2022. The CXO
structure shown in the Transformation Business Plan has
been built against this backdrop. As a result of changing
the organizational structure, I think both the CXOs and staffof the administrative departments are becoming morestrongly committed to leading the Group’s transformation.
As CEO, I used to make decisions in a range of cases, butnow, those around me are making decisions instead of me
more frequently than before, which sometimes gives me asense of loss, but I believe such empowerment is necessary
for the Company to exceed my limits.

1. Be a corporate group devoted to solving social issues centered on people
2. Pursue sustainable profit growth through portfolio structure transformation
3. Establish three pillars of income with Core Education, Core Nursing Care, and New Fields

Direction

Benesse Report 2023

Benesse will continue to aim forthese ideals.

Financial
KPI

Operating income*
FY2025ROE
FY2025

Sales growth in New Fields
FY2022–2025

32 billion+ yen

10%+

Doubled as of FY2025(Relative to FY2022)

Portfolio structure vision for FY2028:

Portfoliotransformation

Well-balanced profit generation from three pillars:Core Education, Core Nursing Care, and New Fields*Goodwill from future M&As are excluded.

Portfolio strategy

Transformationof core businesses(Core Education)

Management
systems toachieve the plan

21

Group’s
purposeAnybody can enjoy lifelong growth.
Toward a world in which everyone
can live their own life.

Transformationof core businesses(Core Nursing
Care)

Challenges for
new growth(New Fields)

Management system transformation
Corporate transformation

Benesse Report 2023

22

CHAPTERCSO MESSAGE
We will appropriately allocate
our managerial resourcesfrom a firmwide viewpoint toachieve sustainable profit
growth.
Koutarou Ueda

As clearly stated in the Group’s purpose, the Benesse Groupis constantly working to solve social issues centered on
people based on its belief in the potential of people. Mainlyin the fields of education and nursing care, we have been
sincerely serving customers by attributing importance toonsite activities and have proven track records for the quality,
know-how and reliability of our services, with our employees
being committed to providing such services by sharing thevalues of the Group. All the quality, know-how, and reliability
are important assets of the Group, as are our employees.
I believe that by capitalizing on these assets the Group can
become a corporate entity that is deemed necessary for thesolution of global issues both within and outside Japan.
On the other hand, the fields of education and nursing
care are undergoing changes at an even greater speed.
The Company used to formulate its firmwide medium-term
management plan based on the strategies and business plans
made by each business department in line with the firmwide
policies. This approach was quite effective in enabling theCompany to respect the opinions of those working onsite
and make improvements to provide more customer value
over the decades. However, Japan’s formerly rising population
began to decrease, and digitalization started to be promoted
dramatically. We can no longer depend on a conventional
approach, because if we do, we are likely to make strategies
and plans that are simple extensions of the conventional ones.
Against this backdrop, in the Transformation Business
Plan, we clearly show the goals to be achieved by the entire
company under the plan, indicate the “targeted status” of eachbusiness for our business portfolio, and then make our strong

23 Benesse Report 2023

Key points of the portfolio strategy
To generate stable profits in the Core Education
business
The Core Education business comprises the Shinkenzemi,
Shinken Simulated Exams, and prep school businesses,with which we have built a unique business model for thecreation of customer value. This business has been driving
the Group’s growth since its founding, and still accounts
for a large portion in terms of the profits generated by
the Group. At least 90% of senior high schools in Japanare our customers, and we have an overwhelmingly large
number of students enrolled in the business, who aremainly elementary school students. The customer basethat we have built and the trust that we have earned fromour customers will give us a great advantage in the coming
age of digital data and AI.
However, due to Japan’s decreasing birthrate, ourmarket in the country has been diminishing, while themarket needs that we are required to meet are changing
due to the trend of digitalization. Also, changes are being▶Key points in portfolio transformation

Managing Executive Officer, CSO,
Executive General Manager of Corporate
Planning and Promotion

Key points of the Transformation
Business Planof employees beyond the divisional framework as well asa system to ensure that the human resource development
department will receive fair evaluations. We will thereby
increase the precision of matching between our employees
and business opportunities beyond the simple allocation of
personnel. As for the organizational abilities and key humanresources that we clearly lack, I will cooperate with the
CHRO and the Chief Financial Officer (CFO) to acquire themfrom the outside through a special employment program,strategic investments, and M&A. Furthermore, I expectthat the structural reform of the core businesses and theimprovement of our corporate productivity, both of which
are promoted under the leadership of the Chief DX Officer(CDXO), will help us secure more resources.
As described above, the CXOs need to collaborate andenhance their teamwork to implement the Transformation
Business Plan. Already, only several months after theannouncement of the Plan, we have promoted mutual
collaboration and cooperation in an unprecedented manner.
To achieve the structural reform of the business portfolio,
it is important to promote management and corporatetransformation mainly by enhancing the CXO system, while
promoting the transformation of the businesses.

commitment to transforming our management approachand system. Specifically, we uphold, “Establish three pillars
of income with Core Education, Core Nursing Care, and New
Fields for sustainable, profitable growth” as one of the goals
and clarify the time frame for the achievement of the goal.
We will push ahead with the structural reform of our businessportfolio under this plan.

Approach to the structural reform of
the portfolio
It will take us more than one to two years to complete thestructural reform of the portfolio. For the reform, we will first
define the targeted status for each of the businesses and thenappropriately set the tasks to be performed, the goals to bereached, and the timeframe for the attainment of each goal.
Then, the management team will lead the reform for years, while
allocating the necessary resources with total commitment.
In the Transformation Business Plan, we set the targeted
status of the following businesses that comprise New Fields
to be the growth driver: the University and Working Adult
Business, the Nursing Care Peripheral Business, and Overseas
Business. We will input resources intensively in New Fields. For
example, for human resource development, which is being
promoted under the leadership of the Chief Human Resource
Officer (CHRO), we will implement a range of measures tohelp employees develop their career with strong ownershipand support their reskilling while showing, more clearly than
before, the organizational abilities and types of personnel
that we need to have to achieve rapid growth in New Fields.
Moreover, we will introduce a career development meetingin which the management team furthers their understanding

01 Our Vision and Business Strategies▶Management and corporate transformation

Strengthening resources and optimizing their
allocation from a company-wide, medium- tolong-term perspective

Reconstruction and reinforcement of system led by
CXO to achieve the goals of Transformation Business
PlanManagement decision-making based on appropriate
evaluation of return on investment (ROI) of key measures incore businesses and business potential of low-profit businesses

Construction of management system where top
management allocates resources across thecompany

Improvement of management team’s capacity,
expertise, and productivity to drive achievement ofTransformation Business Plan goals

Improvement of corporate productivity

Enhancement of the CXO system

Rebuilding the CXO system and clarifying the CXOs’ missions and KPIs
CEO

Enhance corporate
expertise

Overall supervision
ESG and sustainability

CSO

CFO

CHRO

CCO

Achievement andupdating of theTransformation
Business Plan
goals

Appropriate
profit generation

Enhancement oforganizational
strength
Allocation ofhuman resources

Promotion ofinternal &external
communications

Cash allocation

Enhancecross-organizational
cooperation for speedier
implementation

Increase the precision ofprogress monitoring

CLRO

CDXO

GovernanceDX

Compliance

Structuralreforms▶Establishment of the Transformation Management Committee●

Participants: All CXOs
Purpose: Promote discussion for the CXOs to share issues and information for closer
cooperation and optimal decision making● Frequency: Every week●

▶Organization of the CXO Monitoring Meeting (monthly)●

Held immediately after the end of the monthly Company Management Committee meeting for
the CXOs to discuss necessary corporate support in reference to the business progress report
made at the committee meeting

Benesse Report 2023

24

CSO MESSAGE

CHAPTERsteadily made to the lives of our customers and theirlearning environment, including an increase in the numberof working mothers and the decline and diversification ofpeople’s motivation for learning. Under these circumstances,
we need to maintain and enhance our customer base,which is one of our strengths, respond to the diversificationof customers’ needs, steadily grasp the opportunities
brought about by the Next GIGA Program and other social
reform initiatives, and transform our strengths gained in
the age of expanding population into those that match theage of data, depopulation and digitalization, thus creating anext-generation business model.
In consideration of these changes and challenges, wewill examine our ROI first, and then implement measuresand make investments effectively to maintain andenhance our customer base and to respond to diversified
customer needs. At the same time, we will proactively
utilize the technologies that are dramatically changing,such as generative AI systems, across the organization
to promote structural reforms. In the progress ofdigitalization, we will transform our products and services
into those that better match our customers, includingchildren, their parents and schools, while responding to
the diversification of their needs by further developing
peripheral services such as EVERES, Challenge Schooland MARUG land. Further, in anticipation of the dramaticchanges to be made starting in 2025 following thosemade under the Next GIGA Program, we will work on
the Mirai Seed software and C4th as strategic products
and strive to create the next-generation versions of
Shinkenzemi and Shinken Simulated Exams in the Core
Education business.

For the stable growth of the Core Nursing Carebusiness
In the Core Nursing Care business, we will focus on recovering
the occupancy rate at our nursing care facilities, which has
yet to recover from the impact of COVID-19. However, theoccupancy rate is steadily increasing along with an increasein the number of inquiries from people who want to visit
the facilities for a tour. We will make even more efforts tostrengthen relationships with hospitals and care managers
while enhancing our sales activities and providing short-term
nursing care services to boost the occupancy rate as soon as
possible. On a medium- to long-term basis, the populationof people aged 85 and older will continue to increase up to
2065. In view of this fact, we aim to achieve stable growthin the business by improving the quality of our nursing careservices and helping our customers improve their qualityof life (QOL) through innovative measures such as offering
Majikami AI solutions based on the expertise of Majikami(Benesse's specialists in nursing care).

For the acceleration of growth in New Fields
For New Fields, which comprises the university and working
adult field, the nursing care peripheral field, and the overseas
field, we set the targeted status to be a growth driver for theentire Group up to fiscal 2028.

University and Working Adult BusinessIn the university and working adult field, the markets will
steadily expand for learning, career development and thematching of human resources, amid the remarkable change
and diversification of people’s work styles and necessary
skills. In response, we will make strategic investments andproactive use of the Group’s assets and resources to rapidly
develop the business in a manner unique to Benesse,
specifically by assisting both companies and individuals
with reskilling and thereby more closely linking learning andworking.
The Benesse Group did not have a robust customer
base for businesses targeting companies and working
adults in the past. However, by making strategic
investments in Udemy to form business partnerships withthis online learning platform provider, we now have morethan 1,300 corporate customers, including more than 50%of the Nikkei 225 Index constituents and more than 1.4
million personal users of the business in Japan, and the

Pursue sustainable profit growth through portfolio structure transformation

Our vision (FY2028 -)Goals of current medium-term plan (FY2025)

Sustainable profit growth through a three-pillared
income structure

Our targeted status for FY2025, backcast form our visionWell-balanced profit generation from three areas:
Core Education, Core Nursing Care, and New Fields
GrowthdriverCore
Education

Stabilized earnings throughstructural reforms and response toincreasingly diverse needs, etc.
Initiation of business modeltransformation

Core
Nursing
Care

Quick recovery to pre-COVID-19
occupancy rates
Moving on to stable growthtrajectory

New Fields

Strategic investment and sales
growth to drive profit growth in
FY2026 and beyond

Stable profits

New Fields

StablegrowthCore
Education

Core Nursing
Care* Core Education = Out-of-School Learning + School + K&F, Core Nursing Care = Nursing Care and Childcare
New Fields = University and Working Adult, Nursing Care Peripheral, and Overseas

25 Benesse Report 2023

01 Our Vision and Business Strategies

number of customers is continuing to increase. Also, we
have recently made announcements about Waris joining
the Benesse Group and about our strategic investment in
SkyHive to form a business partnership with the company.
We will continue to speed up our growth in the businessby forming strategic capital and business partnerships
including M&A, freeing ourselves from not-invented-here
syndrome. Further, to propel the growth of our University
and Working Adult Business, we will make effective useof the powerful assets possessed by the Benesse Group,
including Manavision, through which we have contact withalmost all senior high school students in Japan; Shinken-AD,
through which we offer support to universities acrossJapan; doda campus, a joint venture with PERSOL CAREER
Co, Ltd. to support new graduates in finding jobs, theTamahiyo and Kodomo Challenge businesses, and “Thank
You!” magazine, which helps us further our relationships
with parents, particularly mothers.

Nursing Care Peripheral Business
The Benesse Group has long accumulated a range ofexpertise and know-how as a leading enterprise in theindustry of nursing care facilities. We regard the nursing
care peripheral business, in which we have uniquestrengths, as an important growth business for us. The
nursing care market is expected to expand on a mediumto long-term basis. However, due to the serious shortageof labor in Japan, it is becoming a great social challenge
to secure staff for nursing care service and to serve highquality meals, which have a direct impact on health and
QOL, to the residents of nursing care facilities. In theTransformation Business Plan, we have made our firstclear statement that the nursing care peripheral field is an
important growth field for the entire Group. We will takeon the challenge of promoting the nursing care peripheralbusiness by making effective use of the Group’s assets,
including the industry top-level know-how that we havegained through our business operations as well as Group
personnel well-versed in digital technologies.

Basic policy for overseas business development

1

Develop in domains(education/nursing care related)
where the company has strengths
and know-how, rather than in
unrelated areas.

2

Base the strategy on deep
commitment to a specific country,
rather than a global development
strategy (e.g., K12 education in India).

3

However, in areas where we haveknowledge but insufficientorganizational capacity, consider
scenarios involving M&A as a starting
point or booster.

Overseas Business
The Benesse Group has been making examinations to build
a new pillar for the Group’s profit growth outside of Japan
since before the outbreak of COVID-19. The educationand nursing care fields, in which the Group is operating,strongly reflect the culture, tradition, values and social
systems of each country, and we cannot simply apply themethods used in the fields in Japan in other countries.
However, the Benesse Group’s business know-how andassets, which we have accumulated over decades, are on
an incomparably high level globally, and many people fromleading companies overseas and foreign governments are
surprised at the level of our assets when I talk with them.
The Benesse Group is thus attracting much attention fromoverseas as a leading company in Japan, which is facing
social challenges ahead of other companies and which also
boasts high quality product brands. Therefore, I think that
we have great business potential in the countries where
our products and services are closely matched to help local
communities and people solve their issues and where we
can find a market with substantial size and growth potential.
Based on these ideas, we have already expanded the
Kodomo Challenge business in China and have also started
to embrace the challenge of conducting the school support
business in India with a focus on the assessment of students.
Japan and India have much in common in terms of school
entrance examination systems. Moreover, India announced
its intention to reform its entrance examination system in2020 and has been implementing measures for the reform.
We can steadily support the reform based on Benesse’s
know-how and expertise in the field and will take on thechallenge of serving local customers in a manner uniqueto Benesse in the country where the education market
will grow at an overwhelmingly high pace. Also, in thenursing care field, including both the operation of nursing
care facilities and the peripheral business, we will promotedialogue and the implementation of pilot projects withcandidates for our leading business partners in overseas
countries and particularly in China, for which we have been
making examinations with a focus on the human resource
development field.

Benesse Report 2023

26

CHAPTER

CFO MESSAGE
We will proactively makegrowth investments and boldly
promote transformation.

Shinsuke Tsuboi
Managing Executive Officer, CFO,
Executive General Manager of Finance and Accounting

Summary of results for fiscal 2022
and outlook for fiscal 2023
Fiscal 2022 was the final year for phase 1 of the current
medium-term management plan. For the fiscal year, weposted net sales of 411.8 billion yen, down 20 billion yen(4.6%) year on year, operating income of 20.6 billion yen, up
400 million yen (2.2%) year on year, and net income of 11.3
billion yen, up 10.2 billion yen (966.8%), year on year. The
decrease in net sales is attributable to the sale of the Berlitz
business. In operating income, we were able to achieve
an increase of 400 million yen. Although the lingering
pandemic caused a delay in the improvement of theoccupancy rates in the nursing care and childcare business,and the enrollment rate in the Kodomo Challenge businessin China decreased due to the country’s zero COVID-19
policy, we were able to increase profit by selling theunprofitable Berlitz business and expanding the University
and Working Adult Business, in particular the Udemy
business. The environment surrounding our businesses,
including the education business in Japan, is becoming
harsher, and in response we are further enhancing ourbusiness performance management function. We havebeen dispatching employees in charge of managing
business performance under the CFO to each of the
in-house companies and have been appointing somestaff members to more than one job while implementinga job rotation system among them. In fiscal 2022, we also
started to implement measures to increase the frequencyof reporting from onsite staff to the management teamand enhance communication between the two sides.
As a result, the management and onsite staff began toshare a commitment to numerical targets and a sense

27 Benesse Report 2023

of crisis that were stronger than before. They have been
more stringently reviewing measures for each in-housecompany, working to reduce costs, and striving for
more drastic full-year profit and loss management inaddition to ensuring the conventional monthly profit
and loss management. I think these improvements havecontributed to increasing our operating income.
As for our performance in fiscal 2023, the first yearof the Transformation Business Plan announced in May
2023, we expect that net sales will reach 423 billion yen,up 11.1 billion yen (2.7%) year on year, and operating
income will also increase by 800 million yen (4.3%) to
21.5 billion yen, mainly driven by the recovery from theimpact of COVID-19 in the Nursing Care and Childcare
Business. In the Shinkenzemi business, we will face adecrease in the number of enrollments. To counter this,we will work to increase profit through our own pricerevisions and cost reductions.
For fiscal 2023, we will also make investments infuture growth. Specifically, we will allocate funds mainly toenhance our products and operational foundation in thebusiness targeting elementary and junior high schools,
where replacement of devices will be promoted based on
the “one terminal per student” principle under the Next
GIGA Program starting in fiscal 2025; promote sales anddevelop human resources for the speedier growth of the
Udemy business; enhance the area business promotion
system; develop business in India; and develop humanresources for DX. For the fiscal year, we thus plan to increase
the investment amount by a total of about three billion yen
year on year.
While proactively making investments in future growth,
we will also strive to keep increasing our profit.

Important points of the Transformation
Business Plan from the CFO’s viewpoint
Fiscal 2025 and fiscal 2028 are milestone years for theTransformation Business Plan. In consideration of thepresent situation for our existing businesses and theinvestments to be made in new businesses for future
growth starting in fiscal 2025, we set the operating incometarget for fiscal 2025 at 32 billion yen. For the ROE target
for fiscal 2025, we strive to increase the return to 10% ormore. Also, through the transformation of our businessportfolio, we aim for well-balanced profit generation fromthree pillars: Core Education, Core Nursing Care and New
Fields, by setting the targeted status of the three to bestable profits, stable growth and growth driver, respectively.
Specifically, for Core Education, we will boldly transformthe business model up to fiscal 2025 and onwards, while
drastically making structural reforms, enhancing thecustomer base, and responding to the diversificationof market needs, thereby stabilizing our foundation to
generate profits. In order to achieve the targeted status(stable profits), we must maintain the current profit level,
for which we will implement measures as required.
Although the education business remains a core businessfor the Group, the market growth rate will inevitably drop
due to the decreasing birthrate. For the time being, we willcontinue to make prior investments to grasp opportunities
given by the Next GIGA Program to be implemented
starting in 2025, while also steadily evaluating ROI for
well-balanced investments.
In Core Nursing Care, the market will continue to expandin line with the aging of society. Also, we can see signs ofbottoming out regarding the occupancy rates at our nursing
care facilities, which had been falling due to COVID-19. We
are offsetting the increase of costs caused by the recent
inflation by raising our own service prices and saving costs
and are nearly on the path to boost our profit substantially.
First, we will achieve recovery to the pre-COVID-19 level forthe occupancy rates and profits toward building a robust
business foundation for stable growth.
For New Fields, we regard these fields as those that will
drive the Benesse Group’s profit growth starting in fiscal
2026. Accordingly, we will make proactive investments inthe fields, including those for M&A.
We held some meetings with investors after theannouncement of the Transformation Business Plan, andI think the investors largely agree with the direction of
the strategies that we are upholding. However, to further
increase their expectations for our growth potential, we
need to demonstrate that we do have such potential bymaking achievements.

For the sustainable improvement of ourcapital efficiency and earning power
In fiscal 2022, we recorded 7.5% for ROE, up as much as 6.8
percentage points year on year. For fiscal 2023, we will post
ROE of 7.3%. The attainment of 10%, which is our ROE target
for fiscal 2025, is within reach if we can steadily increase our
profit in line with the Transformation Business Plan in addition
to gaining a tax effect from the sale of the Berlitz business.
As for cash allocation for three years from fiscal 2023 to
fiscal 2025, we will allocate a total of about 124 billion yen

01 Our Vision and Business Strategies

to transform the core businesses, make growth investments
in New Fields, and to return profits to shareholders. For
the breakdown, we will allocate a total of 103 billion yen
to making investments at the rates of 30%, 20% and 50%
in Core Education, Core Nursing Care and New Fields.
Specifically, we will invest 50 billion yen in the transformationof the core businesses, and the remaining 53 billion yen in
the growth of New Fields. Then we will use the remaining
21 billion yen to return profits to shareholders and to solidify
our financial foundation. We used to categorize the use offund into the following: 1) CAPEX and other investments
in existing businesses, 2) growth investments in new
business fields and M&A, 3) return of profit to shareholders,and 4) internal reserves. Going forward, we will prioritize
investments in the Core Nursing Care business in which
we are aiming for stable growth, and in New Fields whichhave market growth potential, while making more selective
investments in the Core Education business than in the past.
We will not cut the number of necessary investments, butwill strictly check the returns on each to make well-balanced
investments, which I will lead as a responsibility to be fulfilledby the CFO.
As for the balance sheet, we secure about 150 billion
yen as cash on hand and bank deposits. Relative to theamount of our interest-bearing debt, we have adequate
cash and bank deposits. However, advance payments
received from our customers amount to 100 billion yen
or more, and funds that we can immediately spend total
40 billion yen to 50 billion yen. It might be possible toinvest the funds from advance payments also in ourbusinesses, but as a corporate group engaging in the social
infrastructure business, we have consistently adhered tothe policy of retaining all the cash gained from advancepayments. The Benesse Group thus has enough surplus
fundraising capacity, while the interest rates remain at avery low level. Against this backdrop, when making a large
investment such as for an M&A, we will consider raising ourfinancial leverage on a temporary basis, while giving due
consideration to the availability of working capital.

For the maximization of shareholders’value
In returning profit to shareholders, we aim to continuously
increase the dividend payout ratio by increasing our profit,
setting the lower limit of the ratio at 35%, and enhancing ourfinancial foundation mainly by recovering the equity ratio
to 30%. Recently, our dividend payout ratio has remained
at 45% to 50%, and we will allocate the balance between
the total amount of profit gained and the amount paid
to shareholders as dividends to internal reserves and as afund for future investments. For the repurchase of our own
shares, which we have been conducting, we will consider
shifting our focus to the payment of dividends in view of
the increased number of personal shareholders and witha focus on encouraging our customers to become ourshareholders and our shareholders to become our customers.
Our equity ratio is currently slightly below 30% due tochanges made to the lease accounting method and becauseof the introduction of the revenue recognition standard. To
maintain our corporate rating, we need to recover the ratio
to at least 30%, for which we will focus on dividends as ameans of returning profits to shareholders.
Benesse Report 2023

28

CFO MESSAGE

CHAPTER

Conclusion
The Benesse Group is strongly committed to serving society
and our customers. On the other hand, the Group tends
to be not very sensitive to numerical figures that reflect its
business performance. In order to implement the Group’s
corporate philosophy through its business operations asa going concern, I strongly feel it necessary for the Groupto develop human resources who can help the Group
increase its corporate value financially. To this end, for theeducation business in Japan, employees working under the
CFO are given multiple jobs and are transferred to makethe business more financially robust. I would like to expand
this practice to across the Group to develop personnel who

can make business and investment plans and formulate
financial strategies based on the understanding of worksite
atmospheres and situations.
The Benesse Group’s price-earnings ratio (PER) andprice-to-book ratio (PBR) are about 15 and 1.1, respectively,
and are thus on an average level in the market. However, ourPER used to be 20, and compared with that time, the Group’s
rating in the capital market is not very high. Also, I am not
at all satisfied with our current stock price. We have beenpresenting detailed explanations to investors about thegrowth strategies described in the Transformation Business
Plan, while providing them with relevant quantitative
information to help them further their understanding of
the Group. However, it is not enough, and we need to
implement strategies to make achievements. If we cansuccessfully transform our business portfolio under thePlan, investors will have more expectations for the Benesse
Group’s future growth. Accordingly, it is becoming evenmore important for us to report the progress with the Plan
to them continuously through proactive IR activities.
I would ask all our stakeholders, including shareholders
and investors, to give your frank opinions to the Group, andask for your continued support for us.

Financial Highlights

Net sales

500.0

Operating income/Operating income ratio

Net income attributable to ownersof the parent/Net income per share

Operating income (left)
Operating income ratio (right)

Net income attributable to owners of the parent (left)
Net income per share (right)(billionsof yen)(billionsof yen)

439.4

448.5

(%)

25.0
427.5

431.9

400.0

411.8

21.2

20.1

20.0

300.0

15.0

13.0

10.0

200.0

3.7

4.7

0

18

19

20

21

22 (FY)

ROE/ROA

0

18

4.7

5.0

3.1

5.0

100.0

15

15.0

12

12.0

9

9.0

19

20

6
3

21

0
22 (FY)

CAPEX

(yen)

250

11.3 200

117

6.2

6.0

100

4.9

3.0

50

0

18

65

3.1
32

19

150

20

1.0

50
11

0
22 (FY)

21

Depreciation & amortization

ROE
ROA

(billionsof yen)8

7.5

6(billionsof yen)

25.0

40.0
30.0

31.5

4

The investment plan allocates approx. 50% of them to New Fields.
We also make investments in core business transformation while verifying ROI.

2

▶Cash allocation (FY2023-2025)

0

3.7

23.5

1.2

18

19

24.4

19.8

19.8

18

19

18.8

18.8

19.2

20

21

22 (FY)

15.0

20.0

2.9
1.0

20.0

29.2
22.6

Cash and investment allocation

approx. 124 billion yen

20.6(billionsof yen)16.2(%)

Three-year cumulative cash position
in FY2023-2025:

01 Our Vision and Business Strategies

2.1

1.8
0.6

0.7

20

21

0.2

22 (FY)

Investment plan
(FY2023-2025)

10.0
10.0
0

5.0

18

19

20

21

22 (FY)

0

Note: CAPEX shows the “increase in tangible fixed assets andintangible fixed assets” as listed in summaries of financial
results.

Note: Depreciation & amortization shows the total amountof “depreciation and amortization” and “amortization of
goodwill” as listed in summaries of financial results.

Interest-bearing debt/
Debt-to-equity ratio

Cash dividends/Dividend payout ratio

Percentage of total

Use

1 Core business transformationUse

2

New fields growthBusiness investment

Business investment(CAPEX etc.)(M&A, CAPEX, etc.)*Excluding lease assets, long-term
prepaid expenses, etc.

(Approx.) 50 billion yen

CoreEducation(Approx.) 53 billion yen
Core Nursing
Care

Use

3

Shareholder returns and strengthening of financial base

Shareholder returns

Strengthening of financial baseWith lower limit of dividend
payout ratio at 35%, dividends toincrease continuously thanks toincrease in net income after taxes

Some retained earnings forrecovery of 30% equity ratio in
FY2025 and for future
investments

New Fields

30 %
20 %
50 %
100 %

Equity ratio

Interest-bearing debt (left)
Debt-to-equity ratio (right)

Cash dividends (left)
Dividend payout ratio (right)(billionsof yen)

(%)

(%)

160.0

40

33.6

32.7

31.3

30

27.6

28.5

120.0

20

80.0

10

40.0

120.6

68.1

123.6

72.2

137.2

77.0

139.9

86.9

143.9
93.5

120
90

(%)

(yen)

100

500

452.9

400

80
60

60

60
50

50

50

76.6

154.3

50

40
30

20

300
200

98.2

100
51.0

0

18

19

20

21

22 (FY)

0

18

19

20

21

0
22 (FY)

0

18

19

20

21

0
22 (FY)

Note: Interest-bearing debt includes lease obligations.

29 Benesse Report 2023

Benesse Report 2023

30

CHAPTERCDXO MESSAGE
In response to the changesof the times, we will further
promote our DX strategy
and its growth.
Hidetomo Hashimoto
Senior Managing Executive Officer, CDXO,
Executive General Manager of Digital Innovation Partners

Outline of the Benesse Group’s
DX strategy
In 2021, the Benesse Group launched Digital Innovation
Partners (DIP) as a virtual organization to plan andimplement the Group’s DX strategy. In 2022, DIP became
an actual Group-wide organization that has digital,
IT, human resources, and DX promotion consulting
departments within it. As such, DIP has been leading theGroup’s DX strategy, from making plans and allocating
resources and funds to implementing specific measuresacross the businesses and companies of the Group.
In July 2023, Benesse Corporation merged Benesse
InfoShell Co., Ltd., and integrated the supply chain
management function of this IT company, which was
engaged in the development, maintenance and operationof systems and the implementation of security measures
for the entire Benesse Group. As a result, DIP became anorganization with more than 800 staff members.
Based on the business plans made by each of the
in-house companies, the staffs of the business departments
and DIP have been collaborating as a joint project team tosteadily promote the DX of Benesse’s products and services.
On my part, I frequently visit Group sites to talk withkey persons on pushing ahead with innovation onsite.
Moreover, I check the progress of a range of related projects
on a weekly basis to propel the implementation of the
DX strategy, while focusing on promoting the sharing ofspecific successful examples across the Group.
Under the leadership of DIP, we will continue to further
promote the entire Group’s DX.

31

Benesse Report 2023

Recent results achieved through the
DX strategy
In fiscal 2022, as in fiscal 2021, the Benesse Group was highly
rated for its DX initiatives by multiple external organizations. For
example, at the 19th Japan e-Learning Awards held in 2022, wereceived the grand prize for MARUG land, which is an ICT-basedteaching app that provides children with learning experiencesin reading and writing that are tailored to their individual
developmental characteristics. Also, at the 40th Information
Technology Awards, we received prizes such as one for DIP inrecognition of its consistent promotion of DX projects acrossthe Group, and another for the development of Majikami AI.
Further, in fiscal 2022, coverage of our DX initiatives bymass media such as newspapers, magazines, TV broadcastingstations and online media in their DX-related articles/programs
increased by as much as 266% year on year. Also, we weremore frequently asked to give training and speeches on our DX
strategy and specific DX promotion cases. I therefore feel that
we have substantially increased our public profile as a company
advanced in DX. Partially thanks to these achievements, we also
increased the number of applicants to our DX-related job offers
targeting experienced workers by 150%, whereas companies
are generally facing difficulties in securing personnel for DX.
We also established the Digital Innovation Fund (DIF) in
November 2021 to promote DX for our existing businesses
and services and to promote the co-creation of new
businesses. The number of companies in which we invest
through this fund increased by six over the past one year andtotaled nine as of July 2023. Since the establishment of the
DIF, we have been proactively broadening our network with

01 Our Vision and Business Strategies▶DIP organizational structure

DX Strategy Office

Formulates and promotes Group-wide DX strategy

DX Human Resources Development Department

Recruits and cultivates DX human resources and updates human resource
systems

DX Consulting Department

Advances and promotes participation in digital shift projects and formulates
disruption countermeasures

Data Solutions Department

Promotes data usage at each in-house company

Digital Marketing Department

Promotes digital marketing at each in-house company

IT Governance Department

Formulates and promotes IT strategy, and improves the quality, cost anddelivery standards for IT-related development, costs and personnel

Infrastructure Solutions Department

Gives technical support for the establishment and operation of IT
infrastructure and DX promotion

Corporate System Solutions Department

Develops and operates Group-wide systems and the administrative
departments’ systems

Out-of-School Learning Business Company’s
System Solutions Headquarters

Develops and operates systems for the Out-of-School Learning
Business Company

School and Teacher Support Business Company’s
System Solutions Headquarters

Develops and operates systems for the School and Teacher
Support Business Company

Nursing Care and Childcare System Solutions
Department

Develops and operates systems for the Nursing Care and Childcare
Business Company

Kodomo Challenge System Solutions Department

Develops and operates systems for the Kodomo Challengebusiness

SCM Department

Designs, builds and operates the procurement, production and logistics
infrastructures to support business operations

Benesse BASE COM Co., Ltd.

Builds, operates and improves systems for sales management, logistics
management and student assessment for Benesse’s school business

Benesse Hong Kong Co., Ltd.

Improves the quality, cost, delivery and safety standards in the development
and procurement of educational toys

venture companies, thereby making the Benesse Group
more open to approach by a wider range of parties. Goingforward, we will shift our focus to the improvement of skills
for DX promotion and the generation of synergies for thecreation of new businesses. Powerful venture companies
can provide us with great value through their technologies
and growth potential, and the Benesse Group will be able

to offer even greater value to society by achieving growth
together with such venture companies. We have alreadysuccessfully launched some collaborative projects thatutilize advanced technology of investee companies. We willcontinue to offer the Benesse Group’s long-accumulated
expertise and know-how to the greatest extent possible tothese partner companies to achieve mutual growth.

▶Partners that have received investment and support through the DIF
Code Chrysalis Japan Co., Ltd.

Hmcomm Inc.

Fourth Valley Concierge
Corporation

Paiza, Inc.

Arsaga Partners, Inc.

LearningBOX, Inc.

LX DESIGN Inc.

beBit, Inc.

Natee Co., Ltd.

Benesse Report 2023

32

CDXO MESSAGE

CHAPTER

Making more effective use ofgenerative AI

can therefore use the service safely with peace of mind.
The chat service is facilitating verification and planning for
the use of generative AI by each business department andhas led to the launch of many projects. For example, inJune 2023, the Next-Generation Contact Center Project was
launched, which was followed by the provision of the Jiyu
Kenkyu Otasuke AI service in July to assist elementary school
students with independent research in the Shinkenzemi
business. Further, we launched the Next-Generation Website
Project as well.
When starting a project of unprecedented innovation,some might think it is necessary to clarify the purpose of
the project first. However, for DX, it is also important to try astring of emerging technologies first, and then think about
their specific usage. I think we need to use the technologies
ourselves to truly understand the opportunities and risks
they might bring about. Although we have improved ourinternal environment so that employees can use such newtechnologies proactively over the recent year or two, I would
also like to build a corporate culture that allows Group
employees to use such technologies even more freely andproactively.
For the corporate transformation and cost structurereform as described in the Transformation Business Plan,
I am convinced that the effective use of generative AI will
help us generate innovation. As an organization to facilitate
this, we established the Operation Transformation Officewithin Benesse Corporation in June 2023.
In the face of the decreasing birthrate and further
diversification of society, the Company needs to transform
its conventional business models, change its way of
doing business, and increase its productivity, thereby
further evolving its business. By promoting automationand mechanization, we will be able to provide customers
with necessary information and solutions in an even more
timely manner and can also reduce the time required for
employees to do their jobs and shift their focus onto morecreative operations. I also think that promoting DX not only

The technological innovation of generative AI has been
attracting much attention, and the Benesse Group thinksthat such innovation could pose serious threats, butalso bring about great opportunities to its businesses.
Accordingly, we are working to promptly acquire external
knowledge and the development of new partners toincorporate new generative AI technologies into theGroup. We also hold discussions on generative AI regularly
between the management team and staff of DIP.
One specific measure involves starting the operation of
the AI-based Benesse Chat service for Group employees in
April 2023. It took only two weeks for engineers from DIP todevelop this in-house service, which is intended to provide
employees with an environment that helps them to increase
their business productivity and conduct examinations for
new products and services. This chat service is provided ina closed environment to offer high security and ensure thatno information will leak outside the Company. Employees

Initiatives and services based on the use of generative AI
Step 1
Start of internal use (from April)

Step 2

Step 3

Increase the efficiency of internal operations (from June)
Accumulate knowledge while using AI in internal processes

Launch of a service for customers(from July)

Benesse Chat

Next-Generation Contact
Center Project (from June)

Next-Generation Website
Project (from July)

Jiyu Kenkyu Otasuke AI

Provision of the Benesse Chatapp to 15,000 Group employees
and promote its use in a highly
secure environment

Improve customer experienceand operational efficiency byusing generative AI at thecontact center

Launch the Next-Generation
Website Project by using
generative AI to drasticallyreform the existing online
operational process, thereby
improving both customer
experience and the productivityof the existing website

Based on internal expertise ingenerative AI, develop a service
using AI that does not give
answers for elementary school
students, and offer it free ofcharge to help children enhancetheir ability to think on theirown

Shinkenzemi

33 Benesse Report 2023

01 Our Vision and Business Strategies

DX strategy and priority measures (FY2023-2025)
Promotion of DX in amanner that matches
each business phase1

4

Digital shiftproject

DX Strategy
Accelerate the Benesse
G r o u p’s b u s i n e s stransformation bypromoting the DX ofeach business andimproving eachorganization’s DX
ability

Improvement of organizational DX ability

2

6Effective useof data3

Enhancement

5

Optimization of
the architecture
7

Renewal of
infrastructure
Security measures

IT strategy andgovernance
8

Disruption watch(DIF)

Developmentof DX humanresources

Enhancement

DX ofadministrative
functions

9New

Renewal ofvalue chain

helps us to make effective use of AI but also to enhance
the services that only human beings can offer, in which
Benesse’s strength lies.

this fact gives us a great advantage in the recruitment andretention of DX human resources, for which there is intensecompetition among companies.

Development of human resources
for DX

Policies for DX strategy in fiscal 2023

As for the development of DX human resources, we first
defined the skills required for different job types andintroduced a process to optimize the assignment anddevelopment of personnel. Specifically, we identified theseven job types that are essential for the Group’s DX andhave visualized the level of skills required for each of thetypes in the form of a skill map. We have also identified
DX-related jobs for which we will face labor shortages
in consideration of our future business plans, and arepromoting the reskilling of existing employees for the jobs.
We will give priority to such reskilling even if it takes a longtime, and will employ experts from the outside only if westill have a shortage of personnel for the jobs after making
the reskilling efforts.
In fiscal 2022, the number of employees attending
the DX training program reached 6,504, up 180% year on
year. We created about 60% of the content of the programinternally, and employees themselves serve as lecturers forthe program to share their own related experiences withtrainees. In general DX knowledge, we are making effective
use of Udemy as a self-learning tool for employees. We
also plan to provide the know-how to develop DX humanresources at other companies through the Udemy business.
The Benesse Group is engaging in a wide range ofbusinesses and can thus provide DX personnel with lots ofgrowth opportunities. The Group offers services to infants,
students, working adults, and senior citizens and has abroad range of business models. We can therefore provide
DX personnel with an environment where they can honetheir business skills from various aspects and create a rangeof business value based on their accumulated skills. Indeed,In fiscal 2023, we will focus on the development of humanresources through reskilling, the implementation of priority
measures set for fiscal 2023, and on the enhancement of
our organizational strength for DX. The Benesse Group is
conducting businesses that are deeply related to social
issues. Amid dramatic changes in society, we need totransform ourselves as a precondition to make our business
transformation strategy more persuasive: no strategy,
even if it is a good one, will be widely accepted unless it
is supported by evidence. I therefore think it is critical toshow how our DX promotion measures are linked to thebetterment of our business performance.
We have no goals for DX. In response to changes in
the world, we need to make use of new technologies tochange our businesses and services to continue providing
customers with new value, and I regard it my role as CDXO
to pursue the methodology to respond to environmental
changes and transform our organization into one that cancontinue to grow.
The Benesse Group has expanded its business scopegradually from the education business. As the corporate size
increases, I am afraid that its ability to respond to changes insociety is diminishing. In this unpredictable age of VUCA, weneed adequate ability to respond to changes in society asa prerequisite for sustainable growth. If we can recover thatability once again, we will be able to increase our service
quality even more in the future. By launching DIP and
putting DIF on track, the Group’s business transformation
speed has steadily increased. Going forward, we will further
reform the entire Group’s business foundation and boost thegrowth of its businesses.

Benesse Report 2023

34

Materiality

02
CHAPTER

Supporting lifelong growth
to shape the next era
Materiality
While analyzing the dramatic changes of the current era,
we held repeated discussions to identify our materiality
in order to resolutely make it through to the next era.
New endeavors of the Benesse Group have already begun.

35

Benesse Report 2023

Benesse Report 2023

36

CHAPTER

02 Materiality

Revision of Materiality
We have revised our materiality inconsideration of the changes in thesocial environment surrounding
the Benesse Group.

When formulating our Transformation Business Plan by updating our
medium-term management plan announced in 2020 in view of diverse changes
in the business environment, we also revised our materiality in line with thecurrent situation. Our new materiality is composed of three business themes
aimed at achieving the Group’s purpose, underpinned by a foundation of ESG
promotion.

Haruna Okada
Managing Executive Officer
Executive General Manager
of Sustainability

Toward the Achievement of our Purpose
We will provide products and services to help resolve key social issues in the fields of learning support for children, career development
support for working adults, and nursing care. Furthermore, we will establish and maintain a solid foundation for achieving our purpose,and will aim for sustainable growth while earning the trust of society.

Supporting diversified and multilayered learning experiences toprovide motivational education services
Amid dramatic societal changes affecting children and schools, we will provide education services that accommodate diversity and disparityof opportunity, with the aim of helping more children to thrive as they grow. Specifically, we will fulfill varied needs by harnessing ourcustomer base, professional insight, and digital transformation (DX); support the diversifying choices of postgraduation pathways andchanges in the way teachers work; and provide accessible educational opportunities.

Supporting sustainable corporate growth and personal careerdevelopment through learning experiences
In a society where the qualities and abilities required of workers are changing and autonomous career development is called for, companies
will need to foster individuals who can take ownership of their own career/life as drivers of sustainable corporate growth. We will lead thereskilling market by leveraging our rapidly growing Udemy user network, and expand our human resource matching business (recruitment,
transfers, job searches, job changes) by providing reskilling and skill development services.

Respecting the unique individuality of the elderly while resolving
structural nursing care issues
In the face of the increasing number of senior citizens requiring nursing care, a shortage of nursing care staff, and delays in DX, we will develop
more nursing care workers who can serve as role models while also enhancing the quality of life (QOL) of the elderly, making nursing care amore attractive career choice. To this end, we will proactively develop professional care staff and widely share their expertise with society atlarge, and visualize the tacit knowledge of care experts through the use of technology, thereby contributing to easing staff shortages.

Nurturingorganizations andpeople as drivers oftransformation
We aim to strengthen the leadership of
our employees in driving transformation
as well as their specialized expertise in aneffort to become a company capable ofdeveloping diverse personnel who cantake the lead in resolving social issues
through business. We will enhance
employee engagement by visualizing the
key positions and specialized expertise
required for transformation andimplementing training accordingly,
promoting diversity, creating a comfortableworkplace environment, supporting careerdevelopment, and ensuring appropriate
placement, among others.

37 Benesse Report 2023

Preserving asustainableglobalenvironment
We make concerted efforts to preserve
the environment with the aim ofproviding a secure world for thechildren of the future to grow up in. To
this end, we have endorsed the Task
Force on Climate-related Financial
Disclosures (TCFD) and conductedscenario analysis/action/disclosure, set
greenhouse gas (GHG) emissions
targets, and acquired Science Based
Targets initiative (SBTi) certification. In
addition, we promote environmental
education by providing related materials
and services and recycling of tablets
and toys.

Cultivating a corporate
culture conducive toserving society andcustomers with integrity
Toward the achievement of our
purpose, our Group makes unified
efforts to promote honest and soundmanagement and maximize customer
value through our business. For this,we set codes of conduct for eachGroup company based on the Group’s
purpose and Principles, conductongoing compliance activities basedon a PDCA cycle, ensure increasingly
rigorous information security, andimplement human rights measures,among others.

Upholding “Benesse (Well-Being)” as its corporate philosophy,
the Benesse Group engages in a variety of commercial activities,
including in the fields of education and nursing care, in the
belief that its business is synonymous with resolving social
issues. In keeping with this belief, we formulated our
Sustainability Vision in 2019 and our five areas of Materiality (keyissues) in 2020 following discussion of the specific themes andbasic policies of the Group in relation to our efforts to help
resolve the ever-evolving array of issues facing society.

Jumping ahead three years, the social environment
surrounding the Group has changed more than ever, andunprecedented perspectives have emerged in tackling the social
issues that our businesses seek to address. When formulating theTransformation Business Plan as an updated version of our
medium-term management plan announced in 2020, weconcluded that our materiality also needed to be revised in linewith the current situation, and proceeded with discussions.

To become a corporate group devoted to solving social issues centered on people
Under the Transformation Business Plan, we considered thevarious social changes that will impact our sustainablegrowth and that of society and, by backcasting from thefuture society of 2028 and beyond, redefined one of ourGroup visions as “a corporate group devoted to solving social
issues centered on people.”
In our efforts to achieve this vision, we decided to revise ourmateriality by focusing on the following points: (1) Fulfilling theBenesse Group’s corporate philosophy, “Benesse (Well-Being),”and our Group purpose; (2) Social issues faced by people at eachstage of life, which we identified by backcasting from the futuresociety of 2028 and beyond; and (3) Promoting ESG as thefoundation underpinning (1) and (2). Subsequently, we closely
examined and discussed the significance of (2) and (3) at theManagement Council and the Sustainability Promotion
Committee, and then drafted our new materiality.
Based on the draft materiality formulated through suchinternal discussions, we held dialogues with experts,
members of NPOs, and other external stakeholders toascertain their expectations and demands for our Group froman outside perspective, and incorporated the outcomes into
our revision process.

Materiality that sustains the achievement of the Group’s purpose and business
The revised materiality is configured with the aim of achieving
the Group’s purpose by resolving key social issues through theGroup’s core businesses—supporting children’s learning
experience, supporting working adults’ career development,
and nursing care—with such endeavors underpinned by afoundation of material issues related to the “development oftransformational human resources” as well as the “preservationof the global environment” and “corporate culture of integrity,”
which are prerequisites of economic activities.
We provide products and services for the future to help
resolve social issues with the aim of further achieving
sustainable growth as a corporate group devoted to solvingsocial issues centered on people.
Meanwhile, the supporting materiality items concerning“human resources development,” “preservation of the global
environment,” and “corporate culture of integrity” are pivotal inthat they build and maintain a solid foundation for pushing
forward our efforts to achieve our purpose through business. If
we are to become “a corporate group devoted to solving social
issues centered on people,” our corporate activities should earn
the trust of society and maintain impetus. We regard thetheme-specific goals to be indispensable for the Group’s
sustainable growth.
The Benesse Group will promote the redesigned
materiality and pursue our vision under the Transformation
Business Plan and the Group’s purpose in an effort to achievesustainable growth.

Process of materiality revision

STEP 1
Redefine thecorporate group’s
visionSTEP 2Clarify pointsof emphasis

STEP 3

STEP 4

Hypothesize
materiality

Discuss atmanagement
level

STEP 5
Dialogue withstakeholders

STEP 6

STEP 7

Considertargets

Approval by
the Board of
Directors

Benesse Report 2023

38

CHAPTER

02 Materiality

Toward the Achievement of our Purpose
Issues centered on people Group capitalCommitment

Business fields

Concrete approaches

Initiative examples & visions

Related page

▶ Changes in parenting

environment

Supporting
diversified andmultilayered
learning
experiences toprovidemotivational
education services▶ Disparities in educational

opportunities▶ Decreased motivation to

study▶ Diversification oflearning objectives andpostgraduation pathways▶ Technology▶ Social capital(customer base,schools/municipalities,
community network)▶ Intellectual capital

Provide education
services that
accommodate diversityand disparity ofeducational
opportunity and help
more children to thriveas they grow.

▶ Expand product lineup to meet diverse needs by harnessing▶ Kids & Family Business▶ Out-of-School Learning

Business▶ School and Teacher

Support Business

our educational expertise and DX on the back of ourunrivalled customer base.

▶ Support the diversifying choices of postgraduation
pathways and changes in the way teachers work based on
existing platforms used by a large number of schools.
▶ Provide educational opportunities that are readily accessible▶ Establishment of a scheme/model for new value creationthat links student assessment data, daily learning data,
and the school administration system.

▶ Provision of accessible learning opportunities throughP 41

next generation Shinkenzemi in view of the FY2025 Next
GIGA Program.

by all children.

▶ Changes in the way

teachers work

▶ Human capital

Supporting
sustainablecorporate growthand personal
careerdevelopment
through learning
experiences

Respecting theuniqueindividuality ofthe elderly while
resolving
structural
nursing careissues▶ Changes in required

qualities and abilities▶ Autonomous careerdevelopment by
individuals(strengthen humanresources and increase
number of personnel)▶ Investment▶ Technology▶ Social capital(customer base,governmental/corporate
networks)

By helping individuals
take ownership of
their career/life,
companies can drive
their own sustainablecorporate growth.

Adult Business▶ New businessdevelopment, M&A▶ Lead the reskilling market by leveraging our rapidly

expanding Udemy network of individual, corporate, andmunicipal users.

▶ Expand our human resource matching business(recruitment, transfers, job searches, job changes) byproviding reskilling and skill development services toindividuals.

▶ A capital alliance with SkyHive, a world-leading labormarket database provider▶ Inclusion of Waris (provider of recruitment support

P 42

services for Japanese women) into the Group▶ Intellectual capital▶ Increase in number of

elderly people requiring
nursing care

▶ Shortage of nursing care

workers▶ Delays in nursing careDX

▶ Human capital(professional humanresources)▶ Technology▶ Intellectual capital(know-how)▶ Social capital(multifaceted connections
with nursing care personnel)

Develop more nursing
care workers who canserve as role models
while also enhancing the
QOL of the elderly,
thereby making nursing
care a more attractive job
choice.

Benesse’s policy

Foundation that underpins the above

Nurturingorganizations
and people asdrivers oftransformation

Preserving asustainableglobalenvironment

Cultivating a
corporate culture
conducive toserving society
and customers
with integrity

39 Benesse Report 2023

▶ University and Working▶ Nursing Care andChildcare Business▶ Nursing Care

Peripheral BusinessCommitment▶ Develop nursing care workers with highly specialized skills

based on a systematic in-house training system, and widely
share their expertise with society at large.

▶ Introduction of an internal qualification and related

training system to foster nursing care experts, dubbed
Majikami, who will help enhance the QOL of the elderly(Over 600 Majikami to be certified by FY2025)▶ Visualize tacit knowledge of experts through the use of▶ Provision of support to acquire certified care worker▶ Ease nursing staff shortages through business efforts.

▶ Expansion of Benesse sensing homes that employ AI

technology.

qualification

P 43

technology (All care homes by FY2024)

Concrete approaches/targets

Related page

▶ Visualize the key positions and specialized expertise required to drive transformation and digitalization, and implement

Encourage individuals to achieve autonomous
growth based on a learning culture and provide
relevant opportunities.

Develop diverse talent to lead the drive toresolve social issues through business.

As part of our efforts to fulfill our corporate
philosophy and purpose, position the environment
as one of our material management issues and takeproactive steps to promote related measures in linewith the Group’s business characteristics.

Preserve the global environment with theaim of providing a secure world for futurechildren to grow up in.

Build and operate a management structure that
supports the autonomous growth of operatingcompanies and further enhances our management
oversight function.

Make Group-wide efforts in line with our
corporate philosophy and purpose topromote integrity and soundmanagement to maximize customer
value through our business.

training accordingly, aiming to achieve a fill rate of digital human resources of more than 85% in FY2025.

▶ Promote diversity in terms of experience, age, gender, etc., having at least one female director/executive officer andachieving a minimum of 30% female managers by FY2025.

P 44▶ Promote career development support to enhance employee engagement. Engagement score target: A▶ Set medium- and long-term GHG reduction targets and acquire SBTi certification.
● Benesse Group: Scope 1 and 2 (1.5°C target): <2030: 42.4%> <2041: 100%>● Benesse Corporation: Scope 1 and 2 (1.5°C target): <2030: 52.8%*> <2041: 100%> <2050: 100%*>

Scope 3 (2°C target): <2030: 14.8%*> <2050: 39.4%*>

P 46* SBTi certification already acquired.

▶ Set codes of conduct at all Group companies based on the Benesse Group purpose and Principles (within one year in thecase of a new Group company).

▶ Execute ongoing compliance activities using a PDCA cycle at all operating companies.
▶ Further enhance information security by continuing to hold Security Day, providing regular security training, etc.

P 77

▶ Enhance human rights initiatives through human rights due diligence and awareness-raising activities.

Benesse Report 2023

40

CHAPTER

Supporting sustainable corporate growthand personal career development throughlearning experiences

Supporting diversified and multilayered
learning experiences to provide
motivational education services
Changes in the environment surrounding children and their lack of motivation to study
As birthrates decline and the numbers of working mothers anddouble-income households increase, the parenting environment
is changing dramatically. Household income disparities areaffecting the learning experience of children, leading to gaps ineducational opportunities.
At educational settings, needs are rising for special educationand support tailored to the distinctive features of diverse children
including those with developmental disabilities and attendanceissues. Meanwhile, the way teachers work also needs to change sothat their excessive work hours can be rectified. Disparities among
regions and municipalities are also observed in the progress ofdigitalization and ICT introduction at schools, which points toanother kind of gap in educational opportunity.
Post-learning pathways are also becoming diversified. One of
the major issues is the conspicuous decline in children’s motivation
to study. The percentage of children who lack a sense of purpose or
direction and “do not feel like studying” has increased from 45.9% in2019 to 60.2% in 2022, according to a survey* conducted under ajoint research project by the Institute of Social Science, theUniversity of Tokyo, and Benesse Educational Research andDevelopment Institute.

41

Reskilled workforce needed by society; career design required of individuals
The rapid evolution of digital technology and AI is bringing globalchanges to the way people work and the qualities and abilities
required of them. At the 2020 Annual Meeting of the World
Economic Forum in Davos, it was reported that one in two workers
will need to be reskilled, and the reskilling of one billion people wasadvocated* by 2030.
In Japan, given the shrinking workforce due to its aging
population and declining birthrate, companies are required toenhance productivity. Meanwhile, their need for talent equippedwith the skills and knowledge required for them to achievesustainable growth and globalize their businesses is increasing
rapidly. Against such backdrop, companies view human capital as
their most important asset for maintaining competitiveness andinstigating innovation, and employee reskilling has therefore
become an urgent agenda for the business community.
In an age in which lifespans of a century are expected, people
must cast off conventional notions of lifetime employment andinstead design a longer career plan while acquiring new skill setsthat will allow them to adapt to change.
* The Future of Jobs Report 2020, Davos conference* 2022 survey of parents and children: children’s lifestyles and studying

Leveraging the Benesse Group’s strengths to deliver education catered to diverse learners
As a way to address the above issues, the Benesse Group will beable to deliver personalized learning opportunities optimized toeach child’s needs, while also making these opportunities
widely accessible. For this, we will draw on our unrivalledcustomer base established through Shinkenzemi and otherservices, as well as the knowledge and technology acquired
through our education business.
In addition, we can contribute to transforming school
education for the next generation while reducing teachers’
workload and catering to students’ varying academic abilities. To do

02 Materiality

this, we will harness our extensive networks of municipalities andschools that use our learning support and school administration
software and platforms, and pursue customer success by
responding to diversified region-specific needs.
We aim to capitalize on such unique strengths of the Groupto deliver, on a broad scale, education that motivates diverse
children to learn and grow, thereby helping more children to
thrive in the future.

Supporting individuals who take ownership of their lives to drive sustainable corporate growth
Amid dramatic societal changes, the Benesse Group formed apartnership in 2015 with Udemy, an online video learning platform
service launched in the United States, and expanded the service
into the corporate market as its business operator in Japan. We havetherefore been building a track record in supporting corporate
DX/reskilling in addition to services for individual customers.
Drawing on our know-how and advantages acquired throughsuch existing businesses, we are strengthening strategic
investments in the ever-expanding learning market for working
adults. By leveraging our various resources within the Group,

including our unrivalled customer base, and by collaborating withexternal partners for co-creation, we will proactively roll out new
initiatives, thereby offering a one-stop multifaceted reskilling
support service.
Based on this plan, we will help more people cultivate
fulfillment through lifelong learning in Japan, firmly sustaining thegeneration of a positive value creation cycle through reskilling,whereby the growth capacity of companies is enhanced, withpositive effects rippling out to the broader society.

To resolve social issues centered on children, we uphold the following three major themes, with concrete
approaches and initiatives for each theme to be implemented through our Kids & Family Business, Out-of-School
Learning Business, and School and Teacher Support Business.

By upholding the following three themes, we will implement strategic initiatives based on educational businesses foruniversities and working adults and collaborations with co-creation partners. Our aim is to support the career developmentof individuals who acquire new skills in response to changes, and help companies achieve sustainable growth.

Bridging opportunity gaps ineducation and fostering learning
motivation through unrivallednumber of customer contacts

Products that meet diverse needsof children and families

Supporting students and working
adults to learn and develop theircareer

Providing education services that
underpin corporate humancapital management

Expanding our matching businessthat connects individuals withcompanies

Businesses and services insupport of changing school
education

We will develop widely accessible andlow-priced next-generation models for ourcore education services, which maintain an
unrivalled customer base. We will also
provide a wide range of information
includinghigh-quality
free-of-chargelearning contents via Kodomo Challenge TV
and others.

We will promote computer based testing
and further strengthen our digital services
such as Mirai Seed, Classi, and EDUCOMManager C4th, which are used at numerous
schools, to help change the way teachers
work and provide personalized support indaily study and student assessment.

We will expand MARUG land, an ICT learning
support service catered to different
development characteristics, and enrich ourpersonalized learning support service
optimized for individual attributes andchallenges. Our efforts will also focus on
increasingly popular private lessons andcreating spaces for children experiencing
attendance issues at school.

We will strive to promote the Udemy online
video learning platform service in Japan andprovide students and working adults withgreater support for their education and careerdevelopment. Multifaceted support will be
provided to individuals who are eager toshape their circumstances by gaining a varietyof new learning experiences and achieving
personal growth throughout their lives.

To strengthen human capital as the key forsustainable corporate growth, we will
provide education services including a newoffering that visualizes the skills of each
employee and provides them with optimallearning services, which will be madeavailable in collaboration with SkyHive, a
global AI-based reskilling support provider.

Amid a decline in the working-age
population, we are expanding our matchingbusiness to tap into the potential of thefemale workforce. In collaboration with Waris,
which joined our Group in June 2023, we will
provide companies and individuals withlearning services and employment/career
support services by assisting with recruitment,
transfers, job searches, and job changes.

Kodomo Challenge TV

Mirai Seed / Classi

MARUG land

Udemy

Alliance with SkyHive

Waris

Benesse Report 2023

Benesse Report 2023

42

CHAPTER

Respecting the unique individuality ofthe elderly while resolving structural
nursing care issues

02 Materiality

Nurturing organizations and people asdrivers of transformation

As the first nation to experience a super-aging society, Japan will face a nursing carestaff shortage of approx. 690,000 in 2040.
As Japan’s declining birthrate and transformation into a super-aging
society is occurring ahead of other nations, an overwhelming
shortage of nursing care staff is emerging as a serious problem. In
2040, when second-generation baby boomers reach the age of 65,
there will be a shortage of approximately 690,000* nursing care
workers vis-à-vis the number of older persons in need of long-term
nursing care.
Against this backdrop, nursing care services are chronicallyshort-staffed, causing excessive workloads, which in turn is leading
to greater job turnover. The vicious circle is making it difficult tosecure enough nursing care staff to meet the growing care needs.

There are high hopes that AI and other technologies canalleviate staff workloads while enhancing the quality of service. But
it will be a tremendous challenge to uniformly mechanize or
automate nursing care, considering the varied physical conditions
and needs of each elderly individual, which require advanced skills,
knowledge, and experience on the part of caregivers. The situation
is causing delays in DX across the entire nursing care industry, whichis exacerbating the staff shortage issue.
* Source: “Required number of nursing care workers based on the 8th Long-term
Care Insurance Business Plan” by the Ministry of Health, Labour and Welfare.

Executive Officer, CHRO, Executive General
Manager of Human Resources and General
Affairs

Embracing “well-being,” a hallmark of our people

Develop more nursing care workers who can serve as role models while alsoenhancing the QOL of the elderly, making nursing care a more attractive career
choice.
Upholding the business principle of showing “deep respect for the
person’s individuality,” our Group company Benesse Style Carepursues high-quality nursing care tailored to the needs of eachindividual. Building on its know-how accumulated through longyears of business operation, the nursing care service provider
develops highly specialized human resources. The company also
focuses on implementing DX in nursing care, visualizing the tacitknowledge of highly specialized care workers with the use oftechnology in an industry-first initiative.
Furthermore, we are looking to resolve not only our own issues,
but those shared by the entire nursing care industry. Openly

Empowering employees to empathize with our
corporate philosophy in order to strengthen
our human capital
Hisano Murakami

providing useful information on our website for care workers is justone of our measures. We also engage in temporary staffing andplacement services in support of healthcare and nursing careservices, forging multifaceted and extensive connections withnursing care workers. As the leading company in the nursing careindustry, we intend to draw on inputs from these workers, achieve agreater degree of fusion of people and technology, enhance the
QOL of elderly people, increase the number of role model nursing
care workers, and make nursing care a more attractive career choice
to help resolve the serious societal issue of staff shortages.

We strengthened our initiatives under the following three themes with the aim of pursuing the QOL of elderly
people, fostering highly specialized nursing care workers, and enhancing the quality of our nursing care services,
thereby contributing to resolving the serious societal issue of nursing care staff shortages.

Developing Majikami, or highly
skilled nursing care experts

Developing and proliferating an
AI solution that capitalizes on theexpertise of Majikami

Sharing expertise and developing
a new business to help resolve
staff shortages

Aiming to develop workers who willcontribute to enhancing the QOL of carehome residents, we are advancing our own
system for fostering Majikami, experts
certified as practicing high-quality nursing
care. We also help our staff to acquire thecertified care worker qualification, motivatethem to become highly skilled care experts,
and offer a desirable workplace where they
can thrive, seeking to thereby create avirtuous cycle.

We have developed an AI solution byverbalizing the tacit knowledge of Majikami,
and are aiming to introduce the solution to
all our nursing care facilities. The AI solution
provides newer staff with nursing care hints
and tips from Majikami, which leads to careservices of a higher quality.

We share our nursing care expertise on our
Nursing Care Antenna website for everyone
engaged in nursing care in Japan to accessfree of charge. In addition, in an effort toaddress nursing care staff shortages, we willdevelop a new business that fulfills thediverse needs of workers and employers.

The Benesse Group has put people at the center of its businessever since its foundation. We have likewise long valued ourworkforce of like-minded people who share our goals as aconfirmed asset. In achieving our Transformation Business Plan,
we must continue to put people first while also becoming ateam of goal achievers. Another wonderful quality that ourpeople share is their firm embrace of our corporate philosophy

The key to enhancing organizational capacity lies with each and every employee.
“Nurturing organizations and people as drivers oftransformation” was newly added to our materiality. If we are toachieve our Transformation Business Plan, we need a major
upswing in capacity. In addition to our education and nursing
care businesses, we therefore intend to establish businesses in
new fields. Skills and leadership required for transformation
cannot be developed overnight, however. First and foremost, we
crucially need to clarify the nature of our organizations and

43 Benesse Report 2023

reinforce the areas where we are lacking. And we already havethe means to acquire the missing capacity and skills. Given theGroup’s purpose of “Anybody can enjoy lifelong growth,” I am
certain that each and every employee will participate inreskilling to update their capabilities.

Concrete measures to achieve our visions
There are three particularly important measures that must be
taken to execute the Transformation Business Plan. One is thedevelopment of digital talent. The Group has already started
visualizing its DX personnel and is now striving to speed up
development to meet division-specific targets. The second
measure is diversity promotion, especially in regard to gender.
The percentage of female employees has traditionally been highat the Group, which is why we were quick to introduce maternity
leave and childcare leave programs, with the latter also offered
to male employees. A high proportion of our female employees

choose to return to work after taking such leave. Now thatmaternity and childcare leave has become the norm, we havetaken a further step to empower employees to pursue theircareer and family goals. We also need to further increase thepercentage of female managers, which is already higher than
the industry average, by strengthening the candidate pipeline.
The third measure is about enhancing engagement. Our
employees greatly empathize with the Benesse Group’s
philosophy, as evidenced by their extremely high engagementscores. This is a unique advantage that we hope to build on.

Achieving transformation by unleashing the power of employees whostrongly embrace the Group’s philosophy
The B-Stage internal proposal system is helping us enhance
employee engagement. A total of 3,427 new business andoperational reform proposals were submitted in fiscal 2022
under the system. Many of the proposals, which are based on
ideas and awareness of workers, have already been implemented
in our business. We firmly believe that the initiative is bringing
vibrant energy to the entire Group. As I mentioned, the Benesse

Majikami systemof “well-being” and their deeply ingrained eagerness to engage
with and support our customers’ well-being and growth acrossevery business that we operate. Our philosophy resonates with
our employees because we teach the story of how it wasdeveloped in our training programs.

Utilizing AI at nursing care homes

Group is centered on its people. Our employees have embraced
our corporate philosophy to an unimaginable degree, giving us
our most powerful advantage. Going forward, we will capitalizeon this strength and deliver to each employee a message thatinspires further change, while at the same time transforming ourmanagement structures and HR programs, thereby making
step-by-step progress toward our goals.

Nursing Care Antenna website
Benesse Report 2023

44

CHAPTER

02 Materiality

Nurturing organizations and people as drivers of transformation
In an effort to nurture organizations and people as drivers of the Benesse Group’s transformation, we define the skills required fortransformation and visualize our employees’ existing skills, thereby creating a culture of learning in which the autonomous careerdevelopment of individuals is respected.

Visualize the key positions and specialized expertise required for transformation

Planning
Business process reengineering (BPR)

Assessed by experts
in each job field

Project management office (PMO)
Development management
Engineer
Employee
database

Data

Job type

Breakdown of assigned
personnel levels
Lv3 Lv2 Lv1

Planning
BPR
PMO
Development
management
Engineer
Digitalmarketing
Data
Total

DX training programs (31 courses; 58 times)
Planning● Agile development

in-house case studies

Practical● Defining wireframe

requirements● Implementing design

sprints● Digital teachingmaterialdevelopment● Introduction to DX● UI/UX fundamentals

Introductory● Website

fundamentals● App development
fundamentals

Development
management/
engineering● Using

wireframe-defining
requirements● Agile development● Databases● In-house systems
fundamentals● Systems

development
fundamentals● Development process
fundamentals—
waterfall● Development process
fundamentals—
agile

DigitalmarketingData● Using semi-structured● Digital marketing● Effect verification● Practical accessquery language● Data analysis

in-house case studies
analysisapplication● Using Shinkenzemi’s

elementary, juniorhigh, and high schooldata● Introduction to● Introduction to● Product log design● Marketing strategy

Benesse’s data

● Introductory andpractical analyticaldesign● Data usage
fundamentals

45 Benesse Report 2023

In March 2021, the Group revised the Environmental Policy that
it formulated in 2011. The Group will not only work to promoteclimate control and environmental consciousness in products
and services, as well as in sales and other activities, but also
engage with society to encourage energy conservation andwaste reduction for climate control, recycling, the preservationof biodiversity, and the conservation of water resources,
including the efficient use of water.

support, social media
marketing● Technical fundamentals ....● Operating systems ● Networks ● Databases ● HTML/CSS ● Java ● Web servers● Digital lectures ..................● External case studies ● Culture sessions, etc.

Skill development points

100,000 yen granted to each employee for planningand executing a skill development initiative

Udemy

Available to all employees; also used as a platform
for self-learning and internally developed courses(learning platform service)

Promotion systems
The Sustainability Promotion Committee, with the managing
executive officer for sustainability as its chair and members that
include full-time directors including the representative director
and president and the heads of business divisions, meetsregularly to make decisions about policies and initiatives
concerning sustainability issues, including environmental ones,
and to monitor the status of activities. The Committee’s
activities are reported to the Board of Directors.

formulation,
workshopEnhancing engagement by respecting the autonomous career development of individuals

Personnel
systemsustaining
autonomous
careerdevelopment of
individuals

Reduction rate for greenhouse gas emissions● Multi-device● DX literacy—An explanation of key terms (video)

Employees who have acquired new skills and knowledge bytaking reskilling leave and participating in training programs
are provided with various opportunities for self-fulfillment,such as the opportunity to spontaneously submit an internaltransfer request, whether solicited or not, to pursue a different
role, the opportunity to participate in a milestone career
training program and one-on-one interview, and theopportunity to seek career advice, if they so wish. Such systems
are based on our policy of respecting each employee’s
autonomous career development. The policy, as well as our
employees’ distinctive embrace of the Benesse Group’s
philosophy, has led to high levels of employee engagement,
generating a virtuous cycle that pushes transformation
forward with greater energy.

Environmental policy

marketing● Digital fundamentals.........● In-house DX case studies ● Disruptor analysis, etc.

Basic digitaltraining

Seeking the sustainable growth of society and the Benesse Group, we formulate medium- to long-term environmental targets andactively strive to reduce our environmental footprint while improving external assessments of our activities.

Up from previous year Down from previous year

Expanding training programs to support reskilling

Specialized knowledge
and skills training

We focus on reskilling our existing employees to foster thedevelopment of a workforce able to drive transformation. In
addition to on-the-job-training, we help employees develop
their capabilities by, for example, offering training programs
that include abundant internal case studies. The training
programs provide access to Udemy Business, a digital video
platform with over 210,000 business-related courses. In fiscal
2022, a total of 6,504 employees* participated in the programs,
up 80% from the previous fiscal year. We also started granting a
reskilling leave of three days a year from fiscal 2022 to provide
employees with an opportunity to reflect on their career anddeepen their learning. The leave system was used by 522
employees* in the first year of introduction. By promoting thesystematic use of the leave, we aim to foster a corporate culture
where reskilling is the norm.
(* Benesse Corporation)

The fill rate for DX jobs in 2022 was
86% (up 15% from previous year)

Define the essential skills required foreach job, ascertain the skills of each
employee, and manage the data byusing the talent management system.

Digital marketing

Human resources development andcareer support

Gap analysis of number of required
personnel and assigned personnel

Define jobs and identify individuals

Number ofassigned
personnel
Requirednumber of
personnel

At the Benesse Group, we identify the hiring and development
of digital talent as a key organizational capacity required forrealizing the medium-term management plan. As we see arising need to utilize IT and digital technology across ourbusinesses, we are striving to secure the necessary DX humanresources by defining the essential skills for each DX job,
keeping track of the skills already existing in our workforce, andcalculating the number of DX personnel required based on ourbusiness needs, thereby visualizing the fill rates. To fill vacant
positions, we are working to reskill our existing employees.

Preserving a sustainable global
environment

DX skills development
project

For internal development of programs for learninginternally required DX skills

Reskilling leave

Three-day paid leave for learning

Career advice

Milestone career training and one-on-one interview;advice provided upon request

Internal recruiting
Transfer request

Opportunities provided to spontaneously take on a
new job

Climate control measures
Benesse Corporation had previously set medium- to long-term
reduction targets for GHG emissions, but we have further
revised our Scope 1 and 2 targets upward from the well-below
2°C level to reduction targets in accordance with the 1.5°Clevel. In order to meet these targets, we moved forward withmeasures such as reducing paper consumption by promoting
the digitization of products and services, reducing office spaceby adopting a hybrid working style of office attendance/
working at home, and implementing a medium- to long-term
repair plan for our own buildings.
Medium- to long-term reduction targets for greenhouse gas
emissions(Years ending March 31)
Reduction from baseyear 2018

Every
year*

2030*

Scope 1 and 2

4.4%

52.8% 100%

Scope 3

1.23% 14.8%* Reduction targets have been certified by SBTi.

2041

2050*

100%
39.4%

Reduction frombase year 2018

2019

2020

(Years ended March 31)

2021

2022

2023

Scope 1 and 2(1.5°C targets)

12.0% 20.8% 30.5% 39.8% 59.3%

Scope 3(2°C targets)-2.7% -3.9% 5.4% 13.8% 26.8%

Note: The figures for 2023 are subject to change as third-party verification is in progress.

Reduction targets for the entire Benesse Group(Years ending March 31)

Base year: 2022

2030

2041

Scope 1 and 2

42.4%

100%

*Scope 3 targets under preparation

Evaluation by the Carbon Disclosure
Project (CDP)
In the CDP’s 2022 climate change survey, we were chosen as acompany with a leadership level of A-, a grade given tocompanies that conduct excellent activities in areas such as
reducing greenhouse gas emissions and implementing
measures to mitigate and adapt to climate change. In addition,in the CDP’s Supplier Engagement Valuation, we werechosen as a CDP 2022 Supplier
Engagement Leader—the highest
evaluation—for the fourthstraight year. Our previous CDP
climate change evaluations are
as follows.
CDP climate change evaluations(Years ended March 31)

2018

2019

2020

2021

2022

A

A

A

A-

A-

Biodiversity measures
To proceed with initiatives to promote biodiversity, Benesse
has set forth a procurement policy, based on which we procurematerials, design products, discuss transportation methods,
and conduct recycling/reuse activities.
Endorsement of the Keidanren Initiative
for Biodiversity
We have endorsed the Keidanren Initiative for
Biodiversity as part of our measures for biodiversity.

Benesse Report 2023

46

CHAPTER

02 Materiality

Non-Financial Information

Preserving a sustainable global environment
Conducted a scenario analysis in accordance with TCFD recommendations
In 2019, the Benesse Group expressed its agreement with the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD), the first education business operator in Japan to do so. With regard to the education business in Japan, we are
analyzing scenarios in accordance with TCFD recommendations, and conducting deeper analyses of the risks and opportunities to ourbusiness due to climate change.
The levels of impact and probability of occurrence are defined as follows.
Level of Impact—Large: 100 million JPY or more; Medium: 10 million JPY or more to less than 100 million JPY; Small: less than 10 million JPY
Probability of Occurrence [Transition Risks] 3: Already present/most likely; 2: Partially present/likely; 1: Latent/less likely
Probability of Occurrence [Physical Risks] 3: Once every few years; 2: Once in 10 years; 1: Once in 100 years
The following have been identified to have a large impact and a level 2 or 3 probability of occurrence.

Business-Related
Shinkenzemi and Kodomo Challenge
enrollments in April (Japan)

Kodomo Challenge enrollments in April(Overseas)

Nursing homes & elderly homes by
brand■Senior high school courses ■Junior high school courses■Elementary school courses■Kodomo Challenge (preschool courses)(thousands of students)■China■Aria ■Clara ■Granny & Granda■Madoka ■Bon Sejour ■Cocochi

3,000

1,500

2,620

2,710

2,720

■Taiwan

400

1,270

2,490
2,210

■Li-Re(thousands of students)

1,180

1,210

1,200

1,050

330

339

343

352

322

18

19

20

21

22 (end of

300

880

2,000

900
200

Analytical estimation of risks and opportunities

600
1,000

Analysis of the risks and opportunities that affect the Group is conducted on two key points: Probability of occurrence and level of impact.

Transitional Risks

Physical Risks

Opportunities▪Switch to alternative materials (recycled plastics, etc.)▪Increase in shipping costs (by truck)▪Increase in energy costs▪Risk to the Group’s reputation if we cannot meet consumers’ expectations with regard to environmental awareness▪Procurement failures from suppliers▪Changes in shipping methods due to suspension of the logistics network▪Major damage at logistics hubs
▪Restructuring of the logistics network due to environmental changes and the spread of infectious diseases▪Changes in the environmental awareness of consumers▪Competitive advantages through innovations in environmental technology▪Initiatives towards global environmental preservation▪Highly resilient logistics base

100

300

0

19

20

21

0

22
23 (year)[ as of April each year ]

19

20

21

0

22
23 (year)[ as of April each year ]Human Resources
Employees on consolidated basis

Employees who took childcare leave /Returned from leave

Ratio of female employees/managers
Employees

Managers (including officers)■ Employees who took childcare leave (left)
Percentage of employees who returned from childcare leave (right)(%)
80

25,00020,426 20,673

19,45620,00062.4
16,515 16,637

97.4

400

61.8

61.5

61.7

95.7
323

61.8

60

271

300

Research into alternative materials that take CO2 emissions reductions into account, resource circulation
initiatives (recycling), reductions in shipping fees through the adoption of digital educational materials,
reductions in GHG emissions due to office activities such as energy saving and other initiatives, establishment oftargets and promotion of initiatives for the introduction of renewable energy, consideration of a bring your own
device (BYOD) policy for tablets, etc.
Reduction in risks through the decentralization of production bases, securement of alternate means of transport,
strengthening of flood control measures at logistics hubs, etc.

The promotion of new environmental education, and reflecting innovations in environmental technology, etc.,
in products, services, and marketing activities based on changes in consumer behavior

0

304
90

18

19

20

21

22 (end of0

19

fiscal
year)

20

21

Human Resources

Environment

Male employees who took childcare leave(%)■Scope 2

10,000(thousands of t-CO2)
250

Benesse Report 2023

(t)
60,00055,903 55,102

209

54.7

8,000

56.5

55.4

190

200

6,595

161

5,929
5,204

20

21

22

(fiscalyear)

Note: Figures are for Benesse Corporation and Benesse Style Care
combined.

019(fiscal
year)

88

20

76

21

75

22

51,82345,82545,00038,253

100

50

2,000

19

22

30,000

3,016

88
0

21

150

4,502

50.0

40

20

Paper consumption

4,000

Benesse STEAM Festa

19

Scope 3

229

226

18

Note: Figures are for Benesse Corporation and Benesse Style Care
combined.

Amount of GHG emissions(t-CO2)70

50

Business initiatives Support for environmental education

47

80

70

0

22
23 (year)[ as of April each year ]Note: Figures are for Benesse Corporation and Benesse Style Care
combined.

6,000

Visit the following website for information on our response to climate change.
https://benesse-hd.disclosure.site/en/themes/148#1002

82.2

200

Note: Berlitz Corporation was sold during fiscal 2021.

60

Benesse has long supported environmental education. Benesse STEAM Festival is an
exploratory learning event where junior high and high school students gather from acrossJapan to discuss various subjects including the SDGs, a topic that has proven particularly
popular. Some students conduct investigations and experimental studies while others
develop apps. In fiscal 2022, the event was held on March 18 and 25, 2023, attracting a large
number of students eager to tackle environmental issues.

33.9

33.3

100

100

■Scope 1

Opportunities

33.7

20

5,000

Physical Risks

34.6

(%)

387

10,000

The Group will promote the following strategies and initiatives in the future based on the results of our climate change-induced risk-opportunity analysis.

Transitional Risks

34.8

40

377

90.7

15,000Future strategies and initiatives

fiscalyear)

Note: Information is shown by country and region.

15,00073

23(year)[ FY ended in March of each year ]Notes: 1. GHG emissions are those of Benesse Corporation.
2. The figures for 2023 are subject to change as third-party
verification is in progress.

0

19

20

21
22
23 (year)[ FY ended in March of each year ]Note: Paper consumption excludes printing paper for use in offices.

Visit the following website for the latest ESG-related information.
https://benesse-hd.disclosure.site/en/themes/168

Benesse Report 2023

48

Value Creation

03
CHAPTER

Empowering people topursue lifelong growth in
the age of the 100-year life
How We Create Value
Reviewing and enhancing each of the activities, and taking on
new challenges proactively, the Benesse Group continues tocreate new value in order to support each person in pursuing theirgoals at each stage of life.

49

Benesse Report 2023

Benesse Report 2023

50

CHAPTER

03 How We Create ValueAt a Glance
We are strongly committed to tackling the social challenges currently facing many people and helping our customers live well (toachieve “Benesse”). To this end, the Benesse Group provides services in the areas of education (in Japan and overseas), nursing care andchildcare, and lifestyle in order to meet people’s needs at different stages of life and help solve social challenges.

We conduct activities in our Out-of-School Learning Business, School and Teacher Support
Business, and University and Working Adult Business.

Fiscal year
ended
March 2023

School and Teacher
Support Business

50.8%

Out-of-School
Learning Business

Education in Japan

Percentage of consolidated
net sales▶ Provide Shinkenzemi correspondence courses targeted atelementary to high school students; and run prep schools andclassrooms through Tokyo Individualized Educational Institute,Tetsuryokukai, BE studio (English classroom), and others▶ Offer Shinken Simulated Exams (mock university entrance exams for highschool students), Study Support and Course Map (materials for learningand choosing a postgraduation pathway), GTEC (Global Test for English
Communication), Mirai Seed (ICT education support service forelementary and junior high schools), school study drills and tests, etc.
▶ Provide services to support cloud-based learning and school
administration operations

Major products and services

Net sales breakdown
Shinkenzemi

Major business companies:
Benesse Corporation
Tokyo Individualized Educational Institute, Inc.
UP Inc.
Tokyo Educational Institute Co., Ltd.
(Tetsuryokukai)
Benesse BE studio Inc.

45.0%

Prep Schools/
Classrooms

21.0%

School/Teacher Support

23.2%

Major business companies:
Benesse Corporation
Classi Corp.
EDUCOM Corporation

University/
Working Adult

University andWorking
Adult Business▶ Operate online education platform Udemy for working adult learners; andprovide study abroad support▶ Offer university administration support services▶ Offer career development support services

9.6%

Major business companies:
Benesse Corporation
Shinken-AD Co., Ltd.
Benesse i-Career Co., Ltd.

Other*: 1.2%

Percentage of consolidated
net sales

Kids & Family

16.5%
Fiscal year
ended
March 2023

We engage principally in offering Kodomo Challenge, correspondence courses aimed atpreschoolers, mainly in Japan, China, and Taiwan.
Japan▶ Offer Kodomo Challenge correspondence courses for preschoolers and Kodomo Challenge
English, and operate related businesses▶ Publish magazines: Tamago Club and Hiyoko Club (pregnancy, childbirth, parenting); THANK YOU!
(lifestyle information); Inu no Kimochi and Neko no Kimochi (direct selling)▶ Operate online-order services, such as Tamahiyo Shop and Tamahiyo no Uchiiwai

Major products and services

Net sales breakdown
Kodomo Challenge (Japan)

29.0%

Other

30.9%

Major business companies:
Benesse Corporation
Benesse Corporation China

China▶ Operate correspondence courses and classrooms, mainly for preschoolers

Kodomo Challenge (overseas)

40.1%

Taiwan▶ Operate correspondence courses mainly for preschoolers

Percentage of consolidated
net sales

Nursing Careand Childcare

51

Benesse Report 2023

32.2%
Fiscal year
ended
March 2023

We engage in the care business centering on nursing home care and related services such ashome help, meal delivery, and nursing care consultation as well as nurse and caregiver referraland staffing. We also operate daycare and after-school childcare centers.
▶ Nursing home care service:
Operate nursing homes for the elderly under six
brands: Aria, Clara, Granny & Granda, Madoka,
Bon Sejour, and Cocochi and elderly housing
under Li-Re▶ Home help services▶ Adult daycare services, nursing caretraining courses▶ Daycare and afterschool childcare▶ Referral to and staffing of nurses andcaregivers▶ Meal delivery and nursing care meals▶ Nursing care consultation services

Major products and services
Major business companies:
Benesse Style Care Co., Ltd.
Benesse MCM Corp.
Benesse Palette Co., Ltd.
Benesse Senior Support Co., Ltd.
Heart Medical Care Co., Ltd.

Net sales breakdown
Other

15.0%

Nursing home care

85.0%

Benesse Report 2023

52

CHAPTER

03 How We Create Value

Education Business in Japan
Review of fiscal 2022

(billions of yen)

240.0

In the Education Business in Japan, net sales decreased by 1.4% year on year to 209 billion yen. Thisis chiefly attributable to a decrease in revenues from Shinkenzemi due to reduced cumulativeenrollments, which was not offset by the increase in orders received by the University and Working
Adult Business. Operating income grew by 0.4% year on year to 19.1 billion yen, owing to efficiency
improvements in selling expenses for Shinkenzemi and the effect of expenses having been posted
in the previous year to respond to the revision of school textbooks, which more than offset thedecrease in profit accompanying the fall in revenue. The total enrollment for the Shinkenzemi
correspondence course in Japan was 1.6 million as of April 2023, a 140,000 decrease from the samemonth in the previous year.

160.0(billions of yen)

212.1

209.0

19.0

19.1

25.0

15.0

80.0

5.0

0

FY2021
Net sales

FY20220Operating income

Out-of-School Learning BusinessBusiness overview and future prospects

Enhancing products and services inorder to raise motivation for learningand respond to diverse learning needs
Yumi Narushima
Managing Executive Officer
Head of the Out-of-School Learning Business Company ofBenesse Corporation

Market
The annual number of births in Japan peaked at two million in 1975 and has
been declining ever since, dipping below 0.8 million in 2022. Going forward, thenumber of babies born in Japan is projected to decline by around 1.0% per year
on average.
Despite this ongoing demographic decline, the scale of Japan’s
out-of-school learning market has remained unchanged in recent years. In fiscal
2020, however, market performance of prep schools and other services
weakened due to the impact of the spread of COVID-19. In fiscal 2021,
performance improved as a result of business activities being continued with amanaged response to the COVID-19 situation and the provision of systems forproviding online and offline services in combination. As a result, the market in
fiscal 2021 grew year on year to 1,469.7 billion yen*.
In addition, with the coming of the so-called “era when anyone can get
into college” due to the decline in births, the needs of children and parents withregard to learning are growing more diverse, as formats for entrance
examinations are becoming more varied. Furthermore, the COVID-19
pandemic has also triggered the emergence of new digital products andservices which have not been fully captured in the traditional out-of-school
learning market survey, shown to the right, and competition among
companies is growing fiercer. The same movement toward digitalization is also
taking place in school activities, and it is gaining momentum against the
backdrop of the GIGA School Program.

53

Benesse Report 2023

Trends in the out-of-school learning market in Japan*
Prep school
Correspondence courses (for preschool-aged children/elementary to high school students)
Others (preschool education/study guides/tutoring)

Share of correspondence courses

10.0%(billions of yen)

2,500.0

8.2%

8.5%

9.0%

(%)

10

9.8%

2,000.0
1,500.0

1,476.7

1,480.6

1,477.2

1,432.9

1,469.751,000.0
500.0

0

2017

969.0

972.0

972.0

924.0

970.0

121.4

125.6

132.3

143.2

144.0

386.3

383.0

372.9

365.7

2018

2019

2020

355.7
2021 (fiscal year) 0* The figures were calculated by Benesse based on data from Education Industry 2022, surveyed by Yano
Research Institute Ltd.

The Out-of-School Learning Business Company runs Shinkenzemi
correspondence courses as well as prep schools and classrooms to
support out-of-school learning activities in a comprehensive manner.
Shinkenzemi in particular uniquely possesses the key skills andinfrastructure to provide instruction and services, with a history ofaround 1.6 million enrollments, a wealth of systematic content, and a
network of around 8,000 Red-Pen Teachers and 1,500 coaches incharge of different high schools. By combining these long-cultivatedstrengths with the individualization efforts that we have been
focusing on in recent years with our push into digital, we provide
individualized teaching materials and programs according to learners’
interests and concerns, learning progress, and academic level. By
doing so, we are working to increase the retention rate of enrollments
and maintain and expand cumulative enrollments. Despite our efforts,
cumulative enrollments for fiscal 2022 did decrease due to a numberof factors, such as diversifying needs for learning, changes in school
education methods, and declining motivation for learning, in addition
to the accelerating trend towards decrease in the number of children.
Going forward, Shinkenzemi will further enhance its teachingmaterials and services to raise motivation to learn while developing andoffering products and services to respond to diverse learning needs.

As opposed to the correspondence education businessand school and teacher support
business, the prep school andclassroom business offers education services to students directly
in real physical spaces. At present,
we operate prep schools andEnglish classrooms through fivegroup companies.
In fiscal 2022, cumulative enrollments reduced year on year,
driven mainly by a fall among senior high school students. This waschiefly an outcome of the early scheduling of a growing number ofuniversity entrance exams (intra-year entrance exams). In theout-of-school learning market, demand related to junior high school
entrance exams is rising, mainly in urban areas. In response, inFebruary 2023, Benesse opened a Shingakukan Rootasu classroom
specializing in junior high school entrance exams in Shibuya. Also
joining the Group was Kyoto Rakusai Yobikou Co., Ltd., known for its
high examination pass rate for public senior high schools andintegrated junior and senior high schools in Kyoto, which will help us
address a broader range of entrance exam-related needs.
Furthermore, we are exploring the possibility of new methods andsettings for out-of-school learning, focusing on combining
Shinkenzemi’s correspondence education platform and theclassroom’s in-person setting to create an Online Merges with Offlinemodel that takes full advantage of the Benesse Group’s out-of-school
learning-related assets.

Benesse Report 2023

54

CHAPTER

03 How We Create Value

Education Business in Japan

Out-of-School Learning Business

School and Teacher Support Business

Related business data

Business overview and future prospects

Shinkenzemi and Kodomo Challenge enrollments in April
Senior highschool courses

Junior highschool courses(thousands of students)

2,620

3,000

2,710

Elementary
school courses

2,720

Shinkenzemi average monthly fee per person

Kodomo Challenge in Japan(preschool courses)

Senior highschool courses(yen)Junior highschool courses

Elementary
school courses

12,0002,490

Responding to the GIGA School
Program for elementary and junior highschools as well as enhancing products
catering to needs specific to senior highschools with the aim of maintaining andstrengthening our position as a partner
for public education

2,210

9,000

2,000

8,440
5,768

6,000
1,000

3,770

9,119

9,420

9,563

6,325

6,684

6,963

7,112

4,094

4,150

4,247

4,334

8,620

Takanori Tamura

3,000

0

2019

2020

2021

2022

2023

[ as of April each year ]Junior highschool courses

19,13820,000

2020

2021

2022

(fiscal year)

Senior highschool courses

Junior highschool courses

25

19,13920,70920,112

19.7

18,315

Elementary
school courses

10,000

10

5,000

5
2019

2020

2021

22.3

20.9

19.5

10.8

10.0
3.0

20
15

2018

21.3

2022 (fiscal year)

0

12.9

13.1

12.8

4.4

4.4

4.1

3.3

2019

2020

2021

2022

2023

(year)[ as of April each year ]Prep school and classroom enrollments in April

108

116

117

12,500

115

60
30
2019

2020

2021

2022

2023

(year)[ as of April each year ]

55

9,910

9,680

10,00090

0Benesse Report 2023

Number of schools using Mirai Seed(thousands of students)

150
120

Related business data

Students taking Shinken Simulated Exams and other exams(thousands of students)

114

Executive Officer
Head of the School and Teacher Support Business Company ofBenesse Corporation

The School and Teacher Support Business offers Shinken Simulated
Exams (mock university entrance exams for high school students),
Study Support and Course Map (materials for learning and choosing a
postgraduation pathway), GTEC (Global Test for English Communication),
Mirai Seed (ICT learning support service for elementary and juniorhigh schools), and other products including school study drills andtests. Within this segment, Classi Corp. and EDUCOM Corporation
provide services to support cloud-based learning and school
administration operations. Through these offerings, we aim to
maintain and strengthen our position as a reliable partner for public(%)

15,00002019

Note: The average monthly fee is calculated by dividing the net sales of each course by the
cumulative enrollment.

Elementary
school courses(thousands of students)

25,0002018

Shinkenzemi share of the target population

Cumulative enrollments in Shinkenzemi over a full year
Senior highschool courses

0(year)

education. We are speeding up
digitalization initiatives andincreasing capabilities for broad
area coverage, diverse solutions,an d qu ic k su b m issio n o f
proposals, which constitute our
key growth strategies, in order to
respond to individual challenges
faced by schools andmunicipalities.
In fiscal 2022, in the area of elementary and junior high schools,
the number of schools adopting our Mirai Seed ICT learning support
software continued to grow on the back of the GIGA School Program
implemented to introduce PCs and tablets to these levels of schools.
Meanwhile, in the senior high school segment, where we countaround 90% of the schools in Japan as our customers, enrollments for
Shinken Simulated Exams and other assessment programs trended
downward, principally as a result of demographic decline and theincreasing number of university entrance exams that were scheduled
for earlier than the standard time (intra-year entrance exams). Against
this backdrop, we will enhance products for schools facing issues with
providing advice on diverse postgraduation pathways as part of ourefforts to offer services more attuned to the needs of individual
schools. By promoting these activities while maintaining ourlong-established strong assessment services, we aim to maintain andbolster our competitiveness.

8,900

9,280

9,110

8,000

7,500

6,000

5,000

4,000

2,500

2,000

0

2018

2019

2020

2021

2022 (fiscal year)

9,010

10,000

0

7,942
5,945

Apr. 2021

Apr. 2022

Apr. 2023

Benesse Report 2023

56

CHAPTER

Education Business in Japan

Special feature: University and Working Adult Business

Based on Udemy, we are starting to take on new challenges

University and Working Adult Business

Enriching lifestyles and society

Business overview and future prospects

Aiming to build a business model thatcan provide reskilling support forbusinesses and consumers along withHR services in an integrated fashion

increasing their investment inpersonnel
recruitment
anddevelopment for sustainablegrowth and the government isenforcing investment policies topromote reskilling.
Given these factors, theUniversity and Working Adult
Business anticipates that Japan’s
reskilling market will expand
significantly toward 2030, and plans to increase net sales from 20
billion yen in fiscal 2022 to 100 billion yen in fiscal 2030. The key tool
for promoting this plan is the online learning platform Udemy, forwhich Benesse Corporation is Japan’s sales agent. Our Udemy
business in Japan is steadily growing, with a total number of users
exceeding 1.4 million and 1,300 companies registered, which will
provide a solid customer base for expanding the reskilling business.
Centering on this tool, we are working to build a business model thatcan offer reskilling support and matching services for businesses andconsumers in an integrated manner while also seeking partnershipand M&A opportunities.

Masaki Yamasaki
Managing Executive Officer
Head of the University and Working Adult BusinessCompany of Benesse Corporation

The Benesse Group is focusing efforts on expanding into new fields
as a driver of long-term profit growth. Among a number of target
fields, the highest priority is given to the University and Working
Adult Business.
In many countries, DX and GX initiatives are driving major socialtransformations, giving rise to needs for different work methods and job
skills. Japan, while facing a dwindling birthrate and aging population andshrinking working-age population, is entering the era of the 100-year life.
Against this backdrop, people are calling for an environment conducive
to lifelong learning and career development, while many enterprises are

Related business data

Udemy customer base

Net sales plan for the University and Working Adult Business(unit: billions of yen)Enterprise

50% or above

Nikkei 225-listed90%

Selected% as a model
operator forpracticing humancapital management*

50% or above

DX-certified by the
Ministry of Economy,
Trade and Industry

Annualgrowth+22 %We promote the Udemy business as one of our key initiatives toachieve a “society where people take pride in their latest learning
pursuits.” In 2015, Benesse entered into a business alliance agreementwith Udemy, Inc, a US-based company that operates the world’s
largest online education platform, and launched services to provide
working adults in Japan with opportunities to acquire skills at theworld’s most advanced levels. Udemy represents an online
consumer-to-consumer (C-to-C) marketplace that connects teachers
and learners from around the world. Users access the program via
their computer or smartphone to pursue their chosen learning
activities in an efficient way, particularly by utilizing their unscheduled
space of time. In addition to services for individual users, we offer
corporate users a broad spectrum of business skills learning programs
to choose from through Udemy Business.

Individual upskilling
opportunities
for career development

Organizational
culturethat recognizes and encourages
reskilling activities

Learning culture: everyone has the opportunity to
pursue autonomous and continuous learning

Society where people take pride in their latest
learning-related pursuits

One of the world's largest online education platform
For individual users

For organizational users

More than 1,300 companies and 1.4 million users registered in Japan

65.0

40.0

Used by more than 1.4 million people(Jun. 2023)

2022

2023

*19 entities named in ITO Report for Human Capital Management, issued by the Ministry of Economy, Trade and Industry

Benesse Report 2023

Business alliance with US-based Udemy, Inc.

What working adults in Japan need most right now(Jun. 2023)

20.0

57

In Japan, which is entering the era of the 100-year life, relatively few
adults engage in learning activities aimed at personal fulfillment ascompared with people in the US and Europe. We believe it isimportant to establish a culture of learning where adults can haveroutine opportunities to continue learning, not only at university but
also after graduation, in order to pursue their individual career or life
goals. In April 2022, backed by this belief and a commitment tosquarely tackle the challenges of social structure related to university
and working adult segment, Benesse established the University andWorking Adult Business Company and set forth its purpose to support
people to “continue learning throughout life, thus enriching individual
lives and society at large.”

100.0

Adopted by more than

1,300 entities

03 How We Create Value

2024

2025

2026

2027

2028

2029

2030 (fiscal year)

The major strengths of the Udemy services operated in Japan are thespeedy content delivery via the C-to-C platform, curricula for practicalbusiness skills, and the extensive lineup of programs. Our offerings
cover courses on technology, coaching and 1:1meetings, and mental
health, and they are all cutting edge in every field, from business
communication to health. For example, courses on generative AI werealready available from Udemy when the technology began to draw
public attention overseas. Learning programs are constantly updatedwith the newest information, enabling users to stay one step ahead.
This feature is made possible by the use of the C-to-C model, which iswell suited to autonomous content creation planning andimplementation.
As of June 2023, Udemy Business has a customer base consistingof more than 1,300 enterprises of all sizes in Japan, and the combined
total number of people using Udemy Business and/or Udemy for
individual users exceeds 1.4 million. Our analysis indicates that the
major reasons for adopting the tool are its ability to offer a solution to
the issue of developing DX personnel, which is common to many
companies across different industries, and its flexibility, which suits theneeds of many companies that have begun to prefer online training in
the wake of COVID-19. The growing user count moreover testifies tothe appeal of the product, which provides easy access to high-quality
curricula from anywhere in Japan. Going forward, we will create moreuser-friendly functions to meet the needs of corporate users
regardless of industry and organization size.

Benesse Report 2023

58

CHAPTER

03 How We Create Value

Special feature: University and Working Adult Business

Forming the National Municipal Reskilling Network, an off-shoot from the Udemy business
In May 2023, the Company formed the National Municipal Reskilling
Network to support municipal governments with their reskilling
efforts. This action was planned in response to our recognition of thespecific challenges faced by many municipalities in promoting
reskilling activities, which we identified by examining the use of
Udemy Business services by certain municipal officers, and we foundthem of a different nature from those of business companies. The new
project is designed to provide solutions to these challenges by sharing
know-how and insights with participating municipalities.

Specifically, major activities are: actively publishing a booklet on
reskilling activities to share best practices and challenging projects
among participating municipalities; hosting webinars featuring
public figures and guest experts; and organizing networking
sessions to help participating municipalities form closer ties with
one another. It is expected that needs for similar networking
activities will grow in the future, and we hope to act as a catalyst in
forming appropriate structures.

Building a business model capable of providing comprehensive reskilling support services
Our goal as the University and Working Adult Business is to match theneeds of companies and individuals by providing support forreskilling through Udemy. In this business field, demand is growing
from various sectors such as government (To G) and schools (To S) in
addition to business (To B) and consumers (To C), and we will respondto this demand by expertly drawing on the wealth of know-how that
we have accumulated over the years. At present, we are expanding
the business centering on Udemy-based learning support while

investing in SkyHive Technologies Inc. and acquiring Waris Co., Ltd.
SkyHive, which possesses the world’s largest labor market database,will engage in skills visualization while Waris will play a key role inexpanding into the matching market for female workers (recruiting,transferring, job hunting, changing jobs) through reskilling services.
With these functions in place, we aim to build a business model
capable of providing comprehensive support for a full range ofreskilling processes related to human capital management.

Committed to achieving a “society where
people take pride in their latest
learning pursuits”
Tomonori Iida
Executive General Manager in chargeof Working Adult Education Businessand Udemy business in Japan
Benesse Corporation

Launching the Udemy business, a demonstration of Benesse’s innovative power
The Udemy business represents a new global partnershipproject, a business development format that generally poses
formidable challenges for Japanese companies. We also had a
hard time launching the Udemy business, spending muchtime and energy on a process of trial and error that lasted
nearly one year. At that time, we were simultaneously
engaged in a total of 13 new project developments andviewed Udemy as one of the most promising among them.
As it turned out, my confidence was well-placed, as the

project has subsequently developed into a successful
platform business, winning numerous corporate andindividual customers. This achievement exemplified
Benesse’s ability to achieve innovation through a newpartnership and develop it into a new business.

We are a company engaging in social value creation
Clarificationof goals

Expanding business toinclude visualization ofcurrent status/skills

Visualizationof current
status/skills

Expanding business fromlearning to visualizationof current status/skills

Matching

Expanding business beyond
learning to matching(recruiting, transferring,job hunting, changing jobs)
through reskilling

Learning
Business
expansion

Expanding businessto include matching

Business
expansion

Since announcing the Transformation Business Plan we havereceived inquiries about it from many companies. The Plan
describes our future business visions and approaches toward
them. In the future, when cooperation with several
companies is realized, we would like to think further about
what role Benesse will play. In the Udemy business, forexample, we promote a co-branding strategy to represent
Udemy and Benesse in combination. I think it appropriate for
Benesse to play alternating roles in public exposure, either inthe spotlight or behind the curtain.
With regard to this, we are primarily pursuing our goal of
creating a “society where people take pride in their latest
learning pursuits, ” while not necessarily seeking to attach ourname to the achievement. This means that Benesse must be
willing to perform its role from behind the scenes, particularly
with respect to realizing various social ideals or achieving thewell-being of society in general. I think this could be a worthy
way of Benesse. Of course, as a business entity, it is ideal tocreate social value while at the same time adding economic
value.

Aiming to provide one-stop solutions to human capital management issues

Pursuing possibilities beyond the ideal learning culture
In October 2022, the Japanese government announced its plan toinvest a total of one trillion yen in reskilling promotion over five years.
This will serve as a tailwind for our business based on Udemy. On theback of this situation, we are promoting the Udemy business toachieve an environment where practical hands-on learning
opportunities are easily accessible and available to willing adult59

Benesse Report 2023

learners, with a view to building an ideal learning culture. At the sametime, we are looking beyond this goal to the possibility of developing
new business models using datasets obtained from the Udemy
business, such as about individual learners’ characteristics, interestsand concerns, and actions and behaviors, which constitutes a sourceof business growth with immeasurable potential.

Toward the goal of realizing a “society where people takepride in their latest learning pursuit,” we are striving to build
appropriate learning infrastructure. To this end, the University
and Working Adult Business is solidifying its foundation basedon the Udemy business in order to expand into new fields.
Our plans include helping companies to address issues
related to human capital management by providing
one-stop solutions. We are committed to successful
performance in this field.

Benesse Report 2023

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CHAPTER

03 How We Create Value

Kids & Family Business
Review of fiscal 2022

(billions of yen)

90.0

In the Kids & Family Business, net sales decreased by 4.7% year on year to 67.8 billion yen. This isprincipally attributable to a decline in revenue, reflecting reduced cumulative enrollments for
Kodomo Challenge both in Japan and China. In China in particular, the reduced revenue resulted
from the temporary suspension of business activities due to the country’s zero-COVID policy, andcould not be offset by the positive effect of currency exchange accompanying the weaker yen.
Operating income declined by 95.9% year on year to 70 million yen due to decreased revenue andprofit despite a boost in profit resulting from the reallocation of the burden of selling expenses
between the Kid’s & Family Business and the Education Business in Japan.

(billions of yen)

71.2

67.8

60.0

15.0

10.0

30.0

1.7

0

FY2021
Net sales

5.0

0.07
FY20220Operating income

Business overview and future prospects

Responding to diversifying needs
to improve customer's lifetime value
Toshihiko Nishimura
Executive Officer
Head of the Kids & Family Business Company of Benesse Corporation

The pillar of the Kid’s & Family Business is Kodomo Challenge, thecorrespondence course designed to help children acquiredevelopmentally appropriate lifestyle habits and knowledge. We are
expanding the market for this product in Japan, China, and Taiwan.
In fiscal 2022 in Japan, cumulative enrollments decreased due tothe accelerating trend toward lower birthrates, changes in theeconomic environment, and diversifying needs. Despite this, however,operating income grew, thanks to cost-cutting measures and theincrease in unit price per student following a price revision. Goingforward, while focusing on improving our product retention rate byMarketRelated business data

Japan

China

Due to both demographic decline and the impact of COVID-19, the needsof parents in regard to their children’s education are significantly changing.
In the domestic preschool education market, mainstream teachingmaterials have been shifting from print to digital tools such as tablets,
reflecting a shift from the values of older generations as well as social
conditions. In addition, learning needs of preschoolers are becoming morediverse and individualized against the backdrop of a rising employment
rate for women and a growing percentage of female university graduateswith four-year degrees. Demand for English learning and STEAM as well asother education activities is also increasing.

In China too, the decline in the birthrate is picking up speed. The annual
number of births continued to fall for the sixth year to below the 10 million
level, specifically, 9.56 million, or a 50% reduction from the 17.86 million
recorded in 2016, the most recent peak. The annual figure is expected tocontinue to decrease in 2023.
One factor contributing to the declining birthrate is the excessive costof education. In July 2021, to address this issue, the government
announced the “Double Reduction” policy to reduce the burden on
students in terms of homework and out-of-school education during theyears of compulsory education.
The policy includes restrictions on prep schools and other education
providers at the compulsory education level. In response to this situation
as well as to stay-at-home orders related to COVID-19, a number ofbusinesses are scaling back or withdrawing from the market.
On the other hand, consumer enthusiasm for education remains high,and it is expected that the preschool education market for character
cultivation will continue to trend at a certain level.
Due to these factors, needs for preschool education in China arechanging significantly while also becoming more diverse and individualized.

Cumulative enrollments in Kodomo Challenge over a full year

Kodomo Challenge enrollments in April
Japan

China

(thousands of students)
2,500
2,080

Japan

Taiwan

1,990

2,020

2,000

24,390

1,800

1,490

1,500
1,000

24,25924,20423,232

2019

2020

2021

19,82920,00010,000

500
0

2019

2020

2021

2022

2023 (year)

0

2018

2022 (fiscal year)[ as of April each year ]Kodomo Challenge average monthly fee per person (Japan)
(yen)
2,500
2,000

1,882

1,961

2,006

2,204

2,376

Kodomo Challenge share of the target population (Japan)
(%)
20
15

13.9

14.1

14.2

13.9

2019

2020

2021

2022

1,500
1,000

10

500

5

0

Benesse Report 2023

Overseas(thousands of students)
30,000

2018

2019

2020

2021

2022 (fiscal year)

Note: The average monthly fee is calculated by dividing the net sales of each course by the cumulative enrollment.

61

increasing customer loyalty, we
will create multilayered value andprice structures for our products
and promote combination options
to respond to diversifying needs inan effort to achieve growth despite
the demographic challenges.
In China, our cumulative enrollments in fiscal 2022 decreased,primarily due to a plunging birthrate and the effect of the
COVID-related lockdown policy on sales and delivery operations, evenwith the fierce market competition having begun to ease due to the
Double Reduction policy. In response to these changes in theenvironment, we will strive to evolve our products to cater topreschool education needs that are becoming more diverse andindividualized while aiming to recover Kodomo Challenge
enrollments for character cultivation and improve customer lifetime
value.

0

11.7

2023 (year)[ as of April each year ]Benesse Report 2023

62

CHAPTER

03 How We Create Value

Nursing Care and Childcare Business
Review of fiscal 2022

(billions of yen)

150.0

In the Nursing Care and Childcare Business, net sales increased by 4.2% year on year to 132.6
billion yen. This is largely attributable to an increase in the number of customers resulting from theaddition of nine new nursing home and elderly housing facility locations and six new daycare andafterschool childcare centers. Operating income decreased by 17.0% year on year to 6.6 billion yen
due to increased utility costs connected to rising energy prices as well as increased sales
promotion costs for the enhancement of related activities.

(billions of yen)

132.6

127.3

100.0

10.0

8.0

6.6

50.0

0

FY2021
Net sales

15.0

5.0

FY20220Operating income

Business overview and future prospects

Aiming for further growth by achieving
recovery from the impact of COVID-19
and expanding peripheral businesses
Shinya Takiyama
Director and Senior Managing Executive Officer
Head of the Nursing Care and Childcare Business Company ofBenesse Style Care Co., Ltd.

The Nursing Care and Childcare Business engages primarily inproviding facility-based nursing care and related services such ashome help, meal delivery, and nursing care consultation as well as
nursing and medical professional referral and staffing. We also
operate daycare and afterschool childcare centers. Utilizing advanced
digital technology and unique methods based on the verbalized
know-how of our staff, we are committed to offering high-quality
service to each of our elderly and young customers. We have thus
established a solid position in the nursing care and childcare markets.
In fiscal 2022, the occupancy rates of our nursing homes

MarketWith the ongoing aging of the population in Japan, the number of people
who require nursing care has also continued to increase. To resolve the issueof nursing care for elderly, the nursing care insurance system under thesocial insurance system was enacted in 2000. Since then, the domestic
nursing care market*1 has expanded rapidly, with the long-term care benefit
expenditure in fiscal 2020 at 10.2 trillion yen, a 2.6% increase over theprevious year. As of April 2022, the number of people receiving nursing
care insurance services was 5.93 million, a 2.0% increase from a year earlier.
The number of elderly aged 65 and over increased to 29.1% of the total
population*2 as of September 15, 2022, a 0.3pt increase over the previous
year. It is expected that in 2040, the percentage of elderly people will havehit 35.3%.
As the birthrate declines, the population ages, and we enter the era of
the 100-year life, in order to improve the quality of life of the elderly andsolve the social issue of a shortage of human resources for nursing careservices, the nursing care industry needs to leverage digital technology to
improve the quality and efficiency of services.
*1 Source: Ministry of Health, Labour and Welfare, ”Status Report on the Long-term Care
Insurance Projects”*2 Source: Statistics Bureau, Ministry of Internal Affairs and Communications, “The Elderly inJapan from a Statistical Standpoint (as of September 15, 2022)”

People receiving nursing care insurance services
In-home services(millions)
5.43
6Community-based services

Facility services

5.93 (+2.0%)*

5.81

5.64

5.59

Related business data

4

3.66

3.78

3.84

3.99

4.08 (+2.2%)*

2

0.84
0.93

0.87
0.95

0.84
0.95

0.87
0.95

0.89 (+2.9%)*
0.96 (+0.6%)*

0

2018

2019

2020

2021

2022

Source: Ministry of Health, Labour and Welfare, ”Status Report on the Long-term Care Insurance Projects”* Figures in parentheses are a comparison with the previous year (service recipients in April each year).

Long-term care benefit expenditure by category
Facility services

6.2%

30.9%

Community-based services

16.1%
12.9%
Specified nursing homes licensed toprovide nursing care (private-pay
elderly homes with nursing care)

In-home services
FY202046.7%

10.2 trillion yen
in totalHome-visit services

13.5%
Commuting services

5.3%

Occupancy rate of our existing facilities

Distribution of our nursing homes

(%)
100

(As of March 2023)

96

95

93

90

90

80

OthersOther in-home services

continued to decline due to theimpact of the COVID-19 outbreak,mainly affecting our high-end
facilities. Striving to improve theoccupancyrate,
ourhighest-priority issue at present,
we are carrying out a number ofmeasures, such as expanding trial
short-stayprograms
andboosting sales capabilities, in the context of the pandemic’s waning
effects on economic and social activities. We are looking to restore
the occupancy rate to the pre-COVID level by the end of fiscal 2024.
At the same time, we are steadily moving forward with new
initiatives, namely new area development strategies for expanding
the number of facilities as well as human capital investment and DX
promotion plans for improving the quality of nursing care services.
Going forward, we are planning to focus more efforts on expanding
peripheral businesses in markets with strong growth potential where
we can leverage the Company’s advantages to best effect, such as
nursing care HR and nursing care meal services.

15.1%

Aichi

22

Kyoto

4

Hokkaido2

Miyagi5

Saitama24

60
Osaka 1940

Hyogo 24

14

Tokyo

164

Kanagawa 65

20
Nara

0

Chiba

2018

2019

2020

2021

2022

(end offiscal year)

2

Okayama 4
Fukuoka

3

Source: Ministry of Health, Labour and Welfare, “Status Report on the Long-term Care Insurance Projects”

63 Benesse Report 2023

Benesse Report 2023

64

CHAPTER

03 How We Create Value

Nursing Care and Childcare Business

Related business data

Facility-based nursing care business: improving the quality of nursing care

Nursing homes & elderly homes by brandNumber of daycare and afterschool childcare centers■ Aria ■ Clara ■ Granny & Granda■ Madoka ■ Bon Sejour ■ Cocochi■ Daycare

400

330

322

■ Li-Re339

343■ Afterschool

120

352

80
200

Developing the Majikami nursing careexpert and Majikami AI to increase thequality of nursing care

99

93

88

84

80

300

Benesse’s unique nursing care DX for increasing the QOL of residents

53

57

60

62

27

27

28

31

65

40
100

0

19

18

20

21

22

(end offiscal year)

0

18

19

20

34

21

22 (end of
fiscal year)

New challenges for growth: expanding Nursing Care Peripheral Business

Focusing on nursing care HR and nursing
care meal services
The Benesse Group is pursuing the extensive development of its
nursing care business centering on facility-based care and a diverse
range of related services.
In Japan, demand for nursing care professionals is increasing
with the growth of the elderly population and personnel shortages
will likely become more severe.
In this situation, we are seeing good opportunities to develop
business related to nursing care HR (matching care providers withjob seekers) and nursing care meal services (providing prepared
meals to make up for a shortage of cooks). We will focus on
expanding into these two fields, which have strong market growthpotential and are likely to provide us with opportunities to takeadvantage of our strengths.

Market growth potential and our strategies for nursing care HR/
meal services businesses
Market growthPresent operations
potential(FY2022–FY2028)
Nursing care HR

Annual growth+5%*1

Nursing care meal services

Annual growth

+10 %
*2

Benesse MCM
engaged in staffing;
Heart Medical Care inpersonnel placement
and media relations

Benesse Palette
engaged in mealdelivery services forthe elderly at homes
and provides nursing
care meals for
Benesse Style Care
homes

Future development
Benesse’s strengths
direction▶ Deep understandingof customers
cultivated throughfacility-based service
operations▶ Knowledge gained
from existing
nursing carepersonnel businessWill create new
personnel services
businesses to meet adiverse array of
employment-related
needs, while
expanding existing
businesses▶ Adept cooking
techniques (taste
and safety) honed
through operations
to provide nursing
care meals at ourown facilities

Will create a B-to-B
business to provide
pre-prepared nursing
care meals to facilities
operated by othercompanies*1 The value of the nursing care HR market has been calculated based on the number of people eligible toreceive nursing care services.
*2 The value of the pre-prepared nursing care meal market is an estimate that factors in the shifting of
cooking operations from in-house kitchens to off-site commercial kitchens in addition to existing demand.

65 Benesse Report 2023

Benesse Group’s nursing care business
Market growth rate: 5% or more*

Facility care/Home care

Nursingcare meal
services

Nursingcare DX

Under
consideration(Unit: billions of yen)AI

Knowledge of nursing Acquiring nursing
care experts certifiedcare knowledge
by Benesse (Majikami) (Majikami AI Solution)

Improving the nursing skills of
non-Majikami
staff using Majikami AI Solution

Expertise in nursing care from 28 years of operations and personnel training
capabilities stemming from Benesse’s education business operations

Granda Yotsuya, opened in March 2022 as the first Benesse’s “sensing home”

Nursing Care Antenna for making nursing
care knowledge publicly available

30.0

Nursingcare HR

Annualgrowth

+35%

Nursingcare
meal
services

5.0

2024

An overwhelming improvement to service infrastructure
by combining people and technology

Support and increase nursing care personnel

Net sales plan

2023

Analysis for“unusual”
signs

Sleep
qualityIn March 2022, we opened the first Bennese’s “sensing home,” Granda
Yotsuya. We are also rolling out the relevant technology to existing
facilities to expand the use of this model in a bid to make our products
more appealing. Our plan is to expand the coverage to 56 locations in
total by the end of fiscal 2023. In the sensing home, each resident’s
room is equipped with sensors that collect information on theresident’s status in relation to sleep and toileting, and the collected
data is processed for visualization. Using this data and Majikami's
know-how, we will further accelerate the development of AI solutions
that realize quality of service with the highest priority on QOL.

* Both figures are forecasts for 2022 to 2028.

2022

Dementia
care

Expanding the Bennese’s “sensing home”

Nursingcare HR

Assistive
products

Service quality that places the highest emphasis on QOL

Market growth rate: 5% or less*

Seniorhousing

CustomerreferralWith the aim of improving the quality of life (QOL) of elderly residents
of nursing homes, Benesse Style Care is promoting the developmentof the Majikami nursing care expert and the Majikami AI digital tool.
Majikami is an internal nursing care qualification system to certify
employees with a high level of expertise and practical skills, and a totalof more than 220 Majikami experts have been certified to date.
Majikami AI is being developed by quantifying the factors that
contribute to improving the QOL of residents and then employing theinsights and behavior of Majikami experts as instructional data to train
the system. By effectively combining human and technologicalcapabilities, this system aims to enable even less-experienced staff toprovide nursing care of a quality close to that provided by Majikami.

Overview of Benesse-style nursing care DX

2025

2026

2027

2028 (fiscal year)

While committed to improving the quality of nursing care provided at
its own facilities, Benesse Style Care is also sharing its accumulated
knowledge in an effort to contribute to the industry as a whole.
As part of such effort, we run Nursing Care Antenna, a portal site thatprovides comprehensive information needed by caregivers in Japan.
The website makes available for free expertise on nursing caretechniques that was previously limited to internal use as well as theBenesse Methods knowledge base that Benesse Style Care has built
up over its 28 years of nursing home operations. Posts also include
information on seminars, recreational and other activity materials foruse in nursing care settings, and information on common geriatricdisorders and related medicine.
Site membership has expanded to reach 120,000 as of July 2023.

Offering free access to practical knowledge assets built
through 28 years of operations

Nursing care techniques

Outing destinations

Benesse’s nursing caretechniques

Wheelchair-accessible

Nursing caretechnical guidelines(with video)

popular destinations

Accessibility
information

Nursing care recreational
activity materials
Recreational activity
materials for nursing care:
More than 5,000 items

Benesse Methods

Emergency preparedness
measures

Visual materials

Free access to Benesse’s
nursing care expertiseand methods

Protection against
infectious disease
Disaster preparedness/
response

Free-of-charge, copyright-free

Toileting care
Dementia care

Visual materials for use innursing care settings:
More than 1,000 items

etc.

Benesse Report 2023

66

Corporate Governance

CHAPTER

Corporate GovernanceCorporate governanceManagement Council
The Management Council is chaired by the CEO and attended byheads of companies, those responsible for administrative divisions,and individuals designated by the CEO. Group management leaders
share important issues and information and deliberate on importantmatters for the Group.

The Company, as a holding company, is committed to ensuring theappropriate governance of the entire Benesse Group through its
Board of Directors and Audit & Supervisory Board. The Board of
Directors (the Board) makes it a rule to maintain the proportion ofoutside directors at 50% or more and that of independent outside
directors at one-third or more of the total number of sitting directors.
The Company continuously appoints directors in charge of businessexecution, multiple highly independent outside directors, andnon-executive directors who disseminate our founding spirit inaddition to leveraging stockholder viewpoints to supervise
management. This ensures that meetings of the Board consist of lively,
multifaceted discussions that go beyond internal circumstances andthat the supervisory function of the Board is maintained andimproved. The Company also ensures that effective audits are
conducted by standing Audit & Supervisory Board Members who areknowledgeable about the Company and outside Audit & Supervisory
Board Members who are attorneys or certified public accountants.

Audit & Supervisory Board

The Board is composed of three directors in charge of businessexecution, one non-executive director, and four highly independent
outside directors. In principle, the Board, led by a non-executive
director, meets monthly to deliberate on matters important for the
management of the Company and supervises the business executionof the Company and of Benesse Group companies. Since 2003, theCompany has appointed multiple outside directors, thereby ensuring
the appropriate fulfillment by the Board of its supervisory andbusiness execution functions.

In accordance with the Audit & Supervisory Board Member AuditingStandards, the policy of the Audit & Supervisory Board is to assume
responsibility for establishing a good corporate governance structure
worthy of the trust that society places in the Company, with emphasis
on preventive auditing. The Company also conducts effective audits via
standing Audit & Supervisory Board Members who are knowledgeable
about the Company, and via outside Audit & Supervisory Board
Members who are attorneys or certified public accountants.
The Audit & Supervisory Board meets once a month, in principle,
and individual Board Members share their awareness of key
management issues by attending important management meetings
such as Board of Directors, Nomination and Compensation Committee,
and Management Council meetings, and by exchanging opinions withsenior management. Two standing Audit & Supervisory Board Members
and one part-time Member also serve as auditors for major subsidiaries
while actively receiving verbal business reports and the results ofinvestigations of business conditions by operating companies.
In addition to appointing two dedicated audit staff members toenhance its audit system, the Company has established the Benesse
Group Audit Committee (which also includes standing members of
Audit & Supervisory Boards at subsidiaries) to strengthen cooperation
among the Group’s audit systems.

Nomination and Compensation Committee

Other optional committees

The Company established the Nomination and Compensation
Committee as an advisory committee to the Board. The chair is an
outside director, and the majority of the Committee’s members areoutside directors. In the appointment and dismissal of directors and of
the director and president/CEO, the Committee deliberates andsubmits its opinions to the Board, which makes the final decision. The
Committee also deliberates on the compensation system for directors
and submits its opinions to the Board. It is delegated by the Board to
decide the compensation of individual directors.

The Company has established the Sustainability Promotion
Committee, Information Security Surveillance Committee, and Risk
and Compliance Committee as optional committees.

Board of Directors

04
CHAPTERFor greater lifelong
growth potential
Enhancing Operational
Resources

04 Enhancing Operational Resources

Corporate governance structure (As of March 31, 2023)
General Shareholders’ Meeting
....... Independent &outside

Audit & Supervisory
Board

Board of Directors
Nomination andCompensation Committee

Independent Auditors....... Inside

In order to achieve sustainable growth with all
stakeholders, the Benesse Group is continuing toenhance the effectiveness of its corporate
governance toward solidifying its managementfoundation and further increasing its corporate value.

67 Benesse Report 2023

Management Council / Company Management Committee(CMC) / Cross-Departmental Committee for People in Chargeof the Administrative Divisions / Sustainability Promotion
Committee / Group Human Resources Committee / DX
Governance Board / Information Security SurveillanceCommittee / Risk and Compliance Committee

Internal Auditing Department

President, CEO

Benesse Corporation

Benesse Style Care Co., Ltd.

Administrative Divisions

Subsidiaries

Subsidiaries

Subsidiaries

Benesse Report 2023

68

CHAPTER

04 Enhancing Operational Resources

Corporate GovernanceDirectors and Audit & Supervisory Board Members (As of June 2023)

Expertise, experience and activity status of Directors and Audit & Supervisory Board Members(As of June 2023)
OutsideHitoshi Kobayashi

Shinya Takiyama

Representative Director and President, CEO

Director

Joined the Company in 1985. After having served as Representative
Director and President of Benesse Style Care Co., Ltd., in 2012 became a
Director of the Company, a position that he continues to serve in. Went
on to lead the Company’s Corporate Planning Division, Overseas Business
Development Company, Zemi Business Company, etc. Has served as theRepresentative Director and President of Benesse Corporation (current)
since 2016. Became the Representative Director and President, COO of
the Company in 2021, and became the Representative Director andPresident, CEO of the Company (current) starting in 2022.

Joined the Company in 1996. Has been Representative Director andPresident of Benesse Style Care Co., Ltd. (current) since 2013, and a
Director of the Company since 2016 (current). Became a Group
Executive Officer of the Company in 2021, and became a Senior
Managing Executive Officer of the Company (current) starting in 2022.

Kenji Yamakawa

Hideaki Fukutake

Director

Director

Joined the Company in 1986. Served as Director of Benesse Corporationin 2012. Has served in the position of Director of Tokyo Individualized
Educational Institute, Inc. since 2016, and the position of Executive Vice
President of Benesse Corporation (current) since 2020. Became Group
Executive Officer of the Company in 2021. Has served as Director andSenior Managing Executive Officer of the Company (current) since 2022
and Executive General Manager of Area Business Promotion of Benesse
Corporation (current) since 2023.

In 2000, joined KEYENCE CORPORATION. In 2006, joined SMS CO., LTD.
and subsequently became Division President of Nursing Care andMedical Care Media at that company. Since 2009, has been Director of
efu Investment Limited (current). After having served as Outside
Director of Benesse Corporation, became Director of the Company in2014. Has served as Representative Director of Minamigata Holdings
Ltd. (current) and Non-executive Director of the Company (current)
since 2021. Has been Chairman of the Board, Fukutake Foundation(current) and Outside Director of Foodison, Inc. (current) since 2023.

Name/Affiliation

Years in
officeBoard ofDirectors
meetings

Audit &
Supervisory
Board

Hitoshi Kobayashi

11 yearsRepresentative Director andPresident, CEO

Representative Director andPresident of Benesse Corporation

13/13

7 years

Director

Representative Director andPresident of Benesse Style Care
Co., Ltd.

13/13

Kenji Yamakawa

1 yearDirector

Executive Vice President ofBenesse Corporation

11/11

Hideaki Fukutake

9 years

Chairman of the Board, Fukutake
Foundation
Director of efu Investment Limited
Representative Director of
Minamigata Holdings Ltd.

13/13

Yumiko Noda

• Chair of the Board• Member of the Nomination andCompensation Committee

Director

Director

Mutsuo Iwai

Joined the Japan Tobacco and Salt Public Corporation in 1983. Served as
Director and Managing Executive Officer of Japan Tobacco Inc.,
Executive Vice President of JT International S.A., and Representative
Director and Executive Vice President of Japan Tobacco Inc. Was
appointed as Deputy Chairperson of the Board of Japan Tobacco Inc.
and Outside Director of the Company in 2020 (current). Was appointed
as Outside Director at TDK Corporation in 2021 (current). Has served as
Chairperson of the Board of Japan Tobacco Inc. (current) since 2022 andas Vice Chairman, KEIZAI DOYUKAI (Japan Association of Corporate
Executives) (current) since 2023.

Joined Bank of America Corporation, Tokyo Branch, in 1982. After
serving in positions such as Deputy General Manager of London branchof the Long-Term Credit Bank of Japan, and advisory partner with PwC
Financial Advisory Services, Deputy Mayor of Yokohama City, and asenior fellow at the Tsinghua University Research Center for JapaneseStudies, became Representative Director and President at Veolia Japan
K.K. in 2017, then Chairman and Representative Director in 2020
(current). Became Director of the Company in 2021 (current). Has been
Vice Chair and Director, KEIDANREN (Japan Business Federation)(current) and Outside Director of Mizuho Financial Group, Inc. (current)
since 2023.

• Chair of the Nomination andCompensation Committee

Kohey Takashima

Masaru Onishi

Director

Director

Joined McKinsey & Company Inc Japan in 1998. Became Representative
Director and President of Oisix Inc. (now Oisix ra daichi Inc.) in 2000
(current). Became Director of the Japan Wheelchair Rugby Federation in2018 (current). Became Outside Director of CARTA HOLDINGS, INC. in
2020. Has served as Vice Chairman of KEIZAI DOYUKAI (Japan Associationof Corporate Executives) (current), as well as Outside Director of theCompany (current) since 2021. Has been Joint Representative Director of
Data for Social Transformation (current) since 2022 and External Directorof SHiDAX CORPORATION (current) since 2023.

Joined Japan Airlines Co., Ltd. in 1978. Became President, JAL Aircraft
Maintenance Narita in 2007. Became Representative Director, President,
Japan Air Commuter Co., Ltd. in 2009. Became Representative Director,
President, Japan Airlines International Co., Ltd. (currently Japan Airlines
Co., Ltd.) in 2011, before becoming Representative Director, Chairman
for Japan Airlines Co., Ltd. in 2012. Became Senior Representative,
External Affairs, Japan Airlines Co., Ltd. in 2018. Has served as an Outside
Director of the Company since 2022 (current).

3 years

Director

Chairperson of the Board ofJapan Tobacco Inc.
Outside Director of TDK
Corporation

13/13

Yumiko Noda

2 years

Director

Chairman and Representative
Director, Veolia Japan K.K.
Outside Director of Idemitsu
Kosan Co., Ltd.
Outside Director of Mizuho
Financial Group, Inc.

• Member of the Nomination andCompensation Committee

13/13

Kohey Takashima

2 years

Director

Representative Director andPresident of Oisix ra daichi Inc.
External Director of SHiDAXCORPORATION

12/13• Member of the Nomination andCompensation Committee

Masaru Onishi

1 yearDirector

Outside Director, TEIJIN LIMITED
Outside Director, Mitsui O.S.K.
Lines, Ltd.
Outside Director, Kadoya Sesame
Mills inc.

10/11

• Member of the Nomination andCompensation Committee●

Naoto Saito

Standing Audit & Supervisory Board Member

Standing Audit & Supervisory Board Member

Joined Daio Paper Corporation in 1977. Joined the Company in 1991 andwent on to serve as Manager of the General Affairs Department, asManager of the Human Resources Department, and in other positions
before becoming Corporate Executive Vice President, General Manager of
the Personnel & General Affairs Division and Legal & ComplianceDepartment in 2003. Became President, Representative Director ofBenesse Business-mate, Inc. in 2005. Has served as Standing Audit &Supervisory Board Member of the Company (current) since 2008.

Joined the Company in 1986. After working in the Finance andAccounting and Auditing & Business Administration Departments in theGroup, he became Manager of the Accounting Department, Executive
General Manager of the Finance and Accounting, Executive General
Manager of the Internal Auditing Division, and then Executive General
Manager of the Business Administration Division. In 2015, became an
Audit & Supervisory Board Member at Tokyo Individualized Educational
Institute, Inc. (current), and in 2017, became a Senior Executive Officer of
the Company, before also being appointed as a Standing Audit &Supervisory Board Member starting in 2019 (current).

Yoshinori Matsumoto

15 years

Naoto Saito

4 years

8 years

Miyuki Ishiguro

Audit & Supervisory Board Member

Audit & Supervisory Board Member

Joined Tohmatsu & Co. (currently Deloitte Touche Tohmatsu LLC) in 1995.
Since 1998, has been registered as a certified public accountant. In 2010,
became Partner at Deloitte Touche Tohmatsu LLC, and in 2015, after
leaving that position, became Representative of Izumo CPA Office(current) and Outside Audit & Supervisory Board Member of theCompany (current). Became Outside Director serving as Outside Audit &Supervisory Board Member of Torii Pharmaceutical Co., Ltd. and Audit &Supervisory Committee Member of Intage Holdings Inc. in 2016 (current).
Has been Outside Audit & Supervisory Board Member of Lasertec
Corporation (current) since 2020.

In 1991, enrolled as a lawyer and joined Tsunematsu Yanase & Sekine(currently Nagashima Ohno & Tsunematsu). In 1999, became a partnerat that firm (current). In 2017 became Outside Audit & Supervisory Board
Member of the Company (current). Became Vice President, Tokyo Bar
Association in 2018. Has been President Elect, Inter-Pacific Bar
Association (IPBA) (current) since 2022 and Outside Director of Nomura
Holdings, Inc. (current) since 2023.

69 Benesse Report 2023

Miyuki Ishiguro
Audit & Supervisory Board
MemberB-to-Cbusiness

Global

●

●

●

●

●

Finance

ー

●

●

●

ー

●

●

ー

●

●

●

ー

●

●

●

ー

●

●

●

●

●

●

●

ー

Accounting

13/13

Digital

Legal

16/16

●

Standing Audit &Supervisory Board Member

Eiichi Izumo●●

Standing Audit &Supervisory Board Member

Audit & Supervisory Board
MemberEiichi Izumoー

Nursingcare

ーAudit & Supervisory Board Members

Yoshinori Matsumoto

Strategyー• Member of the Nomination andCompensation Committee

Shinya Takiyama

Industry expertise

Leadership

Corporate
management Education

Directors of the Board

Director Non-executive Director

Mutsuo Iwai

Other major current
positions

Independent

Necessary expertise and experience

State of attendance for FY2022

6 years

Audit & Supervisory Board
Memberof Tokyo Individualized
Educational
Institute, Inc.

13/13

Certified Public Accountant
Outside Audit & Supervisory Board
Member at TORII PHARMACEUTICAL
CO., LTD.
Outside Audit & Supervisory Board
Member of Lasertec Corporation

13/13

LawyerOutside Audit & Supervisory
Board Member of Lasertec
Corporation
Outside Director of Nomura
Holdings, Inc.

13/13

16/16

●

16/16

●

16/16

●

Visit the website for details about other major current positions.
https://www.benesse-hd.co.jp/en/about/management/executive.html

Benesse Report 2023

70

CHAPTER

04 Enhancing Operational Resources

Corporate Governance

The expertise and experience demanded of directors, and reasons for their selection
The Company specifies the skills required of directors from the following viewpoints so that the Board will continue to fulfill and enhance its
important managerial decision-making and supervisory functions through high-quality discussions toward the achievement of theMedium-Term Management Plan.
(1) The Company deems it essential that candidates for director have actual management experience, and requires each candidate fordirector to have experience in corporate management, in order to perform management supervisory functions even more effectively.
(2) In order for the Board to perform its function, while keeping the customer’s perspective as the starting point of all the actions takenby the Company, the candidates for director are required to have experience in B-to-C business, and in particular, knowledge andexperience in the education and nursing care businesses, which are the two pillars of the Company’s business, are required of thecandidates for executive director.
(3) From a strategic point of view, emphasis is placed on global, digital, and financial skills, in order to promote the use of digital technologies
in business, new domain and overseas development, and portfolio management, with the aim of realizing the Medium-Term
Management Plan.

Reasons for the appointment of outside directors and outside Audit & Supervisory Board Members
Outside Directors
Mutsuo Iwai

Mr. Iwai has a wealth of corporate management experience in companies that carry forward B-to-C business globally,
as well as extensive specialized knowledge. He is using this extensive experience and specialized knowledge tocontribute to supervision of management for medium- to long-term improvement of corporate value, as well as toimprove the transparency of the decision-making processes regarding management of the Company as a director
and the chair of the Nomination and Compensation Committee.

Yumiko Noda

Ms. Noda has a wealth of corporate management experience in companies that carry forward business globally andextensive specialized knowledge of finance. In the Board and the Nomination and Compensation Committee, she isusing this extensive experience and specialized knowledge to contribute to supervision of management for mediumto long-term improvement of corporate value, as well as to improve the transparency of the management
decision-making processes regarding the management of the Company.

Kohey Takashima

Mr. Takashima has a wealth of corporate management experience in companies that are engaged in B-to-C business,and specialized knowledge of e-commerce business. In the Board and the Nomination and Compensation
Committee, he is using this extensive experience and specialized knowledge to contribute to supervision ofmanagement for medium- to long-term improvement of corporate value, as well as improvement of thetransparency of the management decision-making processes regarding the management of the Company.

Masaru Onishi

Mr. Onishi has a wealth of corporate management experience in companies that are engaged in B-to-C businessglobally, and broad experience and extensive specialized knowledge gained as outside director of other companies. In
the Board and the Nomination and Compensation Committee, he is using this extensive experience and specialized
knowledge to contribute to supervision of management for medium- to long-term improvement of corporate value, as
well as to improve the transparency of the management decision-making processes regarding the managementof the Company.

Improving the effectiveness of the Board
In fiscal 2015, the Company began carrying out an annual assessmentof the Board to ensure that the Board is able to fulfill its strategic andsupervisory functions in a more effective manner. Since fiscal 2016, thefindings of these assessments have been used to make improvements
to the Board.
In fiscal 2022, as well, a questionnaire was administered to all 12
directors and Audit & Supervisory Board Members. Based on theseresults, the Board’s effectiveness was analyzed, and the Board

Fiscal 2022 initiatives and how to respond going forward, with the aim of improving effectivenessFiscal 2022 initiatives for addressing major fiscal 2021 issues
Initiatives targeted at challenges(1) Through utilizing executive workshops and holding executive
camps, depending on the circumstances, continue to have morein-depth discussions regarding what the Company’s businessportfolio should be Group-wide and the allocation of management
resources, after organizing the necessary information(2) Have more in-depth discussions regarding ESG andsustainability at the Board, taking the results of deliberations by
the Sustainability and ESG Promotion Committee into account(3) Make reports and have discussions at the Board regarding thecontent of discussions on diversity and inclusion at theNomination and Compensation Committee(4) Promote business understanding through measures such as
online participation in various internal events, resumption ofsite visits, and networking events with relevant parties atbusiness sites

Mr. Izumo has expert knowledge as a Certified Public Accountant and experience in accounting audits and consulting
services for many companies. In meetings of the Board and the Audit & Supervisory Board, he is drawing on his
experience and expertise and actively presenting opinions and suggestions regarding important management matters.

Miyuki Ishiguro

As a partner at a leading law firm, Ms. Ishiguro has extensive experience and a high level of insight into corporate legal
affairs as well as experience as an outside officer at other companies. In meetings of the Board and the Audit &Supervisory Board, she is drawing on her experience and expertise and actively presenting opinions and suggestions
regarding important management matters.

Visit the following website for the Criteria for Independence of Outside Directors and Outside Audit & Supervisory Board Members.
https://www.benesse-hd.co.jp/en/about/management/corp_governance.html

71 Benesse Report 2023

Major progress on initiatives▶ The Company held executive workshops and camps to foster
discussions on the desirable business portfolio and theallocation of managerial resources, and then formulated theTransformation Business Plan as an update of the existing
Medium-Term Management Plan.
▶ The Company had in-depth discussions on ESG issues andsustainability and held a briefing session on these issues forshareholders and investors in February 2023. The details of thesession were subsequently posted on the official website.

Fiscal 2022 assessment
High level maintained▶ Directors and Audit & Supervisory Board Members haveconstructive discussions based on their experience and expertise.
▶ Medium-term Group strategies are discussed proactively toincrease corporate value.

Outside Audit & Supervisory Board Members
Eiichi Izumo

evaluated itself and deliberated concerning the results. The
questionnaires found the Board to have maintained a high level of
effectiveness and confirmed that the Board engages in substantive
discussions. However, they also confirmed further issues to be tackled
in order to raise the effectiveness of the Board and continue increasing
the Company’s value. These issues will be resolved through further
deliberation by the Board.

Issues to be intensively addressed based on the analysis andevaluation results▶ Further foster in-depth discussions on the capital cost as well ason the Company’s desirable business portfolio and theallocation of resources based on an understanding of the major
KPIs set for targets and challenges, status of market competition,and status of risks posed to each business.
▶ Promote business understanding through measures such as
participation in various internal events, resumption of site visits
and networking events with relevant parties at business sites as
was done before the outbreak of COVID-19.

Matters deliberated by the Board
Matters related to management strategy

46%▶ Deliberations on budgets and businessplans; approval of financial statements▶ Matters related to capital policy▶ Matters related to M&A, etc.

Matters related togovernance

17%

Report on the status of business execution

37%▶ Matters related to management structure,▶ Matters related to the Corporate Governanceorganizational changes, and human resources
Code▶ Report on the Nomination and▶ Matters related to business risks
Compensation Committee activities▶ Matters related to internal audits, etc.
▶ Matters related to the evaluation of theeffectiveness of the Board

Benesse Report 2023

72

CHAPTER

04 Enhancing Operational Resources

Corporate GovernanceTraining for directors and Audit & Supervisory
Board Members
Upon their appointments, new outside directors and outside Audit &Supervisory Board Members are briefed on various matters andregulations such as company profile, corporate philosophy,
management situation, and corporate governance. Furthermore, after
they have assumed their roles, the Company explains businessactivities, industry characteristics and trends, and management
environment to deepen their understanding of the Company, andregularly invites them to presentations of best practices at eachbusiness site, as well as other internal events. The Company
conducted the following activities in fiscal 2022.
Format

Theme

Date ofsessionTime
requiredPreliminary
briefings on
the Board

Preliminary briefings on the content
of the Board of Directors proposals
to directors and Audit & Supervisory
Board Members who are not incharge of business execution

In principle, to beheld one week
before Board of
Directors
meetings

Approximately
90 minutes

Executive
study
sessions

Discussions about topics such as
business portfolio, sustainability,
and corporate governance,
targeted at all directors and Audit &Supervisory Board Members,
toward the formulation of theTransformation Business Plan(announced in May 2023)

Executive
workshop:
Conducted after
Board of Directors
meetings (5 times)
Executive camp:
Held in October
2022

Executive
workshop:
Approximately
60 to 90
minutes
Executive camp:
Two days▶ Requirements of directors

In order to fulfill their roles appropriately, directors of the Company
must meet the following requirements in addition to having theexpertise and knowledge necessary to solve its medium- to long-term
management issues and respond to social issues (see The expertiseand experience demanded of directors, and reasons for their selection
on p. 71):
1. Deep understanding and empathy for the corporate philosophyof the Benesse Group
2. Outstanding leadership befitting of a manager
3. Outstanding character and insight, as well as mental andphysical health
4. Meets legal requirements for eligibility as a director

Concerning the appointment and dismissal of senior management
and nomination of director candidates by the Board, the Company will
ensure transparency, fairness, and objectivity in the process by having
the Nomination and Compensation Committee—where outside
directors constitute the majority, and which is chaired by an outside
director—hold discussions based on policies regarding requirements
for directors, composition of directors, and other matters and submits
its opinion to the Board, which then passes resolutions.

The Company employs the following method of appointing directors
in order to ensure proper supervision over management from thestandpoint of achieving sustained growth for the Benesse Group.

▶ Number of Board members
No more than 10 directors.

▶ Diversity

With a view to achieving sustainable growth, the Company specifies
the skills required of the Board to ensure that the Board fulfills andenhances its important managerial decision-making and supervisory
functions through high-quality discussions (see The expertise andexperience demanded of directors, and reasons for their selection on
p. 71). It then appoints directors who have the right balance of therequired skills and expertise to enable the Board to fulfill its
supervisory functions in an even more effective manner. The
Company also appoints female directors for gender diversity.

▶ Outside directors/independence

In order to ensure proper supervision over management, at least halfof the Board is composed of outside directors, and at least one-third iscomposed of independent outside directors.

The Company, situating the matter of planning for and training
successors to the position of representative director and president as
a vital issue, has formulated a succession plan for the representative
director and president and works to implement it. Specifically, theCompany works to organize candidate requirements, list candidates
and evaluate them on an individual basis, consider where they shouldbe placed, and provide training. In formulating and implementing the
succession plan for the representative director and president, theNomination and Compensation Committee—where outside directors
constitute the majority, and which is chaired by an outside
director—deliberates to ensure transparency and objectivity in theformulation and implementation of the succession plan.

▶ Organization of requirements for candidates▶ Listing of candidates

AgendaTheme[Issues related to nomination]▶ Appointment and dismissal of the Company’s directors andothers▶ Succession planning▶ Signing of advisory contracts with former representative directors[Issues related to compensation]▶ Resolution on the compensation for each director asdelegated by the Board▶ Examination of the compensation plan for officers

Officer compensation
The Company has established the Nomination and Compensation
Committee, which is chaired by an outside director, to ensuretransparency, fairness, and objectivity in the process of making
decisions on compensation for directors. The Benesse Group aims toincrease its corporate value continuously on a medium- to long-termbasis. To this end, the Group has designed a system of compensationthat focuses not only on short-term business performance but also on
medium- to long-term results to encourage directors to work for thesustained improvement of corporate value.
For compensation for the representative director, the level ofmeasures taken for ESG and sustainability issues is included in theCompensation system for directors (excluding outside directors)
Fixed Compensation
Representative
director

Basic Compensation

50%

Bonuses

Restricted Stock
Compensation(1) Company-wide performance, (2) performance insupervised areas, and (3) assessment of qualitative goals

Compensation
linked to stock price35%
Set based on expectations for the role

15%

Fixed Compensation
Other directors

Non-monetary
Compensation

Performance-based Compensation

Performance-based Compensation

Basic Compensation

55%

Bonuses

Restricted Stock
Compensation(1) Company-wide performance, (2) performance insupervised areas, and (3) assessment of qualitative goals

Compensation
linked to stock price35%
Set based on expectations for the roleNon-monetary
Compensation

10%

For more information about each element of Benesse’s compensation structure, visit the following website for the Corporate Governance page.

▶ Individual assessments of candidates▶ Deliberations on where candidates should be placed, training

https://www.benesse-hd.co.jp/en/about/management/corp_governance.html

Total compensation by officer category (fiscal 2022)▶ Submission of opinions on candidates for CEO

Board of Directors▶ Final decision on CEO

73 Benesse Report 2023

2022: June 3, June 25, July 8, August 5, September 2,
October 7, December 92023: February 8, March 31

Date

Process for selection of Chief Executive Officer
Nomination and Compensation Committee

indicators set for performance-based compensation.
Compensation for directors in charge of business execution is set
to competitive levels commensurate with the roles, skills, andresponsibilities expected of directors who manage the Group, basedon median levels found for Japanese companies of similar size using
externally conducted compensation surveys as a reference.
The amount of basic compensation is decided based on the roles
that are expected to be fulfilled by the directors for the term.
Bonuses comprise three sections and are weighted for eachdirector individually, based on his or her area of responsibility, as
follows: (1) the section on company-wide performance, which is thepercentage of actual results achieved relative to the consolidated
performance forecast; (2) the section on performance in supervised
areas, which is the percentage of performance targets achieved ineach director’s area of responsibility; and (3) the section on qualitative
assessment, which is the degree to which qualitative
goals—organizational contributions such as training successors andworking to reform organizational culture, as well as contributions tobrand enhancement—were achieved. Restricted stock compensation
was introduced in fiscal 2017 to link director compensation to
medium- and long-term business performance to a greater extent, inorder to provide directors with incentives to further engage insustained efforts to improve corporate value, and to promote further
value sharing with shareholders. Compensation for non-executive
directors, including outside directors, is composed of only basic
compensation, so as not to obstruct outside directors’ supervision ofmanagement. At the same time, compensation for Audit &Supervisory Board Members is decided through consultation withthose members and is composed of only basic compensation.

Activities in fiscal 2022

▶ Appointment and dismissal process

Succession plan
Composition of directors, method and process
for appointment and dismissal of directors

Activities of the Nomination and Compensation
Committee

Amount of Compensation by Type (millions of yen)

Officer Category

Amount ofCompensation(millions of yen)

Basic Compensation

Bonuses

Restricted Stock
Compensation

Directors(excluding outside directors)

105

63

15

26

5

Number of Eligible
Officers

Outside directors

50

50

ー

ー

5

Audit & Supervisory Board Members(excluding outside Audit & Supervisory
Board Members)

64

64

ー

ー

2

Outside Audit & Supervisory Board
Members

20

20

ー

ー

2

Benesse Report 2023

74

CHAPTER

04 Enhancing Operational Resources

Dialogue between Two Outside Directors

For the sustainable growth of the Group, we will contribute toincreasing the corporate value from an outside perspective

Yumiko Noda

Masaru Onishi

Outside director

Outside director

Please frankly share with us yourimpressions of the Board
Onishi: The Benesse Group provides us outside directors withdiscussion opportunities not only through Board of Directors
meetings but also through the advisory committee’s meetings andthe executive workshop. The Board commands a set of skills that arecontributed by different directors in a well-distributed manner, andthe directors can express their opinions firmly at the meetings, which
is something I rate highly. Also, I think members of the Audit &Supervisory Board give their opinions more proactively than theircounterparts at other companies.
Noda: I assumed the position two years ago, and feel that theoutside directors, who have experience in corporate management indifferent industries, are revitalizing discussions by expressing opinionsfrom their different standpoints. I think open discussion has beenfurther promoted recently, relative to the situation in my first year as
outside director of the Company.

Could you give your frank rating of the Board inview of the process leading to the formulationof the Transformation Business Plan?
Noda: Toward the formulation of the Transformation Business Plan,
the Board had profound discussions for the optimization of thebusiness portfolio in consideration of social changes from a long-term
perspective. The Benesse Group used to get more business
opportunities thanks to an increasing population driven by Japan’shigh economic growth. Going forward, however, the Group needs tosearch for new business opportunities in the face of a falling birthrate
and an aging society, which have come to the fore as social issues. The
reskilling business will provide the Group with such opportunities. As
for the nursing care business, the market will further expand while
market needs will become more diversified as economic disparities
widen. In such a market, the Group needs to transform its businessmodel to meet the individual needs of customers in a more attentive

75 Benesse Report 2023

We can use the time allocated to the meetings more effectively by
understanding the main points of the issues to be discussed inadvance and then listening to the explanations about the referencematerials at the meetings.
Noda: The management team and employees are all fulfilling theirjob duties conscientiously and they sincerely listen to our opinions,which pleases me a lot. At Board meetings, however, I think it isnecessary to have even more constructive and in-depth discussions,although the time allocated for the meetings is limited. The executive
team should not just respond to questions raised by outside directors
and listen to the directors’ opinions. They must also express their own
opinions. Who are the true customers of the Benesse Group? The
Group is conducting B-to-C business, but it is difficult for the Group to
identify its true customers, and those with whom it has direct contact
might not be decision-makers. It is difficult for the Group to decide
whom it should satisfy as customers and whom the Group should
please in terms of motivating staff. Customers who are satisfied tend
to say nothing, while those who are dissatisfied tend to complain
immediately. I am always worried that trying to placate the dissatisfied
people may lead to the degradation of services that have beensatisfactory to others. I always participate in discussions by keeping
this in mind. The Group conducts the education business for children,
but it is essential for the Group to deal with the problems faced bytheir parents. The same applies to the nursing care business. It is
important to respond not only to the needs of the elderly who areusing the services but also of their families. I feel very grateful for the
explanations given to us about the analysis results at the
time-constrained meetings, but I also want to have more discussions
about who are the true customers of the Group.

manner, as uniform and standard nursing care services will eventually
be outdated.
Onishi: The Transformation Business Plan was announced aroundthe end of phase 1 of the Medium-Term Management Plan, when theGroup’s business performance was good. How many people had
expected that it would make such an announcement? I also think thatthe details of the Plan, which are quite different from the Group’s past
management strategies, surprised many people. That difference
reflects the substantial changes undergone by our society and implies
that the management team has a healthy sense of crisis that is urging
them to take the required action now. In the Plan, the Group’sbusinesses are roughly categorized into three, of which the
management has the greatest concerns about the Core Education
business. Unfortunately, I have to say that the Plan does not fully set
out the path that the Group will follow going forward, but it isimportant in that it clearly specifies the systems and organizations
necessary for the Group to find new business opportunities and topush ahead with reforms in a business environment that will continue
to contain uncertainties. The Group also aims to optimize its businessportfolio with a focus on new business areas that have sufficientaffinity with its existing businesses and that can be developed bycapitalizing on its existing strengths.

What will it take for the Board to further
enhance its effectiveness?
Onishi: As a requirement to enhance effectiveness, we need tomake more effective use of the time allocated to us for discussions. At
Board of Directors meetings, we focus on making resolutions as
required, but at the meetings of the advisory committee and at theexecutive workshop, we hold intensive discussions. For thesemeetings, which are separate from Board meetings, I want theexecutive team to explain to us—in any format, including bullet
points—what on-site problems and concerns they have prior to themeetings in addition to sharing with us the wealth of reporting
materials prepared for the meetings, which are certainly very useful.

Onishi: The needs that we are required to meet in the B-to-C
business are becoming increasingly diversified and complicated.
There are very few people who can communicate their needs clearly,
and many of our customers are not aware of their true needs.
Moreover, there are people who just stop using services when they
feel dissatisfied with them, without making any complaints at all. How
to make the Benesse Group’s products and services shine morebrightly? It is extremely important to obtain information throughunofficial channels, for which it is absolutely necessary for staff to get
out of the office and go looking for it. Based on my own experience inthe airline industry, I would like to foster direct communication withstaff who are serving customers on-site to help make the Group’s
products and services even more attractive. I hope that more time willbe allocated to discussions on these issues at Board of Directors
meetings and at the executive workshop.

What challenges should the Benesse Group
meet for sustainable growth?
Noda: It is still unclear in what way the Group’s purpose will help theBenesse Group to increase its corporate value and what value could
be produced by the achievement of the purpose. Also, what kinds of
KPIs are needed to improve the business performance based on the
purpose and mission? How should necessary measures be
implemented? How much social value can be brought about as aresult? I think the Group needs to find clear answers to these questions
as the next challenge to be met. For example, in the nursing carebusiness, the Group is implementing the Majikami AI project to enable
an AI system to acquire the skills and know-how of an experienced
caregiver with the aim of upgrading the skill level of the entire staff. In
order to become the top leader in the industry, how should the Grouputilize such AI systems and technology? I feel irritated at the fact thatthe project has not yet contributed to the Group’s value creation andpositive external evaluation, as I have seen the Group’s on-site staff
serving customers very attentively and making efforts to please thecustomers even more. Also, Benesse Corporation is doing much better
than other listed companies in terms of female manager numbers,
with a rate of around 30%. However, there are still no female
employees who have been promoted to Board member after a long
period of loyal service. I think the Group should promote more women
who have lots of experience with on-site work to top management
positions where they can make decisions, and it is good to have sucha goal. However, having ESG-related goals is presently regarded as amanagement priority of all companies. I would like to have morein-depth discussions with other members of the Board to specify thepath to be followed by the Group to achieve its goals and to examine
how the Group can increase its financial performance and corporate
value by implementing nonfinancial measures. I will also share with
the Board members my own observations about how society and thebusiness environment are changing from an outside perspective.
Onishi: In order to achieve true transformation and sustainablegrowth, the Group needs to foster internal reforms, includingchanging its corporate culture, in addition to reforming its businessportfolio and business model. Under the leadership of President
Kobayashi, the Group is pressing forward with measures to instill its
corporate philosophy and vision across the board based on theGroup’s purpose, which I highly appreciate. According to myexperience, it is critical to have a corporate purpose and mission thatcan be shared with on-site employees. No corporate reforms can becompleted unless employees accept the corporate purpose andmission as their own. Conversely, employees who can take actions
autonomously in line with the purpose and mission will provide a
tremendous driving force for such reforms. I would like to discuss
measures that will help the Group instill the corporate purpose acrossmore of its workforce and will do anything that I can to contribute to
the Group.

Benesse Report 2023

76

CHAPTER

04 Enhancing Operational Resources

Corporate Governance

Enhancing internal control
With regard to the establishment of a system (internal control system)to ensure compliance with the stipulations of the Companies Act andthe Ordinance for Enforcement of the Companies Act, the Company
passed a resolution at a meeting of the Board held in May 2006, andthe latest revision of said resolution is dated April 1, 2022. In addition,
the Company’s Internal Auditing Division centrally manages the entire
Group’s activities involved in the creation and operation of internal
controls relating to financial reporting under the Financial Instruments
and Exchange Act.

Ensuring compliance
The Company has established the Benesse Group Principles, which arerooted in the Group’s corporate philosophy. The principles indicate
how all the Group’s executive officers and employees should behave,for the purpose of ensuring that the operations of the Group be
performed in an appropriate and ethical manner that goes beyond
just legal compliance. The Company has established the Benesse
Group Risk Management and Compliance Rules to further our efforts
in risk management and compliance. In order to act in accordancewith the Group’s Principles, individual companies comply with laws
and regulations and establish standards of conduct or internal rules of
their own that have more specific content suited to the conditions,nature, and size of their businesses, ensuring that their operations arecarried out in an appropriate manner and thereby ensuring
compliance.
Compliance administrators are appointed at each company and ineach important business department to identify the risks within theirrespective businesses and implement measures to counteract them.
In these activities, they work closely with the administrative office incharge of compliance for the Company (Compliance Division) todevise ways to fortify the systems on-site, such as sending staff on
assignment to take charge as dictated by the circumstances. Various
types of training are also provided for the purpose of raising employee
awareness, and the Internal Auditing Division monitors how
thoroughly compliance is implemented at our business sites.
In addition, the Group set up the Benesse Group Speak-Up Line as
an internal reporting mechanism to be used whenever illegal conduct,
improper conduct, or conduct that violates the Group’s articles ofincorporation or internal rules may be discovered. The Audit &Supervisory Board Member Hotline has also been set up for cases inwhich someone in the Company’s management may be involved in
the conduct being reported. These mechanisms are operated outside

the Group and managed in such a way that they can be used withoutworry, such as by allowing anonymous reporting, thus ensuring theeffectiveness of the Group’s compliance monitoring.

Risk management
The Company visualizes the Group’s critical risks by monitoring theadministrative offices, as well as critical risk measures incorporated
into business plans by subsidiaries, which manage each risk. The Risk
and Compliance Committee, which is attended by directors incharge of business operations, the executive general managers ofeach administrative office, and the business managers responsible
for strategic business areas, determines the major risks facing theGroup each fiscal year and the policies for dealing with them. The
results of those meetings are reported to the Board, thendisseminated within the Company and to its subsidiaries on aregular basis. In conjunction with operation of a PDCA cycle topromote improvement activities and other important risk
countermeasures, the Company also shares negative informationand promotes risk management during normal times.
When emergencies occur, we set up the Emergency Reporting
Hotline for reporting situations to management immediately. In moreurgent situations, we convene an Emergency Task Force and put
systems in place for dealing with the emergencies.

Day-to-day risk management

Execute measures
to counter risks

MonitorCompany administrative offices,
strategic business domains,and subsidiaries assess risks
and implement measures
to counter them

Propose measures
to counter risks

Report to management
Report on policies
regarding critical risk
countermeasures(Board of Directors)

Assess risk

Analyze and identify
critical risks, consider
policies regarding criticalrisk countermeasures,and make decisions(RC Committee*)* Risk and Compliance Committee

Internal reporting mechanisms and response in the event of an emergency
Internal reporting mechanisms(set up externally: anonymity supported)
Benesse Group Speak-Up Line

Monitoring report(RC Committee*)

To earn our customers’ trust, we have formulated the Benesse Group’s
Policy on Information Security and Personal Information and areworking to maintain and improve our information security and the
management and protection of personal information.
Specifically, we assign a Chief Legal & Risk Officer (CLRO), who also
serves as the executive general manager of Compliance andInformation Security. The Compliance and Information Security
Division manages the plans and status of enforcement of information
security and protection of personal information throughmanagement personnel in each operating company. An information
security chief is appointed in each operating company, and we havecreated a system to promote information security, formulate
emergency response plans, and define procedures for dealing withincidents. We have also established an information security
surveillance committee composed of outside experts. It regularly
checks the management, maintenance, and operation of data andsystems within the Group and makes recommendations, which arereported to the Board and examined internally to enable the Group tobuild a world-class information security system.

Benesse Holdings and Benesse Corporation implement
web-based training, where attendance is required of all employees
working at Benesse, including part-time staff, and work to reconfirm
the skills, actions, and basic knowledge that must be followed byinformation security, focusing on personal information protection.
At the department that is responsible for the development,
management, maintenance, and operation of the Group’s systems,
more stringent training is offered through a special program. We
check on attendance until all target employees have completed thetraining, and our attendance rate is always 100%.

Information Security Surveillance Committee members

Registration as a business approved to display thePrivacyMark Symbol (November 2016) and continuation ofactions to protect personal information

Committee
Chair
Ryoichi Sasaki

Professor emeritus at Tokyo Denki University (TDU), as well as visiting
professor at the TDU Cyber Security Laboratory/Honorary presidentof the Japan Society of Security Management/ Director and advisor at
the Institute of Digital Forensics/Fellow at the Information Processing
Society of Japan/Chief information security advisor at the Board ofAudit of Japan

Committee
MemberAtsuo Inomata

Professor, Osaka University of Office for Information Security

Committee
MemberTetsutaro Uehara

Professor, Ritsumeikan University College of Information Scienceand Engineering

Committee
MemberHarumichi Yuasa

Professor, Meiji University of Governance Studies, Graduate School

Emergency Reporting Hotline(Benesse Group Hotline)

Visit the following website for more information on information security.
https://benesse-hd.disclosure.site/en/themes/175▶Third-party certification
We obtain third-party certification with the aim of maintaining andimproving our information security and the management andprotection of personal information.

After being assessed by JIPDEC, Benesse Corporation was registered asa business approved to display the PrivacyMark symbol in November
2016. We will continue to work to maintain and improve ourinformation security and the management and protection of personal
information and to further increase our customers’ trust.
November 2, 2016: Initial registration
November 1, 2024: Expiry date

▶ Security measures in system operations/
Strengthening our security environment
We are strengthening the operation and monitoring of our systems
and increasing our system security with technological measures
based on the latest information so that our customers will feel secureand trust the Benesse Group with their personal information. We arealso advised and audited by outside experts to ensure that we
maintain and improve our level of information security on acontinual basis.

▶ Employee awareness and training
Emergency response systems

Audit & Supervisory Board
Member Hotline

Information security

Benesse Corporation has designated July 7, the day of the discovery of
the personal information breach in 2014, as Security Day. The
company carries out activities on and around Security Day each year
in which all executives and employees reaffirm the importance of
information security. These activities include morning meetings,
presentations on internal initiatives, and lectures by outside specialists.

ISMS Certification (March 2016) and Continuation of ISMS Action
Following the acquisition of ISO 27001 (ISMS) certification by Benesse
Corporation School Headquarters and Benesse BASE COM in May
2015, Benesse Holdings, Benesse Corporation (excluding someoffices), and Benesse InfoShell (merged into Benesse Corporation on
July 1, 2023) acquired ISO 27001 (ISMS) certification in March 2016.
May 25, 2015: Initial registration
May 24, 2024: Expiry date

In December 2019, Benesse Style Care, Benesse MCM, Benesse Palette,
Benesse Senior Support also acquired certification (registration
number IC19J0497)
December 26, 2019: Initial registration
October 31, 2025: Expiry date

Superiors
Employees (who detect the emergency)

77 Benesse Report 2023

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CHAPTER

04 Enhancing Operational Resources

Communication with Shareholders and Investors

Investor Information (As of March 31, 2023)

Benesse proactively discloses information to shareholders and investors.
In addition to enhancing our IR disclosure tools, we emphasize mutual communication in our IR activities.

Shares issued

102,604,773 shares

Unit of trading

100 shares

Listed date

October 26, 1995

Independent auditor

Deloitte Touche Tohmatsu LLC

Securities listing (Common stock)

Tokyo Stock Exchange/Prime Market

Transfer agent

Mitsubishi UFJ Trust and Banking Corporation

Securities code

9783

Shareholders

93,785

ISIN code

JP3835620000

Striving to increase corporate value throughdialog with shareholders and investors
The Company strives to maximize its corporate value by promptly andaccurately disclosing and explaining information regarding its
management policies, business strategies, forecasts, etc., to shareholders,investors, and securities analysts, and by reflecting their opinions andrequests in our management.
The Company’s top executive, the representative director andpresident, CEO, actively engages in dialog with shareholders, investors, andsecurities analysts through financial results briefings (held twice per year),small meetings, individual meetings, etc. outside directors and major
shareholders also have face-to-face meetings. Roughly 200 IR meetings,
including the aforementioned meetings, are conducted each year.
To ensure that the ordinary general shareholders' meeting can be
conducted openly, we accept voting by mail or online and questions
submitted in advance, and also stream the meeting live so that it can beviewed from people’s homes, etc. Footage of the meeting, presentationmaterials, question and answer session summaries, and the like areavailable from our website.

Disclosures on our IR website
Guided by the principle of fair disclosure, we strive to provide an extensive
range of information on our website. In addition to the proceedings fromfinancial results briefings and General Shareholders’ Meeting which we
make available on our website, we also disclose various IR materials,
financial data, and press releases in a timely manner.
We have also created a website geared toward individual investors,
designed to help those unfamiliar with Benesse to gain a greater
understanding of our company. It points out the strengths of Benesse andour strategies, as well as information about our business performance,
presented in a way that is easy to understand.

Online Investor Relations
https://www.benesse-hd.co.jp/en/ir/
Introducing the Benesse Grouphttps://www.benesse-hd.co.jp/en/ir/individual/index.html
Basic IR Policy
https://www.benesse-hd.co.jp/en/ir/strategy/ir_policy.html

79 Benesse Report 2023

Reflecting the results of dialog with investors andanalysts in our corporate management
By engaging in dialogue with our shareholders and investors, we assess
perception gaps between investors and the Company and use the resultsin our IR activities. The findings are also reported, shared, and deliberated at
the Board meeting, and we are using them to assist with the future
improvement of our management initiatives.

Main IR activities
We conduct the following activities over the course of the year.
● General Shareholders’ Meeting● Financial results briefings: Twice per year (interim andyear-end)● Activities for providing information: Roughly 200 activities per
year (10 of these being SR meetings)● IR pamphlet publication: Benesse Integrated Report,
Shareholder News, Data Book, etc.
● IR site planning and operation

Top 10 shareholders

Shareholdings by type of shareholder
Shares(Thousand)

Percentage (%)

The Master Trust Bank of Japan, Ltd.

19,46320.18

efu Investment Limited

7,858

8.14

Fukutake Foundation

7,758

8.04

Other Corporations

Custody Bank of Japan, Ltd.

5,510

5.71

12.71 %The Chugoku Bank, Ltd.

2,787

2.89

Treasury Stock

FUKUTAKE EDUCATION AND CULTURE FOUNDATION

1,919

1.98

Minamigata Holdings Ltd.

1,836

1.90

Mizuho Trust & Banking Co., Ltd. (Retirement
Benefit Trust Account, The Chugoku Bank, Ltd.)

Individuals andOthers

1,600

1.65

23.39 %

Toshiaki Matsuura

1,396

1.44

Mitsuko Fukutake

1,375

1.42

Notes: 1. The shares held by The Master Trust Bank of Japan, Ltd. include 6,809 thousand Company shares(a 7.06% investment ratio) contributed by efu Investment Limited as trust assets. efu Investment
is an asset management and investment corporation of which Hideaki Fukutake serves asrepresentative. The decision-maker with respect to the execution of voting rights related to theconsigned trust assets is efu Investment Limited.
2. The Company owns 6,163 thousand shares of treasury stock which are not included above
because they do not carry voting rights. These shares of treasury stock are also excluded fromthe calculation of percentages.
3. The shareholding ratio has been rounded down to the second decimal place.

Financial Instruments Firms

1.83 %

6.00 %

Financial
Institutions

31.01%

Foreign Companies
and Others

25.03 %The percentage has been rounded down to the second decimal place.

Coverage in ESG indexes
External assessments of our IR tools (FY2022)● Gomez IR Site Ranking, Best Company Ranking 12th Place,
Gold Award● Nikko Investor Relations Co., Ltd. All Japanese Listed
Companies’ Website Ranking AAA Grade● Daiwa Investor Relations Co., Ltd. Internet IR Excellence Award(Silver Award)

Internet IR
Excellence
Award

MSCI ESG Index*

SOMPO Sustainability Index

Recognized as a leading “Prime”
company in the ISS ESG Corporate
Rating by the ISS ESG* The inclusion of Benesse Holdings, Inc. in any MSCI index, and the use of MSCI
logos, trademarks, service marks or index names herein, do not constitute asponsorship, endorsement or promotion of Benesse Holdings, Inc. by MSCI or
any of its affiliates. The MSCI indexes are the exclusive property of MSCI. MSCI
and the MSCI index names and logos are trademarks or service marks of MSCI or
its affiliates.

2022

FTSE4Good Index Series/FTSE Blossom Japan Index/
FTSE Blossom Japan Sector Relative Index

S&P/JPX
Carbon Efficient Index

Morningstar Japan ex-REIT Gender
Diversity Tilt Index

Benesse Report 2023

80

Group Information

Corporate Information
Company nameDate established

As of March 31, 2023

Benesse Holdings, Inc.
January 28, 1955

Headquarters

3-7-17 Minamigata, Kita-ku, Okayama-shi,
Okayama 700-0807, Japan

Representative

Hitoshi Kobayashi
Representative Director and President, CEO(As of June 24, 2023)

Employees (Consolidated)

16,637

Capital13,817 million yen

Fiscal year-end

March 31

Consolidated subsidiaries
Name of company

Benesse Corporation

As of March 31, 2023

Common stock(Millions of yen)
3,000

Ratio ofshareholding (%)

Description of main business

100.0

Shinkenzemi correspondence courses for preschool, elementary, junior andsenior high school students, Shinken Simulated Exams, magazines

642

61.9

Education business focused on education through individual tuition

Benesse i-Career, Co., Ltd.

261

51.0

Provision of career-development and career educational support services touniversity students and adults

UP Inc.

100

100.0

Operation of schools providing educational guidance including preparation for
entrance examinations, primary instructional science laboratories, and English
conversation instruction

Classi Corp.

100

67.3

Development and operation of educational platform

Shinken-AD Co., Ltd.

65

100.0

Advertising services and creation of university information magazines

Plandit Co., Ltd.

40

100.0

Planning and editing of study materials

EDUCOM Corporation

33

100.0*1

Developing school management support systems

Benesse BE studio Inc.

10

100.0

Operation of English schools and international preschools

Learn-S Co., Ltd.

10

100.0

Planning, editing, production and sales of study materials

Tokyo Educational Institute Co., Ltd.

10

100.0

Operation of Tetsuryokukai, a prep school which helps prepare students hoping
to enter elite universities

Benesse Corporation China

125,000 Thousands of RMB

100.0

Sale of correspondence course materials for pre-schoolers

Benesse Style Care Co., Ltd.

100

100.0

Operation of nursing care business, childcare and afterschool care business

Benesse Senior Support Co., Ltd.

100

100.0*1

Nursing home-search service, operation of consultation services for nursing
care, hosting seminars on nursing care

Benesse Palette Co., Ltd.

100

80.0*1

Delivery of prepared food for the elderly

Heart Medical Care Co., Ltd.

80

100.0

Providing recruitment services for medical, nursing, and welfare business

Benesse MCM Corp.

80

100.0*

272,700 Million INR

100.0*2

Operation of prep schools in Indonesia

Benesse InfoShell Co., Ltd.*3

150

100.0

Information system maintenance and operation business, information
processing service business

Benesse Business-mate, Inc.

50

100.0*4

Cleaning, mail services, OA, general affairs and accounting agencies

Naoshima Cultural Village Co., Ltd.

20

100.0

Operation and management of hotels

20

100.0

Logistics and data processing of tests and teaching materials for schools

3,600 Thousands of HKD

100.0

Sale and procurement of educational equipment, toys and other items

PT. Benesse Indonesia

Benesse Base-Com, Inc.
Benesse Hong Kong Co., Ltd.

Embodiment of Benesse (Well-Being)and Manifestation of Lifelong
Growth Potential
Benesse Art Site Naoshima is the collective name for the art-related activities we conduct in cooperation

Tokyo Individualized Educational Institute, Inc.

1

Special Feature: Benesse Art Site Naoshima

with the Fukutake Foundation on the islands of Naoshima, Teshima, and Inujima in the Seto Inland Sea.
Through Benesse Art Site Naoshima, we demonstrate how nature, art, and people can co-exist harmoniously
and provide places where visitors can encounter the embodiment of Benesse (Well-being),
which is our corporate philosophy, and a manifestation of the concept of lifelong growth potential.
Since launching the project 30 years ago, we have been conducting a string of related activities.
In this special feature we introduce some of these activities and our ideas reflected in them.

Medical and nursing care recruitment and dispatch service business

Plus 14 other subsidiaries.
*1
*2
*3
*4

Indirect stock holding through a subsidiary
Including an indirect stock holding of 0.1% through a subsidiary
Benesse InfoShell Co., Ltd. was merged into Benesse Corporation on July 1, 2023
Including an indirect stock holding of 2.0% through a subsidiary

81 Benesse Report 2023

Pumpkin, Yayoi Kusama ©YAYOI KUSAMA

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Special Feature: Benesse Art Site Naoshima

Communicating the Significanceof Sustainable Growth since
the Pre-SDGs Era
Special places where nature, art and people
co-exist in harmony
Benesse Art Site Naoshima was started in the 1980s, long before the term “SDGs”
was coined. We started the activities in order to bring art to the Seto Inland Sea
area, with a focus on Naoshima and Teshima in Kagawa Prefecture and Inujima
in Okayama Prefecture and based on a policy of taking as much time as wasneeded and not trying to rush the process. Specifically, we aim to make artistic
and architectural works an integral part of the local landscape and culture to turnthe islands into special places. Through the artistic activities, we have beencommunicating the true meaning of affluence and sustainability. We hope that
visitors to the area will start thinking about the meaning of well-being and how itapplies to their own lives through contact with the local nature, people, and art.

Revitalizing local communities and solving local
problems through art
Naoshima, Teshima, and Inujima each have a long history and are blessed with
abundant nature, including virgin Japanese landscapes. On these islands, you
may find answers to questions like: “Can people exist in areas with no history or
nature?” and “What does well-being mean?” Although designated Japan’s firstnational park, the area also supported the country’s modernization and higheconomic growth of the postwar period, which left a negative legacy, including
various environmental problems. Through the artistic activities, we arecontributing to solving these problems and ensuring that the local nature,
history, culture, and various other indigenous charms of the islands are passed on
to the next generation.

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Top: Teshima Art Museum Photo: Kenichi Suzuki
Bottom: Inujima Seirensho Art Museum Photo: Daichi Ano

Photo: Shintaro Miyawaki

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Special Feature: Benesse Art Site Naoshima

Use What Exists to Create What Is to Be

Creating unprecedentedly new value for sustainability and growth
The concept of Benesse Art Site Naoshima is “Use what exists to create what is to be.” In line with this concept, artistic
works were created and installed on the islands. Creating unprecedentedly new value by making use of the local nature,
history, culture, and others fosters sustainability and growth. In the following we introduce some of the works born out of
the idea of sustainability.

Photo: Noboru Morikawa

Teshima
Art Museum

Harmony between rice terraces, art, and architectureThis museum, which is shaped like a water droplet, stands on the slopeof a small hill in the Karato area, which is characterized by extensive
rice terraces. The open section of the roof allows wind, sounds, andlight to enter from the surrounding area as a means of embodying thelimitless fusion of art, architecture, and nature. Moreover, for local
revitalization, the neighboring rice terraces have been restored toprovide opportunities for local people and visitors to the island to makeexchanges through events, such as a harvest festival where they canenjoy the rice terrace scenery along with local food.

Photo: Daichi Ano

Inujima Seirensho
Art Museum

Regional development from the perspectives of the environment, heritage, architecture, and art
The art museum was built on the site of an old copper refinery. The remains of the factory, which was built with karami bricks madefrom copper slag (a by-product of copper smelting), were preserved and incorporated into the design along with the chimney. The
museum moreover utilizes natural energy, such as solar and geothermal heat, and operates an advanced water treatment system thatuses plant life to purify water. With even its grounds planted with trees suited to the local climate, the museum represents a recycling
society-oriented project implemented from the perspectives of the environment, heritage, architecture, and art.

The Naoshima Plan “The Water”

Highlighting the nature and history of Honmura,
Naoshima
An old house was renovated to take advantage of the island’swind patterns and the groundwater network that lies beneath thelocal village. A basin filled with well water was installed to create
an atmosphere of wind and water for visitors to enjoy. This
project was intended to highlight the importance of design andthe richness and beauty of nature.
The Naoshima Plan:
We have been implementing this project with architect Hiroshi Sambuichi
since 2011. Under the project, the architect presented the Cockpit for Windand Water in 2013, and Naoshima Hall (multipurpose facility) and Matabe (aprivate residence) in 2015. Following the presentation of The Naoshima Plan
“The Water” in 2019, he also presented The Naoshima Plan “Ju” in 2022.
SAMBUICHI ARCHITECTS

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Photo: Shinkenchiku-Sha Co., Ltd.

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