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

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

Benesse Report 2023

78

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

Benesse Report 2023

82