Investment in human capital

Introduction

Material issues (IV)

▶Ensuring diversity of HR▶Realizing health management▶HR and organization development toachieve sustainable growth▶Workstyle reforms utilizing technology

Taking on corporate
culture transformation
Koji Shibata

The major themes of our Group Vision 2030 announcedin April, “Be a solution company leading the nextgeneration circular economy,” are “improving profitability
by providing added value to resolve social issues” and“creating a company that employees who share the samevalue can take pride in (improvements to engagement).”
I recognize that this Group Vision cannot be achieved
simply through the continuation of conventional
initiatives, but that it requires major challenges andinnovation at both the organizational and individual levels.
Moreover, it is essential for all employees to innovate
their ways of thinking, their awareness, and their actions.
Up until now, we had formulated “Human Resources
Medium-term Plans” based on management strategies,
but this time, we have formulated a “Human Resources &Corporate Culture Transformation Medium-term Plan” thatincorporates corporate culture transformation with the aimof transforming corporate culture into the one conducive
to ongoing challenges and innovation. Last year, we
introduced 360-degree feedback to general managers forthe first time, and “challenges and innovation” was listed
as one of the actions that needed improvement. Moreover,in the engagement survey conducted last year, scores for a“culture of openness and mutual respect” were lower

27

Financial/Corporate Data

▶Improvements to engagement

Message from an executive officer in charge of human resources

The background of the formulation of a
Medium-term Plan for the human resources
department

Foundation for Value Creation

Our initiatives

Investment in
human capital

Executive Officer

Strategies for Value Creation

than other companies. Accordingly, we have incorporated
various measures into our Human Resources & Corporate
Culture Transformation Medium-term Plan in order to bringabout a “culture that is open and free, values challenges,
and allows people to participate in their own unique way,”a “culture that understands and respects the diversity ofhuman resources and ways of thinking, and thus leads tothe improvement of corporate value,” as well as a “safework environment for both the mind and body, including
psychological safety” during the period of our Mediumterm Plan.
The source of our value as a company that operates
financial services lies in the staff who work for us.
Therefore, the key to realizing the Group Vision 2030 lies intransforming our corporate culture and helping each andevery employee maximize their potential.

What are the challenges to improving profitability?
As part of our management strategy, we are promoting
the “introduction of innovations to capital solutions” toimprove profitability. Specifically, we are expanding not
only conventional business segments but also peripheral
domains, and venturing to create new businesses and“circular economy-oriented” services. When creating
new businesses and services, it is essential to have aculture that allows diverse human resources with varying

experience, expertise, and values to openly exchange
opinions. In addition, from the perspective of challenges,
we need to encourage each and every employee to take onchallenges, and change our organizations and systems topromote and encourage the taking on of challenges.

Toward corporate culture transformation

As a first step, we have established five standards of
behavior that should be incorporated into employees’

daily actions based on the Principles (Action Guidelines):
Four Shinka (advance, deepen, update, true value)(please see page19 for details), which were formulated
together with our Group Vision 2030. As of FY2024/3,
we have incorporated these standards into our humanresources evaluation system. The five standards of
behavior are customer-oriented, self-development, taking
on challenges, speed, and open communication, andthey serve as a system to promote desirable actions. For
example, if a subordinate tries taking on a new initiativethat is different from past practices and it does not lead tosuccess, but they still receive a positive response from theirsuperiors and colleagues, said subordinate is more likely to
try taking on other challenges again in the future. In termsof open communication, we are encouraging innovationin communication, such as by promoting training to makemanagement more aware of psychological safety andunconscious bias. I believe that raising each individual’sawareness of the standards of behavior and having
them change their behavior accordingly will lead to atransformation in corporate culture.

What constitutes a company that employees
can take pride in?

If a person works at a company where they can empathizewith the Group Vision, contribute to resolving social
issues through their daily work, and experience personal
growth, then surely they will be proud to tell their family

and friends about the company they work for. To realize
this, we aim to be a company where all employees arerecognized as important individuals and where the daily
work, while demanding, is truly enjoyable. In other words,
I would like for us to aim to be a company with high levelsof engagement.
Improving engagement is not something that can beachieved in a single step. In addition to the engagement
survey conducted once a year, we plan to measure
the effectiveness of our measures and change them asnecessary by conducting mini-surveys three times a year.
Although we still have a lot of work to do in the future,
we value our excellent culture of keeping promises tocustomers and seeing things through to the end, as wellas trusting the colleagues who work alongside us. At thesame time, we would like to work on corporate culture
transformation so that all employees can play even greaterroles going forward.

● Behavioral evaluation items

The actions that employees should take (Dos) areevaluated as either “Excellent” or “More” for eachbehavioral indicator
Indicator

Dos

Self-development

Always look toward the future

Customer-oriented
Taking on challenges
Speed

Open communication

Take anticipatory action

Take on challenges by asking
how to make things work
Take action first, and makechanges as you go
Openly exchange opinions

Efforts toward open communication (President’s luncheon put inplace based on suggestions from employees)

NEC Capital Solutions Limited Integrated Report 2023 28

Investment in human capital

Introduction

Basic policy (human resources strategy)

Investment in human capital is one of the material issues we need to address to achieve the Group vision 2030. We arecarrying out initiatives in five areas: improvements to engagement; ensuring diversity of HR; realizing health management;
HR and organization development to achieve sustainable growth; and workstyle reforms utilizing technology.

Basic policy for HR development

Human resources are the greatest asset in the Group’sbusiness. By maximizing the value of our personnel, we
aim to enhance our corporate value over medium- to longterm. To this end, we will develop HR, organization, andcorporate culture transformation strategies that are linked
to our business strategies. Based on these strategies, wewill strive to be a company in which diverse personnel can
maximize their potential, feel satisfied in, and can takepride in.
Based on our Group vision, the Group will take on thechallenge of expanding not only our existing business, butalso business in peripheral fields, as well as creating new
business and “circular economy-oriented” services. To
achieve these, as well as our Group vision, we aim to be acompany that is chosen by diverse personnel by improving
the well-being of employees that continue to take onchallenges and grow.

Workplace environment improvement policy

Based on our basic policy for HR development, we willdevelop an in-house environment in which diverse
personnel can maximize their potential and play anactive role. We have set our eyes on achieving thefollowing: a system that enables employees with various
circumstances, such as needing childcare and nursing care,
to exercise their potential regardless of time and placeconstraints; a compensation system based on employees’roles (work) regardless of their years of experience orage, and their contributions to company performance;and being a company that employees can take pride in,such as by creating an organizational culture that values
unrestricted, vigorous action and encourages them toplay an active role in their own way (a company andorganization filled with highly engaged employees). To thisend, we plan to implement a variety of measures, including
the provision of IT environments and office space.

Improvements to engagement

The Company regularly conducts employee engagement
surveys to monitor our reforms to be a company where
employees feel satisfied in and can take pride in, as
outlined in our basic policy for HR development, andmake improvements under the PDCA cycle. We sharethe company-wide engagement score and key points for
improving the engagement score among all directors. We
also share the results of each division among the officers
and general managers in charge to improve these scores.

In the final year of the Medium-term Plan 2025 (thefiscal year ending March 31, 2026), we will accelerate
improvements in order to reach the top 25% of thecompanies participating in the survey (see table below).
The Company will also introduce a system that links
employee engagement scores to the performance

evaluations used to determine the director compensation,and our management team are also committed to
improve these scores.

● Non-financial indicators in the Medium-term Plan 2025

Objective

Description

Improve employee engagement Employee engagement score

FY2019/3

18%

FY2023/3

21％

FY2026/3 (Target)

34%*Based on a survey by Kincentric, a global HR consulting firm. The score of 34% represents the score level for the top 25th percentile of theJapanese company participants.

Ensuring diversity of HR (diversity, equity and inclusion)

We have acquired talent with expertise and experience in different
areas in line with the expansion of our business into new domains.
This has enabled us to create a richly diverse organization, where
47% of our employees are mid-career recruits and 37% are women(right table). From the perspective of diversity and equity andinclusion, going forward we will further promote the creation of anenvironment in which diverse personnel can truly play an activerole, such as by utilizing female and senior personnel and promoting
the employment of people with disabilities. We will promote these
initiatives from both aspects of systems and corporate culture.

29● Status of employee diversity(non-consolidated)

Ratio of mid-career
recruits

Ratio of female
employees

Ratio of female
managers

Ratio of employeeswith disabilities

End of
2021/3End of
2022/3End of
2023/3

37%

38%

37%

48%

4.4%

1.52%

47%

5.0%

2.28%

47%

5.5%

2.38%

Strategies for Value Creation

Initiative to promote women’s active engagement
To date, we have implemented various HR development
measures. These include promoting the conversion ofgeneral clerical personnel into career-track positions,dispatching employees to external educational institutions,
supporting the acquisition of specialized knowledge, andholding workshops aimed at exploring individuality andcareer ambitions. We have also taken steps to encourage
women to take active roles, such as the enhancementof our support system for balancing childcare and work
beyond the legal requirements, and the introduction ofa mechanism that enables flexible work styles throughrevisions to our remote work and flextime systems.
In the fiscal year ended March 31, 2023, we held our
first workshop for management, including directors, on
identifying and controlling unconscious bias. Throughthese measures aimed at managers, we will strive to create
an environment in which women can play an even more
active role.
However, while the ratio of female managers in the
Company has improved, diversity in decision-making
remains an issue. We consider this as one of our top
priority management issues, and we will work to improve
both the recruitment and systematic development of
human resources, aiming to achieve a 10% ratio of female
managers as of the end of March 2026 (5.5% as of the endof March 2023).

Foundation for Value Creation

Financial/Corporate Data

Efforts to employ people with disabilities

In July 2021, we began operating a farm for two purposes:
providing an environment where workers with disabilities
can work for a long time with peace of mind and serving
the local community by creating jobs for people withdisabilities. This accelerates the employment of people
with disabilities. In the fiscal year ended March 31, 2023,
2.38% of employees were people with disabilities (on anon-consolidated basis).
In the fiscal year ended March 31, 2023, the second year
since the opening of the farm, we held an event to plantseeds and harvest crops with the interested employees
from the head office site. We also carried out initiatives
to enable employees at the head office to feel closer tothe people with disabilities that work on the farm, suchas distributing the fresh vegetables harvested there to
employees at the head office, and introducing farm
activities on the Company intranet.

● Non-financial indicators in the Medium-

term Plan 2025

Objective

Promotion of diversity

Description

Ratio of female managers

FY2026/3(Target)10%

Employees from the head office site sowing seeds

Realizing health management

As our energetic employees are the source of our businessactivities, we believe that the mental and physical healthand safety of all our employees is of utmost importance.
In promoting health management, we will make efforts
to collaborate with industrial physicians, healthcare staff
and health insurance associations, and work together
to maintain and improve the health of our employees
and their families, and the president will be in charge ofpromoting these efforts.

In September 2022, we announced our Commitment
to Health Management both internally and externally.
In March 2023, we were recognized as a Health &Productivity Management
Outstanding Organization 2023
(large enterprise category) by
the Ministry of Economy, Tradeand Industry and the Nippon
Kenko Kaigi.

HR and organization development to achieve sustainable growth

Development of next-generation
leader candidates

We have been working on the systematic developmentof next-generation leadership candidates, ranging fromsenior management candidates to young talent withhigh potential. This has involved carrying out strategic

personnel rotations, including dispatching them toexternal companies and overseas subsidiaries, as well
as selecting employees to be dispatched to external
educational institutions. In the fiscal year ended March
31, 2023, we once again ramped up these initiatives andstarted the full-scale development of succession planning.

NEC Capital Solutions Limited Integrated Report 2023 30

Investment in human capital/Pursuit of corporate governance that supports improved corporate value

Expanding HR development systems that promote career autonomy
To promote career autonomy, in addition to the currently

implemented human resources development andplacement in accordance with employees’ wishes basedon the self-reporting system, we introduced an HR open
recruitment system in the fiscal year ended March 31, 2023.
We will continue to expand this system going forward.
Moreover, in order to support the autonomous learningand career development of individual employees in linewith their diverse work and roles, we collaborate withexternal educational institutions to provide training
courses that meet a wide range of needs, including
training to enhance expertise, and aim to develop
qualified individuals in the financial area systematically.

Transforming corporate culture and strengthening management

To realize our Group Vision 2030 and Medium-term Plan
2025, we established standards of behavior that we expectfrom our employees and introduced a new behavioral
evaluation system based on these standards in April 2023.
The standards of behavior for realizing our vision are
divided into five categories: “customer-oriented,” “selfdevelopment,” “taking on challenges,” “speed,” and “opencommunication.” By giving examples of expected behavior
in each category, we will change the speech and conduct of

our employees, which will in turn transform the corporate
culture.
In order to effectively implement an corporate cultureof taking on challenges and innovation in the workplace,management skills as well as an open and psychologicallysafe workplace culture are essential. For this reason, we havebeen implementing measures to strengthen management
skills and enhance psychological safety, and we will continue
to strengthen and implement these initiatives.

To help every employee independently choose theirown workstyle and place to work, we have provided
them with notebook computers and smartphones andhave established an IT environment that allows them towork flexibly at home, in a satellite office, or elsewhere.
Moreover, from the perspectives of improving productivity,
BCP, and environmental considerations, we have reduced
or eliminated the use of paper. We have also beenpromoting the electronic workflow of approval processes
so that work can be carried out digitally.
Going forward, we will continue to promote companywide DX activities centered around the Information
Systems Department, such as by launching a core system
as DX foundation, utilizing Robotic Process Automation(RPA), and utilizing AI. Through this, we aim to achieve
high productivity. In addition, we will enhance IT and DX
education to develop and secure HR.

Message from outside director

organization and the introduction of an HR management
system aligned with management strategies, and thecreation of a corporate culture conducive to ongoingchallenges and innovation, have been widely expanded
upon since last year.
To promote the dissemination of top management’s
commitment and values, the Company has continued
to implement activities to deepen communication, suchas holding dialogue sessions between employees andthe president as well as other executives, and creating
opportunities for regular exchanges of opinions between
the president, executive officers, and other executives
expected to play leadership roles in promoting innovation.
I would like to see the management team and executives
work together to continue deepening communication
with employees, until the results of their activities havespread throughout the entire organization, and all
employees are able to talk about cultural transformation
initiatives as their own issues. I hope that the Company willdevelop into an organization that listens sincerely to theopinions of each and every employee, and where honest
communication is possible regardless of position.

Workstyle reforms utilizing technology (utilization of IT, promotion of DX)

Representative Director of
DDD Corporation

Takako Hagiwara

Under the new management structure, “Group Vision2030” and “Medium-term Plan 2025” have begun to move
forward. The goals of the “Medium-term Plan 2025” areto “implement CSV management and resolve issues forcustomers and society through business,” and “create
services unique to the Company to achieve a nextgeneration circular economy,” and now is the time to takea step toward a new stage.
Under this management policy, the major management
themes are “cultural employee engagement,” which makes
next-generation business development possible, and“improve employee engagement,” which supports this.
It is encouraging to see that, in order to achieve these,
initiatives related to human capital, such as the creation of31