2030
Benesse Integrated Report2021

Non-Financial
Information
Messagefrom theCEOBusiness-Related
Shinkenzemi and Kodomo Challenge
enrollments in April (Japan)
Senior high school courses

Junior high school courses

Elementary school courses

Kodomo Challenge(preschool courses)

Kodomo Challenge enrollments in April(Overseas)
China

Taiwan(thousands of students)(thousands of students)

4,000

4,000

3,000

2,450

2,570

2,620

2,710

2,720

1,270

1,180

18

19

0

(year)
21[ as of April ]20

Cocochi

Li-Re

308

316

322

330

339

16

17

18

19

20
(end of fiscal year)

1,210
100

1,000

17

Granny & Granda

Bon Sejour

200

1,270

1,220

0

Clara

Madoka

300

2,000

1,000

Aria

400

3,000

2,000

Nursing homes & elderly homes
by brand

17

18

19

20

0

(year)
21[ as of April ]Human Resources
Employees on consolidated basis

2025
and Beyond

Ratio of female employees/managers
Employees

Employees who took childcare leave /Returned from leave

Managers (including officers)

Employees who took childcare leave (left)
Percentage of employees who returned from childcare leave(%)

25,00021,022

20,387

20,426

20,673

53

60

53

52

53

51

19,45620,00036

35

31

15,000

300

34

0

16

17

18

19

20
(end of fiscal year)

30

200

15

100

0

17

18

19

20

Environment

Employees taking shorter hours forchild-rearing

Amount of GHG emissions
Scope 1(t-CO2)

400

300

8,000

354
265

306

270

6,595
6,000

18

19

0

20

(fiscal year)
Note: Figures are for Benesse Corporation and Benesse Style
Care combined.

Paper consumption(t-CO2)(t)

460,000

60,0005,204

425,000

45,000390,000

30,000355,000

15,000320,000

0

390,498

2,000

120
19

20

(year)
21[ as of April ]Note: Figures are for Benesse Corporation and Benesse Style
Care combined.
* Benesse Style Care has 276 employees as of July 31, 2020. The
number of employees as of July is also listed for fiscal 2020,
due to the fact that some employees and staff returned towork later than usual because of the spread of COVID-19.

BenesseReportBenesseReport2021202117

54,16655,94855,90318

1955,102

51,823373,986100
Representative
Director, Chairman and CEO

163

16

442,701

400,988

Tamotsu Adachi

18

70

5,929

4,000

17

80

Scope 3

7,477

330

200

0

Scope 2

90

80.0

0

21
(year)[ as of April ]Note: Percentages are for Benesse Corporation.

Human Resources

304

90.7

86.8

10,000
5,000

271

260

34

100

323

304
45

(%)

97.4

400

0

18

88
19

88

76

20
21 (year)[ FYE in March of each year ]Note: GHG emissions are those of Benesse Corporation.

17

20
21 (year)[ FYE in March of each year ]Note: Paper consumption excludes printing paper for use in offices.

I would like to begin by expressing my gratitude to all of our stakeholders for yourconstant support of the business and activities of the Benesse Group. The Group
adopted a new management structure in April 2021 under which I was appointed
Representative Director and Chairman, CEO of Benesse Holdings, and Hitoshi
Kobayashi was appointed Representative Director and President, COO. Mr.
Kobayashi also serves as Representative Director and President of Benesse
Corporation. Under the new structure, I will continue to be responsible fordetermining the management policy for the Group, promoting activities to instillsustainability and the corporate philosophy, as well as for the executive personnel
and the Berlitz business. I will communicate closely with COO Kobayashi and all ofour business executives as I endeavor to lead the Group.
Our education and nursing care businesses are facing major changes in theiroperating environments. Society and personal values are changing dramaticallywith Japan’s maturing economy, aging population and low birthrate, businessglobalization, and advances in digital technology as well as the worldwide
COVID-19 pandemic.
In this business environment, in fiscal 2021, the Benesse Group launched a
new medium-term management plan with a target end date of fiscal 2025. The
initiative is geared to our vision of society in 2030 when the Group will have aneven greater social responsibility as a leader in education and nursing care. The
initiative is also meant to reconfirm to our stakeholders our commitment that weare moving in the direction that will reestablish our business growth. By
advancing digital transformation, using our current business assets to expand ourbusiness synergies, and strengthening the human resources leading our activities
throughout the Group, we will accelerate the evolution of our core businesses andexpansion into new business fields to create new value in the education andnursing care fields.
We are issuing this report for our stakeholders to gain a deeper
understanding of our initiatives to create value, our business strategies and theirprogress, and the steps we are taking to fortify our management base. We hope
this report will encourage dialogue between management and our stakeholders
and we look forward to hearing your frank opinions and feedback about the
management of the Group. We appreciate your ongoing support as the Benesse
Group heads into the future.

Benesse Report 2021

2

Benesse Group Corporate Philosophy

bene (Well)esse (being)(Well-being)
What is “Benesse”? The heart of Benesse is enjoying the process of moving forward
step by step, with resolve, toward the realization of your dreams and aspirations.
Benesse empowers people to solve issues for themselves and to enjoy life to the fullat every stage by offering them the tools and support they need to create well-being.
We aim to be a globally respected corporate group that is both supported by andindispensable to its customers, communities, and society now and in the future.
* Benesse is a word coined from the Latin words “bene” (well) and “esse” (being).

Benesse Group Principles
The Benesse Group is a global corporation with a people oriented culture.
We believe that before we become good business people, we must
live as responsible members of society and that all of our actions should
lead to “Benesse” (Well-being). In order to achieve this,we adhere to the following principles and promises.

Our Principles
Act sincerely
Build trust
Pursue challenges and innovation

Promise to our :3

Customers

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

Colleagues

We value teamwork, people development, fairness, and active participation in the work place.

Business Partners

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

Community and Society

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 2021

CONTENTS
Message from the CEO

1

Benesse Group Corporate Philosophy & Principles

3

Contents / Editorial Policy

4

Steps in the History of Value Creation at Benesse

5

FOCUS 2 Fusing people and digital technology as only Benesse can

31

The Benesse Value Creation Model

7

Nursing Care and Childcare Business33

Key Sustainability Challenges for the Benesse Group9FOCUS 3 Using technology to improve QOL

34

Berlitz Business

35

Part 1 Our Vision and Business Strategies
Message from the COO
Medium-Term Management Plan

12Part 3 Enhancing Operational Resources

15

Corporate Governance

37
45

Messages from the Outside Directors

Message from the CFO

19

Financial Highlights

21

Part 2 How We Create ValueAt a Glance

23

Education Business in Japan

25

Kids & Family Business

28

FOCUS 1 Ensuring that learning goes on despite the COVID-19 pandemic

29

Editorial Policy
We are publishing this report to let 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, which we released in November 2020. In
editing the report, we have kept in mind the reporting
frameworks of the International Integrated Reporting Council(IIRC) 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 waythat is concise and easy to understand.
More detailed investor-relations
information and information related toenvironmental, social, and governance (ESG)
matters is published on our website.
• Period covered
The report covers primarily activities carried out in fiscal 2020 (i.e., from April
2020 through March 2021), though it also includes some information on
initiatives from prior to that period and activities taking place after April 2021.
The organization names and the job titles used are current as of June 26, 2021.
• Activities covered
The report covers the activities of Benesse Holdings, Inc., and its
consolidated subsidiaries. If the discussion at any point references any otherparticular scope of coverage, this will be indicated on the pages concerned.

The Benesse Group DX Strategy

47

Human Capital

51

Intellectual Capital

55

Social Capital

57

Environmental Initiatives

59

Communication with Shareholders and Investors

61

Non-Financial Information

63

Group Information

64

How this integrated report fits into our information reporting
Financial information

Non-financial information

Benesse Integrated Report 2021
(hard copy, website)

Multiple media formats are utilized according to
the content to facilitate understanding of the Group’s strategies
and initiatives for creating value.
* Information about the online version can be found on the back cover

Data Book(hard copy)

Investor relations(website)

Corporate governance(website)

Corporate &Group information/
Sustainability
information (website)

Note regarding forward-looking statements
This report includes statements regarding current plans, forecasts, 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 and uncertainties. Please be aware that, for a variety of reasons, actual performance may differ
from current forecasts.

Benesse Report 2021

4

Steps in the History of Value Creation at Benesse

1955–

Establishes the foundations of future business,such as simulated exams for senior high schools
and correspondence courses
Fukutake Publishing Co., Ltd. was founded in January 1955 in Okayama Prefecture, Japan. The
company published educational materials and student pocketbooks for junior high school
students. It began offering simulated exams for senior high school students in 1962. In 1973, thesesimulated exams were renamed Shinken Simulated Exams. The start of the nationwide,standardized Joint First-Stage Achievement Test in 1979 further boosted the simulated exam
business, and the company improved and enhanced its business foundation, such as byintroducing computers and expanding business sites, taking the simulated exam nationwide. In
1969, the company began offering correspondence courses for senior high school students, andfrom 1972, courses were also offered for junior high school students. Both began with roughly 500
enrollments, but through constant innovation and validation efforts, the number of enrollments
increased, and correspondence courses grew into one of the company’s core businesses.

1990–

Announces new “Benesse” corporate
identity on the company’s 35th anniversary
Expands into new business domains such as
nursing care and lifestyle1990 saw the adoption of the concept “Benesse” as both a philosophy and a brand. The company
coined the term by combining the Latin roots “bene” (Well) and “esse” (Being). From there, guided by abasic philosophy of supporting well-being, the company expanded its business operations in stepwith the changing times in Japan, particularly trends such as globalization, declining birthrates, andthe aging of society. This period in the company’s history saw the acquisition of Berlitz, the start of thenursing care business, and the publication of magazines Tamago Club and Hiyoko Club, which deal
with pregnancy, childbirth and parenting. In 1995, the company took the step to unify its businessactivities under a single corporate philosophy by officially changing its name to Benesse Corporation.

5

Benesse Report 2021

2000–

Dramatic success based on twin pillars of education and nursing care
Growth within Benesse’s core correspondence course business slowed due to the declining number of children, but Benesse achieved further
growth within the education business sector through measures such as expanding its school & teacher support business and bringing
preparatory schools into the Group. With the introduction of nursing care insurance in 2000, the company made its full-fledged entry into thenursing home business, growing the nursing business sector into one of the company’s twin pillars.

2010–

Decline in business results due to personal data breach,subsequent recovery, and further growthA leak of personal information in 2014 caused a loss of customer trust, and the number of users of correspondence courses, one of thecompany’s core business areas, fell precipitously, leading to a decline in the company’s business results. Following the incident, the company
did its utmost to win back the trust of customers and restore its correspondence course business. As a result of these efforts, business results
began to recover.
Aiming for further growth, the company accelerated the digitization of Shinkenzemi and engaged in business selection and concentration.

2020–

Striving for continuous growth by evolving core businesses
and expanding into new fields
The COVID-19 pandemic has profoundly changed the Group’s business environment. Benesse has created a five-year medium-term
management plan, beginning in fiscal 2021, to “Evolve Core Businesses and Expand into New Fields.” We aim to achieve sustainable growthby advancing our core businesses of education and nursing care and by leveraging our strengths to take on the challenge of cultivating new
business areas.

Goals for 2030

Leading efforts to solve educational and nursing care issues
in Japan and the rest of the world

Benesse Report 2021

6

The Benesse Value Creation Model
We seek sustainable growth for both the Benesse Group and society by bringing
people well-being through our business and social activities, and continuously
creating new value that helps solve social problems.

INPUTS

Medium-Term Management Plan FY2021–2025

Financial capital

Financial targets & KPI

Business capital

Evolve core businesses &expand into new fields

Phase
Total assets

1¥541.9 billion
Shareholders’ equity¥173.4 billion

Human capital

Phase

2

FY2023–2025
FY2021–2022

Rebuild sales/OP
to above
FY2019 levels

Organic growth
3%+ (sales)
FY2025

OPM 8%+
ROE 10%+

Employees (consolidated)

20,000Evolve core businesses

Intellectual capital

Survey reports

400

Social capital

Organic V-shaped
recovery in existing
business fields fromthe COVID-19 impact

Inorganic growth (bydeveloping existing
businesses into newareas) to further boost
sustaining growth

Study history for

2 million

approximately
Shinkenzemi members

Expand into new fields

Assessment data for

9 million

roughly
annual test-takers for the Shinken
Simulated Exams and other tests
Nursing home residents

17,0007

Note: Number of Shinkenzemi enrollments is as of April 2021;
other numbers are as of the end of March 2021

Benesse Report 2021

Leveraging Benesse strengths to enter
new fields and overseas markets

OUTPUTS
Value createdCorrespondence
courses
Shinkenzemi

OUTCOMES
VisionAs one of Japan’s leading
education and nursing
care companies

Mock university
entrance exams
Shinken Simulated
Exams
Operation of prep
schools and English
language classes

Providing learning
to aid individual growthand fuller lives

Correspondence
course for preschoolers
Kodomo Challenge
Japan version

Supporting seniors
in having a way of lifethat suits them

China version

Informationalmagazines for
pregnancy, childbirth,and parenting
Informationalmagazines andwebsites about pets+

New challenges on
global issues

Managing residencies
for the elderly

Operation of daycare
centers andafterschool childcare
centers
Berlitz language
services

Applying educationaland nursing care assets
cultivated in Japan to
global educational andnursing care issues

Benesse Report 2021

8

Key Sustainability Challenges for the Benesse Group

Materiality (Key issues)

Opportunities for
maximizing utilization

Progress in obtaining opportunities(2020–2021)

Making learning new:• Digital course membership for Shinkenzemi has hit about 70%• Launched “programming seminars” which offer various learning ontablets• Shinkenzemi “Today’s Schedule” support for COVID-19 school
closures (used by over one million people in two months)• Expansion of schools using “Mirai Seed” educational software forelementary and junior high schools• Expansion of ICT platforms for schools (schools using “Classi” and“EDUCOM”)• Completed prep school videos and online support, improved
infection countermeasures

We will deliver to children the “new learning” that thetimes to come will demand, together with “new ways oflearning” that make the most of data and technology.

Bringing learning toevery part ofpeople’s lives
With “the joy of learning” as our starting
point, we will extend learning at a highquality, for all generations, to Japan, Asia,and the world.

A life of continued learning:
We will transform society into one in which, even as
adults, people can keep learning with enthusiasm fortheir entire lives.

Opportunities to learn for all:We will offer accessible learning in response to all
people’s desire to learn and create a future in which they
can grow.

Allowing every individual to play their own
leading role:

Toward a super-aging
society
Viewing the arrival of the super-aging
society as “the 18th goal” following on
from the 17 SDGs, we will be global
pioneers in the delivery of nursing careservices that provide support for all
individuals.

We will provide nursing care that respects every
individual elderly person in what they want to do andthe challenges they want to take.

Making nursing care a great job:
We will develop growth opportunities and pleasantworking environments for the people who are involved innursing care occupations, increase society’s understandingof nursing care, and raise the quality of nursing care.

Toward nursing care of the future:
We will continue to take on the challenge of futurenursing care that uses technology to improve QOL andprovide deep support for each individual.

Passing our knowledge
onto society
We will communicate and share withsociety the experience and knowledge wehave cultivated and cooperate withpartners who practice “well-being” with us,
to take on solutions to difficult issues.

Passing on expertise and knowledge:
We will pass on to society our educational knowledge
backed by data and our nursing care techniques basedon our extensive experience, thus raising the quality ofthese industries as a whole.

Community-based education and nursing care:Co-creation of value
with the community
Together with the people living in thosecommunities, we will create new value
through education, culture, and art torealize a rich society.

In addition to supporting daily life, we willtake on the challenge of developing
businesses in new domains that will beessential for future “well-being.”

9

Benesse Report 2021

• Offered growth opportunities for university students throughprograms for instructors at the Tokyo Individualized Educational
Institute• Made afterschool childcare clubs online
Kodomo Challenge Online Kindergarten support for COVID-19
school closures (used by 650,000 people in 100 countries in twomonths)• Offered the Shimajiro Club Application for free
• The Benesse Style Care “Door to Tomorrow Project”• Evolved the “Dementia Care Method,” born from the convictionthat Benesse Style Care continues to have

• Efforts towards making the nursing care profession a vocation thatpeople choose to do - Benesse Style Care “Expert Qualification
System” (known internally as the Majikami system): Reached 177“Majikami” in total• The “Service Navigation System,” which will change the future ofnursing care
• Developed a Benesse version of sensing homes• Offered educational information through “Learning Pocketbook,” aBenesse application for guardian support• Received the GOOD DESIGN AWARD 2020 for “Soundly Taking Careof Nightly Discharges,” which was made freely available to the
public on “Kaigo Antenna,” a comprehensive information site
• A collaborative research project between Benesse Art Site
Naoshima and Okayama University entitled “What is True
Happiness?”

Through our education and nursing care businesses, wewill conduct problem solving that suits thecharacteristics of each community.

• Entered into a partnership agreement with Ogaki City, Gifu
Prefecture, in connection with the GIGA School Project• Began offering “Learning Pocketbook,” a Benesse application for
guardian support

Global education with the locals:• 15th anniversary of expanding the Kodomo Challenge to China

By joining hands with our local partners, we will deliverrich learning to the world, while reflecting local
characteristics.

Reinvigorating communities through art:
Through art and cultural activities, we will bring newenergy to individual communities and create
communities in which the locals can feel happy.

Realizing ahealthy society• Udemy for Business received the highest award in the professional“Human Resources Development and Training” category of the “HRAward 2020” for human resources departments in Japan• Benesse Corporation Udemy members: 2,065 people (roughly 93%)

Towards sustainability for our company
and society• Developed programs at Naoshima for schools and corporations• Launched art appreciation seminars on Udemy, set in Naoshima• Inorganic growth in existing business areas, progress with planting
seeds in new areas

Risks that should be
minimized

Progress in minimizing
risks (2020–2021)

Growing inequality of educational
opportunities due to regional andeconomic disparities
Restrictions on and inequality ofeducational opportunities due to the
spread of COVID-19 and other factors
Restrictions on and losses of job choices
and opportunities due to the expansionof digital transformation and digitalization
Inequality of and restrictions on learningand ability assessment opportunities forall students
Reduced motivation to re-skill andimprove skills due to the end of lifetime
employment in Japan• Shinkenzemi “Today’s Schedule”
support for COVID-19 school closures(used by over one million people intwo months)• Disseminated entrance exam
information and learning methods at
the Benesse Educational InformationForum• Began offering “Learning Pocketbook,”
a Benesse application for guardian
support• Over 300 companies using Udemy for
Business (Japan)• Support for concerns about learning
due to developmental disabilities on
the Shinkenzemi Elementary School
Courses Developmental Disability
Support website• Special consideration for those withdisabilities taking the Global Test ofEnglish Communication (GTEC)

Sustainability Vision of
the Benesse Group“Well-being” in society andfor the future
In the coming era, when change will be the normal

Shortage of nursing care staff in asuper-aging society, decline in thequality of nursing care

• Purchase of Proto Medical Care Co., Ltd.

state of things, to achieve our aim of an abundant,sustainable world, we want to reconsider all social
issues with a “people-centric” perspective, andcreate a society in which everyone can seek out thethings they want to do and take on those challenges.

Each and every one of our employees will practiceour corporate philosophy of “Benesse – well-being,”
and extend it to their local communities, to society
at large, and to the future.

Restrictions on and inequality ofeducational opportunities due to the
spread of COVID-19 and other factors
Growing inequality of educational
opportunities due to regional andeconomic disparities
Shortage of nursing care staff in asuper-aging society, decline in thequality of nursing care

• Benesse Educational Research andDevelopment Institute conducted asurvey of COVID-19’s impact on thedaily lives of preschoolers andelementary school students

Events and issues that hinder “livingwell” in the education and nursing careindustries as a whole• Benesse Educational Information
Forum to settle all of test takers’
concerns and put them at ease

Sustainability Vision and Promotion Structure
In March 2019, the Benesse Group formulated theSustainability Vision.
We have established the Sustainability•ESG Committee as theorganization to lead the activities based on this vision.

Issues with regional educational abilities
Uncertainty in a VUCA era• Started a three-year research projectwith Okayama University on
sustainability and well-being in the
Setouchi region, centered on the SDGs

The Committee’s membership is made up of theRepresentative Director and Chairman of Benesse Holdings,
Inc.—who serves as Chairman and the decision maker—andfull-time officers, who engage in discussions to boost thesustainability of the Benesse Group. (Meetings are held several
times a year / as appropriate for the agenda.)
In addition, disseminating important items and regularly
reporting on activities are also carried out at Board of Directors
meetings and management meetings.

Benesse Report 2021

10

Part

1

Our Vision
and Business
Strategies

11

Benesse Report 2021

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Message from the COO

We are fully devoted to creating a corporate culture
and structure that will reestablish our businessperformance and generate sustained growth

Hitoshi Kobayashi
Representative Director and President, COO
Mr. Kobayashi joined Benesse Holdings, Inc. in 1985. He served as
Representative Director and President of Benesse Style Care Co., Ltd., and was
appointed to his current position as Director of the Company in 2012. He hasserved as the head of the Benesse Holdings Corporate Planning Division,
Overseas Business Development Company, and Zemi Business Company. He
was appointed to his current positions in April 2021.

The COVID-19 pandemic has upset the lives of people aroundthe world and the circumstances continue to prevent us fromliving our normal lives. We would like to express our deepest
sympathies to everyone who has suffered from the infection or
has lost loved ones during the pandemic. We also wish to convey
our heartfelt gratitude to all those working in the medical
profession and maintaining the social infrastructure foreverything you are doing for the safety and well-being of us all.

My objectives as president

Unifying management and worksites tocreate value amid the major changes
The world is rapidly changing, and the COVID-19 pandemic has
only accelerated the changes to society. It is more difficult thanever to see ahead to what will come even just one year from now.
Benesse Holdings adopted a new corporate structure in
April 2021 to respond to these changes, in anticipation of evenfaster changes in the business environment, and to deepen thesynergies within the Benesse Group. Under this new structure, I
was appointed Chief Operating Officer.
One of my main themes as president is to keep
management in close touch with the worksites. Our customers
are also facing rapidly changing business environments and newissues because of the pandemic. In times like these, it is criticalthat management understands the situations at our businesssites that are our front line to our customers. I am seeking tobuild an organizational structure that can quickly and flexibly
respond to the rapid changes by hearing and responding to

input from our business sites and by quickly incorporating
information from the front lines into our management activities.
I have held various positions in the Benesse Group’sbusiness divisions during my 35 years at the Company. I always
felt that every business site had a sincere desire to help theircustomers. All of our employees have taken our corporate
philosophy to heart and are devoted to the “well-being” of eachcustomer. I believe this is our Group’s greatest strength. I also
believe that the major changes in our business environment is an
opportunity to dedicate ourselves to understanding andaddressing various issues and for management and employees
to work closely together to lead our Company forward.

Review of fiscal 2020

Progress with new initiatives in the harsh
pandemic conditions
The whole Group was impacted by the COVID-19 pandemic in
fiscal 2020. Shinkenzemi business was brisk as school closuresincreased demand for home-study solutions. New 12-monthenrollments at the April start of the fiscal year increased, and theretention rate also rose. Use of our study materials also increased
following the introduction of digital versions. All other businesses
struggled as businesses with in-person locations, including theschool and teacher support business, preparatory schools, andnursing care business all restrained their activities during theperiod. The consolidated results for fiscal 2020 included net salesof ¥427.5 billion (down 4.7% year-on-year), operating income of¥13.0 billion (down 38.4%), ordinary income of ¥9.2 billion (down
44.7%), and net income attributable to owners of the parent of¥3.1 billion (down 50.3%).
In the harsh operating environment, the businesses tookgreat effort to respond to customer needs and to create systems
that would enable safe and secure business activities. The
Shinkenzemi and Kodomo Challenge businesses were strongly
driven to help their customers and quickly created innovative
ways to provide services. When nursery schools, kindergartens,
and schools were closed to students in March 2020, Shinkenzemi
distributed free spring practice drill booklets and national
evaluation tests, and Kodomo Challenge began offering online
kindergarten programs. To help students stay on track with their

Benesse Report 2021

12

Message from the COO

studies while schools were closed, Shinkenzemi introduced
online lessons for tablet computers and other lessons combining
digital technology and live instruction. To prevent the spread of
COVID-19 and provide a structure where students can learnsafely during the pandemic, the Group’s preparatory schools
provided online classes and video programs.

Progress of the Medium-term Management Plan

A V-shaped recovery in two years andnew growth phase in three years as
we prepare for the world in 2030
The Benesse Group began implementing structural reform withthe five-year medium-term management plan launched in fiscal
2018, which included restructuring the Berlitz business anddigitalizing the Shinkenzemi business. We also revised ourbusiness portfolio through selection and concentration as well as
by selling non-core businesses and increasing investment ingrowth areas. These efforts had put our earnings performanceback on the growth track; however, the major changes in themarket conditions, which included revisions to the national
education and school entrance examination systems, derailed
our momentum and caused our earnings to deviate from ourplan. Then the COVID-19 pandemic that arose in 2020
substantially impacted all of our businesses that relied on
in-person activities, including our school and teacher support
business, preparatory schools, nursing care facilities, and Berlitz.
The Group revised its medium-term management plan toreflect the major changes in the business environment andintroduced a new plan for the fiscal years from 2021 to 2025 withstrategies to “evolve core businesses and expand into new fields.”

The new plan describes our vision for the Group in thesociety and business environment we envision in the year
2030. Japanese society is facing deepening structural issues
from its low birthrate, aging demographics, and shortage oflabor. As one of Japan’s leading education and nursing carecompanies, our role in society will become even greater. We
have therefore set an image for 2030 to be a corporate group“at the vanguard of directly addressing issues in education andnursing care issues in Japan and worldwide, helping people
seeking to better themselves and make their lives what theywant them to be.”The new medium-term management plan has a growthplan for the next five years with two main phases of growthstrategies. Phase one in the first two years will generate organic
growth in sales and operating income to drive a V-shaped
recovery in earnings to the regain the levels of fiscal 2019. Phase
two for the three years beginning in fiscal 2023 will continue theorganic growth while adding a layer of inorganic growth. Our
existing businesses fields will be the primary focus in phases one
and two, but we will also leverage the Group’s strengths to
expand business into new areas. Our quantitative targets are to
generate annual growth in existing business sales of 3% during
fiscal years 2023 to 2025 and to raise the operating margin to 8%
and ROE to 10% by fiscal 2025.

Business strategy for fiscal 2021 onward

Generating growth by evolving existing
businesses and expanding into new fields
Fiscal 2021 is the first year under the medium-term management
plan and an important year for setting up the V-shaped recovery

Operating income
Medium-Term Management Plan
Transform and Grow Benesse 2022
(billions of yen)
30.0

26.0

25.0

21.2

20.0
15.0

New Medium-Term Management Plan
Evolve core businesses andexpand into new fields Phase 1

17.5

16.2
13.0

12.6

10.0
5.0
0

13

Benesse Report 2021

2017

2018

2019

2020

2021
Forecast

2022
Forecast(fiscal year)

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Company Image for 2030
Benesse Group is at the vanguard of directly addressing issues in
education and nursing care issues in Japan and worldwide, and helping people
seeking to better themselves and make their lives what they want them to be.
Benesse Group Initiatives to Address Social Issues
A leading education and nursing care company in Japan

Providing learning to
aid individual growthand fuller lives

Supporting seniors tolive their lives as theywant them to bein business performance. The Group is aiming to raise operating
income to ¥26.0 billion in fiscal 2022, bringing it back above the¥21.2 billion in fiscal 2019.
In our education related operations, the school andteacher support business and the prep school and classroom
education businesses are already recovering from the impact ofthe pandemic. Shinkenzemi is developing new educational
services combining “digital + human support” and courses tomeet diversifying learning needs in course lessons as well as incareer education using the roughly three million dedicatedShinkenzemi tablet computers as a platform. In the Kids & Familybusiness, in fiscal 2021, we integrated the organizations of
Tamahiyo, which is a major brand in the pregnancy, childbirth,and childcare segment, and the Kodomo Challenge courses forpreschool children. We are combining their product and service
offerings through mobile applications to increase the customer
contact points and also developing peripheral businesses
targeting families and parents.
In the nursing care business, we will expand our area
coverage in conjunction with staff recruitment and new facility
opening strategies following our fundamental approach ofmanaging facilities from the perspective of the residents. We will
also design nursing care homes with unique features bycontinuing to improve the Benesse Method that has beensystematized over 25 years of practical knowledge using ascientific approach, and form our own Benesse version of nursing
homes with sensing technologies. We will seek to expand the

New approaches to global issues

Applying educational andnursing care assets
cultivated in Japan toaddress global educationaland nursing care issues

nursing care business in the medium term by growing therecruitment business and other peripheral services.
Our current plan for the Berlitz business is to reestablish its
profitability in fiscal 2022. We will be closely monitoring theachievability of that target and will take early action in fiscal 2021
to determine the future direction for the business.
We will also be exploring new fields with promise for
growth where we can use the Group’s strengths to aggressively
develop new businesses. In our services for universities and adulteducation, which centers on Udemy, we are constructing andexpanding a new profit model and are conducting local researchoverseas with the main objective of developing peripheral
operations to our core businesses.

For medium- and long-term growthGroup-wide initiatives transcendingorganizational and business boundaries
Digital transformation across the entire GroupA major key to fulfilling the new medium-term management
plan is the accelerating of digitalization of our businesses andimproving the digital skills of Group employees. We believe wecan use DX to transform our abundant knowledge and assets inthe education and nursing care fields into new value that willfurther augment our already high value and competitiveness.
We have made great strides with DX in the education

Benesse Report 2021

14

Message from the COO

FY2021–2025 Medium-Term Management Plan

Evolve core businesses & Expand into new fields
Medium-Term Management Plan Roadmap

Phase

1

Financial targets & KPI

Evolve core businesses

FY2021–2022

Organic V-shaped recovery inexisting business fields fromthe COVID-19 impact

Rebuild sales/OP to above
FY2019 levels

Expand into new fields

FY2023–2025

Phase

2

Organic growth rate 3%+

Inorganic growth (by developing
existing businesses into new areas)
to further boost sustaining growth

FY2025

OPM 8%+
ROE 10%+

Leveraging Benesse
strengths to enter new fields
and overseas markets

Evolve Core Businesses

Education in Japan

Kids & Family

Swiftly establish blended learning
Offer individual learning through digital sources (optimize video,
online, and class instruction)
Support diverse learning needs (such as with tablet-based learning)••

Preparatory Schools
Develop an online nationwide preparatory school network•

School & Teacher Support• Strengthen the mock exam business• Create the next-generation school support business geared to
the GIGA School ProjectIncrease new customers by combining Tamahiyo World and• Kodomo
Challenge World• Develop new businesses (such as parent support)

Nursing Care and Childcare• Increase the number of new facilities by moving into new areas
Pursue non-contiguous growth in peripheral businesses,• suchas HR recruitment
Berlitz• Develop Berlitz 2.0 and strengthen digital marketing• Continue structural reform

Expand into New Fields
Businesses for universities
and working adults,
health businesses, etc.

Existing

DomainUsing the Company strengths cultivated in Japan to develop• businesses
overseas
Lifelong learning and support for diverse work styles in• theuniversity and working adult domains

New

We are actively developing new businesses in domains where themarket is expected to continue growing and we can take advantage ofthe Group’s strengths.

Education,
nursing care, etc.

Japan

Overseas
RegionManagement Foundation• Digital education services
Please see page 31• Systems to promote DX
Please see page 47

15

Benesse Report 2021

Capital Strategies

SDG Efforts

Benesse actively invests in growthfollowing Group portfolio and financial
strategies while maintaining a dividend
payout ratio of at least 35%.
Please see page 19

The Group will contribute to fulfilling theSDGs through its core education andnursing care businesses.
Please see page 9

Part 1 Our Vision and Business Strategies

Part 2 How We Create Valuebusiness in the past five years, and in June 2021, Benesse wasselected for the DX Stocks 2021 list by Japan’s Ministry of
Economy, Trade and Industry and the Tokyo Stock Exchange. Yet
we believe we are at a stage where we need to further deepen
the digital skills throughout the Group. We accordingly
established the Digital Innovation Partners (DIP) in April 2021
integrating all of the Group’s digital, IT, digital technology training
for human resources, and DX consulting. DIP will support thedigital shift of all of our businesses and accelerate the digitizationof the entire group, and is already working with all departments
to advance their digitalization. At the same time, we are
improving the digital technology training for human resources.
Improving the digital skills of employees with expertise in the
education and nursing care fields will boost the value we provide
to customers and help drive business growth.

Part 3 Enhancing Operational Resources

strength in our management, in fiscal 2021, we introduced the
new B-Stage suggestion system enabling any employee tosubmit proposals for new projects and ideas for new businesses
and improvements for our operations.
Benesse’s original company Fukutake Publishing had asystem for employees to write letters beginning with “Dear
President.” The president read some 2,000 letters each year andreceived numerous valuable tips for better company
management. Reviving that idea and making B-Stage apermanent part of our management system will provide candid
insights from employees at worksites with direct customer
contact that we can incorporate into our business andmanagement activities to make us more competitive.
We have also launched the Group-wide Bringing the Future
Closer for Children Project. Benesse Corporation selected some
80 individuals from an open call for participants for the project,

Creating a culture that encourages learning andtaking on challenges
Benesse is presently working to create a Group culture where
employees can be continuously learning. This learning culture
will encompass various topics including digital technology, andwill have a structure and environment encouraging learning of
all forms and reach across the business framework, such as one
business division learning another division’s know-how.
We have also created a mechanism to promote “taking
challenges.” As I mentioned earlier, the passion and sense of
mission of each employee at the worksites to follow the Benesse
philosophy is a major strength of the Group. To fully utilize thisThe B-Stage new business and business reform suggestion system

The passion and sense of mission ofeach employee at the worksites is
one of the Group’s major strengths
and a source of our growth

Benesse Report 2021

16

Message from the COO

which seeks to provide a forum to share various perspectives onwhat kind of education children will need and how to providethat education in a society that is undergoing such majorchanges. We are eager to hear the ideas that the project
participants come up with in the hope that they will provide
new directions for business development that are outside thescope of our current business content and profitability.

Reform of corporate division andmanagement meeting
I believe that the major changes in society and our businessenvironment has made it more important than ever for theGroup and the corporate division to decide precisely what wewant the Benesse Group to be and to begin working towardthat vision. To fulfill that vision, officers in the corporate division
and at the operating companies will need not only to carry out
their specific business functions but to have a deep
understanding of business initiatives throughout the Group sothey can determine how each function can be applied to thegreatest effect and how various functions can be linked togenerate new business activity. The Cross-sectional Meeting ofCorporate Headquarters Managing Directors was therefore
created in April 2021 to bring together Group staff withprofessional expertise in human resources, general affairs,
accounting, finance, legal affairs, public relations, and investor
relations to share issues and to unite and strengthen theeffectiveness of our business functions.
The format of the meeting, whose members include
executives from Benesse Holdings, the operating companies, andAn online meeting of the Bringing the Future Closer for Children Project

corporate departments, has been changed from “information
sharing” to “a discussion by executives about issues from acrossthe Group.” This format will create a uniform understanding of
the Group’s position and enable a more dynamic interrelation ofGroup activities.

The Benesse philosophy and sustainability

Sustaining growth fueled by the cycle ofcustomer, social, and economic value
The Benesse Group follows its corporate philosophy of “Benesse= well-being” by actively addressing social issues in educationand nursing care. Sustainability is by no means a new concept for

Sharing the Benesse philosophy andcustomer-oriented values, andcontinuing to take on new challenges

17

Benesse Report 2021

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

The cycle of value

Customer Value
Products, services

Cash flow used toboost investments

Addressing social
issuesHigher Corporate
Value
Economic Value

Social Value

Ability to make profit

Addressing social issues

Intangible value
adds to businessthe Group and it is deeply intertwined with our corporate values
and business practices.
Our objective is to raise our corporate value on a cycle ofthree different types of value—customer, social, and economic
value. Earnest efforts to increase customer value and social value
will lift our economic value. I consider management’s mostimportant job is to ensure executives and employees assimilate
all three types of value and that each value is integrated into our
corporate activities.
The nursing care business, for example, may not be tenable
if only profitability or investment efficiency were considered, but
it has incredibly high value and need in society. My primary
mission is to create the best balance for society, customers, andemployees to contribute to the sustainability of society andcreate conditions for the Company to continue growing.
We are currently in discussions to clarify non-financial
indicators for our business performance based on our vision forthe sustainability of our business and our medium-term
management plan.

Message to stakeholders

Creating value with “philosophy-driven”
management
In our business supporting each customer’s desire to grow andlearn and make their life what they want it to be, the decisions
we make are rooted in our corporate philosophy of “Benesse =well-being” and our customer-centric values that motivate us tohelp each customer individually. In that sense, I also consider
Benesse to be a “philosophy-driven” company.
Being philosophy-driven is not easy. We can lose sight ofthe philosophy when there is a tailwind and business is steadily
expanding; and we can forget the reason for our existence
when there is a harsh headwind that causes us to narrow ourfocus to only the immediate profits. That is why I believe
management must continually remind everyone about theimportance of the philosophy, even at the risk of repeating thesame thing over and over.
The Benesse Group will remain centered on its philosophy
as our society continues changing and our management and allof our worksites will work together to take on new challenges
and generate sustained growth. We look forward to thecontinued understanding and support of our stakeholders.

Benesse Report 2021

18

Message from the CFO

Fueling Group growth with a balance ofinvestments and financial stability
Allocating funds for a balance of growthand stability
I have been focusing specifically on finance for over 20 years since1999 when joining the Benesse Corporation Finance Department
as a mid-career hire. The finance department’s role has evolved
over the past two decades, but the mission to financially support
businesses of high social importance such as education andlong-term care has been unchanging.
At this moment, the Group’s most pressing issue is to quickly
reestablish its business performance, which has suffered during the
COVID-19 pandemic. The new medium-term management plan
launched in April 2021 aims to generate a V-shaped recovery forprofits first to regain the level of fiscal 2019 and then continue
growing. The foundation for this resurgence will come fromfortifying our existing businesses to generate organic growth andthen to leverage our strengths to expand into new fields and build
our overseas operations. At the same time, we will strengthen our
financial standing, which is the foundation for growth. As directorof finance, I will seek to allocate funds and generate investment
return while maintaining a balance of growth investment andfinancial stability.

Fiscal 2020 performance review
The COVID pandemic disrupted our business activities and forced
us to revise our growth plans for all of our business segments.
Shinkenzemi business increased while schools were closed under
the state of emergency conditions. However, all of our businesses

that rely on in-person business, such as the school and teacher
support, classroom education, and nursing care businesses, faced
extremely harsh operating conditions. The result was an overall
decline in sales and a substantial reduction in profits. Despite thesedevelopments, the market needs for all of the businesses have notdiminished, and we expect the high customer satisfaction for ourGroup’s products and services to drive earnings recovery in all
businesses once the pandemic subsides.
In the Berlitz business, the structural reform during the past
few years significantly lowered the breakeven point, and sales
and profits were on an upward trajectory until the pandemic
caused both to turn sharply downward. Sales are currently
edging back upward and profitability has improved following theextensive restructuring. If the impact from the pandemic
subsides, we believe the business will regain profitability in fiscal
2022. The many uncertainties make it impossible to anticipate
when or how quickly earnings will recover, and we will not
hesitate to implement further measures if we determine that
positive profits still appear unattainable in fiscal 2022.

DX to strengthen our businesses andexpand into new areas
For our current businesses, we will advance an investment
strategy aimed at generating a V-shaped recovery that will drive
profits to regain the fiscal 2019 level and then continue growing.
A major point in the investment in our core domain of education
will primarily focus on digitalizing the business. We are stepping

Shinsuke Tsuboi
Executive Officer, CFOManaging Director of
Finance and Accounting
Mr. Tsuboi joined Benesse Corporation in 1999 after asuccessful career primarily as a fund manager in an
investment trust company. His career at Benesse has beenin the finance department, where he has been in charge ofplanning and executing financial strategies for fundprocurement and management, investments, and M&A.
He was appointed to his current positions in April 2021.

19

Benesse Report 2021

Part 1 Our Vision and Business Strategies

Part 2 How We Create Valueup investment in digitalization after the growth of the
Shinkenzemi business since digitalizing its teaching materials
showed us that digital transformation is essential. Digitalization
will bring many advantages, such as enabling us to rapidly
deliver materials with enhanced interactivity and that are better
tailored to customer preferences as well as facilitating the
introduction of new products and services to the tablet
platforms. We will also have a better ability to cross-sell products
and add high value-added services. All of these will enable more
efficient and effective marketing and contribute to revenue
growth. We will also aggressively invest to enhance employee
digital proficiency and other areas that will fortify our businessfoundation for growth in the medium and long term.
The Group has also been carefully selecting andconcentrating its businesses over the last few years with the aimof securing the funds needed for growth. The Group sold the callcenter and the interpretation/translation companies, added
EDUCOM and Study Hacker to the education business, andadded Proto Medical Care to the nursing care business. The
Group also made a substantial investment in Udemy, a major
company in the adult education field in the United States. As
these existing businesses grow, we plan to allocate funds toinvest in new areas where we can apply the Group’s knowledge
and know-how to generate business synergies as well as indeveloping our domestic businesses for overseas markets.
Investment targets will be selected based on information
gathered from the IT department and all business divisions, andthe investment methods will take full consideration of our
financial structure.

Improving profitability and capital efficiency
The key performance indicators we are mainly focused on are
the sales growth rate, operating profit margin, and ROE, and the
new medium-term management plan sets a target of ROE of
10% or higher in fiscal 2025. ROE was 1.8% in fiscal 2020, and weestimate it will rise to 3% in fiscal 2021. If we raise profit to thelevel we are aiming for, then we project ROE will rise to the 7%
level in fiscal 2022. In fiscal 2020, we also began using ROIC
internally as an indicator of our performance to give us a closer
look at the profitability of each business. We will also use ROIC asa measure of M&A investment efficiency.
It’s also important to understand that ROIC varies frombusiness to business. For example, nursing care profits are quite

Part 3 Enhancing Operational Resources

stable but its ROIC tends to be lower than the Shinkenzemi andschool and teacher support businesses. The Group attaches great
importance to the social significance of its businesses, andtherefore does not evaluate business performance based solely
on ROIC. Similarly, the nursing care business is primarily geared
to higher income customers, so we are accordingly seeking toraise its overall capital efficiency by expanding into peripheralbusinesses, such as the employment matching business inaddition to the operation of facilities.

Maintaining financial discipline andaccumulating cash
At the end of fiscal 2020, roughly ¥150 billion of the Company’s
cash and cash equivalents were customer deposits, which
included roughly ¥140 billion in deposits such as advancepayments in the education business and lump sum payments forlong-term nursing care. Our policy is to not use these deposits
for business investments or investments that carry risk.
Considering the asset-side receivables of over ¥50 billion and thestandard seasonal fluctuations in the balance of deposits, wehave designated up to ¥50 billion as standby funds for risk
investment. Our capital expenditure is currently roughly
equivalent to depreciation, but is rising as we make progresswith our digital transformation. We believe that carefully
managing capital expenditure and investment efficiency are
essential to stable business operations.
From this point, our next step is to continue increasing
operating income to raise free cash flow and to use those funds
to invest in digitalization and business development whileconsidering the funds needed to operate the existing businesses.
We will also expand free cash flow and fortify our financial
foundation by being scrupulous about the investment returnfrom capital investments and M&A moves and by further
strengthening our financial strategy.

To our shareholders
Our basic policy for distributing dividends to shareholders is toincrease the dividend payment amount by expanding profits andto maintain a payout ratio of 35% or higher while retaining
sufficient internal reserves for future growth. With this policy inmind, we maintained the stable dividend in fiscal 2020 byproviding a dividend payment of ¥50 per share for the year. We
look forward to your continuing support for the Benesse Group.

Benesse Report 2021

20

Financial Highlights

Net sales

Operating income/Operating income ratio
Operating income (left)(billions of yen)
500.0

430.0

434.4

439.4

448.5

427.5

Net income attributable to owners of
the parent/Net income per share

Operating income ratio (right)

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

25.0

15

15.0

400.0

20.0

300.0

15.0

21.2

200

12.3

16.2

12

12.0

9

9.0

13.0

12.6

(yen)

160

128

120

6.2
200.0
100.0
0

7.6

10.0

1.8

5.0

16

17

18

19

20
(fiscal year)

ROE/ROA

0

16

4.7

3.7

2.9

17

6

18

19

4.9

6.0

3.5

3.1
3

3.0

0
20
(fiscal year)

0

50

36
16

80

65

17

18

19

Depreciation & amortization(%)(billions of yen)(billions of yen)

9

40.0

6

2.1

16

17

23.6

22.6

1.0

1.2

18

19

19.8

16

17

18

19

18.8

15.0

10.0

5.0

0.6
20
(fiscal year)

0

16

17

18

19

(%)

(billions of yen)

60

200.0

Interest-bearing debt (left)

58.6

63.9

150.0

33.6

19.8

10.0

1.8

Interest-bearing debt/
Debt-to-equity ratio

34.5

19.9

20.0

Equity ratio

34.9

20.3
20.0

2.9

2.5

0.7

29.2

19.4

3.7

45

0

(fiscal year)

25.0

31.5
30.0

0

20

ROA

7.3

3

40

32

CAPEX

ROE

3.1

32.7

31.3

105.8

111.0

68.1

120.6

20
(fiscal year)

020(fiscal year)

Cash dividends/Dividend payout ratio

Debt-to-equity ratio (right)

72.2

77.0

Cash dividends (left)
(yen)

(%)

80

120

400

60

90

95
123.6

137.2

Dividend payout ratio (right)

(%)

30

100.0

40

60

15

50.0

20

30

95

256.9

300

50
98.2

50
76.6

50

200

154.3
100

73.8
0

16

17

18

19

20
(end of fiscal year)

0

16

17

18

19

0
20
(end of fiscal year)

Note: Interest-bearing debt includes lease obligations.

21

Benesse Report 2021

0

16

17

18

19

0
20
(fiscal year)

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

1

FOCUS

Supporting learning and growth inevery environment (p.29)

Part

2

FOCUS

2

New education in linewith the times (p.31)

How WeCreate Value

FOCUS

3

Placing importance on deep respect
for people’s individuality (p.34)

Benesse Report 2021

22

At a Glance

Education Businessin Japan
Education in Japan is the Group’s main
business, accounting for approximately
half of consolidated sales. We aim to use
digitalization and the introduction of
information and communication
technology (ICT) in education as anopportunity for further growth.

Global Kodomo
Challenge BusinessKeeping our focus on Kodomo Challenge,a correspondence course for preschoolers
that draws on the expertise of Benesse,
we are pushing ahead with expanding
this competitive brand globally.

48.1%* Starting in fiscal 2021, we consolidated
lifestyle-related businesses, and changed thesegment’s name to “Kids & Family.”

Share of net sales
Fiscal year ended March 31, 2021

6.2%

12.9 %
29.0 %

Nursing Care andChildcare Business
The Nursing Care and Childcare businessconstitutes the number-two pillar of theBenesse Group. We are focusing on
improving quality and reinforcing ourstrategy of regional dominance.

Berlitz Business

Others3.8%

23

Benesse Report 2021

One of the largest language-educationcompanies in the world. We are working
on drastic structural reforms to become
profitable and to expand sales throughour new product, “Berlitz 2.0,” whichmakes use of digital technology.

Part 1 Our Vision and Business Strategies

Strengths
fostered over many years and a• Trustformidable base of clients
A business scale that is number one in• theindustry, with collective capabilities••

that cover elementary, junior high andhigh schools, as well as extracurricular
education
An abundance of educational
knowledge which has provided support
for bolstering children’s motivation andability to learn on their own
Diverse personnel and a corporate
culture that embodies ourcustomer-centric philosophy

Over two million enrollments in Japan and• aroundthe world, plus the expertise of 30

•
•
•
•

years in business educating preschoolers
The brand power of Shimajiro, which iswell-known and well-liked in Japan andinternationally
A curriculum which nurtures students’motivation according to their stage ofdevelopment
A solid customer base in businesses related
to pregnancy, childbirth, and parenting
The Tamahiyo App, which boasts 450,000
annual downloads

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Reflections on FY2020
Shinkenzemi Business:
Significant improvement in retention
rate and profitability, due to increased
usage rate of digital teaching materials
School and Teacher Support
Business:
The GIGA School Project made apositive contribution to ourelementary and junior highbusinesses, but our high school
businesses were impacted by school
closures, and our simulated exams
business declined to a large extent
Prep School and Classroom
Education Business:
Impacted by school closures, anddeclined in a major way

Net sales / Operating income

In Japan, though our concert
business was affected by COVID-19,
our business of providing courses isin excellent shape
In China, in addition to the impact of
COVID-19, the entry of competitors
poses a threat

Net sales / Operating income

Operating income

Net sales(billions of yen)(billions of yen)

250.0
200.0

192.0

200.3

20.0
14.0

150.0

25.0

205.7

10.0

12.0

15.0

100.0

10.0

50.0

5.0

0

2018

2019

Operating income

Net sales(billions of yen)

60.0

0

2020 (fiscal year)

56.4

56.5

55.1

(billions of yen)

4.5

3.2
2.6

40.0

3.0

1.6
1.5

20.0

0

2018

2019

0

2020 (fiscal year)* The figures for the fiscal year ending on March 31, 2019,
have been rearranged to reflect the new segments.

Nursing home management from the• residents’perspective, seeking to “place

•
•
•
•

importance on deep respect for people’s
individuality”
Benesse Method: Systematized scientificapproaches based on 25 years of practicalknowledge
Through deployment of our methods, improved
service quality that stands out from the rest
Strategic hiring and human resources
development
Daycare center and afterschool childcare
club management from the children’s
perspective, seeking to “help children growas their own unique individuals”

357 language centers in over 70 countries• andregions worldwide
The Berlitz Method of learning a target• language
through immersion in life•

situations using that language only, verified
as effective with a 140-year track record ofsuccess in the world
Able to offer language learning throughintercultural understanding

Occupancy rate decreased due to theimpact of COVID-19, as a result of
refraining from operations in the firstquarter and an increase in thoseconsidering occupancy who decided
not to do soThough sales increased due to anincrease in the number of locations,income decreased due to the decline
in occupancy rate

Net sales / Operating income
Net sales

Operating income(billions of yen)(billions of yen)

150.0
120.0

116.9

122.8

123.8

11.3

11.3

10.3

90.0

18.0
15.0
12.0
9.0

60.0

6.0

30.0
0

Due to the impact of COVID-19, sales
in fiscal 2020 greatly declined
Fixed costs were significantly
reduced through structural reforms
The introduction of Berlitz 2.0 was
postponed

3.0

2018

2019

2020 (fiscal year)0

Net sales / Operating income
Operating income

Net sales(billions of yen)

60.0

(billions of yen)

49.2

30.0

45.0

40.0

26.4

10.0

20.0
0
(20.0)

20.0

(4.7)
2018

(3.1)

2019

(6.7)

0

2020 (fiscal year) (10.0)

Benesse Report 2021

24

Education Business in Japan

Shinkenzemi BusinessMichiaki Yamamoto
Group Executive Officer,
Head of the Out-of-School Learning Business Company ofBenesse Corporation

Business environment and prospects

Levering the digital shift being driven by the
COVID-19 pandemic to further evolve towards“Digital + Human Instruction”

Opportunities
Greater acceptance and demand for digital
education due to the COVID-19 pandemic

Due to the COVID-19 pandemic, fiscal 2020 was a year of greater acceptance anddemand for digital education. Led by the improved retention rates for digital
Shinkenzemi enrollments, total annual enrollment grew significantly. Shinkenzemi has
strengths that competitors do not, such as a track record of roughly two million
students and human instruction by “Red-pen teachers,” who use red pens to write advice
on students’ work. We believe that through digitization, these strengths will produce
even greater value. As educational disparity grows and learning needs become morediverse, we will provide powerful support for the education of each and every customer
by combining digital personalized instruction and human guidance.

Wider range of learning needs due todiffering values and diversification ofentrance exams

Risks
Market contraction due to thedecreasing birthrate
Lower barriers to entry due toacceleration of educational DX andgreater competition as a result

Growth strategy(1) Improved retention rates for digital course
enrollments
We aim to further improve retention rates and refine our blended
learning, which combines digital learning which can be tailoredto the goals and proficiency of individual users with human
instruction, which motivates learners.

(2) Marketing reforms
In conjunction with our digitization of instructional materials, wewill shift our marketing approach from its current direct
mail-focused model to one that uses digital technologies.
Furthermore, through our “Learning Pocketbook” support app forparents, we will provide parents with information regarding

education and career advancement andenable them to experience actual
instructional material use. Through this, wewill expand our customer contact points andbuild ongoing relationships.

“Learning Pocketbook”(3) Meeting diverse learning needs
Using the platform provided by our dedicated tablet computers,
over 500,000 of which are provided to new enrollees each year,
we will provide diverse study content and further expand
business. The first of these efforts was the creation of aprogramming course in fiscal 2021, which is off to a strong startwith 30,000 enrollments.

Launch of blended learning through Shinkenzemi
Understand material throughclass participation

Solve problems inindividualized lessons

Master non-multiple choice questions
through teacher instruction

Live, online classes

Individualized digital lessons

Digital Red-pen teachers

By
With aoneself teacher

25

Benesse Report 2021

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

School & Teacher Support Business
Kenji
Yamakawa
HarunaOkada
Group Executive Officer,
Head of the School
Headandof theTeacher
Kids &
SupportFamily Business Company ofBenesse Corporation

Business environment and prospects

Recovering from the impact of the
COVID-19 pandemic and aiming for further“Mirai Seed” growth

Opportunities
Rising need for individualization due tothe diversification of entrance
examinations

In fiscal 2020, the suspension of school due to the COVID-19 pandemic had a major
negative impact, especially for our senior high school business. However, theimplementation of the GIGA School Project, in which every elementary school andjunior high school student would be provided with a computer, was accelerated, so themarket for software used in schools has grown. The number of schools using our “Mirai
Seed” dedicated programming content has also grown. As of April 2021, roughly 6,000
schools are using Mirai Seed. In fiscal 2021, we aim to recover from the impact of the
COVID-19 pandemic and achieve further Mirai Seed growth.

GIGA School Project and the use of ICT inschool education

Risks
Overworking of educators and handoverto next generation
Paradigm shifts in school education,such as support for new courses and
COVID-19 countermeasures

Growth strategy(1) GIGA School Project status and related measures(2) Expansion of platform business for schools

Under the GIGA School Project*, all of the students in roughly
30,000 elementary and junior high schools in Japan will be
supplied with a computer. Currently, we provide Mirai Seed, paid
tablet computer learning software, to roughly 3 million users in
7,000 schools. It has been recognized for its service design, whichmakes it easy to use in educational settings, and its ICT support
system, which provides assistance with utilization. As a result, thenumber of schools using Mirai Seed is steadily growing. We willfurther promote this growth, and plan to have Mirai Seed used in
8,000 schools by the end of this fiscal year.

Every year, a growing number of schools are using Classi, thecloud-based learning assistance platform service that supports
the shift to ICT in school education, and EDUCOM, a system
which provides integrated support systems for school affairs inelementary and junior high schools. In order to further enrich theofferings of our Classi service, we are integrating it with otherassessment services offered by the Group and promoting
individualized learning. With the EDUCOM school support
system, our policy is to support day-to-day instruction using ICT,such as by providing school life notebooks and integrating withrelated services like Mirai Seed.

* This initiative, promoted by the Ministry of Education, Culture, Sports, Science andTechnology, aims to create educational ICT environments that nurture creativity
through individualized and optimized instruction through the use of devices, one ofwhich is supplied to each individual student, and high speed networking environments.

GIGA School Project status and related measures
Percentage ofschools with
one computerfor each student

No. of schools
using Classi

97% of elementary and junior high schools

Percentage ofApprox. 60%
schools using
Primarily in Tokyo area, cities designated bypaid educational government ordinance, and major urban areas
softwareApprox. 40%(introduction of software will
expand in future, primarily inprovincial regions)

4,000
3,000

2,800
2,100

3,100

2,400

Approx. 6,000 schools (2.4 million students) are using Mirai Seed (as of April 2021)
Usage rates are rising, supported by the sense of security offered by our roughly 900 ICT
supporters» We plan to increase this to 8,000 schools by the end of the current fiscal year

» For details regarding Mirai Seed, see page 32 Focus 2

8,000

7,400

8,300

9,300

6,045

4,000

1,000
0

10,000

6,000

2,000

The number of schools using Mirai Seed is growing

No. of schools
using EDUCOM

2,000
2017

2018 2019 2020 (fiscal year)

0

2017 2018 2019 2020 (fiscal year)* Figures include only elementary andjunior high schools.

Benesse Report 2021

26

Education Business in Japan

Prep School and Classroom
Education Business

Kenji Yamakawa

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

Business environment and prospects

Completion of a classroom + video classes/online structure
for the post-COVID-19 era.
Providing individualized, optimized education
In fiscal 2020, due to the spread of COVID-19, we had to refrain from sales activities inadvance of the start of the new school year in April. This had a major impact, such as adrop in the number of students enrolled as of the start of the fiscal year and thetemporary closure of preparatory schools and classrooms. In fiscal 2021, as of April, ourenhancements to our new student recruitment efforts have proven successful, and thenumber of enrollments now exceeds that of fiscal 2019, pre-COVID-19. Furthermore, inthe midst of the ongoing COVID-19 situation, each company has completed its
preparation of online systems.

Opportunities
Improve convenience for students
through use of online instruction
Online instruction will enable distinctive
preparatory schools to attract students
from a wider area

Risks
Online instruction may lower the barriers
to entry
The acceleration of education digitization
may blur the lines between school, prep
schools, and home teaching, resulting in
greater competition

Growth strategy(1) Rapidly recover from the impact of the COVID-19 pandemic
The number of enrollments in Group prep schools as of April 2020 fell significantly
year-on-year due to the suspension of new operations and the temporary closure ofclassrooms due to COVID-19. However, the number of enrollments has recovered
steadily since then, due to the fruit of our infection countermeasures, improvements tostudent service satisfaction, reinforced recruitment measures, and other measures. In
April 2021, we began the new academic year with 110,000 enrollees, and we expect tosee a full and rapid recovery for the full year.

Number of enrollees in Group prep
schools as of April(10,000 students)
12
10.9
11
9.9
10
9

0

(2) Reinforcement of hybrid strategy through use of
online education
Each of the Group companies are expanding and enriching their video and online
offerings given the long duration of the COVID-19 pandemic and the establishment of a“new normal.” Shinkenzemi individual tutoring lessons are already being offered online,
and we have begun providing online and video lessons through our BE Studio English
classrooms. We plan to further increase our growth in fiscal 2023 and beyond, with aneye towards expanding the regions in which we do business by using online
approaches and offering hybrid services.

11.0

2019

2020

2021

(fiscal year)

Highlights of hybrid strategy forachieving growth in the midst of the
COVID-19 pandemic(1) Improved contract signing rate
Make up for decrease in inquiries
through initiatives such as enablingprospective customers to experience
prep schools online(2) Hybrid proposals
Provide effective hybrid proposals forclass attendance based on conditionsin individual homes(3) Improve level of video/online andhybrid services
Improve level of programs, instructional
materials, and instructors in order toproduce more effective learning

27

Benesse Report 2021

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Kids & Family Business

Kids & Family Business
Haruna Okada
Group Executive Officer,
Head of the Kids & Family Business Company ofBenesse Corporation

Business environment and prospects

Merging of Tamahiyo and Kodomo Challenge organizations
into a “first contact brand” to expand customer contact
points and provide wide-ranging support
While the spread of COVID-19 in fiscal 2020 resulted in the suspension of course
operations in China and the cancellation of concerts in Japan, China, and Taiwan, therates of usage of instructional materials, including the Shimajiro Club App, rose, andretention rates remained stable and strong. In China, new companies entered themarket, and competition grew even more fierce. In fiscal 2021, in order to achieve thetargets of the new Mid-Term Management Plan, the organizational structure in Japan
has been changed to promote even greater customer retention and new customer
development. In China, as well, digital contact points are being reinforced, the sales
structure is being revamped, and a multilevel structure is being applied to products.

Opportunities
Japan: Increased use of digital technology
in childcare, diversifying customer values
China: Acceleration of digital technology
usage, growth of e-commerce

Risks
Japan: Further decline in birth rate,increased digital competition
China: Further decline in birth rate,intensifying competition, moves towards
placement of restrictions on education
businesses

Growth strategy(1) Japan: Integrate and reinforce Tamahiyo andKodomo Challenge businesses(2) China: Redesign of strategy based on
business environment

In April 2021, we merged businesses such as our Tamahiyo andKodomo Challenge businesses into the Kids & Family business inorder to strengthen our customer contact points. Our goal is to
use the Tamahiyo App, which is very popular among pregnant
customers (450,000 downloads per year), to lead into the use of
the Shimajiro Club App. We will meet new needs by providing
services tailored to individual customer life stages, thereby
establishing relationships with them, reinforcing existing
businesses, and developing new businesses.

In China, the use of digital content in early childhood education
is rapidly growing. However, the influx of new market players dueto heating up markets and resulting in fierce competition.
Furthermore, while the e-commerce market is growing, our sales
are primarily conducted through shops and by phone, so oursales efficiency is falling. Given this, we are redeveloping ourstrategy with an eye on the business environment. We aretransforming our sales structure by making productimprovements, growing e-commerce, expanding our digitalcontact points, leveraging data, and other initiatives.

Reinforcing the value we provide, aligned with our customers, and expanding our world of offerings
Pregnancy/childbirthParentingTamahiyo App

Lifestyle

THANK YOU! App

Pet life/seniors

DOG’S HEART & CAT’S HEART Apps

Shimajiro Club App
By enhancing coordination between service brands, we will expand our new customer contact points and improve our sales efficiency

Benesse Report 2021

28

FOCUS

1

Supporting learning and growthin every environment

Ensuring that learning goes on
despite the COVID-19 pandemic

The spread of COVID-19 had a tremendous impact on children’s education in fiscal 2020.
The Benesse Group is implementing a wide range of initiatives to support children’s growth and learning.

How Benesse can help in the midst of the pandemic
The COVID-19 pandemic has caused confusion and disarraythroughout society, resulting in temporary daycare center andschool closures and forcing changes to school curricula. The
Benesse Group has been quick to respond by implementing
support activities to ensure that children’s educations are notinterrupted. These activities have been carried out throughShinkenzemi, Kodomo Challenge, preparatory schools, English
classrooms, and other businesses in the Benesse Group. We havealso developed a variety of instructional materials, content, andservices, some of which are provided free of charge to thegeneral public, not just enrollees. At the heart of these activities

has been the firm desire among each and every employee to
alleviate the concerns of children and family members and tohelp solve the problems they face. Even before the COVID-19
pandemic, the Benesse Corporation has responded to thedramatically changing environment by examining its own
purpose and principles (judgment standards and behavior
standards), putting them into words. We have been able tospeedily take on the challenges presented by COVID-19 due toour thorough application of our purpose and principles. We willcontinue to give our full attention to our customers, providing
value as only Benesse can.

The state of society through the COVID-19 pandemic and the support offered by Benesse
2020 Jan.

Feb.

Mar.

3/2–
4/7–
Elementary, junior
School closureshigh, and senior high extended due toschools temporarily state of emergency
closed nationwide
declarations

Support forparents andyoung
children

Kodomo Challenge• Opened “Together
with Shimajiro!
Web Challenge
Daycare”• Opened “Online
Kindergarten”

Support forelementary,junior high,and seniorhigh school
students

Shinkenzemi
Business

Benesse Report 2021

May

BE Studio• Beganstreaming“Online Lessons”
and “Video
Lessons”

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

6/1–
Classes resumed at elementary,junior high, and senior high schools
nationwide

Tamahiyo• Opened“Tamahiyo Making it Throughthe Pandemic”
special support
website for
expecting mothers

Elementary, Junior Elementary andHigh, and Senior
Junior HighHigh School
SchoolShinkenzemi
Shinkenzemi• Opened “Today’s• Began providing“Spring practice drill Schedule” online
classroom
booklets” free ofSenior HighchargeJunior High School School
Shinkenzemi
Shinkenzemi• Launched• Began offering“Online Shinkenzemi interactive online
classesClasses”

Other
Class Benesse
Prep schools and• Online services forbusinesses classrooms• Suspended face-to-face junior high school
students Heldclasses (in stages)“StudyCast
Afterschool childcare
Workshops”• Expanded operation
hours

29

Apr.

Major events

Kodomo Challenge Kodomo Challenge
Kodomo Challenge
Kodomo Challenge• Held “Cheers with • Streamed popular • Streamed “Home• Opened “Online
Vegetables PARTY
Summer School,”music that children Happy Halloween”‘Onlineoffering classroom
online show, free
can enjoy at homelessons in eight fields, Extracurricularof charge, toLessons’” inincludingprovide children
collaboration withexperimentation,with expressive
Kagome Co., Ltd. andathletics, art, andopportunities
children’s cafeterias
EnglishElementary and Senior High School
Shinkenzemi
Junior High• Launched “Online
SchoolOpen Campus” due
Shinkenzemi
to cancellation of• Offeredin-person open
“Nationwide
Assessment Tests” campuses
free of charge• Provided“Individual
Review Drills” freeof charge

Prep schools andclassrooms• Opened“Overseas
University
Advancement
and Study
Abroad Lab” andoffered online
workshops forstudents
planning tostudy overseas

Prep schools and classrooms• Route H and Tetsuryokukai jointly held
“U.S.-Japan Top University Online Summer
School”• UP Educational Project’s Eigokan offered“English Study Method Seminar” and“Overseas University Advancement
Seminar” online, free of charge• Ochanomizu Seminar offered online
seminar, free of charge

Benesse Education Prep schools
Information Forum and classrooms• Free Benesse• Benesse
Education
Tetsuryokukai
Information Forum
Individualized
service offered to
Education
help solve theCenterproblems faced byexpanded web
students preparing
course offeringsfor entrance
examinations in
the midst of the
COVID-19
pandemic

Benesse
Education
InformationForum• Senior HighSchool Entrance
Exam Seminars
for individual
prefectures heldin collaboration
with 27 prep
schools andclassrooms
nationwide

Benesse
Education
Information
Forum• “Uniform Test
for University
Admissions
In-depth
Analysis
Festival” online
explanation
event held freeof charge

Part 1 Our Vision and Business Strategies

Shinkenzemi

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Providing free instructional materials andprograms that meet changing needs

In response to rising concerns about disparities in educational abilities as the result of schools
nationwide being shut down for a long period of time, Shinkenzemi carried out a variety ofactivities. These included offering “Nationwide Assessment Tests” that could be taken at home,providing “Individual Review Drills” linked to the results of the assessment tests, providing“Spring practice drill booklets” for elementary, junior high, and senior high school students thatcovered three semesters of material, and offering “Today’s Schedule” online classrooms, whichenabled participants to maintain their life and study rhythms during the long school closure
period. All of these were provided to students free of charge. Questionnaires were administeredon a daily basis, and instructional materials and programs were provided that addressed theconcerns felt by users and their families.
The decision to offer the “Spring practice drill booklets” free of charge was made on the
day that the school closures were announced, and we received
100,000 applications on the first day that registration was
open. The schedule was a grueling one, with
instructional materials being prepared while
reservations were in progress, but Shinkenzemi
employees and partner companies worked
together as one and succeeded in delivering thematerials in just one week. We will continue to place
great value on our ability to immediately addresschanging needs while thoroughly maintaining our unique
Shinkenzemi focus on the student experience.

Hiroshi Mizukami
Brand Communication Department
Benesse Corporation

Spring practice drill booklets

Kodomo Challenge

Online Kindergarten provides support to children
and parents while daycares are closed

Numerous kindergartens and daycare centers across Japan closed in order to prevent the spreadof COVID-19, so children spent a greater amount of time at home. Benesse responded to this by
opening its Online Kindergarten in March 2020.
The Online Kindergarten distributed educational and video content, including “brushingteeth,” “washing hands,” “singing,” “dancing,” and “intellectual training,” matched to a dailyschedule made with the supervision of experts. It was
designed to enable children to have fun and learn, justlike they would in kindergarten or daycare, from within
their own homes. Furthermore, it also provided exercise
content to help refresh parents working at home. Over a
two month period, the content was viewed by over
600,000 people, and we received wonderful feedback,such as “Thanks to the Online Kindergarten, I was able toaccomplish a lot while working from home” and “Theprogram helped my children maintain their daily rhythm
while the kindergarten was closed.” The situations
surrounding parents and children is likely to continue tochange, and we plan to meet these changes by
providing instructional materials that offer new value.

Reona Yamada
Nursery Department
Benesse Corporation

Streamed content was matched to the day’s schedule

Benesse Report 2021

30

2

FOCUS

New education in line with the times

Fusing people and digitaltechnology as only
Benesse can
The Benesse Group provides cloud services that support the use of ICT in elementary, junior high, and senior high schools nationwide from a variety
of approaches. We leverage the strengths of our educational platform, providing dedicated learning tablet computers to more elementary and juniorhigh school students than any other company, and our tutelage abilities, cultivated over many years, to develop and provide products and services
that only our Group can.

Combining the strengths we have cultivated with digital technology totake our services to the next level
Benesse aims to accelerate the digitization of education, thereby
meeting the need for personalized services tailored to individual
students’ educational abilities and motivation, together withdiverse educational needs. The number of companies entering
the market from other industries is rising. Our sources ofcompetitive superiority are the three strengths of our tutelage
abilities, our educational knowledge, and our customer base,which we have developed through our educational services. Our
tutelage abilities include our roughly 9,000 “Red-pen teachers”
and instructors from Group preparatory schools. Our educational

knowledge includes the expertise and content we havedeveloped through our over five decades of instruction
experience and the results of studies and research by the
Benesse Educational Research and Development Institute (BERD).
Our customer base is an asset made up of the enrollment historyof Shinkenzemi, assessment data from Shinken Simulated Exams,
and our contact points with schools nationwide. By combining
these strengths with digital technologies, we can further
enhance our competitive superiority and achieve our
educational ideals.

The strengths of Benesse’s
educational business

The history of technology use by Shinkenzemi
Customer needs

Blended learning

Continually matched to students - AI/live streaming

Challenge Touch (2014–)
that students can use to keep studying on their own - Tablet computers
Comprehension-focused Instructional Materials (2008–)

Tutelage• Number of Red-pen teachers: Approx. 9,000• Abundance of instructors in Group prep
schools: Approx. 8,000• Course supporters (former Shinkenzemi
students): Approx. 13,000

Overcoming the challenges of weak subjects - Online/video
Pocket Challenge (1995–)

Making memorization fun - Pocket computer

Prefecture-specific entrance exam support (1992–)
Test preparation measures for students’ own prefectures - Database
Study Textbook Support (1978–)
Tailored to classes - Printing technology

Customer base

Comics and Characters (1974–)- Editing technology
2WAY (1969–)- Letter correspondence

Technologies used to meet needs

31

Benesse Report 2021

Educational knowledge• Expertise and content developed over thecourse of more than five decades• Assessment know-how• Studies and research by the Benesse Educational
Research and Development Institute• Roughly 2 million current and former
Shinkenzemi enrollees• Assessment data: Total number of takers of Shinken
Simulated Exams, etc.: Approx. 9 million/year• Contact with schools we do business withroughly 90% of schools

Part 1 Our Vision and Business Strategies

Shinkenzemi

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Combining “instruction that motivates students”
and “personally tailored digital learning” toimprove customer satisfaction

Of the roughly 400,000 students currently enrolled in our Shinkenzemi Junior High School Courses,
about 70% are using our hybrid style, combining dedicated tablet computers and textbooks. The
growth of tablet computer-based learning has made it possible for us to speedily provide students
with education proposals that are personally tailored to meet, for example, students’ academic
levels and frequency of school club activities. In April 2021, we introduced proficiency scores,
which use learning data to predict test scores and generate study plans for reaching andsurpassing target scores. In August, we applied AI to historical data regarding past initiatives to
identify which lessons increase proficiency scores the most and offered those lessons during thesummer break. Furthermore, our weekly bidirectional online live classes are improving students’motivation, creating a weekly study rhythm, and enabling teachers to explain questions that are
hard for students to understandon their own and to answer
individual students’ questions. By
creating a study cycle that fuses
digital technology with human
instruction, we aim to improve
instructional material utilization
Generating study plans based
Bidirectional online live classes
on proficiency scores
rates and ongoing use.

School andTeacher Support

Itsuko Yamane
Department Chief, Shinkenzemi JuniorHigh School Courses Department
Benesse Corporation

Developing independent, interactive, deep study
among the students that will shape the future

Thanks to the GIGA School Project, almost every elementary and junior high school student has
been assigned their own digital device, and digital study in schools is shifting from the device
ubiquity to the device usage phase. Our tablet learning software, Mirai Seed, is notable not only forthe drills it provides and its ability to enable opinion-sharing in class, but also for supporting theentire process from data collection to effectiveness verification. We hope that the tablets help
students organize and share their ideas, stimulating group work and class-wide discussions andexpanding the use of active learning classes.
In the future, we plan to use Mirai Seed to further collaborate with local municipal
governments with the aims of helping schools and governments realize their educational ideals
and enabling all students to actively and independently engage in learning, anywhere, at any time.

Hirotaka Koyanagi
Department Chief, Elementary andJunior High School Business
Department, School and Teacher
Support Business Company
Benesse Corporation

Mirai Seed all-in-one software for tablet education
Basic academic ability
improvement
Individualized
learning

Study material
collections

Support for independent, interactive study

Class support

Collaborative
learning

Discussion
supportEffectivenessverification

Study data collection

Development ofprogrammingoriented thinking

Centralized
management oflearning

Instruction
knowledge
sharing

Evidence-basedclass support

Benesse Report 2021

32

Nursing Care and Childcare BusinessNursing Care and Childcare BusinessShinya Takiyama
Director and Group Executive Officer
Head of the Nursing Care and Childcare Business Company
Representative Director and President of Benesse Style Care Co., Ltd.

Business environment and prospects

Steadily implementing the strategies of the Mid-Term
Management Plan while addressing the COVID-19 situation
In fiscal 2020, we added nine nursing homes and increased sales, but occupancy rates
fell due to the COVID-19 pandemic. COVID-19 is continuing to spread as of August 2021,
but we are thoroughly and consistently implementing infection countermeasures,making them our highest priority, as we steadily implement the strategies of our
Mid-Term Management Plan, such as increasing the number of nursing homes,
cultivating human resources with a focus on developing expertise, and expanding
peripheral businesses.

Opportunities
Increasing elderly population in big cities
More recipients of nursing care services
covered by nursing care insurance
Growing need for nursing carepersonnel referrals

Risks
Spread of COVID-19
Serious shortage of nursing care anddaycare staff

Growth strategy(1) Increasing the number of nursing homes(3) Expanding peripheral businesses

We are opening roughly 10 new nursing homes per year,
primarily in highly urbanized areas. In the future, we will reinforce
efforts related to our distinctive, high-end nursing homes,
increase our dominance, and expand in untapped areas incoordination with our hiring strategies, steadily increasing thenumber of nursing homes we operate.

Our strategy in the nursing care field is to steadily grow ournursing home management business while also expanding
peripheral business. Based on this policy, in June 2021, we
acquired all of the shares of Proto Medical Care, which engages
in human resource business in the nursing, welfare, and medical
fields, turning it into a wholly-owned subsidiary. We plan toachieve non-continuous growth in the human resource referralbusiness, led by Proto Medical Care. We will also work to develop“Benesse Sensing Homes,” which leverage technology, and createa “Benesse Sensing Home” method.

(2) Cultivating human resources with a focus ondeveloping expertise
In the nursing care industry, increasing retention rates isimportant to achieving stable operation. Benesse Style Care raised
wages in fiscal 2019 and established an internal certification
system for certifying expertise related to dementia, nursing
technologies, safety management, and reoccurrence prevention.
It introduced a new human resources system that linked
expertise and wages. By providing individual employees withgreater expertise, we aim to provide them with a sense of
growth, recognition that they are professionals, a stronger feelingthat their work is rewarding, and greater motivation. We believethat this will improve the quality of the service they provide andthereby enhance our competitive superiority.

A human resource business specializing in nursing andmedical care that leverages the strengths of both companies
Proto Medical Care Co., Ltd.

Benesse MCM Corp.

Owns powerful media that canbe used to recruit job-seekers
and cultivate clients

Human-based
career support

Nursing Recruitment Nav
Recruitment and job change site specializing
in nursing, welfare, and medical care.
Attracts numerous job-seekers and haslarge number of position listing

Benesse MCM
Company that leverages thehigh quality of its registeredstaff to assist with temporary
employee recruitment andjob changes for medical andnursing care specialists

Heart Pages
Free regional newspaper with information
regarding nursing care insurance andnursing care service providers

33

Benesse Report 2021

Part 1 Our Vision and Business Strategies

FOCUS

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

3

Placing importance on deep respect
for people’s individuality

Using technology to improve QOL

Benesse’s combination of nursing care and technology emphasizes improving the QOL of residents and making more time for staff members tointeract with residents, stimulating new discoveries. We use technology to support the people that provide care, constantly evolving so that we canprovide even better services.

BenesseStyle Care

Bringing together a wealth of data and implicit workplace knowledge toimprove the skills of all staff members

In 2017, we developed the Service Navigation System, a recordkeeping platform for nursing and caregiving. By digitizing and collecting dataon nursing and caregiving, we have been able not only to improve operation efficiency and prevent accidents from reoccurring, but also tofoster new realizations regarding residents. We are making further advances in technology usage, and are in
the process of preparation and development work aimed at introducing “Sensing Homes,” which utilize
sensors throughout nursing homes, in 2022.
Sensing Homes will combine the data we have accrued through our Service Navigation System withthe results of analysis of data regarding residents acquired through the use of sensors, such as data regarding
their sleep and excretory activity. AI will be applied to these data to perform analysis and make optimal carepredictions. Furthermore, we are raising the skill level of staff members across the board by sharing
information with staff whose high level of expertise and ability has been recognized with our “Majikami”
internal certification system, and by turning their implicit knowledge into explicit knowledge.
Selection to participate in AMED’s Project to Promote the Development and Standardization of
Robotic Devices for Nursing Care (Development Support)

Ken Iwaida

Benesse Style Care was selected to engage in nursing care operation system development as part of the Projectto Promote the Development and Standardization of Robotic Devices for Nursing Care (Development Support)
being conducted in fiscal 2021 by the Japan Agency for Medical Research and Development (AMED). It will
receive subsidies over the course of at least three years as it accelerates system development.

General Manager, Service
Promotion Division
Executive Officer, Benesse Style
Care Co., Ltd.

The evolution of our service navigation
FY2019 and earlier(1)
Record digitization

Nursing homes
Real time

Service Navigation
SystemStaff and residents

Alerts displayedon Service
Navigation
System screen

Nursing IoT
FY2020(2)
Utilization of records
in providing care×
AI platform+

Extracting data
Accumulated data

Nursing homes utilizing sensors

FY2021 and beyond(3)
Fusing the IoT andhuman knowledge

Analysis and prediction using
the IoT and AI

Sensors and robots

Staff and residents

expertise of “Majikami”
certified staff
Perspectives staff should use+

Care optimized forindividual customers

Benesse Report 2021

34

Berlitz Business

Berlitz

Business environment and prospects

Rapidly determining potential for achieving
profitability in fiscal 2022

Opportunities
Language learning needs are increasingaround the world due to theglobalization of businessIn fiscal 2020, in the midst of structural changes spanning several years, the COVID-19
pandemic placed further negative pressure on business results. Berlitz uses the Berlitz
Method, which has a consistently strong reputation for language learning efficacy, and ahigh level of brand recognition. However, at the same time, it has dealt with thedifficulties that come with operating in over 70 countries and regions. Furthermore, it
had fallen behind in its product and marketing digitization. Just when the product andmarketing reforms were on the point of producing returns, the global COVID-19
pandemic placed major restrictions on face-to-face lessons, overseas study, and the like.
Due to this, both sales and profits fell significantly in fiscal 2020.

Medium- and long-term economic
growth is driving an increase in thenumber of people studying abroad

Risks
Diversification and intensifying
competition in products and services
due to the shift to digital mediums
COVID-19 related restrictions on
face-to-face lessons and overseas travelfor business and study purposes, etc.

Growth strategy(1) Clarify roadmap to achieving profitability infiscal 2022
The additional structural reforms implemented in fiscal 2020
succeeded in bringing down costs in fiscal 2021 compared tothe previous year. Restructuring measures have also significantly
lowered the break-even point. Implementation of the new online
foreign language courses was completed in the first half of fiscal
2021, and we have begun offering a new program worldwide.
Through this, we aim to accelerate digital marketing andoperating reforms and to increase sales, primarily in the online
and digital areas. At the same time, we will also identify theroadmap to achieving profitability.

Break-even point (net sales)(billions of yen)
70.0

57.9

60.0

(6.1)

50.0

(5.2)

40.0

38.4
(8.3)

30.0
20.0
10.0
0.0

FY2018
Break-even point(net sales)

Franchising
initiatives, etc.

FY2021
Break-even point(net sales)(forecast)Cutting costs throughrestructuring

Classroom Education Business

ELS Business

Key online and digitization points
Establishment of a shared global platform• Instructors around the world provide classes online
platform connectivity, from customer contact point front office systems• Seamlessto back office systems• Operation automation

Product reforms• Reform Live Online class provision systemautonomous digital learning products which use AI and voice recognition• Provide(Berlitz Flex)

Marketingmarketing experts from Google, Facebook, etc.
• Recruit
Leverage shared global CRM and deploy digital marketing best practices
throughout the organization

35

Benesse Report 2021

Input

OutputUse of lesson videos
and AI for:Use of live coaching byforeign instructors for:1. Preparation
3. Review

2. Practicalconversation
practice

Part 1 Our Vision and Business Strategies

Part

3

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Environment
SocialEnhancingOperational
Resources

Governance
Benesse Report 2021

36

Corporate GovernanceCorporate governance
The Company continuously appoints both directors in charge ofbusiness execution and multiple, highly independent outside
directors. This ensures that meetings of the Board of Directors
consist of lively, multifaceted discussions that go beyond internal
circumstances and that the supervisory function of the Board of
Directors is maintained and improved. It also ensures that theCompany conducts effective audits by standing Audit &Supervisory Board Members who are knowledgeable about theCompany and by outside Audit & Supervisory Board Members
who are attorneys or certified public accountants.

Board of Directors
In principle, the Board of Directors, led by an outside director,
meets monthly to deliberate on matters important for the
management of the Company and the Benesse Group, make key
management decisions, and supervise the business execution of
the operating companies. Since 2003, the Company has
appointed multiple outside directors. Four of the Board’s eight
directors are outside directors (all of whom are independent
outside directors). By appointing multiple directors and multiple
highly independent outside directors, the Company assures theBoard’s supervisory function and executes business appropriately.

Nomination and Compensation Committee
The Company established the Nomination and Compensation
Committee as an advisory committee to the Board of Directors.
The chairman is an outside director and the majority of theCommittee’s members are outside directors. In the appointment
and dismissal of directors and of the director and president/CEO,the Committee deliberates and submits its opinion to the Boardof Directors, which makes the final decision.

The Committee also deliberates on the compensation systemfor directors and submits its opinions to the Board of Directors. It isdelegated by the Board of Directors to decide the compensation ofindividual directors.

Management Council
The Management Council is chaired by the COO and attended byheads of companies, those responsible for administrative
divisions, and individuals designated by the CEO or the COO.
Group management leaders share important issues andinformation and deliberate on important matters for the Group.

Audit & Supervisory Board
In accordance with the Audit and Supervisory Board Member
Auditing Standards, the policy of the Audit & Supervisory Board isto 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 members of the Board
who are knowledgeable about the Company, and via outside
Board members who are attorneys or certified public accountants.
The 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, andManagement Council meetings, and by exchanging opinions withsenior management. Two standing members of the Board 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
to enhance its audit system, the Company has established theBenesse Group Audit Committee (which also includes standing
members of audit & supervisory boards at subsidiaries) tostrengthen cooperation among the Group’s audit systems.

Corporate governance structure…Independent &outside…Outside

General Meeting of Shareholders
Appoints
Audit & Supervisory Board

Appoints

Appoints
Board of Directors

Nomination andCompensation Committee…InsideIndependent Auditors• Information Security
Surveillance Committee• Risk and Compliance Committee• Sustainability.ESG Committee

Reports

37

Benesse Report 2021

Chairman, CEOInternal Auditing Department

President, COO

Management Council

Benesse Corporation

Benesse Style Care Co., Ltd.

Administrative Divisions

Berlitz Corporation

Subsidiaries

Subsidiaries

Subsidiaries

Subsidiaries

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Improving the effectiveness of the Boardof Directors

Part 3 Enhancing Operational Resources

1) Questionnaire evaluation
Survey Period:

In fiscal 2015, the Company began carrying out an annual
assessment of the Board of Directors. Since fiscal 2016, thefindings of these assessments have been used to make
improvements to the Board of Directors.
In fiscal 2020, as well, a questionnaire was administered to all 14
directors and members of the Audit & Supervisory Board. Outside
experts also interviewed all of the directors and members of the
Audit & Supervisory Board. Based on the results, the Board’s
effectiveness was analyzed and the Board evaluated itself anddeliberated concerning the results. The questionnaires and interviews
found the Board of Directors 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 of Directors andcontinue increasing the Company’ s value. These issues will be
resolved through further deliberation by the Board of Directors.

March 2021

Response Format: Five-stage evaluation +comments/respondents identified by nameEvaluation items: (1) Overall evaluation of the Board of Directors(2) The composition of the Board of Directors(3) The operations of the Board of Directors(4) The quality of Board discussions(5) Information provision and training(6) Dialogue with shareholders and investors

2) Individual interviews
Survey Period:

March to April 2021

Confirmation and further examination of each person’s
responses to the questionnaire, as well as individualinterviews by outside experts about other issues.

FY2020 initiatives and future actions

FY2020 initiatives

Efforts were focused on the following items based on the results of the previous questionnaire.
In the process of preparing the medium-term management plan, in addition to the Board of Directors meetings,
members of the Board held three offsite meetings for intensive discussions where there was a lively exchangeof opinions.
• Ongoing discussions about management strategy and capital policy from medium- and long-term perspectives• Increased sharing of and discussion about non-financial information and sustainability• Ongoing precautionary discussions about risks that could impact the group as a whole

Overview of the
FY2020 assessment

High level maintained• Thorough support is given to outside directors and to members of the Audit & Supervisory Board by means ofpractices such as various types of briefings and the holding of officer study sessions. As a result, directors andAudit & Supervisory Board Members are able to put their experience and expertise to work, rendering thediscussions of the Board of Directors free, open, and constructive.
• Group strategy, the medium-term management plan, and group performance are actively discussed for the
purpose of increasing corporate value.

Issues to be further addressed• Ongoing review of the business portfolio and discussion regarding the allocation of management resources• Discussion regarding succession planning for representative directors and management compensation• Discussion regarding ESG and sustainability initiatives• Enhanced dialogue with shareholders and investors and improved feedback to management

FY2021 initiatives basedon the results of theevaluation

It was confirmed that focused efforts would be made to address the following issues.
(1) Monitor the medium-term management plan
(2) Discuss nominations and compensation(3) Discuss ESG and sustainability initiatives(4) Discuss improving diversity and inclusion(5) Enhance dialogue with shareholders and investors and improved feedback to management(6) Increase discussion time in order to facilitate the above-mentioned discussions by carefully selecting board
meeting proposals. Promote free and open discussion by increasing opportunities for dialogue among
members of the Board of Directors through participation in various events including preliminary briefingsand executive study sessions

Benesse Report 2021

38

Corporate Governance

Composition of directors and how they
are appointed
The Company employs the following method of appointing
directors in order to ensure proper supervision over managementfrom the standpoint of achieving sustained growth for the
Benesse Group.

• Number of Board members
No more than 10 directors.

• Diversity
The Board seeks to maintain a good balance among its directors,
appointing directors with diverse types of expertise and experience
without being too heavily weighted in any specific field. The
Company is appointing female directors and ensuring diversity interms of gender. The Board is also improving the effectiveness of its
supervision by appointing multiple outside directors who haveexperience in managing companies or who have high levels of
insight and expert knowledge in sectors such as global businessand IT/digital technology, in which the Company aims to grow in
the future.

• Outside directors/independence
In order to ensure proper supervision over management, at least
half of the Board is composed of outside directors, and at least
one-third is composed of independent outside directors.

• Requirements of directors
Directors, who possess the expertise and knowledge necessary toaddress medium- and long-term management issues and social
issues (see the skill matrix on p. 44), must also satisfy the following
requirements, which have been established to ensure that they
can properly handle their roles
1. Deep understanding and empathy for the corporate
philosophy of 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• Appointment process
The Nomination and Compensation Committee, which is chairedby an outside director and the majority of whose members areoutside directors, deliberates on the nomination of directors andsubmits its opinion to the Board of Directors, which then makes a
final decision. This format ensures transparency, fairness, andobjectivity in the appointment of directors.

Reasons for the appointment of outside directors and Audit & Supervisory Board Members
Directors of the Board
Katsumi Ihara

Mr. Ihara has acquired extensive company management experience and knowledge at global companies and as an outside director
at other companies. As chair of the Board of Directors and the Nomination and Compensation Committee, he is drawing on thisexperience and knowledge to contribute to the improvement of the transparency of the decision-making processes used inmanaging the Company.

Mutsuo Iwai

Mr. Iwai has acquired extensive company management experience and knowledge at global corporations.
He is drawing on this experience and knowledge as a member of the Board and the Nomination and Compensation Committee tocontribute to the improvement of the transparency of the decision-making processes used in managing the Company.

Yumiko Noda

Ms. Noda has extensive management experience and expert knowledge in finance. The Company believes she will be able to draw
on this experience and knowledge in her role as outside director to contribute to the Company’s sustainable growth and enhance
its medium-to-long term corporate value.

Kohey Takashima

Mr. Takashima has extensive company management experience and expert knowledge in e-commerce. The Company believes hewill be able to draw on this experience and knowledge in his role as outside director to contribute to the Company’s sustainablegrowth and enhance its medium-to-long term corporate value.

Audit & Supervisory Board Members
Eiichi Izumo

Mr. Izumo, formerly a partner at Deloitte Touche Tohmatsu LLC, possesses the professional knowledge of a certified public
accountant and experience acquired by working with many different companies in various roles as an auditor and consultant.
Utilizing this knowledge and experience, he actively provides opinions and recommendations on important matters for the
management of the Company in the Board of Directors and the Audit & Supervisory Board.

Miyuki Ishiguro

Ms. Ishiguro has considerable practical experience and advanced insight into corporate affairs law as a partner in a major law firm,
as well as experience as an outside officer in other companies. In the Board of Directors and the Audit & Supervisory Board, shedraws on this experience and expertise to actively offer opinions and recommendations regarding important matters associatedwith the management of the Company.
The Company therefore judges that she is capable of continuing to appropriately perform her duties as an outside audit &supervisory board member.

* Please see our 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

39

Benesse Report 2021

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Officer compensation
The Benesse Group aims to achieve sustained medium- tolong-term growth for the entire Group. We have designed a systemof compensation for executive directors that provides incentive forthe sustained improvement of corporate value by focusing not only
on short-term business results, but also on contributing to theimprovement of employee satisfaction and the organizational
culture, and on medium- and long-term business results. At thesame time, compensation for non-executive directors, including
outside directors, is composed of only basic compensation, so as

Part 3 Enhancing Operational Resources

not to obstruct outside directors’ supervision of management.
Compensation for directors is set to competitive levels
commensurate with the roles, skills, and responsibilities expected of
directors who manage the Group, based on median levels foundfor Japanese companies of similar size using externally-conductedcompensation surveys as a reference. Furthermore, compensation
for directors is evaluated by the Nomination and Compensation
Committee, which deliberates regarding the amount ofcompensation.
At the same time, compensation for Audit & Supervisory
Board Members is decided through consultation with thosemembers, and is composed of only basic compensation.

Compensation system for directors (excluding outside directors)
Fixed Compensation

Performance-based Compensation

Representative Basic Compensation
Director

50%

Bonuses

Restricted Stock
Compensation

35%

15%

Set based on expectations for the roleTakes the Company’s business performance
into accountFixed Compensation
Director

Compensation
linked to stock price

Performance-based Compensation
Restricted Stock
Compensation

Bonuses

Basic Compensation

55%

35%
Set based on expectations for the role10%

Takes the Company’s business performance
into accountCompensation
linked to stock
price

Total compensation by officer category (FY2020)
Directors

Officer Category(excluding Outside Directors)

Outside Directors

Amount of Compensation (millions of yen)Amount of Compensation
by Type (millions of yen)(excluding outside Audit &Supervisory Board Members)

Audit & Supervisory
Board Members

Outside Audit &Supervisory Board
Members

20

204

63

64

Basic Compensation

97

63

64

20

Bonuses

61

Restricted Stock Compensation

44

—
—

—
—

—
—

5

7

2

2

Number of Eligible Officers

Activities of the Nomination and Compensation Committee
Activities in 2020 and 2021 (August 2020 to April 2021)
Date
1stmeeting

August 7, 2020

Agenda Theme
1. Appointment of outside directors for theupcoming fiscal year

2nd
meeting September 4, 2020

1. Discussion regarding the organization ofBenesse HD
2. Selection of outside directors for the upcoming
fiscal year

3rd
meetingNovember 6, 2020

1. Selection of outside directors for the upcoming
fiscal year
2. CEO succession plan

December 4, 2020

1. Selection of outside directors for the upcoming
fiscal year
2. CEO succession plan

4th
meeting

Date

Agenda Theme
1. Selection of outside directors for the upcoming
fiscal year
2. Deliberation regarding the organization (roles) ofinside directors in the upcoming fiscal year
3. Disclosure of the policy used to decide on
directors’ compensation

5th
meeting

January 15, 2021

6th
meeting

March 5, 2021

1. Management structure for FY2021
2. Organization of executive officers in Benesse HD
in FY2021

7th
meeting

March 24, 2021

1. Organization of directors following the next
General Meeting of Shareholders
2. CEO succession plan

8th
meeting

March 30, 2021

1. Organization of directors following the next
General Meeting of Shareholders
2. CEO succession plan

9th
meeting

April 27, 2021

1. Payment of bonuses to Benesse HD insidedirectors

Benesse Report 2021

40

Corporate Governance

Enhancing internal control
At a meeting of the Board of Directors held in May 2006, theCompany passed a resolution establishing a system (internal
control system) to ensure compliance with the stipulations of theCompanies Act and the Ordinance for Enforcement of theCompanies Act. The latest revision of said resolution was passed ata meeting of the Board held on April 1, 2021.
In addition, the Company’s Internal Auditing Division centrally
manages the entire Group’s activities involved in the creation andoperation 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
are rooted 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 mannerthat 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 accordance with the Group’s Principles, individualcompanies 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 theirbusinesses, ensuring that their operations are carried out in an
appropriate manner and thereby ensuring compliance.
Compliance administrators are appointed at each company
and in each important business department to identify the risks
within their respective businesses and implement measures tocounteract them. In these activities, they work closely with theadministrative office in charge of compliance for the Company(Compliance Division) to devise 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 theInternal Auditing Division monitors how thoroughly complianceis 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 of incorporation 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 Risk and Compliance (RC) Committee handles day-to-day risk
management. Attended by executive directors, general managers,
and management personnel responsible for strategic businessdomains, the RC Committee analyzes key risks within the Groupand considers policies in response based on the assessments by
Company administrative divisions in charge of each type of risk
and by each subsidiary. The RC Committee then reports to theBoard of Directors on the key risks they identified and policies for
dealing with them, and risk-related measures are thenimplemented in Company administrative divisions, strategic
business domains, and subsidiaries while the Compliance Division
provides support and monitors their progress.
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
Monitoring report(RC Committee*)MonitorAssess risk
Company administrative offices,
strategic business domains,and subsidiaries assess risks andimplement measures to counter them

Execute measures
to counter risks

Report to management

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

Propose measures
to counter risks* 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

Emergency response systems

Audit &
Supervisory Board Member Hotline

Emergency Reporting Hotline(Benesse Group Hotline)
Superiors

Employees (who detect the emergency)

41

Benesse Report 2021

Analyze and identify
critical risks, consider
policies regarding criticalrisk countermeasures(RC Committee*)Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Information security
To earn our customers’ trust, we have formulated the Benesse
Group’s Policy on Information Security and Personal Information
and are working to maintain and improve our information security
and the management and protection of personal information.
Specifically, we assign a Chief Risk Officer (CRO), who also
serves as the Managing Director of Compliance and Information
Security, to lead the Compliance Security Headquarters. The
Headquarters manages the plans and status of enforcement of
information security and protection of personal information
through management personnel in each operating company. An
information security chief is appointed in each operating company,
and we have created a system to promote information security,
formulate emergency response plans, and define procedures for
dealing with incidents. We have also established an information
security surveillance committee composed of outside experts. It
regularly checks the management, maintenance, and operation ofdata and systems within the Group and aims to create a world-class
information security organization.
Information Security Surveillance Committee members

Committee
Chair
Ryoichi Sasaki

Advisor and visiting professor at Tokyo Denki
University’s Center for Research
Collaboration/Honorary president of the Japan
Society of Security Management/Director andadvisor at the Institute of Digital
Forensics/Fellow at the Information Processing
Society of Japan/Chief information security
advisor at the Board of Audit of Japan

Committee
MemberAtsuo Inomata

Professor, Osaka University of Office forInformation Security

Committee
MemberTetsutaro Uehara

Professor, Ritsumeikan University College ofInformation Science and Engineering

Committee
MemberHarumichi Yuasa

Professor, Meiji University of GovernanceStudies, Graduate School• Security measures in system operations /Strengthening our security environment
We are strengthening the operation and monitoring of oursystems and strengthening our system security withtechnological measures based on the latest information so that
our customers will feel secure and trust Benesse with theirpersonal information. We are also advised and audited by outside
experts and LAC Co., Ltd, the most trusted information security
company in Japan. We are constantly working to maintain andimprove our level of information security.

Part 3 Enhancing Operational Resources

Day each year in which all executives and employees reaffirm theimportance of information security. These activities include
morning meetings, presentations on internal initiatives, andlectures by outside specialists.
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 for
information security, focusing on personal information protection.
At Benesse InfoShell, which is responsible for thedevelopment, management, maintenance, and operation of theGroup’s systems, more stringent training is offered through a special
program. We check on attendance until all target employees havecompleted the training, and our attendance rate is always 100%.
Please see our website for detailed information regarding information security.
Information Security
https://benesse-hd.disclosure.site/en/themes/160• Third-party certification
We obtain third-party certification with the aim of maintaining andimproving our information security and our management andprotection of personal information.

Registration as a Business Approved to Display thePrivacyMark Symbol (November 2016) and Continuation of
Actions to Protect Personal Information
After being assessed by JIPDEC, the Benesse Corporation was registered asa business approved to display the PrivacyMark symbol in November 2016.
We will continue to work to maintain and improve our information
security and the management and protection of personal information andto further increase our customers’ trust.
November 2, 2016: Initial registration
November 1, 2022: Expiry date

ISMS Certification (March 2016) and Continuation of ISMS Action
Following the acquisition of ISO27001 (ISMS) certification by Benesse
Corporation School Headquarters and Benesse BASE COM in May 2015,
Benesse Holdings, Benesse Corporation (excluding some offices), andBenesse InfoShell also acquired ISO27001 (ISMS) certification in March 2016.
May 25, 2015: Initial registration
May 24, 2024: Expiry date

• Employee awareness and training
Benesse Corporation and Benesse InfoShell have designated July 7,
the day of the discovery of the personal information breach in 2014,
as Security Day. They carry out activities on and around Security

Benesse Report 2021

42

Corporate GovernanceDirectors and Audit & Supervisory Board Members (As of June 26, 2021)

Name/Affiliation

OutsideOther current positions

Independent

Newly Appointed

State of attendance
for FY2020
Board ofAudit &
Directors
Supervisory
meetings
Board

Directors of the Board
1

Tamotsu
Adachi

Hitoshi
Kobayashi

Tamotsu Adachi

Representative Director andChairman, CEO

Berlitz Corporation Chairman of
the Board

13/13

Representative Director andPresident of Benesse Corporation

13/13

Representative Director and Presidentof Benesse Style Care Co., Ltd.

13/13

Representative Director (ViceChairman of the Board), Fukutake
Foundation
Director of efu Investment Limited
Representative Director of
Minamigata Holdings Ltd.

13/13

Outside Director of Hitachi, Ltd.

13/13

Deputy Chairman of the Board at
Japan Tobacco Inc.
Outside Director of TDK Corporation

11/11

Representative Director andChairman of Veolia Japan K.K.
Outside Director of Idemitsu Kosan
Co., Ltd.

–

Representative Director andPresident of Oisix ra daichi Inc.
Outside Director of
CARTA Holdings, Inc.

–

• Member of the Nomination andCompensation Committee

2

Hitoshi Kobayashi

Representative Director andPresident, COO

3Shinya Takiyama

Director

ShinyaTakiyama

Hideaki
Fukutake

4

Hideaki Fukutake

Director Non-executive Director• Member of the Nomination andCompensation Committee

5

Katsumi Ihara

Director• Chairman of the Board of Directors• Chairman of the Nomination andCompensation Committee

KatsumiIhara

MutsuoIwai

6

Mutsuo Iwai

Director• Member of the Nomination andCompensation Committee

7

Yumiko Noda

Director• Member of the Nomination andCompensation Committee

8

YumikoNoda

Kohey
Takashima

Kohey Takashima

Director• Member of the Nomination andCompensation Committee

Audit & Supervisory Board Members
9

13/13

17/17

Audit & Supervisory Board Member ofTokyo Individualized Educational
Institute, Inc.

13/13

17/17

Representative of Izumo CPA OfficeOutside Audit & Supervisory Board
Member at Torii PharmaceuticalCo., Ltd.
Outside Audit & Supervisory Board
Member of Lasertec Corporation

13/13

17/17

Partner at the law firm of Nagashima
Ohno & Tsunematsu
Outside Audit & Supervisory Board
Member of Lasertec Corporation

12/13

16/17

Yoshinori MatsumotoStanding Audit &Supervisory Board Member

10

YoshinoriMatsumoto

Naoto
Saito

Naoto Saito

Standing Audit &Supervisory Board Member

11 Eiichi Izumo
Audit & Supervisory Board Member

12Eiichi
Izumo

43

Benesse Report 2021

MiyukiIshiguro

Miyuki Ishiguro

Audit & Supervisory Board Member

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Necessary expertise and experience
CareerLeadership

Industry expertise

Management

Education

Accounting

Legal

Nursing care

Strategy
DigitalGlobalFinance

In 1977, joined Mitsubishi Corporation. Went on to serve as a Partner at McKinsey & Company,
Inc. Japan, President and CEO of Japan Lease Auto Co., President and CEO of GE Fleet Services
Co., Managing Director and Japan Representative of Carlyle Japan LLC, and in other positions.
Since 2003 he has been an Outside Director of the Company, a position which he has heldintermittently for a total of 11 years. Since 2016 he has been the Company’s Representative
Director and President, CEO. He has served in his current role since April 2021.
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 servein. Went on to lead the Company’s Corporate Planning Division, Overseas Business Development
Company, Zemi Business Company, etc. Currently serves as Representative Director and President,
COO of the Company, and as Representative Director and President of Benesse Corporation.
Joined the Company in 1996. Has been Representative Director and President of Benesse Style
Care Co., Ltd. (incumbent) since 2013, and a Director of the Company since 2016. Currently aGroup Executive Officer.
In 2000 joined KEYENCE CORPORATION. In 2006 joined SMS CO., LTD., and subsequently became
Division President of Nursing Care and Medical Care, and Media at that company. Since 2009, hasbeen Director of efu Investment Limited. After having served as an Outside Director of Benesse
Corporation, he has been a Director of the Company since 2014. In 2018, he became Director ofKings Plant Barn Ltd., a position he currently serves in. At present, he is a Non-executive Director
for the Company.
In 1973 joined Mitsui Knowledge Industry Co., Ltd. After joining Sony Corporation in 1981 he hasserved as Group Chief Strategy Officer (CSO), Chief Financial Officer (CFO), and Executive Deputy
President, then as Representative Director and President of Sony Financial Holdings Inc., and later
also as Director and Chairman of the same company. Starting in 2018 he has been an outside
director at Hitachi, Ltd., and in 2019, he became a Director of the Company.

Joined the Japan Tobacco and Salt Public Corporation in 1983. Served as Director and Managing
Executive Officer at Japan Tobacco Inc., Executive Vice-President at JT International S.A., andRepresentative Director and Executive Vice-President at Japan Tobacco Inc. In 2020, he took up
the post of Deputy Chairman of the Board at Japan Tobacco Inc. and Director at the Company.

Joined Bank of America Corporation, Tokyo Branch, in 1982. After serving in positions such as
Deputy General Manager of London branch of the Long-Term Credit Bank of Japan, an advisory
partner with PwC Financial Advisory Services, Deputy Mayor of Yokohama City, and a senior
fellow at the Tsinghua University Research Center for Japanese Studies, she became
Representative Director and President at Veolia Japan K.K. in 2017, then Chairman and
Representative Director in 2020. She became a Director of the Company in 2021.
Joined McKinsey & Company Inc. Japan in 1998. Became Representative Director and Presidentof Oisix Inc. (now Oisix ra daichi Inc.) in 2000. Became the Director of the Japan Wheelchair
Rugby Federation in 2018. Became Outside Director of CARTA Holdings, Inc. in 2020. Took up theposts of Vice Chairman of Keizai Doyukai (Japan Association of Corporate Executives) andDirector of the Company in 2021.

In 1977, joined Daio Paper Corporation. In 1991, joined the Company, and went on to serve as
Manager of the General Affairs Department, as Manager of the Human Resources Department,
and in other positions before becoming a Corporate Executive Vice President in 2003. Since 2008,
has been a Standing Member of the Audit & Supervisory Board.
Joined the Company in 1986. After working in the Finance & Accounting and Auditing &Business Administration Departments in the Group, he later became General Manager of the
Finance & Accounting Division, General Manager of the Internal Auditing Division, and thenGeneral Manager of the Business Administration Division. In 2015, he became an Audit &Supervisory Board Member at Tokyo Individualized Educational Institute, Inc., and in 2017, hebecame a Senior Executive Officer of the Company, before also being appointed as a Standing
Audit & Supervisory Board Member starting in 2019.
In 1995 joined Tohmatsu & Co. (now Deloitte Touche Tohmatsu LLC). Since 1998, has beenregistered as a certified public accountant. In 2010, became a Partner at Deloitte Touche
Tohmatsu LLC, and after leaving that position, became Representative of Izumo CPA Office in2015, a position he currently holds. Since 2015, has been a Member of the Company’s Audit &Supervisory Board.

In 1991, registered as a lawyer and joined the firm Tsunematsu Yanase & Sekine (nowNagashima Ohno & Tsunematsu). Since 1999, has been a partner at that firm. Since 2017, hasbeen a Member of the Company’s Audit & Supervisory Board.

Benesse Report 2021

44

Corporate Governance

Messages from the Outside Directors

We will further enhance the effectiveness of the Board of
Directors and support the growth of the Group
The Board members also convened three times for intensive
in-person discussions about the medium-term management plan.
In fiscal 2021, we will be monitoring the plan’s progress and plan
to discuss any issues that come up during the discussion process,such as optimizing the business portfolio, measures to improve
capital efficiency, and branding.

Clarifying issues and further improving Board
effectivenessKatsumi Ihara
Outside Director
Chairman of the Board of Directors

Leveraging the Board of Directors’ diverse
experience and knowledge to ensure we
fulfill the Medium-Term Management Plan
During my career at the Sony Group, I supervised various business
operations and gained extensive experience working withoverseas joint venture firms as well as with M&A and post-merger
integration. I also served as the president and chairman of a listedcompany. Myself and all of the outside directors at Benesse bringan extremely wide range of experience. The role of the outside
directors is to provide advice to executives from various
perspectives that are not framed by the organization’s internal
logic. Our input helps ensure the business plans and medium-term
management plans are fulfilled and speeds up the progress
toward attaining the Company’s objectives. As Chairman of theBoard of Directors, I believe it is my duty to bring out each Board
member’s full experience and knowledge.
Prior to each Board meeting, Benesse’s directors participate
in a Preliminary Briefing Session to understand the background of
the items to be discussed and join in an Executive Study Group to
discuss important business themes. Through these meetings andother activities, the directors are able to engage in fully informed
business discussions. Although the pandemic conditions bynecessity led to the Board meetings being conducted remotely
and prevented us from directly visiting business sites in fiscal 2020,
we were still able to effectively address important topics, including
formulating the medium-term management plan and revising themanagement structure.

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Benesse Report 2021

The fiscal 2020 survey on the Board of Directors effectivenessshowed a high evaluation overall, but some areas had mixed
results. We engaged a special external agency to discuss various
issues with each of the directors, and the Board members thenheld several in-depth meetings to deliberate the agency’s findings.
Issues identified in the effectiveness evaluations included theneed to discuss representative director evaluations, remuneration,and the development of successors as well as ESG andsustainability initiatives, diversity and inclusion, and thethoroughness of dialogue with shareholders and feedback to
management. We also understood that we need to create more
opportunities for Board members to communicate with one
another. These items will be priority topics for the Board of
Directors and the Nomination and Compensation Committee.

Cultivating next-generation
management human resources andvisualizing the HR pipeline
Fiscal 2021 is the first year of the Benesse Group medium-term
management plan. To ensure the most effective management
structure to enable quick responses to changes in the businessenvironment and to generate a V-shaped earnings recovery, we
decided to give President Kobayashi broader authority, based on his
direct leadership at our business sites, and to have Chairman Adachi
focus on leading the Group’s medium- and long-term strategies.
As chairman of the Nomination and Compensation
Committee, in fiscal 2021, I intend to examine succession plans todevelop the next generation of managers. I will also be focusing
on creating a visualization scheme for the human resources
pipeline for top management.
Benesse has a wonderful corporate culture that strongly
adheres to its corporate philosophy. I will work to continue improving
the effectiveness of the Board of Directors and the Nomination andCompensation Committee so this culture will continue to flourish
as the Company grows and expands into new business realms.

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Forming a strong business foundation for contributing
to a sustainable society
Expanding possibilities by incorporating
an artistic sensibility

Mutsuo Iwai

As someone from outside the company, one piece of advice I cangive is that sometimes when major changes occur it’s important tostep back to take a wider view and look at the bigger picture. Be
curious even about things that don’t seem to have any connection
to yourself, and ask “why is that?” Seek out new experiences, andtry to unlearn things that you have learned previously. Sometimes
you can find new solutions that you couldn’t see before.
In that sense, I think the Group’s active development of
art-related activities has huge potential. I also think thatmanagement could be even more creative if, rather than following
just the numbers and data, it could incorporate an element ofartistic sensibility into its thinking.

Outside Director

The Board functions effectively as a place fordemocratic dialogue
The dialogue that we have between management and humanresources is one of aspects that I particularly cherish. A core chainof command is essential for an organization, but dialogue that issolely top-down limits the company to the abilities of the top
management. I firmly believe that democratic dialogue is what
creates the most value. From this perspective, I believe Benesse’s
Board of Directors is a place where real dialogue takes place.
When we were formulating the medium-term management
plan, our approach and review process was to make decisions
based on the input from everyone on all of the elements. Points
that I think need particular attention include the global strategy
going forward and the Group’s ability to advance that strategy as
well as the status of both the corporate brand and the productand service brands.
Our focus in the area of ESG is on our human resources,
which are critical to our business. To strengthen our humanresources, we are enhancing the education and training programs,
and we are using the Group’s area of specialty in fostering alearning culture that encourages each person to build their skills intheir daily activities to become the best version of themselves.

Sustainable growth from a balance ofstrength and kindness
In the year since I was appointed director, I have seen how all of
the Company’s employees in their explanations and reports on
various projects earnestly put into practice the corporate
philosophy of “well-being.” My impression is that at Benesse thephilosophy is not just a slogan, it’s deeply embedded into the daily
activities of all employees.
Increasing interest in sustainability and social issues aroundthe world is leading to a reconsideration of the idea of shareholder
supremacy and new perspectives on the reasons companies exist
and the value they create. In this way, it seems as if society is now
catching up with the Group and its practice of “well-being.”
Raymond Chandler’s great fictional detective Philip
Marlowe once said, “If I wasn’t hard, I wouldn’t be alive. If I
couldn’t ever be gentle, I wouldn’t deserve to be alive.” I believethat sentiment is reflected in the Group’s management.
Commanding market share and earning power allows theCompany to survive fierce competition. Underlying that strength
is the feeling of gently supporting each customer’s growth andsecurity. In my role as outside director, I will continue to support
management efforts to achieve sustainable growth through abalance of strength and kindness.

Benesse Report 2021

46

The Benesse Group DX Strategy

Enhancing the Group’s
digital technology capabilities
to continue offering products
and services meetingcustomer needs
Hidetomo Hashimoto
Executive Officer, Chief Digital Officer,
Managing Director of Group DX Strategy

The Benesse Group is advancing its digital transformation (DX) as the central strategy to its medium-term management plan to
evolve the core businesses and expand into new fields. The Group established the Digital Innovation Partners (DIP) in April 2021
to accelerate the DX in all of the Group’s business divisions.

Group-wide DX on the Group level andfor the individual business units
The Benesse Group’s diverse businesses each have their own
unique customer base, business model, and competitiveenvironment. Each business therefore must undertake its own
form of DX with a detailed strategy matched to its uniquecharacteristics and current level of digitalization. At the sametime, certain aspects must be approached on the Group level,such as the personnel training and system infrastructure
construction needed for DX.
With this in mind, we are following two main tracks toadvance our DX: introducing DX tailored to each bussiness’
phase of digitalization and improving the organization’s overall
DX capabilities. Each bussiness’ level of digitalization will be
categorized into one of three phases of digital shift, integration,or disruption, and the application of the digital technologies to

DX strategies tailored to business characteristics

Infant /family lifestyleOff-campus
learning

Digital shift

Integration

Disruption

Digitalize existing
businesses

Integrate online andoffline services

Convert the businessand profit models

Systematically digitalize services
and business processes toenhance quality and productivity

Provide integrated online andoffline customer services

Develop new models capable ofaccommodating market
environment changes anddisruptive innovation

SchoolUniversity student /working adults
Nursing care /childcare

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Benesse Report 2021

Part 1 Our Vision and Business Strategies

Part 2 How We Create Valueeach product and service will be based on the bussiness‘ market
and competitive environments. Improving the Group’s overall
DX capabilities will entail addressing the various issues across theGroup to enable us to harness the digital technology forsustaining growth, including training DX human resources,
strengthening our partnerships with specialists inside andoutside the Group, and preparing the organizational structureand system infrastructure for digital operations.

New Group-level unit for planning andpromoting DX strategies
The Digital Innovation Partners (DIP) unit was created in April 2021
to direct the steady advancement of the Group’s DX. Combining
the Digital Department, IT Department, Human Resources
Development Department, and a Consulting Department for DX
promotion led by the Chief Digital Officer (CDO), the DIP is
directing all aspects of the DX strategies for all departments andGroup companies from preparing strategies to allocating resources
and investments and implementing specific DX measures.
The Benesse Group is accelerating its DX strategy byimplementing specific priority measures, led by the DIP, on theGroup level and for each of the individual business units.

Part 3 Enhancing Operational Resources

A corporate group always providing the bestproducts and services for its customers
The ultimate goal of our DX strategy is to “continue being acompany that always provides the best products and services.”
The Group’s products and services are highly regarded in themarket, but the advances in digital technology are creating a
steady stream of new services and market disruptors. These
conditions mean that there is no guarantee that our methods andservices will necessarily continue to be the best in the market.
We want to use DX to enhance our ability to quickly
respond the moment that a customer thinks of a new type ofservice that would meet their need. Digitalization is a means toachieving that, but it cannot be achieved by digitalization alone.
The goal we need to shoot for is to use our customer base andthe knowledge and know-how in the nursing care and education
fields that we have created in our past businesses and combine
them with new technologies, functions, and business models tocontinue providing the best value on the market.

DX promotion scheme
Management

Group infrastructure

Corporate system

Business system

Benesse Holdings

Operating companies

Strategy and Resource Allocation

Executive functions

Digital Innovation Partners

Benesse Corporation (Corporate)
DX Promotion Department

Group DX Strategy Department

DX Human Resources Development
Department• Resource and investment allocation, R&D

Corporate DX Promotion Department• DX consulting (including on data utilization)

Group Infrastructure Strategy Department• Group infrastructure and information
security development• Development governance, project risk audit• System maintenance and operation(Benesse InfoShell)

Human resource
allocation
Project risk
management

Benesse Corporation (Company)
School and Teacher Support Business Company,
Digital Business Development Department
Off Campus Learning Business Company,
Digital Business Development Department
Kids & Family Business Company
Kodomo Challenge Digital Business
Development Department

Benesse Style Care (Corporate)
Nursing Care and Childcare Business Company
Information Planning Department

Benesse Report 2021

48

The Benesse Group DX Strategy

Specific measures

DX promotion according to
the business phase of digitalization
Dispatching in-house consultants toaccelerate the digital shift at each site
We are advancing the DX for each business with initiatives
geared to three phases of digitalization.
All businesses are digitalizing non-digital services andbusiness processes in stages to bring about a digital shift that willstabilize quality and improve productivity. For businesses in fields
where digitalizing products and services face special challenges,
DIP is dispatching highly skilled DX human resources to help
them make a successful shift.

The three main areas in which DIP is providing support aredata utilization, digital marketing, and operating efficiency
improvement. Employees who are deeply familiar with thespecific issues of each business site are acting as consultants to
support digitalization at the business divisions. The ultimate
objective of the consultation is to help each business site gain
the organizational capability to diagnose its specific needs sothey can proceed with their digital shift independently. Eachbusiness division’s results will also be shared with other divisions
to boost the overall effectiveness of our organizational abilities.

Digital shift projectGroup DX Strategy Department

Business Division

Dispatch in-house
consultant

Data utilization
DX specialists
in all fields

Digital marketing
Operating efficiency
improvement

Tailored to organization’s
initiatives to boost its
DX capabilities

Building foundations for data utilizationin each business
Once businesses and services bring about the digital shift, they
will then begin focusing on making effective use of thedigitalized data. We are therefore also working to build thefoundations that will enable the business divisions to makeeffective use of the data.
We will explore how the data can be used to grow theOn watch for disruption using industry
landscape maps
The Group’s wide range of businesses in various fields
presents a high risk of exposure to digital disruption. We are
therefore constantly on “disruption watch” by objectively
assessing the changes in the competitive environment and
our Company’s strengths.
We use desk research to identify new service trends in theindustry and with venture firms around the world, and create
industry landscape maps for each business area and category.
Business managers and on-site digital managers use the maps tomonitor for signs of change in the landscape, such as what kindof players are increasing in which categories and where capital is49

Benesse Report 2021

Specialists provide project support tailored to businessneeds and remain until a division has adequate ability to
execute on its own

Consultation for each business division to identify
organizational capabilities and train human resourcesbusiness and then experiment to see what works. When resultswith potential are found, IT infrastructure will be created tocollect and analyze data, human resources will be trained toanalyze the data, and support will be provided to create andstandardize the analysis environment and processes so that thebusiness divisions become fully capable of utilizing the data andoperating the business on their own.

being directed. When a potential disruptor arises, we willconsider building a relationship, such to co-create, collaborate,and cooperate in a business. We are also exploring markets andservice fields where we can move in as a disruptor.

Industry landscape map

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Specific measures

Improving the organization’s
overall DX capabilities
Systematic personnel allocation anddevelopment using visualization of digital skills
DX human resources will be developed using a system of six
types of work content and three skill levels for each type of work.
Individual skill levels will be assessed, including evaluations using
external assessment standards, and the related data will be input
to a management system. We systematically assign, train, and hireDX human resources based on an accurate identification of how
many personnel with what specialty and skill level are needed inwhich department. If a gap is found, for example, between ourcurrent capabilities and the specialties and skill levels needed fora certain business area, we will boost our organizational

capabilities by training in-house employees or hiring
professionals from outside the organization. To boost individual
employee skills, we are also currently developing several original
training programs based on case studies in each business.
Clearly identifying the skills needed for each business site
will give us greater flexibility to allocate DX human resources
within the Group. The possibility to transfer across businessdivisions and departments is also beneficial for motivating andrecruiting DX human resources. Benesse Corporation is currently
using this system for its employees, and we plan to expand it toother operating companies in the future.

DX human resources development measures

Six types of work content

Specialty definitions

Define six specialties required for Benesse DX

Skill map

Create a skill map for each specialty, chart the required skill level

Assessments

Use skill assessment services to ensure objectivity and gauge market value

Management

Use a talent management system to assign, train and recruit human resources

Training programs

Introduce an original program using actual case studies from our Company,
and use Udemy for general knowledge

Redesigning system architecture as
the business evolves
As our businesses have evolved, the systems that were designed
and developed for specific services have become outdated
legacy systems, with some systems even becoming
technological liabilities. As we redesign our system architecture,
we will create even stronger coordination between the System
Development Department and the business divisions. Businessplanning and system planning will be combined together, andwe will gradually redesign the system architecture as ourFurther enhancing development
governance effectiveness
System development governance will also be enhanced, which
will increase development quality and improve our ability toquickly provide stable services. For this purpose, we have createda specialized team to examine the system architecture suitability
and identify any risks that arise with the DX. The team monitors

Planning

Development
andmanagement

Engineering

Digitalmarketing

Data

Designbusiness plans evolve. The system infrastructure will be migrated
to the cloud environment, which will reduce costs while enabling
us to flexibly respond to change and improve system quality.
We will also implement more sophisticated information
security measures based on the zero trust model as we continue
making greater use of the cloud environment, software as aservice (SaaS) and application service provider (ASP), andcollaboration with external partners as well as telecommuting
and remote work.

the progress of the important development projects within theGroup to identify and assist in responding to any issues or risks.
The specific experiences and the expertise the team gains
during its activities will also be shared throughout the Group to
train project leaders and further enhance our DX organizational
capabilities.

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50

Human CapitalStrengthening our human resources and organizational capabilities throughemployee development, based on the desire to serve our customers

Yuko Onizawa
General Manager ofGroup Human Resources
Benesse Holdings

Our desire to support people’s well-being (Benesse) is thefundamental idea behind the products and services we provide
to our customers. In order to make this possible, we would like toassist our employees in taking care of their own well-being, andto that end, we would like to have personnel systems andpersonnel policies which support this objective.
It is nothing short of rewarding when each of the Benesse
Group’s employees feel as though they are helping to solve theproblems of customers through their work, if only slightly, which
in turn is helping to address social issues. Our goal is for each
employee to fully demonstrate his or her abilities, and to link theaccumulation of small daily challenges to their individual growth
and to the growth of our business. “Management is centered on
people,” and “When our employees in the field are bursting withvitality, that is precisely when our business grows.” These are themessages that top-level management constantly sends out, andI believe that it is the responsibility of personnel departments tobring them to fruition.
In today’s rapidly changing environment, which is centeredon digital transformation (DX), personnel departments areworking to create a more comfortable work culture, whichmeans an environment that can create customer value, througha focus on the following three points.
The first point is getting a learning culture to take root as
our corporate climate. Employees’ desires to “provide these kindsof services to our customers” and “offer more of these sorts ofthings” will be the starting point, and they will realize that they51

Benesse Report 2021

will need to develop certain abilities and gain more knowledge
in order to do so, which will lead to learning. I call upon all
employees to strive for a state of affairs in which personnel
development improves organizational capabilities, which thenleads to the creation of customer value and business growth. In
particular, in the area of DX support, which is becoming increasingly
important, we are increasing opportunities for skill development
in cooperation with Digital Innovation Partners (DIP).
The second point is implementing work style reforms thatare suited to this era. Within the Group, the COVID-19 pandemic
has had a major impact on how employees work. Benesse
Corporation has standardized hybrid work that combines remote
work and in-office work to guarantee safety and security for our
employees, while also experimenting with more productive ways
of working by balancing tasks that can be completed byindividuals and tasks which emphasize teamwork. In addition,
the entire Group is examining ways to increase the flexibility ofwork styles as the job types, preferences, and lifestyles ofindividuals grow more and more diverse.
The third point is fostering a sense of unity between
employees and management, creating a more open workplace,and improving engagement. As mentioned in the previous
Message from the CEO, the Group believes that frontline
employees who face customers are the sources which create
value. It has been a matter of course for us to take the voices andperceptions of each and every employee, and reflect them in our
products and services. However, now that the businessenvironment is changing rapidly and it is difficult to foresee thefuture, we aim to increase the awareness of each and every
employee that they are participating in the management of thecompany by gathering their wisdom and firmly incorporating
mechanisms into management to link their insights to businessproposals and operational reforms.

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Executive development
Implementing a program to train
next-generation leaders
As part of our measures to strengthen our pipeline formanagement human resources, we are implementing a program
to train the next generation of leaders. We have shortlisted about
100 candidates from across the Group, and are continuing to
implement the program under a development plan thatcombines induction courses, external training, and coaching todevelop human resources with a big-picture view who can drive
the growth of the Benesse Group over the medium to long term,even in a rapidly changing business environment.
In this training program, business proposals made by theparticipants are turned into projects and considered forcommercialization moving forward, among other initiatives
which will lead to business growth.
Regarding the development of the next generation ofleaders, we are making steady progress with succession throughactions such as sharing information with management,
establishing regular opportunities to conduct reviews fromvarious perspectives, and further developing these humanresources by appointing them to important jobs.

Fostering a learning culture
Training young human resources(Benesse University (programs))
We launched the “Benesse University” programs in fiscal 2018,
mainly targeting young employees in their 20s and early 30s, aspart of our measures to provide employees with learning
opportunities and support their growth. About 80 people in total
from nine Group companies have participated up to this point.
Since fiscal 2021, the programs have also allowed employee
participation via open recruitment in addition to on-site
recommendations, providing opportunities for employees tolearn independently.
These training programs offer lectures by senior
management and outside lecturers, leadership development,
and action learning that challenges participants to solve
problems in their current jobs from a higher perspective. By
having participants present their results to Benesse Holdings
management at the end, the programs attempt to develop“proactive action-takers.”

Part 3 Enhancing Operational Resources

As for the status of the participating employees after
program completion, more than 70% of them have beenpromoted to management and other leadership positions.
Chances for each employee to grow through friendly
competition across the Group stimulate their desire to grow, leadto the formation of intrinsic motivation, and serve asopportunities for them to reconsider the meaning and purposeof their work and to elevate their perspective on the Group’s
contribution to society to a higher level.

Making our philosophy widespreadthrough organizational learning opportunities
Our Group sets the corporate philosophy of Benesse (well-being)as the linchpin for our business operations. It is our belief thateach and every employee having a solid understanding of ourphilosophy and being able to put it into practice will lead to theprovision of high-quality products and services in our business.
At each Benesse Group company, in order to instill their own
respective philosophies and value standards, they are
implementing initiatives such as verbalizing their value standards
and making their employees feel ownership through training
and practice.
As an example, at Benesse Style Care, which operates our
Nursing Care and Childcare Business, we have compiled ourcode of conduct in the form of the Benesse Style Care
Declaration. The code of conduct is established as part of ourcorporate climate through regular learning opportunities, suchas having all employees read the code of conduct together oncea year and reflect on each other’s experiences with episodes
from the actual workplace.

Developing and training DX capabilities
In order to successfully “evolve core businesses” and “expand into
new fields,” as are set forth in the medium-term management
plan, improving our organizational DX capabilities anddeveloping DX human resources are urgent challenges for us.
In order to improve the organizational capabilities forpromoting DX in Benesse Corporation, we are working tounderstand the current state of literacy by conducting DX
knowledge assessments for all employees and to improve their
specialized skills through training. In addition, we are working to
improve the DX capabilities of the entire Group by expanding
the DX training conducted at Benesse Corporation to otherGroup companies.
Refer to pages 47–50 for more information on our DX strategy.

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52

Creating a comfortableworking environment
Promoting diversity
The Group is striving to practice management based on the
Benesse Group Human Rights Policy Statement, which seeks torecognize diversity in human resources, irrespective of qualities
such as nationality, ethnicity, gender, and age, and to make bestuse of those differences.
With regard to promoting women’s participation andadvancement in the workplace, Benesse Corporation introduceda child care leave system in 1988, before the Child Care andFamily Care Leave Act was enacted, to prevent employees fromleaving the company due to childbirth, and has been revisingand operating the system for over a quarter of a century, taking
into account the actual utilization of the system by employees
and their opinions. Currently, we have moved past the “helping
employees to balance work and family life” stage and arefocusing on “providing career support while employees arebalancing work and family life,” with the percentage of women in
management positions at 34% in fiscal 2020. In addition, we areaiming to thoroughly implement systems and measures such as
child care and nursing care as personnel policies for all
employees, including men. We will continue to work to
Acquired Eruboshi certification
The Eruboshi certification, based on the Act on the Promotionof Female Participation and Career Advancement in the
Workplace, is a certification system which is issued to companies
that meet certain standards and have excellent conditions
related to the promotion of women’s participation andadvancement in the workplace. In April 2016, Benesse
Corporation was granted “Grade 3,” the highest grade attainable.

appropriately respond to the changes in career awareness andvalues regarding work styles of our increasingly diverse
employees, in order to ensure that a varied range of humanresources will be able to flourish in the future.

Reforming our work styles and offices toaccomplish both infection prevention andbusiness continuity
In response to the spread of COVID-19, the Benesse Group is
promoting hybrid work, a combination of remote and office
work, in order to reduce the risk of infection among employees
while conducting efficient business operations.
In addition to taking measures to prevent infections in theoffice, such as having employees wear masks, encouraging handwashing, and installing acrylic panels and making disinfectant
available, we are also reevaluating our ideas about what offices
should be, and building offices from the perspective of creating
value with the team, thereby devising ways to create high-quality
products and services even in a hybrid work environment.
Specifically, at Benesse Corporation, senior management
and frontline employees have launched a project which brings
them together to consider what offices should be like, goingback to their raison d’etre (their purpose), and reaffirming theircommon understanding that the office is a place to “create value
with the team (co-creation).” As a result, we have reduced officespace by 40%, while simultaneously increasing the number ofteam-building and collaboration spaces, by changing to a freeaddress system where employees can choose the mostappropriate location according to the nature of their work inorder to increase productivity. Through these efforts, we will
create value (co-creation) in teams, and further aim to create
value that will make the well-being of our customers andemployees a reality.

Recognized as a 2021 Certified Health & Productivity Management Organization (White 500)

Michiko Kobayashi
Human Resources Division
Project Leader
for Health Management
Benesse Holdings

The Benesse Group announced that it would work to improve
employee health maintenance for its employees and their families,
with the aim of creating a workplace where employees can workin a vigorous and enthusiastic way, and has been implementing
a variety of health maintenance and promotion measures, withmanagement and frontline employees acting in tandem. In fiscal
2020, the Benesse Group launched Group-wide online programson exercise habits, mental health, and work and nursing care

53

Benesse Report 2021

(family health), and 1,760 employees participated. Sixty percentof the participants have successfully made new initiatives andhealth measures into habits, demonstrating that triggers canchange awareness, change behavior, and change habits.
One of the reasons for this is connections with peers. We
set up interactive communication opportunities in all programs
so that participants would be able to interact with each other andfeel connected to their peers, even amidst the COVID-19
environment, and the satisfaction rate for all programs exceeded
95%, which was an excellent rating. In
recognition of these efforts, Benesse wascertified as one of the corporations in
the 2021 Certified Health & Productivity
Management Organizations
Recognition Program (White 500).

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Fostering a culture of openness

Part 3 Enhancing Operational Resources

B-Stage, where all group employees participate openly

A Group-wide system for working on proposals
All
companies

Benesse’s organizational culture and DNA of achieving solutions
to customer issues and business problems through ideas
developed in the field has been passed down since it was
founded. The awareness of our frontline employees concerning
the issues they perceive while interacting with customers, as wellas what they think needs to be improved in their work, has been
the driving force which has empowered Benesse up to this point.
In recent years, amidst rapid changes to societal demands
and the business environment, the importance of the field,
which is the front line of our business, has become even morevital. In fiscal 2021, in order for the Benesse Group to remain
indispensable to the world, we launched “B-Stage,” a system formaking new business and operational reform proposals, as amethod for bringing management and frontline workers
together to create the next Benesse.
B-Stage is available to all employees of the Group, who can
propose various solutions and ideas which transcend theboundaries of their company, division, or work responsibilities.
We hope that through this proposal system, each and every
Group employee will have a sense that all employees participate
in management, and that this will foster a free and open-mindedorganizational culture.

External
partners

Ideas fornew business andoperational reforms

Parties outside
the company

Groupcompanies

Corporate
Headquarters

Making Group-wide efforts to address issues
which arise in day-to-day operations, andcannot be solved solely on the frontline

Disclosure of job satisfaction scores and our current initiatives

Tetsuya Matsushita
Human Resources Division
Benesse Holdings

In order to implement people-focused management, theBenesse Group has conducted organizational assessments forover 20 years. We are incorporating the PDCA cycle into ourgroup and company management systems to make the stateof the organization visible and improve issues through actions
such as reporting on results at Board meetings and reflecting
them in our business plans. Our organizational assessments
consist of the categories of “management,” “organizational
management,” “job satisfaction,” and “compliance,” and the job
satisfaction score has risen every year for the last three years.
Notably, in 2020, amidst the COVID-19 pandemic andsignificant environmental changes, we have been working to
be familiar with the challenges faced by our customers, solve
problems, and create new value. As a result, employees havebecome aware of their own growth and realized that they are
valuable to customers and society, which has led to anincrease in job satisfaction.
We will continue working to resolve organizational issues
and make improvements at each company through various
measures in order to promote a learning culture, a comfortableworking environment, and a culture of openness, with the aimof further improving job satisfaction.

Employee job satisfaction score
Average score per category(%)

Response rate

100

87.0

89.0

92.7

80

64.7

65.4

68.2

2018

2019

2020

60
40
20
0

(fiscal year)* Category average for job satisfaction-related questions, such as motivation to work andlevel of satisfaction, in the organizational climate survey

Benesse Report 2021

54

Intellectual Capital

Combining our accumulated knowledge and expertise withdigital technology to create new value
Diverse intellectual capital asa foundation for value creation

Turning intellectual capital into social assets

Leveraging intellectual capital for the growthof the Benesse GroupIn the 1960s, the Benesse Group began offering mock exams andcorrespondence courses. Since then, the Group has gone on to
expand its business into many other fields including languages
and nursing care, thereby creating new markets. The marketingknowledge and expertise in product and service development that
we have acquired along the way in these different fields constitutevaluable intellectual capital for the Group. We are currently
engaged in a variety of R&D activities including business researchand questionnaire surveys, through which we will create superior
products and services while growing our intellectual capital.
The Benesse Group has also accumulated big data fromchildren’s learning histories and residents’ life records, in addition
to a wealth of implicit expertise-type knowledge based on longyears of business operations. Using advanced digital technology
to analyze, verbalize, and systematize this big data and implicit
knowledge, we aim to create new value that drives the growth of
the Group.

Benesse Style Care embodies “sharing of knowledge with society,”
which has been positioned as one of the Group's key tasks. It
operates Kaigo Antenna, a portal site that supplies busy nursing
staff nationwide with information they can trust.
Kaigo Antenna is rooted in the know-how and expertisedeveloped by Benesse Style Care during its over 25 years of
nursing home management. It provides information regarding
the Benesse Method and previously confidential know-how
regarding nursing technologies. It also contains information on
seminars and materials for use in recreational and other activities,
for which there is a high level of demand among nursing staff.
First published in September 2019, it now has registered
recipients in every one of Japan’s prefectures, and access rates
are rising. We aim for Kaigo Antenna to serve as an invaluable
resource for anyone experiencing difficulties in the nursing field
and to improve the overall quality of the nursing industry by
sharing various knowledge not only with nursing staff across thecountry, but also with all those involved with nursing, including
those providing nursing care to family members at home.

Breakdown of Group R&D expenditures(Benesse Group, FY2020)
Company-wide

Others¥74 million¥21million
Nursing Care andChildcareBusiness¥3million
Global Kodomo
Challenge
Business¥181million

55

Benesse Report 2021

Total

¥

1,609 million

Education Businessin Japan¥1,329 million
Kaigo Antenna: https://www.kaigo-antenna.jp/(only available in Japanese)Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Think tanks complement the Group’s
intellectual capital
The Benesse Educational Research and Development Instituteand the Benesse Senior/Nursing Care Research Institute are our
two laboratories which serve as think tanks, carrying out original

Part 3 Enhancing Operational Resources

surveys and research based on knowledge the group has
accumulated in the education and nursing care businesses.
These laboratories not only utilize their research findings for thedevelopment of business in the Benesse Group, but they also
widely disseminate their findings in society through reports,
websites, and symposiums, thereby contributing to solutions tosocial problems involving education and the elderly.

Benesse Educational Research and Development Institute (BERD)

Using the results of multifaceted surveys
and research to benefit society
The Benesse Educational Research and Development Instituteis an in-house think tank that came into being in 2013 throughthe merging of several Benesse Group research departments.
Taking a comprehensive view of parenting and theeducational environment, the BERD conducts multifacetedsurveys and research in the field of education regarding a wide
range of people, covering everyone from infants to college
students, working adults, parents, and teachers.
The BERD is made up of four different research offices,each of which collaborates with educational institutions andresearchers in Japan and abroad while carrying out researchin their particular areas of specialization, e.g., the talents andabilities that will be needed in society in the future, ways foracquiring those talents and abilities, and assessment basedon testing theory. Since the founding of the predecessor tothis research institute in 1980, more than 400 studies havebeen carried out, the results of which are being presented
through our website and printed publications, and which arepresently being put to actual use in parenting and education.
Examples of research“Skills for Social Progress—The Power ofSocial and Emotional Skills”
Author: Organisation for Economic
Cooperation and Development (OECD),
Planning and production: Benesse
Educational Research and Development
Institute (BERD), Akashi Shoten (2018)
This publication presents measures,practices, and research from around theworld related to social emotional skills(non-cognitive skills), which are importantfor improving wellbeing and achieving
success in society.
“Tracking the Learning and Development ofChildren—Results from a Panel Survey of
20,000 Children and Their Parents”
Editor: Institute of Social Science, The
University of Tokyo & Benesse Educational
Research and Development Institute (BERD),
Keiso Shobo (2020)

Satoshi Okabe
Child Sciences and Parenting
Research Office
Benesse Educational Researchand Development InstituteHow the COVID-19 pandemic and the GIGA
School Project are changing school andhome study
In spring 2020, schools were temporarily shut down toprevent the spread of COVID-19. During the 2021 academic
year, tablet computers have been distributed to each andevery elementary school and junior high school student. The
school environment surrounding children is undergoingprofound change. Will these sudden changes enrichchildren’s learning? Will they contribute to the development
of diverse talents and abilities? Or will they demotivate
children and lead to greater educational inequality?
One approach, in the face of the uncertain future that is
drawing closer, is to identify the sources and signs of change.
The signs of change can be seen in schools (among teachers)
and in homes (among guardians and children). Identifying
these changes requires steady observation, with identicalconditions before and after the changes, and study designand statistical analysis based on academic knowledge.
We are conducting a nationwide sampling survey thataims to identify changes in school educational guidance,home education selection, and children’s learning over the
medium and long term. How will children, the generation of
the future, grow and develop the independence they willneed in changing school and home environments? This
book points out issues, based on solid evidence, andactively provides recommendations on how those issues
can be addressed.

This publication presents the interim
findings of an ongoing study of 20,000
children and their parents which began in
2015. It covers how children develop andbecome independent.

Benesse Report 2021

56

Social Capital

Creating new value through the strength of the relationships
we have cultivated with people and society
Education Business in Japan
Improving customer satisfaction andeducation in communities
We are working hard each day to maintain and improvecustomer satisfaction in Shinkenzemi and Kodomo Challenge by
providing educational materials that support each and every
enrollee. The Shinkenzemi individual tutoring lessons offeredthrough our prep schools contribute to education in the region
by coordinating with regional and local prep schools to provide
Shinkenzemi students studying at home with teaching thathelps them improve their own learning abilities.

• ”Iid Awards” customer satisfaction survey
Worldwide Kids was awarded the top prize in
the Children’s English Teaching Materials Preschool (Age 0 to 6) category** From an internet survey of parents of 1,168 children
using children’s English teaching materials.

Benesse signs GIGA School Project collaborationagreement with Gifu Prefecture’s Ogaki City
In October 2020, Benesse Corporation and Ogaki City, Gifu
Prefecture, entered an Agreement on Coordination andCooperation in Enriching Educational Environments Using
State-of-the-art Technology. The aim of this agreement is thepromotion of Ogaki City’s GIGA School Project, based on Japan‘snational GIGA School Project. Benesse has enteredcomprehensive cooperation agreements with municipal
governments in the past, but this is its first cooperationagreement related to the GIGA School Project.
Mirai Seed tablet learning software will be installed in thetablet computers distributed to students by the city government
and used for purposes including study drills and sharing
opinions during class. We also plan to ensure that students can

57

Benesse Report 2021

smoothly take advantage of rich study opportunities by
providing various types of support, such as creating moredetailed visions of school and home study, utilizing cloudtechnology, enriching information ethics education, and more.

Accommodating GTEC English exam test-takers
with disabilities
The Global Test of English Communication (GTEC), an English
examination administered by Benesse Corporation, evaluates all
four skills of English language proficiency (listening, reading,speaking, and writing) in the form of a score-based absoluteassessment. However, there are situations in which the English
proficiency of people with disabilities cannot be accurately
evaluated using the standard testing format. This is why we offer
11 types of disability accommodation, based on each test-taker’s
individual disability status. During the course of developing theseaccommodations, we conducted multiple interviews withexperts and related associations. We established methods ofproviding support through multiple rounds of development,
testing, and refinement to ensure that the methods wereeffective and that the test remained fair. A total of 19 of thepeople that took the GTEC administered in July 2020 made useof these disability accommodations.

Nursing Care and Childcare Business
Benesse enters agreement on protective
monitoring network for seniors
Led by its desire to contribute to the healthy lives of themembers of customers’ communities, Benesse Palette, which
offers food delivery services for seniors, is an active participant in
the protective monitoring programs operated by individual local
governments. It has signed agreements regarding local
protective monitoring networks, etc., with Tokyo’s Shinagawa,
Suginami, Nerima, Bunkyo, and Nakano wards.

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Benesse Art Site Naoshima
Benesse Art Site Naoshima is the collective name for theart-related activities we conduct in conjunction with the
Fukutake Foundation on the islands of Naoshima, Teshima, andInujima in the Seto Inland Sea. These activities have contributed
to community development in the area for over three decades.

Offering an “art thinking” course
through Udemy, set in Naoshima
In May 2021, Udemy, an online learning platform operated
through a capital alliance with Benesse Holdings, conducted acourse titled, “’Art Thinking’ for Adults - Developing Three Abilities
at Naoshima, the Art Island of
the Seto Inland Sea.” In thehands-on, online course,
participants closely observed
artworks on Naoshima anddeveloped their ability to see
things from their own uniqueStudents study Water-Lily Pond, aperspectives and come to their Claude Monet work in the Chichu Art
own conclusions.
Museum’s collection

Foundation activities—Initiatives geared toward
the creation of well-being—
Our commitment to the Benesse corporate philosophy ofwell-being is not limited to our business activities, but isalso reflected in the activities of our foundations thatengage in community initiatives. Our two foundations aim
to create social value by aiding regional development andassisting children.

• Fukutake Foundation
The Fukutake Foundation (formerly the Naoshima Fukutake
Art Museum Foundation) was established together with
the Chichu Art Museum, which opened in 2004, andassumed its current name after a merger of two aid
foundations in October 2012. The foundation carries out
three different types of activities. The first is museum
operation, mainly in Naoshima, Teshima, and Inujima. The
second is assisting with culture- and art-driven regional
development activities throughout Japan. The third is
independently and jointly organizing events such as
Setouchi Triennale.

Part 3 Enhancing Operational Resources

Full-fledged launch of programs for schools,
companies, and organizations
Benesse Art Site Naoshima offers programs for schools, companies,
and organizations. The program, which went into full-fledged
operation in 2020, provides participants with the experience ofengaging in dialog, deliberation, and empathetic communication
through art appreciation, and offers opportunities to take an active
approach to thinking by
developing numerous new
perspectives, such as thecontemporaneous social issues
that underlie works of art andlessons to be learned regarding
community involvement.
Senior high school training program tour

Benesse and Okayama University begin
joint research focused on SDGs
Benesse Holdings and Okayama University are conducting athree-year joint academic research program, from fiscal 2020 tofiscal 2022, on community sustainability and well-being. We are
studying the changes in the well-being of the communities andresidents of Naoshima, Inujima, and Teshima and thesurrounding area being brought about by the “Naoshima
Method” and “public interest capitalism” activities of Benesse Art
Site Naoshima, and the mechanisms behind those changes. We
plan to compile and present the academic results of the study,
including information on the creation of a model which can beapplied to other regions and countries as well.

Corporate Philosophy Benesse (Well-being)
Business Activities

Community Initiatives

Benesse Educational
Research and Development
Institute (BERD)

ESG

Benesse Senior/Nursing
Care Research Institute

SDGs

Benesse Foundation forChildren
Fukutake Education andCulture Foundation
Fukutake Foundation

Social Value Creation• Benesse Foundation for Children

The Benesse Foundation for Children is working to create
environments where children can learn with peace of mind;
to assist children dealing with economic issues, sickness,disabilities, or other obstacles to learning; and to aid thestudy and growth of children who have been affected bydisasters (emergency assistance). The foundation is also
ambitiously attempting to go beyond simply providing
assistance for overcoming problems to also nurturing andeducating children who will play prominent roles inbuilding an even better society.

Benesse Report 2021

58

Environmental Initiatives
Seeking further growth, Benesse formulates medium- to long-term environmental targets, and we actively strive to
reduce our environmental footprint while improving external assessments of our activities.

Environmental policy

Assessment and endorsement of initiatives

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

Climate control measures
With the year ending March 31, 2018 (fiscal 2017) as thereference year, Benesse Corporation revised its reduction targets
upward in line with the WB 2°C target (2°C target for Scope 3) inaccordance with SBT standards, and has set the following
medium- to long-term targets for reducing greenhouse gas
emissions (with regard to the data, it has received third-party
verification via the Japan Quality Assurance Organization).
To achieve this goal, in fiscal 2020, we made progress on
further reducing the burden we place on the environment
through actions such as reducing the amount of paper we use
by promoting digitalization of products and services, as well as
facilitating energy conservation via remote work and web
meetings in connection with the COVID-19 pandemic.

Medium- to long-term environmental targets(Years ended March 31)

Reduce CO2
emissions(compared to
2018)

2020

2030

2050

Scope 1 and 2

6.0%

36.2%

100%

Scope 3

2.5%

14.8%

39.4%

Reference year: 2018

Actual greenhouse gas emissions (per basic unit)(Years ended March 31)

59

Reference year
2018

2020

2021

Scope 1+2+3(t-CO2)0.00230.00220.0024Yearly change—

104.5%

109.4%

Benesse Report 2021

• Acquired SBT certification

The Benesse Corporation’s greenhouse gas emission targets for2030 and 2050 were certified by the SBT Initiative* based on
scientific evidence to “keep the global average temperature
increase well below 2°C andmaintain it below 1.5°C compared
to pre-industrial levels” under theParis Agreement. We also received
SBT certification from the Initiative.
* SBT Initiative: Established in 2015 by fourorganizations—CDP, the UN Global Compact, the World Resources Institute (WRI),
and WWF (World Wildlife Fund for Nature)—to promote achieving science-basedtargets (SBT) for the reduction of greenhouse gas emissions, in order to limit thetemperature increase from pre-industrial levels to below 2°C.

• Evaluation by the CDP
In the CDP’s climate change survey, we were selected in 2020 as
an A List company—the highest evaluation for companies that
conduct outstanding activities in areas such as reducing
greenhouse gas emissions and implementing measures tomitigate climate change—for the third straight year.
In addition, we have received the highest evaluation of A in
the CDP’s Suppliers Engagement Valuation for two straight years,
continuing from last year. Furthermore, 396 companies fromaround the world who are taking
action on climate change haveobtained the highest evaluationon the CDP supplier engagement
leader board, and we were one of
the companies to be chosen.

• Agreement with TCFD
In 2019, we expressed our agreement with recommendations
made by the Task Force on Climate-related Financial Disclosures(TCFD), and were the first education business operator in Japanto do so.

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Conducted a scenario analysis in accordance with TCFD recommendations
The Benesse Group conducted a scenario analysis of its education business in Japan in accordance with TCFD recommendations to makean in-depth analysis of the risks and opportunities for its business due to the impact of climate change.

• Analytical estimation of risks and opportunities
Analysis of the risks and opportunities that affect Benesse is conducted on two key points: probability of occurrence and level of influence.

Transitional
Risks

Physical Risks• Switch to alternative materials (recycled plastics, etc.)• Increase in shipping costs (by truck)• Increase in digital educational materials (rare metals, etc.)• Increase in energy costs• Procurement failures from suppliers• Major damage at logistics hubs
• Changes in shipping methods due to suspension of• Restructuring of the logistics network due toenvironmental changes and the spreading of
infectious diseases

the logistics network

Opportunities• Changes in the environmental awareness of consumers • Competitive advantages through innovations inenvironmental technology• Initiatives towards global environmental preservation • Highly resilient logistics base

• Future strategies and initiatives
Benesse will advance the following strategies and initiatives in the future based on the results of our climate change-induced
risk-opportunity analysis.

Transitional
Risks

Research into alternative materials that consider reductions in CO2, resource circulation initiatives (recycling), andreductions in shipping fees through the adoption of digital educational materials

Physical Risks

Reduction in risks through the decentralization of production bases, securement of alternate means of transport,
strengthening of flood control measures at logistics hubs, etc.

Opportunities

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

Business initiatives Support for environmental education
Benesse is working to provide support for environmental education from an early stage. In
2020, we held an online event, the Benesse STEAM Festival, where junior high and highschool students present research and initiatives that will lead to solving problems in the realworld. There were many presentations themed around social innovation, and they havebeen made available on our Library. We also conducted the 2020 National Research Contest
on Manavision. A total of 300 high school students from across Japan participated, andamong their research projects, many of them were seen to touch on the topic of the SDGs.

Benesse STEAM Festival

Benesse Report 2021

60

Communication with Shareholders and Investors
Benesse proactively discloses information to shareholders and investors. We use superior IR disclosure tools andemphasize mutual communication in our IR activities.

Striving to increase corporate value throughdialog with shareholders and investors

Reflecting the results of dialog with investors
and analysts in our corporate management

The Company strives to maximize its corporate value by promptly
and accurately disclosing and explaining information regarding
its management policies, business strategies, forecasts, etc., toshareholders, investors, and securities analysts, and by reflecting
their opinions and requests in our business management.
The Company’s top executives, the Chairman & CEO andthe President & COO, actively engage in dialog with shareholders, investors, and securities 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. In fiscal
2020, in order to prevent the spread of COVID-19, all meetings
were held remotely.
Furthermore, as a COVID-19 infection countermeasure, theOrdinary General Shareholders’ Meeting for the 67th Period washeld in the same manner as last year, by requesting that all
shareholders refrain, whenever possible, from attending inperson, instead exercising their voting rights in advance by mailor via the Internet. To ensure that the Ordinary General
Shareholders’ Meeting was conducted openly despite the
COVID-19 situation, we accepted questions submitted online inadvance. We also streamed the meeting live, for the first time, sothat it could be viewed from peoples’ homes, etc. Footage of themeeting, presentation materials, question and answer session
summaries, and the like are available from our website.

In fiscal 2020, we conducted a perception study of institutional
investors and securities analysts. We assessed perception gaps
between investors and the Company and used what we
discovered in our corporate management and IR activities. The
findings were reported, shared, and deliberated at the Board of
Directors meeting, assisting with the future improvement of ourmanagement initiatives.

Disclosures on our IR website
Guided by the principle of fair disclosure, we strive to provide anextensive range of information on our website. In addition to theproceedings from financial results analysis meetings and General
Meetings of Shareholders which we make available on our
website, we also disclose various IR materials, financial data, andpress releases in a timely manner.
We have also created a website geared toward individual
investors, designed to help those unfamiliar with Benesse to gaina greater understanding of our company. It points out thestrengths of Benesse and our strategies, as well as information
about our business performance, presented in a way that is easy
to understand.

Online Investor Relations

Main IR activities

External assessments of our IR tools (FY2020)

We conduct the following activities over the course of the year.

• Gomez IR Site Ranking, Best Company, 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)• General Meetings of Shareholders• Financial results briefings: Twice per year (interim and year-end)• Media coverage assistance: Roughly 200 activities per year, for a total of
342 companies (Japanese and foreign)• IR pamphlet publication: Benesse Integrated Report, Shareholder News,
Databook, etc.
• IR site planning and operation

61

Introducing the Benesse Group

Benesse Report 2021

Investor Information
Shares issued
Listed date
Securities listing(Common stock)
Securities code
ISIN code(As of March 31, 2021)

102,541,528 shares
October 26, 1995
Tokyo Stock Exchange, First Section

Unit of trading
Independent auditor
Transfer agent

9783
JP3835620000

Shareholders

Top 10 shareholders

100 shares
Deloitte Touche Tohmatsu LLC
Mitsubishi UFJ Trust and Banking
Corporation
61,814

Shareholdings by type of shareholder
Shares (Thousand) Percentage (%)

The Master Trust Bank of Japan, Ltd.

12,259

12.71

Custody Bank of Japan, Ltd.

10,658

11.05

Treasury Stock

efu Investment Limited

7,858

8.15

6.00%

Fukutake Foundation

7,758

8.04

The Chugoku Bank, Ltd.

2,787

2.89

Fukutake Education and Culture Foundation

1,919

1.99

Minamigata Holdings, Inc.

1,836

1.90

CREDIT SUISSE (LUXEMBOURG) S.A./
CUSTOMER ASSETS, FUNDS UCITS

1,728

1.79

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

1,600

1.66

THE BANK OF NEW YORK MELLON 140044

1,532

1.58

Financial Instruments Firms

Other Corporations

12.69%
Individuals and
Other

1.73%
Foreign Companies—
Other

30.50%

20.16%
Financial Institutions

28.88%

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 as representative. The decision-maker with respect to the execution of voting rights
related to the consigned trust assets is efu Investment Limited.
2. The Company owns 6,158 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.

Coverage in ESG indexes
MSCI ESG Index*

FTSE4Good Index Series / FTSE Blossom Japan Index* 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.

SOMPO Sustainability Index

Recognized as a leading “Prime”
company in the ISS ESG
Corporate Rating by the ISS ESG

S&P/JPX Carbon Efficient Index

Benesse Report 2021

62

Non-Financial Information
Business-Related
Shinkenzemi and Kodomo Challenge
enrollments in April (Japan)
Senior high school courses

Junior high school courses

Elementary school courses

Kodomo Challenge(preschool courses)

Kodomo Challenge enrollments in April(Overseas)
China

Taiwan(thousands of students)(thousands of students)

4,000

4,000

3,000

2,450

2,570

2,620

2,710

2,720

2,000

3,000

18

19

0

(year)
21[ as of April ]20

Granny & Granda

Bon Sejour

Cocochi

Li-Re

308

316

322

330

339

16

17

18

19

20
(end of fiscal year)

200

1,270

1,270

1,180

1,210
100

1,000

17

Clara

Madoka

300

1,220

0

Aria

400

2,000

1,000

Nursing homes & elderly homes
by brand

17

18

19

20

0

(year)
21[ as of April ]Human Resources
Employees on consolidated basis

Ratio of female employees/managers
Employees

Employees who took childcare leave /Returned from leave

Managers (including officers)

Employees who took childcare leave (left)
Percentage of employees who returned from childcare leave(%)
25,00021,02253

60

20,387

20,426

20,673

53

52

53

51

19,45620,00036

35

31

15,000

300

34

0

16

17

18

19

20
(end of fiscal year)

30

200

15

100

0

17

18

19

20

Environment

Employees taking shorter hours forchild-rearing

Amount of GHG emissions
Scope 1(t-CO2)

400

300

8,000

354
265

306

270

Scope 2

80

70

16

17

18

19

0

20

(fiscal year)
Note: Figures are for Benesse Corporation and Benesse Style
Care combined.

Paper consumption

Scope 3

7,477
6,595

330

90

80.0

0

21
(year)[ as of April ]Note: Percentages are for Benesse Corporation.

Human Resources

304

90.7

86.8

10,000
5,000

271

260

34

100

323

304
45

(%)

97.4

400

(t-CO2)(t)442,701

460,000

60,0005,204

425,000

45,000390,000

30,000355,000

15,000320,000

054,16655,94855,90318

1955,102

51,823

5,929
6,000

200

4,000

100

2,000

400,988
390,498
373,986

120
0

17

18

19

20

(year)
21[ as of April ]Note: Figures are for Benesse Corporation and Benesse Style
Care combined.
* Benesse Style Care has 276 employees as of July 31, 2020. The
number of employees as of July is also listed for fiscal 2020,
due to the fact that some employees and staff returned towork later than usual because of the spread of COVID-19.

63

Benesse Report 2021

0

18

88
19

88

76

20
21 (year)[ FYE in March of each year ]Note: GHG emissions are those of Benesse Corporation.

17

20
21 (year)[ FYE in March of each year ]Note: Paper consumption excludes printing paper for use in offices.

Group Information
Corporate Information
Name
Date established
Headquarters

As of March 31, 2021

Benesse Holdings, Inc.
January 28, 1955
3-7-17 Minamigata,
Kita-ku, Okayama-shi,
Okayama 700-0807, Japan

Representatives

Tamotsu Adachi
Employees (Consolidated)
19,456
Representative Director
Capital13,739 million yen
and Chairman,
CEO my gratitude to all of our stakeholders for yourI would like to begin
by expressing
Fiscal year-end
March 31
Hitoshi Kobayashi
constant supportof the business and activities of the Benesse Group. The Group
Representative Director
President, COO
adopted a newand
management
structure in April 2021 under which I was appointed(As of June 26, 2021)

Representative Director and Chairman, CEO of Benesse Holdings, and Hitoshi
Consolidated subsidiaries

As of March 31, 2021
Kobayashi was appointed Representative Director and President, COO. Mr.

Common stock
Ratio of
Descriptionof business
Kobayashishareholding
also
serves(%)
as Representative Director
and Presidentof Benesse(Millions of yen)

Name of company
Benesse Corporation

Corporation.
Under
structure,
I will continue
to be100.0 the new
3,000
Education,
publishing,
mail-order sales,
etc.responsible forClassi Corp

50.0
840
Developmentof educational
platform
determining
themanagement
policy andfor operation
the Group,
promotingactivities to instill

Tokyo Individualized Educational Institute, Inc.

61.9the corporate
642
Operationof prep schools
sustainability
andphilosophy,
as well as for the executive personnel

Benesse i-Career, Co., Ltd.

and261the Berlitz 51.0
business. I willcommunicate
closely with COO Kobayashi and all ofstudents
and working adults

UP Inc.

our 100
business executives
asOperation
I endeavor
to leadthe Group.
100.0
of prep
schools

Career education and career building support services for university

100.0 and nursing
65Our education
Advertisingbusiness
specializing
higher education
institutions
carebusinesses
areinfacing
major changes
in their

Shinken-AD Co., Ltd.

100.0
Planning and editing of study materials
operating environments.
Societyand personal values are changing dramatically

Plandit Co., Ltd.

40

EDUCOM Corporation

33

100.0*1

Development and sales of school business support system

10

100.0

Operation of English language schools for children

with Japan’s maturing economy, aging population and low birthrate, business

Benesse BE studio Inc.
Learn-S Co., Ltd.

globalization,
and advancesin digital technology as well as the worldwide
100.0
10Planning, editing, production and sales of study materials

Ochanomizu Seminar Co., Ltd.

COVID-19
pandemic.
100.0*2
10

Operation of prep schools

100.0
10In this business
Operation ofinprep
schools
environment,
fiscal2021, the Benesse Group launched aTokyo Educational Institute Co., Ltd.

100.0 management
125,000 Thousandsnewof RMB
Sales of correspondence
course materials
for preschoolers
medium-termplan with a target
end dateof fiscal 2025. The

Benesse Corporation China
PT. Benesse Indonesia

272,700 Million INR

100.0*3

Operation of prep schools in Indonesia

100

100.0

Nursing care services for the elderly business, childcare businessinitiative is geared to our vision of society in 2030 when the Group will have an

Benesse Style Care Co., Ltd.
Benesse Senior Support Co., Ltd.

even100greater social
responsibility as a leader in education and nursing care. The
100.0*1

Benesse Palette Co., Ltd.

4
initiative
meant
to reconfirm
toservices
our stakeholders
ourcommitmentthat we
100 is also80.0*
Food delivery
and nursing carefoodfor seniors business

Benesse MCM Corp.

1
80
Introduction
temp staffing ourof nurses
and human
resourcesBy
trained in nursing careare moving
in100.0*
the directionthat willand
reestablish
business
growth.

Berlitz Corporation

100.0transformation,
1,005 Thousands of U.S.
dollars
Languageusing
instruction,
leadershiptrainingand support
for studyour
overseas
advancing
digitalourglobal
current
business
assetsto expandNursing care consultation service business

Benesse InfoShell Co., Ltd.

90.0

Information system maintenance and operation business, information processing service business

50

100.0*5

Office operational management, outsourcing and support services

20

100.0

Hotel and campsite operation and management

throughout the Group, we will accelerate the evolution of our core businesses andNaoshima Cultural Village Co., Ltd.

expansion
into100.0
new businessfieldssales
to andcreatenew value
in materials
the education andCreation,
distributionof study
20

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

150

business synergies, and strengthening the human resources leading our activities

Benesse Business-mate, Inc.

nursing
100.0
3,600 Thousands of H.K.
dollars care fields.

We are issuing this report for our stakeholders to gain a deeper

Plus 13 other subsidiaries.
*1 Indirect stock holding through a subsidiary.
*4 Indirect stock holdings of 80.0% through subsidiaries.

General trading and quality assurance related to educational equipment, toys and other items*2 Including an indirect
stock holding of 50.0%
througha subsidiary.
*3 Including
indirect
stock holdingof 0.1% throughsubsidiary.
understandingof ourinitiatives
to createvalue,anour
businessstrategies
andatheir*5 Including indirect stock holdings of 2.0% through subsidiaries.

progress, and the steps we are taking to fortify our management base. We hope

this report will encourage dialogue between management and our stakeholders
Benesse Holdings corporate website

and we look forward to hearing your frank opinions and feedback about the

www.benesse-hd.co.jp/en/

management of the Group. We appreciate your ongoing support as the Benesse

Our corporate website provides comprehensive information on the Group as a whole.

Group heads into the future.

Corporate and Group information

Investor Relations

Sustainability

2 64

BenesseReportBenesseReport20212021

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/ir/index.html

Online Version ofBenesse Report 2021
HTML articles and PDF files of the report
are available on the website.
https://www.benesse-hd.co.jp/en/ir/library/ar/
2021/index.html

2