Benesse Holdings, Inc.

Benesse Integrated Report 2022

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/

Information disseminated on major websites
The Benesse Group provides stakeholders with a variety of information through its websites.

Online version of Benesse Report 2022

Benesse Holdings corporate website

HTML articles and PDF files of the report are available
on the website.

Our corporate website provides comprehensive informationon the Group as a whole.

https://www.benesse-hd.co.jp/en/ir/library/ar/2022/index.html

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

Corporate and Group information

Benesse’s action on sustainability
from Benesse

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

We are introducing our efforts to solve social issues.
https://www.benesse.co.jp/brand/en/

Investor Relations
https://www.benesse-hd.co.jp/en/
ir/index.html

Sustainability
https://www.benesse-hd.co.jp/en/
sustainability/index.html

BenesseIntegrated Report2022

CONTENTS

Benesse Group Corporate Philosophy
bene (Well)esse (being)(Well-being)
What is “Benesse”? The heart of Benesse is enjoying the process of moving forward

Benesse Group Corporate Philosophy & Principles

1

Contents / Editorial Policy

2

Steps in the History of Value Creation at Benesse

3

Benesse’s Value Creation Process

5

Key Sustainability Challenges for the Benesse Group

7

Part 1 Our Vision and Business Strategies
Message from the CEO

Part 2 How We Create ValueAt a Glance

35

Education Business in Japan

37

Kids & Family Business45

Nursing Care and Childcare Business48

Part 3 Enhancing Operational Resources

1052

Corporate Governancestep 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.

Message from the Director

61

Message from the Outside Director

62

We aim to be a globally respected corporate group that is both supported by andindispensable to its customers, communities, and society.
We will contribute positively to society now and in the future.
* Benesse is a word coined from the Latin words “bene” (well) and “esse” (being).

Message from the CFO

15

Financial Highlights

18

Message from the Chief DX Officer

19

FOCUS Enhancing Our Non-Financial Capital

23

Initiatives for Improving Human Capital29

We believe that before we become good business people, we must

Environmental Initiatives

31

live as responsible members of society and that all of our actions should

Non-Financial Information

33

Benesse Group Principles
The Benesse Group is a global corporation with a people oriented culture.

Communication with Shareholders and Investors

63

Investor Information

64

Group Information

65

Foundation Activities / Benesse Art Site Naoshima

66

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 :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.

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 thereport, we have kept in mind the reporting frameworks of theInternational 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 way that 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.

How this integrated report fits into our information reporting
Financial information

Non-financial information

Benesse Integrated Report 2022
(PDF, 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

Period covered
The report covers primarily activities carried out in fiscal 2021 (i.e., from April
2021 through March 2022), though it also includes some information on
initiatives from prior to that period and activities taking place after April 2022.
The organization names and the job titles used are current as of June 25, 2022.
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.

Data Book(PDF and Excel)

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 basedon 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.

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Benesse Report 2022

Benesse Report 2022

2

Steps in the History of Value Creation at Benesse
While continuing to grow by keeping up with the times, we have faced manydifficulties and made repeated reforms alongside kindred spirits (colleagues) who
have gathered under the unifying force of the corporate philosophy “Benesse.”
With the DNA that has lived on since the company’s founding, we will move tospread the message of “Benesse = well-being” to society and into the future.

Net sales of
500 billion yen
Image of growthfor fiscal 2025

Leak of personal
information
Our company was founded as Fukutake Publishing Co., Ltd. in 1955 in
Okayama Prefecture. The Company’s education business grew rapidly, with
momentum from advanced economic growth and the increase in thenumber of children. After that, with an eye on the 21st century, theCompany announced the philosophy brand “Benesse” under thesecond-generation President, Soichiro Fukutake. In April 1995, the 40th
anniversary of the Company’s founding, we changed our name from
Fukutake Publishing Co., Ltd. to Benesse Corporation. By doing so, we
expressed our determination to unify all of our activities, from organizationand structure to business activities and employee behavior, with our
corporate philosophy, and to support “Benesse” for our customers.
A corporate culture of persistence and commitment to “our DNA since
the Company’s founding“ and “our questioning how we can make Benesse
into a business model“ have been the driving forces which have enabled us
to overcome the challenges we have faced time and time again, such as
the leak of personal information in 2014 and COVID-19.

Announcement of
new Medium-Term
Management Plan

Shift to a holding
company structure

Change ofCompany nameAnnouncement of“Benesse”

Net sales

Founding of Fukutake
Publishing Co., Ltd.

Operatingincome

1955

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025 (fiscal year)

Founding–

1990s

2000s

The 2010s and onward

The strong belief in education possessedby founder Tetsuhiko Fukutake

Promoting the diversification ofbusinesses under the “Benesse” banner

Evolving our education andnursing care businesses

Doing our best to regain the trust lostby the leak of personal information• Launch of simulated exam business for high school students• With an eye on trends such as declining birthrates, the aging• For Shinkenzemi, we promoted individual responses tailored to
the learning of each student, as well as digitalization• We expanded our education business even further through• Worked to regain the trust lost due to a leak of personaland correspondence courses that led to today’s “Shinkenzemi,”
based in Okayama. While thecorrespondence education market had not
yet materialized, we developed the market
by ourselves through products with newconcepts and expanded our enrollments
Tetsuhiko Fukutake, who established
Fukutake Publishing Co., Ltd. after working
in jobs such as elementary school teacher

population, and the increase in dual-earner households, weentered the Nursing Care and Childcare Business. Publishedmagazines Tamago Club and Hiyoko Club, which deal withpregnancy, childbirth and parenting• Started overseas expansion andlanguage business against a
backdrop of increasing
globalization

Benesse House in Naoshimameasures such as growing our school and teacher support
business and bringing prep
schools into the Group• We made a full-scale entry into thebusiness of elderly homes, with thenursing care business growing into
our second pillar

information, and strengthened all physical, organizational, andpersonnel security measures to prevent recurrence of suchan incident• In the education business, further promoted the use of digitaltechnology and pursued learning that is tailored to the needsof each individual student• Announced a Medium-Term Management Plan to evolve ourcore businesses of education and nursing care, and to take on
the challenge of leveraging our strengths in new areas

Note: Operating income figures prior to fiscal 1992 are estimates according to current calculations

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Benesse Report 20224

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

Roadmap to Completion of
the Medium-Term Management PlanINPUT

OUTCOME(FY2021)

Financial capital
Total assets¥540.5 billion

Shareholders’ equity¥146.2 billion

2,206 locations(Total for Tokyo Individualized Educational Institute, UP, Ochanomizu
Seminar, Tetsuryokukai, Benesse BE studio, and StudyHacker)

Nursing homes & housing for the elderly

343 locations

Human capital
Employees (consolidated)

1

FY2021–2022

Phase

2

FY2023–2025

V-shaped
recovery fromCOVID-19 impact
organically inexisting business

Aim for sustainablegrowth throughinorganic growthmeans (new challenges

in existing businesses)

17,000Approx. 800

Approx.

DX human resourcesIntellectual capital
Strong brands for childcare, education, and nursing care
Teaching materials and methods for
instilling the ability to learn
Expertise in developing and grading simulated exams
Unique nursing care methods and mechanisms
Multifaceted surveys and research in the education field

Expand into new fields(Move into new fields and overseas territories byleveraging Benesse’s strengths)
The fields of universities and working adults, expanding our
education and nursing care businesses overseas

Cumulative enrollments in Shinkenzemi / learning data

20.11 million members

Students taking Shinken Simulated Exams andother exams / test data
Approx.

9.28 million people

School business partners
Approx.

16,500 schools(Of that number, approx. 4,500 high schools)

Nursing home residents
Approx.

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Benesse Report 2022

(Details about actions and results on p. 7)

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

Strong promotion of DX based onlateral organization Digital Innovation
Partners (DIP)

2025 goals
8%+
10%+

OPM
ROE

3%+ (sales)

Organic growth rate

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 thedelivery of nursing care services that provide
support for all individuals.

Social value and customer value

As one of Japan’s leading educationand nursing care companies

Passing our knowledge onto society
We will communicate and share with society
the experience and knowledge we havecultivated, and cooperate with partners whopractice “well-being” with us, to take on
solutions to difficult issues.

Co-creation of value withthe community

Social capital
Approx.

Economic value

Materiality

FY

Evolve core businesses

Productive capital
Prep schools and classrooms

Phase

Together with the people living in thosecommunities, we will create new value
through education, culture, and art to realize
an affluent society.

Realizing a healthy society
In addition to supporting daily life, we will takeon the challenge of developing businesses in
new domains that will be essential for future“well-being.”

Providing learning
to aid individual
growth andfuller lives

Supporting seniors
in having a way oflife that suits them+
New challenges on global issues

Applying educational andnursing care assets cultivatedin Japan to global educationaland nursing care issues

16,900 people

Benesse Report 2022

6

Key Sustainability Challenges for the Benesse Group
The Benesse Group has formulated its Sustainability Vision, for resolving social issues in 2030 and beyond,as well as its Materiality (key issues), as a specific initiative based on the Vision.

Key issues for the Benesse Group andawareness of social issues

Bringing learning to every part ofpeople’s lives
With “the joy of learning” as our starting point, we will extend high quality
learning, for all generations, to Japan, Asia, and the world.
Awareness of social issues• Growing inequality of educational opportunities due to regional and economic disparities• Restrictions on and losses of job choices and opportunities due to the expansion ofdigital transformation and digitalization• Inequality of and restrictions on learning and ability assessment opportunities for students

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.
Awareness of social issues• Shortage of nursing care staff in a super-aging society, decline in the quality ofnursing care
• Demand for nursing homes, growing needs for nursing care services in major
metropolitan areas

Opportunities for maximizing utilization
Making learning new
We will deliver to children the “new learning” that the times to come will
demand, together with “new ways of learning” that make the most of data
and technology.
A life of continued learning
We will transform society into one in which, even as adults, people cankeep learning with enthusiasm for their entire lives.

Dealing with opportunities and challenges(major policies for fiscal 2022 and beyond)

Education Business in Japan
Shinkenzemi• Evolve teaching material development/create marketing innovations
through DX• Support diverse learning needs
University and Working Adult• Support recurrent education and reskilling needs in an era of 100-year longevity“Well-being” in society andfor the future

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
We will provide nursing care that respects every individual elderly person
in what they want to do and the challenges they want to take.
Making nursing care a great job
We will develop growth opportunities and pleasant working environments
for the people who work in nursing care, increase society’s understandingof nursing care, and raise the quality of nursing care.

Sustainability Vision of
the Benesse Group

Nursing Care and Childcare
Development of nursing care workers with advanced expertise andimprovement of their status• Development of Majikami (nursing care experts)• Moving toward assessment systems and higher average annual pay
QOL improvements for residents via the introduction of Majikami AI
Solution (a fusion of people and technology)

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

In the coming era, when change will be normal stateof things, to achieve our aim of an abundant,sustainable world, we want to reconsider all social
issues with a “people-centric” perspective, and createa society in which everyone can seek out the things
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

Passing our knowledge onto society
We will communicate and share with society the experience and knowledge
we have cultivated, and cooperate with partners 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 andour nursing care techniques based on our extensive experience, thus
raising the quality of these industries as a whole.

Awareness of social issues• Growing inequality of educational opportunities due to regional and economic disparities• Shortage of nursing care staff in a super-aging society, decline in the quality of nursing careCo-creation of value with the community
Together with the people living in those communities, we will create newvalue through education, culture, and art to realize an affluent society.
Awareness of social issues• Shortage of educational capabilities in the community, shortage of educational personnel• School issues (New courses, changes to entrance examination questions, expansion of
ICT, increased burdens on teachers)

Nursing Care and Childcare
Promoting “Kaigo Antenna*”* We took our expertise and practical knowledge on topics such as nursing care techniques,
put them into words as “Benesse methods,” and made them freely available to the public.
We also provide seminars and other information, as well as a large quantity of othermaterials for activities and recreation, which are highly needed by nursing care staff.

Benesse Educational Research and Development Institute
In conjunction with the Institute of Social Science, the University of Tokyo,
we launched the “Children’s lifestyles and studying” research project in 2014.

Community-based education and nursing care
Through our education and nursing care businesses, we will conduct
problem solving that suits the characteristics of each community.
Global education with the locals
By joining hands with our local partners, we will deliver high quality
education to the world, while reflecting local characteristics.
Reinvigorating communities through art
Through art and cultural activities, we will bring new energy toindividual communities and create communities in which the locals
can feel more satisfied.

Education Business in Japan
School and Teacher Support BusinessContributions geared toward making the GIGA School Program* a reality* This initiative, promoted by the Ministry of Education, Culture, Sports, Science andTechnology, aims to create educational ICT environments that nurture creativity throughindividualized and optimized instruction through the use of devices, one of which issupplied to each individual student, and high speed networking environments.

• Improving the Benesse Group’s ability to solve problems and adapt tochallenges at schools in response to environmental changes• Various kinds of support for schools to move toward ICT (the education
platform Classi, the school management support system EDUCOM, the class
support and digital drill software Mirai Seed)
Holdings
A three-year research project* with Okayama University on sustainability
and well-being in the Setouchi region, centered on the SDGs
* Searching for ways to put “well-being” into practice, using the regional renewal model
Benesse has worked on as a hint

Realizing a healthy society
In addition to supporting daily life, we will take on the challenge of developing
businesses in new domains that will be essential for future “well-being.”

Studying challenges and solutions for the sustainability of ourcompany and society, with an eye toward new areas

Awareness of social issues• Restrictions on and losses of job choices and opportunities due to the expansion ofdigital transformation and digitalization

Visit the following website for more information on sustainability at the Benesse Group.
https://www.benesse-hd.co.jp/en/sustainability/index.html

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Benesse Report 2022

Education Business in Japan
University and Working Adult• Making recurrent education and reskilling in an era of 100-year
longevity into a businessMeeting corporate training needs and developing DX personnel with Udemy at thecore of our efforts

at large, and to the future.

Sustainability Vision and Promotion Structure
We have established the Sustainability and ESG Promotion Committee as
the organization to spearhead activities based on the Sustainability Vision.
In addition, we established the ESG and Sustainability Division within
Benesse Holdings as a department to promote the specific initiatives ofeach business.

In today’s society of unexpected changes, Benesse Group is also
undergoing an enterprise-wide business transformation. The 2030
goal of our new medium-term management plan is to realize asociety in which everyone has a desire to improve and cancontinue to tackle challenges in their own way. To that end, I was
appointed to serve as Executive General Manager of ESG and
Sustainability, which was newly established in fiscal 2022, to leadthe company’s social responsibility activities in conjunction witheach business. At present, through a cross-company project led
by this division, we have launched a review of our materiality inlight of changes to the social environment since its formulation
three years ago. To enable everyone to live well in their own way
for the rest of their lives, we are rethinking all social issues, putting
people center stage, linking closely with other companies, andworking to make social value linked to ourbusinesses into a reality.

Haruna Okada
Managing Executive Officer, Executive General
Manager of ESG and Sustainability,
Chair of the Sustainability and
ESG Promotion Committee

Benesse Report 2022

8

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Message from the CEO

We will continue working toward a new stage of
growth based on our corporate philosophy
Steadfastly implementing our philosophy
amid a changing environment
The Benesse Group’s corporate philosophy is the word “Benesse”

Part

1

Our Vision and Business Strategies

Representative Director and President, CEOand actions.
Since our founding in 1955, we have constantly worked towhich means well-being. It expresses how we will accompany

provide solutions to social issues in the fields of education andeach individual customer as they move forward, step by step,nursing care, and the well-being that is the goal of the SDGs is

toward the realization of their dreams and aspirations,the same as our “Benesse” corporate philosophy. I think thisempowering them to grow and to solve issues at every stage ofshows that sustainability is a core principle of the Group’s

their lives. This has been of utmost importance to the Groupmanagement. We aim to continue enhancing long-term

throughout our history. You could say it is an unchanging

corporate value by realizing a three-value cycle comprising

management principle that we have always pursued.

social value, customer value, and economic value. We will work

However, the education, lifestyle-related, and nursing care

to generate social value by contributing to solutions for various

markets in which we do business are constantly changing. Theysocial issues while also generating customer value by providing

have been transformed, even compared to just 10 years ago, andproducts and services that meet customers’ expectations. This

the pace of this transformation is expected to accelerate further.

will lead to the creation of profit, thereby generating economic

Other business areas are also experiencing great change as thevalue for the company. Achieving this cycle through oursocial and economic environments of our customers and thecorporate activities is at the heart of our purpose and I

nature of the issues troubling them are altered by factors such asrecognize that it is also my important duty as a member of thethe continuing impact of the COVID-19 pandemic. In order tocompany’s management.

steadfastly implement our unchanging philosophy amid thisHitoshi Kobayashi

Benesse Group. I believe it has always been present in our values

In April 2022, we launched ESG and Sustainability Division

rapidly changing world, we must be flexible in meeting the needs

within Benesse Holdings in order to implement specificof customers. This includes carefully observing and understanding

measures based on the management direction outlined above

the current situation to predict changes and customer demands
over the next five to 10 years, which will enable us to develop anddeliver products and services in a timely manner.
If we are to confront our current situation and take theThree values

correct path for continuously providing customers with value thatmeets their expectations, then we need to clarify our reason forexistence and the basis of our decision making. Obviously,“Benesse” is at the root of these, but as our philosophy is a broad

Customer Value
Products, services

reaching concept, we need to add to it to create specific growthstrategies and principles of action for our everyday work. Therefore,
starting two years ago, every organization within the Group has
been setting and implementing a clearly stated purpose.

Contributing to the realization of a sustainable
society by putting a three-value cycle
at the heart of our purpose

Higher Corporate
Value
Social Value
Addressing social
issuesEconomic Value
Sales and profit

Recently, sustainability has become a buzz word within thebusiness community. However, it is not a new concept for the9

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Benesse Report 2022

10

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Message from the CEOat each business. It has been established as an independentat our nursing homes, but the main factor behind this was that

advance inorganic growth strategies, including M&A. At thedivision to clearly demonstrate our intent to address

prospective residents were wary about moving into homes assame time, we will aim to make further leaps forward by creating

Targeting university students and working
adults as a new business fieldsustainability to stakeholders both inside and outside thethe Omicron variant prolonged the effects of the COVID-19

and expanding into new fields. We are targeting net sales ofIn our efforts to cultivate new business fields, we are putting aGroup. It will play a central role in examining the Group’s

pandemic. In order to continue our business, we also made it a¥500.0 billion and operating income of ¥40.0 billion in fiscal 2025

particular emphasis on the education market for university

various actions and initiatives from a sustainability perspective

top priority to prevent infection among residents and staff. In theand we anticipate that over 20% of contributions toward

students and working adults. While many companies are aiming

to further strengthen our ability to contribute to addressing

nursing care market, demand continues to outweigh supply, andachieving these targets will come from inorganic growth andfor sustainable growth by focusing on reskilling employees, fromsocial issues.

as our facilities and services have an excellent reputation, I am

growth in new fields from fiscal 2023 to 2025.

an individual’s perspective, we have entered an age in which

confident that business performance will recover once theA rapid recovery from the downturn in businessperformance caused by the pandemic

We also recognize that digital transformation (DX) will playeven adults who are already employed need to gain new

pandemic subsides. In our forecasts for fiscal 2022, we expect

an extremely important role in both organic and inorganic

abilities and expand their potential. We believe that developingthat net sales will decrease by 1.4% to ¥426.0 billion due to thegrowth in every business field. Therefore, we are providing robustand delivering services that meet these individuals’ needs is notabsence of sales from the Berlitz business, but operating income

support for the advancement of DX in every business, primarily

only a business opportunity, but also contributes to solving a

Fiscal 2021 was the first year of our medium-term management

will increase 24.0% to ¥25.0 billion due to profit growth in thethrough the establishment of the Group-wide organizationsocial issue.

plan. The plan covers five years and is divided into two phases.

education business in Japan and the absence of losses incurred

Digital Innovation Partners (DIP) in April 2021.

The first is to realize a swift V-shaped recovery in business results,

by Berlitz.

We are already active in this field as the long-time partner

which declined in fiscal 2020 due to the COVID-19 pandemic,
while the second will aim to further improve performance to¥431.9 billion, operating income grew 54.1% year on year to

Leaping forward in Phase 2 of the plan andbeyond by growing existing businesses andexpanding into new fields¥20.1 billion, resulting in a significantly faster recovery thanOur targets for fiscal 2025, the final year of our medium-term

forecasted. Within this, we should highlight that the education

management plan, are an operating margin of at least 8% andbusiness in Japan achieved a V-shaped recovery in a single year

ROE of at least 10%. ROE was low in fiscal 2021, at 0.7%, due toand even exceeded fiscal 2019 results. Another big result was the

special losses accompanying the sale of Berlitz. However, we aresale of the Berlitz business, which has been a management issue

aiming to achieve our target of at least 10% two years early infor a number of years. The sale has given a huge boost to ourfiscal 2023 through business growth and the effects of reduced

business selection and concentration efforts. We see these twotaxes following the Berlitz sale.

new heights.
In fiscal 2021, although net sales only increased slightly toresults as a smooth start to Phase 1 of the plan.
The nursing care business saw a decline in occupancy rates

Targets of the Medium-Term Management Plan (Announced in November 2020)

Positioning ofeach phase

Phase 1: FY2021–FY2022

Phase 2: FY2023–FY2025

V-shaped recovery

Challenge & growth

V-shaped recovery from the impact of
COVID-19 organically in existing businesses

Aim for sustainable growth throughinorganic means (new challenges in existing businesses)

Expand into new fields(Move into new fields and overseas territories by leveraging Benesse’s strengths)

Our main medium- to long-term growth strategy is torealize organic growth in existing business, but we will also

Financial
targets & KPI

We will keep our purpose frontand center as we work withall Group employees to create
new value

FY2022
Rebuild sales/OP to above FY2019
levels in “2 years”

Based on FY2022 earnings after V-shaped recovery
from COVID-19 impact(ex. ASRR impact)

FY2025
Operating margin 8%+
ROE 10%+Update on financial KPI for FY2025 (Announced in May 2022)
Net sales

Operating income

Benesse Report 2022

Financial KPI

FY2022 forecast¥426 billion¥25 billion

FY2023–FY2025

Organic growth 3%+

FY2025 PL estimate¥500 billion+¥40 billion+

FY2025

Operating margin 8%+

FY2023

ROE 10%+

FY2023–FY2025

Growth contribution 20%+from inorganic/new fields

Contribution ration to growth in FY2023–FY2025 (breakdown)

11

FY2023–FY2025
Organic growth rate of 3%+ (sales)

Organic+¥50–¥60 billion

80%

Inorganic/New fields+¥10–¥15 billion+α20%

UpdatedNEW+

Benesse Report 2022

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Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Message from the CEOof Udemy, a world-class online learning platform, in Japan. We

markets. In fiscal 2022, our paid assessment business in India

the elderly, which our current employees have been cultivating

also plan to provide various learning and self-improvement

started holding tests. We are also considering a potential nursing

through their work. Therefore, I think the company should focus

support services for university students and for working adults.

care business in China.

on training these employees to learn new skills so they cancreate new services that meet customers’ needs.

We plan to invest proactively to expand our business in this area,
including exploring potential M&As.

The digitalization of Japan’s education industry is
progressing rapidly, driven by the government’s GIGA School

facilitate more robust expansion into new fields. This includes

Leveraging our learning culture to encourage
the reskilling of individual employees

making the divisions in Benesse Corporation’s School and

Human resources continues to be the main theme of theacross the Group for some time now, but if we are to continue

Teacher Support Business Company that were previously

non-financial initiatives in our medium-term management plan.

producing highly competitive materials in our education

responsible for the development of services for university

Within these, we recognize that strengthening the pool of DX

business, then we will need knowledge at a workplace level thatstudents and working adults into the independent University

employees is an increasingly important issue across the Group.

is completely different from the methods we have developedand Working Adult Business Company. While the company is still

There is strong demand for DX human resources from every

that use paper-based materials.

small, we think it has the highest growth potential out of all ofindustry, so it is becoming extremely difficult to recruit

the companies in the Group. Our targets for the university andexceptional talent. However, I think that merely gathering

people are the core of our nursing care services, digital

working adult business are to achieve sales of ¥40 billion by fiscal

together engineers with a talent for digital technology will nottechnology will be the key to further improving quality. In March2025 and ¥100 billion further into the future.

necessarily lead to the development of good services.

2022, we opened Granda Yotsuya, a sensing-based nursing home

We have been carrying out organizational restructuring to

Program. We have been advancing the digital shift of services

The same applies to the nursing care business. Although

Innovation will be essential to the continued growth of thelocated in Yotsuya, Tokyo. This facility gathers data about

Group and there are many examples of innovation throughout

philosophy through advanced digital technology alone. It needs

residents’ activities in real time through various sensors and theour history. Our current business portfolio did not just spring out

occupies a clear leading position in Japan and under our current

to be combined with essential factors such as conviction

data is then analyzed by our Majikami (nursing care experts

of nowhere as a perfectly arranged collection of assets. There wasmedium-term management plan, we are adapting it for overseas

regarding education, affection toward children, or sympathy forcertified by Benesse) to revise how care is delivered. We are also

a time when we were also a venture company, but by building adeveloping Majikami AI, an AI solution that incorporates this data

new business model piece by piece through a process of trial

and the knowledge of the Majikami. We will use Majikami AI toand error, we gradually gave shape to our philosophy in each

improve the skills of nursing care staff, further raising quality ofbusiness field. Examples of this are Benesse Art Site Naoshima

life for residents.

and the nursing care business.

We will also continue working to expand our overseas

We cannot create great value based on our “Benesse”

business as an initiative in a new field. Our assessment business

Key measures for FY2025

Proactively undertake measures to create organic growth and new growth
Organic
Shinkenzemi
School & Teacher
Support
Prep Schools andClassrooms
Kids & Family

Inorganic• Raise profitability via improvement of retention rate andreform of marketing• Develop platform business to address diverse learning needs• BYOD-based tablet strategy• Stabilize Mirai Seed earnings (Elem/J. High schools)• Bolster service model for schools with diverse students’
education advancement• Boost product attractiveness via assessment × ICT(High schools)• Grow number of schools and strengthen uniqueness of • Further increase industry share (M&A)
each prep school• Raise profitability via improvement of retention rate and • Overhaul model to focus on “multi-layered” product services• Rebuild occupancy rate, expand strategic locations• Grow peripheral businesses with focus on HR business (M&A)

New fields
University andWorking Adult• Move into new markets (M&A), expand into recurrent education/reskilling markets utilizing Group’s strengths

Overseasdevelopment• Move into school assessment in India, consider and evaluate nursing care in China

In BATON, the creation of the “Benesse” corporateneed to reskill with regard to DX and as a company, we will

philosophy is used as a starting point for employees who were

provide them with the means and opportunities to do thisactive at that time to look back and describe how they pursued

wherever possible. Happily, the Benesse Group has ainnovation and what kind of difficulties they overcame in orderdeep-rooted culture of self-directed learning. We will leverageto create something new. We also plan to create opportunities

this culture as much as possible to support individual

for all employees to meet and talk to the people featured in

employees in developing new abilities.

the book.
We are not publishing BATON in order to merely pass on(development + advancement support)

reform of marketing

Nursing Care andChildcare

I am confident that our employees also recognize theReaffirming our history of taking onchallenges to create new value

company legends or to relive past glories. As we face a drasticallychanging business environment, we want to reaffirm the factthat we have striven to realize innovation based on our

In April 2022, we compiled the book BATON as part of efforts tophilosophy in the past, and therefore, that we will be able to doensure the continuation of our philosophy. The book’s purpose

so again. We will work together with the support of ouris to remind all Group members of Benesse’s history of taking

predecessors to take on various challenges and realize

on challenges.

innovation that will create new value for customers.

Foundation: strongly pursue DX based on cross-organizational DIP (digital innovation partners)

13

Benesse Report 2022

Benesse Report 2022

14

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Message from the CFO

We will steadily achieve
our medium-term
management plan bystrengthening existing
businesses and investingin new businesses
Shinsuke Tsuboi
Managing Executive Officer, CFO (Chief Financial Officer),
Executive General Manager of Finance and Accounting

Recovery in the Education Business in Japan
led to an increase in sales and profits forthe entire Group
The Benesse Group’s medium-term management plan positions
fiscal 2021 to 2022 as Phase 1 with the goal of recovering businessresults to the levels recorded in fiscal 2019, before the COVID-19
pandemic. In fiscal 2021, we made smooth progress toward thisgoal. Net sales increased 1.0% year on year to ¥431.9 billion, while
operating income increased by 54.1% to ¥20.1 billion, surpassing
initial forecasts by a huge ¥17.5 billion and drawing close to the¥21.2 billion recorded in fiscal 2019. Net income attributable toowners of the parent decreased 65.9% to ¥1.0 billion due to thebooking of special losses accompanying the sale of the Berlitz
business, but we still managed to secure a profit.
The biggest story in the fiscal 2021 business results was therecovery of the education business in Japan. The prep school andclassroom business and school and teacher support business inparticular suffered from big falls in results in fiscal 2020 due to theimpact of the pandemic, but in just one year they have recovered
to levels that exceed fiscal 2019 results. Another notable event
was the sale of the Berlitz business, which has been an issue for
the Group for a number of years. While the sale did incur special
losses, we were able to complete it within the fiscal year so that
there will be no negative impact from fiscal 2022 onward. The
special losses are a temporary factor, so we can expect to see
positive effects from the sale in fiscal 2022 and beyond.

15

Benesse Report 2022

Overall, the implementation of our medium-term
management plan is going smoothly, but there are still someissues regarding our main businesses. One is that as of April 2022,
enrollment at our Shinkenzemi business has fallen by around 8%
year on year. This is due to a combination of declining birthrates
and the prolonged effects of the pandemic. The spread of theOmicron variant in the second half of fiscal 2021 caused a
succession of school and class closures across Japan and theresulting increase in homework meant that the amount of timechildren had to learn at home was limited. We have also come tothe conclusion that a growing sense of unease about family
finances has affected the use of home learning services. However,the Shinkenzemi business has been monitoring the decline inbirthrates for several years and has been shifting its focus fromacquiring new enrollment to raising retention rates. It is working
to secure profitability by combining digital teaching materials
with support provided in person to steadily increase the numberof frequent users, as well as by expanding services that meet thediverse educational needs of children, such as providing online
learning through Challenge School.
In the nursing care business, occupancy rates at ournursing homes are taking longer than expected to recover. This ismainly because of the prolonging of the COVID-19 pandemic
and many new applicants decided to postpone the date of theiroccupancy due to declarations of a state of emergency in several
regions. However, our nursing homes have always been very
highly regarded by residents and as the pandemic began toabate in spring 2022, we saw recovery trends in resident
numbers and occupancy rates. We have also started taking a
new sales approach toward regional healthcare institutions andcare managers, so we expect to see a gradual improvement
toward our targets going forward.

Further raising ROE and ROIC by improving
capital efficiency in the nursing care businessWe are aiming to raise corporate value by improving capitalefficiency. In our medium-term management plan, we have set
the target of achieving ROE of at least 10% by fiscal 2025 and wehave introduced ROIC as an indicator with the aim of enhancing
the earning power of each business. We had been hindered bylosses recorded by the Berlitz business over the last few years.
However, the sale of said business means that a negative factor
has been removed from fiscal 2022 onward and it will also have apositive effect in terms of taxes over the next few years.
Therefore, ROE and ROIC should both improve rapidly. In fiscal
2022, ROE is forecast to surpass 8% while ROIC is forecast to
improve beyond our current weighted average cost of capital(about 5%). We will aim to hit our ROE target of at least 10%
ahead of schedule in fiscal 2023.
Looking at ROIC by business, the nursing care business,

which has to treat real estate leases in its accounts, is lowering
the overall average. The nursing care business is an asset heavy
business, so we have been told by shareholders and investors
that we should concentrate business resources on the education
business instead. However, it also offers stable cash flows, and weare striving to improve capital efficiency by expanding ancillarybusinesses that do not require actual facilities, such as staff
dispatch and referral services. In fiscal 2021, we made Heart
Medical Care Co., Ltd., which provides nursing care personnel
referrals among other services, into a consolidated subsidiary.
A very large portion of the Group’s businesses takepayments from customers in advance, so we need to keep acertain amount of cash in reserve to maintain a sound financial
position, which is a limiting factor from a capital efficiency
perspective. We will manage this reserve more efficiently andreduce fixed costs to raise ROE.

Actively investing in growth while
fortifying our financial foundation
At the start of fiscal 2022, the second year of our medium-term
management plan, we disclosed our cash position up to fiscal
2025 and our approaches to growth investment and shareholder
returns. In fiscal 2025, the final year of the plan, we forecast that

Approach to cash position and allocation
Cash position
FY2022–2025 cumulative

Cash allocation¥180 billion

Investments in reform/
growth of existing businesses(estimate) ¥70 billion

FY2022–2025
Adjusted operating CF

Total ¥130 billion–

FY2022–2025
Operating CF

Total ¥170 billion

Business investment (capex, etc.; excluding lease assets)

Increase in advances received+
Repayment of lease liabilities¥40 billion

Strategic investments in the future(estimate) ¥50 billion
M&A/Digital Innovation Fund

End-FY2021 Investment standby funds¥50 billion

Total of cash/cash equivalents
and highly-liquidmarketable securities

Approx. ¥160 billion–

Advances received,
advances received fromnursing home residents, etc.

Approx. ¥110 billion

Shareholders return and strengthening of financial foundation
Shareholder returns

Based on 35% lower limit for dividend
payout ratio, aim to continuously
raise dividends by growing post-tax
net income

Financial foundation strengthening

Regain equity ratio of 30% by FY2025
and retain some capital for future
investments¥25–¥30 billion¥25–¥30 billion

Benesse Report 2022

16

Part 1 Our Vision and Business Strategies

Linking ESG initiatives to the enhancementof economic value
As a Group that delivers services in the socially important fields,
including education and nursing care, we should be putting agreater emphasis on ESG activities than other companies.
Therefore, it is essential that we ultimately link the enhancementof non-financial value to the enhancement of financial value.
With this in mind, we will be setting non-financial KPI for eachcompany and business from fiscal 2022 and we are currently
discussing how this will be monitored at meetings of Benesse
Holding’s Management Council.
We aim to maximize our corporate value by generating
three types of value—social value, customer value, andPart 3 Enhancing Operational Resources

Financial Highlights

Message from the CFO

cumulative adjusted cash flow from operating activities will haveincreased by around ¥130.0 billion. When combined with ¥50.0
billion in investment standby funds at the end of fiscal 2021, it
results in an anticipated cash position of about ¥180.0 billion
over the next four years.
Our basic policy for the allocation of these funds is tobalance growth and strategic investments and shareholder
returns with efforts to fortify our financial foundation. We plan tospend ¥70.0 billion on business investments, primarily expanding
products and services in existing business fields, funding new
products, and IT investment. We will also allocate about ¥50.0
billion for strategic investments aimed at inorganic growth, suchas M&A and funds for use by the Digital Innovation Fund (DIF),
which we established in November 2021.
We also plan to allocate a total of around ¥25.0 to ¥30.0
billion for shareholder returns over the four years. If actual results
are in line with plan forecasts, we expect to be able to raise thedividend each year from fiscal 2022 onward, even under theassumption of a 35% payout ratio. In fiscal 2022, we plan to raise
the annual dividend by ¥10 to ¥60 per share.

Part 2 How We Create Valueeconomic value. There is a certain amount of alignment between
customer value, social value, and our ESG-related KPI. We plan toreanalyze the relationship between non-financial KPI andcorporate value from this perspective and disclose our findings
to external stakeholders in an easy-to-understand manner.

Net sales

Operating income (left)(billions of yen)
500.0

Steadily achieving the medium-term
management plan by steering fromselection and concentration to growth
One of the important responsibilities of a CFO is to ensuresmooth communication with investors and the financial markets.
While there may be concerns about the decline in enrollment of
our Shinkenzemi business that I mentioned at the start of thismessage, said business accounts for only around 25% of theGroup’s operating income. Currently, our education business inJapan has a broad scope, from schools to prep schools andclassrooms, and even through to university students andworking adults, and we are strengthening efforts in each field.
Furthermore, profit contributions from our nursing care businessare growing each year. This balanced business portfolio meansthat we can still achieve corporate growth, even if there is no
increase in Shinkenzemi enrollment. I intend to properly explain
topics such as our profit structure to shareholders and investors
to ensure their understanding.
Although we are improving in many KPI, I am aware thatraising our price-earnings ratio (PER) is a challenge. At the releaseof our fiscal 2021 financial results, our PER was less than 15, which
could be seen as a worrying indication regarding the Group’s
growth potential. I understand some people might be concernedthat our main strength is an education business in a country withdeclining birthrates and that we are also facing factors such as
the impact of the weakening yen. However, there is still plenty ofroom for business growth by expanding our market share, evenin the Japanese market, and we are building a solid strategy forachieving this. We will disclose the details going forward, so I
hope you will share in my excitement about the future.
We started to wind down our main activities forconcentration and selection in fiscal 2021 and we are now
moving strongly toward the next phase, which is focused on
growth. We will work to achieve our target of ¥40.0 billion in
operating income by fiscal 2025, the final year of the current
medium-term management plan, by growing our existing
businesses and actively investing in new businesses, whilestaying conscious of financial soundness and capital efficiency.

Operating income/Operating income ratio

434.4

439.4

448.5

427.5

431.9

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)

(yen)

25.0

15

15.0

250

400.0

20.0

300.0

15.0

21.2

12.3

20.1

16.2

12

12.0

9

9.0

13.0

12.6

200

128

150

6.2
200.0

10.0

2.9
100.0
0

4.7

3.7

4.7

6

18

19

20

21
(fiscal year)

ROE/ROA

0

3

17

100

3.1

5.0

17

4.9

6.0

3.1

18

19

20

0
21
(fiscal year)

3.0
0

50
17

18

65
32
19

20

CAPEX

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

9

40.0

ROE

21

50

11
0

(fiscal year)

ROA

25.0

7.3

31.5

29.2

30.0
6

3

1.0

2.5

2.9
1.0

3.7

19.8

19.8

17

18

19

18.8

18.8

20

21
(fiscal year)

23.5

22.6

19.4

19.9
20.0
15.0

20.0
10.0

1.2

1.8
0.6

0.7

10.0

5.0

0.2
0

17

18

19

20

21
(fiscal year)

Equity ratio

0

17

18

19

Interest-bearing debt/
Debt-to-equity ratio

Cash dividends/Dividend payout ratio(billions of yen)

60

160.0

33.6

32.7

31.3

Debt-to-equity ratio (right)

137.2

120.0

111.0

80.0

63.9

27.6

30

0

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

(%)

34.5

21
(fiscal year)

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

Interest-bearing debt (left)

45

20

120.6

68.1

139.9

(%)

(yen)

120

100

123.6

72.2

77.0

86.9

Cash dividends (left)

90

Dividend payout ratio (right)
(%)

95

452.9

80

400

60

50

50

50

76.6

154.3

0

40.0

17

18

19

20

21
(end of fiscal year)

0

30

17

18

19

50

300

60
40

15

500

20

0
21
(end of fiscal year)

20
0

200

73.8

17

98.2

18

19

100

20

0
21
(fiscal year)

Note: Interest-bearing debt includes lease obligations.

17

Benesse Report 2022

Benesse Report 2022

18

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Message from the Chief DX Officer

We will raise value for customers by enhancing
in-house organizational capabilities to strengthen
partnerships with external partners

Advancing DX to continue providing
the best value

Hidetomo Hashimoto
Senior Managing Executive Officer, CDXO (Chief DX Officer),
Executive General Manager of Digital Innovation Partners

Visit the following website for more information on
Benesse’s DX strategy (only available in Japanese)
https://www.benesse.co.jp/digital/

19

Benesse Report 2022

The Benesse Group is advancing its digital transformation (DX) as
one of the key measures in its medium-term management plan.
The ultimate goal of this DX is to “continue being a company that
can always provide customers with the best products and services.”
New services that utilize cutting-edge technologies arebeing launched one after another and a succession of new
players are entering the market. If we are to remain as the best
within this environment, we need to raise our ability to respondswiftly to the needs of customers. Digital technology is one wayof achieving this and we think that we can continue providing
the best value by combining the Group’s customer base and ouroperational resources, such as knowledge and expertise in the
education and nursing care fields, with new functions andbusiness models that utilize digital technologies.
Based on this approach, we established the Digital
Innovation Partners (DIP) in April 2021 as an organization thatintersects with all of the Group’s business divisions. Initially, the
DIP was a virtual organization comprising systems developers,
data scientists, personnel in charge of human resources
development, and others from Benesse Holdings and Group
companies, but in fiscal 2022, it was converted into an actual
physical organization. The DIP will reorganize and strengthenorganizational functions related to IT and digital technology ineach business division in order to further accelerate theGroup-wide advancement of DX.

Focusing on the digitalization of products
and services and cultivation of
DX human resources
The Benesse Group is engaged in a wide range of businesses andeach business has different customers, business models, andcompetitive environments. It is important that DX is advanced
using strategies that are matched to the unique characteristics ofeach business and service, as well as its current level ofdigitalization. Furthermore, the training of personnel andconstruction of systems infrastructure that are essential for DX
need to be addressed as shared issues for the entire Group.
Therefore, the DIP has been implementing specific measures
under the two themes of “DX promotion according to thebusiness phase of digitalization” and “improving theorganization’s overall DX capabilities.”
For example, in fiscal 2021, more than 20 projects werelaunched based on the business plans of each Group company
and each of these projects has been making smooth progress
through close coordination between personnel from the relevantbusiness division and personnel from the DIP. Also, as a measure
to strengthen DX human resources, we carried out an assessment
based on new definitions of DX-related work content and skills,
and then set up 25 different training programs (for a total of 56
sessions) based on the result. To date, almost 3,000 employees
have taken this training. Furthermore, there is a growing numberof cases where DX has facilitated coordination between Groupbusinesses, such as the use of skill analysis and training programs
designed for sales personnel in the school & teacher support
business to develop staff in the nursing care business.

External recognition of DX initiatives
Certified in May 2021

Selected in June 2021

DX Stocks 2021

18th Japan e-Learning Awards
Minister for Internal Affairs
and Communications Award

Award in the Educational
BCP special category

Learning Pocketbook

39th Information Technology Awards

An increase in the number of mid-career job
applicants following greater recognition of
our efforts as a DX pioneer
In fiscal 2021, the Group received an unprecedented amount of
external recognition related to its DX initiatives. Benesse Holdings
was selected for the DX Stocks list due to its overall DX efforts,
and we also received commendations from external experts,
including Japan e-Learning Awards and an Information
Technology Award for services and teaching materials provided

IT Award (Customer andBusiness Functions category)

IT Encouragement Award(Management category)Discernment of
needs

Current monthPrevious month
Branch average
Service user
informationcollection

Crisismanagement

Proposalformulation

Mirai Seed

Relationshipbuilding

Sales skills assessment andcultivation program

DIP organizational structure
Digital Innovation Partners

DX Strategy Office

Formulates and promotes Group-wide DX strategy

IT Governance Office

Formulates and promotes IT strategy and enhances quality, cost, and delivery
related to development and IT costs

DX Consulting Department

Advances digital shift projects and formulates disruption countermeasures

Data Solutions Department

Promotes data usage at each company

Infrastructure Technology Promotion Department

Builds and operates infrastructure and provides technical support for DX

Corporate DX Promotion Department

Develops and operates cross-divisional systems and corporate functions

DX Human Resources Development Department

Recruits and cultivates DX human resources and updates human resources systems

Benesse InfoShell Co., Ltd.

Develops, operates, and maintains the Group’s systems security

Benesse Report 2022

20

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Message from the Chief DX Officer

by the Group that incorporate digital technology, such as the“Learning Pocketbook” support app for parents, “Speaking Quest”
English performance tests, and “Mirai Seed” tablet computer
learning support software.
This succession of awards provided opportunities for theGroup to appear in media articles about DX and in fiscal 2021,
the number of mentions in media grew by an impressive 378%
compared to the previous fiscal year. Benesse has a rich history in
the education industry, but unfortunately this also tends to beaccompanied by the image that we are lagging behind in termsof digitalization among people who do not generally use our
products and services. However, I think the huge increase inexternal assessments and media exposure has helped to change
this kind of negative impression and raise recognition of theCompany as a digital pioneer. It will also have a positive impact
on recruitment and actually, in fiscal 2021, the number ofapplications we received from mid-career DX personnel
increased year on year by about 20%.

Leveraging the DIF to further expand
Group business through partnerships
When advancing DX, it is important to not only focus on solving
immediate challenges but also to draw up a vision of an ideal
future and then backcast from that vision to find what needs tobe done now. Therefore, we established the Digital Innovation
Fund (DIF) in November 2021 to implement this approach.
The DIP has already been carrying out an ongoing“disruption watch,” in which it identifies and monitors potential
disruptors that may threaten the Group’s business in the future
and the technological fields they are likely to target, as part of its
analysis of risks and opportunities in each business area. We
established the DIF to take these efforts one step further bybuilding partnerships with potential disruptors throughco-creation, cooperation, and joint projects. Its scope forinvestment is a total of ¥5.0 billion over five years and as of July
2022, it has agreed to partnerships with four companies.
The DIF’s core concept is to avoid getting dragged into abattle for survival with future competitors but instead, to vitalize
markets and create greater value for society by working together
with fellow industry players. Therefore, in addition to financial
assets, it also needs to be able to leverage as great an amount as
possible of non-financial assets, including our knowledge andexpertise, with the goal of supporting the growth of companies
it has invested in. Going forward it will continue to explore
potential investment partners that are expected to produce
synergies with the Group’s businesses, including in the
education, lifestyle-related, and nursing care fields, andcompanies engaged in activities that could lead to the creationof new businesses for the Group.

Partners that have received investment and support through the DIF

21

Benesse Report 2022

Code Chrysalis Japan Co., Ltd.

Hmcomm Co., Ltd.

Fourth Valley Concierge Corporation

Arsaga Partners, Inc.

DX training programs
Planning
development• Agilein-house case studies
wireframe• Defining
requirements
Practical• Implementing design sprints
teaching material• Digital
Specialized
development
knowledge
and skilltraining

Introductory

Basic digital training• Introduction to DX• UI/UX fundamentals• Website fundamentals
development• App
fundamentals

Development management/
engineering

Data

Digital marketing

wireframe-defining• Usingrequirements• Agile development• Databases
systems• In-house
fundamentals

Semi-Structured• Using
Query Language• Effect verification• Data analysis application
Shinkenzemi’s• Using
elementary, junior high,development• Systems
fundamentals
process• Development
fundamentals—agile
process• Development
fundamentals—waterfall

to• Introduction
Benesse’s data
marketing• Digital
fundamentals• Product log design
and practical• Introduction to marketing• Introductory
analytical design• Advertising fundamentals• Data usage fundamentals

marketing• Digital
in-house case studies• Practical access analysis

and high school data

• Digital fundamentals - In-house DX case studies, disruptor analysis, etc.
• Technical fundamentals - Operating systems, networks, databases, HTML/CSS, Java, web servers, etc.
- External case studies, culture sessions, etc.
• Digital lectures• DX literacy—An explanation of key terms (video)

Reskilling each employee to enhance
the quality, cost, and delivery of
products and services
The DIF realizes inorganic growth through investments, while the
DIP’s mission is to support organic growth by working together
with existing businesses to properly address immediatechallenges and advance DX.
The DIP’s activities have clarified that the biggest challenge
we are currently facing is a human resources shortage.
Awareness of the advantages of using IT and digital technology
is rising at each workplace and the number of development
projects being launched within the Group is growing, but there
is still a shortage of personnel who can implement DX. The rapid
increase in development projects also means that this shortageis growing, despite our efforts to increase the number of DX
personnel by strengthening mid-career recruitment.
I think the key to overcoming this problem is to reskill current
employees. Basically, the advancement of DX is not a task thatshould be taken on by IT departments alone. We need our
employees at each business location to possess knowledge of IT
and digital technology, or in other words, to become DX literate, andto adopt a proactive mindset. Even personnel who are not involvedin the actual development of systems and apps need to have aminimal understanding of concepts and specialist terms in order tobe able to communicate with others both inside and outside theGroup. The 25 training programs I mentioned earlier weredeveloped with this in mind. Happily, learning is deeply rooted in

Benesse’s culture, and we have a huge number of employees whoare highly committed to self-directed learning. We will work to raisethe value provided by the products and services of each businessby steadily providing each individual with new DX-related skills.

Advancing DX to realize well-being
for each individual
We will continue to focus on both reskilling in-house andrecruiting DX human resources. I think one of the advantages weoffer as a workplace for both new and experienced recruits isthat we provide a variety of career options.
We deliver services to a truly wide range of people, from
infants to school and university students, working adults and theelderly. Our business model also covers many different kinds ofwork, including instruction through correspondence and in realclassrooms, assessments, care work at nursing homes, anddispatch staffing and referral operations. We also provide
environments that can meet the needs of diverse jobseekers, suchas people who want to use their skills to benefit society or people
who want to hone their capabilities by taking on various types ofwork. My role as CDXO is to make this advantage and theatmospheres at our actual workplaces more visible to people
outside the Group. It is said that a company is its people andultimately, this is also true of DX. Going forward, we will continue
to advance DX in order to realize well-being for all our customers,
partners, and employees as a leader in education and nursing care.

Benesse Report 2022

22

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

FOCUS Enhancing Our Non-Financial Capital

Human
CapitalIntellectual
CapitalEvolution of Mirai Seed

Evolving digital products and services throughthe training of DX personnel

Sparking innovation throughthe synergy of non-financial
capital to improvethree values

Customer Value
Products, services

Intellectual capital, which is our expertise andintellectual property (IP); social capital throughco-creation within the Group and with ourcustomers and partners; and human capital,
based on our learning culture.
The Benesse Group is working to further enhance
this accumulated non-financial capital through avariety of initiatives.

Higher Corporate
Value
Social Value

Sales and profit
Intellectual
CapitalSocialCapitalExpanding and popularization of
Udemy Business

Further growing our customer base throughexpansion of corporate-targeted services

Intellectual Capital
Expertise and IP

Benesse Report 2022

Mirai Seed

Economic Value

Addressing social
issuesBy sparking frequent innovation through thesynergy of each type of capital and continuing tocreate new products and services, we are working toenhance three values: social value,customer value, and economic value.

23

Benesse Corporation offers Mirai Seed, tablet learning support
software, to elementary and junior high schools nationwide. Since
2020, the user base for this Mirai Seed software has greatly
increased due to school closures caused by COVID-19 and the
GIGA School Program being pushed forward. We therefore
established fan sites to provide detailed information to teachers incharge of ICT at the schools where the software was introduced,
and online seminars were held to strengthen points of contact.
Leveraging the diverse opinions of teachers in each region, we are
expanding our services by improving the UI/UX that is easy to use
in daily classes and revising it to accommodate individualized andoptimal learning using AI, while enhancing our efforts to recruit,retain and train DX personnel who are responsible for thedevelopment of functions and operation of services.
As a result of these initiatives, Mirai Seed was a winner inthe 39th Information Technology Awards (customer/business
function category) in 2021, which are held by the Japan Instituteof Information Technology. We developed Mirai Seed to beusable in various situations for instruction and learning, based on
our accumulated knowledge and expertise from the Benesse
Group’s sustained efforts to support school education in the field,
and Mirai Seed was recognized for its contribution to DX in thefield of education, including support for student learning andacademic affairs.

Human CapitalSocial Capital

Human resources
developed throughour learning culture

Co-creation within
the Group and withour customers andpartners

The Benesse Group is working to enhance social capital by offering
new products and services for universities and working adults.
Udemy, one of those services, is an online platform service
for video learning that brings together people who want toteach and people who want to learn from all over the world, andBenesse Corporation is aiming to popularize the service as
Udemy’s exclusive business partner in Japan. We also developeda corporate-targeted service, Udemy Business, to enable users toview approximately 7,300 Japanese and English
seminars—which have been carefully curated for a Japaneseaudience from the material available on Udemy—on asubscription basis. As of June 30, 2022, Udemy Business has
been adopted by more than 800 companies in Japan, including
50% of the companies chosen for the Nikkei 225. Since fiscal
2021, the program has also been used in Mie Prefecture to
improve the IT knowledge and skills of administrative staff,
thereby contributing to the human resource development ofcompanies and local governments.

Udemy is also used by employees of our Group, and it is not
merely helping to enhance companies which have introduced
Udemy Business, but contributing to the improvement of theGroup’s human capital, as well. Going forward, by evolving
Udemy, we will make progress with growing the Group’s
customer base and developing the skills of employees.

Udemy Business

Benesse Report 2022

24

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

FOCUS Enhancing Our Non-Financial CapitalIntellectual
CapitalHuman
CapitalDevelopment of Majikami AI

Improving residents’ quality of life (QOL) throughthe fusion of people and technology
With the aim of improving QOL for residents of elderly homes
nationwide, Benesse Style Care has been making progress on thedevelopment of Majikami AI, in conjunction with the DX
Promotion Department of Benesse Holdings. Majikami is thecommon name for an internal qualification system for a nursing
care expert with a high level of expertise and practical skills, anda total of over 190 staff members have been certified as Majikami
up to this point. Majikami AI is being developed with the insights
and behavior of Majikami serving as instructional data. By turning
the intangible expertise of highly specialized staff into
instructional data, we quantify the factors that lead to improved
QOL for residents. Through the fusion of people and technology,
our goal is to enable any staff member to provide high-quality
care that is close to the care provided by Majikami.
Benesse Style Care opened Granda Yotsuya in March 2022 as
the first edition of the Benesse sensing home, with 55 more elderly
home locations planned for conversion to sensing homes by fiscal
2023. Multiple sensors, including “sleep sensors” and “excretory
activity sensors,” will be installed in the rooms in these homes, andthe information collected by the sensors will be aggregated to makethe physical condition of the residents visible. Using this data and
Majikami expertise, we plan to develop AI solutions which will makeservice quality that places the highest priority on QOL into a reality.
With regard to the Benesse Group’s use of AI in the nursing
care field, we intend to continue enhancing this initiative going
forward as one of the Group’s key DX measures, which will not

only improve operational efficiency at nursing care facilities, butwill also enhance the quality of nursing care by developing
human resources to address the critical social issue of a shortageof nursing care personnel, and also lead to the revitalization of
the industry as a whole.

Yukari Miyashita
Data Scientist,
Data Solutions Department
Benesse Holdings

The process of developing solutions that will further advance
Benesse nursing care is both challenging and rewarding, as wehave to make them requirements so that frontline nursing careproviders will be able to comprehend and actually use thesolutions. We have promoted the review of requirements anddevelopment of solutions in tandem while listening to thethought process of Ms. Edamatsu, a Majikami active in the field.
In the future, I would like us to continue to create synergy
between people and technology by continuously reflecting
human insights in the system and enhancing functions to
support better judgment by each on-site staff member.

Human
CapitalIntellectual
CapitalBenesse Educational Research andDevelopment Institute (BERD)

SocialCapitalIncreasing the speed and quality of researchfindings, and passing on those findings to society,the educational field, and our own business:
Better learning through digital technology
The Benesse Educational Research and Development Institute(BERD) is an in-house think tank, which was created in 2013 byintegrating several research divisions of the Benesse Group. Witha large number of human resources as the foundation for its
research activities, BERD takes a comprehensive view of thechildcare and education environment and conducts
multifaceted surveys and research in the field of education whichtarget a wide range of people, from infants and toddlers touniversity students, adults, parents, and teachers.
As the environment surrounding business has changed at a
dizzying pace, research themes are becoming more complex
and interdisciplinary with each passing day. In order to respondin a flexible way to the speed of business changes, we havereformed BERD to switch from its traditional research function
divided by field to a research function divided by issue, and are
evolving the institute’s research on the topics of humandevelopment, growth, and learning outcomes. As part of thiseffort, we newly established the Education Innovation Center

within BERD in April 2022. The center will work to disseminate
information to society and within the Group on the theme of“better learning through the use of digital technology,” in
addition to strengthening functions to support DX in the
education business domain.
Specifically, we hold monthly information strategy
promotion meetings—attended by those in charge of the
Shinkenzemi business and School & Teacher Support Business, aswell as those in charge of branding and public relations—to shareknowledge, cutting-edge domestic and international casestudies, and research results which are related to digital-basedlearning, mainly in the elementary through high school domains.
In addition to conducting case studies and empirical researchwith elementary and junior high schools and high schools acrossJapan, we hold events such as the Benesse STEAM Festival, where
junior and high school students and working adults interact witheach other based on inquiry-based learning. We also conducted
the Project to Maximize Student Insights and Learning, a weekly
online dialogue with teachers across Japan. The latest information
obtained through these collaborations with outside parties is also
shared with business division personnel and others to enhance
employee’s expertise and communication skills.

Disseminating information to support
better learning through digitization

Use of Majikami AI

Yuko Edamatsu

Data is collected, analyzed,
and interpreted

Nursing Care Professional (Majikami),
Expert Development Department
Benesse Style Care

Data obtained from nursing carerecords and sensors areinterpreted in detail by Majikami

Majikami serve as“instructional data”
Majikami expertise and perspectives
are used as instructional data fordeveloping AI solutions

All staff members make choices
for the most appropriate care
The system provides support toenable non-Majikami staff members
to make judgments at a level close
to that of Majikami

25

Benesse Report 2022

AI

The advantage of Benesse’s nursing care personnel is that inorder to make our business principle of showing “deep respect
for the person’s individuality” into a reality, we are systematicallylearning about ways to grasp the individuality of each resident,
as well as a framework to realize that approach for showing
them that deep respect.
Furthermore, going forward, not only will we be able toget insights about matters like changes to residents’ physicalcondition by leveraging information gathered by sensors and
Majikami AI, but we will also enable each resident to express
their individuality to a greater extent.

Benesse Educational Research andDevelopment Institute
Infant careand childcare

Elementaryand secondary
education

Highereducation

Measuringcompetencies

English andlanguageeducation

Curriculum

Education
Innovation
CenterBusiness divisions andcorporate departments
Supplementary education(Shinkenzemi, prep schools
and classrooms)

Information strategy
promotion meetings
Sharing knowledge,
cutting-edge case studies,and research results

Schooleducation

Schoolacademic
affairs

Branding

Publicrelations

Cooperation with stakeholders••

Students at school

Teachers

Working adults

Researchers

Shinkenzemi
enrollments

Students at prep schools
and classrooms

Students at school

Teachers

Benesse STEAM Festival
Project to Maximize Student Insights and Learning

Benesse Report 2022

26

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

FOCUS Enhancing Our Non-Financial CapitalIntellectual
CapitalHuman
CapitalSocialCapitalStrengthening partnerships through DIF

Establishing an investment facility to accelerate
open innovation
The Benesse Group is accelerating the development ofbusinesses that will lead to the resolution of social issues bypromoting open innovation and enhancing cooperation with its
business partners.
As part of this initiative, we established the Digital
Innovation Fund (DIF), an investment facility, in November 2021.
Through the DIF, we will strengthen our partnerships withventure startup businesses that possess revolutionary
technologies in fields such as education, daily living and nursing
care, and aim for co-creation of various projects, service updates,
and new value. The total ceiling on investments is five billion yen
over five years.

Aiming for the sustainable development of
the Group, in conjunction with partners who
have promising technologies
We have established the following three requirements for theselection of investment and partnership partners by DIF.
Partners who have potential for synergy with Benesse Groupbusinesses in areas such as education, daily living, andnursing carePartners with plans and development capabilities for
DX-related services promoted by Benesse
Companies with innovative technologies and markets infields related to Benesse, or partners with the potential todevelop such technologies and markets
In conjunction with DIF activities, the Digital Innovation
Partners (DIP) division, which handles the promotion of DX
strategy at the Benesse Group, is constantly on “disruption watch.”
While being on disruption watch is generally understood as
identifying and monitoring future threat players (disruptors) andtheir technology areas, the Benesse Group does not limit its
activities to that aspect, and engages in monitoring to search forpromising partners who have potential for synergy with Benesse
Group businesses. By creating partnerships with companies withwhom we can share our guiding principle of “creating new
products and services that respond to customer needs, as well as
new businesses that contribute to solving social problems,” weare aiming for sustainable growth for those partner companies
and for the Group. Since its establishment, the DIF has alreadyinvested in several partners, and will continue to contribute tofurther business growth.

Disruption watch

Enhancing partnerships through DIF

Creating chaos maps for each business area,
clarifying the players and identifying disruptors

Benesse

Venture businesses
Conducting regular monitoring to avoid missing trends,
sharing and reviewing information with business divisions

Driving the digitaltransformation of existing
businesses and services

Hiroshi Mizukami
General Manager of
DX Consulting Department,
Digital Innovation Partners
Benesse Holdings

Since the digital shift consulting and disruption response that DIP is
moving forward with are conducted for each business division, we
also deal with business division issues at the same time.
For example, in digital shift consulting, as the situation
becomes clearer as we enter each business division, we are working

Jumpei Nakamura
Manager of Digital Innovation Section,
DX Consulting Department,
Digital Innovation Partners
Assistant Fund Manager of
Digital Innovation FundBenesse Holdings

We understand that collaboration with startups that have skills andideas not possessed by Benesse will enable us to have a wider varietyof opportunities for speedily offering new value. We are considering awide range of possibilities, not only in the areas of education, nursing
care, and daily living, but also in new areas if they are in line with our
corporate philosophy of “well-being.”
In terms of the circumstances for our activities up to this point,

Co-creation of
new businesses

Searching for the possibility ofentering the field ourselves as a disruptor
Expand into new fields

New

Expanding services inline with customer needs
Evolve core businesses
Domestic

Overseas

Naoki Sugita
Deputy Manager in Charge ofInvestment and Procurement of
Finance Department,
Finance and Accounting
Assistant Fund Manager of
Digital Innovation FundBenesse Holdings

Investee companies (as of July 2022)
Investee company

Business description

Start of cooperation

Code Chrysalis Japan Co., Ltd.

Offers advanced IT personnel training boot camps

November 2021

Hmcomm Co., Ltd.

Pursues value creation through “sound”

February 2022

Fourth Valley Concierge Corporation

Provides global recruitment support that goes beyond national borders

March 2022

Arsaga Partners, Inc.

Promotes corporate DX and IT development

June 2022

Benesse Report 2022

we have been monitoring the trends of digital players in the fields ofeducation, nursing care, and daily living as part of our disruption
watch, and DIF aims to be positioned as a catalyst for innovation aspart of those specific measures.
In 2021, we selected and made a list of approximately 1,900
companies from around the world with the potential to achieve
digital disruption in each business. At present, while using that list forreference, we are continuing to meet with startups that may bepotential candidates for collaboration in terms of business synergy
and net investment, and are also in discussions with businessdivisions. My focus is on the areas of NFT/tokens, the blockchain, andthe metaverse in relation to Web 3.0. I am pursuing these activities
because I believe that if we are able to make them a reality, they havethe potential to make significant contributions to the co-creation of
new businesses and the expansion of business areas.

Building relationships with players starting when they are small-scale,and actively considering co-creation, collaboration, and cooperation

Existing

27

on DX promotion tailored to their business phase.
For dealing with DX issues at each business division, I think we
can resolve issues not simply by developing everything in-house in aself-sufficient manner, but also through co-creation with external
parties. There are currently several precedents, and going forward, I
would like to further promote DX through DIF activities while havingorganic connections with external partners that possess moreadvanced expertise.
Benesse is a company that supports people’s growth, so I hopethat the employees who are involved with DIF will grow as well, notjust our customers. I would like to create a system and culture where
everyone involved in the project can grow. I believe doing this will
have a positive impact on the company, and I expect that it will
become an initiative worthy of the Benesse name.

At DIF, we provide financing from the holding company Benesse
Holdings itself, and we are creating mechanisms to rapidly scale up
business collaboration by encouraging cooperation with each
operating company. Our Group has had past experience with things
such as minority investments, and has a track record of several

investee companies going public. I believe that in the future, we will
be able to take advantage of that experience in these DIF activities.
We have already invested in four companies and engaged incooperation with them as DIF, and in each case, we have made theinvestment with a strong awareness of the relationship being
mutually advantageous for both parties. While it is a prerequisite forinvestment that there will be financial benefits and expected synergy
for our Group, we believe that accelerating growth by providing
support—not only financially, but also in terms of business to thepartner companies in which we invest—will ultimately lead to mutual
benefits for both parties.
In this way, we will leverage our investments to pursue
mutually advantageous relationships with partner companies andachieve sustainable growth for our Group.

Benesse Report 2022

28

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Initiatives for Improving Human Capital
A personnel system that supports the “Benesse (well-being)” of employees themselves
It is nothing short of rewarding when each of the Benesse Group’s
employees feel as though they are helping to solve the problems ofcustomers through their work, if only slightly, which in turn is helping
to address social issues. “Management is centered on people,” and“When our employees in the field are bursting with vitality, that isprecisely when our business grows.” I believe that it is the responsibilityof personnel departments to bring these messages to fruition.

TopicsExecutive Officer,
CHRO (Chief Human
Resource Officer),
Executive General Manager
of Group Human Resources

Policies
Promoting principle-driven management
Implementation of events such as morning meetings attended by
all employees, company-wide meetings, and Security Day (for theGroup, or for Benesse Holdings and Benesse Corporation)
Publication of the BATON booklet on our philosophy, andemployee engagement
p. 30•
Improving
Employee
Engagement

Yuko Onizawa•

Implementation of the B-Stage internal proposal system(fiscal 2021) p. 30
Launch of a proposal system to embody the “DNA of utilizing
voices from the frontlines in management”•

Providing growth opportunities based on individual suitability
and career
Fiscal 2021 “skill development point” system
Granting approximately 200,000 yen for training expenses and otherfees annually (Benesse Corporation)
Reskilling leave system: Three days a year (from fiscal 2022, Benesse
Corporation)•

Progress••

Implementation of morning meetings on the founding date of Benesse, as well asactivities to make our principles widespread (nine times in fiscal 2021)
Implementation of employee engagement surveys (A rating across the entire
company in fiscal 2021)
p. 30

plans received awards from among 1,782 plans and proposals• Six
Three plans were chosen from units proposing new business initiatives and three
from units proposing business process reforms, with preparations underway toimplement them

all generations through improved “feelings of growth” for each
• Revitalizing
individual employee• Approximately 20% of skill development points used•
Fosteringa Learning Culture

DX personnel enhancement (from fiscal 2020)• DX reskilling, fostering of a learning culture

800 DX personnel in fiscal 2021
• Approximately
reskilling: Approximately 2,600 employees at Benesse Corporation who took
• DX
Udemy seminars in fiscal 2021
an “Outstanding Performance” Award at the 4th Platinum Career Awards,• Received
which recognizes companies that are oriented toward providing careerdevelopment and career opportunities for their employees. (Organized by
Mitsubishi Research Institute, Inc. in cooperation with Toyo Keizai Inc., with support
by the Ministry of Health, Labour and Welfare and the Tokyo Stock Exchange)

Promotion of diversity and active participation by female employees

Diversity
Promotion andLeadership

ESG and Sustainability Division and ESG and Diversity• Launched
Department (April 2022)
University (training of young human resources)• Benesseof an “Instructor and Business Leader Training System”• Establishment
at a special-purpose subsidiary which promotes the employment of
persons with disabilities

CEO successor training / leadership

Succession Plan / discussions at the Nomination and• CEO
Compensation Committee
Developing
the next generation of management through planned• work experienceand other measures (The Benesse Leadership

female executives, one Outside Director and two Executive Officers• For
of all managerial positions held by women (Benesse Corporation)• 35%
Participants• fiscal 2022) in Benesse University (17 employees in fiscal 2021 / 12 employees in
Business-mate, a special-purpose subsidiary, was awarded the “Innovation• BenesseAward” at the 11th Japan HR Challenge Awards
discussions at the Nomination and Compensation Committee• Six
new employees chosen for the program for training the next generation of• Six
leaders (In total, 53 employees chosen in fiscal 2021)

Program, a program for training the next generation of leaders)

Promotion of a hybrid working style (Benesse Corporation)
Office work combined with remote work
Renovations to shift offices to an ABW* style (Tokyo area/Osaka/Nagoya)* ABW (Activity-Based Working): A working style where employees canfreely choose where and when they work in accordance with theirrespective jobs•
Working Style
Reforms /Productivity
Improvements

Improving
Awareness ofManagement
Participation

Support for balancing work with nursing care and childcare(continually implemented since the 1990s)
Encouraging male employees to take childcare leave
Enhancing support systems
Introducing a dual-employment system (with permission) for
networking, career development, and skill enhancement purposes•••

all-employee meetings to explain financial results and share• Holdingbusiness plans
membership in the employee stock ownership group• Promoting(incentive payment*)

COVID-19
Countermeasures

29

Benesse Report 2022

in turnover rate due to childcare and nursing care reasons• Reductionof introducing the dual-employment system: 72 employees• Results(fiscal 2021)

of each employee’s awareness of management participation• Improvement• Increased interest in stock price and dividends* Approximately 10% of accumulated amountmanagement promotion activities for fiscal 2021:• Health(1) Online exercise program, (2) nursing care seminars, (3) women’s

health for each employee• Bettercertified 2022 Health and Productivity Management Organizations from the• Six
Benesse Group (Benesse Holdings, Benesse Corporation, Tokyo Individualized

vaccinations at workplaces• Conducting• Promotion of hybrid working styles

an environment in which employees can work without anxiety even in• Creating
the face of the COVID-19 pandemic (vaccinations were conducted a total of 12

Promotion of Benesse health management

Improving Healthwith office environment up 10.6% over the previous year
• Satisfaction
an office attendance rate of below 50%• Maintained
space on office floors increased by 2.45 times• Communication
space on common-use floors increased by 1.87 times• Communication• Fixed costs reduced by 35.6%

health online seminars, (4) mindfulness experiences, (5) a quitting
smoking program

Educational Institute, Benesse Business-mate, Benesse BE studio, Benesse Senior
Support)times in Okayama, Osaka, Shinjuku, and Tama)• Average office attendance rate of under 30% (Benesse Corporation)

Creation of BATON, a pamphlet on
our philosophy
Amidst the rapid changes occurring to the business environment,
our Group is working to make “reform and growth” a reality. In order
to continue promoting reform and growth across the entire Group,“Benesse,” our unchanging corporate philosophy, serves as the focal
point. How was Benesse born about 30 years ago, and how has it
been passed down through our businesses? We produced anddistributed approximately 10,000 copies of the BATON pamphlet on
our philosophy, which incorporates the voices of Group employees,with the aim of helping each individual to understand thephilosophy and create a future with Benesse as the starting point.
Furthermore, we held online Benesse Meetups forphilosophy-related activities and study sessions, whereparticipants could listen to the actual words of people who
appeared in the pamphlet about topics such as their actual
feelings in the course of creating businesses, as well as theirconcerns. We have invited Yumi Narushima (Deputy Head of the
Out-of-School Learning Business Company of Benesse
Corporation), who has attempted to reform Shinkenzemi’s
elementary school courses and Challenge Touch up to this point,
Tomonori Iida (General Manager of the Working Adult Education
Business Unit of the University and Working Adult BusinessCompany), who was involved with the Japanese businessexpansion of Udemy, and Gen Yamaguchi (Representative
Director of Benesse Socius Co., Ltd.), who has made great efforts
to launch a new company for theemployment of people withdisabilities, as guests. Approximately
1,000 Group employees participatedin each Meetup.
These Meetups are a valuable
opportunity to have employees
actively listen to the guests’ talks,
think about how to make thephilosophy of “Benesse” a reality inbusiness, and take ownership.

B-Stage, an internal proposal system toconvey the voices of frontline workers tomanagement, with 1,782 proposals submitted
in the first fiscal year
Benesse’s organizational culture and DNA of attempting toachieve solutions to customer issues and business problems
through ideas developed in the field has been continuously
passed down since it was founded. The awareness of ourfrontline employees concerning the issues they perceive whileinteracting with customers, as well as what they think needs tobe 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.
In 2021, the first fiscal year of the system’s operation, there
were 1,782 proposals submitted. In the final round of judging,
final presentations were made by employees on the submitted
six business reform proposals and seven new business proposals
that had been chosen through two rounds of selection. The
judging panel of 23 people, which included executives from
Benesse Holdings and Benesse Corporation as well as outside
experts, made incisive points, asking “What is the significance ofBenesse doing this?” and “What is your business model?” andmaking rapid-fire comments with expectant voices.
After discussions and deliberations by the judges, one
Grand Prize winner and two Excellence Award winners wereselected from the new business proposal category, while one
Grand Prize winner and two Excellence Award winners wereselected from the business reform proposal category. The six
award-winning projects are currently making progress towards
commercialization and making the business reforms a reality.

The scene at the final judging

Introducing a new organizational assessment
tool for people-centered management, withthe aim of improving employee engagement
The Benesse Group has been conducting organizational assessments
for more than 20 years to realize “people-centered” management.
Based on the results of organizational “health checkups,” we haveincorporated the PDCA cycle into the management structures of
the Group and each company in order to improve issues, such as
sharing and reporting the current status at Board of Directors
meetings and reflecting the results in business plans.
Starting in fiscal 2021, we switched from our original in-houseorganizational health checkup tool, GAMBA, which we had
previously used up to this point (annual checkups) to Motivation
Cloud (Link and Motivation Inc.), one of the biggest organizational
assessment tools in Japan (biannual checkups). Results and issues
can now be immediately understood, with the most recent results
being an A-rating for the entire company. We will boost employee
engagement by speedily making the state of the organization visible,
comprehending organizational issues, and making improvements.

Benesse Report 2022

30

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

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

Reduction rate for greenhouse gas emissions(Years ended March 31)

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.

Reductionrate, basedon 2018

Promotion systems

Assessment and endorsement of initiatives

The Sustainability and ESG Promotion Committee, with theManaging Executive Officer for Sustainability and ESG as its chair,
and whose membership includes full-time directors including
the Representative Director and President and the Heads ofBusiness Divisions, meets regularly to make decisions about
policies and initiatives concerning ESG issues, including
environmental ones, and to monitor the status of activities. The
Committee’s activities are reported to the Board of Directors.

Climate control measures
Benesse Corporation had previously set medium- to long-term
reduction targets for greenhouse gas emissions, but we havefurther revised our Scope 1 and 2 targets upward from the WB
2°C level to reduction targets in accordance with the 1.5°C level.
In order to meet these targets, in fiscal 2021, we moved forwardwith measures such as reducing paper consumption bypromoting the digitization of products and services, reducing
office space by adopting a hybrid working style of officeattendance/working at home, and implementing a medium- tolong-term repair plan for our own buildings.
Medium- to long-term reduction targets
for greenhouse gas emissions(Years ended March 31)

Reductionrate, basedon 2018

Every
year

2030

2041

2050

Scope 1 and 2(1.5°C targets)

4.4%*1

52.8%*1

100%

100%*2

Scope 3*3(2°C targets)

1.23%

14.8%

—

*1 Updated application pending for SBTi 1.5°C targets (as of July 31)*2 Reduction targets have been certified by SBTi
*3 Scope 3 targets have been certified by SBTi as 2°C targets

39.4%

2019

2020

2021

2022

Scope 1 and 2

12.0%

20.8%

30.5%

39.8%

Scope 3

(2.7%)(3.9%)

5.4%

13.8%

Conducted a scenario analysis in accordance with TCFD recommendations
In 2019, the Benesse Group expressed its agreement with the recommendations of The Task Force on Climate-related Financial Disclosures(TCFD), the first education business operator in Japan to do so. With regard to the education business in Japan, we are analyzing scenarios inaccordance with TCFD recommendations, and conducting deeper analyses of the risks and opportunities to our business due to 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• 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 and maintain it below 1.5°C compared topre-industrial levels” under the Paris Agreement. We also received
SBT certification from the Initiative in May 2021. Furthermore,with regard to Scope 1 and2 emissions, we raised ourtargets to 1.5°C targets andresubmitted our applicationin December 2021.

• Evaluation by the CDP
In the CDP’s 2021 climate change survey, we were chosen as acompany with a leadership level of A-, a grade for companies
that conduct excellent activities in areas such as reducing
greenhouse gas emissions and implementing measures tomitigate and adapt to climate change. In addition, in the CDP’s
Suppliers Engagement Valuation, we were chosen as a CDP 2021
Supply Engagement
Leader—the highest
evaluation—for the third
straight year, continuing fromlast year. Our previous CDP
climate change evaluations
are as follows.
CDP climate change evaluations
2017

2018

2019

2020

2021

A-

A

A

A

A-

Physical Risks• Switch to alternative materials (recycled plastics, etc.)• Increase in energy costs• Increase in shipping costs (by truck)• Risk to Benesse’s reputation if we cannot meet

• Procurement failures from suppliers• Major damage at logistics hubs
• Changes in shipping methods due to suspension of• Restructuring of the logistics network due toconsumers’ expectations with regard toenvironmental awarenessenvironmental changes and the spreading of
infectious diseases

the logistics network

Opportunities• Changes in the environmental awareness of consumers • Initiatives towards global environmental preservation• Competitive advantages through innovations in• Highly resilient logistics baseenvironmental technology• Future strategies and initiatives
Benesse will promote with 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 take reductions in CO2 into account, resource circulation initiatives (recycling),
reductions in shipping fees through the adoption of digital educational materials, reductions in GHG emissions due
to office activities such as energy saving and other initiatives, establishment of targets and promotion of initiatives forthe introduction of renewable energy, consideration of a Bring Your Own Device (BYOD) policy for tablets, etc.

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 earlystage. In fiscal 2021, in addition to holding the Benesse STEAM Festival, an online
event where junior high and high school students present research and initiatives
that will lead to solving problems in the real world, we also conducted the 2021
National Research Contest for junior high and high school students. There was adiverse array of research report applications from about 1,700 applicants aroundthe country, touching on topics including the SDGs. We have made entries
available to the public on our “Research Library for All” (Manavision).

Benesse STEAM Festival

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

31

Benesse Report 2022

Benesse Report 202232

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

1,500

3,000

2,570

2,620

2,710

2,720

2,490

Nursing homes & elderly homes
by brand

1,270

Aria

Clara

Granny & Granda

MadokaBon Sejour

Cocochi

400

1,270

1,210

1,180

1,050

1,200

Li-Re

316

322

330

339

343

17

18

19

20

21
(end of fiscal year)

300

900
200

2,000
600
1,000

0

100

300

18

19

20

21
22
(year)[ as of April each year ]

0

18

19

0

20

21
22
(year)[ as of April each year ]Note: Information is shown by country and region.

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(right)(%)(%)
25,00020,387

20,426

20,67353

60

52

19,45620,000

53

51

97.4

400

52

304
16,515

45

36

35

34

271

300

34

33

15,000

95.7
323

377

Part

2

How We Create Value

100

304

90.7

90

86.8

30

200

80

15

100

70

10,000
5,000
0

17

18

19

20

0

21
(end of fiscal year)
Note: Berlitz Corporation was sold during fiscal 2021.

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

Human Resources

Environment

Employees taking shorter hours forchild-rearing

Amount of GHG emissions

18

Scope 1

19

Scope 2

354
306

300

330

333

10,000
8,000

270

250

209

6,595

200

5,929

5,204

200

18

19

20

(year)
21
22[ as of April each year ]Notes: 1. Figures are for Benesse Corporation and Benesse Style
Care combined.
2. Benesse Style Care employees returned to work later
than usual in fiscal 2020, due to the impact of the
spread of COVID-19.

4,502

2,000

50

18

88
19

21

0

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

88

(t)

60,00055,94855,903

55,10276

51,82345,82545,00030,000
100

0

20

150

4,000

120
0

19

190

7,477

6,000

100

18

Paper consumption(thousands of t-CO2)

229

226

220

17

Scope 3(t-CO2)

400

0

20

15,00075

2021
22 (year) 0[ FYE in March of each year ]Notes: 1. GHG emissions are those of Benesse Corporation.
2. Emissions were independently verified. However, thefigures for Scope 3 emissions from 2019 to 2021 havebeen revised as a result of reviewing the calculation
methods after verification.

0

18

19

20

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

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

33

Benesse Report 2022

Benesse Report 2022

34

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

At a Glance

Benesse Group Businesses That Support Every Stage of
People’s Lives in an Age of 100-Year Longevity
Features of Each BusinessCorrespondence
courses

We offer Shinkenzemi—correspondence teaching materials for homestudy—which are targeted at elementary, junior high and high school student
enrollments, and are attuned to students’ stages of development. For Shinkenzemi,
we are moving forward with the digitization of our teaching materials. Combinedwith digital and paper teaching materials and the support of people who utilize
educational knowledge cultivated over many years, such as corrections andguidance by Red Pen Teachers, we are continuing to work on the development of
products and services that can respond to the needs of our increasingly diverse andunique enrollment with meticulous care.
Major business companies: Benesse Corporation

Prep schools
and classrooms
School andteacher support

Education Business in Japan

In addition to unique prep schools such as Tokyo Individualized Educational
Institute, which is geared toward elementary, junior high and high school students,
and Tetsuryokukai, which is for prospective the University of Tokyo applicants, weare expanding our BE studio English classrooms. We provide each student withcareful guidance in accordance with their goals and level of understanding, bothin-person and online, and have earned a solid reputation among students and parents.
Major business companies: Tokyo Individualized Educational Institute,Tokyo Educational Institute (Tetsuryokukai), UP,
Ochanomizu Seminar, Benesse BE studio

Our offerings include Shinken Simulated Exams, which are mock university
entrance exams for high school students, as well as Study Support, materials forlearning and deciding on a path after graduation, which are intended to assist
students in choosing their optimal path. We have business deals withapproximately 90% of high schools nationwide. In addition, in response to the
GIGA School Program, we are offering paid Mirai Seed tablet learning software toapproximately 9,000 schools out of 30,000 elementary and junior high schools
nationwide.
Major business companies: Benesse Corporation, Classi

Net sales / Operating income
Net sales(billions of yen)

Operating income(billions of yen)

FY2020

FY2021

FY2020

FY2021

Education
Business in
Japan

204.4

212.1

11.9

19.0

Kids & Family
Business

71.8

71.2

2.0

1.7

Nursing Careand Childcare
Business

123.8

127.3

10.3

8.0

Berlitz
Business

26.4

20.0

(6.7)

(2.7)

Note: Benesse Holdings divested its entire shareholding in Berlitz Corporation
on February 14, 2022. For this reason, in fiscal 2021, Berlitz Corporationis only included in the cumulative consolidated results for the period
up to the end of the third quarter.

Review of fiscal 2021
Education Business in Japan

University andworking adult

We conduct services for university students and working adults which include our
education business, study abroad support, and employment support. In
particular, Udemy—an online education service which mutually meets the needsof people who want to teach and people who want to learn—has expanded, andit has been adopted by over 800 companies in Japan as of the end of June 2022.
Furthermore, we are aiming to make inroads into corporate-targeted services
such as employee training, acquisition of qualifications, and assessment, as well as
the inbound-targeted educational services sector.
Major business companies: Benesse Corporation, Shinken-AD, Benesse i-Career

Kids &
FamilyWe have leveraged our expertise in education for young children to offer Kodomo
Challenge, correspondence courses aimed at preschoolers, in countries andregions that include Japan, China, and Taiwan. As of April 2022, Kodomo
Challenge has 750,000 enrollments in Japan and 1,050,000 enrollments overseas.
In addition, we are developing publishing and online sales businesses which offer
useful lifestyle information on topics such as pregnancy, childbirth, parenting,day-to-day life, and pets.
Major business companies: Benesse Corporation, Benesse Corporation China

Nursing
Care andChildcare

We operate businesses including the management of nursing homes andhousing for the elderly, as well as the home help services, operation of daycare
and afterschool childcare centers. As for nursing homes and housing for theelderly, we have established 343 facilities as of the end of March 2022, primarily inurban residential areas. Based on a guiding principle of “placing importance on
deep respect for people’s individuality,” we have developed seven series withdifferent price ranges and services to match the lifestyles of residents.
Major business companies: Benesse Style Care, Benesse MCM, Benesse Palette

35

Benesse Report 2022

Shinkenzemi had decreased revenue due to a decline in
the total number of enrollments. On the other hand, through anincrease in the number of customers in the prep school andclassroom business and the number of orders in the school
business, respectively, we made a steady recovery from the impactof the COVID-19 pandemic, and our business as a whole showed
increased revenue and profit.
Kids & Family Business
Though we had increased revenue due to factors such as pricerevisions to Kodomo Challenge in Japan, the positive effect of theexchange rate in China, and the recovery of our domestic concert
business which suffered cancellations due to the impact of the
COVID-19 pandemic, our revenue as a whole decreased due tofactors such as decreased revenue for our mail-order sales businesscaused by the application of the revenue recognition standard andthe decrease in total enrollment for Kodomo Challenge in Japanand China. In addition, profits decreased due to lower sales andhigher expenses for product and service development.

Nursing Care and Childcare BusinessWe increased revenue by making Heart Medical Care Co., Ltd. into a
consolidated subsidiary and through growing our customer baseby increasing the number of locations. However, due to factors suchas a decline in occupancy rate for existing homes caused by the
prolonged impact of COVID-19, as well as the increased labor costs
as a result of the expanded number of locations, we showed adecrease in profits.

Benesse Report 2022

36

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Education Business in Japan
Business

Shinkenzemi BusinessBusiness overview and future prospects
Focusing on providing new goods andservices that improve people-reliant
individual learning support and meetthe need for diverse learning

Michiaki Yamamoto
Managing Executive Officer,
Head of the Out-of-School Learning Business Company of Benesse Corporation

Shinkenzemi possesses major advantages that other companies do not
have, such as the learning history of about two million enrollments and awealth of systematic content, as well as the ability and infrastructure toprovide instruction and services via roughly 8,000 Red-Pen Teachers andabout 1,500 coaches in charge at different schools. By combining theseadvantages— cultivated through many years of businessdevelopment—with the individualization efforts that we have been
focusing on in recent years by going digital, we will provide teachingmaterials and programs according
to each enrollment’s interests andconcerns, learning progress, andacademic ability level. By doing so,
we are working to increase theretention rate of enrollments andmaintain and expand cumulativeenrollments. However, schoolschedules were irregular in fiscal
2021 as a result of the prolonged COVID-19 pandemic. Due to factors
such as restrictions on the time that children could spend on homelearning, despite an increase in average spending per customer, thecumulative enrollments for the year decreased.
Based on these factors, we will continue to improve people-reliant
individual learning support, and enhance our development andprovision of goods and services which go beyond the realm of subject
teaching and meet the need for diverse learning.

Opportunities and risks for businesses
Opportunities

Market
The annual number of births in Japan peaked at two million in 1975, andhas been on a downward trend ever since. In 2021, the number of births
had decreased by about less than half of the peak level, at 0.81 million.
Going forward, the number of children is expected to continue todecrease, with the annual number of births projected to decline byaround 1.0% per year on average.
Although Japan’s birthrate has continued to decline, theout-of-school learning market has remained flat in recent years. As formarket scale in fiscal 2020, however, performance declined due to theimpact of the spread of COVID-19 on prep schools and other out-of-school
learning products, and the market shrank to 1.4329 trillion yen*.
In addition, with the coming of the so-called “era when anyone canget into college” due to the decline in births, the needs of children andparents with regard to learning are growing more diverse, as formats forentrance examinations are becoming more varied. Furthermore, the
COVID-19 pandemic has also triggered the emergence of new digitalproducts and services which have not been fully captured in the
traditional out-of-school learning market survey, shown to the right, andcompetition among companies is growing fiercer. The same movement
toward digitalization is also taking place in school activities, and it isgaining momentum against the backdrop of the GIGA School Program.

Prep school
Correspondence courses (for preschool children/elementary to high school students)
Share of correspondence courses
Others (preschool education/study guides/tutoring)

8.2

8.0

9.0

8.5

10.0

(%)
10

Market contraction due to the decreasing birthrate

Wider range of learning needs due to differing values
and diversification of entrance exams

Lower barriers to entry due to acceleration of educational DX
and greater competition as a result

Shinkenzemi and Kodomo Challenge enrollments in April
Senior high school courses
Junior high school courses
Elementary school courses
Kodomo Challenge in Japan (preschool courses)(thousands of students)
2,720
2,710
2,620
3,000
2,570
2,490

Shinkenzemi share of the target population
Senior high school courses

Junior high school courses

Elementary school courses

(%)
21.3

22.3

20.9

12.9

13.1

12.8

10.8

4.7

4.4

4.4

4.1

3.3

2018

2019

2020

2021

2022

25
19.0

19.7

12.9

20

2,000

2,000
1,470.5

1,462.0

1,476.7

1,480.6

1,477.2

1,500

1,000

957.0

962.0

969.0

972.0

972.0

500

132.3

117.6

121.4

125.6

132.3

381.2

382.4

386.3

383.0

372.9

2016

2017

2018

2019

10

1,000

5

924.0
0

2015

15

1,432.9
50Greater acceptance and demand for digital education

Related business data

Trends in the out-of-school learning market in Japan*(billions of yen)
2,500
9.0

Risks

143.2
365.7
2020 (fiscal year) 0

2018

2019

2020

2022

(year)[ as of April ]0

Cumulative enrollments in Shinkenzemi over a full year

Shinkenzemi average monthly fee per person

Senior high school courses(thousands of students)(yen)

Junior high school courses

25,000* The figures were calculated by Benesse based on data in Yano Research Institute Ltd.’s“Education Industry 2021”

2021

20,00018,561

19,138

19,139Elementary school courses
20,70920,112

Senior high school courses
12,0009,000

15,000
6,000
10,000Elementary school courses

8,620

9,119

9,420

6,325

6,684

6,963

3,770

4,094

4,150

4,247

2018

2019

2020

2021 (fiscal year)

8,059

8,440

5,748

5,768

3,759

2017

3,000

5,000
0

Junior high school courses(year)[ as of April ]

2017

2018

2019

2020

2021 (fiscal year)

0

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

37

Benesse Report 2022

Benesse Report 2022

38

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Education Business in Japan
Business

Growth strategy(1) Improved retention rates
for digital course enrollments(2) Marketing reforms

As a result of becoming able to offer teaching materials which havedramatically improved at responding to individual learning progress andacademic ability level by going digital, the retention rate of Shinkenzemi
for highly motivated learners is steadily increasing. On the other hand,
there are a certain number of students with unstable learning motivation
and usage. In order to increase usage by customers whose use of
Shinkenzemi is not steady, we detect signs of usage stagnation at an earlystage from each person’s learning history, encourage them via phone calls
and other methods, and provide learning advice.

Shinkenzemi digital course enrollments andselection percentages
Enrollment(thousands of students)
2,000
1,500
1,000

61
48
770

52
1,070

68

71

1,200

1,170

860

80
60
40

500
0

Percentages
(%)

20

2018

2019

2020

2021

2022
(year) 0[ as of April ]Amidst the wide variety of digital and online products available on themarket, which makes it difficult for customers to tell the difference
between them, we are aiming to reform our marketing model to getcustomers to choose Shinkenzemi by experiencing the value of our
products. We will establish several patterns for success, such as sendingout products that can be held in customers’ hands or providing places
where they can be picked up, and reduce inefficient sales measures.
In addition, as more and more parents are concerned about theirchildren’s future and education, we are continuously distributing
information to assuage their concerns and worries about career paths,
education, and childrearing through our free support application forparents, Manabi no Techo. The number of customers who havedownloaded the application has increased to 1.36 million, we willcontinue to further grow the trust and expectations of parents.

(3) Developing platform-type businesses to
respond to diverse learning needs
We are working to develop platform-type businesses on the back of theincrease in enrollments for Shinkenzemi digital courses. One of thosebusinesses is the Challenge School, an online service which launched in
April 2022. As of August 2022, we offer live lessons for two courses, dance
and art, and we plan to continue to make our courses more substantial
across a variety of genres, in collaboration with first-class partner companies.

School & Teacher Support BusinessBusiness overview and future prospects
Speeding up initiatives toward
digitalization and retaining our position
as a reliable partner for public education

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

In the School and Teacher Support Business, we have set a goal of
maintaining our position as a reliable partner for public education. We
aspire to grow the business by speeding up initiatives toward
digitalization and responding to individual challenges faced by schools
and municipalities.
In 2021, with the introduction of PCs and tablets in the area of
elementary and junior high schools due to the GIGA School Program,the number of schools that have adopted our tablet learning support

software, Mirai Seed, continued
to grow.
In addition, in the highschool area, where we do businesswith about 90% of the schools inJapan, while our performance inthe previous fiscal year declined
due to the impact of COVID-19,
we realized a business recovery infiscal 2021, centered around our traditional advantages such as our
Shinken Simulated Exams and Study Support assessment services. In the
future, we will work to maintain and improve our competitiveness byoffering services that are more attuned to high schools’ uniquecharacteristics, such as assessment services and the Classi digital service,
which provides total support for teachers, students and parents.

Opportunities and risks for businesses
Opportunities

Risks

Rising need for individualization due to the diversificationof entrance examinations

Topic

GIGA School Program and the use of ICT in school education

Overworking of educators and handover to next generation
The acceleration of DX in education lowers barriers to entry
and intensifies competition

Challenge School, an online service where students can learn what they want to at home
In April 2022, Benesse Corporation launched Challenge School,
which provides support for various types of children’s learning.
Challenge School is an online course that pursues first-class
instruction, a real feeling of growth, and a reduced burden on
parents. Based on our expertise accumulated through digital learningand online classes centered around Shinkenzemi, we provide“authentic learning experiences,” developed with partner companies
that are experts in their respective fields. We set up nationallystandardized tests and grade recognition, as well as recitals andother formal occasions where students can show off what they havelearned, to provide support for their growth while attempting toboost their motivation. In addition to dance and art classes, startingin September 2022, we will offer classes for abacus, calligraphy,
programming, and guidance counseling, and going forward, we willcontinue to expand the genres in which we offer courses.

39

Benesse Report 2022

We will expand the Challenge School—which differs from realclassroom instruction in not imposing a transportation burden on
parents and allowing students to learn easily at home, even in ahousehold with working parents—to lead to growth for our
Shinkenzemi and Kodomo Challenge businesses.

Related business data
Students taking Shinken Simulated Exams and other exams

Number of schools using Mirai Seed(thousands of students)
12,50010,080

9,910

9,680

10,000

8,900

9,280

8,000

7,500

6,000

5,000

4,000

2,500

2,000

0

2017

2018

2019

2020

2021 (fiscal year)

8,900

10,00007,942
Approx. 6,000

April 2021

End offiscal 2021

End offiscal 2022
(Target)Students taking Challenge School art and dance classes

Benesse Report 2022

40

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Education Business in Japan
Business

Growth strategy(1) Promoting strategies suited tothe characteristics of high schools
As the field of school education undergoes major changes in response to
new curricula and the diversification of university entrance examinations,
we are improving our approach which is tailored to the characteristics ofhigh schools: high schools which prepare students for admission to top
universities, high schools primarily aimed at admission to mid-tieruniversities, and schools where students have diverse career paths. We arealso offering support for teachers, students and parents to address theirrespective challenges, by evolving each of our services and linking them
together. As part of this strategy, we are working to achieve matches
between students and universities and vocational schools that are highly
satisfactory, as well as offering a “Future Path Achievement Program” toreduce the burden of instruction on teachers.
In addition, we will continue to implement speedy and optimal
solutions to school issues on-site, while leveraging the information we
have accumulated by offering services to high schools nationwide, as
well as the Information Dashboard—which accumulates service

adoption information, visitation history, inquiry history and otherinformation for each school—in order to make high-quality proposals inline with students’ needs at the most appropriate time.

(2) Offering Mirai Seed, which maximizes
educational results
There were approximately 6,000 high schools which had adopted theMirai Seed tablet learning support software for elementary, junior highand high schools in April 2021, and that number had surpassed 7,900 at
the end of fiscal 2021. A number of 9,000 schools is in sight for the end of
fiscal 2022, which would exceed our target of 8,900 schools. Whenoffering this Mirai Seed software, we established a new development
team to respond to student and teacher feedback and quickly expand
functions, which has led to further expansion of the number of schools
adopting the software and promotion of its use. We are also proposing
the adoption of Mirai Seed in conjunction with other services, such as
the school management support system EDUCOM, and contributing to
the maximization of learning results and work-style reforms for teachers.

Topic
The “Future Path Achievement Program” to boost students’ interest in studying andprovide support for continuous learning
Among high school students, there are some students who havenot found something they want to do in the future, or do not reallyknow about schools they want to be admitted to until right before
entrance examinations. Students having a lack of interest in career
paths is one factor that leads to them having low motivation.
For that reason, Benesse Corporation offers the Future Path
Achievement Program, which stimulates students’ interest andsupports their ongoing learning and career choices by going
through three steps: “knowing yourself,” “creating your own point ofview,” and “taking ownership.” In a survey of students at high schoolsthat have adopted and implemented the program, approximately
80% responded positively to the program’s effectiveness,demonstrating that it has led to increased motivation.
Beginning in fiscal 2020, we began offering this service on a
trial basis, and we proposed it to 2,000 high schools nationwide as
test marketing in fiscal 2021. Our goal is to release the new service
in conjunction with existing assessment services in fiscal 2023.

Prep School and Classroom BusinessBusiness overview and future prospects
Growth strategies that leverage the uniquefeatures and advantages of each prep school
company of the Benesse Group, andresponses to environmental changes
through Group cooperation

Kenji Yamakawa
Director and Senior Managing Executive Officer,
Head of the Prep School and Classroom Business Company ofBenesse Corporation

Our prep school and classroom business differs from our correspondence
education business and school and teacher support business in that it
offers education services to students directly in real physical spaces. For
this reason, in fiscal 2020, the spread of COVID-19 infections forced us toclose our classrooms and refrain from business activities, which had asignificant impact on our business performance. However, even amidst
the COVID-19 pandemic, we were able to continuously provide services
and keep student retention steady by implementing thorough infection
control measures and promoting new Group-wide initiatives, such as
hybrid face-to-face and online classes, so that students could receive
high quality services with peace of mind.
In fiscal 2021, the prep school industry as a whole is returning to an
in-person approach, and the number of students enrolled in our Group’s

prep schools has recovered to alevel exceeding that before
COVID-19, resulting in a significant
improvement in net sales andoperating income. In order tofurther solidify this growthtrajectory, we will continue ourgrowth strategy of leveraging theunique features and advantagesof each prep school and classroom in our business.
Furthermore, we are approaching a period of major reforms for theeducational environment, such as digital learning materials being usedin schools and becoming widespread in homes due to the GIGA School
Program, changes to school instruction caused by work-style reforms forteachers, and the trend toward students wanting to attend private
junior and senior high schools becoming more pronounced as a resultof the shift to free tuition and the COVID-19 pandemic. Using thesechanges as opportunities for growth, we will not only collaborate within
the Group, but also actively engage in forming alliances, including M&A,
and aim to grow our business, situating “people”—the greatest value ofour prep school business—at our core, so that we can continue torespond to students’ setting of higher goals and help them to achieve
those objectives.

Opportunities and risks for businesses
Opportunities

Risks

Changes to the educational environment after the
COVID-19 pandemic (interest in private schools, changes
to school environments)

The acceleration of education DX may blur the lines between
school, prep schools, and home teaching, resulting in greater
competition

Future Path Achievement Program
One class period

Guidance for taking classes

One month of self-study

Creating your own
point of view

Taking ownership

STEP 1

STEP 2

STEP 3

Take an engagement
assessment

Work on creating your own
point of view

Topic

Related business data

Knowing yourself

Work on declaring what
path you want to take

Prep school and classroom enrollments in April

The first Benesse Group prep school in theTokyo metropolitan area to specialize injunior high school entrance examinations(thousands of students)
150
120

111

114

2018

2019

108

116

117

90
60
30
0

41

Benesse Report 2022

2020

2021

2022

(year)[ As of April ]UP Inc. of the Benesse Group, which develops classroomsin the Kansai area, has expanded into Tokyo and opened aclassroom in Shibuya which specializes in junior highschool entrance examinations. Shingakukan Rootasu is a
new style of classroom which combines small groupclasses and individualized instruction.

Benesse Report 2022

42

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Education Business in Japan

Growth strategy(1) Growth of existing businesses(2) Expansion of our business through new M&A

We aim to maintain and strengthen the competitive advantage ofexisting businesses by promoting the growth strategies of each Group
company, each of which has its own unique characteristics andadvantages, and by improving cooperation and information sharing
among the companies. As one aspect of this endeavor, UP Inc., whichdevelops Shingakukan tutoring for junior high school entrance
examinations and Kenshinkan tutoring for university entrance
examinations in the Kansai area, has made inroads into Tokyo. UP Inc. will
open the first Benesse Group classroom in the Tokyo metropolitan area in
Shibuya to specialize in junior high school entrance examinations.
Together with aiming for growth in the segment at each of ourGroup prep schools, which have their own unique features andadvantages in the market, we will attempt to strengthen our businesses
through greater cooperation than before.

Along with promoting growth strategies for our existing business, we willcontinue to actively pursue alliances with other companies and engage
in M&A. Even business operators that have developed distinctive
initiatives and established their own unique position are, in some cases,
facing a decline in student numbers as well as the challenge of training
and finding people to succeed them. In those circumstances, by being
able to share the guiding principles of the Benesse Group with business
operators who possess such advantages, and engaging in more in-depth
cooperation, we will work toward greater growth.

Benesse Group prep schools and classrooms
Tokyo Individualized
Educational Institute, Inc.
We have developed individual
tutoring prep schools for elementary,junior high and high school students,
mainly in the Tokyo metropolitan area
and the Keihanshin area. We haveearned a solid reputation for providing
instruction that is fully customized toalign with students’ goals, academic
ability, and personality.

UP Inc.
We operate prep schools andindividual tutoring classrooms, aswell as science experiment classes,
English conversation classes, andsports classes, mainly in the
Keihanshin area. We provide a variety
of services for a wide range ofstudents, from preschoolers to highschool students preparing foruniversity entrance examinations.

Tokyo Educational Institute Co.,
Ltd. (Tetsuryokukai)
We operate a prep school primarily
for students who are attending alinked junior high/high school andare aiming for admission to the mostdifficult universities to enter,
including the University of Tokyo, inTokyo and Osaka. We produce a large
number of students who areadmitted to the University of Tokyoand the medical schools of public
universities every year.

Ochanomizu Seminar Co., Ltd.
We operate a prep school for current
students in Tokyo. With its thoroughsmall-group instruction, we havemaintained a high acceptance rate
to difficult-to-enter universities, andare supported by many students andtheir guardians.

Benesse BE studio Inc.
We have established numerous English language classrooms throughout Japan,
primarily targeted at students from preschoolers to junior high school students.
We also operate international preschools and provide English lessons forkindergartens and nursery schools.

43

Benesse Report 2022

Newly establishing the University andWorking Adult Business Company withthe aim of inorganic growth

Masaki Yamasaki
Managing Executive Officer,
Head of the University andWorking Adult Business Company ofBenesse Corporation

Establishing the University and Working Adult BusinessCompany with the aim of business expansion
The Benesse Group, with the aim of achieving inorganic growth, isworking to establish new business pillars in areas where it is possible tocreate synergy with existing businesses.
To realize this goal, our focus is on educational businesses foruniversities and working adults. As the social environment undergoes
dramatic changes, and people’s values and attitudes toward work andcareers become more diverse, there is an ever-increasing need for
products and services that will help individuals realize their dreams andaspirations and improve employees’ knowledge and skills. In Japan,
where the birthrate is declining, the market for learning by working
adults is estimated to be worth approximately one trillion yen.
In response to these needs, we established the University andWorking Adult Business Company in April 2022, in order to establish asolid position in the market. By consolidating the Group’s accumulatedresources into this company and accelerating efforts to expand thebusiness, we aim to increase sales of the university and working adultbusiness to 40 billion yen by fiscal 2025.

Market structure in the field of learning for working adults
Corporate training
market (reskilling)

Assessment market

51%

4%
Certification test
preparation market(recurrent education)

Domestic
marketApprox.

One trillion yen

27%(estimate for
FY2021 )Languageeducation market+

Overseas global
Inbound(foreign workers)

18%
Note: Reference : Calculated by Benesse based on data in Yano Research Institute Ltd.’s“Education Industry 2021” (Assessment market is based on our own research)

Business areas for the University and Working Adult Business Company
Companies: Working adults

University: University students

AP Admission
PolicyRecruitment

CP Curriculum
PolicySupport for public relations andShinken-AD management reform
Education

Business DX skills Udemy(Computer Based Testing) /Benesse i-Career CBTclasses and courses

DP Diploma
PolicyGraduation

Benesse i-Career

English Training

Job hunting support

StudyHacker

Expansion into
new areas

Utilizing the Group’s resources to meet the needs of businesses and universities
At present, in the university and working adult business, we are establishing
Udemy—an online video learning platform which connects people whowant to teach and people who want to learn—as a pillar of our service forworking adults, and we are working to expand the number of companies
who have adopted it. At the end of fiscal 2019, there were 80 companies
who had adopted Udemy. However, as companies expand their DX
human resources and reform their work styles, the number of companies
in Japan that have adopted it has increased to more than 800 as of theend of June 2022. Going forward, together with the expansion of Udemy,
we will aim to create new businesses, including M&A and collaboration,such as a corporate assessment business, a certification test preparation
business, and an education and training business for foreign workers.

In addition, for universities and university students, we will also use
the resources of Group companies, including Shinken-AD and Benesse
i-Career, to improve our services that provide support for public relations,management, student assessment and job placement at universities.

Number of companies who have adopted Udemy
800
600
600
400
200
200

80

0

2019

2020

2021

(fiscal year)

Benesse Report 2022

44

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Kids & Family BusinessBusiness

Kids & Family BusinessBusiness overview and future prospects
Shifting to a re-growth strategy, centeredaround improving the retention rate inJapan and China, to revitalize our Kodomo
Challenge businessToshihiko Nishimura
Executive Officer,
Head of the Kids & Family Business Company of Benesse Corporation

The Kids & Family Business situates the Kodomo Challenge
correspondence course, which is useful for children to acquire lifestyle
habits and knowledge that are developmentally appropriate, as the pillarof our operations, and we have expanded the course in Japan and China.
For fiscal 2021 in Japan, although cumulative enrollments declined
amid the prolonged COVID-19 pandemic, the unit price per student
increased, which led to an increase in sales. Going forward, with a central
focus on improving the retention rate of our products by acquiring

customer loyalty, we will create
several tiers for our products interms of value and price, promote
multiple-time usage along withresponding to diversifying needs,
and aim for growth, even as thebirthrate continues to decline. In
China, our cumulative enrollments
in fiscal 2021 decreased, primarily
due to a plunging birthrate and an increasingly competitiveenvironment. In addition, sales, shipping and other operations were
impacted by lockdowns which started in the latter half of March 2022 asa result of the COVID-19 pandemic. With the recent easing of thecompetitive environment due to the double reduction policy, theBenesse Group’s business environment—centered around character
cultivation—is improving, and we aim to achieve a quick recovery.

Business opportunities and risks
Opportunities

Risks

Japan: Increased learning needs for preschoolers, greater
usage of digital tools in childrearing
China: An easing of the competitive environment due to the
double reduction policy

MarketJapan and China: An acceleration of the declining birthrate,
the spread of COVID-19 infections, the economic
environment getting worse

Related business data

Japan

China

Against the backdrop of a declining birthrate and changing values,
parents’ needs for their children’s education are becoming more diverse
and individualized.
Traditionally, there has been a trend in the domestic education
market for preschoolers toward printed teaching materials. However, in
accordance with changing values and a changing society in their parents’generation, teaching materials using digital tools are becoming
increasingly mainstream. In addition, the learning needs of preschoolers
are also increasing, amidst a rising employment rate for women and a
growing percentage of four-year university graduates.

Even in China, the declining birthrate is picking up speed. The annual
number of births declined by about 40% in five years, from 17.86 million
in 2016 to 10.62 million in 2021.
One of the factors contributing to the declining birthrate is theexcessive cost of education. In July 2021, a “double reduction” policy wasannounced to reduce the burden of homework and out-of-school
education for students in the compulsory education stage.
The policy includes restrictions on prep schools and othereducation providers at the compulsory education stage, and a number ofbusinesses are scaling back or withdrawing from the market. On theother hand, consumer enthusiasm for education remains high, and it isexpected that the need for character cultivation for preschoolers will bemaintained for the foreseeable future.

Kodomo Challenge enrollments in April
Japan

China

Cumulative enrollments in Kodomo Challenge over a full year

TaiwanJapan(thousands of students)
2,500

2,060

Overseas(thousands of students)
2,080

1,990

2,020

2,000

30,0001,800

23,81024,39024,25924,204

2017

2018

2019

2020

23,23220,000

1,500
1,000

10,000

500
0

2018

2019

2020

2021

Note: Information is shown by country and region.

2022

0

(year)[ as of April ]2021 (fiscal year)

Kodomo Challenge average monthly fee per person (Japan)

Kodomo Challenge share of the target population (Japan)

(yen)

(%)

2,500

1,854

1,882

1,961

2,006

2,204

2,000

15

1,500

13.0

13.9

14.1

14.2

13.9

2018

2019

2020

2021

2022

10

1,000

5

500
0

20

2017

2018

2019

2020

2021 (fiscal year)

0(year)[ as of April ]Note: The average monthly fee is calculated by dividing the net sales of each courseby the cumulative enrollment.

45

Benesse Report 2022

Benesse Report 2022

46

Part 1 Our Vision and Business Strategies

Kids & Family BusinessPart 2 How We Create Value

Part 3 Enhancing Operational Resources

Nursing Care and Childcare Business

Growth strategy(1) Kodomo Challenge Business:
A growth strategy that emphasizes retention
and reforming our sales methods
In an environment where the birthrate is declining, we are promoting ashift to a strategy that places more emphasis on increasing the retention
rate. In Japan, we are creating several tiers for our composition of
products and utilizing the data of customers to improve their customer
experience and bolster their feelings of loyalty toward each product,
while developing measures to promote the use of multiple products.
In China, with our efforts centered on improving the retention rateby leveraging applications used in conjunction with the main course, wewill promote the taking of courses at peripheral businesses, increase sales
per student, and further improve evolution by utilizing the digital

The set of “Kodomo Challenge” products in China

teaching materials for character cultivation that can be developed, evenunder the double reduction policy.
On the sales front, in Japan, we are working to improve thepromotion of continuous product usage from pregnancy and childbirththrough our Tamahiyo Business, as well as the development ofexperience-type DMs coupled with free teaching materials that arelinked to digital marketing. In China, in addition to doing solicitation at
shopping malls and through phone calls as we have previously done, we
are working to improve methods such as one-to-one marketing on social
media and recommended sales through “recommendation staff.”(2) Tamahiyo (Media) Business:
Development of media that is close to
our customers
Our Tamahiyo Business provides useful information on pregnancy,
childbirth, and child-rearing through magazines and smartphone
applications. Up until now, we had developed two monthly magazines,
Tamago Club and Hiyoko Club, but we renewed our publications in April
2022. We divided the pregnancy and child-rearing periods into three
periods—early, middle and late—and published a total of six quarterly
magazines to provide information that would be more relevant to ourreaders (users) and promote multiple usage during pregnancy andchildbirth by linking with our apps. In addition, we are working to
improve coordination between Tamahiyo and Kodomo Challenge forsales, content development and data utilization.

MarketTopic“Kodomo Challenge Jump Touch,” a tablet course for older preschoolers
Amidst the mainstreaming of digital teaching materials inhouseholds with preschoolers, Benesse Corporation launched
Kodomo Challenge Jump Touch, a tablet course for olderpreschoolers, in April 2022.
Jump Touch consists of digital learning materials that aredesigned to spark children’s curiosity and motivation, in addition to
helping them acquire study habits and a foundation of academic
skills in preparation for entering elementary school. Using theknowledge we have gained over the 33 years since creating
Kodomo Challenge, the course does not solely use tablets, but also
combines them with paper materials and educational toys inmedia designed to be appropriate for preschoolers, to foster basic
letter and number skills as well as programming and thinking skills.
The use of special tablets with an emphasis on safety andsecurity—which allows children to smoothly tackle their first tablet

learning experience by themselves—is gaining support fromworking mothers and other groups.

Jump Touch in use

With the ongoing aging of the population in Japan, the number ofpeople who require nursing care has also continued to increase. To
resolve the issue of nursing care for elderly, the nursing care insurance
system under the social insurance system was enacted in 2000. Since
then, the domestic nursing care market*1 has expanded rapidly, with thetotal cost of nursing care in fiscal 2019 at 9.9 trillion yen, a 3.5% increaseover the previous year. As of April 2021, the number of people receiving
nursing care insurance services was 5.81 million, a 3.1% increase from ayear earlier. The number of elderly aged 65 and over increased to 29.1%of the total population*2 as of September 15, 2021, a 0.3% increase overthe previous year. It is expected that in 2040, the percentage of elderly
people will have hit 35.3%.
As the birthrate declines, the population ages, and we enter an eraof 100-year longevity, in order to improve the quality of life of the elderly
and solve the social issue of a shortage of nursing care service providers,
the nursing care industry needs to leverage digital technology to
improve the quality and efficiency of services.
*1 Source: Ministry of Health, Labour and Welfare “Status Report on the Long-term
Care Insurance Projects”*2 Source: Ministry of Internal Affairs and Communications Statistics Bureau “TheElderly in Japan from a Statistical Standpoint (as of September 15, 2021)”

People receiving nursing care insurance services
In-home services(Millions)
5.54
6
4
2
0

Community-based services
5.54

Facility services

5.81 (+3.1%)*

5.64

5.59

5.43

3.90

3.81

3.66

3.78

3.84

3.99 (+4.0%)*

0.72

0.81

0.84

0.87

0.84

0.92

0.93

0.93

0.95

0.95

0.87 (+2.8%)*
0.95 (-0.1%)*

2016

2017

2018

2019

2020

2021

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

Total long-term care insurance-paid expenses by category
OthersFacility services

6.1%

30.9%

Community-based services

16.1%
Other in-home services

13.1%
Specified nursing homes licensed toprovide nursing care (private-pay
elderly homes with nursing care)

5.2%

FY20199.9 trillion yen
in total

In-home services

46.8%
Home-visit services

12.9%
Commuting services

15.7%

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

47

Benesse Report 2022

Benesse Report 2022

48

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Nursing Care and Childcare BusinessBusiness

Growth strategy

Nursing Care and Childcare Business(1) Improving occupancy rates for our nursing
care businessBusiness overview and future prospects
Aiming for further business growth by
improving occupancy rates in homes for theelderly and expanding peripheral businesses

Shinya Takiyama
Director and Senior Managing Executive Officer,
Head of the Nursing Care and Childcare Business Company
Representative Director and President of Benesse Style Care Co., Ltd.

For our nursing care and childcare business, we have established a solid
position in the nursing care and childcare fields based on thehigh-quality service that is committed to each elderly person and child,and by utilizing our company’s unique methods that articulate theknow-how of our staff, as well as advanced digital technology. However,our business—which is conducted in real physical spaces—was heavily
impacted by the spread of COVID-19 in fiscal 2021, as well. Notably, due
to the decline in occupancy rates at high-end nursing homes, our overallbusiness saw a year-on-year decline in income.

However, the Benesse
Group’s nursing care services,which implement quality of life
improvements for residents, havethe ability to compete, and oursales measures to improve
occupancy rates are also
beginning to produce results.
Going forward, in addition to
improving occupancy rates, increasing the number of homes—using
measures making inroads into areas where we do not yet have apresence via our area-dominant strategy and recruitment strategy—andpromoting the development of staff expertise, we will strengthen
peripheral businesses such as temporary staffing and placement, which
will also contribute to solving the shortage of workers in the nursing careindustry and lead to the growth of our business.

Risks

Increasing elderly population in big cities
More recipients of nursing care services covered by nursing
care insurance(2) Promotion of DX in Benesse-style nursing care
Through the fusion of human skills and know-how with technology, we
are working to establish sensing homes that only Benesse could create,in order to improve the quality of life of our residents. In addition, as ainformation stored in this system and information collected via
sensors, such as residents’ sleep and bodily discharges, are analyzed
by AI, using the knowledge of nursing care experts as instructional
data. By using this analytical data to carefully communicate withresidents, the staff aims to improve their quality of life in the home,which includes their sleep and activities during the day.

Serious shortage of nursing care and daycare staff

Related business data

DX in Benesse-style nursing care

Distribution of nursing homes(As of March 31, 2022)(%)

Service quality that places the highestemphasis on quality of life

100
95

96

95

93

90

80

60

40

20

0

Aichi

22

Kyoto

3

Nara

2

Osaka 18
2017

2018

2019

2020

With the aim of developing a new business to follow the nursing care andchildcare business, we are focusing on growth of our dispatch andrecruitment business in the nursing care and medical fields. As one aspectof this initiative, we transferred Heart Medical Care’s personnel dispatch
business to Benesse MCM in April 2022. We clarified theiradvantages—recruitment for Heart Medical Care and dispatch for Benesse
MCM— and established a system to strengthen them. We aim to expand
our personnel business, which contributes to solving the shortage ofhuman resources, an issue facing the nursing care industry as a whole,and to achieve sales of 10 billion yen in this business by fiscal 2025.

Granda Yotsuya, a Benesse version of the sensing home

Stagnation of customer behavior due to the spread of
COVID-19

Growing need for nursing care personnel

Occupancy rate of our existing facilities(3) Growing and accelerating our personnel business

Topic

Business opportunities and risks
Opportunities

Due to the spread of COVID-19 infections, the number of customers who
postpone consideration of moving into nursing homes—mainly
high-end homes—has increased, which is a reason for the decrease inoccupancy rates. We are therefore leveraging our advantage inpromoting an area-dominant strategy to improve relationship building
with local hospitals and care managers, with the aim of recovering to thepre-COVID levels by the end of fiscal 2023. We are working on
approaches for those who are about to be discharged from a hospital but
have difficulty returning home, or who are considering moving into a
nursing home because at-home care has become difficult.
In addition, improving our trial move-in campaigns for homes has
led to long-term contracts with customers, and we will continue these
efforts as a measure to improve occupancy rates.

core tool for sensing home management, we are developing AI solutions
that incorporate the knowledge and experience possessed by nursing
care experts who have a wealth of wisdom and practical expertise andthe ability to read and interpret nursing care records and data. We arepromoting DX in the nursing business by continuing to adopt AI
solutions in each sensing home, including Granda Yotsuya, which we
opened in March 2022.

Hokkaido2

Miyagi5

Saitama

24

Tokyo

161

Kanagawa 63
Chiba

2021 (end of fiscal year)

Hyogo

24

14

Exterior of “Granda Yotsuya”
Dementia care

In March 2022, Benesse Style Care opened a private-pay nursing
home with nursing care, Granda Yotsuya, the first version of thesensing home by Benesse. By combining information obtained
from various sensors with human skills and expertise andtechnology, we support residents so that as much as possible, they
can continue to do what they would like to do on their own.
We have introduced the Service Navigation System, a platform
for nursing care and nursing records, at all homes by Benesse Style
Care, to digitize and collect various information. At sensing homes,

Sleep quality

Analysis of“unusual” signs

An overwhelming improvement toservice infrastructure by combining
people and technology

Knowledge of nursing Learning nursing care
care experts certified knowledge (Majikami
by Benesse (Majikami)
AI Solution)

Improving the nursing skills ofstaff who are not Majikami
through Majikami AI Solution

Expertise from 27 years in the nursing care business, personnel
training capabilities stemming from Benesse in the education field

Okayama 4
Fukuoka49

Benesse Report 2022

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Benesse Report 2022

50

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Corporate Governanceits opinions to the Board of Directors. It is delegated by the Boardof Directors to decide the compensation of individual directors.

Corporate governance

Part

3

Enhancing Operational Resources

The Company continuously appoints directors in charge ofbusiness execution, multiple highly independent outside
directors, and non-executive directors who disseminate ourfounding spirit in addition to leveraging stockholder viewpoints tosupervise management. This ensures that meetings of the Boardof Directors consist of lively, multifaceted discussions that go
beyond internal circumstances and that the supervisory functionof the Board of Directors is maintained and improved. It also
ensures that the Company conducts effective audits by standing
Audit & Supervisory Board Members who are knowledgeable
about the Company 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 a non-executive
director, meets monthly to deliberate on matters important forthe management of the Company and the Benesse Group, makekey management decisions, and supervise the business executionof 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 in charge ofbusiness execution, non-executive directors and highly
independent outside directors, the Company assures the Board’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 chair 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 Board of
Directors, which makes the final decision. The Committee alsodeliberates on the compensation system for directors and submits

Management Council
The Management Council is chaired by the CEO and attended byheads of companies, those responsible for administrative
divisions, and individuals designated by the CEO. Groupmanagement leaders share important issues and information anddeliberate on important matters for the Group.

Audit & Supervisory Board
In accordance with the Audit & 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 andone 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.

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

Corporate governance structure…Independent &outside…Outside

General Shareholders’ Meeting
Appoints

Appoints

Appoints

Audit & Supervisory Board

Board of Directors

Nomination andCompensation Committee…InsideIndependent Auditors

Reports

51

Benesse Report 2022

Internal Auditing Department

President, CEO

Benesse Corporation

Benesse Style Care Co., Ltd.

Administrative Divisions

Subsidiaries

Subsidiaries

Subsidiaries

Management Council / Company Management Committee (CMC)
Cross-Departmental Committee for People in Charge of the
Administrative Divisions / Sustainability and ESG Promotion Committee
Group Human Resources Committee / DX Governance Board
Information Security Surveillance Committee / Risk andCompliance Committee

Benesse Report 2022

52

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Corporate GovernanceImproving the effectiveness of the Boardof Directors
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 2021, as well, a questionnaire was administered to all 12

directors and Audit & Supervisory Board Members. Based on theseresults, the Board’s effectiveness was analyzed, and the Board
evaluated itself and deliberated concerning the results. The
questionnaires found the Board of Directors to have maintained ahigh level of effectiveness and confirmed that the Board engages insubstantive discussions. However, they also confirmed further issues
to be tackled in order to raise the effectiveness of the Board of
Directors and continue increasing the Company’ s value. These issues
will be resolved through further deliberation by the Board of Directors.

Fiscal 2021 initiatives and how to respond going forward, with the aim of improving effectivenessFiscal 2021
initiatives foraddressing major
fiscal 2020 issues

Initiatives targeted at challenges(1) Monitor the medium-term management plan
• Ongoing discussions regarding what the Company’s business portfolio should be, and the allocation of management
resources(2) Discuss nominations and compensation• Criteria for appointment and dismissal of representative directors, as well as assessment methods (short-andmedium-term objectives)• Plans for training successors to representative directors, executive human resources training and compensation design(3) Discuss ESG/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 briefings and executive study sessions.

Upon their appointments, new outside directors and outside
Audit & Supervisory Board Members are briefed on various
matters and regulations such as company profile, corporate
philosophy, management situation, and corporate governance.
Furthermore, after they have assumed their roles, the Company
explains business activities, industry characteristics and trends,
and management environment to deepen their understanding of
the Company, and regularly invites them to presentations of bestpractices at each business site, as well as other internal events. The
Company conducted the following activities in 2021.
Format

Theme, etc.

Date ofsessionTime
requiredPreliminary
briefings on
the Boardof Directors

Preliminary briefings on thecontent of Board of Directors
proposals to directors andAudit & Supervisory Board
Members who are not incharge of business execution

In principle,
to be held
one week
before Boardof Directors
meetings

Approximately
90 minutes

Executive
study
sessions

Discussions about topics
such as business portfolio,
sustainability, and corporate
governance, targeted at all
directors and Audit &Supervisory Board Members

Conducted
after Boardof Directors
meetings(6 times)

Approximately
60 to 90
minutes

Major progress on initiatives• Through ongoing discussions regarding what the Company’s business portfolio should be, as well as the allocation ofmanagement resources, the Company transferred all shares of Berlitz Corporation.
• In order to move forward with improving ESG/sustainability and diversity and inclusion Company-wide, ESG and
Sustainability Division was established in April 2022.
• In addition to holding small-group meetings for shareholders and investors, the Company expanded dialogues with themarket through measures such as increasing the number of one-on-one meetings with shareholders and investors, aswell as strengthening internal feedback, which includes reporting to management on shareholder and investor reactions
as needed.

Fiscal 2021
assessment

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

Issues to be further addressed• Ongoing discussions regarding what the Company’s business portfolio should be and the allocation of management
resources• Discussions regarding ESG/sustainability initiatives• Discussions improving diversity and inclusion• Providing opportunities to understand each project in order to hold discussions, which take the specific actual situations
on the ground into accountFiscal 2022
initiatives going
forward, based on
assessment results

53

Benesse Report 2022

It was confirmed that focused efforts would be made to address the following issues:(1) Through utilizing executive workshops and holding executive camps, depending on the circumstances, continue tohave more in-depth discussions regarding what the Company’s business portfolio should be Group-wide and theallocation of management resources, after organizing the necessary information(2) Have more in-depth discussions regarding ESG and sustainability at the Board of Directors, taking the results ofdeliberations by the Sustainability and ESG Promotion Committee into account(3) Make reports and have discussions at the Board of Directors regarding the content of discussions on diversity andinclusion at the Nomination and Compensation Committee(4) Promote business understanding through measures such as online participation in various internal events, resumptionof site visits, and networking events with relevant parties at business sites• Requirements of directors

Training for directors and Audit &Supervisory Board Members

Directors, who possess the expertise and knowledge necessary toaddress medium- and long-term management issues and social
issues (see the skill matrix on pp. 59–60), must also satisfy thefollowing requirements, which have been established to ensurethat 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 and dismissal process
Concerning the appointment and dismissal of senior
management and nomination of director candidates by the Boardof Directors, the Company will ensure transparency, fairness, andobjectivity in the process by having the Nomination andCompensation Committee—where outside directors constitutethe majority, and which is chaired by an outside director—holddiscussions based on policies regarding requirements for directors,
composition of directors, and other matters and submits its
opinion to the Board of Directors, which then passes resolutions.

Succession plan

No more than 10 directors.

The Company, situating the matter of planning for and training
successors to the position of Representative Director and President
as a vital issue, has formulated a succession plan for the
Representative Director and President and works to implement it.
Specifically, the Company works to organize candidate
requirements, list candidates and evaluate them on an individual
basis, consider where they should be placed, and provide training.
In formulating and implementing the succession plan for the
Representative Director and President, the Nomination andCompensation Committee—where outside directors constitute themajority, and which is chaired by an outside director—deliberates
to ensure transparency and objectivity in the formulation andimplementation of the succession plan.

• Diversity

Process for selection of Chief Executive Officer

Composition of directors, method andprocess for appointment and dismissalof directors
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

The Board seeks to maintain a good balance among its directors,
appointing directors with diverse types of expertise andexperience without being too heavily weighted in any specificfield. The Company is appointing female directors and ensuring
diversity in terms of gender. The Board is also improving theeffectiveness of its supervision by appointing multiple outside
directors who have experience in managing companies or who
have high levels of insight and expert knowledge in sectors suchas global business and IT/digital technology, in which theCompany 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.

Nomination and Compensation Committee• Organization of requirements for candidates• Listing of candidates• Individual assessments of candidates• Deliberations on where candidates should be placed, training• Submission of opinions on candidates for CEO
Board of Directors• Final decision on CEO

Benesse Report 2022

54

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Corporate Governancesystem of compensation for directors that provides incentives for thesustained improvement of corporate value by focusing not only on
short-term performance, but also on medium- and long-term results.
Bonuses comprise three sections and are weighted for eachdirector individually, based on his or her area of responsibility, as
follows: (1) the section on company-wide performance, which isthe percentage of actual results achieved relative to theconsolidated performance forecast; (2) the section on
performance in supervised areas, which is the percentage ofperformance targets achieved in each director’s area of
responsibility; and (3) the section on qualitative assessment,
which is the degree to which qualitative goals—organizational
contributions such as training successors and working to reformorganizational culture, as well as contributions to brandenhancement—were achieved. As for restricted stockcompensation, this was introduced in fiscal 2017 to link director
compensation to medium- and long-term business performance
to a greater extent, in order to provide directors with incentives tofurther engage in sustained efforts to improve corporate value,
and to promote further value sharing with shareholders.
Compensation for directors in charge of business execution is set
to competitive levels commensurate with the roles, skills, andresponsibilities expected of directors who manage the Group,
based on median levels found for Japanese companies of similar
size using externally conducted compensation surveys as areference. Compensation for non-executive directors, including
outside directors, is composed of only basic compensation, so as
not to obstruct outside directors’ supervision of management. At
the same time, compensation for Audit & Supervisory Board
Members is decided through consultation with those members,
and is composed of only basic compensation.

Activities of the Nomination andCompensation Committee
Activities in 2021 and 2022 (April 2021 to March 2022)
2021: June 4, June 26, July 9, August 6, September 3,
October 1, November 5, December 3

Date2022: January 14, February 7, March 30•• Nomination:
Review of Director structure (nine times)•• Compensation:
Agenda
Theme

Review of and decisions on compensation for directors incharge of business execution (three times)• Evaluations and decisions on bonuses for directors incharge of business execution (six times)•• Succession plan:CEO succession plan (six times)•• Other:

Reviews of Benesse HD organizational structure (four times)• About signing contracts with advisors who are former
representative directors

Officer compensation
The Company has established the Nomination and Compensation
Committee—which is chaired by an outside director—to ensuretransparency, fairness, and objectivity in the process of making
decisions on director compensation. The Benesse Group aims toachieve improved corporate value on a sustained basis over the
medium- to long-term. For that reason, the Group has designed aCompensation system for directors (excluding outside directors)
Fixed Compensation

Performance-based Compensation

Representative Basic Compensation
Director

Bonuses

50%

35%

15%

(1) Company-wide performance, (2) performance inCompensation
supervised areas, and (3) assessment of qualitative goals linked to stock pricethat were established at the start of the fiscal year are
taken into account to issue bonuses
Performance-based Compensation

Set based on expectations for the role

Fixed Compensation
Director

Restricted Stock
Compensation

Basic Compensation

Bonuses

55%

35%

Restricted Stock
Compensation

10%

Compensation(1) Company-wide performance, (2) performance insupervised areas, and (3) assessment of qualitative goals linked to stock
pricethat were established at the start of the fiscal year are
taken into account to issue bonuses

Set based on expectations for the role

For more information about each element of Benesse’s compensation structure, visit the following website for the Corporate Governance page.
https://www.benesse-hd.co.jp/en/about/management/corp_governance.html

Officer Category
Amount of Compensation (millions of yen)Amount of Compensation
by Type (millions of yen)
Number of Eligible Officers

55

Benesse Report 2022

Directors(excluding Outside Directors)

193

Outside Directors

54

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

Ensuring compliance
The Company has established the Benesse Group Principles, which
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 wheneverillegal conduct, improper conduct, or conduct that violates theGroup’s articles of incorporation or internal rules may bediscovered. The Audit & Supervisory Board Member Hotline has
also been set up for cases in which 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 without worry, such as byallowing anonymous reporting, thus ensuring the effectiveness of
the Group’s compliance monitoring.

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

Propose measures
to counter risks

MonitorCompany administrative offices,
strategic business domains,and subsidiaries assess risks andimplement measures to counter themMonitoring report(RC Committee*)

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

Assess risk
Analyze and identify
critical risks, consider
policies regarding criticalrisk countermeasures, andmake decisions (RCCommittee*)* Risk and Compliance Committee

Internal reporting mechanisms and response in the event of an emergency

Total compensation by officer category (FY2021)
Audit & Supervisory
Board Members

Enhancing internal control(excluding outside Audit &Supervisory Board Members)

Outside Audit &Supervisory Board
Members

64

20

Basic Compensation

93

54

64

20

Bonuses64

Restricted Stock Compensation

36

—
—

—
—

—
—

6

7

2

2

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)

Benesse Report 2022

56

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Corporate Governance

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 Executive General Manager of Compliance andInformation Security. Compliance and Information Security
Division 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 operatingcompany, 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, andoperation of data and systems within the Group and aims tocreate a world-class information security organization.
Information Security Surveillance Committee members

Committee
Chair
Ryoichi Sasaki

Committee
MemberAtsuo Inomata

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

Visit the following website for more information on information security.
https://benesse-hd.disclosure.site/en/themes/160

We obtain third-party certification with the aim of maintaining
and improving our information security and our management
and protection 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, Benesse Corporation was registered as abusiness 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.

Professor, Ritsumeikan University College ofInformation Science and Engineering

November 2, 2016: Initial registration
November 1, 2022: Expiry dateCommittee
MemberHarumichi Yuasa

Professor, Meiji University of GovernanceStudies, Graduate School

ISMS Certification (March 2016) and Continuation of ISMS Action

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 the Benesse Group with
their personal information. We are also advised and audited byoutside experts and LAC Co., Ltd, the most trusted information
security company in Japan. We are constantly working tomaintain and improve our level of information security.

• Employee awareness and training
Benesse Corporation and Benesse InfoShell have designatedJuly 7, the day of the discovery of the personal information breachin 2014, as Security Day. They carry out activities on and around
Security Day each year in which all executives and employees

Benesse Report 2022

Directors and Audit & Supervisory Board Members (As of June 25, 2022)
Hitoshi Kobayashi

OutsideIndependent

Newly Appointed

Shinya Takiyama

Representative Director and President, CEO

Director

Joined the Company in 1985. After having served as
Representative Director and President of Benesse Style Care Co.,
Ltd., in 2012 became a Director of the Company, a position that hecontinues to serve in. Went on to lead the Company’s Corporate
Planning Division, Overseas Business Development Company,
Zemi Business Company, etc. Has served as the Representative
Director and President of Benesse Corporation (current) since2016. Became the Representative Director and President, COO of
the Company in 2021, and became the Representative Director
and President, CEO of the Company (current) starting in 2022.

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

Kenji Yamakawa

Hideaki Fukutake

Director

Director

Joined the Company in 1986. Served as Director of Benesse
Corporation in 2012. Has served in the position of Director ofTokyo Individualized Educational Institute, Inc. (current) since 2016,
and the position of Executive Vice President of Benesse
Corporation (current) since 2020. Became a Group Executive
Officer of the Company in 2021. Has served as a Director andSenior Managing Executive Officer of the Company (current) andDirector of Classi Corp. (current) since 2022.

In 2000, joined KEYENCE CORPORATION. In 2006, joined SMS CO.,LTD., and subsequently became Division President of Nursing Careand Medical Care Media at that company. Since 2009, has been
Director of efu Investment Limited (current). After having served as
an Outside Director of Benesse Corporation, he was a Director of
the Company starting in 2014. Since 2021, has served as
Representative Director of Minamigata Holdings Ltd. (current) anda Non-executive Director of the Company (current).

Mutsuo Iwai

Yumiko Noda

Director

Director

Joined the Japan Tobacco and Salt Public Corporation in 1983.
Served as Director and Managing Executive Officer of Japan
Tobacco Inc., Executive Vice-President of JT International S.A., andRepresentative Director and Executive Vice-President of Japan
Tobacco Inc. Was appointed as Deputy Chairperson of the Board ofJapan Tobacco Inc. and an Outside Director of the Company(current) in 2020. Was appointed as an Outside Director at TDK
Corporation in 2021 (current). Since 2022, has served as
Chairperson of the Board of Japan Tobacco Inc. (current).

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 partnerwith 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 andPresident at Veolia Japan K.K. in 2017, then Chairman and
Representative Director in 2020 (current). Became a Director of theCompany in 2021 (current).

Kohey Takashima

Masaru Onishi

Director

Director

Joined McKinsey & Company Inc. Japan in 1998. Became
Representative Director and President of Oisix Inc. (now Oisix radaichi Inc.) in 2000 (current). Became the Director of the Japan
Wheelchair Rugby Federation in 2018 (current). Became Outside
Director of CARTA HOLDINGS, INC. in 2020 (current). Has served asVice Chairman of KEIZAI DOYUKAI (Japan Association of Corporate
Executives) (current), as well as an Outside Director of theCompany since 2021 (current).

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

Yoshinori Matsumoto

Naoto Saito

Non-executive Director• Third-party certification

Committee
MemberTetsutaro Uehara• Security measures in system operations /Strengthening our security environment

57

reaffirm the importance of information security. These activities
include morning meetings, presentations on internal initiatives,and lectures 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, andwork to reconfirm the skills, actions, and basic knowledge thatmust 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 aspecial program. We check on attendance until all target
employees have completed the training, and our attendance rateis always 100%.

Following the acquisition of ISO 27001 (ISMS) certification by Benesse
Corporation School Headquarters and Benesse BASE COM in May 2015,
Benesse Holdings, Benesse Corporation (excluding some offices), andBenesse InfoShell also acquired ISO 27001 (ISMS) certification in March 2016.
May 25, 2015: Initial registration
May 24, 2024: Expiry date

In December 2019, Benesse Style Care, Benesse MCM, Benesse Palette,
Benesse Senior Support also acquired certification (registration number
IC19J0497)
December 26, 2019 Date of registration
December 25, 2022 Date of expiry

Standing Audit & Supervisory Board Member

Standing Audit & Supervisory Board Member

In 1977, joined Daio Paper Corporation. In 1991, joined theCompany, 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. Has served as a Standing Audit &Supervisory Board Member of the Company since 2008 (current).

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

Eiichi Izumo

Miyuki Ishiguro

Audit & Supervisory Board Member

Audit & Supervisory Board Member

In 1995, joined Tohmatsu & Co. (currently Deloitte Touche
Tohmatsu LLC). Since 1998, has been registered as a certified
public accountant (current). In 2010, became a Partner at Deloitte
Touche Tohmatsu LLC, and after leaving that position, became
Representative of Izumo CPA Office in 2015 (current). In 2015,
became an Outside Audit & Supervisory Board Member of theCompany (current).

In 1991, enrolled as a lawyer and joined Tsunematsu Yanase &Sekine (currently Nagashima Ohno & Tsunematsu). In 1999, becamea partner at that firm (current). In 2017, became an Outside Audit &Supervisory Board Member of the Company (current).

Benesse Report 2022

58

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Corporate GovernanceExpertise, experience and activity status of Directors andAudit & Supervisory Board Members (As of June 25, 2022)
Name/Affiliation

Years
in officeState of attendance for FY2021
Other major current positions

Board ofDirectors
meetings

Audit &
Supervisory
Board

10 yearsRepresentative Director andPresident, CEO

Representative Director andPresident of Benesse Corporation

15/15

Independent

Leadership

Shinya Takiyama

Education—

6 years

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

15/15

—

Kenji Yamakawa—

Executive Vice President ofBenesse Corporation
Director of Tokyo Individualized
Educational Institute, Inc——

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

15/15

—

2 years

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

15/15

—

1 yearChairman and Representative
Director, Veolia Japan K.K.
Outside Director of Idemitsu Kosan
Co., Ltd.

11/12

—

1 yearRepresentative Director andPresident of Oisix ra daichi Inc.
Outside Director of CARTAHOLDINGS, INC.

12/12

—

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

—Director

Hideaki Fukutake

8 years

Director Non-executive Director• Chair of the Board of Directors• Member of the Nomination andCompensation Committee

Mutsuo Iwai
Director

The expertise and experience demanded of Directors,
and reasons for their selection

Industry expertise(1) The Company deems it essential that candidates for director have actual management
experience, and requires each candidate for director to have experience in corporate
management, in order to perform management supervisory functions even more effectively.

NursingcareStrategy
B-to-Cbusiness

GlobalDigitalFinance(2) In order for the Board of Directors to perform its function, while keeping the customer’s
perspective as the starting point of all the actions taken by the Company, the candidates
for director are required to have experience in B-to-C business, and in particular,
knowledge and experience in the education and nursing care businesses, which are thetwo pillars of the Company’s business, are required of the candidates for executive director.
(3) From a strategic point of view, emphasis is placed on global, digital, and financial skills, inorder to promote the use of digital technologies in business, new domain and overseas
development, and portfolio management, with the aim of realizing the Medium-Term
Management Plan.

• Member of the Nomination andCompensation Committee

Director

Newly Appointed

Necessary expertise and experience

Corporate
management

Directors of the Board

Hitoshi Kobayashi

OutsideReasons for the appointment of Outside Directors andOutside Audit & Supervisory Board Members
Outside Directors
Mutsuo Iwai

Mr. Iwai possesses a wealth of management experience and deep expertise at B-to-C
business companies that have expanded globally. Utilizing these abundant experiencesand expertise in the Board of Directors and the Nomination and Compensation
Committee, he is contributing to the supervision of management and the improvementof transparency in the decision-making process by the Company management, in orderto enhance corporate value over the medium- to long-term.

Yumiko Noda

Ms. Noda possesses a wealth of management experience at companies that have
expanded globally, as well as in-depth expert knowledge of financial matters. Utilizingthese abundant experiences and expertise in the Board of Directors and the Nomination
and Compensation Committee, she is contributing to the supervision of management
and the improvement of transparency in the decision-making process by the Company
management, in order to enhance corporate value over the medium- to long-term.

Kohey Takashima

Mr. Takashima possesses a wealth of management experience at B-to-C businesscompanies, as well as expert knowledge of e-commerce. Utilizing these abundant
experiences and expertise in the Board of Directors and the Nomination andCompensation Committee, he is contributing to the supervision of management and theimprovement of transparency in the decision-making process by the Company
management, in order to enhance corporate value over the medium- to long-term.

Masaru Onishi

Mr. Onishi possesses a wealth of management experience at B-to-C business companies
that have expanded globally, as well as wide-ranging experiences and in-depth expert
knowledge from serving in positions such as outside director at other companies. The
Company judges that he can be expected to demonstrate his management supervisory
function as an outside director, from the perspective of promoting the Company’ssustainable growth and enhancing corporate value over the medium- to long-term.

• Chair of the Nomination andCompensation Committee

Yumiko Noda
Director• Member of the Nomination andCompensation Committee

Kohey Takashima
Director• Member of the Nomination andCompensation Committee

Masaru Onishi—

Director• Member of the Nomination andCompensation Committee—

Audit & Supervisory Board Members

Yoshinori Matsumoto

Accounting

14 years—

15/15

3 years

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

16/16

15/15

16/16

7 years

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

15/15

16/16

LawyerOutside Audit & Supervisory Board
Member of Lasertec Corporation

15/15

Standing Audit &Supervisory Board Member

Naoto Saito

Outside Audit & Supervisory Board Members

Standing Audit &Supervisory Board Member

Eiichi Izumo
Audit & Supervisory Board Member

Miyuki Ishiguro
Audit & Supervisory Board Member

5 years

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

59

Benesse Report 2022

Legal

Eiichi Izumo

Miyuki Ishiguro
16/16

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

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

Benesse Report 2022

60

Part 1 Our Vision and Business Strategies

Part 2 How We Create Value

Part 3 Enhancing Operational Resources

Corporate Governance

Message from the Director

Message from the Outside Director

Continuing to actively express the opinions of a member ofthe founding family from a long-term perspective andcontribute to the Group’s growth

Hideaki Fukutake
Director, Chair of the Board of Directors

Leveraging knowledge based on personal
experience to support endeavors towardsustainable growth from the perspective ofa member of the founding family
I had the experience of developing new projects and setting up asystem for taking a company public when I was at SMS Co., Ltd.,
which was a startup business at the time. At present, I am involvedin the launching and acquisition of companies through aninvestment company I founded myself. At the same time, I havebeen involved in the management of organizations of various
sizes and forms, both domestic and international, which includes
serving as the Vice Chair of the Board at the Fukutake Foundation,a public interest incorporated foundation.
Currently, through the Digital Innovation Fund (DIF), we are
actively investing in technology companies and also working tostrengthen our overseas expansion. The Group has always been arather cautious corporation that tends to avoid taking risks, but inthis era of rapid change, this attitude can pose a risk to our growth.
Naturally, it will be necessary to correctly identify and assess risks
when making investments and implementing other policies
through due diligence and other means, and I hope to be able toutilize my experience in this regard.

Discussing the direction we should be aiming forfrom a long-term perspective, taking overseas
trends into accountAt the Board of Directors, I endeavor to create opportunities for

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having in-depth discussions by expressing opinions about thedirection our Group should be aiming for from a long-term
perspective, while looking ahead to social trends, changes inpeople’s values, and the further evolution of technology. For
example, with regard to Naoshima initiatives which aim tointegrate business and cultural activities, I believe that they willcontribute to enhancing Benesse’s corporate value over the longterm, and in addition to expressing opinions from this viewpoint at
the Board of Directors, I have made proposals such as conducting
executive training centered around Naoshima.
I also make proposals in the course of Board discussions
which take overseas trends and cases into account. I currently
reside overseas, and looking at cases in the field of education within
Japan and overseas, there are some cases where educational
companies are using IT to expand their services, while in othercases, IT companies are starting new educational services. We needto make appropriate decisions on how to confront such domestic
and international competition and how to incorporate them into
the Group’s growth. Our Group has developed Udemy—a service
which was launched in America—in Japan, and we are expanding
the business. I recognize that my role is to contribute to increasing
the number of such success stories going forward.

Enlivening Board of Directors discussions
and making contributions to further
improving effectivenessThe assessment of the effectiveness of the Board of Directors, which
has been in place since fiscal 2015, includes a space for additionalcomments along with a five-point rating scale. Every fiscal year, aquite large number of opinions based on the expertise of each
Director are listed in this comment space, and it is utilized to ensure
the effectiveness of the Board. In addition, in the fiscal 2021
assessment, it was confirmed that improvements have been made in
expanding dialogue with shareholders and investors, which wasraised as an issue in the previous year, and in reflecting the content of
those dialogues in the management of the Company. I perceive thatthe effectiveness of the Board of Directors is improving, year after year.
I assumed the post of the Chair of the Board of Directors inJuly 2022. As a young Chair in his forties, I will focus on creating anenvironment in which each Director can freely and actively discuss
issues, without being bound by precedent. There are many topics
to be discussed in our Group, and by organizing key points andeliciting the opinions of individual Directors, I intend to makecontributions to the further enhancement of governance.

Having more in-depth discussions from diverse perspectives
and supporting challenges for further growth

Mutsuo Iwai
Outside Director, Chair of the Nomination andCompensation Committee

Taking the time to have more in-depth
discussions at the Board of Directors, even amidst
the COVID-19 pandemic
Although there were constraints on the Board of Directors in fiscal
2021 due to the COVID-19 pandemic, I appreciate that we were able
to leverage the expertise and experience of each Director and takethe time to have multifaceted discussions. Among those discussions,
our exit from the Berlitz business was one of the major issues on theagenda. In particular, the specific details of negotiations werereported, and the process has been closely monitored. Similarly, we
have been monitoring the progress of the Medium-Term
Management Plan to achieve the goal of a V-shaped recovery in two
years. In addition, we have been discussing initiatives in eachbusiness area from a variety of perspectives, including not only thecurrent situation but also the future potential of the business.
Of those discussions, I place importance on checking themanagement situations of companies that were added to theGroup through M&A. How do we position, integrate and grow eachbusiness company as part of the major brand Benesse? Since thismatter also relates to investment efficiency, I am actively speaking
up at board meetings in order to have more in-depth discussions.

The essential point of a succession plan isconsensus building through internal discussions
I was appointed to serve as the Chair of the Nomination andCompensation Committee beginning in July 2022, and I recognizethat the succession plan is the biggest function of said Committee.
In my opinion, in formulating a succession plan, it isimportant to first develop and assess a successor from within thecompany, and form a consensus that this person will be
responsible for the next generation. After doing so, it is key thatsomeone from outside the company makes a judgment about
whether or not the plan is appropriate from a larger perspective,
which I call “endorsement.”
Leading up to this point, the Nomination and Compensation
Committee had already been holding discussions anddeliberations from a broad perspective. However, I recognize thatdeveloping a process to obtain an internal consensus within thecompany and providing information on factors such as the statusof the Executive Officer pipeline —which will serve to bolster ourdecisions—are issues that need to be addressed to promote more
ideal discussions.

Challenges are precisely what lead to thegrowth of the Group
When I communicate with shareholders and investors in myactivities as an Outside Director, I sometimes feel as though they
do not fully understand the current circumstances of the Groupand the direction it is heading. For example, there are many voices
expressing concern about the decline in Shinkenzemi
membership numbers. However, the Group is promoting astrategy with an eye towards the future, in conjunction withaccelerating DX in all businesses, not just the Shinkenzemi
business. In addition, each business is pursuing the principle of“well-being,” and working to offer new value to customers andsociety. I believe it is also necessary to properly convey tostakeholders through communication activities, using indicators ofBenesse’s future social value, that Benesse encourages people of
all generations to have the desire for “well-being,” and that it is a
corporate Group that can expect continued growth.
The greatest asset of a company is its human resources.
Benesse has a deep-rooted culture of treasuring human resources
and using them to the fullest, and each and every one of its
employees is continuing to take on new challenges. It is myunderstanding that the growth of the Group to date has beenachieved through the efforts of those employees. Challenges arewhat will lead to the future growth of the Group. Making the final
decisions on risk-taking is the role of the Board of Directors, and in
my capacity as the Outside Director, I would like to continue
observing and providing support for such efforts.

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Communication with Shareholders and Investors

Investor Information

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

Shares issued
Listed date
Securities listing(Common stock)
Securities code
ISIN code

Striving to increase corporate value throughdialog with shareholders and investors
The Company strives to maximize its corporate value by
promptly and accurately disclosing and explaining information
regarding its management policies, business strategies, forecasts,
etc., to shareholders, investors, and securities analysts, and byreflecting their opinions and requests in our management.
The Company’s top executive, the Representative Director
and President, CEO, actively engages 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
2021, 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 68th Period washeld in the same manner as last year, by requesting that all
shareholders refrain, whenever possible, from attending inperson, and to exercise their voting rights in advance by mail or
via the Internet. To ensure that the Ordinary General
Shareholders’ Meeting can be conducted openly despite the
COVID-19 situation, we accept questions submitted online inadvance, and also stream the meeting live so that it can beviewed from peoples’ homes, etc. Footage of the meeting,presentation materials, question and answer session summaries,
and the like are available from our website.

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

Introducing the Benesse Group

Main IR activities
We conduct the following activities over the course of the year.
• General Meetings of Shareholders• Financial results briefings: Twice per year (interim and year-end)• Activities for providing information: Roughly 200 activities per year
(12 of these being SR meetings), for a total of roughly 350 companies(Japanese and foreign)• IR pamphlet publication: Benesse Integrated Report, Shareholder News,
Data Book, etc.
• IR site planning and operation(As of March 31, 2022)

102,571,215 shares
October 26, 1995
Tokyo Stock Exchange/Prime Market

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
64,373

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

The Master Trust Bank of Japan, Ltd.

19,418

20.14

Treasury Stock

Financial Instruments Firms

efu Investment Limited

7,858

8.15

6.00%

Fukutake Foundation

7,758

8.04

Other Corporations

Custody Bank of Japan, Ltd.

4,365

4.52

The Chugoku Bank, Ltd.

2,787

2.89

12.66%THE BANK OF NEW YORK MELLON 140044

2,009

2.08

Fukutake Education and Culture Foundation

1,919

1.99

Minamigata Holdings, Inc.

1,836

1.90

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

1,600

1.65

Foreign Companies—
Other

Toshiaki Matsuura

1,396

1.44

30.80%

Individuals and
Other

0.98%
Financial
Institutions

30.00%

19.53%

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 6,160 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*

SOMPO Sustainability
Index

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

Reflecting the results of dialog with investors
and analysts in our corporate management
In fiscal 2021, 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 IR activities. The findings were also reported,shared, and deliberated at the Board of Directors meeting, andwe are using them to assist with the future improvement of ourmanagement initiatives.

External assessments of our IR tools (FY2021)• Gomez IR Site Ranking, Best Company Ranking 5th Place, Gold Award• Nikko Investor Relations Co., Ltd. All Japanese Listed Companies’ Website
Ranking AAA Grade• Daiwa Investor Relations Co., Ltd. Internet IR Excellence Award (Silver Award)

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

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 briefings 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.

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Benesse Report 2022

* 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 anyof 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.

S&P/JPX
Carbon Efficient Index

Visit the following website for information on our basic IR policy.
https://www.benesse-hd.co.jp/en/ir/strategy/ir_policy.html

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64

Group Information
Corporate Information

As of March 31, 2022

Name

Benesse Holdings, Inc.

Employees (Consolidated)

16,515

Date established

January 28, 1955

Capital13,780 million yen

Headquarters

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

Fiscal year-end

Representatives

Hitoshi Kobayashi
Representative Director and President, CEO(As of June 25, 2022)

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 and assisting children.

March 31

As of March 31, 2022

Common stock(Millions of yen)

Ratio ofshareholding (%)

Description of main business

Benesse Corporation

3,000

100.0

Shinkenzemi correspondence courses for preschool, elementary, juniorand senior high school students, Shinken Simulated Exams, magazines

Classi Corp.

3,985

67.3

Development and operation of educational platform

Tokyo Individualized Educational Institute, Inc.

642

61.9

Education business focused on education through individual tuition

Benesse i-Career, Co., Ltd.

261

51.0

Career-development and career educational support services foruniversity students and adults

UP Inc.

100

100.0

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

Shinken-AD Co., Ltd.

65

100.0

Advertising services and creation of university information magazines

Plandit Co., Ltd.

40

100.0

EDUCOM Corporation

33

100.0*Developing school management support systems

Benesse BE studio Inc.

10

100.0

Operation of English schools and international preschools

Learn-S Co., Ltd.

10

100.0

Ochanomizu Seminar Co., Ltd.

10100.0*

Operation of prep schools for senior high school students

Tokyo Educational Institute Co., Ltd.

10

100.0

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

125,000 Thousands of RMB

100.0

Sale of correspondence course materials for pre-schoolers

272,700 Million INR

100.0*3

Operation of prep schools in Indonesia

Benesse Style Care Co., Ltd.

100

100.0

Operation of nursing care business, childcare and afterschool care business

Benesse Senior Support Co., Ltd.

100

100.0*1

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

Benesse Palette Co., Ltd.

100

80.0*4

Delivery of prepared food for the elderly

Heart Medical Care Co., Ltd.

80

100.0

Providing recruitment services for medical, nursing, and welfare business

Benesse MCM Corp.

80

100.0*

Medical and nursing care recruitment and dispatch service business

Benesse InfoShell Co., Ltd.

150

100.0

Information system maintenance and operation business, information
processing service business

Benesse Business-mate, Inc.

50

100.0*5

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

Naoshima Cultural Village Co., Ltd.

20

100.0

Operation and management of hotels

Benesse Base-Com, Inc.

20

100.0

Logistics and data processing of tests and teaching materials for schools

3,600 Thousands of HKD

100.0

General trading and quality assurance related to educational equipment,
toys and other items

Benesse Corporation China
PT. Benesse Indonesia

Benesse Hong Kong Co., Ltd.

Corporate Philosophy

Benesse (Well-being)

Business Activities
Benesse Educational
Research and Development
Institute (BERD)
Benesse Senior/Nursing Care
Research InstituteCommunity Initiatives
ESG

Benesse Foundation
for Children

SDGs

Fukutake Education andCulture Foundation
Fukutake Foundation

Social Value Creation

Consolidated subsidiaries
Name of company

Foundation Activities—Initiatives geared toward
the creation of well-being—

Planning and editing of study materials
1

Planning, editing, production and sales of study materials
2

1• Fukutake Foundation• Benesse Foundation for Children

The Fukutake Foundation (formerly the Naoshima Fukutake Art
Museum Foundation) was established together with the Chichu
Art Museum, which opened in 2004, and assumed its current
name after a merger of two aid foundations in October 2012. The
foundation carries out three different types of activities. The first ismuseum 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.

The Benesse Foundation for Children is working to create
environments where children can learn with peace of mind; toassist children dealing with economic issues, sickness, disabilities,
or other obstacles to learning; and to aid the study and growth ofchildren who have been affected by disasters (emergency
assistance). The foundation is also ambitiously attempting to go
beyond simply providing assistance for overcoming problems toalso nurturing and educating children who will play prominentroles in building an even better society.

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

Offering a learning program through field workat Naoshima

Conducting trials for nursing care services
that utilize art

Benesse Art Site Naoshima designs and offers programs targetedat schools, companies, and organizations for learning about
dialogue, thinking, and presentation through Visual Thinking
Strategies (VTS) tailored to their respective purposes.
In fiscal 2021, we implemented programs for students andadults nationwide to learn about local activities throughfieldwork and other activities, as well as inquiry-based learning
programs in which participants discover issues on their own andconsider solutions from the perspective of the SDGs.

In conjunction with Benesse Art Site Naoshima, Benesse Style Careconducted trials for art appreciation as an aspect of services thatwill lead to better quality of life for elderly home residents. Residents
in the trials—which adopted Visual Thinking Strategies (VTS), a
method for art appreciation which Benesse Art Site Naoshima is
working on—verbalized and shared what they had felt anddiscovered while looking at artwork such as Claude Monet’s Water
Lilies, Cluster of Grass, which is owned by the Chichu Art Museum.
Doing so was an opportunity for them to further express themselves
emotionally and have more expansive social interactions.

Elementary students admiring Lee Ufan’s Porte vers l’infini (2019)

In online VTS sessions, the trial participants appreciated artwork such as
Claude Monet’s Water Lilies, Cluster of Grass (1914–17),
which is owned by the Chichu Art Museum

Plus 14 other subsidiaries.
*1 Indirect stock holding through a subsidiary.
*4 Indirect stock holdings of 80.0% through subsidiaries.

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Benesse Report 2022

*2 Including an indirect stock holding of 50.0% through a subsidiary.
*5 Including indirect stock holdings of 2.0% through subsidiaries.

*3 Including an indirect stock holding of 0.1% through a subsidiary.

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