Interview with an Outside Director

Keiko Yamahira
Outside Director

Please give us your evaluation ofMIRARTH HOLDINGS.
A year has passed since my appointment as an outside
director of the Company, and I have gained a strong
impression that the Group possesses the spirit to take onchallenges and the ability to surpass itself while continuing
to evolve with a sense of urgency.
There is a saying used in corporate management: “Thesnake that cannot shed its skin perishes.” In other words,staying rooted to the spot and not adapting in an era ofrapid change will mean stagnation and spell the demise ofa company. Even though having a history that dates back
50 years to its founding, the Company has maintained a
corporate culture that faces challenges and has retained its
ability to surpass past performance. In the past decade up
to the fiscal year ended March 2022, net sales haveapproximately tripled, and I think this attitude is one of thefactors behind the significant growth in performance oversuch a short period of time.
Running contrary to that, having expanded businessdomains over such a short period of time, I feel there will
be a heightening need for an “optimized business portfolio,”
which is one of the 7 Elements of the Medium-Term Management Plan, in the years to come. Having transitioned toa holding company, I recognize the importance of restructuring the portfolio so that the synergies within the Groupcan be maximized.

In transitioning to a holding company,
please tell us about any discussions thathave left a lasting impression on you.
One of the most important roles in being an outside director is management oversight. Concerning agenda items, I
have endeavored to fulfill my role as an outside director, forexample by frankly questioning whether the optimal solution has been selected objectively from the stakeholder’spoint of view.

What has left a lasting impression on me above all else
were the discussions about the company name, MIRARTHHOLDINGS. The Board of Directors thoroughly debatedwhether it would be the optimal solution to adopt a completely different company name, for the very reason that
Takara Leben had been raising its name recognition
through aggressive advertising campaigns. Through these
discussions, I was able to gain a sense of the executives’
fervent desire to show what form they wish to take as acorporate group in the years to come rather than theirname recognition now; in other words, to contribute to thefuture and the global environment.
Furthermore, as business continues to expand throughdiversification, transitioning to a holding company will
involve major organizational restructuring to accelerate
decision-making and clarify management responsibilities.
For this reason, I thought that there would be concerns
about personnel changes and confusion among employees
about Takara Leben becoming a holding company. An outside director pointed this out, and discussions were heldon the importance of alleviating employees’ concerns andgaining consensus through sufficient explanations so thatthe entire Group would be moving forward in one direction.

Please tell us about the issues facing
the evolution of governance atMIRARTH HOLDINGS.
One of the points I can mention as being characteristic of
our Board of Directors’ meetings is that there are many discussions on matters relating to business execution. Previously at Board of Directors’ meetings, there tended to be alot of time spent deliberating projects on account of thelarge amount of assets handled as a real estate businessdeveloper. Regarding this issue, my expectations are that,after having become a holding company, we will be able todelegate business execution matters to the operating companies. As a holding company, we will then be able tofocus more on improving the Group’s medium- to long-term management strategies and plans as well as on ourmonitoring function.
In the years to come, it will also be important to pay close
attention to the risk management aspects within the entire
Group and to ensure that effective governance is being
exercised over subsidiaries. On the one hand, the Group
attracts diverse human resources from outside, but on theother, issues have arisen with instilling the corporate philosophy and the sharing of information. After organizational
restructuring, I believe that efforts will be required to devise
standardization of the corporate philosophy and prevent
scandals and accidents at Group companies, by creatingand sharing unified rules within the Group and coordinating
related departments on a cross-organizational basis.
Promoting the delegation of business execution to operating companies and strengthening the monitoring function
as a holding company will demand that the Board of Directors also be of an appropriate institutional format. Goingforward, it will be considered necessary to revise the system as required, including in terms of the composition ofoutside and internal directors.

sees the organizational restructuring as an opportunity toproceed with initiatives through discussion going forward.

Please point out the issues thatMIRARTH HOLDINGS should address toachieve sustainable growth.
In the corporate management of today, sustainability is an
important theme that simply cannot be overlooked. Considering social and environmental sustainability as well as
corporate sustainability to be inextricably linked, I believethat as an operating company MIRARTH HOLDINGS
should be contributing to society through its businesses.
Involved in housing development, urban development,
and renewable energy, the Group is deeply involved in thesustainability of society as a whole. The Group is able toPlease explain your role as chairpersonof the Compensation Committee and any
points for improvement with respect toexecutive compensation.
At MIRARTH HOLDINGS, outside directors conduct individual interviews and assess all the executive officers. Iconsider that there are two qualities that make a person
suitable as a leader: the ability to indicate direction withdecisiveness and the ability to empathize with others. It is
my belief that we can maximize management resources by
having the organization be driven by people who can leadfrom the front in making decisions, are in tune with people
and can share their thoughts.
With regard to the executive compensation system, acertain percentage of compensation is linked to businessperformance and the degree of contribution of individual
directors for them to show commitment to more proactive
management toward sustainable growth. There is also aframework for assessing the degree by which they havecontributed to ESG by a coefficient, and thus I believe that
there is no problem with the current system. Concerning
the compensation systems in place at subsidiaries, however, I feel that it will be necessary to take into account thosecompanies that have joined the Group through M&A andfactors such as differences in business scale to ensure
consistency across the entire Group. Regarding compensation systems as one of the issues to be addressed on across-organizational basis, the Compensation Committeetake a comprehensive approach to address the variety ofissues that local communities have been facing in recentyears, such as the promotion of compact cities as a solution to population decline and the resultant increase in public costs, innovative urban development and the building ofsocieties that utilize IoT and the latest technologies. The
key to further increases in the contributions the businesses
make going forward will be how to effectively increase
Group synergies.
The Group has been achieving growth by always taking
the initiative and responding quickly to changes in thetimes with a sense of urgency and its ability to surpass
itself. Looking ahead to the 50th anniversary and beyond, I
hope that MIRARTH HOLDINGS will continue to create
new value as a future environment design company andfurther enhance its corporate value while maintaining its
venture spirit.