CHAPTER

04 Enhancing Operational Resources

Dialogue between Two Outside Directors

For the sustainable growth of the Group, we will contribute toincreasing the corporate value from an outside perspective

Yumiko Noda

Masaru Onishi

Outside director

Outside director

Please frankly share with us yourimpressions of the Board
Onishi: The Benesse Group provides us outside directors withdiscussion opportunities not only through Board of Directors
meetings but also through the advisory committee’s meetings andthe executive workshop. The Board commands a set of skills that arecontributed by different directors in a well-distributed manner, andthe directors can express their opinions firmly at the meetings, which
is something I rate highly. Also, I think members of the Audit &Supervisory Board give their opinions more proactively than theircounterparts at other companies.
Noda: I assumed the position two years ago, and feel that theoutside directors, who have experience in corporate management indifferent industries, are revitalizing discussions by expressing opinionsfrom their different standpoints. I think open discussion has beenfurther promoted recently, relative to the situation in my first year as
outside director of the Company.

Could you give your frank rating of the Board inview of the process leading to the formulationof the Transformation Business Plan?
Noda: Toward the formulation of the Transformation Business Plan,
the Board had profound discussions for the optimization of thebusiness portfolio in consideration of social changes from a long-term
perspective. The Benesse Group used to get more business
opportunities thanks to an increasing population driven by Japan’shigh economic growth. Going forward, however, the Group needs tosearch for new business opportunities in the face of a falling birthrate
and an aging society, which have come to the fore as social issues. The
reskilling business will provide the Group with such opportunities. As
for the nursing care business, the market will further expand while
market needs will become more diversified as economic disparities
widen. In such a market, the Group needs to transform its businessmodel to meet the individual needs of customers in a more attentive

75 Benesse Report 2023

We can use the time allocated to the meetings more effectively by
understanding the main points of the issues to be discussed inadvance and then listening to the explanations about the referencematerials at the meetings.
Noda: The management team and employees are all fulfilling theirjob duties conscientiously and they sincerely listen to our opinions,which pleases me a lot. At Board meetings, however, I think it isnecessary to have even more constructive and in-depth discussions,although the time allocated for the meetings is limited. The executive
team should not just respond to questions raised by outside directors
and listen to the directors’ opinions. They must also express their ownopinions. Who are the true customers of the Benesse Group? The
Group is conducting B-to-C business, but it is difficult for the Group to
identify its true customers, and those with whom it has direct contact
might not be decision-makers. It is difficult for the Group to decide
whom it should satisfy as customers and whom the Group should
please in terms of motivating staff. Customers who are satisfied tend
to say nothing, while those who are dissatisfied tend to complain
immediately. I am always worried that trying to placate the dissatisfied
people may lead to the degradation of services that have beensatisfactory to others. I always participate in discussions by keeping
this in mind. The Group conducts the education business for children,
but it is essential for the Group to deal with the problems faced bytheir parents. The same applies to the nursing care business. It is
important to respond not only to the needs of the elderly who areusing the services but also of their families. I feel very grateful for theexplanations given to us about the analysis results at thetime-constrained meetings, but I also want to have more discussions
about who are the true customers of the Group.

manner, as uniform and standard nursing care services will eventually
be outdated.
Onishi: The Transformation Business Plan was announced aroundthe end of phase 1 of the Medium-Term Management Plan, when theGroup’s business performance was good. How many people had
expected that it would make such an announcement? I also think thatthe details of the Plan, which are quite different from the Group’s past
management strategies, surprised many people. That difference
reflects the substantial changes undergone by our society and implies
that the management team has a healthy sense of crisis that is urging
them to take the required action now. In the Plan, the Group’sbusinesses are roughly categorized into three, of which themanagement has the greatest concerns about the Core Education
business. Unfortunately, I have to say that the Plan does not fully set
out the path that the Group will follow going forward, but it isimportant in that it clearly specifies the systems and organizations
necessary for the Group to find new business opportunities and topush ahead with reforms in a business environment that will continue
to contain uncertainties. The Group also aims to optimize its businessportfolio with a focus on new business areas that have sufficientaffinity with its existing businesses and that can be developed bycapitalizing on its existing strengths.

What will it take for the Board to further
enhance its effectiveness?
Onishi: As a requirement to enhance effectiveness, we need tomake more effective use of the time allocated to us for discussions. At
Board of Directors meetings, we focus on making resolutions asrequired, but at the meetings of the advisory committee and at theexecutive workshop, we hold intensive discussions. For thesemeetings, which are separate from Board meetings, I want theexecutive team to explain to us—in any format, including bullet
points—what on-site problems and concerns they have prior to themeetings in addition to sharing with us the wealth of reporting
materials prepared for the meetings, which are certainly very useful.

Onishi: The needs that we are required to meet in the B-to-C
business are becoming increasingly diversified and complicated.
There are very few people who can communicate their needs clearly,and many of our customers are not aware of their true needs.
Moreover, there are people who just stop using services when they
feel dissatisfied with them, without making any complaints at all. Howto make the Benesse Group’s products and services shine morebrightly? It is extremely important to obtain information throughunofficial channels, for which it is absolutely necessary for staff to get
out of the office and go looking for it. Based on my own experience inthe airline industry, I would like to foster direct communication withstaff who are serving customers on-site to help make the Group’sproducts and services even more attractive. I hope that more time willbe allocated to discussions on these issues at Board of Directors
meetings and at the executive workshop.

What challenges should the Benesse Group
meet for sustainable growth?
Noda: It is still unclear in what way the Group’s purpose will help theBenesse Group to increase its corporate value and what value could
be produced by the achievement of the purpose. Also, what kinds ofKPIs are needed to improve the business performance based on thepurpose and mission? How should necessary measures beimplemented? How much social value can be brought about as aresult? I think the Group needs to find clear answers to these questions
as the next challenge to be met. For example, in the nursing carebusiness, the Group is implementing the Majikami AI project to enable
an AI system to acquire the skills and know-how of an experienced
caregiver with the aim of upgrading the skill level of the entire staff. Inorder to become the top leader in the industry, how should the Grouputilize such AI systems and technology? I feel irritated at the fact thatthe project has not yet contributed to the Group’s value creation andpositive external evaluation, as I have seen the Group’s on-site staff
serving customers very attentively and making efforts to please thecustomers even more. Also, Benesse Corporation is doing much better
than other listed companies in terms of female manager numbers,
with a rate of around 30%. However, there are still no female
employees who have been promoted to Board member after a long
period of loyal service. I think the Group should promote more women
who have lots of experience with on-site work to top management
positions where they can make decisions, and it is good to have sucha goal. However, having ESG-related goals is presently regarded as amanagement priority of all companies. I would like to have morein-depth discussions with other members of the Board to specify thepath to be followed by the Group to achieve its goals and to examine
how the Group can increase its financial performance and corporate
value by implementing nonfinancial measures. I will also share withthe Board members my own observations about how society and thebusiness environment are changing from an outside perspective.
Onishi: In order to achieve true transformation and sustainablegrowth, the Group needs to foster internal reforms, includingchanging its corporate culture, in addition to reforming its businessportfolio and business model. Under the leadership of President
Kobayashi, the Group is pressing forward with measures to instill its
corporate philosophy and vision across the board based on theGroup’s purpose, which I highly appreciate. According to myexperience, it is critical to have a corporate purpose and mission thatcan be shared with on-site employees. No corporate reforms can becompleted unless employees accept the corporate purpose andmission as their own. Conversely, employees who can take actions
autonomously in line with the purpose and mission will provide a
tremendous driving force for such reforms. I would like to discuss
measures that will help the Group instill the corporate purpose acrossmore of its workforce and will do anything that I can to contribute tothe Group.

Benesse Report 202376