ESG Initiatives in Line with the Medium- to Long-term Management Targets
Round-Table Discussion among Outside Directors

engaged more deeply in the formulation of the Medium- toefforts to establish and implement a succession plan are only half

Long-term Management Targets “SUMINOE GROUP WAY

done. The Company must define the skills required for a successor

2022-2024-2027” (hereinafter SGW). Next time and onward, I hopeand create a foundation for nurturing personnel who have thesethat we outside directors will be deeply involved in formulatingskills, on a long-term basis.

such targets from the initial stage.

Oida Some have the idea of developing professionals by letting

Oida Regarding information provision in advance of the meeting,employees accumulate experience in a single business segment.

I would like to request that such information be given to us at anHowever, I believe that it is important to broaden employees’

earlier time. Especially for important subjects, I would appreciate it if

perspectives, by having them experience working at a Group

we could have an opportunity to receive prior explanation throughcompany in Japan or overseas when they are in their 40s or so, toan online meeting or other means. In the present situation, it isenable them to obtain skills and knowledge that differ from thosedifficult to say that enough time is secured to well consider suchthey have acquired through their previous work.

subjects before the meeting. To enable us to participate in theShimizu With factories located around the world, the Company is

discussions after deepening our understanding of the contents, I

engaged in production and sales on a global scale. At the same

hope some improvements will be made.

time, the Company has been vigorous in conducting overseas

Nomura In terms of understanding of the Company’s businesses,investment. To comprehensively manage these strategies over a

it was greatly helpful to be able to visit the Nara Factory after its

long period, it is necessary to formulate human resources strategies,

reorganization in fiscal year ended May 2023. In a manufacturing

including a succession plan taking into account aging members ofsetting, what is important is to increase production efficiency while

the Board of Directors.

implementingtheShibuya I think that the key is to have as many successor

aforementioned visit, I realized that the Group factory has a highcandidates as possible. As for qualities and skills, generally there arelevel of safety awareness. I hope that the Company will continue tominimum requirements for successors. However, corporate

offer us opportunities to observe manufacturing sites firsthand.

business strategies will vary according to the times. I recommend

Oida We are given regular opportunities to better understandthe Company having many candidates to create room for selecting

the Group. By actually seeing products and production sites, we canthe right person at the right time. In addition, if the Company has

get a clearer image and engage in discussions in greater detail. I

nurtured diverse candidates, it will be able to establish a Board ofknow that some other companies hold events other than the board

Directors comprising individuals with a broad range of knowledgeof directors’ meetings for exchanging views between the president

and skills.

and outside directors. In many cases, such events are designed toNomura In terms of accumulating experience, it may be a good

help both the president and outside directors to comprehend eachidea to have executive employees make a presentation on aNomura The Company has devised the ways of providing us withother’s views on various matters, including matters that are difficult

discussion theme at a meeting of the Board of Directors. Although

information in advance of the meetings. I think this indicates thatto discuss when internal officers are present—for example, eachthe number of participating employees should be limited,

the Company wants to ensure that outside directors understand theother’s level of understanding governance and ways of recognizing

candidates for future managers can witness what kind ofcontent of the meetings. This also reflects the Company’s

the business environment and the medium- to long-term strategies.

discussions are being held among officers. After receiving

recognition that if we have deeper understanding, it should lead to

Shibuya It is true that, during the Board of Directors’ meetings,

explanations about the theme, these candidates will work together

more in-depth discussions.

occasionally we only have time to plainly express our ideas.

with directors to answer our questions. Such activities will provide

Shibuya Although I have attended the Board of Directors’

Oida In addition, the Company has secured the diversity ofHowever, at informal sessions other than board meetings, we canthem with an opportunity to build experience and a mindset tomeeting only once, I have an impression that the meeting has an

outside directors by appointing individuals of various age groups

further deepen discussions without being concerned aboutbecome a member of the next management.

open atmosphere that encourages free and vigorous discussions, soand genders. These members include a manager, lawyer,reaching a conclusion. It is therefore desirable for the Company tomembers were engaged in very lively exchange of views.

accountant, and other professionals having diverse skills in theirincrease such opportunities in the future.

Oida That’s right. Partly because many of us have served as

respective fields.

outside directors of the Company for a long time, we can makeShimizu I have been engaged in overseas business at anrecommendations based on our understanding of the Company as

automotive parts manufacturer for nearly 60 years. Taking

well as our own experiences. Internal officers, including theadvantage of this background, I can make many suggestions to thePresident, who chairs the board meeting, always seriously listen toCompany, which attentively listens to these suggestions.

recommendations from outside directors. As such, unreserved

Nomura I dare say about the issues with the Board of Directors,

discussions take place at meetings of the Board of Directors.

there may be room for enhancing its function to ensure that aShimizu Since we can obtain accurate answers to every question,board meeting will not be just a “venue for approval” but be aShimizu As pointed out when the effectiveness evaluation wasswings, the Company runs relatively stable businesses with a firm

I presume that careful preparations are made for board meetings.

“venue for discussion.” For example, I regret that we could havemade for fiscal year ended May 2023, I think that the Company’sbase of operations. On the other hand, I think there is a limit toHaruo Shimizu

Yumiko Oida

Kohei Nomura

Yuko Shibuya

Outside Director

Outside Director

Outside Director

Outside DirectorEnhancing the Effectiveness ofGovernance to Achieve Further
Improvement of Corporate Value
How would you evaluate
the Company’s governance systemand management?

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SUMINOE GROUP Integrated Report 2023

thoroughlysafeoperation.

Through

What do you think will be
the future challenges forthe Company?

What do you expect of
the Company in the future?

Shibuya My impression is that although the Interior Fittings andAutomotive Textile businesses tend to be vulnerable to economic

SUMINOE GROUP Integrated Report 2023

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ESG Initiatives in Line with the Medium- to Long-term Management Targets

ESG Initiatives in Line with the Medium- to Long-term Management Targets

Round-Table Discussion among Outside Directors

Messages from Outside Corporate Auditors

expanding its market share in Japan. I expect to see further

and contributing to society. I thus hope that the Company will moredevelopment of overseas businesses, on which the Company has

widely demonstrate the fact that it is fulfilling its social

already focused its efforts. In addition, I hope that overseas

responsibilities.

Performing audits to safeguard investor interests fromthe standpoint of a financial expert

businesses will be utilized for human resources development. WhenI was transferred to a company in a foreign country, I keenly realizedthat I had to take on greater duties and responsibilities on my own
than I did in Japan. I believe that experience in working overseas
offers a great opportunity for personal growth of employees.
Nomura There may be examples of young employees who are

What kind of initiatives would
you like to work on toward further
enhancement of corporate value?

successfully working in Japan after having improved their businessskills through experience in working at an overseas Groupcompany.

Shibuya I’m sure that the Group is built on a solid foundation andShimizu Well, the reverse situation is also conceivable. We canhas excellent products and human resources. In order for the Group

Atsuhiro Sonoda

imagine that employees of an overseas Group company come toto continue to produce products that are conducive to society,

Outside Corporate Auditor

Japan. While accumulating working experience in our country, they

human capital, particularly its “diversity,” is the essential element.

will learn about the Group’s spirit, which will be brought into theirSince we don’t know where growth opportunities lie in the future, Icountries when they return home. In June 2023, a new Group

believe it is extremely important to hire and secure diverse human

Philosophy and logo were formulated. Taking this opportunity, theresources to seize such opportunities.

Group’s spirit, along with its new Philosophy and logo, should beOida At present, the greatest challenge for the Company is toknown to all Group employees not only in Japan but also in overseas

achieve “a market capitalization of tradable shares of at least 10countries.

billion yen” to meet the continued listing criteria for the Prime

Oida As measures to prevent the loss of opportunity due toMarket. I strongly recommend the Company to focus its efforts on

shortages of qualified personnel, I can cite M&A, let alone in-house

M&A initiatives as its growth opportunities in order to increasehuman resources development. I recommend the Company toinvestor expectations for the Company. As a certified public

continue to proactively conduct M&A when required for its

accountant, I will make financial suggestions.

businesses.

Shimizu The Company’s subsidiary in the United States, Suminoe

Shibuya To attract superior human resources, it is important toTextile of America Corporation (STA), has been in the red for many

enhance name recognition. As compared with B-to-C companies,years. However, it has finally become almost certain to achieve

B-to-B enterprises, including the Company, tend to be less known toprofitability. After visiting STA for an on-site inspection, I had an

the general public. For this reason, we should disseminate theimpression that its deficits may be caused by inaccurate cost

Group Philosophy and other various kinds of information to outsideaccounting. If income is stabilized, external impact due tothe Company. I think that such initiatives will also be instrumental influctuations in foreign exchange rates or other factors can be

securing human resources and revitalizing the Company.

absorbed to some extent. Although its cost management has now

Shimizu I agree. Young employees these days will be highly

been improved, I will continue to pay close attention to the U.S

motivated to work if they see the Company resolving social issues

subsidiary to prevent it from returning to the same state.
Nomura Needless to say, single-year income is important, andprofitable management should be continued. On the other hand, Iwould like to emphasize the importance of having long-term
perspectives. The SGW targets have been established for thepurpose of the Company’s growth. With this in mind, all of top
management and all employees should take action. Together withother outside directors, I will strive to help the Company make rightbusiness decisions for sustainable growth while always being awareof this fiscal year’s objectives in working toward the SGW.

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SUMINOE GROUP Integrated Report 2023

Ever since I joined Takashimaya Co., Ltd., I have experienced various duties, primarily
in the accounting and financial fields. In February 2023, I obtained a tax accountant
license. I understand that my roles are to check the legitimacy of decisions made by
the Company, to bring out the strengths of each business to improve management,
and to monitor whether investor interests are realized or not.
Since the Company has many Group companies in Japan and overseas, one of its
crucial challenges is to establish a governance system at each Group company. Ibelieve that it is vital that Group auditors share governance-related issues of eachcompany and hold discussions to find radical solutions in terms of Group governanceat their liaison meetings, held several times a year. These auditors should also work toincrease opportunities to provide advice from the investor’s perspective.
Meanwhile, considering overseas business expansion aimed at further growth, it isindispensable to secure human resources with higher skills regarding globalstrategies. Much of the Group’s income derives from the United States and ASEAN
countries. In this sense, I consider it important to find and appoint appropriate
individuals who can advance opinions about management from a global perspective,
from among local executives of major overseas Group companies. Since I myself
frequently make contact with investors, I will contribute to the Company as an“activist auditor” to improve shareholder value from the viewpoint of investors.

Contributing to further improvement in transparency,
capitalizing on my expertise cultivated throughtextiles-related businesses

Takafumi Katayama
Outside Corporate Auditor

For many years, I have been engaged in trading of fiber raw materials and textile
products at Marubeni Corporation while overseeing sales strategy formation,
governance improvement and internal control of Marubeni Group companies. I havealso conducted business management as President of a major Marubeni Groupcompany. As an independent outside auditor, I believe that I can be actively involved
in better management and administration of the Company.
The Company secures sufficient coordination between the full-time corporate
auditor and the accounting auditor, as I can see them exchanging candid views andsharing information. Currently, I am working in coordination with the Internal
Auditing Department via the full-time corporate auditor. Going forward, I hope I will
be able to have more opportunities to talk with the Department members. I can fully
appreciate the appropriateness of the Board members’ business execution. I think,however, if outside directors have a deeper understanding of the Company’sactivities, it will lead to more constructive discussions at board meetings. I would also
like to point out an issue regarding the development status of governance policies ofrespective Group companies in Japan and aboard. It is important to establish agovernance policy at a certain level or above that is applicable across the Group while
respecting the autonomy of each company.
To enhance the Company’s corporate value, I will continue endeavoring tofurther increase the effectiveness of governance and ensure full compliance with laws
and regulations. Moreover, I will work to improve transparency so that the Companywill grow as an enterprise that earns greater respect in society.

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