Sustainable Growthfor More Companies

Integrated Report2023（Covering January ‒ December 2022）

Funai Soken
Consulting Group
Purpose and Vision
Our Group Purpose

Sustainable Growth for More Companies
Sustainable Growth for More Companies
We lead the way to a better future and a more productive society
in which more companies can achieve growth in any conditions
and people can reach their full potential

1Our Vision for the Future
The foremost provider of digital andcomprehensive consulting solutions
for mid-scale and SME clients
For more than 50 years, we have pushed back the boundaries ofwhat’s possible in the consulting industry. In the 2020s, we aim
to build on that history and establish the Funai Soken Consulting
Group as the foremost provider of digital and comprehensive
consulting solutions for mid-scale and SME clients.

Funai Way
Our Core Values: The Funai Way
Adventureship

Empathy

Integrity

Convertingchange into
momentumA reliable partner
for businessownersA force for good
■ Our work is a vehicle
for the betterment ofsociety.

■ Our work is not work
unless it’s fun.

■ Our focus on outcomes isunwavering.

■ We relish the challengesof our ongoing quest for
growth.

■ We share the mindset ofthe entrepreneurs we serve.

■ We are leaders of change.

■ We dream farther andact quicker.

■ We design environments
where everyone can bethemselves.
■ We are good corporate
citizens, and we behave
like it.

The Spirit Espoused by theGroup’s Founder, Yukio Funai
We make the world a better place.
2

Contents & Editorial Policy

A bo ut t he Fu nai
Soke n Cons ul t ing
Gro up1. Our Group Purpose
5. The Group at a Glance
7. Our Journey So Far
9. Real Strengths Forged in Experience
11. The Value Creation Process
13. Financial & Non-Financial Highlights

15. Group CEO’s Message

Grow th S trate gies

21. Executive Vice President’s Message
23. Mid-Range Business Plan

29. Our Business Segments at a Glance

Valu e Cre ati on

30. Consulting

Dr iver s

45. Logistics
46. Digital Solutions

Editorial Policy

Reference to Guidelines

This report is designed to provide stakeholders a comprehensive

This report is edited and configured

understanding of the Funai Soken Consulting Group’s efforts to achievewith reference to relevant Japanesesustained growth and mid-to-long-term improvements in corporate

and international guidelines.

value. Thus, in addition to financial data, the report contains nonfinancial information about aspects such as the group’s strengths, andthe philosophy, business model, sustainability, growth potential, growthstrategies, and governance regime that contribute to its earning potential.
This year's report includes unique content that conveys the thoughts

3

Scope
This report pertains to FY2022(January 1 through December 31,2022), with additional commentof the management team, as well as an explanation of the growth

regarding other adjacent times as

strategies set out in the Mid-Range Business Plan, in order to provide

necessary.

shareholders, institutional investors, and other stakeholders with a

All data shown herein pertain to the group’s

deeper understanding of our operations.

period unless otherwise stated.

consolidated accounts for the aforementioned

47. Dedicated to ESG in Management

E SG: Th e Bed ro ck

About the Funai Soken
Consulting Group49. Environment (TCFD Disclosures)
55. Our Peopleof Ou r Bus in es s

61. Information Security
63. Compliance

Growth Strategies

65. Corporate Governance
73. Outside Directors’ Messages

Corp orate

78. Standing Audit and Supervisory

Gover nan ce

Committee Member’s Message

Value Creation Drivers

79. Business Risks
81. Consolidated Financial KPIs 2012–2022
83. Consolidated Financial Statements
87. The Funai Soken Consulting Group

Corp orate Data

Network

ESG

88. Corporate Overview & Stock
Information

A Comprehensive Communication StructureThis report is published solely for the purpose of

Financial Information

providing information relating to the Funai Soken

induce investment in securities issued by Funai

OnlineConsulting Group’s performance in FY2022 andits strategies for the future. Its purpose is not to

Corporate Governance

Disclaimer

General information about our activities: corporate website
https://hd.funaisoken.co.jp/en/
IR information for shareholders and investors

ESG management and sustainability information

https://hd.funaisoken.co.jp/en/ir/

https://hd.funaisoken.co.jp/en/sustainability/

Corporate Data

Soken Holdings, and no contents hereof shall

Non-Financial Information

constitute a warranty or promise.
Integrated Report 2023

Opinions and outlooks contained in this report
the Funai Soken Consulting Group at the time ofwriting, and we make no guarantee or promise

Printedrepresent the views of Funai Soken Holdings and(for shareholders, investors, client companies, employees,
students, families, business partners, local communities, etc.)

Shareholders meeting convocation notices(for shareholders, etc.)
Securities Report(for investors, etc.)

regarding the accuracy or completeness of such

Summary of Financial Results(for investors, etc.)

contents, and the contents of this report may be

Operation Reports(for shareholders, etc.)

changed at any time without notice.
4

The Group at a Glance

The Funai Soken Consulting Group is a provider of comprehensive management consulting solutions for
mid-scale companies and SMEs.

We are one of Japan’s foremost comprehensive
consulting groups for mid-scale companies and SMEs

70.2%

Logistics

13.7%

Digital Solutions

Forecast share of
total sales in 2023

Forecast share of
total sales in 2023

Forecast share of
total sales in 2023

Consulting

16.1%

Management consulting
Consulting＊

Contact center
consulting

Logistics

Logistics solutions

Digital solutions
Digital Solutions
HR solutions*Seicho Senryaku, Inc. joined the Funai Soken Consulting Group in January 2023.

5

The Funai Soken Consulting Group Business Model

Helping businesses overcome
their own unique challenges
How can we boost ourcompany’s growth
beyond current levels?

Total companies
in Japan

3.67

Approx.

How can we improve
our customer contact
center capabilities?

99.7%

Where can we findenough staff tosustain sales growth?

We don’t have an appointed
successor. How can we
secure the company’s future?

Source: 2021 Economic
Census for Business
Activity, METI

Where can we discuss
issues with, and learn from,other business managers?

Growth Strategies

Where can we findthe right logistics partner
for our needs?

mil.

SMEs as%age of
total

About the Funai Soken
Consulting Group

The Market We Serve

How can we upgrade
our IT and digitize
our business?

Value Creation Drivers

We at the Funai Soken Consulting Groupcan help find solutions to your concerns.

ESG

Housing, Healthcare, Certified pro’ Life events,
real estate nursing care,servicesbeautywelfareMobility

Manufacturing Environment,
energyLeisure,sports,tourism

Education,
childcare,schools

Logistics

IT

Growth support

HRD consulting

Consulting Divisional
Headquarters

Overseas
markets(China)Use ofgrantsSupport for
IPOs, holdingco. set-up

Support for improved
corporate value
Talent development
support

Digitalization support

Ruralcommunity
revitalization(focus on balance sheet for
improved corporate value)Newbusinessdevelopment
supportDX consulting

HR Business Consulting
Department

DX Development
OfficeHRsolutions

Digitalsolutions

M&A Consulting Dept.; Improved
Corporate Value Consulting
Div. HQ; Rural Community
RevitalizationConsulting
Dept.

Rural
community
revitalization
support

Corporate Data

Contact
center(focus on PL statement for
improved bottom line)

Comprehensive, industry-specific, solution-category-specific,
personal support for mid-scale company and SME proprietors

Businessownershipsuccession
through M&A

Dining,food

Corporate Governance

Provider of comprehensive
digital and consulting solutions

HRbusiness

FinancialsupportSupport for
improved
productivity

6Our Journey So Far

Company Timeline and Financial Performance
The history of Funai Soken is the history of management consulting in Japan, the very contours of theindustry shaped by our unique evolution as a consulting firm for business proprietors. The 2020s willbe the age of digital expansion, and we are committed to being the most trusted provider of digital andcomprehensive consulting solutions for mid-scale and SME clients.

How We’ve Grown in the Past 10 Years（Million yen）

30,000(2012 vs. 2022)

28,000Avg. growthin sales

26,000Operating margin

24.9%

24,000ROE

9.4%

22,000

Employees

526

20,00050th
anniversary

11.0%
27.7%
19.2%
1,382

1,400

1,300

1,200

1,100

1,000

900

18,000Move toholdingcompany
structure

16,000800

700
14,000600
12,000500
10,000400

8,000

Listed on
stockmarket

6,000

300

200

4,000

Founded
100

2,000

0

’70

’75
Net sales

’80

’85

Operating income

’90

’95

’00

Employees at end of year

ASBJ’s Accounting Standard for Revenue Recognition adopted in FY2022.
Amounts for FY2021 have been amended retroactively.

7

’05

’10

’15

’20 ’220

Mid-Range Mid-Range Mid-Range Mid-Range
Business
Business
Business
Business
Plan
Plan
Plan
Plan
(2014-2016) (2017-2019) (2020-2022) (2023-2025)

1980s

1990s

Inauguration

Focus on the distribution industry, stock listed

Expand focus to include the service industry

One-man consulting operation by
founder Yukio Funai

Research & marketing consulting
for distribution industry clients

Marketing consulting for distribution
and service industry clients

March 6, 1970

1981

March 1990

Yukio Funai starts the Japan Marketing Center(now renamed Funai Soken Holdings).

Preparing for stock listing.

September 1970

Name changed to Funai Consulting.

Tadashi Moto'ori is appointed
president, coinciding with a shift
from predominantly the distribution
industry to the service industry.

Members-only Cosmo Club established.

1972

March 1985
September 1988

Our first premises inYariya-machi, Osaka.

Founder Yukio Funai.

June 1993
Stock reclassified on OSE 2nd
section.

2010s

2020s

Further expand range of client industries

Expand range of solution categories

Focus on expanding digital consulting solutions

Marketing consulting for JapaneseSMEs in all industries

Comprehensive consulting for
SMEs and mid-scale businesses

Digital and comprehensive
consulting solutions for mid-scale
and SME clients

February 2010

March 6, 2020

Funai Information Systems
established (renamed Funai Soken
IT Solutions in July 2014).

Inaugural annual Great Company
Awards held.

50th anniversary

March 2000

March 2010
Sakae Takashima is named the company’s
4th president, implementing group policyof self-control, autonomy, and teamwork.

Takayuki Nakatani is appointed
president, and a new set of corevalues, the Funai Way, is instituted.

December 2004
Stock listed on the Tokyo Stock
Exchange 2nd section.

December 2005

Funai Consulting Shanghai established.

January 2014
Funai Soken Logistics becomes awholly owned subsidiary.

July 2014
Transition to holding company structure.
Funai Consulting renamed Funai Soken
Holdings; consulting arm spun off as the
new Funai Consulting; sales support arm
spun off as Funai Soken Corporate Relations.

February 2015
Proseed becomes a wholly owned subsidiary.

February 2018
HR Force established.

June 2018
Great Company Awards launched in 2010.

April 2022
Tokyo Stock Exchange reorganizes
market segments; Funai Soken
Holdings shares now listed on thePrime market.

July 2022
Funai Soken Corporate Relations andShinwa Computer Service merge tocreate a new company: Funai Soken
Digital Inc.

Corporate Data

Stock reclassified on the TSE andOSE 1st section.

January 2012

March 2021

Corporate Governance

New President Masahiko Koyama
launches the “change of gears” toachieve financial and workforce
growth.

ESG

February 2000

Value Creation Drivers

2000s

Growth Strategies

Yukio Funai’s Henshin Shoho (Commercein Change) becomes a bestseller.

Listed as a Specially Designated
Stock on the 2nd Section of the
Osaka Stock Exchange.

About the Funai Soken
Consulting Group

1970s

January 2023
Seicho Senryaku becomes awholly owned subsidiary of Funai
Consulting.
“Sustainable growth for morecompanies” is instituted as theFunai Soken Consulting Group
Purpose.

Shinwa Computer Service becomesa wholly owned subsidiary.
8Real Strengths Forged in Experience

Throughout the Funai Soken Consulting Group’s steady growth over the past 53 years, we have amassed a
wealth of strengths, and these have enabled us to thrive in good times and bad through prudent application ofsensible strategies. We will continue to add to those strengths as a vehicle for creating new group value.

Our Core
Strengths

Japan’s Leading Consultant for
Mid-scale Companies and SMEs

As Japan’s foremost specialists in management solutions for mid-scale businesses and SMEs, we have developed a uniquecapacity for offering proprietors across-the-board support from early strategy planning to final implementation and embedding.

A Strong Capital Base to Underpin Our Strengths

Social Capital

Wide-Ranging
Client BaseOur pool of management workshop clients is one of the largest
among all consulting firms in Japan. In recent years, we havebegun holding workshops in Shanghai, where they are regarded
as being unlike those found anywhere else in the world.

Human &
Intellectual
CapitalA Diverse
Workforce

A diverse workforce of talented people is vital for sustaining
the group’s development. We are committed to enhancing
our talent management capabilities and maintaining anenvironment that enables our people—the true drivers of our
growth—to make the most of their strengths.

Financial
CapitalA Solid Financial
Foundation

Our high ROE and equity ratio provide a solid financial
foundation to underpin our ongoing quest for sustained
improvements in corporate value through growth investments,
as well as shareholder value through steady shareholder returns.

9trusted brandAbout the Funai Soken
Consulting GroupA long-standing,

53 Double-figure growth
Recent growth in profits

years

Growth Strategies

10,800Management Workshops(groupwide)Workshops
held

180

Consulting
clients

5,687

Workshopmembers

6,905

Contract renewal
rate

73.3%

ClientApprox.
companies:

Value Creation Drivers

Our Clientele by the Numbers

Seminars

1,537

Femaleemployees

38.1%
23.8%

ESG

Seminars
heldGroup Workforce by the Numbers

1,382

Consultants

862

Women inmanagement

DX staff

260

Childcare leave uptake

Non-JapaneseCorporate Governance

Employees

20.0%
Women 100 %
Men

4.7%

Corporate Data

Our Finances by the Numbers
Operating margin27.7%

Equity ratio

81.7%

Return-toshareholders ratio

62.5%

ROE

Dividends up

19.2%
12 years in a row

10

The Value Creation Process

Today’s Challenges

Business Risks

Management Capital

High-materiality Issues

P79

P47

Our Strengths

Social Capital

Clients’ needs

Client companies: Approx. 10,800 (groupwide)
Management workshop members: 6,905
Seminars held: 1,537
Seminar participants: 27,506

We offer services“Shacho Online” platform for business proprietors:

optimized to meet

5,571 subscribers

clients’ needs based onIntellectual CapitalLong track record:

53

state-of-the-art
business models

years

Strengths lie in marketing (growth support)solutions offered by teams of consultants
specializing in specific industries andsolution categories

Human Capital
Employees: 1,382 groupwide
Consultants: 862 groupwide
DX staff: 260 groupwide
Non-Japanese employees: 4.7% of group workforce
Female employees: 38.1% of group workforce
Women in management: 23.8% of management
positions groupwide

Financial Capital

Real Strengths Forged inExperienceP9■ J apan’s leading consultant for
mid-scale companies and SMEs
■ Wide-ranging client base
■ Diverse workforce■ Solid financial foundation

Our Group Purpose

P1

Funai Way

P2

Consolidated operating income

7,100

mil. yen

Total assets

33,01011

mil. yen

Corporate Governance

P65

About the Funai Soken
Consulting Group

Value Creation Driver

Value for the Benefit of Society (Outcomes)

Creating Value Groupwide

Three Business Segments

Carrying out our Group Purpose

P29

Logistics

P45

Digital Solutions

P46

Companies that can achieve sustainable

Value Creation Drivers

P30

Growth Strategies

Consulting

Sustainable Growthfor More Companies

growth are those that can thrive and growamid tumultuous change and uncertainty.

Industries Served
Housing, real estate

Manufacturing

We strive to deliver strong, sustainablegrowth for our clients and ourselves.

Healthcare, nursing care, welfare Education, childcare, schools
Certified professional services Dining, foodHR business

Mobility

Leisure, sports, tourism

Environment, energy

FinancePublic, gov’t services

Solution Categories
IT, systems development

Overseas markets (China) Digital innovation
HRD

AI, robotics

Contact center

Logistics

FinanceBusiness process outsourcing

Increasing Corporate Value (Output)

Mid-Range Business Plan
(2023-2025) Targets

Corporate Governance

M&A, IPO

ESG

Life events, beauty

Operating income

10.0

bil. yen

ROE

20

+％
Corporate Data

Return-to-shareholders ratio

60

+％

12

Financial Highlights
Total Assets, Net Assets, Equity Ratio

Net Sales, Operating Income, Net Income（Million yen）

Net sales

Operating income

Net income（Million yen）

30,000Total assets

Net assets

Equity ratio（％）

50,00025,752

25,63525,02725,00045,00022,816*

21,697

90
80.7

79.4

40,00020,000

82.4

82.2

80

35,00015,00030,00026,732

85

81.7

28,41930,92833,01070

27,951

25,00010,000
5,705

4,946

5,000
0

2018

4,982

3,868

3,549

7,100

＊

2019

3,498
2020

6,358

4,378
2021

65

20,00015,000

4,990

10,0002022

75

22,37023,16523,68825,710

2018

2019

2020

2021

27,700

60
55

2022

50

*ASBJ’s Accounting Standard for Revenue Recognition adopted in FY2022.
Amounts for FY2021 have been amended retroactively: net sales
down by 5,997 million yen, income up by 9 million yen.

Total Dividends & Share Buy-backOperating Cash Flow

（Million yen）

（Million yen）

Total dividends

Shares bought back from market

6,000

4,000
3,503

3,500
3,000

2,771

2,500

5,214
2,972

1,500

739

999

2,000

5,000

3,117
399

2,630
260

4,000

1,000

1,771

2,003

2,233

1,000

0

2018

2019

2020

Return-to-Shareholders Ratio &Dividend Payout Ratio
100
90
80

Return-to-shareholders ratio
Dividend payout ratio

90.6
78.1

50

60.1 62.5
54.5

40

Year end

55.0
45.0

48.0

40.0
35.0

30

10

10
2018

2019

2020

2021

2022

2022

25.0

27.0

0

11.0

10.5

10.5
10.0

30.0

9.5

9.8

9.9

2020

2021

9.0

9.0
8.5

23.0

8.2

8.0

15.0

17.0

2018

2019

20.0

21.0

25.0

7.5
7.0
6.5

2020

2021

2022

*We adopted the ASBJ’s Accounting Standard for Revenue Recognition (ASBJ Statement No. 29; Mar. 31, 2020)
from the start of FY2022, and have applied the standard retroactively to FY2021’s KPIs herein.

13

2021

（％）

Interim

20

20

2020

（Yen）

20.0

30

2019

Dividend on Equity

52.2
54.1

2018

Dividend Per Share
60

40

0

0

2022

85.0

64.0
50.0

2021

50

70
60

3,515

2,000

2,370

500

（％）

3,554

5,000

3,000
2,717

1,500

4,522

6.0

2018

2019

2022

Non-Financial Highlights
Employee & Consultant Numbers for the Entire Funai Soken Consulting Group
Business staff*

Non-consultant employees

Workforce admin

About the Funai Soken
Consulting Group

Consultants

1,600
1,400
1,200

1,209

1,105

Our people are our most valuableasset and our biggest investment. We
aim to have a groupwide workforce

1,000
800

1,382

1,317

1,303

813

739

of 1,800 (incl. 1,150 consultants, 400

862

873

859

business staff) by 2025.

400

305

200
0

366

396

444

444

2018

2019

2020

2021

Consultants Hired

Recent graduates

Mid-career

242

250

Recent graduates

299

300

200

174

162
150
185

150

Mid-career

250

226

200
182

190

123

152

51
2018

194

0

44

2020

2021

140

144

38

26

30

43

2019

2020

2021

2022

50

50
57

183

ESG

137

174

168

100

100

Value Creation Drivers

Hires

215
2022

Growth Strategies*“Business staff” are those that work in
consulting departments with a direct
bearing on sales but who are notconsultants; roles include
development engineering, productsales, new business, management
workshop operations staff, etc.

600

0

2022

Women in Our Group Workforce

Women in Management Positions Groupwide

（%）

（%）

40

25

35.8

36

38.1

23.8

2021

2022

Corporate Data

37.4

38

23.5

Corporate Governance

We are recruiting aggressively, and are known forhiring large numbers of recent graduates.

20.4
20

36.3

34.4

15.8

15.9

2018

2019

15

34

32

2018

2019

2020

2021

2022

10

2020

*The percentage of the Funai Soken Consulting Group workforce made up of women, and the percentage of group management positions held by women are
increasing, but we need to do more. To that end, we provide management training for women and offer a broad range of working styles.

14Group CEO’s Message

Setting an Example for
Clients by Striving for
Sustainable Growth andProfitability
Takayuki Nakatani
President and Group CEO
Funai Soken Holdings, Inc.

Our Group Purpose Fixes Our Focus on 2030
A new era has begun at the Funai Soken Consulting
Group, heralded by a new CEO (after a decade’s
sterling work by my predecessor) and the recedingof Covid-era restrictions. I aim to make this a periodof further progress and strong, sustained growth forthe group so that we may cement our position as
Japan’s top listed consulting group.

・What kind of contribution to society would we beuniquely able to make?
・ What constitutes a “good company” these days,
that we can model for our clients to emulate?
・ What qualities are most becoming of one of thenation’s top listed companies?
・ What gives a company the flexibility needed tosurvive and grow in unpredictable times?

The Funai Soken Consulting Group Purpose

15

In January 2023, we instituted a Group Purpose:

What Do We Mean by “Sustainable Growth for

Sustainable growth for more companies. The

More Companies”?

purpose updates and builds on our long-standing

Given our origins as a marketing consulting firm,

mission: We help to build a better future for people,

growth—i.e., helping mid-scale and SME clientsbusinesses, and society.

achieve quick improvements in customer attraction

It is the result of two years’ discussion andand sales—has always been a core focus of ourconsideration, based on a long-term view (i.e., ten-work. Sustainability, meanwhile, is an increasinglyyear) of the group’s business and taking a variety ofvital requirement for businesses all around thequestions into account, including:world.

・ What is the shared aspiration of all Funai Soken

As we see it, sustainable growth is theConsulting Group employees, that can inspire us

combination of the strength to thrive in all

to work cohesively and powerfully?

circumstances and the gentleness to strive forsustainability and consider their wider stakeholder

communication of management’s intentions in thecommunities.

case of subjects of high importance but modest

Over the past two to three years, epidemics,

urgency.

fluctuating exchange rates and share prices haveingraining the Founder's Spirit, our core values,

wrought dramatic change. Our goal is to be a highly

vision for the future, and Group Purpose will lead torelatable model for our clients and set an example

the development of a sustainable growth mindsetof how mid-scale companies and SMEs can achievein each employee and result not only in sustainable

sustainable growth even amid such uncertainty. In

growth but also synergies that can be harnessed indoing so, we hope to guide more and more of our

the management of group companies.

Growth Strategies

We h ave h i g h h o p e s t h a t t h e p ro ce s s o f

About the Funai Soken
Consulting Groupclimate change, energy crises, inflation, and wildly

clients to such sustainable growth.
By growing Japan’s (and, indeed, the world’s)

Regain → Regrowth → Sustainable Growth
The 2020 was a bitter one for the Funai Soken

to use our business for the benefit not only ofConsulting Group: the effects of Covid brought

individual companies, but of whole regions andeight consecutive years of sales and income growthindustries, which in turn can have a more positive

to a halt.

impact on societies and nations.

Value Creation Drivers

pool of sustainably growing companies, we hope

The following year, we sought to regain that lost
momentum through an all-in groupwide effort.

The Ecosystem of Our Guiding Principles

In 2022, we worked to reevaluate what we
lacked and launched a concerted drive (dubbed

our guiding principles imagines a forest nurtured

Regrowth) to put us back on track for growth. Thatby the sun. Our operating companies are the trees

year, we listed double-digit growth in sales andthat collectively grow bigger and stronger in theincome, reaching record high performance andsunlight of the Funai Soken Consulting Group

achieving the targets of the Mid-Range Business

Purpose. Each company has its own vision andPlan.

mission.

ESG

The diagram on page 1 showing the “ecosystem” ofNow, starting in 2023, we are working tosolidify that regrowth trajectory with a new focus

businesses, and the Founder’s Spirit is the life-on sustainable growth. Sustainable growth is an

giving water that feeds their growth.

integral part of our business, closely linked with our

Corporate Governance

The Funai Way is the soil that upholds our

medium-term strategy (Mid-Range Business Plan)

Ingraining a Sustainable Growth Mindset

and our long-term direction (Group Purpose).

Groupwide through Dialogue
To ensure our Group Purpose is taken to heart and“town hall meetings” with all group employees. To
encourage proper dialogue, meetings are limited toa few dozen employees at a time.
Town hall meetings are something we picked up
at tech companies during overseas study tours; welike how they provide opportunities for face-to-face

Net sales(Million yen)

30,00025,75225,027

Old ASBJ
standard

Old ASBJ
standard

Net sales

+12.4
%
y-o-y

Operatingincome

+11.7
%
y-o-y

28,813

Old ASBJ
standard

22,816

Amended per
new standard

25,63520,00010,000dialogue between top management and employees.
Dialogue like this is a vital method of repeated

Operating income*We adopted the ASBJ’s AccountingStandard for Revenue Recognition in
FY2022. Old standard applies to net
sales for 2019 through 2021 herein.

Corporate Data

not seen as empty sloganeering, we are holding

Business Performance 2019-2022

0

6,358

5,705

4,982

Amended per
new standard

7,100

Operatingmargin

27.7%

2019

2020

2021

2022 (actual)16

The New Mid-Range Business Plan (2023-2025)
Aiming for Double-digit Growth and 20+% ROE

value, targeting an ROE of at least 20% by 2025.

Under the new plan, we are aiming for 36.0 billion yen(Capital policy under the Mid-Range Business Planin sales and 10.0 billion yen in operating income by 2025.

Targets Under the New 3-year Plan

These figures represent an average annual growthrate of around 12%. To that end, while we intend tosustain the steady growth of our consulting business,within that we will endeavor to increase digital

Net Sales and Operating Income:
Performance & Targets

Net sales(Million yen)

40,00030,000solution sales to around 25% of the total by 2025.
Through ongoing growth investment, increased
capital efficiency ratio, and high shareholder returns,

Operating income

25,63528,500Avg. annual
growth in sales+12.0%▼

P28)

Avg. annual
growth inoperating income+12.1%

32,00036,00020,00010,000we aim to achieve sustained improvements in corporate
0

7,100

Operatingmargin

7,900

8,900

27.8%

27.7%

2022(actual)

10,000Operatingmargin

2023

2024

2025

Our Mid-Range Vision
The Foremost Provider of Digital and Comprehensive

industries and new solution categories so as to boost

Consulting Solutions for Mid-scale and SME Clientscontact with our “stock” of nearly 10,000 businessThis is the vision for the future established as part ofproprietors, and maximize the value generated therein

our new Mid-Range Business Plan, which sets out three

by offering a full spectrum of digital and comprehensive

key tasks needed to turn that vision into reality.

consulting solutions for mid-scale and SME clients.

Key Task①(Mid-Range Business Plan (2023-2025) policies

P23)

▼

Further expand upstream (strategy)
consulting services
Expand into mid-scale and high-profit

Think Digitalbusiness domains

Digital and DX are key concepts in our new Mid-Range

Key Task③ Expand digital solution services

Business Plan. DX is already well advanced overseas,

Key Task②

Today, the management consulting industry is boomingwith general consulting firms serving major corporate clients.
The fastest growing area in this segment is the combinationof digital solutions and comprehensive consulting.

starting with major companies.
This is particularly relevant to Japan, where
population has already begun and productivity is lowest

In that sense, our focus is on a relatively niche market:

among the OECD; now is the time to harness DX in the

mid-scale and SME clients, and indeed we are one of Japan’s

search for solutions. Covid spurred Japan’s SMEs andlargest providers of comprehensive management consulting

mid-scale companies to undertake DX, and we believe

solutions for that sector. Now, under the new Mid-Rangethat full-scale adoption is imminent in that demographic.

Business Plan, we are striving to combine our dominanceFor our part, we will strive to use marketing DX

in that niche with digital and comprehensive consulting

solutions tailored to suit clients’ industries—an area ofsolutions to establish ourselves as the leader in that spaceparticular strength—to help them reform business andwhile other firms are still getting themselves organized.

business processes.

To that end, we will launch services for new
17

and Japan’s market for DX services is expanding, too,At the same time, we plan to accelerate the hiring

and training of digital solutions staff, and to grow our

Capturing Growing Demand for Digital Solutions

range of digital solutions.

In order to better demonstrate our increasing presence in the
rapidly growing market for digital solutions, we have reorganized
our portfolio to establish digital solutions as a third segment.

Starting with the current Mid-Range Business Plan,（Changes in segments

we are investing more effort in targeting mid-scalebusinesses as well SMEs.
This is because we believe mid-sized companies are the

▼

P25）

The Strategies by Segment (1) section of page 25
shows the positions we are striving to achieve under
the new Mid-Range Business Plan.
It is presented as a graph, and shows average growthwhen the number of companies is expected to decrease.

rate of sales over the next three years, our operating

In addition to helping clients become the best in their

margin target for 2025, and operating income amount. We

industry and region, we plan to offer a solutions at a higher

envisage ongoing sustainable growth and profitability inscale, such as M&As to help clients form regional conglomerates,

the consulting business, further improved profitability in thereach the ￥10 billion turnover mark, and undertake IPOs.

logistics business, and aggressive investment in the digitalsolutions business, this driving the group's growth rate.

the market, and the Funai Soken Consulting Group has

Through these efforts, we hope to achieve both

Value Creation Drivers

Mid-scale companies have considerable influence on

Growth Strategies

core engines that will propel Japan into the future at a time

the scale and breadth of solutions to serve as a powerful

About the Funai Soken
Consulting Group

Broader Focus: Mid-scale Companies and SMEs

profitability and growth.

one-stop provider of solutions to suit their needs.

Priority Areas of Investment & Shareholder Returns
Investing in People and Offices; Distributing

Investment in people refers to investing in our
most vital resource: the human resources that drive the

Our investment strategy stipulates investment ingroup’s growth.

human capital and offices, and distributing surpluses
to shareholders.

To strengthen human capital, we will continue toimprove compensation for consultants, including sustainableannual salary increases, to better reward performance.

of the group’s Tokyo headquarters to Tokyo Midtown

In addition, we will further accelerate digital

The move has several aims, including:

education for all employees by, among other things,
tripling our training budget by 2025.
We also aim to help employees build wealth, forby expanding points of in-person contact, e.g.,

instance by improve the employee share ownership planmanagement workshops and seminars, by making

so that the benefits of our corporate management are

our premises a place clients want to visit;

also open to our workforce as shareholders.

・A better workplace: improved telecommunication

Meanwhile, are investing aggressively in human

functionality, convenient for commuting and travel,

resources to prepare for the projected increase in

conducive to communication, and compatible withdemand for our services, and personnel and hiring

flexible working styles;

expenses are therefore on the rise. Some suspect thisbringing Tokyo offices under one roof; and・Better ability to attract and retain talented people

Corporate Data

・Improved office functionality, and a boost to business・Boosting inter-group communication and synergies by

Corporate Governance

The investment in offices refers to the relocation
Yaesu in the spring of 2024.

ESG

Surpluses to Shareholders

might exert downward pressure on profits in the shortterm, but we believe that it is a necessary investmentthat will not take long to drive business growth.
18

As for shareholder returns, our dedication

increasing shareholder value. At the same time, we areremains as strong as ever, with a policy of sustaining

also mindful of the need to maintain a stout financial

dividend payout ratio of at least 55% and a return-to-

structure, and it is vital that we continue improving

shareholders ratio of at least 60%.

financial strength so as to build the capacity to respondflexibly to changes in the consulting industry.

consecutive years, placing us firmly among the top 15%（Investment strategy under the Mid-Range Business Planof listed companies. This is due to our strong focus on(Financial strategy

P24）

▼

We have succeeded in increasing dividends for 12

▼

P28)

HR Strategy Geared toward Growth
Our Hiring Goal: A Roster of 1,000+ Consultants

to and from such visits) impacted our ability to identify and

They key to implementing our HR strategy is to hire

address their concerns. The result was a higher turnover rate.

more people. Starting in 2023, we have tapped some

However, the return of in-person consulting andmuch younger talent to serve in hiring manager andmanagement workshops in the second half of 2022 has

HR-related staff positions.

led to signs of improvement in the turnover, and we have

Having people closer in age to job applicants process those

tweaked our systems to encourage swift attention for

applications will enable better understanding of applicants

employees identified as possibly considering resignation.

and employees, and improves our ability to respond to therecent shift in the job market climate and hiring methods.
Indeed, we are already seeing a positive influence

Diversity and Inclusion
Diversity in business management—not the least of whichis empowering women to forge meaningful careers—is theon talent acquisition and retention.
Under the new Mid-Range Business Plan, our goal isbedrock on which inclusivity, value creation, and improved

to increase our pool of consultants to more than 1,000

productivity are founded. We endeavor to maintainby the end of 2025. To that end, we plan to increase therewarding, diverse, inclusive workplaces. For instance,

number of people in positions directly linked to sales:

Funai Consulting’s “Lady Go” project to help women forge

consultants and business staff (e.g., engineers).

meaningful careers is progressing well, including initiatives

We will strengthen recruitment of new graduates

such as the Career Navi Café study group and forum forand mid-career hires, as well as people from more

female consultants, and the Lady College training program

diverse backgrounds for management roles.

to help female managers develop their careers. In addition,
P27)▼(HR strategy under the Mid-Range Business Plan

we encourage flexible working arrangements to suitdifferent lifestyles, such as remote work and flex-time.

Steadfast Support for Improved Retention
We must improve retention if we are to grow our poolgroupwide will be held by women by 2030, and ourof consultants and business staff, and a number ofinterim target is 25% in 2025. Already, women alreadyrecent initiatives have begun to yield results.

hold close to 60% of team leader positions at Funai

For instance, in the consulting business, when Covid-era

19

Our aim is that at least 30% of management positions

Consulting, and we are eager to continue in this vein.

restrictions hampered our core activity (i.e., visiting clients inMore broadly, we are determined that our work

person and delivering solutions on site), the switch to remoteenvironment should be one in which each employee can

support made it hard for younger employees to appreciate

maximize their abilities and strive for professional fulfilment

the appeal of what we did, and the lack of time for close

and a work-life balance. For instance, we are eager to hirecommunication with senior colleagues (i.e., when travelling

non-Japanese people and are considerate of mental health.

Sustainability Underpinning Long-term Profitability
formulate and execute growth strategies in keeping

We pursue ESG because we believe that it will lead towith the expectations of institutional investors.

enhanced corporate value. Our stated high-materiality

While the skill matrix is an important tool in ensuring a

issues include contributing to our communities throughfunctional board, it is vital that we incorporate DX and a global

consulting services for mid-scale businesses and SMEs

outlook in the mid-to-long term to secure board members

and helping clients implement ESG management.

with the skills needed to create value in our industry.

for action on this front. For instance, Funai Consulting

Business Plan, and given the increasing importance ofoffers carbon neutrality support services, operates asustainability in corporate management, it is only fitting

management workshop focusing on becoming carbon-

that the board include experts in DX and sustainability.

free, and net-zero-energy housing support services,

The acquisition of two new specialists was an ideal

while Funai Soken Logistics offers ESG logistics

chance to bring more gender balance to our board—anconsulting. In this way, our core business of helping clients

area in which we had lagged somewhat—with outside

overcome the issues they face in their discrete industries

directors Taeko Yamamoto (DX specialist) and Tomomi

is conducive to promoting ESG management. All of us at

Murakami (sustainability specialist), whose arrival will

the Funai Soken Consulting Group strive for businessadd significant forward momentum to the group.

growth and solutions to social issues through ESG.

Neither is an Audit and Supervisory Committee(Basic Policy on ESG Management and high-member, so hope they will serve in an execution-materiality issues

adjacent advisory capacity and work with us in our

▼

P47)

Value Creation Drivers

Given that DX is a part of our new Mid-Range

Growth Strategies

Indeed, our business provides plentiful opportunities

About the Funai Soken
Consulting Group

Taking Action on High-materiality Issues

management. For instance, we revised our Basic Policy on

Meanwhile, the composition of Board of Directors

the Environment in 2023 to incorporate TCFD disclosures,

ensures an appropriate level of objective oversight,

and we disclose information proactively via our annualwith outside directors providing advice based on an

securities report and integrated report. We are conscious

impartial understanding of the group’s operations.

Corporate Governancejourney toward strong, sustainable growth groupwide.

ESG

In addition, we also seek ongoing improvements toof the need to counter climate change, and have acquired
ISMS certification for tougher cyber security. These

Growth through Robust Debate and Governanceinitiatives are part of our action on our third high-In the group’s quest to create value, enhancing non-financial

materiality issue: ESG and proactive information disclosure

value is just as important as financial value. Identifying andare at the core of our group company management.

analyzing the items of non-financial value that influence(Environment (TCFD disclosures)the group’s growth allows us to find the actions best suited

▼

▼

P62)

to maximizing each one. For instance, our new Mid-Range

Corporate Data

(ISMS certification

P49)

Business Plan (2023-2025) sets out quantitative targets not

Skill Matrix, DX, and Sustainability

just for finance, but for sustainability, too. In this way, we

The Funai Soken Holdings Board of Directors comprises a

are committed to identifying the non-financial values suchmajority of outside directors, and is continually evolving.

as human resources with a direct bearing on growth, mostOur intention is that the board should be morethan just a “board 2.0” monitoring organ, and that itshould be more of a “board 3.0,” better equipped toimportant to the group’s business.
We are grateful to all our stakeholders for yourongoing understanding and support.

20

Executive Vice President’s Message

Safeguarding the Group’s
Future Growth throughPrudent Investment
in Human Capital
Director and Executive Vice President

Tatsuro Ono

Laying the Groundwork for the Group’s Businesses

vital work requires a talented team at all levels of

If roles within a business could be compared to thehierarchy, and we must now work swiftly to develop

offense and defense of sports, then I would be aa management-level workforce.

defender and Takayuki Nakatani, our Group CEO,

21

would be a point-scorer. Our roles are reflected

Key Skills in Workforce Development:

clearly in the Group Vision of becoming the foremost

Project Development and Risk Anticipation

provider of digital and comprehensive consulting

One of the skills we require of executive officers issolutions for mid-scale and SME clients.

project direction. Unlike directors, who are charged

The establishment of Funai Soken Digital in 2022with leading groupwide action on management

was a statement of the group’s intention to expand

strategy and governance, executive officers andour digital solutions business and prepare the grounddepartment heads manage their own departments

for a second core business after Funai Consulting’s

and projects, while supporting each group company’

management consulting. Now, the launch of the new

top management. In my view, sharp project direction

Mid-Range Business Plan this year sees our portfolio

skills are founded on motivational leadership andconfigured to include a third pillar. Under the newcommunication skills.

plan, I believe it will be vital to bolster governanceAlso vital is the ability to anticipate risks. For

of group management and enhance synergies

instance, when I was a consultant, I could sense

without abandoning the focus on autonomy of eachpotential risks in daily reports and the sales figuresgroup company nurtured under previous plans.

reported at meetings, and identified them more

Meanwhile, to safeguard the group against the ever-clearly through dialogue.

changing demands of our unpredictable age, weFollowing this, the Risk Management Committee’s

need to deepen communication and cooperation

scope of operations was expanded from Funai

among the group’s companies to enhance synergies.

Soken Holdings to include the entire group, andThat is where my defensive role comes in, covering

each company got a designated risk management

everything from essentials such as complianceofficer. The committee meets about eight times ato human capital and its related systems. Suchyear, and attendees share concerns and potential

countermeasures on topics like compliance andsecurity.

1. Problem solving skills 2. Team player
3. Strategy execution
4. Organizational control
5. Nurtures potential management talent
6. Project development 7. Risk anticipation

Intragroup Teamwork Sparks New Initiatives
My work includes implementation of corporate
strategies. This entails pursuing new initiatives

legal and compliance matters. Specifically, we arelooking to create a solid base to underpin businessgrowth by improving things like contract-related
tasks and risk management in the consulting
business. In terms of governance, we strive tosatisfy stakeholders’ expectations, for instanceby making sure that at least half of our board areoutside directors and continuing to improve theboard’s gender balance.

through intragroup teamwork in three specific

The S in ESG

areas: HR strategy, groupwide DX, and compliance

Given the link between corporate strategy andand governance.

ESG, the new Mid-Range Business Plan stipulates

recruitment and training of consultants in order

foremost asset, so harnessing that asset to boost

to increase profitability, and striving to secure

corporate value is a perennial theme. Moreover,personnel for highly specialized solution categories,

given the centrality of human capital to thesuch as upstream (strategy) processes, DX, and M&Agroup’s management strategy, we recognize thatas stipulated in the Mid-Range Business Plan. We also

recruitment and retention are vitally to our very

aim to improve productivity through better recruiting

existence. The new Mid-Range Business Plan sets

and training of project management personnel.

forth targets for gender balance in management,

Moreover , we are aiming t o e xpand sys t em

a n d we a r e p l e a s e d t o s e e m o r e a n d m o r edevelopment and BPO in the high-growth digital

women appointed to top management positions

domain. Specifically, we are hiring more engineers tothroughout the group. By committing to choosing

increase our ability to develop DX solutions.

the right people for the job, regardless of gender

retention is important, too, and we have multiple

Corporate Governance

Soken Consulting Group’s employees are its

ESG

quantitative targets for sustainability. The Funai

business strategy. We are working hard to boost

Value Creation Drivers

HR strategy is closely related to the group's

But it is not enough to just hire more people;

Growth Strategies

strategies that support group companies’ businessthe group’s base level of performance regarding
About the Funai Soken
Consulting Group

Seven Attributes Required of Executive Officers

Meanwhile, we are striving to continually raiseor age, we hope to offer our employees rewarding,motivating career paths.

initiatives in place, including human capital

Our Group Purpose: A Vehicle for Greater Unity

and training, as well as productivity improvements,

The chaos of Covid caused us to reexamine ourbetter working practices, and greater diversity.

business and our working practices. I believe

Groupwide DX is an area of considerable activity,that unity and team spirit are vital for the group’s

and we are working to strengthen operational

growth, and that investing in people will help us

aspects such as policy making and planning. In

achieving the goals of the new Mid-Range Businessdoing so, we form project teams to handle specificPlan. Strengthening those bonds, however,problems, including making rules for using AI

requires first ingraining the Funai Soken Consulting

and other advanced technologies, coming up withGroup Purpose throughout our workforce, and aways of utilizing the group’s client assets, anddepartment dedicated to enhancing engagement

information security.

was established in January 2023 to that end.

Corporate Data

investment in the form of improved compensation

22Mid-Range Business Plan
2023-2025 Targets
The target for 2025 is 36.0 billion yen in sales and 10.0 billion yen in operating income. We will endeavor tosustain high profitability while expanding our presence in the high-growth digital solutions field.

Net Sales and Operating Income: Performance & Targets
2025 Targets by Segment (%)（Million yen）

40,00036,000Net sales
Operating income

32,00012.0%

28,50030,000Sales
CAGR

25,635
Operatingincome
CAGR

20,000

12.1%

10,000

0

7,900

7,100

10,0008,900Operatingmargin:27.8%

Operatingmargin:27.7%

2022（Actual）

2023

2024

2025

24.7
Net sales

11.4

63.9

7.5

8.5

Operatingincome84.0
Consulting
Logistics
Digital solutions*Percentages exclude intra-group &whole-group transactions

Mid-Range Business Plan 2023–2025: Policies
Under the new plan, our basic policy is to establish our group as the foremost provider of digital andcomprehensive consulting solutions for mid-scale and SME clients, with aggressive investment in HR andingraining the Group Purpose identified as priorities.
Industry-specific

Mid-Range
Business

Mid-Range
Business
Plan

23

Basic Policy

2020-2022+
Priorities

Plan

Basic Policy

2023-2025

Digital and comprehensive
consulting solutions for
mid-scale and SME clientsmanagement consulting

DX consulting

Solution-category-specificmanagement consulting
Comprehensive management consulting

Digital solution services

services for mid-scale companies

Aggressive investment in HR

Hiring, training DX staff

Ingraining the Group Purpose

Better engagement

Comprehensive
management consulting
services for SMEs andmid-scale companies

Comprehensive management
consulting services for SMEs
DX consulting for SMEs
Comprehensive management consulting
services for mid-scale companies

Improved productivity, sustained
improvements in compensation
Group synergies

Numerical Targets for 2025
Profitability

Efficiency

Sales

Operating incomeROE

36 bil. yen
25.6 bil. yen
2022

10 bil. yen

20+%

7.1 bil. yen

19.2%

2022

2022

862
2022

62.5%

54.5%

Tackling climate change

Stronger oversight

60+%

55+%

2022

2022

Women in
Outside directors
GHG emissions*management positions% continue to comprise
Cut by（vs. 2019)%
more than half

50

25.0

23.8%
2022

Value Creation Drivers

1,382

1,150

Dividend
payout ratio

Growth Strategies

Sustainability

1,800Consultants

Return-toshareholders

2022

Growth-driving workforce

Total headcountShareholder returns
About the Funai Soken
Consulting Group

Financial

GrowthOutside directors
comprise more than half2022

653.2t-co2

2019*Per Scope 1 and 2.

ESG

Investment Strategy & Cash Allocation
We will allocate cash earned in operations between activities aimed at generating future growth and appropriate
shareholder returns, thus improving shareholder value. We will also use the 2023-2025 plan period for
aggressive investment in HR with a view to 2030.

12.0%

Operatingcash flow（18+bil. yen）

Growthinvestment（4+bil. yen）

Revenue

60+%

Dividend payout ratio

55+%

Corporate Data

Sales CAGR

（10+bil. yen）

Corporate Governance

Sustained businessgrowthShareholder
returns

Return-toshareholders ratio

Aggressive
investment in HR
with a view to 2030
・Invest in human capital・Invest in new businessdevelopment

Stable financial
foundation

・Invest in M&A

Expenditure

・Invest in offices

・Invest in DX

24

Mid-Range Business Plan
Changes in Segments
We have adjusted our segments to better suit our business strategy. We now have three segments:
1. Consulting, 2. Logistics, and 3. Digital solutions.
Previous segmentation

New segmentation

Management
consulting
Consulting

Consulting＊

Contact center
consulting

Logistics

Logistics

OthersDigitalsolutions

Logistics solutions

Digital solutions
HR solutions*Seicho Senryaku, Inc. joined the Funai Soken Consulting Group in January 2023.

Strategies by Segment (1)We are aiming to boost sustained growth without compromising the high profitability of our core consulting
segment. We will also invest aggressively in the high-growth digital consulting market.

Digital solutions
Avg. annual growth in sales

Aggressive investment,high growth rate

30%

Invest aggressively in high-growth
digital consulting.

Consulting

Sustained growth,high earnings ratio
Aim to boost sustained growth withoutcompromising profitability of consulting
segment.

20%
Logistics

Improve profit margin

10%

0%

10%

20%

30%

Operating margin（2025） *Bubble size indicates operating income amount in 2025
25

Strategies by Segment (2)About the Funai Soken
Consulting Group

Consulting

Sustained growth, high earnings ratio
Operating income CAGR

Operating margin

10.4%（Million yen）

25,00036.5%

Net sales
Operating income

20,000■ Manufacturing: priority industry. Boost offerings to clients in that sector.
■ DX consulting: Develop industry-specific cloud modules (Growth Cloud);

thereby expand to incorporate HR in addition to MA, SFA, and CRM

18,277Growth Strategies■ Further deepen industry-specific consulting for SMEs

23,00015,000■ Consulting for mid-scale companies

・Expand consulting services designed to propel client companies
to the 10-billion-yen turnover mark10,0008,400

・Expand IPO support services

Value Creation Drivers

6,238

・Expand M&A consulting services
5,000

・Bolster hiring, training of project management staff■ Develop and invest effort into new growthindustries: e.g., CX consulting, rural community revitalization,02022（Actual）

new business planning support

Logistics

2025

Digital solutions

Operating income CAGR

18.7%

Aggressive investment, high growth rate

Operating margin

18.3% : +6.4%

Operating income CAGR

35.7%

69.0%

■ Roll out sales process transformation (SPX) services with afocus on digital marketing■ Expand scope and reach of services: e.g.,logistics real estate, global supply chain consulting,■ Cloud-based solutions development

platforms (build data center for logistics information)■ Back-office consulting and BPO centered on IT consulting■ Logistics ESG consulting services with a focus on the■ Expand HR Tech business domain: e.g., HR solutions,environment（Million yen）

4,000

recruitment process outsourcing (RPO), SaaS education
Net sales
Operating income

3,778（Million yen）

10,000

4,100

8,000

3,000

6,000

2,000

4,000

1,000
0

448
2022（Actual）

750
2025

Net sales

8,900

Operating income

3,562

2,000
0

Corporate Data

5,000

Corporate Governance■ Boost profitability by increasing consulting as proportion of sales

Sales CAGR

ESG

Improve profit margin176
2022（Actual）

850
2025

26

Mid-Range Business Plan
Human Resource Strategy
We will strive to increase the number of consultants and business staff—i.e., employees with a direct bearing
on sales—by an average of 10% per year.

Growth Targets by HR Category

Consultants

2025

1,150

Increase+288（862 in 2022）

CAGR

2025

400

Increase+95

Business staff

10.1%

・Increase upstream service consultants, expand
profitability
・Bolster mid-career recruiting in high-growthdomains like DX and M&A consulting・Boost productivity by strengthening recruiting andtraining of project management staff able to workwith mid-scale clients（305 in 2022）

CAGR

9.5%

・Expand system development and BPO, accelerate growth・Boost engineer numbers; bolster DX solution development*”Business staff” are those that work in consulting departmentswith a direct bearing on sales but who are not consultants;
roles include development engineering, product sales, newbusiness, management workshop operations staff, etc.

Key Initiatives in HR Strategy
HiringRamp up hiring: 1,800 headcount by end of 2025
・Restrengthen hiring of recent graduates for consulting positions
・Strengthen mid-career hiring in new and specialist fields
・Hire people from more diverse backgrounds for management roles
Training & career development

Training & career development for consultants and business staff
・Expand training programs to accelerate development of new and younger employees
・Improve productivity through acquisition of digital skills by consultants
・Expand investment in professional development to boost staff skills and develop the pool of management candidates
Retention

Improve employee value proposition to boost retention of talent・Boost retention through sustained improvements in compensation
・Boost communication by relocating Tokyo office and consolidating into a single floor
・Increase employee engagement by sharing the Group Purpose

27

Financial Strategy(1) Capital Policy
About the Funai Soken
Consulting GroupThrough ongoing growth investment, increased capital efficiency ratio, and high shareholder returns, we aim toachieve sustained improvements in corporate value. Our target is an ROE of at least 20% by 2025.

2014-20162017-20192023-2025

2020-2022

10+% Sustain consolidated ROE at10+% Sustain consolidated ROE at15+%

Sustain consolidated ROE at

ROE
Cost of capital

20

14.0

15

16.4

15.9

13.8

17.4

19.2

18.2
15.3

2025 ROE

20+%

Growth Strategies（%）

Capital efficiency
targets

10.9
10

0

5.1

2014

5.5

4.4

4.3

2015

2016

6.8

8.2

8.0

7.0

Avg. ROE for listedcompanies in Japan(all industries)

2022

Source: Tokyo Stock Exchange,
Summary of Earnings Digests
by Listed Companies(fiscal year ending Mar. 2022)

Value Creation Drivers

5

7.7

9.4%

2017

2018

2019

2020

2021

(2) Shareholder Returns Policy

2023-2025

2014-20162017-20192020-2022

Return-to-shareholders ratio

Return-to-shareholders ratio

Return-to-shareholders ratio

50+%

60+%

（%）

100

Total dividends（mil. yen）

80

Return-toshareholders ratio

85.0

Treasury share buy-back（mil. yen）

Return-to-shareholders ratio（%）
Dividend payout ratio（%）

64.0
60

60.1 62.5

739

260

60%
54.5 55%

2014

2015

2016

2017

2018

2019

+

399

Dynamic sharebuybacks

+

20

0

60+%
55+%

Dividend payout ratio

Corporate Data

54.2
40

Shareholder
Returns Policy

Corporate Governanceapprox.50%

ESG

We will continue to strive for a high rate of shareholder returns, such as through ongoing dividend increases and share buybacks.

2,233

2,370

2,717

Ongoing dividend
increases

2020

2021

2022

(Current dividend increase
streak unbroken since FY2011)28

What We Do : Our Three Business Segments at a Glance
The group’s business was reorganized into three

pursue over the coming three years as we seek tosegment s — consulting , logis tic s , and digit aldevelop our portfolio: in the consulting business,solutions—starting in the first quarter of 2023 tosustainable grow th and high profitabilit y; incoincide with the launch of the Mid-Range Businessthe logistics business, improving profitability;

Plan (2023-2025).

and in the digital solutions business, aggressive

Each of those segments has key themes toinvestment and higher growth rate.

Consulting
Funai Consul ting Inc.
Proseed Corporation
Funai Consulting Shanghai Inc.

Se icho Senryaku Inc.

Logistics
Funai Soken Logistics Inc.

Digital Solutions
Funai Soken D igital Inc.
HR Force Inc.

29

Cl ie nt s

Funa i S oke n Hol d i n g s

Funai Soken IT Solutions Inc.

Consulting Business
About the Funai Soken
Consulting Group1

Consulting for Improved Bottom Line & Corporate Value

Growth Strategies
Value Creation Drivers

We Help Clients
Overcome the Obstacles
to Sustainable Growth in
Shingai
Uncertain Times Daisuke
President and CEO
Funai Consulting Inc.

Growth support for SMEs: Industry-specific, category-specific consulting
Broader Strategic Consulting for Mid-scale and SME Clients:
Growth through Diversification and DX
Expand Focus to Include Mid-scale Companies: Develop Solutions to Help Improve Value

ESG
Corporate Governance

IN THIS SECTION
Market Conditions

2

Clients’ Business Climate

3

Our Streng ths and Oppor tunities

4

Expanding Upstream (Strateg y) Consulting Ser vices

5

Expanding Focus to Include Mid-scale Companies

6

Group Synergies

7

Testimonials

Corporate Data

130Consulting Business

Market Conditions

1

Expanding DX Market, Hopes for Renewed Growth
The Japanese management consulting market

It is expected that this growth will be driven

returned toward in growth in 2022, and is forecastby the ongoing increase in demand for businessexceed ￥600 billion in 2022 and ￥800 billion

transformation support through DX, and wein 2025, with a CAGR of 9.1% in 2022-2025,

are working to expand our presence in the DX

representing a 30% market growth.

consulting domain for SMEs.

Management consulting
market is expected to growby 30% (CAGR 9.1%) in
2022-2025.

(Billion yen)

1,000
800
600

620.8

572.3

805.5

739.6

677.7

873.1

400
200
0

Source: IDC Japan “Japanese Business
Consulting Market Forecast 2022‒2026”

2021

2022

2023

2024

2025

( JPJ47875922). Apr. 2022

2026

Record Performance in 2022
With the gradual post-Covid return to socioeconomic

support services were particularly outstanding,normality, our core management consulting businesswith a steady increase in orders for consulting via

recorded our best ever figures in sales (￥20.3 billion)

seminars and our website.

and operating income (￥6.1 billion). Monthly(Million yen)

Net sales

Operating income

Operating margin(%)

25,00020,00015,00040

19,05820,314

18,544
31.8

30.3

25.2

20

10,000
5,000
0

6,150

5,893

4,801
2020

2022 (actual)*2

2021*1Main Service Categories of
Our Consulting Business(Amts. and Share of External Sales)

Ad listing
1,219 mil. yen

1.9%

0

8.5%

20,314 mil. yen(up 9.5% y-o-y)Management workshop
subscriptions
2,051 mil. yen
10.1%
Projects
1,810 mil. yen

8.9%

10

Others:
1,717 mil. yen

6.0%Open seminars
384 mil. yen

3130*1. ASBJ’ s Accounting Standard for Revenue Recognition
adopted in FY2022. Amounts for FY2021 havebeen amended retroactively.
*2. Amounts for FY2021 have been amended
retroactively to reﬂect new segment conﬁguration
adopted in the 2022 3Q. Funai Soken Corporate
Relations absorbed Shinwa Computer Service in amerger; the surviving company was renamed
Funai Soken Digital and became defunct.
Consequently, the system development businessof Shinwa Computer Service, which was previously
included in the other businesses segment, is now
included in the consulting segment.

Monthly support
13,131 mil. yen

64.6%

Core Business Solid, Digital Support Services Growing
specialist services and manufacturing categories

consulting business, eight experienced year-on-

was spurred by the expansion of DX consulting, andyear growth, including our main market segments:

the growth in the amusement category was due tohousing and real estate, and healthcare, nursing

the large number of M&A brokerage contract sales.

About the Funai Soken
Consulting GroupOf the 12 top client industries served by ourcare, and welfare. Of these, the growth in the
Growth support: Raising business performance to achieve proﬁt-and-loss statement improvements

Housing, realestate

4,953
4,766

+3.9%

3,301

Certiﬁed
professional
services

1,605
1,537

+4.5%

Specialist
services

1,193
1,008

Mobility

1,006
964

+18.3%
+4.4%

0

1,000

Environment, energy

606
605

Education, childcare,schools

599
588

HR business

+6.6%

475
446

Dining424-27.8%

588
417
512

Food

-18.6%
2,000

3,000

4,000

5,000

ESG

+22.8%

403

+1.9%

734
598

Manufacturing+72.1%

+0.1%

3,068

+7.6%

694

Amusement

Value Creation Drivers

Healthcare,nursing care,and welfare

Growth Strategies

Talent development support: HRD consulting services to help clients recruit, train, and assess workers, and invigorate their organizations
Support for improved corporate value, digitalization etc.: Helping clients achieve balance sheet improvements through assistance with
M&As and ﬁnancial matters; and consulting and other assistance for digitalization

0

500

1,000

Corporate Governance(Million yen)
(Million yen)
*Upper bar: Jan. ‒ Dec. 2022; lower bar: Jan. ‒ Dec. 2021
*Figures show sales of consulting contracts, management workshop subscriptions, and open seminar revenues, grouped in accordancewith the company’s industry classiﬁcations, for 2021 and 2022.

DX Packages Prove Popular
had been deployed at more than 350 companies

mid-scale companies and SMEs. For a sector whereor some 6% of our clientele. In addition to DX,

DX progress has lagged so far, we have developed

new consulting solution categories are emerging,DX packages tailored for specific industries,

such as IPO, M&A, and CX improvement, and will

focusing on reforming client management and sales

become areas of focus in the future.

Corporate Data

Demand for DX consulting is growing rapidly among

and business processes. As of 2022, these packages

32

Consulting Business

Clients’ Business Climate

2

Impact of Covid and Ukraine War on SMEs’ Business
Sales Diffusion Index
Sales Diffusion Index

Ordinary Income
Diffusion
Index
Ordinary Income
Funai Consulting
clients
Diffusion
Index

Employee HeadcountDiffusion
EmployeeIndex*
Headcount
Funai Consulting
clients
Diffusion
Index*

55

80
60

80
60

72.3

55

60
40

Funai Consulting clients
Whole-year
averageﬁgures from SMRJ
Funai Consulting
clients
Survey of SME Business Conditions
Whole-year average ﬁgures from SMRJ
80Survey of SME Business Conditions

80
60

44.1

60
40

44.1

40
20

6

20
0

6

0
-20

60.7

-20
-40

60.7

-40
-60
-60
-80
-80

69.2
diff.

69.2
diff.

-14.2

diff.
diff.

-54.7
-54.7
2020
2020

-29.3

-14.2

2021

40
20
20
0

2022
2022

33

38.2

60
40

76.9

33

40
20

76.9

66.2

20
0

66.2
diff.

0
-20

-8.8

-33.2

-20
-40

-8.8

-33.2

-40
-60

2
2

diff.

51.4

-33.6

-20
-40

51.4

-33.6

-60
-80
-80

diff.
diff.

-49.4
-49.4
2020
2020

Whole-year
averageﬁgures from SMRJ
Funai Consulting
clients
Survey of SME Business Conditions
Whole-year average ﬁgures from SMRJ
72.3
80 Survey of SME Business Conditions

38.2

0
-20

-40
-60

-29.3
2021

Whole-year
averageﬁgures from SMRJ
Funai Consulting
clients
Survey of SME Business Conditions
Whole-year average ﬁgures from SMRJ
80 Survey of SME Business Conditions

2021
2021

2022
2022

-60
-80
-80

diff.
diff.

2020

-6.6

-4.6

-6.6

-4.6

2021

2022

*New survey item; no data for 2020, 2021

2020

2021

2022

*New survey item; no data for 2020, 2021

33

T h e g ra p h s a b ove co m p a re o u r c l i e n t s a n d

this settled to normal in 2022. Some of this can be

Japanese SMEs in general in terms of the impact

attributed to our consulting solutions, and the factof the depreciating yen and rising resource costs

that our clients tend to be focused on growth in thecaused by factors such as Covid, inflation in thefirst place.

US economy, and the Ukraine war. The data for

In contrast, the SMRJ’s Survey of SME Businessour clients come from responses to a survey ofConditions (purple line) shows that, on average,

management workshop members and consulting

Japanese SMEs managed to somewhat reduce theclients. The sample size is approximately 3,500

negative effects of the Covid dip.

companies (around 50% of our clientele); response

Comparing the blue and purple lines shows

numbers have grown by 1,100 since 2021, andthat the gap between our clients and the average

we believe that the significance of the survey isJapanese SME actually increased from 50–60 points

increasing by the year.

in FY2020 to 66–76 points in FY2022, including

The blue line represents the diffusion index

employee headcount. Differences in survey andof our client companies’ results; it shows a trend

analysis methodologies mean we are wary of simple

toward a recovery in sales throughout 2022, despitecomparisons, but given that economic downturn

a severe business climate. There was a significant

tends to exacerbate polarization, we do believe thatjump in ordinary income from 2020 to 2021,

the divergence between our clients and Japanese

when the impact of Covid was most severe, but

SMEs in general seen in 2021 will continue.

Typical Examples of Our Clients’ Consulting Needs
About the Funai Soken
Consulting GroupWe harness the strengths and expertise of the group’s companies (outlined on the following pages) tooffer solutions to clients’ specific needs. Here are a few examples of some typical requests.

■ New Growth in an Existing Business■ Launching a New Business“ We mainly do door-to-door sales, but we“ We are a small company, annual turnover

web-based customer attraction. We needbusiness restructuring subsidy and map out our

your expertise on other methods of customer

future. We want help with the subsidy applicationacquisition, and how to improve our online

alongside regular business consulting.

around ￥50 mil. We want to use the government’s”

closing rate. We would also like to discusssubsidies, executive training, and early”■ Reaching the ￥10-bilion Turnover Mark

“ After attending one of your seminars on

conglomerates, I want to know more. We are a■ Restructuring an Existing Businessreal estate leasing company, turnover around“We run childcare facilities, but enrolments￥1 billion, but we lack the know-how to add

have fallen below target figures. New facilities

new businesses and have plateaued. We needare opening up in our area, and we need a USP

your help to try and reach the ￥10 billion markor something if we are to compete with them.

by launching new businesses and operating as a

We want your advice on how to do that withinconglomerate.

”■ Business Ownership Succession, M&A■ Former Client Wants Help with
Profitability and HR“Our annual turnover is ￥100 million, and wehave six sales staff. We are looking for a company

We are a former client, and would like you

to take over our business as I am elderly now.

to consult for us again. We operate three

My children work elsewhere and do not wantclinics, and our total workforce is 20. We

to take over my business. I have no other likely

want to establish a staff evaluation andsuccessors. I am not sure what to do and want

career development system, and to make the

you to connect me with someone who can takecompany more profitable. We are interested inover the business.

”about the latest case studies.

■ Help with Fundraising“Our business is struggling but we are getting”■ Help with IPO (on Tokyo Pro Market)“We are considering listing on Tokyo Pro Market

and looking for a qualified J-Adviser to help.

Based on our growth plans, is a listing within the

new orders so we want to raise funds to try

realm of possibility? We want to know whether,and right the ship. Can you assist us withas things stand, we could start preparing now andfundraising?

”

Corporate Data

new business models, and would like to hear

Corporate Governance

“

”

ESG

a limited budget.

Value Creation Drivers

professional development for employees.

Growth Strategies

want to future-proof our business throughachieve listing within a few years.

”
34Consulting Business3 Our Strengths and Opportunities

Our Strengths
Industry-specific, Category-specific Consulting Structure
Funai Consulting’s approximately 800 specialist

information, and skills. And starting 2023, we areconsultants offer clients solutions that are informed

further deepening our DX expertise, nurturing

by expert knowledge of clients’ characteristics

DX staff (e.g., engineers), and developing new

and positioning within their industries, and thatindustry-specific DX modules (see p. 37).

take advantage of our huge wealth of insights,
Industries Served
Local government

Freight, logistics, transport

Advertising, printing,softwareFinance

General distribution

Hair, beauty, fitness

HR businessDX, digital marketing

BPO, outsourcing

Tourism, accommodation

Leisure, sports

Manufacturing

Dining, delivery, food

Education, childcare, schools

Environment, energy

Mobility

Wedding, funeral services

Certified professional services

Healthcare, nursing care,welfareexperts in…

Real estate, property rentals

Consulting’s
consultants are

Housing, construction,
renovation

Funai

Expert in
specific
industries,
solutioncategories

Store development

Solution Categorie

Business model construction, launch
into new industry
E-commerce, direct sales
Sales channel development
Surveying, research
Globalization, international strategies
Finance, IPOs, M&A, profit
improvement, restructuring
IT, work process improvement
Recruiting, personnel, staff training
Management philosophy,
management planning

Workshops and Monthly Support Services: Our Cyclical Business Model
Our business model comprises multiple stages, each

The chief benefit of this model its cyclical nature,of which feeds the next. Business proprietors whoconstantly generating the seeds of new solutions weattend our seminars are encouraged to sign up for

can offer to our increasing “stock” of clients. Also

management workshops; lessons learned there are

unique is our solution-focused consultant training,

put into practice via monthly support consulting,which equips new hires to become full-fledgedwhich leads clients to faster results and propulsion

consultants at an early stage. Both of these are madeof business strategy; and interaction with clients

possible by having such a solid client base.

generates ideas for new solutions, which we use to
produce new seminars and management workshops.
T h i s c yc l i c a l b u s i n e s s m o d e l e n a b l e s u s
to build a solid client base that underpins thegroup’s sustained growth: roughly 10% of seminar
attendees sign up for workshops, and half ofworkshop members go on to consulting contracts.
To date, we have around 5,500 workshop members
and 5,000 monthly support client companies.
35

5,500 clientcompanies

Monthly supportclientcompanies

Seminars

New solutions

participants/year

annually

Management workshops

27,0005,000

225 created

Business model based onbuilding up a “stock” of clients

High profitability

Quick development ofconsultants

Business model
development strengths

Business Strategy
consulting markets and support diversification andforemost provider of digital and comprehensive

DX efforts to help SME clients reach the ￥10 billion

consulting solutions for mid-scale and SME clientsturnover mark. The second is expanding our focus

by leveraging our two core strengths—expert

to include mid-scale companies as well as SMEs,

consultants in specific industries and solution

and boosting our range of services for larger mid-

categories and a cyclical business model thatscale companies.
In this way, we are broadening the focus ofpart of our strategy for achieving that vision, we haveour consulting services from SMEs to incorporate

identified two key tasks for our consulting business.

upstream (strategy) consulting services and mid-

The first is the expansion of upstream (strategy)

Growth Strategies

perpetually generates new seeds to feed itself. As

About the Funai Soken
Consulting GroupOur vision is that our group will become thescale companies.

consulting services by developing new strategic

Further expand
upstream (strategy)
consulting services
・DX consulting
・Grow membership with new
solutions・Services designed to propel
client companies to the
10-billion-yen turnover mark

Our Vision
for the Future

Value Creation Drivers

Key Task 1.

Key Task 2.

The foremost providerof digital andcomprehensive
consulting solutions
for mid-scale and SME
clients

Expand into mid-scaleand high-proﬁt
business domains
・Increase corporate value(M&A, IPO)
・Solution-expert consultants ×target mid-scale & larger
companies
・Project management

ESG

Business Risks
no security required” loans offered by theand increasing pressure on procurement fromgovernment to help tide business over Covid

rising material costs, are leading to demanddifficulties may cause SMEs to struggle to findfor major changes in SME business models.

funding, and some may experience cash flow

We predict that this will intensify competitiondifficulties as those loans become due in Julyin our industry, leading to mergers and other2023 through 2024.

● The lack of foreign workers in Japan caused by● Deterioration in the effective functioning of ouractivities and methods for client acquisition may

Covid-enforced border restrictions have caused

have an impact on our business performance.

a labor shortage and SMEs are struggling to● L oss of ability to secure talent capable ofrecruit talent. There may be extreme difficultysatisfying ever-changing, ever-diversifying clientin securing the workforce needed to pursue

needs in an IT industry of rapid technologicalcorporate growth.

advancement and intense competition between● T he financial climate for SMEs may be about

Corporate Data

restructuring.

Corporate Governance● T he impact of Covid-19, the war in Ukraine,companies.

to deteriorate: the end of the “no interest,
36

Consulting Business

Expanding Upstream (Strategy) Consulting Services

4

DX Consulting

DX Consulting
Adoption of DX is progressing among larger corporations,modestly sized businesses in terms of functionality and cost.

but mid-scale companies and SMEs are lagging. To redress

Popular packages include Zoho-based Growththis, we at the Funai Soken Consulting Group are working with

Cloud and Kintone-based Funai Fast System, which

SaaS providers to develop industry-specific business system

help with tasks such as CRM, SFA, ERP, and BI, andpackages for mid-scale and SME clients. These packages include

are fast becoming indispensable for data-driven

Zoho, Kintone, and Freee, all of which are ideal for moremanagement at mid-scale companies and SMEs.

Specialists Offering an Expanding Line-up of Industry-specific Modules
With its tight focus on promoting growth (e.g., throughfor the client to build something from scratch; with our

improved bottom-line performance and productivity), ourextensive line-up of templates for specific industries, they

digital transformation support is designed to help clients meetcan simply choose the module with the right templates

digitalization requirements and overcome business management

to realize the appropriate business model in accordancechallenges. This year, we are working hard in partnershipwith insightful advice from our expert consultants.

with leading platform developers to increase our range of

1.
2.
3.
4.

business application modules tailored to specific industries.

Those “DX modules” are all-in-one packages
containing the software templates they need toOur 4 Most Popular DX Products

Zoho
351 happy clients
kintone175 happy clients
Cloud-based accounting
54 happy clients
Cloud-based talent development (Sales Switch) 16 happy clients

DX support* sales Approx.

successfully digitalize specific work processes. No need

1.6 bil. yen per year

Up 21.0% y-o-y*Sales of DX consulting services

Using Zoho to Help Mid-scale Companies and SMEs Boost Business Performance and Productivity
At Funai Consulting, Zoho is one of the main digital tools

can digitalize most of their workthat we recommend to clients. We have a lot of tools

processes with Zoho. In otherat our disposal these days, but Zoho stands out amongwords, Zoho is ideal for people who are not highly trained

the crowd, not just because it is practical for businesses

experts in digital technologies, and means that evenin all industries, but also because of its affordability (itsmaller-scale enterprises can have digitalized systems

was, after all, originally designed with SMEs in mind).

without being tied to specific staff or outside experts.

Moreover, it is highly versatile—its no-code or low-code

Our digital transformation consultants are alreadynature making it easily customizable—meaning clients

helping clients install and make full use of Zoho products.

Zoho’s Extensive Coverage
Marketing

CRM, marketing automation, chat bots, email newsletter distribution, integrated social media
management, forms, heat maps, e-commerce sites, event management, etc.

Sales, customer support

Sales force automation, online contract execution, survey management, simple chat, in-house messaging, etc.

KPI and management data administration

Business intelligence systems

Collaborations

Groupware, workflow and progress management, system linking, etc.

General affairs, personnel, payroll, labor

Personnel and labor management, workplace management, hiring management, etc.

Accounting, finance, settlement, debt management Management of accounts, inventory, subscriptions, billing, and expenses; online payments, etc.

Our Extensive Line-up of Industry-specific DX Modules
Real estate

MA・SFA

Schools

MA・SFA

Staﬃng agencies

MA・SFA

Growth Cloud

37

Mobility

MA・SFANew car leasing

MA・SFA

Mercantile
trading ﬁrms

MA・SFA

Manufacturing

MA・SFA

Growth Cloud

Growth Cloud

Growth Cloud

Growth Cloud

Growth Cloud

Growth Cloud

Growth Cloud

Growth Cloud

Certiﬁed professional
MA・SFA
services

Residential

MA・SFA

Osteopathic clinics MA・CRM

Growth Cloud
Food e-commerce

MA・CRM

Growth Cloud

Dental clinics

MA・SFA

Growth Cloud
Printing, advertising MA・SFA

Growth CloudFunai Fast System Tailored Systems Using Digital Technologies to Help Clients Get a Competitive Advantage
focus on improving clients’ business performance

applications built using Kintone by Cybozu. No

and the applications focusing on KPIs and sales

programming is required, so users can build their own

management data needed to raise the bottom

apps, customize them, and add all sorts of functions.

lines is what sets it apart from the typical customer

Below is one example of a Funai Fast System. Funai

information databases offered by other companies.

About the Funai Soken
Consulting Group

Funai Fast Systems are packages containing

Consulting offers this as part of its consulting for morethan 100 clients in the funeral services industry. The

Growth Strategies

Funai Fast System (Tailored for the Needs of Funeral Services Industry Clients)
Management of basic customer data (e.g., name, address, customer category)
Client management
Pre-funeral consultation management Management of information e.g., survey responses, consultation, materials distributedStandard apps

Partially customizable apps

Management of information e.g., schedules, meetings, staff assignments, venues

Follow-up management

Track progress of post-funeral products and services, e.g., purchase of home altar andaccoutrements, memorial services, disposal of property

Event participation management

Management of event participation information

Funeral service billing

Pre-funeral cost estimates, price quotes, post-funeral invoices

Flower and offering billingManage invoices and receipts for flowers and offerings, track orders

Funeral service billing

Order forms for MC, buses, taxis, catering, etc.; track orders

Memorial service billing

Cost estimates and invoices for memorial services

Incoming payment management

Management of incoming payment data from billing apps

Funeral venue calendar

Track funeral venues’ status

Fleet management

Manage vehicle inspection and refueling schedules

Woodland burial management

Manage provisional and final plot purchase agreements

Daily report management

Track daily reports from staff

In-house FAQManage in-house FAQ data

Phone call management

Manage information regarding call center inquiries and responses

Leaflet distribution management

Track leaflets distributed per staff member, per area

Value Creation Drivers

Customizable apps

Funeral information management

ESG

Our Extensive Line-up of Industry-specific Kintone Applications
Renovators, builders

Real estate

Care equipment rentals Nursing home referral

Home improvement

Mercantile trade

Funeral services Accounting

Labor and social security attorney Attorney

Real estate surveyor

Design firm

Renewable energy

Disability pension

Architecture, construction New home development
Staffing, temping

Bridal services
Judicial scrivener
Corporate GovernanceRental property management Exterior design
New home building

Corporate energy

How Freee-based Accounting Solutions Work

Outsourcing &expense mgmt.

Invoice mgmt.

Acct. mgmt.

Outsourcing &expense mgmt.

Invoice items

Deposits &withdrawals

Billing & receipts

Accts. receivable mgmt.

Payment rpt.
auto-generate

Financial statements

Reconciliation

Accounting

Accts. receivable mgmt.

Remittance rpt.
auto-generate

Journalizing

Remittances

Accts. payable mgmt.
Accounting software

Excel

Business intelligence

Deposits &withdrawals

Recording expenses

Recording sales

Accts. payable mgmt.

Acct. mgmt.

Paper

Invoice mgmt.
Invoice items
Invoices
Recording sales

Accts. payable mgmt.

Journalizing

Accts. receivable mgmt.

Remittances

Financial statements

Reconciliation

Accts. payable mgmt.

Accounting

Accts. receivable mgmt.

Corporate Data

Recording expenses

Billing & receipts

OCR

Invoices

Billing

Auto-recognition
Auto-entry

After

BeforeDeposit rpt.
autogenerate

Auto reconciliation

Operations systems

Clients in These Industries Are Already Benefiting from Our Cloud-based Accounting Consulting
Mobility

Funeral services

Transportation

Nursing care

RetailCertified professional services

Renovation

Manufacturing

Fuel retail

Dental clinics

Staffing agencies

EnergyIT

Construction

Preschool

Industrial waste38Consulting Business4

Expanding Upstream (Strategy) Consulting Services

New Services: Consulting to Propel Clients to
10-billion-yen Turnover

New Business Exploration: How Recent High-Buzz Businesses Relate to Each Other★E-commerce

Popularity◆Leisure, sports, tourism■Dining, food◆Confectionery●Welfare▲Architecture, engineering◎Others◆Craft beer

★Online cosmetics sales◆Indoor golf

◆Small-scale resort hotels■Specialist coffee shops
Korean BBQ restaurants■◆AI fitness★Online frozen food sales▲ Mobile home manufacture ◆Semi-private personal training

Growth★Online health food sales ▲Online building material sales▲▲Residential
land sales ▲Home demolition

traffic control◆Glamping

contracting

Profitability◎Security,◆Strawberry farms

Compact home▲
Factory, development ▲Vacant home
warehouse
renewals
construction●Welfare facilities for disabled●Stay-in-work support

Social Impact

We are constantly pioneering solutions for new industries.

models for welfare and stay-in-work support facilities forIn the housing and real estate sector, we launchedpeople with disabilities. In the dining and amusementbusiness models for vacant house rehabilitation, building

sectors, we launched business models for confectioners,

factories and warehouses, home demolition contracting,

BBQ restaurants, glamping, and indoor golf facilities.

and compact home development. In the healthcare,

All of these new solutions have sparked significant sales

nursing care, and welfare sector, we launched businessgrowth in their respective fields.

Services Designed Propel Clients to 10-billion-yen Turnover
Traditionally, our clients have been companies

What is the Optimal Size of Business?

with annual turnover of less than ￥10 billion,

100,000+ companies have ¥1–10 billion in turnover, but less than 17,000
have ¥10 billion or more. Reaching ¥10 billion means joining the top 1%.

but in 2022 we began ramping up consulting toencourage clients to form “regional conglomerates”

Sales

as a means of reaching for the ￥10 billion mark.

100+ bil. yen

1,859

30–100 bil. yen

4,287

100 mil.–1 bil. yen

511,936

in turnover to ￥10 billion through diversification

Less than 100 mil. yen

895,313

0.1%
0.3%
0.7%
2.0%
4.6%
33.6%
58.7%

of the clients’ business operations by combining

Total

1,524,576

100.0%

Source: Tokyo Shoko Research, Ltd.

Only 1.1% of all Japanese companies have

10–30 bil. yen

10,634

sales beyond that figure, but we have been

3–10 bil. yen

30,463

1–3 bil. yen

70,084able to propel clients from around ￥1 billion

our industry-specific consulting services.
We refer to this type of diversification
strategy as forming a regional conglomerate.
By enabling the client to capture a broader
swathe of local demand and exposing themto synergies in customer acquisition, finding
staff, and risk hedging, forming a regional
conglomerate provides SMEs with strategies
to thrive in this era of uncertainty.
39

Companies %age of total

16,780companies

1.1％¥10 bil. yen =100,547

1%

companies

6.6%

1,407,249
companies

92.3%

Top

Assuming a median grossmargin of 27%, a grossmargin of ¥3 billion isamong the top 1%.

The Size of Local Conglomerates
Approx. 60% have less than ¥2 bil.

Fully

Distribution of Local
Conglomerates by Sales (n=634)
Co’s selected conglomerate partners
from those in other businesses
Source: Funai Consulting study(incl. raw data from Tokyo
Shoko Research andstudy of websites, etc.)

15% have ¥10 bil. or more.

30+ bil. yen

7.1% 45co’s
10–30 bil. yen

7.9% 50co’s
2–10 bil. yen

23.8% 151co’s
Less than 2 bil. yen

61.2% 388co’s¥10 bil. =15%(Co’s with ¥10 bil. are
1% of total)Consulting Business5

Expand into Mid-scale and High-profit
Business Domains

Industry-specific M&A Teams Carry Out Our Commitment to Helping Clients Achieve Growthcompany, the employees, and the proprietor’s family.
Unlike typical M&A brokerage firms, which do nothing

successful a company is, the more likely they are to fretbeyond the signing of the brokerage contract, our consultants

over finding the successor who is best for the company.

(all experts in the relevant industry) work alongside clients

If someone in the family has the ability and desire

and provide ongoing support up to and beyond the M&A.

to take over the reins, the handover, personal andIn some cases, our support has resulted in sales and profits

physical, is easily done with some careful tax planning.

doubling in the first year and a half after the handover.

If, however, there are no potential successors within the

Ownership succession is meaningless unless it

family, employees or third parties must be considered.

enables both parties to grow. M&A deals brokered

It may be that now is not the time to sell but to readyby the Funai Soken Consulting Group are committed

the business for sale by improving the bottom line first.

to corporate growth, which is why we place such

Our job is to help determine the best option for theimportance on industry expertise.

Growth Strategies

keeping the business going when they retire. The more

About the Funai Soken
Consulting GroupOne of the most common concerns facing proprietors is

Value Creation Drivers

IPO Support
Our Latest Venture: Tokyo Pro Market Listing Support Services
Funai Consulting was granted “J-Adviser” status by Tokyo Stock Exchange, Inc., for its Tokyo Pro Market for
professional investors on April 11, 2022.

ESG

Why Did We Seek J-Adviser Certification?
In the course of Funai Consulting’s IPO support services,
there was an increase in companies interested in theTokyo Pro Market. For our part, becoming a J-Adviser

Corporate Governancenot only boosts our ability to help more companies
list on the Tokyo Pro Market, but it also helps us in our
strategy of strengthening comprehensive management
consulting services for mid-scale companies.

Tokyo Pro Market
and that has led to increased interest in market listing.

Exchange, but it is different from TSE’s Prime, Standard,

Feedback has been positive, too, with one executive

and Growth markets. Most significantly, the Tokyo Pro

saying that listing on the Tokyo Pro Market was theMarket is restricted to professional investors, and has lessmost effective investment the company had everstringent listing criteria (e.g., number of shareholders,made, and another saying that listing had led to a hugeamount of profits) than the other markets demand. The

improvement in the quantity and quality of mid-career

audit period is shorter, too—one year compared to two on

applicants responding to job openings.

the other markets—indicating a trend toward shorter time

Being a certified J-Adviser adds depth to our IPO

from kick-off to listing. Even so, companies can achieve

support services, and enables us to serve as a one-stopsome of the recognition and credibility of market listing,provider of comprehensive solutions.

Corporate Data

Tokyo Pro Market is one of the markets on the Tokyo Stock40

Consulting Business

6

Group Synergies

Seicho Senryaku Joins the Funai Soken Consulting Group

Business restructuringsubsidies

In January 2023, Funai Consulting acquired

strengths in financial consulting for mid-a stake in Seicho Senryaku Inc., whichscale companies and SMEs to expand thespecializes in helping clients take advantage

scope of the group’s consulting services andof subsidies. The company has a strong

open up new markets.

track record: in 2022, its average subsidy

When launching new businesses

Manufacturingsubsidies

was approximately ￥50 million and its

and restructuring existing ones, capital

acceptance rate was 82%. The company has

investment is a significant outlay. We

NEDO subsidies

also developed its own process and project

believe that working closely with clientsmanagement systems.

via growth support services in markets

Supply chain subsidies

Hopes are high that Funai Consulting

eligible for subsidies (i.e., markets withwill combine Seicho Senryaku’s experience

official backing) is a sure step on the way

and expertise with its own long-standing

to creating more sustainable companies.

CX Consulting

Making Customer Service Happier and More Reassuring
Better Customer Experience is Better for Society

Contact center consulting, the coreoffering of Proseed, one of our groupMore sales

companies, is a popular service for mid-scale and larger clients.

Business strategy
Customer service

We help clients increase sales and rationalize customer acquisition
costs by improving call center and customer support quality

Less costs

and improving in-person and digital customer experience (CX).

Digital services

Customerexperience (CX)

Clients(i.e., consumers)

The human touch

Eliminate inconvenience = Improve social productivity

Management Consulting for the Chinese Dining Industry
Funai Consulting Shanghai Inc. (consulting)
Adapting the Funai Soken Group’s expertise to provide consulting services in the growing Chinese market.

Business Strategy Under the Mid-Range Business Plan
In 2022, after a long Covid-enforced lockdown, Funai Consulting Shanghai restarted its seminars and management workshops,
as well as new initiatives such as operational support for SNS marketing based on a deep understanding of Chinese digital
media. By combining our marketing strengths in Japan and China, we aim to produce quick wins for our clients.

Areas of Particular Strength• Specialized support aimed at boosting growth

Opening new restaurants, turning around unprofitable restaurants, seeking growth,
improving productivity, management, talent development• Category-specific management workshops and QSC improvement● Funai Consulting Shanghai’s management workshops are tailored to specific categories

41

Top-brand
workshops

For

Products and services

Major
corporations

Opening up new business categories,
organization development

Funai dining
industry workshops

Management
employees

Customer experience, new QSC standards,
store operation and management, DX

SMEs

Online customer acquisition,On-the-Mark Solutions

125 shorts posted to
official TikTok accountin 2022

Consulting Business7

Testimonials

About the Funai Soken
Consulting GroupA True Partner with the Goods to Deliver and theGuts to Say No

Hisayuki Kato
Representative Director and President
The Monogatari Corporation

Client Interview
lies not in what they give you but in what you learn and how you

Our relationship with Funai Consulting is the resonancemake use of it. It is vital, therefore, that proprietors know theirbetween our ways of thinking: honesty, positivity, and a love ofown characteristics and think about how to utilize information.
But Funai’s consultants do more than just feed businessone of them strives to make sense of successes and failures

owners useful information; they also serve as an honest sounding

through the prism of this philosophy and their own sensibilities.

board. Our people in China have said they appreciated how theFunai Consulting have partnered with us for some 15 years

consultants offer both encouragement and dissenting opinions. It

now, and I have been part of that for around a decade. Initially,

is not easy to develop products and pursue business in a foreign

I was floundering in my position in development and planning,

country, so Funai Consulting’s advice, which is based on Chinese

and after another presentation seemingly fell flat, I was saved bymarketing sensibilities, has been a great help to us in in China.

the encouragement of their consultant, who called it interesting.

From Nity-Gritty Solutions to Broader Management

One of the Team in Word and Deed
Most distinctive of all, though, is the way Funai Consulting
consultants are there for you, unlike some who simply throw

Now, as the proprietor, my relationship with Funai Consulting has“solutions” at you and take no responsibility for the outcomes.

changed: where previously we discussed menu strategies, nowThis is best illustrated by their language, such as way they referour discussions are focused on management issues like businessto our company as “we” in meetings and the like.

ESG

Perspectives

strategies. Another significant change pertains to information.

Value Creation Drivers

learning. Their reliability stems from the impression that every

Growth Strategies

A Philosophy that Resonates with Our Own

As a proprietor, my overriding aim is steady growth, and I
hope Funai Consulting will stay the course as we pursue that

information received, so the large volumes of information Funai

quest. I look forward to their ongoing, close partnership—theirConsulting provides us about successful and unique stores is agrounded logic and their sweat—as we undertake the hard

goldmine for me. For a company like ours, the value of consulting

work of our business.

Corporate Governance

I am good at identifying and applying useful nuggets from

Support Provided, Outcomes Achieved
Challenges Faced

Solutions Implemented
・Deployed Servi food service delivery robots, not only to400
improve productivity but also increase customer satisfaction. Servi robots
・400 Servi robots deployed at Yakiniku King restaurants
deployedfollowing needs consultation and trial runs.

Expand into overseas
markets to sustain growth
as Japanese market shrinks

・Market information based on Funai Consulting Shanghai’s deep insights into theChinese market, and help for decision making. Insights gained through China businessexpansion has proven synergistically beneficial for growth among employees in Japan.

Corporate Data

Increase store value toprepare for the shrinking
labor force of the future

Client Company Overview
Name		The Monogatari Corporation

Incorporated

September 1969

Employees		

1,175 (as of Feb. 28, 2022)

Business		

Restaurants, direct operated and franchises
42

Consulting Business7

Testimonials

More Like Employees than Outside Help:
Close Support from Ideas to Implementation

Masaaki Kimura

CEO
Fukae Special Steel Co., Ltd.

Client Interview
Real Commitment to Our Future

For the Betterment of All Society

We first engaged Funai Consulting when seeking

I like how Funai Consulting always comes up withways to link our employees’ efforts to visible

an effective starting point for the first step towardoutcomes. We ended up building a “solutions

action; having something we can get our teeth

site,” and Funai Consulting’s consultants didn’t

into ensures well-paced project. Their consultants

just make suggestions, they helped us plan it anddon’t just suggest, they take responsibility foreverything. They are always eager to discuss future

implementation and outcomes, and I am convinced

development, even when the ideas are still abstract.

that the Funai Consulting team are dedicatedIn that sense, Funai’s consultants are more likenot only to benefiting clients, but also to theemployees than outside help.

betterment of society.

Support Provided, Outcomes Achieved
Challenges Faced

Solutions Implemented
・Created a comprehensive catalog todifferentiate the client from competitors,
and put the catalog online, thus

Adjusting sales methods tothrive in a mature market

strengthening sales capabilities while
reducing reliance on sales personnel.
・Bolstered new processing business.

Implemented
DX in sales

・DX in sales, including marketing

automation and SFA.

Client Company Overview
Name		

Fukae Special Steel Co., Ltd.

Incorporated

November 1964

Employees		120 (as of Jan. 30, 2023)

Business		

Sales of steel material, processed metal products(e.g., wholesale, processing, and sales of materials incl.
structural wire ropes, tool steel, special-purpose steel,forged products, aluminum, stainless steel)43

Consulting Business7

Testimonials

About the Funai Soken
Consulting Group

An M&A that Balanced Growth Strategy
with the Needs of the Proprietor andLeft:

the Employees

Right:Jun Nakagawa

Yoshihiro Komura

President
Frontier Home Inc.

President
CrascoClient Interview
would happen to the company if I were to fall ill. One thing

There were three ways I could secure the future of ourI knew: I absolutely could not let my employees and theircompany beyond my retirement: Ownership succession

families fall by the wayside.

within the family, ownership succession within the company,
and joining forces with a third party via M&A. My children
were too young and not interested, and the burden of
proprietorship, including personal guarantees of loans andhandle, so the first two were out. But M&A? That might work.
Funai Consulting had been consulting for us for aboutfour years, and discussions about the company's future fiveto ten years away led to the idea of an M&A.
I was ignorant about things like mergers share transfers,
but our consultant referred us to a colleague specializing inthat field. We spoke, and I began to think about my twilightyears, and to discuss matters with my family.

M&A Lets Me Stay on as Proprietor After the Sale
I want to dedicate my life to my work and to society as longas I have my health and am entrusted to run the company.
Some proprietors leave once the M&A is completed, but

Value Creation Drivers

share transfers, seemed to much for likely employees toGrowth Strategies

The Options for Business Ownership Succession

I like this job because it is a source of happiness for clientsand me, and I want to see how the company progresses andthe staff grows in future.

A Trusted Partner Smooths the Ownership Succession Process
You probably think—like I did—that you’re okay because
you’re healthy, but if you are concerned about securing thefuture of your company, I urge you to find a trusted partner.
My partner was Funai Consulting. The consultants were
supportive of my concerns, and matched me with Yoshihiro

The bigger your business and the larger your workforce, themore things you have to consider. In our case, everything in ourcompany of 20 people was dependent on me: I was the head of
all departments, I made all the decisions, and still did sales.
thought to business management, even into my 30s and40s. Then Covid hit, and only then did I consider whatconvinced me that an M&A with Crasco was the way to go.
It makes sense to look into the matter and finda reliable partner while you have your health. I readsomewhere that delaying business ownership succession
is as reckless as not backing up your computer, and I, too,

Corporate GovernanceEvery day was busy enough that I never gave much

Komura of Crasco. His respect for our company's culture

ESG

How M&A Came to Be an Option

believe that business ownership succession is something
you need to think about before it becomes urgent.

Support Provided, Outcomes Achieved
Challenges Faced

Solutions Implemented
・Sold stake in the company (M&A)
・Proprietor remains in the company’s management post-sale.

Corporate Data

Business ownership succession to a third
party outside of family and the employees

Client Company Overview
Buyer

Name		
Incorporated
Employees		
Business		

CrascoDecember 1963
187
Real estate sale and purchase, leasing,repairs, and brokerage

SellerName		
Incorporated
Employees		
Business		

Frontier Home Inc.
October 2003
21
Brokerage of real estate sales and rentals, rental property management
44

2Logistics Business

To Be Japan’s Best Logistics Consulting and BPO Solutions Provider
The movement of goods is a vital social infrastructure,comprehensive logistics consulting solutions toand as leaders in the field of streamlining logistics,

practical, effective outsourcing of back-end processes,

we strive to bring improvements through ESG

we help clients identify and remove the roadblocks tomanagement and digital transformation. Fromsmooth business operation.

Results of Operations（Million yen）

Logistics BPO
Logistics consulting

6,000
5,000

448
338

4,000
3,000
2,000

2,234

Group Companies in This Segment

500
400

3,778
300

2,922
2,935

200
100

1,000
0

Total operating income（Million yen）

687

843

2021

2022

0

*ASBJ’s Accounting Standard for Revenue Recognition adopted in FY2022. Amounts for FY2021 have been amended retroactively.

Policies under the Mid-Range Business Plan (see p. 26)
External Factor 1External Factor 2External Factor 3

Regulatory Changes
Coming in 2024

Supply Chain Turmoil

Climate Change

Boost profitability byincreasing consulting as
proportion of salese.g., logistics real estate, global supply
chain consulting, platforms(building logistics data centers)

Logistics ESG consulting
services with a focus on
the environment

Japan’s shrinking working-age

We are working to stay ahead

Amidst growing demand for

population and new laws relatedof recent global supply chain

ESG, including decarbonization,

to working practices have sparked

changes by developing new

in all indus tr ie s , we o f f er

growing demand for consulting

services such as consulting forlogistics-industry clients a

services on both sides of the

global supply chain restructuring.

whole menu of sector-specificlogistics equation. We help shippers

Other new businesses include

consulting options from ESG

set up sustainable logistics systems,

warehouse real estate brokeragediagnosis to implementationand help logistics companies secureand logistics information platform

support. Data-driven support

a stable workforce and pursue

solutions.

enables clients to engage in all

automation and labor conservation
through DX support services.

45

Expand scope andreach of services

aspects of ESG management.

3

Digital Solutions Business

A Full Spectrum of DX Support Services
the 2023–2025 period. That segment is digitalbusiness to include DX consulting and consulting

solutions, and includes Funai Soken Digital, a new

for mid-scale businesses as per our business

addition to the group in July 2022, and HR Force.

About the Funai Soken
Consulting GroupAs part of our effort toward expanding the group’s

strategy, we have established a new segment for

Total sales（Million yen）

6,000

Group Companies in This Segment（Million yen）

Total operating income

176

Growth Strategies

Results of Operations
200

5,000
4,000

3,562

Value Creation Drivers

3,000

150
100

2,538

2,000

50

1,000
0

2021

2022

0

*No operating income figures for 2021.
*ASBJ’s Accounting Standard for Revenue Recognition adopted in FY2022. Amounts for FY2021 have been amended retroactively.
*New segment created to coincide with the start of FY2023; includes Funai Soken Digital (previously included in the consulting segment) andHR Force previously included in the other businesses segment).

ESG

Policies under the Mid-Range Business Plan (see p. 26)
External Factor 1External Factor 2

Expanding cloud-based services
market, higher demand for cloudengineers

Roll out sales process transformation (SPX)
services with a focus on digital marketing

Cloud-based solutions development

Comprehensive, industry-specific and solution-

We offer development and operation of Azure andcategory-specific digital marketing support for mid-other public cloud-based solutions, and technicalscale and SME clientsconsulting.

Japan’s 2025 digital cliff: demand
for legacy system replacement

External Factor 4

Corporate Data

External Factor 3

Corporate Governance

Demand for improved corporate
productivity despite a declining
population

Employers competing for ashrinking labor pool

Back-office consulting and
BPO centered on IT consulting

Expansion of HR tech business,
HR solutions, RPO/SaaS education, etc.

We offer corporate back-office transformation

HR Force’s direct recruiting services offer IT-based

solutions to boost productivity and competitive ability

solutions to clients’ labor shortage issues, primarily

by improving work processes and digitalization.

through recruitment ad placement services.

46

Dedicated to ESG in Management
Creating Value Together to Help Address Today’s Challenges: Our Basic Policy
Regarding ESG Management

1

We contribute to ourcommunities throughconsulting services for
mid-scale businesses and SMEs

2

3

ESG and proactive
information disclosure areat the core of our groupcompany management

We offer support andsolutions to help
clients implement
ESG management

Key challenges in the quest for sustainable growth1
Importance to society, our stakeholders

Issues ofhighestcommonconcern

We contribute to our communities
through consulting services for
mid-scale businesses and SMEs

High

⑦
⑧
⑨

①
②
③

④
⑤
⑥

2

3

Low

⑩
⑪

We offer support andsolutions to help clients
implement ESG management

ESG and proactive information
disclosure are at the core of
our group company managementHigh⑦ Crisis response, BCP⑧ Business ownership
succession⑨ Sustainable management④ Education, training⑤ Rewarding, employee-friendly
workplaces⑥ Diversity

Low

Importance to us① People and trustworthiness② Information Security③ Consulting services: quality and quantity⑩ Rules and policies
governing trading
partners⑪ Climate change

Key Tasks in 2023 for Increased Disclosure of Non-Financial Capital

47

Human Capital

KPIs and investment to boost human capital

Sustainability and ESG

Further expansion of integrated report, TCFD compliance

ESG information disclosure

Improve ESG score with rating agencies

Contributing to Society by Rewarding Outstanding Businesses
About the Funai Soken
Consulting Groupenvironmental responsibility, but also to boost

Soken Consulting Group endeavor to contribute tothose companies’ visibility and recognition. We

the greater good. Since 2010, the Great Company

hope that the awards serve as a means of enriching

Awards have functioned not only to reward

society by bringing broad attention to worthy

companies that combine profitability and growthcompanies and proprietors.

What Is a Great Company?

What Makes a Great Company Great?

A “great company” is founded on a philosophy

1. Sustainable growth
2. Ardent, fiercely loyal fans.
3. High employee satisfaction; employees and theirfamilies are proud to be a part of it.
4. Pride in its unique company character.
5. Generous contribution to the community, whichsees the company as indispensable.

of high value to the community, perfects its
own unique business model and, through these,achieves sustainable growth. It is an organization
whose unique culture earns it recognition from
employees and customers alike as a great company.

ESG

Consulting, are just one of the ways we at the Funai

Value Creation Drivers

potential with social responsibility, education, and

Growth Strategies

The Great Company Awards, which are run by Funai

Corporate GovernanceRegardless of current shortcomings, a greatcompany is forward-looking and wants to be
Number One in Japan and in the world

Recipients of the 2022 Great Company Awards
Industry

Great Company Award

Sears Home Group HD Co., Ltd.

Housing, real estate, renovation

Customer Appreciation Award

Famile Maternity Clinic GroupOb-gyn, post-natal care

Employee Pride Award

Seki Furniture Co., Ltd.

Planning and sale of furniture, interior and other home decorations

Unique Business Model Award

47 Holdings Inc.

General consulting about workplace design and operation

Philanthropy Award

HataraCreate Ltd.

Office admin services, content creation

Better Performance Award

Green System Corporation

Corporate Data

Company

Planning, design, and sales of industrial and agricultural solar
power generation facilities

48

Environment (TCFD Disclosures)
Environmental issues like climate change are

activities and launching efforts to reduce these,a global challenge, and we, informed by the

we also offer our clients and suppliers support forunderlying principles of our Basic Policy on the

responding to these and other climate change issues.

Environment, recognize the importance to business.

We aim not only to improve our readiness for andPropelled by our group purpose—sustainable growthresilience to natural disasters (which are becoming

for more companies—we are eager to be a part of theever more severe as a result of climate change),effort to achieve sustainability and to use all facets

but we are also striving for greater adaptability toof our business to reduce environmental impact.

the inevitable changes in the business environment

For instance, in addition to measuring greenhousecaused by new policies and restrictions implemented

gas emissions caused by the group’s businessas part of the global move toward decarbonization.

In Thought and Action: Our Determination to Tackle Climate Change
Our climate action is founded on our Basic Policy on the Environment, which we updated in 2023 to betterreflect the challenges the world faces.

Basic Policy on the Environment
The Thinking Behind the Policy
Environmental issues like climate change are a global

growth for more companies—we are eager to be a partchallenge, and we recognize the importance toof the effort to achieve sustainability and to use allbusiness. Propelled by our group purpose—sustainable

facets of our business to reduce environmental impact.

Basic Policy on the Environment

1. Compliance with Relevant Laws
We will comply with all laws and regulations
relating to environmental conservation.

2. Energy Efficiency and Reducing GHG Emissions

We strive to make a real reduction inenvironmental impact, not only within ourbusiness activities, but also by using out consulting
and other services as a means for working together

We will strive to use less energy, expand thewith clients to address climate change, prevent

use of renewable energy, and cut greenhouseenvironmental pollution, and promote recycling.

gas emissions.

3. Preventing Pollution
We will reduce emissions of pollutants such as waste
and chemical substances, and prevent pollution of
the atmosphere, oceans, water, and soil.

4. Recycling49

5. Using Our Business as a Vehicle for Good

6. Disclosure and Dialogue
We will strive for continual progress in ourenvironmental initiatives through information
disclosure and dialogue with stakeholders.

7. Education on Environmental Matters
We will endeavor to ensure full understanding

We will promote more efficient use of wateramong officers and employees of our Basicand other resources, and strive to reduce andPolicy on the Environment and awareness of therecycle waste.

ecological issues we seek to tackle.

Environment

Governance Framework
monitors progress, and evaluates outcomes.

vice president is in charge of sustainability, and final

The committee aims to meet three times a year,

responsibility lies with the CEO. The Sustainability

and the chairperson is appointed by the board.

Committee, established in 2021 as an advisory

Environmental risks deemed in need of action arebody to the Board of Directors, sets sustainability

reported to the Board of Directors, and necessary(defined to include climate change action) targets,measures are determined and implemented.

About the Funai Soken
Consulting GroupAt the Funai Soken Consulting Group, the executive

Governance Framework
Growth Strategies

Board of Directors
Risk Management Committee

Value Creation Drivers

Sustainability Committee
Proactive dialogue

Executive Committee

Sustainability OfficeEnvironmental Management Group(Group Wellbeing Department)

Proactive dialogue

Organ

ESG

Group companies

Roles
・Oversees sustainability in management, climate action

Executive Committee

・Decides on key issues for action

Corporate Governance

Board of Directors

・Sets basic policy・Sets mid-to-long-range goals

Sustainability Committee

・Ensures groupwide implementation
・Monitors action on key issues, gauges progress toward targets
Corporate Data・Implements action on key issues
Sustainability Office・Proactive dialogue with group companies
・Periodic collection of environmental impact indices (e.g., CO2 emissions)・Identifies, evaluates, and manages risks with significant impact on

Risk Management Committee

corporate management and business continuity
・Identifies risks requiring priority response, implements specific measures
・Risk management and prevention

50

Environment (TCFD Disclosures)
Strategy
Based on our Basic Policy on the Environment, whichto address climate change, prevent environmental

stipulates that we use our business as a vehicle

pollution, and promote recycling. To that end, we

for good, we strive to make a real reduction in

endeavor to be aware of the impact of risks andenvironmental impact, not only within our business

opportunities pertaining to climate change, andactivities, but also by using out consulting and otherwill carry out the strategies necessary to making

services as a means for working together with clientssustainability the norm throughout society.

Risk
Classification

Risk assessment

Major action

Increased awareness of

As concern about climate change becomes widespread, mid-scale companies

MarketReputation

Transition risks

climate change andand SMEs are increasingly shifting toward decarbonization and environmentallydecarbonization throughout

conscious management, and we seek to support them on that journey withsociety and among clientsconsulting services relating to decarbonization and other climate action.

Loss of business due

Stakeholders are increasingly demanding action on climate change, andto drop in reputation

reluctance to engage brings the risk of damage to brand and public reputation.

among stakeholders andlack of accountability

Urgency

Physical risks

Physical damage to group premises or transport networks would likely impact

Increased risk of
economic stagnation
due to more severe
natural disasters

Also, the particular urgency of climate concern among younger demographics
may cause underperforming companies to struggle to attract workers.

our ability to provide in-person consulting services. Damage to premises also
brings the risk of loss of data (e.g., client data and personal information), so weare working with the Information Security Section and the Risk Management
Committee to strengthen systems and infrastructures.

Opportunities
Classification

Risk assessment

Major action
Growing interest in sustainability among society, markets, and our clients is expected
to boost demand for consulting services. We will offer more climate change conscious,
environmentally friendly options among our industry-specific consulting services.

Opportunities

Products and services

Solutions to Help Clients Achieve Carbon-free Business
Offer
environmentallyconscious services

Funai Consulting
・Decarbonization diagnosis
・Greenhouse gas emission measurement (as per the Greenhouse Gas Protocol’s three-scope system)
・Roadmaps to carbon-free business and support for workplace action
・Partnering with 110+ manufacturers to help clients install renewable energy andenergy-efficient facilities
・New business models for the decarbonization market age
Funai Soken Logistics
・ESG Logistics Diagnosis
・Distribute handbook for logistics industry clients on implementing ESG

51

Environment

About the Funai Soken
Consulting Group

TOPICS
ESG Services for Client Companies

Funai Soken Logistics offers consulting to help
clients incorporate ESG into their logistics toenvironmental impact and the labor load placed

Handbook for
Logistics Industry
Clients on
Implementing ESG

Value Creation Drivers

on employees. Specialist consultants use logistics

Growth Strategies

ESG Solutions for Logistics
Companies and Departments

diagnoses to gauge clients’ progress, devise
strategies, and provide ESG logistics support.

In August 2022, Funai Consulting launched

In December 2022, Funai Consulting publisheda management workshop focused ona book on businesses can decarbonize. Aimed

becoming carbon-free. Here, mid-scaleat mid-scale company and SME proprietors

company and SME proprietors andand sustainability managers, the book shares

sustainability managers can learn about

helpful knowhow, specific approaches, case

CO2 emission measurement and reduction

studies, and explains the significance of

methods from around Japan through guest

different decarbonization actions.

Corporate GovernanceCheck Out Our Book on Carbon
Neutrality in Business Management

ESG

Regular Study Workshops
to Promote Carbon Neutrality

speakers, member forums, as well as thelatest trends from expert consultants.

Corporate Data

Green Transformation: How Mid-scale Companies & SMEs
Can Decarbonize & Maximize Profits
Edited by the Funai Consulting Inc., Carbon Neutrality
Consulting Unit

52

Environment (TCFD Disclosures)
Risk Management
Based on our Basic Policy on the Environment, whichfrom the Sustainability Office regarding the results ofrequires us to disclose information and engage inenvironmental risk assessments and other risk analyses

dialogue, we will strive for continual progress incarried out by the Environmental Management

our environmental initiatives through information

Group, both periodically and in response to internal

disclosure and dialogue with stakeholders.

and external environmental changes, and makes

Climate change risk management is the
responsibility of the Sustainability Committee.

recommendations to the Board of Directors regarding
those risks requiring action. The board then decides on

The Sustainability Committee receives reports

action to be taken regarding these and other risks.

Group companies

Risk Management Committee

Environmental
risks

Sustainability OfficeSustainability Committee

Identify

Evaluate

Risk assessment

Risk analysis(e.g., frequency, impact)

Board of Directors

Businessrisks

ManageConsider, decide on, andimplement measures to manage(e.g., mitigate, avoid,
impute, accept) risks

Targets and KPIs
The group’s Mid-Range Business Plan (2023-2025) stipulates a sustainability goal of reducing greenhouse gas
emissions by 50% compared with 2019 levels.

(1) Electricity used (kWh)

2018

2019

2020

2021

1,220

1,204

1,099

1,128

(2) CO2 emitted through useof electricity (tons)

590.6

577.5

524.8

502.1

(3) Avg. CO2 emitted per employee
through use of electricity (tons)

0.53

0.48

0.40

0.38

(4) Office paper purchased(converted to sheets of A4)

10,098

8,871

2,622

2,025

(5) General waste emissions(tons)

65.4(6) Industrial waste emissions(tons)

4.3

59.0
4.5

27.8
3.1

26.7
3.2

Business sites incl. in calculations: (1)(2)(3) All group sites; (4) Osaka HQ, Tokyo HQ, Gotanda
Office, Fushimimachi Office, Shiba Office; (5)(6) Osaka HQ,Tokyo HQ, Gotanda Office, Shiba Office

53

Tackling Climate
GHG
Changeemissions*653.2 t-co2

Cut by 50%

2019（vs. 2019）*Per Scope 1 and 2.

（Tons of CO2）
660
0.53
630
600

590.6

570

（Tons of CO2）
0.6
0.48
0.40
577.5

540

524.8

2018

CO2 emissions

2019

0.5
0.4
0.3

510
480

0.38

2020

0.2

502.1
2021

0.1
0.0

Avg. emissions per employee

Environment

Commitment to Renewable Energy
reducing greenhouse gas emissions to virtually zerofor our Tokyo office to TEPCO’s Aqua Premium plan,

and achieving Scope 2 under the GHG Protocol.

which provides renewable energy electricity generated

Renewable energy

at hydroelectric power plants and is certified 100%
non-FIT and non-fossil-fuel. As a result, 13.44% of
our overall total electricity consumption that year

About the Funai Soken
Consulting GroupIn June 2021, we switched our power supply contract

13.44%of total electricity
consumption

came from renewable energy sources. By 2030, theNon-renewable energy

86.56%

group aims to achieve a 100% renewable energy
procurement rate at all its Japanese sites, thereby

Growth Strategies

of total electricity
consumption

Reducing Emissions
Reducing Scope 3 Category 1 Emissions
Copy Paper, Seminar DM Printing and Postage

As part of our quest to reduce emissions, we will

Our efforts to make operations paperless continue,

switch our power supply contracts with various

and digitalization is a useful means to that end.

suppliers to renewable energy plans. With a view

Mid-to-long term, we will continue to look for

to future membership of the RE100 (under the RE

more environmentally friendly printing, posting,

Action initiative for smaller-scale users), we will use

and transportation options. We will also calculate

only those plans with non-fossil certification withemissions based on primary data, rather than on aadditionality and tracking (limited to renewable

per-unit basis.

Value Creation Drivers

Reducing Scope 2 Emissions
Electricity Consumption

ESG

energy power plants within 15 years of construction).

Reducing Scope 3 Category 6 Emissions
Business Travel at Funai Consulting
Corporate Governance

The rapid update of remote work in 2020 in the faceof Covid caused a year-on-year drop in business travel.
However, given the resurgence in business travel
following the return to near-normalcy, we intend to baseour course of action on newer data from 2022 onward.

Corporate Data

Teaming Up with External Partners
The GX League
In 2023, Funai Soken Holdings joined theneutrality by 2050. Funai Consulting

GX League, a forum for collaboration byoffers decarbonization support for clientsbusinesses, governments, and universities

via its Carbon Neutrality Support Group,that are serious about seeking

and its participation in the GX League

sustainable growth to seek ways to bringwill further enhance the value of theabout social change and achieve carbon

solutions it delivers.
54

Our People
Human Resources Management
At the Funai Soken Consulting Group, we believe that a diverse workforce is key to sustained growth. To this end,
aggressive investment in HR and ingraining the Group Purpose have been established as priorities under the MidRange Business Plan, and we will endeavor to further enhance our human capital.

Our Workforce: A Breakdown
2020

2021

1,303 1,317 1,382 1,800

Consultants

859

873

444

444

Men

830

Women

473

Workforce admin2025
target

Women as ％age ofworkforce

36.3% 37.4% 38.1%

38%

2020

targetTotal employees

Business staff

2022

2025

2022

2021

862

1,150

Management
employees

270

243

269

ー

305

400

Men

215

186

205

ー

215

ー

Women

55

57

64

ー

824

856

ー

Management as ％ageof workforce

20.7% 18.5% 19.5%

ー

493

526

ー

Women in management
positions

20.4% 23.5% 23.8%

25%

Years until promotion to “chief”

2020

2021

2022

4 years 1 month

4 years 1 month

4 years 1 month*Career tracks have been diversified and the previous title “team leader” has been split into four positions eligible for accelerated
development (target: promotion within 5 years): leader, chief consultant, chief expert, chief professional

HiringWe are hiring aggressively to grow our workforce to 1,800 by the end of 2025, including more new graduates toboost consultant numbers and mid-career recruits in our high-growth DX and M&A businesses. We also intend toenhance our management-level workforce in order to reinforce operations groupwide.

Recent Graduates

Mid-Career

In addition to industry-specific recruiting, we also

We seek to secure more talent through broader

hold whole-group digital transformation hiring

recruitment channels and streamlined screening

events and offer digital transformation internships

processes. Hiring professionals is a particular(featuring workshops and forums) to approach

focus; for instance, given that our ability to attract

students early on. In doing so, we identify the pool

digital transformation staff has a direct bearingof available talent, differentiate ourselves from rivalon the bottom line, we have ever more dedicatedemployers, and lock in potential employees.

recruitment webpages on our site for this purpose.

Independent
recruitment events
Internships
External
recruitment events

55

Company
websiteReferrals
Staffing agencies

Media ads
Direct recruiting

2020

2021

2022

Mid-career

242
185
57

226
182
44

299
162
137

DX staffーーーNew hires
Recent graduates

SocialDevelopment
We will expand training programs and further invest in education, including accelerated development of
About the Funai Soken
Consulting Group

young employees and the acquisition of digital skills for better productivity.

Professional Development Programs
practical work based on real examples rather thantailored to different levels of employees (e.g., newtheory alone. In the consulting segment, we list up thehires, mid-career hires, experienced staff, and upper

digital transformation skills needed to get results, andmanagement); others are designed to develop specificdevise training content for each skill. Linking these withskills or address specific problems. Our focus is on

career enhancement programs is a positive way for us

having the right skills at the right time, instilled throughto develop every employee’s skills and steadily develop

New recruits

Mid-career hires Experienced staff Upper management

Follow-up training
Department-specific training

Careerenhancement
programUppermanagement
training

New manager
training

Committees,
workshops

Systems training

Problem- specifictraining

Instruction in Funai philosophy
Human rights training (e.g., compliance)

a pool of staff with digital transformation skills. Some
employees undergo training that incorporates external
content in order to acquire more specialized skills.
DX staff category

Definition

Learning program

Digitalmarketingconsultant

Achieving outcomesthrough operations

Harnessing the company’s
expertise

Information security training

For new recruits

DX consultant

Achieving outcomesthrough sales, planning,project management

DX engineer

Achieving outcomesthrough building andutilizing DX systems

DX training

For existing employees
DX improvement
External training content

Department-specific training
Workshops, forums for non-Japaneseemployees, mid-career hires

We have training, workshops, e-learning, and otherWe offer a total of 1,014 training courses that

programs in place at group companies to develop

instill applicable skills that enable consultants towork-ready digital solutions staff. Funai Research

assist clients on their way to improved businessInstitute offers a total of 22 DX training courses

performance. The training emphasizes on-the-that systematize the required skills and provide thejob practice, translating educational “input” into

instruction to instill them. Linking skill acquisition

practical “output” in the workplace, with KPIs based

progress with actual performance outcomes not

on bottom-line results.

Corporate Data

Consulting Training
Corporate Governance

DX Training

ESG

Skills training

Helping women forge meaningful careers

Value Creation Drivers

Level-specificstaff training

New employee training

Growth Strategies

We offer a variety of training programs. Some are

only drives the evolution of training content but
ensures implementation of the PDCA cycle.
Learning
Training content
improvements

Skills check

Link with performanceoutcomes

Frontline
work
Department-specifictraining
All-department new recruit training

56

Our People
Retention
We want all employees to feel their work is fulfilling

value p ropositions* (EVP) to retain talent,

and rewarding. Ensuring the Group Purpose andincluding competitive compensation and improved

management policies are fully ingrained is vitalcommunication by relocating our Tokyo office andto that end, as are employee engagement andconsolidating it into a single floor (scheduled forgroup synergies. We also offer attractive employee

spring 2024).

*An EVP is a tailored proposition that combines diverse, flexible working styles based on individuals’ life plans with workplace environments that keep
employees motivated.

How We Can Offer Better EVPs

Town Hall Meetings on the Group Purpose

We use EVPs as a means of retaining talent, andGroup CEO Takayuki Nakatani

maintain attractive workplace environments thatand management from groupkeep employees motivated.

companies held a series of・Expand communication by relocating Tokyo officeand consolidating into a single floor
・Sustained improvements in compensation
・Diverse, flexible working styles, including flex

57

town hall meetings to speakd i re c t l y w i t h e m p l oye e sabout the Group Purpose,its background and intentions, and answer theirtime, remote work, career course changes

questions about it.

An Often Overlooked but Potent Force for GoodThe Founder’s Spirit Lives On

We have always believed that properly voiced

To ensure the spirit espoused by Yukio Funai

greetings have the power to encourage, invigorate,

remains ingrained throughout our workforce andand console. This is reflected in our office culture,operations, future leaders from throughout thewhere it is common practice for employees gather

group participate in workshops and lectures, andand greet arriving colleagues—a bright and cheery

tour the Founder's Memorial Museum, and spreadstart to the working day.

the word among our organization.

SocialHuman Rights
for human rights is not just an obligation but

Basic Policy on Human Rights to ensure thata fundamental precept of our consulting andpeople’s basic rights are protected and respected inother business operations. To that end, we haveall areas of the group’s activities.

Due Diligence

Human Rights Education

To ensure consideration and respect for humanThrough education programs covering issues such as

rights in an age when people and working styles

preventing discrimination and harassment, we seek

are diversifying, we have established a framework

not only to instill an understanding of the basics

of due diligence to ensure we comply with the UN’sand highlight the signs that might help prevent

Guiding Principles on Business and Human Rights,

harassment and human rights violations, but also

as shown below.

to develop a mindset conducive to maintaining a

Growth Strategies

established the Funai Soken Consulting Group
About the Funai Soken
Consulting GroupAt the Funai Soken Consulting Group, respect

workplace in which these are unlikely to occur.
Responding to calls for help
Human rights education and training

Value Creation Drivers

Basic Policy on Human Rights

e-Learning
We strive to maintain an organization and cultureof mutual respect and encouragement. To prevent

Measures to prevent,mitigate harmful
factors

Share information

Monitor and evaluate
effectivenessharassment of any kind, all employees undergoe-learning programs on what constitutes harassment,
and how to respond when such harassment occurs.
Managers undergo further training on compliance

ESG

Identify & evaluate
factors harmful tohuman rights

risk management, prevention harassment in all
forms, and how to respond when an incident occurs.

Corporate GovernanceCorporate Data

58

Our People
Diversity & Inclusion
Diversity in business management—not the least of

creation, and improved productivity are founded.

which is empowering women to forge meaningful

We endeavor to maintain rewarding, diverse,

careers—is the bedrock on which inclusivity, value

inclusive workplaces.

Helping Women Forge Meaningful Careers
At the Funai Soken Consulting Group, we have avariety of initiatives in place to help us reach our

Women as ％age ofworkforce

Target: 40% by 2030

Women inmanagement

Target: 30% by 2030

targets for women in our workforce and women in
management.

Evening Up the Gender Balance
1 Better Workplace Environment and Systems
HR framework and career enhancement program■	

designed to increase women in management■

Women in Our Workforce
900

We encourage flexible working arrangements to600

suit different lifestyles, e.g., remote work, flex-

300

time, career track changes■

Projects to help women forge meaningful careers■

Workshops and forums for female consultants■

Training for managers to encourage better
empowerment of female staff

0725■ “L-Star” certified as a proactive provider of career

Women

Men

2020

2022

2021

30

Women as %age of workforce

150

223

215

15.8

16.2

41

43

55

2018

2019

2020

100

Female Talent Empowerment Committee(training by department heads on strategies tohelp women forge meaningful careers)

Women

Men

205

186

20

57

64

10

2021

2022

Women in management positions

Childcare Leave: Uptake and Return
（%）

100
80
60

100.0

100.0

100.0

93.3

90.0

5.3

3.9

4.8

2018

2019

2020

81.8

3 Harnessing the Business’s Unique Characteristics

20

Assignments and development that take advantage

0of the business’s characteristics

Childcare leave uptake: womenChildcare leave uptake: men
Return from childcare leave: women

30

23.8

23.5

20.4

40

59

526

493

473

2019

218

0

■

40

（%）

250

(Funai Consulting 2 stars; Funai Soken Corporate Relations 3 stars)

Post-childcare-leave Reboarding Programs(ensuring staff on childcare leave are get back up
to speed by the time they return)（%）

Women in Management Positions

50

■

433

2018

opportunities for women
■

38.1

856

35

380

200

2 Promoting and Embedding Diversity

824
37.4

36.3

35.8

34.4

830

776

100.0

100.0

84.2

82.6

17.2

20.0

2021

2022

0

SocialOur Approach to Healthy Management and Labor
Occupational Health and Safety Management System
the group is safeguarded under a system headed bypromote good health and prevent health problems.

Tatsuro Ono, director and executive vice president

The committees meet once a month to discuss

at Funai Soken Holdings, and with health and safety

employee workplace health and safety, in addition

managers at each group company coordinatedto monitoring information such as the number

by the Funai Soken Holdings Human Resourcesof employees on, and returning from, leave, theDepartment. In keeping with the Industrial Safety

progress of health checkups, and the number ofand Health Act, group companies in Japan have

employees working long hours. Meeting minutes

health committees in which employees participate

are posted on the intranet for employees to read.

Growth Strategies

to discuss and implement measures to maintain and

About the Funai Soken
Consulting GroupThe occupational health and safety management of

Healthy Management Initiatives
New employees undergo training within 90

understanding of the group's policies and approaches,days of hiring. And in light of the make-up of ourwe provide comprehensive training for all employees

workforce, the Group Purpose and policies areon topics such as human rights, occupational safety,

translated into English to ensure everyone canand our philosophy and Group Purpose.

understand.

Value Creation Drivers

Given the importance that employees have a correct

1 Mental Health CareESG

By detecting the signs ofWith the help ofindustrial physicians, workplacepoor mental health early

workplace supervisors,

supervisors, and group companies’

and helping those people

we are improving work

personnel departments enables us toget proper care, we canenvironments andensure that any employee struggling

minimize work time lost andestablishing work procedureswith mental health can seek

encourage earlier recovery

that enable people toprofessional medical help promptly.

and return to work.

continue working.

Corporate GovernanceGreater cooperation between

2 Review of Annual Health Check-up “Optionals,” Encouragement of Follow-up Examinations■ Subsidizing Follow-up Tests

We subsidize the cost of gastroscopic tests for employees

Not taking follow-up tests can lead to health issues thataged 35 or over who undergo the procedure as part of

impact work and private life. When an employee’s annual

their annual health check-up.

health check-up results contain an advisory from the

Corporate Data

■ Subsidizing Gastroscopic Tests

testing physician, we encourage the employee to undergo
follow-up tests by subsidizing the cost.

% age of Employees
Taking Health Check-up

2020

2021

2022

2025 target

97.6%

95.6%

98.4%

100%
60

Information Security
Informed by our Group Purpose—Sustainable

efforts to bring joy to people and businesses is part

growth for more companies—we work closely withof our huge wealth of information assets, which

mid-scale businesses and SMEs as they seek tomust be safeguarded from leaks and falsification.

negotiate the challenges of day-to-day business.

As such, information security is a high-materiality

The data we receive from clients as part of theseissue, and a vital element of our ESG management.

Information Security Initiatives
In addition to translating our Basic Policy on Information

Information assets

Security into a set of rules tailored for our various businesses,

Information security management

which we strive to embed groupwide through training, andRules

pursue robust infosec management. Through these initiatives,

Training

Workforce
Information security staff

we seek to strengthen our information security foundation

Information security platform

and build a security-conscious workforce.

Information Security Risks
Asset
1 Information
Leaks

2

3

Insufficient Access
Procedures

Damage to Vital Data,
System Outages

These days, the risk to the group’s As laws become more stringent and Disruption to the upkeep and succession of skills
information assets—including ever-changing customer support means acquired by IT staff, and failure to stay ahead ofi n f o r m a t i o n r e c e i v e d f r o m the data we hold is more confidential, potential for increasingly sophisticated externalclients—is increasing as more any failure of rules or system access attacks poses a risk to our systems and organizationsorganizations become involved permissions to keep up with evolving dedicated to maintaining the confidentiality, reliability,
and as more data gets used in security demands increases the risk of usability, integrity, and security of information, andmore ways across more systems.

unauthorized access.

increase the risk of compromising business continuity.

Information Security Framework
Information Security Section and Information Security Council
We are serious about safeguarding the group’s information
assets. Our dedicated Information Security Section engages
with the Risk Management Committee and Sustainability
Committee, providing objective expert opinion and advice,investigating and assessing incidents, and offering response
support via the Information Security Council. The section
also helps implement the security measures it recommends,
and helps nurture the group’s infosec workforce throughinitiatives such as ISMS certification.

Proactive dialogue

Sustainability Office

Board of Directors

Information Security Section

Sustainability
Committee■B uild framework for administering

information assets

Risk Management
Committee
Executive
Committee■ Education and training for all officers

and employees■ I nformation Security Council operations

Delegates
authority related to
information security■ Incident oversight■ Suggest and implement policies

Information
Security Council
Proactive dialogue & involvement■ Information security management

organization operation■ Development of infosec staff

Group companies’ information security staff(incl. Funai Soken Holdings information systems depts.)

Information Security Management Organization
Each group company has established an information
security committee or ISMS committee, which disseminates
security policy, promotes ISO/IEC 27001 or Privacy Markcertification, and helps nurture the infosec workforce.
61

Cooperation,
shared membershipGroup co’s info.
sec. committees
Group co’s info.
sec. committees

Crossorganizational
Group co’s ISMS cooperation Funai Soken Holdings

committees

ISMS committee

Development of infosec staff

Departmental ISMS staff

Departmental ISMS staff

Establish a frontline risk assessment framework

Governance

Information Security Initiatives Since 2022
ISO/IEC 27001 Certification

Ongoing Information Security Training
Our officers and employees handle a broad range of

ISO/IEC 27001 certification, an international standard

information. Knowing that a disciplined approach emphasizing

for information security management, in 2022 and 2023

strong individual awareness of the rules and of the relevance ofrespectively. This highlights our commitment not only

information security to each of us is vital for ensuring secure,

to bolstering information security by identifying theefficient use of information, employees of all ranks are required

information assets to be protected and managing risks,

to undergo information security training every year.

but also to providing stable value to our stakeholders.

About the Funai Soken
Consulting Group

Funai Soken Digital and Funai Soken Holdings acquired

Moreover, we work with ISO/IEC 27001 certified companies
and others to further improve security measures and spread

Funai Soken Digital

Growth Strategies

the word about the importance of information security.

https://www.fsdg.co.jp/company/#section04

Stronger Security within the Information
Systems Platform

1 Preventing Information Asset Leaks
JQA-IM1889

How Our Information Security Management Works
Value Creation Drivers

Our certified companies lead a cohesive group effort

Funai Soken Holdings

to manage information security risks with appropriate

https://hd.funaisoken.co.jp/sustainability/

management rules, systems, mechanisms, and assessments.

evaluation/#evaluation04

Steadfast Systems for Safer Use of Information Assets
The faster we can use the group’s information assets—
including information received from clients—the greater therisks. We have a groupwide framework in place to counter

JQA-IM1979

those risks, including thorough information security training
for all ranks and enhanced systems for confirming the safety
handing of portable media such as USB and DVD.

We survey the level of information security of all Funai

Risk Assessments of Systems

Soken Consulting Group companies, analyze the results,

We help maintain secure information environments byassessing the risks to public websites and cloud-based

solutions to problems uncovered. Below is an example of theplatforms, and implementing improvements in response toradar chart used to plot the survey results and set targets.

periodic, objective vulnerability assessments.

The survey results plotted on a radar chart.

Modern Working Styles Without Compromising Safety１．
組織的な取組状況 1基本方針・管理規程の整備・実施
１．
組織的な取組状況 2システム開発・管理規程の整備・実施

5.0

８．
情報セキュリティ上の事故対応状況 リスク管理体制
７．
システム運用管理の取組状況 外部委託先の管理
７．
システム運用管理の取組状況
外部委託先の組織体制
７．
システム運用管理の取組状況
システム開発ルール

１．
組織的な取組状況 3ネットワーク管理・システム利用規程

4.5

１．
組織的な取組状況 4スマートデバイス・SNS利用規程

4.0１．
組織的な取組状況 5情報セキュリティ・
コンプライアンス体制

3.5
3.0

１．
組織的な取組状況
6第三者認証の取組
２．
人的な取組状況 誓約書での秘密保持条項2.5

７．
システム運用管理の取組状況
クラウド選定・管理ルール

2.0
1.0

７．システム運用管理の取組状況
運用管理者体制

２．人的な取組状況
リスクアセスメント教育の実施

0.5

３．
情報資産管理の取組状況
機密文書管理区分設定

６．
IT機器利用の取組状況
DX対応

３．
情報資産管理の取組状況
情報資産管理台帳

６．
IT機器利用の取組状況
標準IT

３．
情報資産管理の取組状況
リスクアセスメント

６．IT機器利用の取組状況
個人デバイス禁止

３．情報資産管理の取組状況
業務プロセス上のセキュリティ管理措置

６．IT機器利用の取組状況
社外利用時ルール

４．
アクセス制御及び認証の取組状況
アクセス制御方針

６．IT機器利用の取組状況
画面ロック管理ルール

４．
アクセス制御及び認証の取組状況
アクセス件適時権限更新

６．
IT機器利用の取組状況 パスワード管理ルール
５．
物理的対策の取組状況 情報資産管理

４．
アクセス制御及び認証の取組状況 アクセス件運用ルール

５．
物理的対策の取組状況 入退室管理ルールと運用
５．
物理的対策の取組状況 入退室制御の仕組み

４．
アクセス制御及び認証の取組状況 アクセス履歴監査
５．
物理的対策の取組状況 入退室制御対策

Maintaining—and consistently improving—a robust
authentication infrastructure enables us to offer theflexibility of working styles like remote work withoutcompromising information security.

2 Addressing Faults in Personal Information

Corporate Data

２．人的な取組状況
従業員への計画的な教育や指導

1.5

７．システム運用管理の取組状況
脆弱性管理

Corporate Governanceengage in proactive dialogue and run the PDCA cycle to find８．
情報セキュリティ上の事故対応状況 BCP管理体

ESG

of new software and cloud-based applications, and for secure

Constant Strengthening of theInformation Security Framework

Access Procedures

Our legal departments work closely with group companiest o en s u re t h a t pro cedu res fo r h a n dl in g p ers ona l
information are up to date.

3 Preventing Damage to Vital Data, System Outages
To ensure uninterrupted, safe use of reliable systems,
those systems are subjected to testing upon installation

2023 group target

2021 group averageand major updates, as well as periodic tests for the most2022 group average

2020 group averagevital systems, and even retesting by experts.
62Compliance
Our Basic Approach to Compliance
The three main values we at the Funai Soken

communities, shareholders, investors, business

Consulting Group hold dearest are encapsulated

partners, and our workforce.

in the “Funai Way.” They are adventureship:

To fulfill our corporate responsibility to society

converting change into momentum; empathy: aand to put “Integrity: a force for good” into practice,reliable partner for business owners; and integrity: a

we have established the Funai Soken Consulting

force for good. All of our employees and officers areGroup Corporate Ethics Code of Conduct andexpected to behave as good citizens in accordance

always strive to uphold high standards of fairness

with these values.

and ethics, and to behave in accordance with social

We believe that our fundamental mission isnorms in all aspects of our business.

to use the group’s consulting and other business

The code of conduct sets out specific principles

activities not just in the pursuit of greater corporatein three core areas: fulfillment of our social

value, but also to meet the expectations and earn

mission, compliance with laws and regulations, andthe trust of our stakeholders, including clients, local

behavioral guidelines.

Compliance Initiatives
The Funai Soken Consulting Group Corporate

throughout the group through close teamwork

Ethics Code of Conduct and Regulations on Groupby the Funai Soken Holdings Legal Affairs & Risk

Compliance establish clear, high standards forManagement Office and the executives in charge of

ethics and sensible behavior expected of ourcompliance at the group’s operating companies.

people. To deal with individual issues, we have

Meanwhile, we strive to raise awareness ofestablished a Basic Policy on Eliminating Anti-

the importance of compliance among our whole

Social Forces, a Basic Policy for the Prevention of

workforce—officers and employees alike—throughBribery & Corruption, and Basic Policy on Fair Tradeinitiatives such as mandatory compliance training

Practices, and in-house regulations based thereon.

for new employees and compulsory e-learning

In addition, we have established a framework
to monitor compliance and identify problems

63

courses on compliance and information security
held at least three times a year.

Governance

Whistleblower System
Based on the Funai Soken Consulting Group Hotline

Whistleblower’s Contact Card to be kept with
employee ID card at all times

Hotline for people to report compliance violations,
including breaches of the following basic policies

Whistleblower’s
Contact Card

Harassment
Help Desk

Hotline(in-house)

About the Funai Soken
Consulting Group

Rules, we have established an Internal Whistleblower

Hotline(external)

and regulations. Whistleblower reports are directedto the head of the Legal Department, an outside
director who serves on the Audit Committee, andan independent lawyer.

Growth Strategies

To protect whistleblowers, reports can be madeanonymously by e-mail or telephone, the content
Keep with employee ID card at all timesof reports are kept confidential, and retaliation
against whistleblowers is strictly prohibited.

(Approximate rendering)

Information on whistleblower reports is shared
Value Creation Drivers

throughout the group, by inscribing the information
on cards carried by officers, and making it available
on the group intranet, which is accessible to all
officers and employees.

Anti-bribery & Anti-corruption Initiatives
the basic policy or regulations is reported, the Risk

all Funai Soken Consulting Group employees, stipulate

Management Committee reviews the incident reports todetails and require group employees to report any

the board. Based on these reports, the board determines

violation (or suspected violation) of those regulations

whether or not a review of the anti-corruption

through the Internal Whistleblower System.

compliance system and the basic policy is required.
It is vital that every executive and employee knows

through internal oversight and reported to the board

and understands the basic policy, and we will continueof directors. If a violation or suspected violation of

to implement various education and awareness activities.

Corporate GovernanceCompliance with regulations is monitored regularly

ESG

The Regulations on Group Compliance, which apply toThis table shows figures pertaining to anti-corruption incidents in the past three years.

2021

2022

Total political donations (in yen)

0

0

0

Officers and employees dismissed or otherwise subjected to
disciplinary action under the group’s anti-corruption policy

0

0

0

Disciplinary action, fines, or regulation breaches relating to bribery

0

0

0

Corporate Data

2020

64

Corporate Governance

Officers

65

Atsushi
Nakao

Tomomi
Murakami

Nobuyuki
Isagawa

Takayuki
Nakatani

Outside director andmember of the Audit
and Supervisory
Committee

Outsidedirector

Outsidedirector

President andGroup CEO

About the Funai Soken
Consulting Group
Growth Strategies
Value Creation Drivers
ESG
Corporate GovernanceTaeko
Yamamoto

Masahiro
Hyakumura

AkihiroKobayashi

Director andexecutive vicepresident

Outsidedirector

Director andmember of the Audit
and Supervisory
Committee

Outside director andmember of the Audit
and Supervisory
Committee

Corporate Data

TatsuroOno

66

Corporate Governance
As of Mar. 25, 2023
Directors
President andGroup CEO

Director andexecutive vicepresident

Audit and Supervisory Committee Members

Director

Director

Director

Director, A&S
Director, A&S
Director, A&S
Comm. member Comm. member Comm. member

Outside,independent

Outside,independent

Outside,independent

Outside,independent

Outside,independent

Takayuki
Nakatani

Tatsuro Ono

Nobuyuki
Isagawa

Taeko
Yamamoto

Tomomi
Murakami

Masahiro
Hyakumura

Atsushi Nakao

AkihiroKobayashiAug. 16, 1968

May 8, 1963

Dec. 8, 1966

Oct. 1, 1964

Jan. 23, 1968

Feb. 27, 1965

Dec. 21, 1969

Dec. 19, 1970

3

16

7

ー

ー

7

7

7

179,820

144,340

ー

ー

ー

1,710

ー

ー

13/13(100%)

13/13(100%)

13/13(100%)ーー

13/13(100%)

13/13(100%)

13/13(100%)

ー

ー

ー

ー

ー

14/14(100%)

14/14(100%)

14/14(100%)

Nominating Committee〇●

Successor Nominating
Committee〇●

Compensation Committee

〇

〇

〇

〇

〇

Date of birthYears in office(at end of Mar. 2023
shareholders’ meeting)Shares owned
Attendance
Board meetings
Mtgs. attended / mtgs.
held (attendance rate)
A&S Comm. meetings
Mtgs. attended /mtgs. held
(attendance rate)

Governance Committee
Sustainability Committee

〇

〇

〇

〇

〇

●

●

●

●

●

●

〇

〇
●

〇

●

〇

〇

Corporate management

●

●

●

Sales, marketing

●

●

●

Risk Management Committee
Internal Control Committee

〇

〇
●

●

SkillsFinance●Compliance, risk
management●

Governance, auditing
Sustainability

●

●
●

●

●

●

IT, DX

●

●

●

●

HR

●

●

●Chairperson 〇Member

Board of Directors
Composition*Incl. Audit and Supervisory
Committee members

OutsideDirectors*
InsideInsidedirectors:
directors:
33

55ofof88

62.5
62.5%%

Femaledirectors*
OutsideOutsidedirectors:
directors:
55

Male
Male
directors:
directors:
66

FemaleFemaledirectors:
directors:
22

22ofof88

25.0
25.0%%

Board of Directors
The Funai Soken Consulting Group is led by officers
with diverse backgrounds in terms of expertise andWhen appointing directors, the board draws up a

experience, including directors with an in-depth

matrix outlining the major skills and specialties of its

knowledge of the group’s business and outside

members, and the Nominating Committee (of which

directors whose role is to audit the group from anmore than half of the members are outside directors)

independent and objective standpoint. Of eightdeliberates based on a diverse and varied assessment

directors, five are outside directors (some of whomof capabilities and performance, and is determined bybring management experience from other companies),

the Board of Directors.

six are male, and two female. The board meets once a67

month, in principal.

We do not believe it is necessary to appoint non-Japanese directors at present as most of our sales are

there is one certified public accountant, with

derived within Japan.

specialized knowledge of finance and accounting,In terms of Audit and Supervisory Committee

and one lawyer, with specialized knowledge of legal
About the Funai Soken
Consulting Group

members who are appointed to the Board of Directors,

affairs.

Basic Views
The company strives to strengthen its corporate

accurate disclosure of its current business activities

governance with a focus on ensuring effective legal

and future business strategies through statutorycompliance and maximizing shareholder returns.

announcements and through initiatives such as
Growth Strategies

company briefings and individual meetings withWe b e l i e ve t h a t a p ro a c t i ve a p p ro a c h t oinstitutional investors and analysts.

disclosure is an important pillar of corporate
governance, and we are committed to prompt andFunai Soken Holdings Corporate Governance Structure

Shareholders
Appointments &dismissals

Board of Directors

Appointments &dismissals

Value Creation Drivers

Appointments &dismissals

Audit and Supervisory
Committee

AuditsNominating Committee
Successor Nominating Committee
Compensation Committee
Governance Committee

Oversight

ESG

Sustainability Committee

Internal
Oversight Office

Risk Management Committee
Internal Control Committee

Accounting
audits

Accounting auditors

Corporate Governance

Executive Committee
Group companies

Major Corporate Governance Initiatives
Basic Approach to Capital Policy
proactive investment in the business, while building

is extremely important for enhancing shareholder

shareholders’ equity to an appropriate level andvalue over the mid- to long-term. Our basic

increasing returns to shareholders.

Corporate Data

We recognize that our approach to capital policy

approach is to seek profit growth driven by
Steady increase in ROE above cost of capital (target: ROE 20+% by 2025)
Aim for return-to-shareholders ratio of 60+% and dividend payout ratio of 55+%, with a focus on
methods such as acquisition of treasury shares and increasing total dividend (dividend per share)

68Corporate GovernanceApproach to Cross-Shareholdings
In light of changes in the environment relating
to the Corporate Governance Code and the riskthat the company’s financial situation could besignificantly impacted by share price fluctuations,the company’s basic policy on cross-shareholdings
is to reduce cross-holdings and to not acquire
new shares unless the holding is deemed to be
strategically significant. Each year, the company’s
stockholdings are reviewed on an individual basis,and the economic rationale of these holdings is
assessed. The medium- to long-term objectives
for the holdings are examined and returns, suchas dividends, are taken into account. As a result of
this review, those stockholdings that are deemed
to have limited strategic significance or economic
rationale are sold, while taking the impact of thedisposal on the market and other considerations
into account. On the other hand, those stocks thatare acknowledged to be of strategic significanceto the company are retained. We exercise voting
rights to approve or reject the stockholding
company’s proposals, taking account of whether
there is an appropriate governance system in place,and whether the stockholding company makes
appropriate decisions that will enhance corporate
value over the medium- to long-term, based onwhether it enhances the corporate value of thegroup. With regard to proposals that could have an
impact on corporate value and shareholder returns(such as takeover defense initiatives or businessrestructuring measures), we engage in dialogue
with the stockholding company to assess its aims
and objectives for the improvement of corporate
value. Based on this, we evaluate the merits anddisadvantages of the proposals concerned.

Cross-holdings
Cross-holding
review criteria

Company A
Company B
Company C

Review of eachcompany’s shares･Check the holding’s
significance to our group･Consider returns, e.g.,
dividends

Final decision criteria
Comprehensive decision･Does the company have a proper governance structure?
･Is the company’s decision-making conducive to mid-to-long-term
growth in corporate value･Is the holding conducive to our group’s corporate value?
･With regard to proposals that could have an impact on corporate
value and shareholder returns (such as takeover defense initiatives
or business restructuring measures), we engage in dialogue withthe share-issuing company to assess its aims and objectives for the
improvement of corporate value. Based on this, the company
evaluates the merits and disadvantages of the proposals concerned.

Oversight and Evaluation of Strategic Decision Making
Advisory Committees■ Nominating Committee

Seeks to ensure the transparency and objectivity of theprocess for selecting candidates for director positions.
Deliberates on criteria for director and executive officer
appointments, reinforces the board’s supervisory capabilities.

directors’ remuneration is an incentive for the improvementof business performance over the medium- to long- term. It
submits proposals for remuneration to the Board of Directors
for submission to the General Meeting of Shareholders anddiscusses the policy and details of individual remuneration.
■ Governance Committee■ Successor Nominating Committee

Reviews various issues related to the corporate governance

Seeks to ensure the transparency and objectivity of theof the group from a mid-to-long-term perspective,

process for appointing and dismissing the president.

improves fairness and transparency of management, andAdvises regarding the appointment and development ofstrengthens corporate governance.

the group CEO and representative director, and ensures
the process is fair and highly transparent.
■ Compensation Committee

69

executive compensation. Ensures that executives’ and■ Sustainability Committee

Ensures sustainability is incorporated into management
throughout the whole group, monitors and evaluates

Seeks to improve the group’s corporate value by ensuring the

KPIs, ensures governance functions properly, and oversees

transparency and objectivity of the process for determining

consistent implementation of policies.

Policy Regarding Distribution of Earnings
ROE at 20+%, return-to-shareholders ratio at 60+%,
and dividend payout ratio at 55+%, while keeping awatchful eye on cost of capital.

About the Funai Soken
Consulting GroupWe recognize the vital importance of prudent
capital policy for mid-to-long-term increases inshareholder value. To that end, we strive to sustain

Executive Compensation System: Design and Outcomes
Matters Pertaining to Policy on Determining Directors’ Remuneration Amounts and Calculation Methods
As pertains the process of determining the amountof directors’ remuneration for this business year, theBoard of Directors’ and Compensation Committee’srole is to deliberate multiple times on the policy on
determining officers’ remuneration, and to deliberate
multiple times on the compensation packages of eachof the company’s directors (excluding those who aremembers of the Audit and Supervisory Committee).
Compensation is determined based on factors such aseach directors’ duties, responsibilities, performance,and degree of contribution. Based on the committee’s
decisions, the CEO made submissions to the board of
directors, which made a decision.

Growth Strategies
Value Creation Drivers■ Remuneration Structure and Performance-Based Remuneration

The remuneration structure of directors (excluding
outside directors) who are not members of the Audit andSupervisory Committee contains the items listed below,
and remuneration is apportioned based on rank and

ESG

Our policy pertaining on determining directors’
remuneration amounts and calculation methods
recognizes that directors’ remuneration is a vital partof corporate governance as relates to the pursuit ofsustainable growth for the Funai Soken Consulting
Group and mid-to-long-term growth in corporate
value, as well as sharing value with shareholders. The
policy is configured to allow directors’ remuneration
to function as a healthy incentive for directors to
strive to achieve those objectives. It is intended tohelp us secure, retain, educate, and reward talented
people, and holds that the process of determining
remuneration should be highly transparent andobjective. The compensation of directors who are notmembers of the Audit and Supervisory Committee
is discussed by the Compensation Committee, after
which the CEO submits the matter to the Boardof Directors, which makes a final decision. The
remuneration of directors who are members of the
Audit and Supervisory Committee is determinedthrough discussions by the Audit and Supervisory
Committee.

duties. Compensation comprises a fixed portion as well as
performance-based remuneration and performance-based
stock-as-compensation.

Corporate Governance

Fixed Compensation
A fixed monthly amount comprising the following.
Basic remuneration

Performance-based

Monetary compensation linked to consolidated sales, operating income, and ordinary income in
the most recently completed business year. A personal assessment score (from best to worst: S,
A, B, C, and D) based on each individual’s degree of achievement of criteria (incl. performance of
duties, responsibilities, business performance, and degree of contribution) and personal KPIs.

Corporate Data

remuneration

Monetary compensation, which is not linked to performance, and the amount of which isdetermined in accordance with rank and duties.

Performance-Based Stock-as-Compensation

Stock options ascompensation

Stock options are offered by shareholders in accordance with rank, roles, and achievements withthe aim of increasing motivation and morale relating to the sharing of value with shareholders
and achieving mid-to-long-term improvements in business performance, on the condition thatthe options can only be exercised upon resignation. The remuneration structure of outside
directors and those directors who are members of the Audit and Supervisory Committee
comprises only fixed compensation (i.e., the fixed monthly amount).

70Corporate Governance

Remuneration levels andmethods of determining
remuneration amounts

The Compensation Committee deliberates to ensure appropriate remuneration levels andstructures in accordance with each individual’s duties, and takes into consideration thecompensations paid by other companies in our industry so as to ensure that remuneration
amounts are in keeping with the company’s performance and scale of business. The
Compensation Committee sets officers’ remuneration policy, monitors the system, anddeliberates on specific calculation methods. Based on the conclusions they reach, thecompensation paid to directors who are not members of the Audit and Supervisory
Committee is then determined by a Board of Directors resolution, and the compensation paid
to directors who are members of the Audit and Supervisory Committee is determined throughdiscussions by the directors who are members of the Audit and Supervisory Committee.

Policy for determining the ratioof performance-based stock-ascompensation to compensation
not linked to performance

At Funai Soken Holdings, performance-based stock-as-compensation generally makes
up 20% of total compensation, and this ratio changes in accordance with performanceoutcomes.

KPIs for performance-based
compensation and performancelinked floating compensation;
reasons for choosing those KPIs;
and methods of calculating thecompensation

When calculating compensation, these factors are evaluated: the group’s achievementof targets (i.e., for consolidated net sales, operating income, and ordinary income) in
the most recently completed business year; qualitative evaluation of the individual’s
progress toward achieving targets relating to his/her duties, responsibilities,
performance, and degree of contribution; and the group’s progress toward achieving
the targets of the Mid-Range Business Plan. Indicators relating to achievement of
performance targets are used to gauge earning capability.

Grounds for the board’s findingthat individual directors’compensation packages were inline with policy

The Board of Directors determined that individual directors’ compensation packages
were in line with official policy after receiving a report to that effect from theCompensation Committee, which carried out exhaustive, multifaceted examination of
the proposed packages to check their compliance with policy.
Authority for determining the amount and calculation methods of officers’
remuneration rests with the Board of Directors. We have, in addition to our Audit andSupervisory Committee, a voluntary Compensation Committee. To ensure objectivity
and transparency, the committee is chaired by an outside director and a majority of thecommittee’s members are outside directors. The committee’s role is to deliberate on
the compensation packages of each of the company’s directors (excluding those whoare members of the Audit and Supervisory Committee). Compensation is determinedbased on factors such as each directors’ duties, responsibilities, performance, and degreeof contribution, and bound by the maximum amounts approved at a shareholders’meeting. Based on the committee’s decisions, the CEO makes submissions to the boardof directors, which deliberates on each individual case and makes a final decision. The
amount of compensation paid to directors who are members of the Audit and Supervisory
Committee is determined through discussions by the Audit and Supervisory Committee.

Compensation Paid to Directors’ (Excluding Audit and Supervisory Committee Members)
Fixed compensation

Performance-linked floating compensation

Basic remuneration

Performance-based remuneration

Stock options as compensation

Monetary compensation,
which is not linked toperformance, and the amountof which is determined inaccordance with rank andduties.

Monetary compensation linked toconsolidated sales, operating income,and ordinary income in the most recently
completed business year. A five-level
personal assessment score based oneach individual’s degree of achievementof criteria (incl. performance of duties,
responsibilities, business performance, anddegree of contribution) and personal KPIs.

Stock options are offered by shareholders
in accordance with rank, roles, andachievements with the aim of increasing
motivation and morale relating to thesharing of value with shareholders
and achieving mid-to-long-term
improvements in business performance,on the condition that the options canonly be exercised upon resignation.

*Calculated with reference to executive
compensation packages paid by othercompanies in the industry.

82Compensation Paid to Outside Directors and Members of the Audit and Supervisory Committee
Fixed compensation
Basic remuneration (fixed monthly payment)
Compensation for outside directors comprises only fixed remuneration in light of their independence from executionof operations; compensation for directors who are members of the Audit and Supervisory Committee comprises only
fixed remuneration in light of their independent status as auditors.

71

Evaluation Process and Identifying Areas for Improvement

About the Funai Soken
Consulting GroupThe effectiveness of the Board of Directors is evaluated once a year, covering all directors, including Audit andSupervisory Committee members, through a self-assessment questionnaire. The Board of Directors deliberates theresults of this evaluation to improve the effectiveness of the Board of Directors. The evaluation of effectiveness wasdeliberated at the Board of Directors’ meeting held in March 2023. The following is a summary of those deliberations.

2022 Initiatives in Review

2

The Internal Oversight Office now reports to theBoard of Directors for prompt awareness of riskrelated information, but there is still a need for more
effective, ongoing measures to prevent recurrence.

3

In formulating the Mid-Range Business Plan, there
was a certain degree of discussion of matters likegroup companies’ strategies. Moving forward,
however, we need to work more closely with groupcompanies and schedule opportunities to hearprogress reports and current status analyses.

4

The board took more time to discuss highmateriality issues and endeavored to improve
the substance matters tabled at board meetings
so as to promote more in-depth debate on
important subjects.

5

The board's advisory committees have a majority
of independent outside directors, making themmore effective.

Value Creation Drivers

Materials needed for board meeting discussions
are now being prepared with much greater focus
on key points.

Growth Strategies

12023 Action Plan
The Board of Directors makes decisions on strategy, taking all appropriate information into account, based on active
discussion to ensure the opinions of all directors are reflected. This ensures the effectiveness of the entire Board of Directors.

2

To strengthen risk management, continue
working closely with the Internal Oversight
Office, analyze internal oversight systems’ ability
to identify and address risks and incidents
that may arise, and formulate and implement
effective measures to prevent recurrence.

3

In implementing the Mid-Range Business Plan,
work closely with the Board of Directors andgroup companies toward achieving businessgrowth cohesively under the new group purpose:sustainable growth for more companies.

4

Continue to improve the quality of matters tabled
for discussion so as to make the Board of Directors’
advisory committees more effective. Take stock ofeach committee’s current set-up, cooperation, etc.

Corporate Governance

Ensure appointment of directors is consistent
with the skills and diversity required for theboard as a whole.

ESG

1

Director Training
The company pays expenses and conducts training for inside directors/executive officers, outside directors
and newly appointed inside directors/executive officers as follows in order that directors and executive officers
may fulfill their respective roles and responsibilities appropriately.

1 For Inside Directors and Executive Officers

2 For Outside Directors

The company improves the effectiveness of outside
directors’ supervisory capabilities through better
understanding of the business, based on deepening
their knowledge of the group and its business. This
includes outside directors’ participation in “groupcompany presentations on management policy”
and group company board meetings as appropriate.

Corporate Data

The company invites outside lecturers to
conduct training based on real examples, suchas violations of laws and regulations that wemay be susceptible to, illegal conduct that may
arise at the company, selection of M&A targets,
as well as points to consider for management
decision-making and management approaches
for subsidiary companies, including overseas
transactions.

Newly Appointed Inside Directors and
3 For
Executive Officers

The company offers opportunities for training
at external organizations to gain the minimum
knowledge required for directors on matters suchas laws, compliance and corporate governance.
72

Outside Directors’ Messages
Leveraging academic expertise to boost corporate value
long-term amid growing demand for sustainability
Bringing Solid Expertise to the Debate
An outside director is required by investors and otherstakeholders to fulfill two roles: protect corporate valueand help enhance corporate value. I fulfill these roles byadvising the board of directors on topics I have studied
in depth throughout my schooling and career, including
finance, ESG, and sustainability in management.
Recently, the relationship between financial value and
ESG has become a frequent topic of discussion, as inequity valuation in M&A and business integration deals.

Lively Debate by the Nominating Committee
and Sustainability Committee
I serve as chair of the Nominating Committee and sit on
the Sustainability Committee. Recently, the Nominating
Committee assisted with the selection of new outside
directors, and deliberated on director appointments
for group companies such as Funai Soken Digital andSeicho Senryaku, before making a recommendation to
the board. The Sustainability Committee discussed midrange sustainability targets, as well as TCFD disclosures
for the annual Securities Report. Moving forward, I hope

Nobuyuki Isagawa

Reappointed

Outside director
Bio & Concurrent Positions

to boost opportunities for dialogue between outside
directors and group company presidents as part of thedevelopment of the group management structure.
As part of our cohesive group management, my focus
is on helping the digital solutions business achieve solid

Apr. 1989

Joined New Japan Securities (now Mizuho
Securities)

outcomes. Hopefully, aggressive hiring and training ofApr. 1998

Assistant professor, Kobe University School ofBusiness Administration

synergies among group companies, and in turn generate

Apr. 2007

Professor, Kobe University Graduate School ofBusiness Administration

Jan. 2011

Outside director, Tasaki & Co.

Mar. 2016

Director, Funai Soken Holdings (current)

Apr. 2016

Professor, Graduate School of Management,
Kyoto University (current)

Mar. 2020

Outside director, Inbound Tech (current)

digital solutions staff will spark new customer value andfinancial value for the whole group.

Greater, More Sustainable Growth
Meeting investors’ expectations requires long-termvalue creation, and that means achieving ROE in excess
of cost of capital and raising the rate of sustainablegrowth. Currently, thanks to the efforts of executives andemployees throughout the Funai Soken Consulting Group,
ROE is indeed higher than cost of capital.
Meanwhile, climate change and human capital areareas of increasing concern. Simply releasing numerical
data will not be enough; sustainable management
we require careful examination and application ofquantitative and qualitative information.

73

Promoting DX and Helping Mid-scale Companies and
SMEs Become More Competitive
About the Funai Soken
Consulting GroupLong Experience in Marketing, DX, and Diversity
I bring to the Funai Soken Consulting Group experiencein BtoB marketing, DX, and diversity through the useof technology. My track record is particularly strong
in marketing, with numerous initiatives aimed at
improving corporate value in areas such as in sales and

Growth Strategies

branding. Digitalization is a core facet of the new MidRange Business Plan, and my role as outside director
will be to supervise and advise on its progress. Digitaltransformation is progressing apace overseas; in Japan,
larger corporations are on track but mid-scale companies
and SMEs are lagging. I hope that we can lead byexample and help mid-scale and SME clients boost

Value Creation Drivers

productivity and competitiveness by showcasing whatworks and what does not.

Group Purpose and Personal Purpose
Japan’s corporate community is currently striving todiversify its workforce by improving career paths for
women. To do so, eliminating unconscious bias isimperative; after all, innovation requires us to confront
New appointment

opinion and values. The group’s workforce is ideallyOutside director

suited for this: its overall youth and growing prevalence

Bio & Concurrent Positions

new challenges to overcome.

Joined Mitsubishi

Dec. 1994

Joined Gold Coast Technical Documentationof digital natives make it all the more likely to seek out
The Funai Soken Consulting Group Purpose is
the perfect guiding light for such enterprises. But to

Sep. 1998

Joined Microsoft Japan

understanding the company's purpose, individuals mustJun. 2001

Joined IBM Japanfirst know their own purpose. Considering your purpose

Apr. 2013

Rejoined Microsoft Japan as Senior Director ofEnterprise Marketing

helps organize your future, your career, and even yourJul. 2017

Senior Director, Partner Business andMarketing, Microsoft Japan

Apr. 2020

Joined Fujitsu as Corporate Executive
Officer & CMO

Apr. 2021

Corporate Executive Officer & CMO, Fujitsu

Apr. 2022

Corporate Executive Officer, EVP & CMO,

immediate tasks into a coherent path, and brings clarity
to your role within the collective effort to realize theGroup Purpose.

Corporate Data

Fujitsu (current)

Corporate Governance

Apr. 1987

ESG

Taeko Yamamoto

our norms and biases, and to seek ideas in diversity ofHarnessing SX for the Benefit of Society
The importance of sustainability in business thesedays has brought increased focus on sustainability
transformation (SX) as a means of tuning business tohave a more positive environmental and socioeconomic
impact. As outside director, I intend to harness thepotential of SX to help maximize the group’s impact onsociety.
74

Outside Directors’ Messages
Applying My Experience to Help Build a Brighter Future
Experience and Insights in Business
Management and Policy
Over thirty years at a financial thinktank, I have built up
a broad base of experience, including helping businesses
progress from environmentally friendly management to fullon ESG, and assisting with policy matters such as government
guidelines on management and disclosure. These days, mymain focus is strengthening corporate governance. As outside
director, my role is to encourage sustainable corporate growththrough objective oversight and advice. The changeability
and uncertainty in today’s business environment is partly due
to broader awareness of environmental and social issues, andI am determined to harness my experience and knowledge
in that area to help the group in its mission to help make abrighter future by supporting mid-scale companies and SMEs.

Disclosing ESG Data Strengthens GroupManagement
One of my roles is help strengthen the group's ESG
management. Increasingly stringent demands from society
concerning environmental and social issues raise the stakes
for businesses, who are expected to pursue sustainable

Tomomi Murakami New appointment
Outside director
Bio & Concurrent Positions
Apr. 1990

Joined Fujitsu Research Institute (now Mizuho
Research & Technologies)

Jul. 2017

Promoted to senior manager

Jul. 2019

Promoted to lead consultant

Jun. 2021

Senior manager at Board Advisors Japan, Inc.
(current)

development through flexible, resilient management without
losing sight of mid-to-long-range risks and opportunities.
Increased social pressure can also be seen in ESG
information disclosure rules, and I hope to contribute to thegroup’s ESG performance by ascertaining disclosure trends
and the expectations of shareholders, investors, and otherimportant stakeholders, and guiding the group toward better,more ESG-focused management.

Helping the Group Become a Cornerstone ofa Better, Brighter Future
The establishment of the Funai Soken Consulting Group
Purpose is a strong step toward sustainable growth andenhancement of corporate value. Given that the groupfocuses on supporting mid-scale companies and SMEs, which
employ 70% of Japan’s workforce, I believe the group is acornerstone of the nation’s quest to build a brighter future,and I support that mission wholeheartedly. Those companies
will be increasingly exposed to social and environmental
issues in the future, and I hope to play a part by working
with the Funai workforce toward making the Group Purposea reality and development better sustainability solutions forJapan’s smaller business community.

75

Caution in the Name of Robust Governance
About the Funai Soken
Consulting GroupA Correct Pay Ratio and Rewarding Wages
for All of the Group’s Employees
As a member of the Audit and Supervisory Committee, myrole is one of caution in the name of robust governance.
I work closely with the Internal Oversight Office andother departments to advise the board. I also chair theCompensation Committee, which evaluates executives’

Growth Strategies

pay from a shareholders’ perspective. Presently, we are
discussing improvements to the pay ratio; management
is eager that employees be rewarded appropriately, andI hope to keep executive compensation packages within
the bounds of correct human capital management. I also
advise on M&A deals and the post-merger integration

Value Creation Drivers

processes, and look forward to supporting the group’s
decision-making.

A Fine Balance of Daring and Caution
The group’s sustaining of double-digit growth is an
outstanding achievement by any measure. All the more so
because they did it with without compromising attention
to governance and risk management, as illustrated by aproactive approach led by the Risk Management Committee.
Reappointed

Outside director and Audit
and Supervisory Committee member

and for all its initiative and eagerness for progress, it isreassuring to see discussion of things like information
security and the acquisition of ISMS certification in 2023.
This, surely, is the solid foundation on which the group

Corporate GovernanceBio & Concurrent Positions

Indeed, the group has a fine balance of daring and caution,

ESG

Atsushi Nakao

can base its ongoing quest for sustainable growth.

Oct. 1991

Joined Ota Showa (now Ernst & Young
ShinNihon)

Jul. 1995

Joined Hongo Accounting (now Hongo Tsuji
Tax & Consulting)Nov. 2000

Director, Chuo CS Accounting (now CS
Accounting)Dec. 2005

Executive Vice President, CS Accounting

tasks will be taken over by digital technologies, soMar. 2013

Auditor, Funai Soken Holdings

companies must concentrate their human resources inMar. 2016

Director and A&S Committee member, Funai
Soken Holdings (current)

areas that leverage DX to generate value. Also, despite

Dec. 2019

President, CS Accounting (current)

A Corporate Culture that Underpins Strong Growth
How can businesses in Japan seek to grow when thenation’s labor force is shrinking by the year? Routine

Corporate Datathe lack of an established method for calculating humanvalue in accounting yet, companies should disclose theirinvestments in people, such as training expenses. More
importantly, though, they must build a culture around thequest for growth. In the Funai Soken Consulting Group’scase, this can be seen in the new Group Purpose and an
innate love of learning. I look forward to harnessing myrole of caution in the name of robust governance to help
propel the group to strong, sustained growth.
76

Outside Directors’ Messages
Safeguarding Growth Through In-depth, High-value
Communication
Healthier Communication by Outside Directors
Since 2016, I have served as outside director, using my expertiseas am attorney to overseeing group management as a memberof the Audit and Supervisory Committee. Swift, correct handlingof risks is a vital part of ongoing corporate growth, and the Funai
Soken Consulting Group does this well with a Risk Management
Committee that meets regularly and reports to the board of
directors. The board, meanwhile, is a forum of healthy debate,
where inside and outside directors can exchange views frankly.
The group’s ongoing advancement will be best served bymore in-depth communication aimed at creating value, forinstance by improving the criteria for matters to be tabled atboard meetings and through better communication by outside
directors. As chairman of the Governance Committee, I intend
to promote healthy dialogue with our new outside directors on
issues like supervision and execution of business, and teamwork
among the A&S Committee.

Group Purpose: A Bold Statement of Common Intent
The Funai Soken Consulting Group Purpose is the productof long discussion by the board of directors. My role was toprovide an outside perspective on the intent and wording, andAkihiro Kobayashi

Reappointed

Outside director and Audit
and Supervisory Committee member
Bio & Concurrent Positions
Apr. 1999

Called to the bar (Osaka Bar Association),joined Chuo Sogo Law OfficeNov. 2009

Partner, Kyoto Office, Chuo Sogo Law Office(current)

Apr. 2010

Part-time lecturer at Kyoto University Law
SchoolMar. 2013

Auditor, Funai Soken Holdings

Mar. 2016

Director and A&S Committee member, Funai
Soken Holdings (current)

Apr. 2017

Distinguished professor, Kyoto University Law
SchoolSep. 2019

Acquired certification as certified fraud
examiner

the result is a purpose that communicates the group’s raisond’etre in an appealing way.
Meanwhile, the new Mid-Range Business Plan setsambitious targets aimed at sustaining the group’s growth. In
keeping with Funai’s group management modus operandi,
further growth will require more development, not just by Funai
Consulting, the group’s core company, but by the whole entity.
The Group Purpose serves this enterprise well—a boldstatement of common intent encouraging closer team spirit in
the quest for shared goals.

Encouraging Initiative and Safeguarding Growth
The freedom of employees to pursue their work under theirown initiative is balanced by certain boundaries that form partof business practice. Leaking information, for instance, is oneof those boundaries; security risks are highly pertinent to theFunai Soken Consulting Group because incidents are likely toerode the hard-earned trust of our clients.
Some may see the law as merely a tool of restriction, but
no, the law is there to protect legitimate activity. I hope to
use my legal expertise as a means of encouraging employees’
initiatives and safeguarding the group’s growth.

77

Standing Audit and Supervisory Committee Member’s Message
A Post Uniquely Suited to Bolstering Group Governance
About the Funai Soken
Consulting Group

Balancing Cohesive Quality with Distinct CharacterIn addition to being a standing member of the Audit andSupervisory Committee, I also serve as auditor of the group’s
companies and attend their board meetings. My role to get afirsthand understanding of each company's situation, advise
management, and relay the companies’ views to HQ. Eachcompany is highly distinct, and comparing such different

Growth Strategies

companies helps to shed light on operational issues. I strive
to sustain a uniform baseline of operational quality while
respecting each company’s uniqueness. Close teamwork withstaff is imperative, and I stive to deepen communication
with colleagues in an effort to enhance group governance.

Value Creation Drivers

Closer Cohesion of A&S Committee andOutside Directors
The Funai Soken Holdings board has a majority of outside
directors to ensure objective oversight. The impartiality
the outside directors bring to proceedings ensures healthy
and productive debate. In addition, matters tabled atboard meetings are subject to progress management if
necessary, and I believe that the group’s adoption of valueoriented, “board 3.0” style governance (e.g., focus on topics
Reappointed

Director and Audit andSupervisory Committee member

Oct. 1988

Joined Funai

Jan. 1997

Administration Group Leader

Mar. 2003

President, Funai CapitalMar. 2011

Appointed Auditor

Jul. 2014

Auditor, Funai Consulting (current)

Mar. 2016

Director and A&S Committee member, Funai
Soken Holdings (current)

operations.
Moreover, while outside members of the Audit
and Supervisory Committee contribute proactively tocommittee discussions, it will become increasingly

Corporate GovernanceBio & Concurrent Positions

with impact on the bottom line) has improved the board’s

ESG

Masahiro Hyakumura

important to also include outside directors who are not
A&S Committee members, and we hope to create forums
outside of board meetings for such exchanges.

The Weighty Responsibility of a Voluntarily
Established RoleThe establishment of my post—standing member of the

Corporate Data

Audit and Supervisory Committee—despite there being nolegal requirement to have such a position, illustrates thecompany’s expectations, and my responsibility as part of thedecision-making mechanism weighs substantially. I endeavor
to strengthen group governance by keeping an accurate eyeon the group’s business and offering timely advice. Judicious
oversight of operations to ensure legality and appropriatenessis a service not just to the group’s enterprises, but to investors,
employees, and other stakeholders, and I look forward to
doing my best in this capacity.
78

Business Risks
Our Risk Management Framework
We have established a Risk Management

It consists mainly of directors, executive officers

Committee as a groupwide organization to manageand employees who manage major departments. It

crises including management of the risk of losses.

collects information from both inside and outside

The Risk Management Committee recognizes

the company, conducts risk analysis from various

the importance of identifying, evaluating, andperspectives and deliberates on and implements

managing risks that have a significant impact on

measures in response to risks. We have also

corporate management and business continuity,established other advisory organizations as deemed

and appropriately manages the risks surrounding

appropriate, including a Sustainability Committee

the group and seeks to prevent risks from arising,and a Governance Committee, thus helping tofor instance by identifying risks that require abolster group governance with access to advice

priority response and implementing specificfrom broadly experienced outside directors.

measures to deal with them.

Board of Directors
ReportInternal Oversight Office

ReportRisk Management Committee
Identify
high-priority risks

Preparation &response measures

ReportOversee risk readiness

Departments, group companies

79

Risks we face in the consulting businessPreventive measures

We strive to ensure a high degree of client satisfaction by collating insights gained during
day-to-day operations and using these to formulate new methodologies for analyzing clients’businesses and finding innovations.

About the Funai Soken
Consulting GroupRisk

In an industry already predicted to become even more intensely competitive, the increasing
gap between firms that can and cannot keep up with clients’ needs, including new demands
such as help with digital transformation, raises the possibility of an industry shake-up,
including new alliances and splits.

Over-reliance on consultants

Value Creation Drivers

Preventive measures

・We seek to secure high-potential talent by hiring aggressively, not just recent graduates but
also among those with career experience in other fields.
・We are revising our assessment systems so that compensation reflects individuals’
achievements more accurately.
・We strive to help women forge meaningful careers, e.g., by introducing frameworks that makeit easier to balance work with needs such as childcare.

Growth Strategies

Risk

・Failure to secure and develop the human resources we need may have an impact on ouroperations and business performance.
・The most talented consultants often have a desire to set up their own businesses. Losing
some of our most important talent may have a temporary impact on business performance.

Risks we face in other businesses

Preventive measures

・We will develop a talent pool for our logistics business with the skills to stay abreast ofindustry trends regarding ESG requirements.
・We will expand our share of the HR solutions market through marketing and pursue clientacquisition in a way that is not susceptible to the whims of the economy.

ESG

Risk

・While our logistics business contributes to clients’ improved business performance, thissegment is susceptible to demands for prompt roll-out of environmentally-considerate
solutions for entire supply chains in the name of ESG management.
・Our HR solutions business operates in a crowded industry susceptible to sudden declines incompetitive strength on price and service quality, and to national economic trends.

Information security risks

Preventive measures

Unforeseen circumstances may lead to incidents such as confidential information leaks,
violations of law relating to incorrect procedures for acquiring or handling personal
information, destruction or falsification of important data, and system disruptions.

Corporate GovernanceRisk

・We have a framework that ensures in-house rules are followed through thorough oversight of
information security regulations and their implementation.
・The importance of information management is ingrained in employees and officers throughinstilling our Five Principles of Information Security, adherence to the Information Security
Manual, and e-training.

Risk

Worsening business performance among our core clientele, Japanese SMEs, may have an
adverse effect on our ability to attract new consulting orders, while lost opportunities for neworders caused by restrictions on client acquisition and in-person sales activities may impact
the group’s business performance.

Preventive measures

To ensure we can continue our business in a pandemic, in addition to helping stop the spreadof infections, both inside and outside the group, we have established a framework that enables
us to continue business operations in pandemic conditions, including online seminars, remoteconsulting services, and working from home. We are also striving to restore clients’ businessperformance by supporting their efforts to ready themselves for the “new normal” of the postCovid era and stepping up digital transformation consulting services.

Corporate Data

Risks of longer, more widespread pandemics (e.g., Covid)

80Consolidated Financial KPIs 2012–2022
Key Performance Indicators*We adopted the ASBJ’s Accounting Standard for Revenue Recognition

2012

2013

2014

2015
(Million yen)

Statement of
IncomeNet sales

9,038

10,065

12,485

14,717Gross profit

3,290

3,630

4,340

5,092

SG&A expenses

1,035

1,004

1,348

1,595

Operating income

2,255

2,625

2,992

3,497

Net income attributable toowners of the parent*

1,325

1,984

1,766

2,426

*Net income figures are used for 2015 and before.
(Million yen)

Balance Sheet

Total assets

17,347

18,602

20,43722,260Net assets

14,456

15,912

16,653

18,217(Million yen)

Cash flow

Net cash provided by (used in)operations

1,753

1,975

2,889

2,008

Net cash provided by (used in)investments(1,631)(1,136)

(142)

671

Net cash provided by (used in)financing

(690)

(698)

(1,058)(1,181)

Cash and cash equivalents at
end of fiscal year

3,790

3,936

5,626

7,125
(Yen)

Per-share
indices

Earnings per share

26.18

39.13

34.77

47.83

Dividend per share

14.4

16.1

17.8

20.0

Net assets per share

285.17312.41

325.25356.05*Common shares in Funai Soken Holdings were split twice in recent years: at a ratio of 1.2-for-one on January 1, 2016, and at a ratio of
the beginning of FY2012.
(%)

24.9

26.1

24.0

23.8

9.4

13.1

10.9

14.0

Ratio of ordinary income to

13.1

15.0

15.5

17.3

Equity ratio

83.2

85.3

81.1

81.3

Dividend payout ratio

55.2

41.2

51.1

41.8

Closing share price at end of
fiscal year*

298

467

549

1,152

Price earnings ratio (PER)

11.4

11.9

15.8

24.1

Operating margin
Return on equity (ROE)

Financial KPIs total assets (ROA)

Stock
information*Common shares in Funai Soken Holdings were split twice in recent years: at a ratio of 1.2-for-one on January 1, 2016, and at a ratio of 1.5-forconducted at the beginning of FY2012.

Workforce81

Employees
Avg. no. of temporary employees

526

565

682

783

44

49

56

41

(ASBJ Statement No. 29; Mar. 31, 2020) from the start of FY2022, and have applied the standard retroactively to FY2021’s KPIs herein.

2016

2017

2018

2019

2020

2021

2022
(Million yen)

18,685

21,69725,75225,027

22,81625,635

5,743

6,888

7,654

8,780

8,000

9,310

10,150

1,883

2,256

2,708

3,075

3,018

2,951

3,049

3,859

4,631

4,946

5,705

4,982

6,358

7,100

2,558

3,206

3,549

3,868

3,498

4,378

4,990

About the Funai Soken
Consulting Group

16,433Growth Strategies(Million yen)

22,86225,65026,732

28,41927,95130,92833,01019,272

21,624

22,37023,16523,68825,71027,700(Million yen)

3,950

3,554

4,522

3,515

5,214

5,000

412

(982)

(222)

(500)

263

(219)

348

(1,689)(1,176)(2,762)(3,411)(3,194)(2,547)(2,996)

8,663

10,455

11,022

11,63012,216

14,675

17,031

Value Creation Drivers

2,813

(Yen)

63.37

69.95

76.67

70.32

88.67

100.92

24.0

30.0

35.0

40.0

45.0

48.0

55.0

378.44421.29435.56453.48465.60505.52546.31ESG

50.41

1.5-for-one on January 1, 2018. For the purposes of this section, per-share indices are calculated as if the stock splits had been conducted at

24.8

22.8

22.2

19.9

27.9

27.7

13.8

15.9

16.4

17.4

15.3

18.2

19.2

17.1

19.3

19.1

21.3

18.1

21.9

22.5

83.5

83.3

82.2

79.4

82.4

80.7

81.7

47.6

47.3

50.0

52.2

64.0

54.1

54.5

1,224

2,524

1,642

2,481

2,521

2,616

2,718

24.3

39.8

23.5

32.4

35.9

29.5

26.9

Corporate Data

23.5

Corporate Governance(%)

one on January 1, 2018. For the purposes of this section, closing share price at end of fiscal year is calculated as if the stock splits had been

873

941

1,105

1,209

1,303

1,317

1,382

31

37

41

37

68

52

63
82

Consolidated Financial Statements
Consolidated Balance Sheet
2021(Thousand yen)

2022

AssetsLiabilities

Current assets

Current liabilities

2022

Cash and deposits

14,675,155

17,031,407

Trade notes and accounts
payable535,623552,314

Trade notes and accounts
receivable, contract assets

3,300,636

3,767,959

Short-term loans payable

200,000

200,000

Short-term investment
securities

100,000

408,150

Current portion of longterm loans payable

100,000－

Work in process

127,853

158,767

Other accounts payable

1,362,113

1,651,677

Raw materials and supplies

10,986

8,935

Income taxes payable

1,325,288

1,252,738

Other current liabilities

1,530,051

1,410,292

Other current assets

875,363

950,725

Total current liabilities

5,053,076

5,067,022

Allowance for doubtful
accounts(40,657)(42,610)

19,049,337

22,283,334－

100,000

Retirement benefit
liabilities

69,872

71,994

Deferred tax liabilities

47,164

2,804

Other noncurrent liabilities

47,05067,989Total noncurrent liabilities

164,087242,788

5,217,163

5,309,811

Capital stock

3,125,231

3,125,231

Total current assets
Noncurrent assets

Property, plant, and equipment
Buildings and structures,net

1,195,629

1,111,950

Land

4,596,717

4,596,717

Other property, plant, andequipment, net

124,850

105,132

Total property, plant, andequipment

5,917,197

5,813,800

Noncurrent liabilities
Long-term loans payable

Total liabilities
Net Assets
Shareholders' equity

Intangible assets
Leasehold rights

322,400

322,400

Capital surplus

2,946,763

2,955,094

Software298,339392,655

Retained earnings

22,688,431

25,108,389

Other intangible assets

84,678

115,647

Treasury shares(3,826,322) (4,100,171)

Total intangible assets

705,418

830,704

Total shareholders’ equity

24,934,103

27,088,544

Accumulated other comprehensive income

Investments & other assets

83

2021

Investment securities

4,241,507

3,101,525

Valuation difference on
available-for-sale securities

76,85919,755

Assets related toretirement benefits

540,005395,287

Foreign currency translation
adjustments

23,992

27,299Other investments andother assets

481,471592,068

Accumulated adjustments
for retirement benefits(72,760)(182,338)

Allowance for doubtful
accounts(6,929)(5,997)

Total accumulated othercomprehensive income

28,090(135,282)

Total investments andother assets

5,256,055

4,082,883

Subscription rights for shares

748,651

747,650

Total noncurrent assets

11,878,671

10,727,388

Total net assets

25,710,846

27,700,911

Total assets

30,928,009

33,010,723

Total liabilities and net
assets30,928,009

33,010,723

Consolidated Statement of Income(Thousand yen)

2021

2022

Net sales

22,816,130

25,635,207

Cost of sales

13,505,787

15,484,845

Gain on sales of noncurrent
assets16－

Gross profit

9,310,343

10,150,361

Total extraordinary income

16－

SG&A expenses

2,951,826

3,049,490

Operating income

6,358,516

7,100,871

3,576

2,179

－

40,09010,935

16,987

9,339

－

2022

Extraordinary income

Extraordinary losses
Loss on sales of noncurrent
assetsLoss on retirement of
noncurrent assets
Loss on revision ofretirement benefit plan

15,867

Dividend income

6,997

8,057

38,554

11,850Total extraordinary losses

23,851

59,256

2,086

8,228

Net income before income
taxes and other adjustments

6,424,984

7,138,540

Insurance bonus income

33,76831,938Current income taxes

2,083,037

2,191,247

Other non-operating
income28,25039,213

Deferred income taxes(36,876)(42,996)

Total non-operating income

131,191

115,155

Total income taxes

2,046,160

2,148,251

Net income

4,378,824

4,990,289

Net income attributable toowners of the parent

4,378,824

4,990,289

Non-operating expenses

1,350

－

2,738

2,269

Foreign exchange losses

3,566

4,484

Contributions

25,500

1,000

2,799

3,152

40,88818,2296,448,819

7,197,796

Loss on valuation of
investment securities
Investment partnershipmanagement expenses

Other non-operating
expenses
Total non-operating
expenses
Ordinary income

Corporate Governance

7,322

ESG

4,933

Interest expenses

Consolidated Statement of Comprehensive Income
2022

4,378,824

4,990,289

2021

2022

4,441,722

4,826,915

4,441,722

4,826,915

Details

Other comprehensive income
Valuation difference on
available-for-sale securities
Foreign currency translation
adjustments
Adjustments for retirement
benefits
Total other comprehensive
incomeComprehensive income(Thousand yen)

Corporate Data

Net income

2021

Value Creation Drivers

21,532Growth Strategies

Impairment losses

Interest income

Gain on sales of investment
securities
Gain on valuation of
investment securities

About the Funai Soken
Consulting GroupNon-operating income

2021

1,617

(57,103)

6,917

3,307

54,362(109,577)

62,897(163,373)

Comprehensive income
attributable to owners of theparent84

Consolidated Financial Statements
Consolidated Statement of Changes in Net Assets
FY12/21 (Jan. 1 – Dec. 31, 2021)
Balance at start of fiscal year

Capital stock

3,125,231

Capital surplus Retained earnings Treasury shares

2,946,634

20,565,065

Total shareholders’ equity(3,560,378)

23,076,553(3,560,378)

23,095,283

18,729Cumulative effect of changes in accounting policies
Restated balance(Thousand yen)

Shareholders' equity

3,125,231

2,946,634

20,583,794

18,729ChangeDividends from surplus(2,274,187)

Net income attributable to owners of the parent

4,378,824(2,274,187)
4,378,824

Purchase of treasury shares

128

Disposal of treasury shares(266,079)(266,079)

134

263

Net changes of items other than shareholders’ equity

ー128

2,104,636(265,944)

1,838,820

3,125,231

2,946,763

22,688,431(3,826,322)

24,934,103

Total changes of items during the fiscal year
Balance at end of current fiscal year

Accumulated other comprehensive income

FY12/21 (Jan. 1 – Dec. 31, 2021)
Balance at start of fiscal year

Valuation difference Foreign currency
Accumulated
Total accumulated
on available-for-saletranslation
adjustments for other comprehensive
securities
adjustments retirement benefits
incomeSubscription
rights forshares75,241

17,074(127,122)(34,806)

646,669

23,688,416

75,241

17,074(127,122)(34,806)

646,669

23,707,145

18,729Cumulative effect of changes in accounting policies
Restated balance

Total net
assetsChangeDividends from surplus(2,274,187)

Net income attributable to owners of the parent

4,378,824

Purchase of treasury shares(266,079)
263

Disposal of treasury shares
Net changes of items other than shareholders’ equity

1,617

6,917

54,36262,897

101,982

164,879

Total changes of items during the fiscal year

1,617

6,917

54,36262,897

101,982

2,003,700

Balance at end of current fiscal year

76,85923,992(72,760)

28,090748,651

25,710,846

FY12/22 (Jan. 1 – Dec. 31, 2022)
Balance at start of fiscal year

Shareholders' equity
Capital stock

3,125,231

Capital surplus Retained earnings Treasury shares

2,946,763

22,688,431

Total shareholders’ equity(3,826,322)

24,934,103

ChangeDividends from surplus(2,570,330)

Net income attributable to owners of the parent

4,990,289(2,570,330)
4,990,289

Purchase of treasury shares

8,331

Disposal of treasury shares(402,959)(402,959)

129,111

137,442

Net changes of items other than shareholders’ equity

ー

8,331

2,419,958(273,848)

2,154,441

3,125,231

2,955,094

25,108,389(4,100,171)

27,088,544

Total changes of items during the fiscal year
Balance at end of current fiscal year

Accumulated other comprehensive income

FY12/22 (Jan. 1 – Dec. 31, 2022)
Balance at start of fiscal year

Valuation difference Foreign currency
Accumulated
Total accumulated
on available-for-saletranslation
adjustments for other comprehensive
securities
adjustments retirement benefits
income76,85923,992(72,760)

28,090

Subscription
rights forshares748,651

Total net
assets

25,710,846

ChangeDividends from surplus(2,570,330)

Net income attributable to owners of the parent

4,990,289

Purchase of treasury shares(402,959)
137,442

Disposal of treasury shares85

Net changes of items other than shareholders’ equity(57,103)3,307(109,577)(163,373)

Total changes of items during the fiscal year
Balance at end of current fiscal year

(1,001)(164,375)(57,103)3,307(109,577)(163,373)(1,001)

1,990,065

19,75527,299(182,338)(135,282)

747,650

27,700,911

Consolidated Cash Flow Statement
2021

2022

2021

2022

Net cash provided by (used in) investments

240,553

311,651－

40,090

Amortization of goodwill

23,442

23,442

Share-based compensation
expenses

101,982

136,335

Increase (decrease) inallowance for doubtful accounts(10,489)

1,021

Decrease (increase) in assets
related to retirement benefits(22,580)

35,140

Increase (decrease) in
retirement benefit liabilities

1,783

2,122

Loss (gain) on valuation of
investment securities(735)(8,228)Loss (gain) on sales ofinvestment securities(38,554)(11,850)

Payments of leasehold andguarantee deposits
Proceeds from refund ofleasehold and guarantee
deposits
Other cash provided by(used in) investments

Interest and dividend income(28,530)(23,924)

Net cash provided by (usedin) investments

Interest expenses

4,933

7,322

Loss (gain) on exchange

3,307

18

Proceeds from long-termloans payable－

100,000

Contributions

25,550

1,000

Repayment of long-termloans payable－(100,000)

Loss (gain) on sales ofproperty, plant, and equipment

3,559

2,179

Repayment of leaseobligations(9,103)(26,666)

Loss on retirement of property,
plant, and equipment

2,516

16,987Purchase of treasury stock(266,222)(403,179)

263

105

(2,272,285)(2,566,314)(2,547,348)(2,996,055)

11,4183,050

2,458,736

2,356,251

Impairment losses

Purchase of intangible assets

304,615

100,000(724,985)(399,437)

416,8121,013,565(63,237)(53,170)(155,336)(302,877)

－

9,291

－

(32,300)－

13,1712,366

109(219,766)

348,352

Proceeds from cancellationof insurance funds

Net cash provided by (used in) financing(476,494)(459,100)(474,439)(567,494)

Increase (decrease) in otherliabilities

477,767

132,750

5,078

5,741

Net cash provided by (usedin) financing
Effect of exchange ratechanges on cash and cash
equivalents
Increase (decrease) in cash
and cash equivalents

6,272,053

6,783,743

Cash and cash equivalents atstart of fiscal year

12,216,419

14,675,155

Interest and dividends
received

42,901

38,297

Cash and cash equivalents at
end of fiscal year

14,675,155

17,031,407

Interest paid

(4,937)(7,383)

Subtotal

Income taxes paid

(1,610,671) (2,264,080)

Income tax refunds

540,635

451,326

Contributions paid

(25,550)(1,000)5,214,432

5,000,904

Net cash provided by (usedin) operations

Dividends paid

Corporate Data－

Corporate Governance

8,419

ESG

Proceeds from sale oftreasury shares

Loss on retirement ofintangible assets
Decrease (increase) in tradenotes and accounts
receivable and contract assets
Decrease (increase) in otherassetsOther cash provided by(used in) operations

Value Creation Drivers

7,138,540

Growth Strategies

Proceeds from sale andredemption of short-term
investment securities
Purchase of investment
securities
Proceeds from sale andredemption of investment
securities
Purchase of property, plant,
and equipment

6,424,984

Depreciation

About the Funai Soken
Consulting GroupNet cash provided by (used in) operations
Net income before income
taxes and other adjustments(Thousand yen)

86

The Funai Soken Consulting Group Network (as of Jan. 4, 2023)
Consulting

Logistics

Funai Consulting Inc.

Funai Soken Logistics Inc.

President and CEO: Daisuke Shingai

President: Shigehiro KanManagement consulting

Logistics solutions

Incorporated: Nov. 28, 2013 (founded Mar. 6, 1970)

Incorporated: May 10, 2000

Capital: 3,000 mil. yen

Capital: 98 mil. yen

Proseed Corporation
President: Naoki Nemoto

Digital Solutions

Contact center consulting
Incorporated: Jun. 24, 1991

Funai Soken Digital Inc.

Capital: 100 mil. yen

President: Hitoshi Nagira
Digital solutions

Funai Consulting Shanghai Inc.

Incorporated: Nov. 28, 2013

President: Kyohei Deguchi

Capital: 50 mil. yen

Representative director: Lang Luyuan
China-based consulting
Incorporated: Jan. 13, 2012

HR Force Inc.

Investment: 50 mil. yen

President: Yasuko Murata
HR solutions

Funai Soken IT Solutions Inc.

Incorporated: Feb. 1, 2018
Capital: 64 mil. yen

President: Naoki Nishiyama
IT consulting
Incorporated: Feb. 1, 2000
Capital: 60 mil. yen

Seicho Senryaku Inc.
President: Yoshihito Sugahara
Management consulting
Incorporated: Jan. 4, 2011
Capital: 2 mil. yen

External Certifications, Awards, Etc.
Toyo Keizai Inc.

CSR Company Hand Book

Selected for inclusion in the JPX-

2022 Women in Management

Nikkei Mid and Small Cap Index

Rankings: We ranked 14th in JapanJQA-IM1889

Funai Soken Digital certified Jun. 3, 2022

2022 (Aug. 31, 2022 – Aug. 30, 2023)
Chosen by the Government Pension
Investment Fund as the Most
Improved Integrated Report
Signed up to the UN Global
Compact (Apr. 2023)

87

Funai Consulting

Funai Soken Digital“L-Star” certified as a proactive

JQA-IM1979

Funai Soken Holdings certified Feb. 24, 2023

provider of career opportunities for

Funai Soken Holdings andwomen (Funai Consulting 2 stars;

Funai Soken Digital acquired

Funai Soken Digital 3 stars)

ISMS certification

Corporate Overview & Stock Information
Corporate Overview
Name

Stock Information

Funai Soken Holdings Inc.

Tokyo Stock Exchange Prime
MarketStock code

9757

Major roles

Business year

Jan. 1 to Dec. 31

AGM

Mar.

Share unit

100 shares

To serve as the group holding
company, compile group strategies,
and handle group management
Mar. 6, 1970

Capital3,125 mil. yen

Address

Osaka HQ: 4-4-10 Kitahama,Chuo-ku, Osaka

Number of shares
130,000,000
authorized for issueTokyo HQ: 21st floor, Nihon Seimei
Marunouchi Bldg.,
1-6-6 Marunouchi,
Chiyoda-ku, Tokyo
Consolidated subsidiaries

8 (as of Jan. 4, 2023)

Group employees

1,382

Share price (yen)49,337,034 (excl. 3,162,966
treasury shares)

Shareholders

13,785

Record date fordividends

Jun. 30, Dec. 31

Shareholder Categories
Trading vol. (1,000 shares)

3,000

6,000

4,500

2,000

3,000

1,500

1,500

Financial institutions

Treasury shares

27.85％
（28）

6.02％
（1）

Individuals,
othersFinancial
instrumentbusinesses

31.11％（13,435）

1.26％
（27）

Foreign corporate
Mar. 2022

Jun. 2022

Sep. 2022

0Dec. 2022

ESG

2,500

0
Jan. 2022

Value Creation Drivers

Share Price & Trading Volume

Total number ofshares outstanding

Growth Strategies

Incorporated

About the Funai Soken
Consulting Group

Representative Takayuki Nakatani, president andgroup CEO (since Mar. 25, 2023)

Stock exchange
listing

Other corporate

22.00％（189）

11.76％（105）

Corporate GovernanceTop 10 Shareholders
Name

Stake (%)

The Master Trust Bank of Japan, Ltd. (Trust Account)

6,156

12.48

Funai Honsha Inc.

5,026

10.19

NORTHERN TRUST CO. (AVFC) RE FIDELITY FUNDS

3,062

6.21

Custody Bank of Japan, Ltd. (Trust account)

2,217

4.49

Sumitomo Mitsui Banking Corporation

1,952

3.96

SSBTC CLIENT OMNIBUS ACCOUNT

1,353

2.74

Kazuko Funai

1,307

2.65

Nippon Life Insurance Company

1,062

2.15

Katsuhito Funai

1,056

2.14

TAIYO FUND, L.P.

1,044

2.12

Corporate Data

Shares owned (×1,000)

Treasury shares (3,162,000) are excluded when calculating holding percentages.

88Please direct inquiries to:
Corporate Communication Office, Sustainability Office
Funai Soken Holdings Inc.
https://hd.funaisoken.co.jp/en/contact/
Scan the QR code to go straight to the inquiries form.