Introduction

Interview
with Outside Directors

Value Creation Story

Mariko Sugiyama and Eri Nakajima, appointed as outside directors
in June 2022, were interviewed on behalf of IDEC employees by Yuki
Takahashi, General Affairs & Legal Group Manager for the Strategic
Planning Division, and Rieko Motoyama, Manager of the Corporate
Communication Department.
The interview took place in the head office’s courtyard and focused on
the two directors’ impressions of IDEC and their thoughts on some key
challenges going forward—human capital, DX, and environmental action.

Business Strategy

The “Forest of IZUMI” area of the head office’s
courtyard was certified in 2023 as a green
space under the SEGES OMA program ofthe Organization for Landscape and Urban
Green Infrastructure.

Outside Director

Mariko Sugiyama

Outside Director(Audit & Supervisory Committee Member)

Eri Nakajima

P.46

and needs. The manufacturing industry’s workplace culture
was built up by men and remains an atmosphere. However, ifmanufacturers develop a culture that puts women in managerial
positions and empowers them to exercise leadership in theirown style, I think that the number of women who can play activeroles will grow. Women’s empowerment and diversity should bepositioned as bigger priorities in management strategy.

Sugiyama IDEC’s willingness to embrace new things andto take on challenges without fearing change ran counter tothe image I had of the manufacturing industry. I think that’s
because the management has that sort of vision. The Boardof Directors meetings aren’t rubber-stamp gatherings. Instead,
everyone frankly expresses their thoughts. The management
listens carefully and I really gain new insights with each meeting.
Nakajima I have the same impression. I strongly sensethat everyone—from the CEO to the staffs—is passionate about
taking on new things like DX and environmental and societal
challenges and about staying ahead of the changing needs ofthe times. The Board of Directors has a climate that encourages
everyone to speak freely. I think that it’s wonderful to have such anenvironment where corporate matters can be discussed candidly.

Sugiyama I think that those initiatives will gain momentum as
leaders—not just top management but also worksite managers—
acquire a better understanding of the significance and value thatdiversity has for the company, and as they strive to promotediversity. I believe that IDEC should powerfully communicate
the message that it can provide customers with better value
by developing the same balance of diversity as found in society
and customers’ organizations. I also feel that it is vital for thoseinitiatives to be more strongly driven by an understanding of thesignificance of diversity, rather than by just the uniform opinionof people above a certain age.
Nakajima I agree. I’d like to see the company cultivate anenvironment where all employees, both women and men, canstay motivated and work in a way attuned to their aspirations

How do you feel about IDEC’s talentdevelopment efforts?
Sugiyama Digital transformation requires creativity, so it’s
important to equip your people with thinking skills like design
thinking and logical thinking. I think that one effective approachto talent development is to map out each person’s skills—for
example, you could plot the common skill set for internalizing
the core values of “The IDEC Way” on the horizontal axis, andthe specific technical skills needed for the job on the verticalaxis—and then provide systematic training that targets theweaknesses identified.

Interview with Outside Directors

Data

IDEC Report 2023

Governance

As a recent trend, businesses are
expected to take action to empower
women and invest in human capital.
What’s your take on IDEC’s initiatives
in these areas?

Foundation For Value
Creation

Almost one year has passed since you
became outside directors.
What are your impressions of IDEC as
a company and the Board of Directors’
atmosphere?

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easier to integrate management strategy and environmental
strategy.

Are there any other actions that you
want IDEC to take for the future?
Sugiyama A key step toward increasing your corporate
value is to build up your people’s expertise, so I think that IDEC
should pursue strategic job rotation that provides employeeswith greater opportunity to gain new experiences. This would
also help strengthen cross-functional ties, as employees get tolearn about what other departments do.
Nakajima The head office has a courtyard whereemployees can stop by, and I think IDEC should create similar
green spaces at its factories as well, as one way of advancing
environmental action while also improving productivity. This
would also contribute to the local community’s biodiversity. I
would like for IDEC to develop its workplace environments inways that enable employees to take greater pleasure in their jobs.
Sugiyama & Nakajima We both would like to haveopportunities to get together with employees for laid-backchats over coffee, so that we could hear their honest opinions
about various issues and find out what things excite them. IDEC
appointed us as outside directors even though we don’t have abackground in manufacturing. In a sense, we think that decision
reveals an IDEC that is seeking to transition to its next turning
point. That’s why we think that we could be of greater service
to IDEC if we more broadly and openly gain a better picture ofthe company and its people.

Governance
DataInterview with Outside Directors

Foundation For ValueCreation

IDEC Report 2023

Sugiyama One of the really big needs now for strengthening
a business’s foundation is to enhance the accuracy of its
forecasting of things like demand and available-to-promise
inventory. The next important step after that, I think, is todetermine how to link your accumulated data within the value
chain. Another concern for businesses going forward is figuring
out how to successfully exploit AI as Japan’s population shrinks.
I don’t think that we can move to the next level of humanmachine coexistence by going through digital transformation
processes where people end up doing the same things they
were doing before. Instead, we need to ascertain what things
can be accomplished through AI and how value can be added
to them through human activity.
Nakajima In terms of environmental challenges, I thinkthat IDEC should work on moving away from the use of plastic,
which makes up a significant proportion of the material usedin switches. Reducing this type of plastic may not have a big
impact on the oceans compared with the reduction of singleuse plastics, but I believe that finding cost-effective plastic
substitutes is an important challenge, including with regard
to decarbonization. Another challenge that should be tackled
is assessing the impact of climate change on the company’sfinancials. This is something that investors look at, and I think that
establishing a clear relationship between environmental initiatives
and improvement of the company’s profitability would make it

Business Strategy

Sugiyama IDEC’s medium-term management strategy
shows a strong commitment to increasing profitability, but
the company cannot make sound decisions without a global
perspective of the whole organization. For example, when dealing
with procurement or inventory challenges through optimization
on a company-wide level rather than a limited basis, you can gainmuch from the insights and precision that digital transformation
provides. Digital technology enables you to rapidly evolve yourWhat challenges do you think IDEC
should work on harder?

Value Creation Story

IDEC has turned to both of you toshare your experience and insights
regarding the key challenges of digitaltransformation and environmental
strategy. What sort of role do you want
to play in addressing those challenges,
and how do you want to leverage yourprofessional expertise?

work processes in a short time. In fact, in many cases you’ll
gain access to a wider set of options after just a year. I see thisas an area where I can input my expertise.
Nakajima I think that IDEC as a whole, including the functions
in charge of environmental measures, is taking a forward-thinking
approach to environmental challenges. The Board of Directors’
recent discussion of TCFD gave me the sense that IDEC’s own
people are carefully analyzing the related issues instead of relying
on outside consultants, and that the company’s environmental
initiatives are being advanced not just by the environmental teams
but also with the involvement of other functions. I would like for
IDEC’s messaging to spotlight the fact that its efforts addressing
environmental challenges and other SDGs aren’t just one elementof its contributions to society, but represent an integral part of thestrategic development of its business.

Introduction

Nakajima One impression that I’ve gotten from the reports
I read as a member of the Audit & Supervisory Committee isthat IDEC’s administrative functions should be beefed up alittle more. I think that as a group with many companies under
its wing, IDEC needs to strengthen its pool of talent who can
support the administrative processes of subsidiaries. It would
be a good idea for the company to strategically develop people
who have a cross-functional perspective that enables them totake a bird’s-eye view of many different departments.

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