NITORI Group’s Sustainability

NITORI Group’sE SGSGDiscussion with Female Directors

In this dialogue, Outside Director Naoko Yoshizawa and Director Hiromi Abiko, who took office lastyear as the first female directors of NITORI Holdings, discuss the work of the NITORI Holdings Boardof Directors, sustainable growth of NITORI Group, and women’s active participation.
*Masks were removed only when photographs were taken.

It’s been one year since your appointment
as directors of NITORI Holdings. At theoutset, please share your frank opinionsand impressions of the Board of Directors.
Yoshizawa: To start with the fundamentals, frankly
speaking, my impression is that essential and important
discussions on management are taking place. I believe thatthe board meetings are almost ideal, with outside directors
actively expressing their opinions and executive directors
sincerely responding to those opinions. On the other hand, I
would like to hear more opinions from the inside directors.
Even though there has been sufficient internal discussion,
not all proposals are submitted to the Board of Directors
unanimously. I would also be interested to hear thedissenting voices. Taking human resources development as
an example, I would like to hear the opinions of directors
other than the director responsible for human resources
development. I believe that bidirectional exchange ofopinions between outside and inside directors will further
stimulate discussion at Board meetings. Nevertheless, as I
mentioned at the beginning, I believe that our Board ofDirectors engages in in-depth discussion from theperspective of how best to keep the company moving in theright direction. I feel this is why NITORI has achieved 35

consecutive years of sales and profit growth. Over andabove that, NITORI is oriented toward further advancement,eager to identify what should be the focus of our efforts.
Abiko: On becoming a director, I soon appreciated thevantage point from which directors do their work. My efforts
to attain a similar perspective have enabled me to broaden
my horizon considerably. In addition, I always learn from theoutside directors whose views have developed in the courseof careers not only in management but also as professionals
in specialist fields. We, inside directors, always discuss
themes such as the cost-effectiveness of new businesses
and store openings. Outside directors are more focused on
fundamental issues. Their questions and opinions tend toreflect a medium- to long-term perspective, such as the kindof company NITORI should strive to be and how we canmost effectively contribute to the community. I think this is allvery positive for NITORI. Through fruitful exchanges withoutside directors, I became aware that excessive
preoccupation with short-term tasks can impede our ability
to grapple with fundamental issues. In fact, I take notes on
every question asked by outside directors. I have been trying
to write down every single word and I am already on my fifthnotebook. It’s been a year of great change for me. I amgrateful.

What is the perspective informing yourcontributions at Board meetings? Is there
anything in particular that you keep inmind?
Yoshizawa: I believe that the proposals explained at Boardmeetings have already been fully discussed internally fromthe company’s perspective. So, as much as possible, I lookat them with a critical eye. For example, I try to comment
from the diverse perspectives of stakeholders such as
customers, employees, investors, and shareholders. I am
not especially conscious of adopting a female perspective.
But the perspectives of female customers and employees
are naturally woven into my opinions, which I hope will leadto insights during discussion. When the topic of N+ apparelfirst came up at a Board meeting, my knowledge of N+ wassketchy. But I am among the main target customers of N+.
So, if I don’t know much about N+, it means there is a needto strengthen the marketing of N+. I was able to naturally
point out an issue from a woman’s perspective.
Abiko: Likewise, I am not particularly conscious of being awoman when expressing my opinions. Among the membersof the Board of Directors, I see myself as someone whoshares the viewpoints of customers and employees. I try toimagine their lifestyles and if I feel something isn’t right froma commonsensical point of view, I don’t hesitate to say so.
When we discuss business and how to make a profit, I liketo express my views from a different perspective, looking atthings as if I were a customer or an employee.

Group can accurately communicate what kind of synergies it
wants to achieve through M&A or when forming alliances.
This is great.
Abiko: On the issue of sustainable growth, I think the SDGs
merit the most serious attention. This view partly reflects myresponsibility for the promotion of the SDGs. Since we
handle furniture, the setting of standards for timber
procurement, treatment of collected post-use furniture, andvarious other matters are important issues for us.
Nevertheless, I believe the development of recyclingoriented products can be a source of strength for NITORI,
enabling us to make a valuable contribution to society. The
problem is that initial costs are high, but we hope to apply
NITORI’s signature approach to the SDGs—start small,accumulate results, and then expand rapidly.
Yoshizawa: Revision of the Corporate Governance Codelast year has transformed sustainability issues, previously
viewed simply as risks, into major management issues thatshould be addressed as profit opportunities. This is alreadyhappening at NITORI. For example, last year NITORI
developed easy-to-sort pocket coil mattresses, which not
only alleviated risk related to sustainability issues but also
led to a profit opportunity because of the launch of productswith features attractive to consumers. I feel that NITORI
should do more to publicize such initiatives.

In terms of NITORI Group’s sustainablegrowth, what do you think is the biggest
challenge?
Yoshizawa: I believe business expansion strategies such as
M&A will become essential for sustainable growth. And to
make M&A successful, we need to think specifically about
how to achieve synergies. How should we proceed withintegration in terms of not only product strategy but also
manufacturing, logistics, and IT systems? I have heard ofcases where the attempt to integrate different IT systems
ended up costing more than the acquisition itself, and theacquisition eventually failed. It’s important to detect suchproblems in advance while still being able to achievesynergies. You ask about challenges and this may not be
one, but what I find most impressive about NITORI Group isthat it has a clear mission and vision that are unwaveringand quantifiable. Since its stance is crystal clear, NITORI

Naoko YoshizawaOutside Director5354

NITORI Group’s Sustainability

Hiromi Abiko
Director

In promoting digital transformation (DX)from now on, what are the challenges for
NITORI Group?
Yoshizawa: My impression is that NITORI Group is taking
action in terms of mechanisms to promote DX, such as byestablishing a new company to secure IT professionals. I
feel that we should deepen the discussion on the substanceof the issue. DX refers to a thoroughgoing transformationthat fundamentally changes the entire business. In fact, I
think NITORI has achieved transformations of this order
several times in the past. Whether digital or not, NITORI has
implemented these transformations. At present, I feel that
we are at the stage of discussing the introduction ofmechanisms to realize the goals of the medium- to long-term
strategies. If we consider these medium- to long-term
strategies synonymous with NITORI’s transformation, then I
believe the discussion on NITORI’s DX is moving in the right
direction. However, while NITORI is vigorously tackling DX, it
is not publicizing its DX initiatives to the world. It is similar tothe situation concerning NITORI’s SDG initiatives. I get theimpression that NITORI has yet to clearly communicate its
DX strategy. I think that NITORI should publicize its DX
strategy by emphasizing the specific value it intends tocreate through the achievement of medium- to long-term
strategies by capitalizing on digital technology.

What challenges do you see for NITORIGroup’s human resources development?
Abiko: A source of dissatisfaction and anxiety for
employees, especially the younger generation, people intheir 20s and 30s, is the lack of a clear view as to where
their careers are headed. On the other hand, they think about
where they want to be in 10 years and are eager to make55

NITORI Group’sE SGSG

efforts to approach their goals. Recognizing their aspirations,
I would like to put in place an educational system that will
help them achieve their goals. I am in charge of educationcommon to the entire company, mass education in otherwords. I am endeavoring to clarify possible career paths interms of how employees who have received mass education
apply their skills in specialized roles at departments and link
their experience to the achievement of their career goals. I
would like to show our employees concrete career options bycreating career role models. What kind of systems will ouremployees create who have received mass education andadvanced into specialized fields? I want our employees to beable to create systems that change the way we work at thefrontline, reducing their burden, making work more enjoyable,
and facilitating problem-solving through an initiative at thefrontline. Education does not end with deciding on thecontent of training, gathering participants, and conducting thetraining. We need to envision how employees who havereceived training will make use of what they have learned
through the training when they return to their jobs on thefrontline. It is a difficult aspect of human resources
development.
Yoshizawa: In order to grow, people have to step out of their
comfort zones. The company needs to cultivate anenvironment that encourages them to do so. Let me mention
a training program that was a turning point in my career. In
this program, which lasted about 10 months, as a trainee, I
was allowed to go anywhere in the world to any number ofplaces to collect data to achieve the strategic goal I had set
myself. It was up to me where I went. To talk to people, suchas people of other companies or executives of competitors, I
made appointments through a network of contacts that
extended to very distant acquaintances. Until then, I had
never had the opportunity to do such a thing, never thoughtof doing it, and never felt the need to do so in the first place.
But when I actually did it, it was so exciting. I thought it would
be difficult to make appointments because they were not for
actual business meetings, but surprisingly, I was able tomake appointments. Companies overseas have training
programs of this nature and they are accustomed to suchthings. I discovered so much and was so inspired by theexperience. For example, I was fascinated by the different
perspectives of people on the other side of the world. Most
importantly, I realized that I enjoyed talking to people far
beyond the confines of my own company. I think it would be
beneficial for NITORI Group to offer educational programs
that inspire employees.

What are your thoughts on women
playing more active roles?
Yoshizawa: I think there are two aspects to the promotion ofwomen’s participation and advancement in workplaces. Oneis from the women’s perspective and the other is from theorganizational perspective. From the women’s perspective,
the first step is for individual women to gain confidence. Thisis the heart of the matter. Secondly, if there are issues thatprevent individual women from playing active roles, such as
childcare or nursing care, the obstacles should be removed.
On the other hand, from the organizational perspective, it isnecessary to think about the treatment of men, whoobviously are outside the scope of women’s empowerment.
Promoting the advancement of women can create
psychological tensions among men. They may think, “Whyonly women?” Next, the values and attitudes of supervisors
are important. This is of course also true for male
employees, but without a boss who gives women
opportunities to demonstrate their capabilities, there will be
no catalyst propelling them to play active roles. Lastly, weneed mechanisms and systems that support women in theirefforts to play active roles. But firstly, over and above
everything else, women should be encouraged to gain
confidence. The key is how to do that. Clearly, it meansoffering women opportunities to take on challenges andsupporting them in the workplace so that they persevere andsucceed. I believe that the only way to gain confidence is toexperience success. I think the key is to cultivate anenvironment and a culture that encourage women andsupport them so that they can experience success.
Abiko: I agree. Regardless of gender, successful
experiences on the job lead to personal growth. We canfacilitate personal growth by providing equal opportunities
regardless of gender and in the way we design and allocate
tasks and in the metrics used to evaluate performance.
Unfortunately, in Japan, women’s lives change drasticallyfrom the moment they have children. However, much theywant to continue pursuing personal growth, there will
inevitably come a point where they have to put their desire to
one side. That is why companies, instead of expecting 120%

results all the time, need to be patient and understand thatwomen are, at least for a while, at a disadvantage. During
the past year or so, NITORI has been deliberating on
workstyle reform for women, based on the recognition that itis important to have workstyle options corresponding to eachstage of a woman’s life. We eventually concluded that weneed to reform how both men and women work. We are inan era in which it is necessary to reform not only women’sworkstyles but also men’s so that both men and women canenrich their lifestyles and enjoy a good life-work balance. We
need to consider approaches and systems that wouldenhance operational efficiency in various aspects so thateveryone can make better use of their time. I would love to
see more men take childcare leave as well. NITORI is acompany dealing with interior products. So, involvement inchildcare at home would inspire men to come up with ideas
for great products. That would be wonderful.

What’s your message for women whowant to advance their careers
Yoshizawa: It is often said that women do not have manyrole models, but perhaps we don’t need to be too concerned
about role models, which necessarily differ from one personto another. To reiterate, you need to step outside yourcomfort zone. Look beyond the group of people with whom
you usually spend your time. Talk with people in othersections. Don’t stay within the borders of the company. Seek
opportunities to interact with people in other walks of life or
who work for competitors. If you are in Japan, talk to people
overseas. Go out into the big wide world, talk to all sorts ofpeople, broaden your horizons, expand your network, andtake on new challenges. I think your personal development
will surprise you. As directors, we relish the opportunity tocontribute to the creation of a culture, a climate, and systems
at NITORI that will encourage you to take on newchallenges.
Abiko: I would like to issue a rousing call to action. Since
you only live once, you should enjoy not only your career but
also your private life, including time with your family, as muchas you possibly can. Follow your inclination and have fun!

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