Materiality:
Strengths and initiatives to help

“Realizing mutual growth of employees and the company”
Companies should be able to accommodate diverse work styles, promote the career development of individual employees, andsupport the upgrading and shifting of skills, while providing diverse forms of employment and opportunities. At the same time,
employees should be continually learning once they have entered the workforce, acquiring new skill sets that suit the times, and growwhile leading the way in value creation through education, training, and working day-to-day.
Given this social environment, at Mandom employees must take responsibility as Human Assets to provide support for the Company
and society. The Company, in turn, shall seek to develop their capabilities as Human Assets and provide this diverse talent pool with
opportunities for motivation and active engagement. Employee well-being relies on working for a company that they can feel goodabout and where they can grow, and talented workers are important for the sustainable growth of the company.
In todayʼs era of rapidly changing values, both employee growth and company transformation are necessary.
At Mandom, we will promote work-style reform to improve “productivity per unit,” “growth of individuals and job satisfaction” and“creativity” so that all employees as “human assets” may support the company and society.

Strengths of Mandom 6

Highly-Engaged Employees
Efforts to share and instill the philosophy
FY2017 marked the start of our 12th Middle-Range Planning (MP-12), which was positioned as a period to develop the infrastructure
for realizing “VISION2027,” looking toward the 100th anniversary of the establishment of the Company. Within this, our priority was
the instilling and putting into practice of the corporate philosophy. In order to promote the understanding of the corporate philosophy
across all employees of Group Companies, the text for training has been translated into eight languages: Mandarin Chinese,
Cantonese, Korean, Vietnamese, Indonesian, and Thai, in addition to Japanese and English versions.
We educated all employees on this philosophy in three steps. First, we held assorted discussions through officersʼ gatherings. Next,
each department head was named an “evangelist,” and the program was conducted by the directors to the department heads.
Finally, the “evangelists” conducted the program in the form of workshops for the staff of their own departments.
The project was conducted over a short period of six months, targeting 1,009 employees in Japan and overseas (at the time of
implementation).

FY2021 survey results and Group response
Since 2018, we have been conducting annual employee surveys and providing feedback results to follow up on the degree ofawareness among employees.
Key points for 2021 are as follows.
Note: From FY2021, we have outsourced to a different company for our employee survey.
Of the 91 questions in total, 83 are comparable over time, and employee engagement results compared to the previous year are provided.

Items that showed
improvement comparedto FY2020

1 Sustainable engagement

Sample question Working for the Company inspires me to do my best

2 Cooperation/communication Sample question The Company encourages the sharing of information and ideas between departments

30

Mandom Report 2022and “inter-departmental collaboration” showed significant improvement,
though they usually tend to score lower. The shared groupware introducedin the 12th Middle-Range Planning (MP-12) and work style reforms thatutilize it likely helped contribute to an environment where information
sharing and communication can be done through online meetings whileworking from home or when face-to-face meetings are not possible, as
well as the way work is conducted with the platformʼs file sharing system.
Employee engagement▲

Looking at the results, employee engagement scores fell in FY2020. The
quality and frequency of communication from the Management Teamdeclined along with the onset of poor business performance and rapidchange to a system of remote work due to the COVID-19 pandemic. In
addition, there was a strong sense that the management team did notcommunicate properly with employees to help dispel their concerns,
leading to a feeling of crisis. In response, Supervisory Executive Officers
soon began sending video messages to employees once a month toshare what was currently being worked on in their respective areas of theCompany.
Engagement has shown a clear comeback in FY2021. Items regarding“a positive view of the companyʼs future” and a “high willingness tocontribute” also showed improved results. We are pleased that the
distribution of video messages and the Presidentʼs dialogue sessions
described later have had a positive effect. During the long COVID-19
pandemic, scores for the items “information sharing between departments”■ Mandom■ Global consumer
goods firms

2020

2021

1 Talent management

Sample question I have time for work-related training

2 Business promotion

Sample question There are no major obstacles in the way of carrying out my responsibilities

Items that did not show improvement from FY2021 included “not having
time for training,” “obstacles to carrying out responsibilities,” and“satisfaction with benefit programs,” revealing dissatisfaction among
employees. This may well be due to the growing interest of employees
in their career autonomy accompanying the change in working methods
due to COVID-19, changing perceptions of the challenges they face, andincreased awareness of the importance of benefits.
We are currently preparing to transition to the reform of our humanresources system* with the foundations of “human resources development
for career autonomy” and “job-based perspectives,” with the aim of full-scale
implementation from FY2023.
* MHRX: See p. 33

1 Leadership

Sample question The management team responds well to change

2 Business promotion

Sample question In our company, decision-making occurs at the right level of management

Both “Leadership” and “Business promotion” were items with scoresshowing much room for improvement, with the Company trailing global
consumer goods firms and other high-performing companies. In the
drastically changing business environment brought about by the COVID-19
pandemic, employees need reassurance through frequent communicationand transparency of Company and management team decision-making,strategies, and responses to change. It is also essential for employees

Value Creation Story

Items where we scoredlower than othercompanies

About Mandom

Items that did not show
improvement comparedto FY2020

to understand the direction the Company plans to move in, as well as
expectations towards their role, so they can regain pride and confidence
that they can grow and contribute.
Mandom has decided that officers will continue to release video messages
monthly in FY2022. By continuing these efforts and sharing what our
officers are thinking and their stance on various issues, we believe we canreassure our employees and alleviate the problems related to these items.

Dialogue sessions between the President and employees

when we make internal documents. I felt like we need toabandon doing things just based on precedent or habit, andstart seriously thinking about everything from scratch, from aperspective of overall optimization.
The second point regards communication issues that havebecome apparent. A downside of working remotely is that there
is a considerable risk of loss of motivation and anxiety becauseof the difficulty of noticing subtle changes in subordinatesand colleagues. I also felt like some things take a long time toresolve, when if you spoke face to face you would understandthe situation right away, and this causes stress to build up little
by little. Later on, I urged
our managers to focus on
creating an environment
where employees can be
happy doing their work.

Middle-Range Planning
Performance for the Fiscal Year Ended March 31, 2022

[Nishimuraʼs comments]
In FY2021, a total of 247 people engaged in these groupdialogues, including Mandomʼs managers and group leaders(assistant managers), representatives of Group companies
in Japan and overseas, local overseas executives, andemployees with overseas placements. These highly meaningful
opportunities not only helped provide a more thoroughunderstanding of the direction of medium to long-term
strategies, which was a primary purpose, but also let people
share their own awareness of issues and deepen mutual
understanding.
During these dialogues, I noticed that participants were keenly
aware of the issues, and I felt extremely encouraged by theirgenuine desire to break with the status quo and do something
for the benefit of the Company. There are two points inparticular that I felt during our conversations. The first is that
the Company has a lot of “unspoken rules.” I was concernedthat sometimes we are careful about things that there arenʼteven rules about, and this causes all kinds of waste, like

Materiality

President Nishimura began dialogue sessions with employees in July 2021 when he took office with the objective of directcommunication that leads to mutual understanding and instillation of policies. While the COVID-19 situation overseas necessitated thatthese sessions be held remotely, in Japan they were all conducted face to face.

Company Information

As with the officer video messages mentioned above, the Company sees dialogue sessions as a meaningful opportunity to share with
employees and help them understand how top management views the Companyʼs current situation and its direction. Mandom plans tocontinue these dialogues in FY2022 and thereafter for approximately 500 employees over two years, targeting roughly 250 employees
for FY2022, consisting of employees with ages ranging from the teens to the 30s and those who will be new managers from this fiscal
year, and about 250 senior employees in their 40s and 50s for FY2023.

Initiatives developing and educating human resources
Please visit our website for information on standard training, employee education, and career support.

▲

CSR Information
Mandom Groupʼs CSR KohDoh Practices > Labor Practices > Human Resources Development

Mandom Report 2022

31

Materiality: Realizing mutual growth of employees and the company

Highly-Engaged Employees ̶Topics̶

<Feature> Human Capital Initiatives
Embarking on HR system reform to provide Dedication to Service (Oyakudachi) for consumers in response to achanging society

Mandomʼs human resources philosophy

Our human resources philosophy

Happy individuals make a happy company
Realizing wellness

Physical[Viewpoint][Approach]

MentalToward a brightandabundant life

Environmental Social Health

Safe
and
secure(active and energetic)

Physical andmental safety andsecurity are ensured

Taking on challenges is
encouraged and work offers
opportunities for growth

Engaging
work

Ease of work

Fair
and
impartial

Pleasant to work interms of location, time,and environment

Fair and impartial
treatment, transparent
standards

Background
Changes in external environment

・Age of volatility, uncertainty, complexity,
and ambiguity (VUCA)・Globalization ・Digitalization
・Changes in lifestyles, values, andcosmetics related behavior brought about
by the COVID-19 pandemic

Our vision“VISION2027”“A cosmetics company possessing
unique strengths in specialized areas(not an “all-rounder”).”

For the 100th anniversary of our founding, we have announced
our “VISION2027,” which says we are a cosmetics company possessing unique strengths in specialized areas (not an all-rounder).
The external environment the Company operates in is said to be in an age of volatility, uncertainty, complexity, and ambiguity (VUCA),
undergoing rapid change along with globalization and digitalization, with the future being uncertain and difficult to predict.
We realized that it was necessary to reform not only our human resources system but also its structure in order to properly adapt tosuch drastic changes and continue to provide Dedication to Service (Oyakudachi) for consumers as set forth in the Vision.

32

Mandom Report 2022

About Mandom

Overview of the reform of our human resources system (MHRX)MHRX: The big picture[Purpose] Creating an organization and developing human resources capable of change andtaking on challenges that create value for the Group
Aims of the Company
・Fair and impartial treatment that leads torewarding work and taking on challenges
・Utilization of human resources with a diversityof personalities and strengths
・Organizational (cultural) reform for change andtaking on challenges

Personnel affair system reform

Equalpartners

Career development

Talent management

Ranking
program

Employment

Remuneration
program

Supporting employees in following
their career paths

Evaluation

Posting

Training

Maximizing HR performance

Middle-Range Planning

Fair and impartial treatment andevaluation specific to role

Creating workplace
Career development
opportunities ×
assistanceMateriality

Treatment

Personnel
affairsystem
Evaluation
programValue Creation Story

Employee expectations
・Independent career development (career
autonomy)・Demonstrate strengths applicable outside thecompany・Creation of new value through diverse
personalities and strengths

MHRX (HR system reform starting with jobs and autonomy)
We have launched an initiative to reform our human resources system (MHRX), starting with jobs and autonomy.
MHRX stands for “Mandom Human Resource Transformation.”

Performance for the Fiscal Year Ended March 31, 2022

Based on the Groupʼs human resources philosophy of “Happy individuals make a happy company” that aims for growth of employees
together with growth of the Company, our purpose is to create an organization and develop human resources capable of change andtaking on challenges that create value for the Group.
It is a system based on “human resources development for career autonomy” and “job-based perspectives,” and consists of three
initiatives: (1) personnel affair system reform, (2) career development, and (3) talent management.
We aim to assemble a diverse group of talent with unique strengths, who take the initiative regarding their career development.

Toward a new personnel affair system

Company Information

Our first briefing was held regarding the transition to the new
personnel affair system, and we held about 80 small-scaledialogue sessions of between 5 and 10 people as follow-ups
between February and March 2022 to further employee
understanding.
The second briefing is held in June, and we continue to carefully
prepare for the smooth introduction of the program.
A small-scale dialogue session

Mandom Report 2022

33

Materiality: Realizing mutual growth of employees and the company

Health management
Health management is an important issue for the Company because
we understand that healthy employees enhance its value. In FY2020,
we formulated a “Basic Health Policy.” We also conduct healthmanagement initiatives so that our human resources, the companyʼsfoundation, can work with peace of mind; this means they and theirfamilies do not have to worry as much about health concerns.
In addition, we are investing in health through health-related goals of“reduction of absenteeism,” “improvement of presenteeism,” and “better
work engagement.” As indicators to measure these goals, we will set
and manage changes in employee awareness and behavior, as well as
their participation rates and level of satisfaction with our measures.

In recognition of our health-related efforts, we have been selectedunder the 2022 Certified Health & Productivity Management
Outstanding Organizations Recognition Program (large enterprise
category), a certification jointly implemented by the Ministry of
Economy, Trade and Industry (METI)
and Nippon Kenko Kaigi.
This program recognizes corporations
that practice particularly outstanding
health management with initiatives that
address local health issues and that are
in line with the health promotion effortsof Nippon Kenko Kaigi.

▲

CSR Information
Decent Work and Work-Life Balance

Selected under the 2022 Certified Health &Productivity Management Outstanding Organizations
Recognition Program (large enterprise category)

Ensuring diversity
We are trying to build an organizational system that embodies
diversity and inclusion in order to retain human resources withdiverse attributes and value systems, and enable them to reach
their full potential.
We announced the five Mandom Principles in May 2017, which
are a code of conduct that is followed by all Mandom personnel
at all times. These principles include “Active Employee
Engagement” and “Human Assets” that help guide our thoughts
and actions every day.

Promoting womenʼs participation

In April 2016, a Japanese law took effect, which obliges large
companies and local and central governments to set numericaltargets for hiring and promoting women. Mandom understands
that promotion of women is an important theme that draws
expectations and demands from a broad range of players inthe society. Accordingly, this theme has been reflected in“Achieving employee satisfaction (ES) and diversity.” In linewith the objectives and purposes of the law, Mandom willdevelop and execute a phased action plan to help realize
a society where women are promoted and encouraged toexercise their individuality and unleash their full potential. We
will also disclose our actions and keep the information up todate through the official
website of Ministry of
Health, Labour and Welfare
below.

Promoting hiring of people with disabilities
We aim to build an organization that encourages diversity
and inclusion. As part of this, we are creating workplaceenvironments that allow us to hire more people with disabilities
and facilitate their participation. At our head office we have
set up an accessible restroom on the ground floor, provided
handicapped parking spaces, and made the office hallways
wide enough for wheelchairs and other mobility equipment,
among our many efforts to ensure a “barrier-free” workplace.
At the Fukusaki Factory in 2014 we renovated the productionbuilding, and set up accessible and multi-purpose restrooms,
along with an accessible entrance and other measures. In
December 2018, our domestic subsidiary Mandom Will Corp.
(referred to below as “Mandom Will”) acquired certification asa Special Subsidiary, as set forth in the Act on Employment
Promotion etc. of Persons with Disabilities. At Mandom Will,
we have put in place an environment and programs tailoredto suit diversity, so that people with disabilities and those
returning to employment can work with high motivation overthe long term without undue stress. Steps taken in this area
include allocating work to match diverse capabilities andcharacteristics, and enabling the taking of annual paid holidays
in hourly units to deal with issues such as going to the hospital.
We are also working to develop human resources capable ofself-growth through work.

▲

CSR Information
Mandom Key Data on Personnel and Labor

External Site▲

Ministry of Health, Labour and Welfare Official Website
Mandom page for general employer action plan based on the Act
on Promotion of Womenʼs Participation and Advancement in the
Workplace (Japanese only)

Recognized as a “Three-Star Certified Company” (highest rank) in the “Osaka City Leading Company in
Womenʼs Participation” ranking
In recognition of our efforts related to the advancement of women, we
have been recognized as a “Three-Star Certified Company” in the “Osaka
City Leading Company in Womenʼs Participation” ranking.
This Osaka City program certifies companies that actively promote the“creation of organizations supporting the advancement of motivated34

Mandom Report 2022

women,” “support for work-life balance,” and“household participation of men” in accordancewith set standards, with a goal of providing social
recognition and widely publicizing the efforts of
selected companies.