August 2023
Board of Directors’ Contribution to Key Issues and Challenges for Further Enhancement of Corporate Value
Tsuyoshi Nagano (Left)
Chairman of the Board
After joining カジノ 入金 ボーナスne, Tsuyoshi Nagano was engaged mainly in domestic and overseas sales, corporate planning, and product planning operations. He subsequently serves as CEO of カジノ 入金 ボーナスne and カジノ 入金 ボーナスne Holdings, and as Chairman of Board.
Shinya Katanozaka (Center)
Outside Director
After joining ALL NIPPON AIRWAYS CO., LTD., Shinya Katanozaka served as General Manager of the Human Resources Department, President and Representative Director of ANA HOLDINGS INC., and currently serves as Chairman and Representative Director of the said company. He has held his position as a director at カジノ 入金 ボーナスne Holdings since June 2020.
Nobuhiro Endo (Right)
Outside Director
After joining NEC Corporation, Nobuhiro Endo served as General Manager of the Mobile and Wireless Operations Division, President (Representative Director), and Chairman of the Board. He is currently Executive Advisor of NEC Corporation. He has held his position as a director at カジノ 入金 ボーナスne Holdings since June 2019.
Board of Directorsʼ Contribution to Key Issues
- QThe COVID-19 losses in Taiwan were a key issue in fiscal 2022. What was the discussion in the Board of Directors?
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- Secretariat
- The COVID-19 losses at the カジノ 入金 ボーナスne Taiwanese joint venture announced in August 2022 came as a major surprise. Initially, there were critical voices from the capital markets, asking if it was really necessary to respond to the capital increase and if there would be similar problems at other small, medium, and minor entities. In this context, the capital markets show a strong interest in the content of discussions by the Board of Directors.
- Nagano
- First of all, as Chairman of the Board, I would like to apologize for causing concern to the people of the capital markets regarding this matter. As explained by our executives so far, this event occurred due to the change in Taiwan from a zero COVID-19 policy to a coexisting with COVID-19 policy and impacted the whole of the Taiwanese market. However, the loss based on the カジノ 入金 ボーナスne equity was about 100 billion yen, and I take it seriously as management because of its scale.
- Katanozaka
- I took the stage at the IR conference in May 2023, where I received questions directly from an analyst about this issue. I answered the question of why the Board of Directors of the Company decided to increase the capital when カジノ 入金 ボーナスne, which was a minority at the time, was not legally obligated to cover the excess liabilities as follows.
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With regard to the portion of the capital increase to be allocated to the payment of claims, the Board of Directors believes that it is the insurerʼs responsibility to pay the claims and bear an appropriate burden for that purpose, and made its decision in consideration of its global reputation.
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With regard to the portion to capture future growth in the Taiwanese market, based on detailed figures and facts, we discussed the future of the Taiwanese market and the growth strategies of the Taiwanese joint venture, and evaluated that the economic rationale was comparable to other M&A deals that カジノ 入金 ボーナスne has implemented to date.
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- Nagano
- A total of five Board of Directors meetings were held to fully share information and discuss this matter. We spent a lot of time not only on the decision concerning the capital increase that Mr. Katanozaka explained, but also on identifying the true cause of the situation and on the growth strategy of the Taiwanese joint venture and strengthening our Group-level structure based on the true cause. Outside Directors and outside Audit & Supervisory Board members pointed out many things and gave very useful advice from various angles ranging from management of overseas subsidiaries to geopolitical risks.
This is something I always try to do, and I want to be open to Outside Directors and outside Audit & Supervisory Board members, even regarding embarrassing topics, and to engage in candid discussions. By putting this into practice, I think we were able to make the right management decisions, from identifying the true cause of the problem, to increasing our capital and acquiring a major share, and then to formulating measures to strengthen our management structure. - Endo
- When a problem arises, as in this case, it is easy to get caught up in the idea of solidifying local top management with people from the headquarters side. While this does not negate the value of having members of the headquarters on the ground, including more sophisticated risk controls and better reporting to headquarters, it is important to understand that local people will always be needed to fully understand the local context and possibly to engage in tough negotiations with stakeholders.
In that regard, after カジノ 入金 ボーナスne acquired a major share, it dispatched the Chairperson of the Board as well as an expert in risk control from Tokyo as a CRO as a matter of course, but it appointed as the President a local person who was familiar with the local insurance market. I think that was the right decision.
In addition, market events such as infectious diseases and natural catastrophes can occur anywhere in the world, and from the perspective of taking advantage of the lessons learned this time, it is also worthy of praise that initiatives to advance ERM management at small, medium, and minor entities are accelerating on a global basis. - Katanozaka
- I offered the advice that to strengthen our cultural fit with local partner companies, it is important to have closer communication with top management and to reform the workplace culture. Under the カジノ 入金 ボーナスne Group Purpose, front-line workers and top management, as well as the partner company and カジノ 入金 ボーナスne, need to forge stronger ties and turn problems into opportunities.
I think it was very positive for the future that Mr. Komiya, the CEO, visited the site in person and deepened communication with the top management of the partner company. - Nagano
- As you said, I think it is really important to continue our efforts to spread our corporate culture, even at our small, medium, and minor entities.
- Katanozaka
- I also raised a few other questions and issues. For example, in Asian regions where various issues such as politics and ethnicity are interwoven, it is essential to improve a wide range of intelligence that goes beyond areas directly related to カジノ 入金 ボーナスne operations.
- Endo
- I agree, and to continuously develop the Taiwanese joint venture in the future, we need to evolve so that we can firmly grasp changes that are difficult to predict, such as changes in COVID-19 policy, and build a strategy based on that.
- Nagano
- I would like to thank the Outside Directors and outside Audit & Supervisory Board members again for their advice and judgment on this matter from a high-level perspective. But whatʼs really important is the execution phase. We will make steady efforts toward the sustainable growth of the Taiwanese joint venture, including reforming our corporate culture and enhancing our intelligence. We hope that Outside Directors and outside Audit & Supervisory Board members will continue to make fact-based judgments while receiving status reports from the executive officers.
- Qカジノ 入金 ボーナスne announced in May 2023 that it would accelerate the sale of business-related equities. What was discussed by the Board of Directors?
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- Secretariat
- Even before the establishment of the Corporate Governance Code, カジノ 入金 ボーナスne had positioned the reduction of business-related equities as an important management task and has been promoting the sale of business-related equities for the 20 years from fiscal 2002. In May 2022, the policy was revised, and it was announced that they would continue to be sold.
Subsequently, we announced in November 2022 that we would accelerate the pace of the sale, and in May 2023 that we would front-load the acceleration (600 billion yen or more over the four years from fiscal 2023 to fiscal 2026). These initiatives have been well received by the capital markets.
On the other hand, there are various opinions on business-related equities. For example, some shareholders are opposed to the appointment of the top management when the amount of business-related equity exceeds a certain level of net assets. Please tell us about the “Evaluation of カジノ 入金 ボーナスneʼs Stance and Initiatives for the reduction of business-related equities” and “Discussions by the Board of Directors.” - Katanozaka
- As the secretariat explained, カジノ 入金 ボーナスne has taken a series of measures to meet the expectations of investors regarding the sale of business-related equities. All directors unanimously agree with this policy and direction. カジノ 入金 ボーナスne also owns shares in ANA Holdings, of which I am Chairman, and I myself believe that accelerating sales is the right direction, and of course shares of ANA are no exception.
The Board of Directors discussed not only the pros and cons of the revision of the Guidelines, but also the feasibility of accelerating sales. Specifically, what impact the new policies would have on our client companies, what kind of message would be appropriate to negotiate reductions without damaging our business relationship, and would the sales departments involved in sales negotiations face considerable difficulties were discussed.
Outside Directors and outside Audit & Supervisory Board members are usually strict, but I was a little surprised at the fact that they made a lot of comments on the executive side, ha ha. - Endo
- I was one of them, ha ha. The most important thing in business is the balance among stakeholders. While reduction is a major premise, for customers who are concerned about the impact on the stock price, we should listen to their requests as carefully as possible, such as to proceed with the sale within a time frame and try to respond accordingly.
- Nagano
- When I was CEO, I remember being told in a dialogue with investors that they decide whether to take equity risks from other companies, so they wanted us to take risks in our core business. We cannot deny the views of our customers we heard from Mr. Endo or the views of those investors. As Mr. Endo pointed out, we must listen carefully to the opinions of our stakeholders and continue to engage in careful dialogue with them as we move steadily forward with sales.
- Katanozaka
- At an in-house meeting in October 2022, the directors in charge expressed gratitude to the sales department managers who were responsible for day-to-day operations, including sales negotiations. I think itʼs tough on the front line, but I think they can work with a sense of security that they have approval from the executives.
- Endo
- Another important aspect of the sale of business-related equities is the question of how to use the capital and funds generated from the sale.
- Nagano
- It has been discussed many times in Board of Directorsʼ meetings and strategy discussions. You are exactly right. To date, カジノ 入金 ボーナスne has used the capital and funds generated through the sale of business-related equities in overseas M&A, and we have realized global risk diversification and sustainable profit growth by shifting equity risk to overseas insurance risk, which has a low correlation with domestic non-life insurance. Although it goes without saying that overseas M&A will continue to be one of the candidates for the use of capital and funds in the future, in addition to this, we will further diversify risk and achieve sustainable profit growth by making greater use of our human and intellectual capital and more capital-efficient fee businesses that contribute to the realization of our Purpose, such as disaster prevention and mitigation. As a result, we will increase returns to our customers and shareholders.
At カジノ 入金 ボーナスne, we believe it is our management responsibility to continue to demonstrate to our stakeholders that we will do what needs to be done to improve カジノ 入金 ボーナスneʼs corporate value and that we will follow the right path.
In the era of VUCA, what are the challenges for カジノ 入金 ボーナスne, as a global company, to further increase corporate value?
- Secretariat
- With our Purpose as our starting point, カジノ 入金 ボーナスne has been able to solve social issues and increase corporate value as a result. Although these strategies will not change in the future, please tell us your thoughts on what カジノ 入金 ボーナスne, as a global company, needs to do to further increase its corporate value in an era when social issues are expanding and becoming increasingly complex.
- Katanozaka
- Steady progress has been made in global risk diversification, one of the strengths of カジノ 入金 ボーナスne. As Mr. Nagano mentioned earlier, by expanding both our domestic and international businesses, which have a low correlation with each other, we have increased the diversification effect from 30% in fiscal 2013 to 47% in 10 years. In the unprofitable domestic fire insurance markets, we have been able to implement comprehensive measures over the past four years, including rate increases, product revisions, and reinsurance cycle management. Even amid the materialization of unexpected risks such as natural catastrophes and COVID-19, I think there has been sufficient speed in responding to risks to カジノ 入金 ボーナスne.
On that basis, if I were to raise one issue, it would be the issue of residential fire insurance in the United States. An increasing number of insurance companies are withdrawing from California, where wildfires are growing in scale. We also hear that the number of so-called “insurance refugees” who cannot get insurance as a result of soaring insurance premiums is increasing in Florida, where hurricane damage is worsening. - Nagano
- Insurance serves as “social infrastructure.” However, if the economic value of an insurance company is damaged, it will not be able to run its business, and as a result, it will not be able to fulfill its role as “social infrastructure.” In this era of VUCA, we are confronted with the difficulty of balancing the “social value” and “economic value” of insurance companies.
- Endo
- This is a very difficult problem, but I think one solution lies in data. VUCA is a result of being unable to see the future, so if you can use the power of “data” to figure out the true cause, you can see the future. This ability to see ahead is the method to escape from VUCA. At the end of the day, the insurance business is a human business.
Of course, the situation differs depending on the country or region, but there must be many things in common across the world. Accordingly, I would like to see カジノ 入金 ボーナスne further strengthen its systems and capabilities to accumulate and analyze information on a global basis, including industry-academia collaboration, and continue to protect our customers and society in times of need on a global basis.
In addition to strengthening our core insurance business, カジノ 入金 ボーナスne plans to expand its business into preparation and recovery areas such as preventing and mitigating disasters, preventing disease, and promoting early recovery and preventing recurrence. I believe that data will be a key success factor in these areas as well. - Nagano
- Thatʼs right. To achieve our Purpose, カジノ 入金 ボーナスne is looking to go beyond the framework of traditional insurers and into the preparation and recovery of insured events, but this is unknown territory that no insurer in the world has touched. To create new value, in addition to the data mentioned by Mr. Endo, we believe that diversity of human resources is essential. I am aware that one of the most important issues for the future is how to match カジノ 入金 ボーナスneʼs strategies with human resources strategy.
- Endo
- To create innovation, it is essential to accept a variety of differences, such as age, gender, nationality, and the presence or absence of disabilities, to discuss, and to make use of the diversity of discussions. To take full advantage of this diversity, I think we should put even more effort into building a corporate culture that respects individual independence and a personnel system that values that.
- Katanozaka
- By individual independence we mean someone focused who can say “no” to the company or the president. What kind of employee were you, Mr. Nagano?
- Nagano
- Now that you mention it, I might have been a little like that. When we acquired PHLY of the United States in 2008, I was unofficially told by Mr. Sumi, the president at the time, to oversee this deal as the director in charge of corporate planning. At the time, I said that in the middle of the subprime crisis, a deal worth 500 billion yen was risky, and it was time to solidify our position. In the end, I was persuaded by him to focus on PMI with an emphasis on cultural fit so that I could fulfill my roles. And you know the results of the acquisition. It was the second successful large-scale M&A after TMK.
- Endo
- If you look at the results alone, you might say, “Mr. Sumi was right,” but the important thing in this discussion is whether there is an environment in which individuals can say what they think to anyone, even the president. In other words, to make the most of diversity, it is important to have a culture that allows for failures and mistakes. I want to leave big and difficult work where people expect mistakes to young people, more and more, and I want them to firmly inherit a “focus” like Mr. Nagano.
- Nagano
- I believe that the essence of global management lies in diversity and culture.
First, we must create new value by incorporating diversity into our business. For example, in fiscal 2022, two top executives of acquired companies were newly appointed as Executive Vice Presidents and asked to participate and play active roles at the Group level. They and the Japanese C-suite led by the CEO, Mr. Komiya, discuss priority issues of the entire Group about twice a week.
However, the more diversity you incorporate, the more difficult it is to determine the direction in which the members are heading. Therefore, through the spread of culture, we can unite various members as a team.
カジノ 入金 ボーナスneʼs global integrated group management is now in its eighth year, and we believe it has evolved into the best for カジノ 入金 ボーナスne. However, I hope that カジノ 入金 ボーナスne will continue to evolve agilely in line with the changes of the times and the direction it is heading. - Nagano
- The Companyʼs Board of Directors and Audit & Supervisory Board were reorganized in July 2023. With the addition of three outside directors, including one foreign director, and one outside Audit & Supervisory Board member, the Company now has a total of 20 officers, half of which are internal officers and half external. Mr. Katanozaka is the chairman of the Nomination Committee, and Mr. Endo is the chairman of the Compensation Committee.
As I have mentioned, in the era of VUCA, of course, the content of the discussions by the Board of Directors will change from time to time, but the roles of the Board of Directors in カジノ 入金 ボーナスne have not changed at all.
As a spokesperson for stakeholders, the Board of Directors is the last stronghold to answer the questions of if カジノ 入金 ボーナスne will solve social issues through its corporate activities, and if the results will lead to sustainable improvements in corporate value, and whether カジノ 入金 ボーナスne leads businesses and society to the future through the realization of its Purpose.
We have been and will continue to engage in substantial discussions toward the realization of our Purpose and the enhancement of corporate value. - Secretariat
- Thank you for taking time out of your busy schedule today.