The matters handled by the Board of Directors fall into four broad categories. The first of these is matters stipulated by the Companies Act, such as corporate accounts and dividends. The second category is quarterly budget planning, and this is the area where there tends to be the liveliest exchange of views. While all companies review their accounts on a quarterly basis, I am not aware of any other company that performs the quarterly Plan–Do–Check–Act (PDCA) cycle with as much precision or as extensively as HOYA. What is more, although this process is based around a short period of just three months, the medium- and long-term growth strategy is also incorporated into the process, so the independent directors are able to point out issues and make suggestions based on their diverse perspectives. The third category is the business review, in which the directors and executive officers engage in discussion, based not so much on recent performance as on explanations from the division heads responsible for each business area regarding medium- and long-term market forecasts and strategies. Finally, the fourth category is matters relating to business development. Projects both large and small are brought up for discussion by each business, and the directors present their views in an objective manner, making effective use of their own respective skillsets in terms of M&A activity, international business, etc. Whatever the topic being discussed, it is not viewed in a one-sided manner, but rather is examined from multiple perspectives, and assessment is performed rapidly using the PDCA cycle.

Having had experience at various different companies, I personally feel that where HOYA excels most is in its implementation of business portfolio management that adheres to a management philosophy of aiming to be “a big fish in a small pond.” What I also think is marvelous is that HOYA has clear positioning for each business in its portfolio, and consciously characterizes each business as being a “star,” “cash cow” or “problem child.” As a result, the Company has been able to achieve outstanding financial performance, including capital efficiency, which is very impressive too. With regard to corporate governance also, HOYA was one of the earliest companies in Japan to have independent directors hold more than half of the seats on the board of directors, and to transition to a committee system, and it has continued to be seen as being at the cutting-edge of governance. If one looks more closely at the details of HOYA’s corporate governance, it is clear that the diversity of its independent directors, in terms of having management experience in a wide range of industries and having diverse specialist backgrounds, has also contributed to strengthening governance.

Although, as I have just noted, HOYA has received very positive assessments in relation to the governance (G) aspect of ESG, I think that in terms of the environmental (E) and social (S) aspects of ESG, HOYA has only really kept pace with other companies, and may even have lagged behind, and that there is a need for improvement here. As attention has been focused on the areas where HOYA excels, so far it has not received criticism for being weaker in other areas but going forward HOYA will be aiming to speed up its efforts to address these weaknesses. A further point is that HOYA needs to bring its succession planning up to the standards of a global enterprise. In this regard, HOYA is making a painstaking effort to put the necessary framework in place, with the Chief Human Resources Officer (CHRO) playing a central role. As an independent director and member of the Nomination Committee, I think that HOYA should make a steady, concerted effort in this area.

The most important role of the independent directors is to remove the CEO in the event that anything improper has occurred, so the basic precondition for being an independent director is that you must have the necessary force of character to be able to do that if necessary. As all of HOYA’s independent directors have extensive managerial experience, HOYA has the right system in place to allow the CEO to be removed whenever that might prove necessary. Although during the nine years that I have been an independent director at HOYA, the company has received a positive external assessment of its corporate governance system, I have always felt that there is a need for constant adjustment. Although HOYA’s corporate governance is outstanding, I have raised the questions of whether it might be a good idea for the Board of Directors to be chaired by an internal director (as representative executive officer, president & CEO), whether it would be practical to introduce an “in-house company” system or a holding company structure, and what the response should be if something were to happen to the CEO. I think that these questions need to be discussed again. While such discussion may lead to the conclusion that things are fine as they are now, I think that it is important to discuss these kinds of topics from multiple different perspectives.

Regarding the strategy for business development, we are currently engaged in ongoing discussions of this issue with the executive officers. One of the reasons why Mr. Ikeda was selected to become the new CEO was that he was able to outline a clear vision and path for the HOYA Group’s growth over the medium and long term. With regard to the Information Technology business domain, HOYA is in the process of firmly adopting a strategy of looking for potential seeds of growth in areas outside its existing businesses, while also realizing business development by making even more effective use of the Company’s technological excellence. As regards the Life Care business domain, consideration is being given to expanding the range of business areas with a focus on ophthalmology. Discussion is underway based on expanding the range of HOYA’s existing Life Care businesses, such as eyeglass lenses, contact lenses, intraocular lenses, and surgical instruments for eye surgery, new business areas that are closely related to them, and vision-related markets. As an independent director with expertise in the areas of international business development and M&A, I support these moves, and I want HOYA to demonstrate that it still has plenty of potential for growth.

In the past, I have had the opportunity to examine a wide range of companies, and I have found that when approaching ESG it is not enough to just think “how will this be viewed by the market?” How sincere senior management are about ESG is extremely important, and if this sincerity is lacking, ordinary employees will not be convinced by the ESG message.

The last 10 years or so have seen the emergence, particularly in the United States, of the “benefit corporation” (an enterprise that aims to generate not only economic benefits but also environmental and/or social benefits) concept, a concept that is exemplified by Patagonia, Inc., the outdoor clothing and equipment vendor. This may be the ultimate expression of ESG and can probably be said to be in conformity with the trend away from capitalism that emphasizes shareholders’ interests above all else toward stakeholder capitalism.

A further point is that I believe that, fundamentally speaking, ESG cannot be successful without respect for other living beings and without a perspective that views the world as an integrated system. Over the past 300 years, a single species—mankind—has caused extensive destruction to the global environment and has deprived other species of their right to existence. The fact is that scientific and technological development in human society has brought about a fundamental transformation in global ecosystems. However, I believe that science and technology also have the power to solve this problem. Some people would say that “a profit-oriented organization like a corporation cannot solve the world’s environmental problems,” but as I see it, business enterprises are the organizations that can most effectively address social issues in their own particular fields of expertise. I am convinced that it is actually business enterprises that are the best organizations for realizing a sustainable planet. While HOYA specified its materiality in September 2021, I think that the Company will need to keep adding to and adjusting its materiality. HOYA has a wide range of different businesses, each of which has different material issues, so I see this as being an issue that needs to be discussed at the level of the individual business division.

The deciding factor was Mr. Ikeda’s expertise and strong track record across a wide range of different businesses. He has performed outstandingly, not only with regard to technology but also in terms of his ability to read the market and the way he interacts with customers. In particular, although the former CEO Mr. Suzuki unquestionably played a leading role in driving the growth of HOYA’s Information Technology business division, Mr. Ikeda’s contribution was also very substantial.

Something else which can safely be said to be one of Mr. Ikeda’s strengths is his ability to take a wide-ranging view of the HOYA’s business portfolio as a whole, from a perspective that emphasizes technological superiority, by utilizing the experience he has accumulated in overseeing technology development for the HOYA Group as a whole, including the Life Care business domain. A further point I would like to add is that I was very impressed by some of the statements that Mr. Ikeda made while he was serving concurrently as head of HOYA’s contact lens business (the “eyecity” brand). The perceptiveness that Mr. Ikeda demonstrated by pointing out, within a short time after taking over as head of the business, that with the changes in the market environment such as the growth of e-commerce, it was time to reconsider the business strategy (including its future store opening plans), left a deep impression on me. Adding to this his familiarity with HOYA’s management philosophy and with the Company’s mechanisms, I felt that Mr. Ikeda was the ideal choice to become HOYA’s new CEO.

Regarding the increase in the number of internal directors, Mr. Ikeda expressed a desire to have Mr. Ryo Hirooka join the Board. In the past, the Chief Financial Officer (CFO) did serve as a member of the Board, and Mr. Hirooka was already sitting in on every Board meeting, including those at which quarterly budgets were discussed; furthermore, his appointment would not upset the balance between independent directors and internal directors, so we as external directors did not feel that there was anything wrong with this idea, and in fact we thought it was a good suggestion.

With regard to the independent directors, finding suitable female candidates for directorships who possess the necessary insight and experience in relation to governance, business development, and global business has been a long-standing challenge for HOYA. Every year, when compiling a list of potential candidates and exchanging views, we have found that there are relatively few women on active service in Japan who have the necessary experience in business development and business management, and due to the shortage of candidates, we have had to extend the scope of our search to include women working overseas. This year, we invited Ms. Takayo Hasegawa, who is one of very few women in Japan with a high level of expertise in both technology and management, and Ms. Mika Nishimura, who has extensive global business experience, mainly in the United States, to become independent directors.

Rather than allowing itself to become complacent, HOYA is implementing managerial reforms so that it can continue to demonstrate outstanding performance in the future and realize sustainable growth. HOYA is currently fine-tuning a market-focused growth strategy for the Information Technology business domain, where the Company has a significant technological advantage, and also for eye care-related businesses, where strong structural growth is anticipated, and I am confident that you will be impressed by these strategies when they are finalized. By integrating the business growth strategy and the ESG strategy, the Company will be managed in a way that contributes toward addressing the social issues highlighted in the United Nations Sustainable Development Goals (SDGs), and we look forward to receiving the continued support of all stakeholders.