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Interview with an Outside Director

"We will enhance the effectiveness
of the Board of Directors to
maximize returns through solid
analysis of current operations
and risk management."

Tomoya Yoshizumi
Outside Director
Tomoya Yoshizumi

Q1 What is your evaluation of Duskin's Board of Directors?

Two years have passed since I assumed the position of Outside Director in June 2017. I believe the effectiveness of the Board of Directors has been improved compared to what it was in my first year. The Operating Officer System, which was introduced from April 2018, has greatly contributed to this improvement. In my first year, detailed reports on the status of business operations were made at the meetings of the Board of Directors. There were many times that I felt the items on the agenda needed to be better organized. With the introduction of the Operating Officer System, the function of the Board of Directors was made clearer by delegating the business execution to the Operating Officers. This led to a better organized agenda at the Board meetings, and expedited decision-making processes for both Directors and Operating Officers.

Due to the reduction of the number of internal Directors, Outside Directors now comprise one-third of all Directors. This facilitated more active discussions, helping us, Outside Directors and Outside Audit & Supervisory Board Members to express our opinions more freely. As a result, management decisions, from a company-wide perspective, are now made more effectively. We hold regular meetings of the Outside Directors and Audit & Supervisory Board Members Council (with three Outside Directors and three Audit & Supervisory Board Members) as an advisory body for the Board of Directors. The discussion report and recommendations from this Council are shared and reviewed within the business divisions. Responding to our recommendations, the business divisions developed their measures and have come to present them to the Board of Directors. This is a good example of the improved effectiveness of our Board of Directors.

If I would make a request, I would ask for more diversity among our Board of Directors. Our current Board has two female outside directors, but there are no women among the internal Directors. I look forward to having female directors on board. Also, the majority of the internal Directors are from the business divisions. To maintain diverse viewpoints, I think it is beneficial for us to have directors from other areas, such as finance, human resources, or compliance departments.

Q2 What do you think your role is as an Outside Director?

Outside Directors at Duskin have different backgrounds. As for myself, I have experiences in developing strategic plans for a whole group of companies and supervision of business operations outside Japan. Leveraging this expertise, I will support the Board to make good management decisions, which I believe is my most important mission.

I also raised the topic and led a discussion at the Board meetings on the capital policy for improvement of the Return on Equity and Price Book-value Ratio.

In the future, I expect to take more opportunities to give advice and make recommendations for overseas business development based on my experiences in global businesses.

Q3 How do you evaluate Duskin's support system for Outside Directors?

Duskin supports us well by giving us all the information we need to fulfill our duties as Outside Directors. We are also given opportunities to talk directly with franchise owners at the events and meetings. In these past two years, my understanding of Duskin's management philosophy, policies and businesses has been significantly deepened. Because of my background in the manufacturing industry (Ajinomoto Co., Inc.), I did not have sufficient knowledge and understanding of some aspects of franchising. Duskin has another stakeholder, franchisees, who are united in our philosophy of Prayerful Management. I have come to understand that the profit distribution at Duskin should be considered with our franchisees included as stakeholders to improve shareholders value. This needs a different approach from that of general manufacturers.

As to the meeting materials, I would appreciate more digitization of documents. Electronic documents facilitate and expedite the process of the preparation for the meetings. We can check such documents at home or elsewhere and pose questions well in advance to the related business divisions or departments. This can help the divisions or departments to prepare the required explanations and information in time.

I hope the use of less paper, more electronic documents and tablet devices will be accelerated to further improve efficiency and save resources.

Q4 What do you think is necessary to improve effectiveness of the Board of Directors?

The effectiveness of Duskin's Board of Directors has been steadily improving. However, I believe we should aim for a higher level of effectiveness. The role of the Board of Directors is to identify potential risks from the current business operations, to develop response measures and to maximize the returns. Business divisions and other departments are responsible for the optimum operations in their own areas. However, such optimization tends to be partial or divisional as their focus stays within the scope of division/department's operations. It is the responsibility of the Board of Directors to achieve total optimization for all of our activities from a company-wide perspective.

The Board of Directors is required to consider our current portfolio and to make swift and steady decisions by selecting the key issues and concentrating the effort required, in order to decide the effective asset allocations to achieve long-term strategic goals. Then, the Board should delegate the execution to business divisions. I believe effective portfolio management, one that drives the execution of the growth strategy is the key to improve the effectiveness of the Board of Directors. Following this process and approach will also contribute to the development of the next generation of leaders.

As an Outside Director, I will continue to actively participate in the analysis of our current operations and discussions for our future development. In so doing, I hope to contribute to further improve the effectiveness of our Board of Directors.

Tomoya Yoshizumi
Outside Director

Joined Ajinomoto Co., Inc. in 1978. Named a Member of the Board in 2007. Served in leadership positions, including President of Amino Acids Company, General Manager, North America Division, Bioscience & Finechemicals Business Division and President of Ajinomoto U.S.A. (currently called Ajinomoto Health & Nutrition North America, Inc.). An Outside Director of Duskin Co., Ltd. since June 2017.