Three Outside Directors look back on the issues addressed in the 2020 Corporate Report and give their views on Duskin's future direction and what the company needs to do now to enhance corporate value.
The Board of Directors, including Internal Directors, give their opinions much more frequently, including topics beyond their own area of responsibility, and discussions have become more multifaceted and energetic as a result. This has made it possible to talk about withdrawing from underperforming businesses, and in my opinion Duskin is making solid progress on evaluating the viability of its businesses from a "selection and concentration" perspective. To further build this momentum, I will continue to express my opinions as an Outside Director representing our shareholders. I hope this will help accelerate the pace of optimizing and strengthening the overall value chain, which is another priority for Duskin.
The succession issue is one of the Outside Directors and Audit and Supervisory Board Members Council's priorities. I am chairman of the Directors Evaluation Committee, which includes two Outside Directors. At the Committee meetings, we are deliberating how best to transparently and impartially evaluate next-generation leadership candidates who have produced results within each business group. If that works well, I think it will further raise the effectiveness of the Board of Directors. We are also looking at human resource education with an eye on the Group's next-generation leadership. Clearly showing what kind of human resources we need is a management responsibility, and we are therefore discussing this issue with those in charge of personnel affairs.
Duskin conducts business guided by the philosophy of Unifying Business and Morals, and in order to practice this philosophy as a publicly listed company, achieving our ROE targets is a vital responsibility of all of management. I believe it is the role of Outside Directors to support the President and Group COOs in their efforts to meet these performance targets and to contribute to meeting these performance targets and returning some of those results to our shareholders. With a sense of responsibility and a sense of urgency toward our shareholders, I will therefore continue to advocate for effective management.
Compared to last year, discussions at Board of Directors meetings have become much more substantial. Besides discussion about proposals from individual business lines, there is a great deal more discussion about the company in the medium-term of three to five years and about overall company strategy. Last year I mentioned the need for more constructive proposals from the Board of Directors, and since then our Corporate Planning team, which guides medium-term strategy not only actively included the proposals on the company strategy in the agenda, but also they have prepared materials with concrete numbers that make it possible to have productive discussions. From a corporate governance perspective, I do not think there are very many companies capable of such frank discussion, and in the future I hope that we can contribute more time to discussing strategy. I want to encourage Internal Directors to express their opinions even more than they have so far.
Currently, increasing sales is an issue at Duskin, and a growth strategy is key to achieving sales growth. Duskin has been in the rental business for mop and mat products for some time, and the company has long advocated SDGs. Duskin also has superb services, and I think that the company has yet more potential for enhancing brand value. Moreover, it is my opinion that Duskin needs to leverage these strengths toward the new challenge of achieving a digital transformation of the company's overall business model, including franchisees all over Japan. I have also attended, as an observer, the information system meetings that the company started last year in order to better understand the IT and digital challenge.
There is growing awareness within the company for the need for digital training for executives, and we will continue to apply Duskin's resources to an all-out effort aimed at meeting the needs of the next-generation of consumers.
While I have served as an Outside Director for just one year so far, my impression is that Duskin practices effective governance not only in form but in substance. I can attend company meetings as an observer when I think it necessary, and I can obtain sufficient information about management issues by, for example, asking those involved to explain in advance the details of a presentation given at a Board of Directors meeting. It is easy to express opinions at Board of Directors meetings, and to my mind as an Outside Director they are easy to work with.
At Duskin, I would say that employees listen to the various opinions of other people and really try to do what needs to be done. Besides fulfilling my role as an Outside Director on the Board of Directors, and informed by my past experience and knowledge, I make an effort to contribute to enhancing corporate value. Taking part in new product and service development meetings and stating my opinions about things like customer understanding and development processes are among such efforts.
Duskin's strength is a business model—and the brand power that accompanies it—that forms a single line extending from the product planning stage, through sales and services, and directly to the customer. In line with a changing social environment and customer needs, I hope that Duskin headquarters will take the initiative in using advances in technology to form even more robust, direct connections with our customers, including market segments that until now have posed challenges to the company.
Currently, Duskin's business rests on two main pillars: clean service and Mister Donut. In the future, Duskin needs to further strengthen its business foundation by working hard on nurturing a third pillar. As a member of management, I am always thinking about what kind of company we want Duskin to become 50 years from now and working hard to contribute to making the company a profitable and growing business.