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Report on the 15th Dialogue with Stakeholders

Date: July 20, 2018
Participants: Stakeholders:
Shinichiro Hyogo
Chief Analyst/Chief Fund Manager,Asset Management Division, Mitsubishi UFJ Trust and Banking Corporation
Masatoshi Tamamura
Professor, Faculty of Policy Management, Keio University
Shu Yamaguchi
Senior Client Partner, Korn Ferry Hay Group Co., Ltd.

Satoshi Suzuki  Representative Director and President
Naoki Kume  Director and Vice President
Akira Fujii  Director

Sharing thoughts and philosophy with customers and employees is key to corporate competitiveness in the 21st century

Mr. Hyogo  ESG investment is rapidly expanding these days but until just recently was viewed with not a little skepticism. Even then, I said that governance is particularly important within the ESG framework and that a lack of good governance can lead to a significant erosion of corporate value. Floods and extreme heat caused by abnormal weather and even the pervasive nature of the Internet-these developments have heightened business risks more than anyone in the past could have imagined. Vigorous efforts to deal with risks related mainly to the environment, human rights and human resources create the corporate vitality that underpins the capability to capitalize on opportunities. It is important to address risk long term as part of management strategies.

Mr. Tamamura  My area of expertise is corporate social marketing.
For a long time, your company has created businesses that consistently influence society-or are influenced by society-over the entire value chain. Going forward, from a CSV* perspective, I think you need some sort of competitive axis, like being the No. 1 company for empowering women. You have to state this explicitly.
*CSV: Creating Shared Value

POHD  Cosmetics have always been a cultural commodity, with external beauty leading to inner beauty. This underscores a feeling to be active in society and to be successful. In the POLA business,some 45,000 Beauty Directors function like a bridge, closely linking the people and the economy of the region in which they work. Few companies are able to think about business as a member of the community, as a consumer. Going forward, we will tackle CSR from an original businesslike perspective.

Mr. Hyogo:  Then the question is how do you convey the president's ideas to tens of thousands of people. And how do you get everyone to instinctively understand management's philosophy?

Mr. Yamaguchi:  For example, an art collector is more of a supporter than a consumer. In the future, the connection between companies and their customers might become based on something similar to art. Companies have messages to get out, and people who sympathize with the stated concept will gravitate toward that company. When like-minded individuals gather, saying, “I want to work here” or “I want to buy this company's product,” then you know governance that is highly independent works.

POHD:  When I go around to Group companies, I feel that top management should convert our thoughts into words and put them in writing to explain to employees. Back in 2002, we hammered out a new vision and established a research facility with no separation between cosmetics and pharmaceuticals. An employee had realized that this was an opportunity to do something different. The first thought in art is to be unique. Never do the same thing someone else is doing. When researchers stopped for a moment and thought, “Are we on the right track with what we're doing?” that was a watershed moment, leading to the revolutionary product Wrinkle Shot. Going forward, we will do more than just convey management's message by posing questions and engaging in dialogues to communicate deeper meanings.

ESG Information
Corporate Report2020