Governance Dialogue

In Funawara 2024, two serious compliance cases of different natures occurred: a notice of violation of competition law regarding Turcus in Singapore, and an investigation by the Japan Fair Trade Commission into a logistics company in Japan. When we received the notice regarding the Turcus case, we felt that the most important thing was to quickly and accurately confirm the facts, especially since it was an overseas case. Therefore, we worked with our external auditors to quickly establish an investigation committee centered on local experts with independence and expertise, and to establish a system for collaboration with the Board of Auditors.

In the case of Japan, on the other hand, we established a system from the start of the investigation, audited progress on a regular basis, and were involved even in formulating measures to prevent recurrence.

Through these measures, we are working to strengthen our current compliance system, but creating an environment where employees can easily discuss their concerns and further utilizing our internal reporting system are essential to strengthening our compliance foundation. At the same time, it is also important to increase our sensitivity to changes in social norms. We believe that this should be an ongoing effort as part of our education and training.

Moriya: The two incidents that occurred in 2024 have once again highlighted the importance of group governance. At Itoki, we are making progress in establishing a system by establishing a Corporate Governance Division and strengthening our human resources, but we will also make improvements across the group based on the lessons learned from these incidents. Our current challenge is that we are not fully collecting information from group companies, and we believe there is room for improvement in early risk detection and response through accurate and prompt understanding of the situation. In response, we are strengthening our response through support from headquarters, collaboration with group company auditors, and direct on-site audits by our company's auditors. Going forward, we will utilize the knowledge of our headquarters to deploy a control system based on the "three-line model" throughout the group, aiming to establish a system that protects all stakeholders.

As the company's performance continues to improve and grow dramatically, I would like to work closely with the internal audit department and outside directors to achieve a good balance between "offensive governance" and "defensive governance."

Mr. Bando: Since both of you have focused on compliance, I would like to talk about the important theme related to sustainability: women's participation in the workforce.

Currently, at Itoki, thanks to the strong commitment of management to promoting women's participation in the workplace, results are gradually beginning to appear, such as an increase in the ratio of female managers. However, there is still one step to go before establishing a full-fledged pipeline for producing female managers, and awareness at the workplace level is still only half-way there. The challenge of promoting women's participation lies in how well we can provide the three elements of "expectations, training, and opportunities" to those on the verge of becoming managers. Going forward, we will need to promote employees based on their individual abilities and aptitudes, rather than simply numerical targets. We will also focus on unconscious biases not only among men but also among women themselves, and support the creation of a corporate culture that encourages confidence and challenges.

Regarding sustainability and ESG in general, I believe Itoki is making advanced and substantial progress in understanding and implementing sustainability, as symbolized by the high evaluation it received in the Nikkei Award for its integrated report. In particular, Itoki is sincerely and ambitiously working to create workplaces from the perspective of We Design Tomorrow. We Design WORK-Style." Their commitment to providing offices that maximize human capital not only for themselves but also for their Japanese clients is a perfect example of solving the S-type of ESG issue. I believe that healthy, comfortable, and productive work styles can be highly praised from the perspective of "for people." This truly balances problem-solving with business. At the same time, they are steadily making progress in solving issues "for planet," such as reducing environmental impact and transitioning to a recycling-oriented society. The challenge going forward will be to disseminate these principles and advanced initiatives throughout the group and among partner companies. I hope they will further evolve as a company that creates sustainable value for both the environment and people, leveraging the practical wisdom of "ITOKI DESIGN HOUSE."