Roundtable Discussion: Chairman of the Board and Outside Audit & Supervisory Board Members
Incorporating an "outside pair of eyes" into decision-making and achieving growth through appropriate risk-taking

In 2024, YKK AP appointed its first outside director (Ms. Tomoko Inoue, Full-time Audit & Supervisory Board Member at Hino Motors). Mr. Hachiuma and Ms. Sekiguchi have served as outside Audit & Supervisory Board Members since 2023. They use their experience and knowledge to share their Candid opinions from the perspective of those outside the company.

As a company manager myself, I have often benefited from the help of outside members of Audit & Supervisory Boards. It is surprising what you don’t realize when you are just running a business from the inside. There are things that can be seen and said only from an outside perspective.

When I was appointed as an Audit & Supervisory Board Member, I was told that they wanted my opinion on "what is normal and what is not in the outside world." As such, I am aware of the need to serve as an "outside pair of eyes."

You have both consistently provided us with many useful observations. Particularly with regard to risk, it is very helpful when someone points out that there has been insufficient consideration from a particular perspective.

In today's environment, business managers must be willing to take more risks and move forward. However, there are key points that need to be addressed when doing so. Many of the problems that occur in society result from a lack of openness, a disparity between internal common sense and public perception, or leaks of information. I would like to offer advice on these factors that can damage corporate value, allowing management to move forward with confidence, taking risks correctly and appropriately.

Outside Audit & Supervisory Board members at listed companies give opinions on management in their capacity as representatives of a diverse range stakeholders, including minority shareholders, vendors, and employees. Although YKK AP is a privately held company, I am mindful of the governance of listed companies, and try to speak from a similar perspective.
With the macro environment surrounding companies changing dramatically, including social conditions and climate change, it is very difficult to move toward the next stage of growth while ensuring that everything is still done properly. I would like YKK AP to maintain its unique strengths and aim to become a privately held company with excellent governance.

YKK AP has become the market leader in window sales in Japan, and to achieve its next stage of growth, we are actively considering alliances and acquisitions to expand into new areas, including overseas markets. The lack of staffing and information may have appeared to the two of you as floundering.

Well, YKK AP had a change of president last year. It is in the process of establishing new leadership and building a system that will move forward with a sense of urgency. This structure is not something that can be established overnight, and it was right to proceed even if there was not sufficient preparation.

I believe that in order to communicate to our stakeholders how we are actively moving toward growth and to ensure transparency in governance, it is first important to ascertain information within the company.

There is a need to strengthen communication and escalation, and to have a system in place to ensure that information on what is happening internally and externally reaches the management team in a timely manner. YKK AP is now working to centralize data, and it is also important to establish a system structure that shows exactly what is going on in terms of business operations.

The Board of Directors has to deliberate on and consider a large number of matters within a limited amount of time. We have given instructions to ensure that materials submitted to the Board of Directors are written in a way that is easy for everyone to understand, without using jargon or internal shorthand. I would also like to once again redefine the role of the Board of Directors so that sufficient time can be allocated for deliberations on the company's core agenda. Going forward, we will also consider conducting effectiveness evaluations.

There is a lot on the Board of Directors' agenda, from mergers and acquisitions to capital investments, succession plans, globalization, systems, and more. It is important to identify the really important things that need to be resolved and to take as much time as possible for deliberation.

It is not easy for outside Audit & Supervisory Board members to determine the specific details of each agenda item. While we make every effort to obtain information from the front lines, our role is to check the process leading up to the resolution and to ensure its legality, plausibility, and reliability. The rest is up to the executive side of things.
The question is how to create an efficient framework for future challenges while maintaining a sense of urgency.

What should we keep in mind when aiming to become a leading company with net sales on the order of one trillion yen?

A culture of taking on new challenges is one of YKK AP's strengths, and one that I hope you will uphold. We want to support your efforts in this regard, while keeping an eye out for any pitfalls.
In moving into new areas to achieve growth, it is imperative to achieve diversity. Creating common values within that is also a new challenge. I am confident that YKK AP, with its corporate philosophy firmly in place, will be able to achieve this goal.

Future growth will require broadening in terms of both geographic area and business domains. If mergers and acquisitions are used to integrate technology and human resources, it will likely transform the company into a new YKK AP, and I believe that this is where a new order will emerge. It is my hope that, based on the spirit of the Cycle of Goodness, which YKK AP has upheld since its founding, and which can be considered its defining characteristic, the company will deliver growth in the spirit of providing good things to society.