Top > Corporate Social Responsibility > Management > Corporate Governance
Management Activities Emphasize Transparency and Responsiveness
The Benesse Group strives to promote a decision-making process which is highly transparent, and which responds quickly in making and implementing decisions. The Board of Directors includes Advisory Committees, and the Group has actively increased the number of outside directors and outside corporate auditors. Benesse strives to strengthen oversight functions and to enhance management quality by leveraging these distinctive characteristics.
Comments from an Outside Corporate Auditor
A Company that Communicates with Employees to Develop a Positive Corporate Culture
Nobuko Takahashi
Outside Corporate Auditor
I have served as an outside corporate auditor for Benesse for two years, and have received an extremely positive impression of the Group's systems of corporate governance, as well as the effective way in which the Company implements these systems. The auditor's role is generally regarded as being to identify and report internal problems in a company. My responsibility, however, does not end with the identification of a problem; I think that the most important aspect is to ensure that issues are addressed and corrected as quickly as possible. If there is a problem, then I want to work closely with Company employees to address it and work with them to build a better corporate culture. I have the sense that at Benesse, it is possible to play this sort of active role in the Company.
Benesse's auditors are allowed to attend all important management meetings, and have access to all reporting documents. I also find that Company management and employees are very forthcoming; I can ask questions of practically anyone I meet. I think there are only a small number of listed companies where auditors receive this degree of access to actual operations. Furthermore, at the Board of Corporate Auditors meetings every month, issues that are raised receive active and energetic discussion, to the point that the meetings often run longer than scheduled.
Promoting a More Objective Viewpoint Based on Increased Contacts with “the Outside World”
I have always had the impression that Benesse is a broad-minded, teamwork-oriented organization. Employees are constantly focusing on the “next generation,” and are ready to move in the same direction, so that when the Company advances, it does so at a rapid pace. The one point that I do want to make, though, relates to the danger of corporate “groupthink,” which can cause people to view “abnormal” conditions as “normal.” Often, people within an organization come to view certain features of the company as “natural,” whereas someone from outside the company might find them to be quite unnatural. Employees need to have opportunities to expand their horizons and see how things are done elsewhere, so that they can take a more objective look at their own workplace. As an outside auditor, I think my role is to help provide that sort of outside viewpoint.
I also happen to be a Benesse customer, so I can offer Benesse my opinions on a range of topics from a user's viewpoint as well.
Management Structure
Benesse uses the corporate auditor governance model and in April 2003 introduced the Corporate Executive Officer System in order to clarify responsibility for business execution. Benesse puts emphasis on the role of Independent Directors in the Board of Directors, thereby strengthening the board's oversight functions with respect to management. Similar emphasis is placed on the presence of outside Corporate Auditors in the Board of Corporate Auditors, serving to ensure a high degree of independence and to enhance management oversight. At the core of the current management system are three Representative Directors and one Director and Vice Chairman. Benesse's Board of Directors has 10 members, 4 of whom are Independent Directors, and the Board of Corporate Auditors has 4 members, 2 of whom are outside Corporate Auditors. In addition, there are presently 15 Corporate Executive Officers, 3 of whom are also Directors.
Benesse has also selected five individuals from the managers of key consolidated subsidiaries to act as Group Executive Officers. These individuals are not only responsible for managing subsidiaries, but also for increasing Group-wide synergies based on the same level of responsibility and authority for Group business strategy as Corporate Executive Officers.
Corporate Governance System
*As of June 2009
Committees Established as Management Advisory Bodies
| Committee | Overview of Activities |
|---|---|
| Corporate Executive Officer Nomination, Development and Compensation Committee | With the Vice Chairman and Deputy CEO serving as committee chair and full-time Corporate Auditors present as observers, this committee is charged with decisions regarding nomination, assessment and development of Corporate Executive Officers, as well as clarifying compensation criteria and making related processes more transparent. |
| Organizational and Human Resources Committee | This committee is responsible for examining personnel requirements and organizational matters from a medium- to long-term and Group perspective. The President and COO serves as committee chair. |
| Business Investment Committee | Chaired by a Representative Director, and with Independent Directors and Corporate Auditors as members, this committee examines important management issues that could potentially trigger large monetary changes in capital or assets. The committee also scrutinizes new high-risk business projects, investments and loans, and other matters that require more objective insight. |
*As of June 2009
Board of Corporate Auditors and Audit System
Benesse's audit policy is designed to ensure that the Board of Corporate Auditors fulfills its responsibility of creating a robust and trusted corporate governance system based on a shared understanding of key management issues with senior management. Based on this policy, Benesse emphasizes preventative audits in line with regulations governing audits performed by the Corporate Auditors. In principle, the Board of Corporate Auditors meets every month.
Corporate Auditors regularly exchange opinions with senior management, and attend meetings of the Board of Directors and other important management meetings. The Corporate Auditors also receive business reports from the Corporate Executive Officers and vigorously perform audits of operational status and other areas. At the same time, the Corporate Auditors work closely and actively exchange opinions with the independent auditor and Internal Audit Department, proactively offering their own insight from an audit standpoint.
For internal audits, the 12-member Internal Audit Department audits all business units, including subsidiaries, based on annual audit plans, using the results to provide assessments and recommendations. The Internal Audit Department also reports the results of these audits to senior management and the Corporate Auditors.
For financial audits, Benesse has appointed independent auditor Deloitte Touche Tohmatsu, which conducts regular audits of the Company's accounts. To mutually strengthen ties, the Corporate Auditors, Internal Audit Department and the independent auditor hold regular joint meetings to exchange operational reports and other information as necessary.
Board of Directors
The Board of Directors, which is restricted to less than 10 directors, is headed by the Company's Chairman and meets in principle every month. It is responsible for management decision-making on important matters and monitoring business execution. The board is advised by two committees: the Nomination and Compensation Committee, and the Takeover Response Committee.
The Nomination and Compensation Committee is headed by the Company's Chairman and selects candidates for the posts of Director and President. It also examines proposals for dismissals, as well as formulates remuneration systems and operational policy and determines pay levels for Directors. The committee's membership includes all the Independent Directors and one Corporate Auditor. The inclusion of a Corporate Auditor as a committee member is to ensure that the committee properly fulfills its oversight function, although the Corporate Auditor has no committee voting rights.
The Takeover Response Committee was established to examine the Company's response to any large-scale purchase of its shares. All Independent Directors and outside Corporate Auditors sit on this committee, which can also obtain advice from external specialists as needed.
Business Execution and Ensuring Transparency
Regular employees observe top management decision-making processes.
Benesse operates a system of three committees as decision-making organizations for important matters concerning management policy and management. One of these committees is the Headquarters Management Committee (HMC), which discusses important operational execution matters for the parent Company and the Group as a whole. Chaired by the President and COO, this committee meets in principle twice a month. In addition, Benesse has also established Division Management Committees (DMCs) and Company Management Committees (CMCs) as decision-making bodies for important matters related to in-house companies and major subsidiaries. These committees, which in principle meet monthly, are headed by business division directors, or presidents of subsidiaries. In a bid to ensure the transparency of the examinations and processes conducted, in principle, any manager or employee can sit in and observe the meetings of all these committees. The results of their deliberations are shared within the Company.
Another part of Benesse's management structure is the Group Strategic Marketing Committee, headed by the Chief Marketing Officer (CMO). This committee, which in principle meets every month, is responsible for studying and assessing Group-wide marketing strategy, policy and initiatives.
Benesse Group's Management Policy
Philosophy
Benesse: Enjoying life to the full by aiming high, steadily working to realize dreams and ideals, and enjoying the journey at the same time.
At Benesse, we are striving to become an indispensable partner for customers, local communities and society at large by working to make the symbolic meaning of Benesse a reality. To do this, we are providing support in the fields of education, culture, lifestyle and welfare to help people make the most of life and tackle the issues they face everyday.
Realizing our corporate philosophy through our products and services.
A Visionary Company
*Sales activities to cultivate understanding of Benesse's corporate philosophy as well as its products and services
Corporate Culture and Behavior Guidelines
Employees are the Benesse Group's most important asset and the source of our competitiveness.We are striving to create a corporate culture where every employee has a crucial role to play. This will mean becoming a company where employees can take pride in their work and continue to develop by fully realizing their capabilities in the pursuit of personal goals. At the same time, we will strive to create an organization that draws its strength from maximizing the abilities of all its employees.
- Pursuit of Benesse
Always think about and act in accordance with the idea of “live well” (Benesse). Make every effort to be a good citizen in harmony with your family, local community, society and the global environment. - Customer Focus With Top Priority on Trust
Place the greatest weight on trust. Always conduct work sincerely, wholeheartedly, with your focus on the customer. Work to offer products and services that win high levels of customer satisfaction by making use of advanced technologies and close communication, while keeping how the products and services are used in mind. - Teamwork and Communication
In the pursuit of key objectives, sharing clear goals and roadmaps and ensuring good teamwork are essential. Teamwork means meeting your commitments to the team: fulfilling your individual responsibilities, collaborating with other members of the team, helping to train junior employees, and working toward personal and team targets.
Strive to increase the power of the team through dynamic communication where team members conduct free and open discussion regardless of their department's or their individual position in the debate. - Creativity and a Determination to Take on New Challenges
Always remain aware of potential issues retain a sense of intellectual curiosity and take an international perspective; carry out your work with a high level of awareness and creativity.
Place importance on Benesse's essential, unchangeable characteristics rather than being swayed by the latest fads; strive to create new kinds of value based on a vision of what Japan and the rest of the world will look like 10 to 20 years from now. - Transparent Decision-making
Ensure transparency in decision-making and accurately explain ideas, facts and figures from an objective standpoint. - Total Optimization
Do not become preoccupied by the immediate details of your own work; instead, strive to understand the goals and strategies of each department and the Group as a whole, acting and thinking based on a broad perspective. - Integrity
Comply with all rules and regulations, remain sensitive to the needs of business partners, and pursue profits that the public will perceive as benefiting society as a whole. - Zero Base
Start from scratch (zero base) rather than relying on past approaches, best practices or social obligations that restrict innovative thinking; choose the optimum business processes when taking on a new task.
Pursuing an Outstanding Business Model
The Benesse business model, which has continued to evolve over more than 50 years, is underpinned by lessons and approaches learnt by the Company's founder from earlier business failures. Subsequent Benesse employees then used their originality and ingenuity to build up the Company. As Benesse has moved into new business fields, we have pursued a more advanced business model.
Keywords in Benesse's Evolving Business Model
Basic Values and Standard for Decision-making
When planning new businesses, based on the business model keywords and in accordance with the following criteria, always assess if there is the potential to build an outstanding business model.
- Does the business conform to Benesse's corporate principles and philosophy?
- Will the business clearly provide value to customers and earn their satisfaction?
- Does Benesse possess the core competencies (unique competitive advantages or specialist skills), or are there external partners that can complement the Company's strengths?
- Does the business' market offer the potential for growth?
- Can the business generate sustained profits?
If the business meets these criteria, plan an exit strategy and then move forward boldly.
Key Management Strategies : Toward 2010
Guided by the keywords “Selection,” “Concentration” and “Reform,” we will work to build an outstanding business model that will drive sustained growth.
- [Selection] Review the operating fields and target markets of existing and new businesses in accordance with the Basic Values and Standards for Decision-making.
- [Concentration] Optimally distribute internal resources across the entire Group.
- [Reform] Search for ideal approaches for the business model and business processes in production, sales and the basic operating structure.
Performance Targets
- As evidence of customer trust in Benesse-net sales : 430 billion yen
- As evidence of our own efforts-operating income : 43 billion yen
- As evidence of the effective use of shareholders' funds : ROE 12%
- Enhance and extend the Benesse Brand in the education field
Create diverse places for learning, help boost the motivation of customers, encourage greater student interest in education, help to boost the motivation of studentsin learning, and take other steps to provide products and services that offer customers real value.
Emphasizing the Benesse brand in the education field means more than just operating an education business-each of our employees also has to continue learning for themselves based on a sense of modesty. - Reinforce and evolve the direct marketing model to create new markets
Link face-to-face marketing activities with local communities and the media to develop new customer segments and enhance our ability to close sales. For customers who have emotional ties with Benesse throughout their lifetimes, build mechanisms for creating contact points that lead to better, long-term relationships, thereby supporting a more sustainable business model. - Create a powerful corporate structure
Tap the creative ability of all our employees, improve the productivity of teams, and actively reform business processes; create a corporate structure where reform and personal development are integral parts of business processes.
