Formed from the Latin roots bene (“well”) and esse (“live”), the word “Benesse” – to “live well” – serves both as our company name and corporate philosophy. In each of Benesse’s business fields – domestic education, overseas education, lifestyle, senior/nursing care, and language/global leadership training – we strive to support the desire for self-improvement that enables people to lead better lives. We believe that continuing to provide products and services grounded in a deep commitment to our corporate philosophy is the key to Benesse’s distinctiveness, its competitiveness, and to sound, sustainable growth.

On October 1, 2009, Benesse Holdings completed its transition to a holding company structure. Under this new structure, Benesse will focus on growth strategy promotion and effective allocation of management resources, while operating companies will concentrate more on business execution. Determined to realize greater growth, the Benesse Group is meeting the challenges of a changing business environment, including Japan’s low birthrate and aging population, the rise of globalization, and advancements in telecommunication network technology. To this end, the entire Group is united in developing a management framework capable of stimulating growth and expansion well into the future.

The management framework we are working to develop and operate under the holding company structure further separates management oversight from business execution, allowing operating companies to pursue autonomous growth, and supporting and enhancing the Board of Directors’ management oversight functions. We believe this to be the best way to fulfill Benesse’s corporate philosophy and retain sound business growth, as well as to maintain a proper relationship with stakeholders and achieve our corporate mission.

In January 2005, Benesse marked its 50th anniversary by formulating and publicizing the Benesse Group Code of Conduct. In April 2008, the Company partially revised this code, and extended the scope of its enforcement beyond domestic Group companies to include all Group companies, including those overseas. In tandem, we conduct timely and appropriate training for executives and regular employees to ensure that standards of behavior are properly instilled throughout the Company. In this way, the Benesse Group strives to remain a company that continuously delivers value to society through strict compliance with societal norms, corporate ethics, and applicable laws and regulations.

Benesse’s management framework consists of eight Directors (four of whom are Independent Directors) and four Corporate Auditors (two of whom are outside Corporate Auditors). We elect several Independent Directors on an ongoing basis, thereby maintaining and improving the board’s management oversight functions.

The Nomination and Compensation Committee, which serves as an advisory body to the Board of Directors, was established with the tasks of selecting candidates for the post of Director and evaluating Director performance. Independent Directors comprise over half of the committee’s members, and emphasis is placed on operating the committee in a manner that is fair, honest and appropriate.

The Corporate Auditors monitor the Directors in the performance of their duties from an objective viewpoint. They also participate in meetings of the Board of Directors and other important meetings, and actively exchange opinions with senior management in order to audit the status of business execution. In May 2007, we moved to further enhance these monitoring functions by establishing a Corporate Auditor Hotline. This internal mechanism allows any Group employee to anonymously report problems concerning Directors or other senior managers directly to the Company’s full-time Corporate Auditors.

Under the holding company structure, Benesse is responsible for collecting and sharing information pertaining to Group-wide business execution and providing leadership, as stipulated in internal regulations governing operating company management. The purpose here is to realize Group-wide management policies and Benesse’s long-term vision, and to meet the Group’s numerical business targets. For the purpose of finalizing business plans, the Group is divided into five strategic business fields and four operating companies that fall outside of these domains. The business plans drafted by the leaders in each business field are vetted by the Group Growth Strategy Committee, with Benesse senior managers in attendance, and by the Board of Directors. The outcome of this process is passed to the Board of Directors, which gives its final decision on the plan.

For each business field, we have established management committees, like the SBCs (Strategic Business Unit Committees), which are responsible for researching, reporting and deciding on important matters, as well as reporting on business performance. These committees are attended by the President, the Vice Presidents, Chief Officers, and Corporate Auditors, who offer their opinions on the issues discussed. Especially important matters are placed on the agenda of the Board of Directors and researched further, allowing Benesse as the holding company to supervise business execution across the entire Group. In line with internal regulations, any items requiring deliberation must be put to these management committees, a step designed to enhance decision-making transparency and clarify accountability.

The Board of Directors meets monthly, in principle, and is responsible for vital decision-making and the supervision of business execution. The Nomination and Compensation Committee, the Takeover Response Committee and the Group Company Officer Nomination Committee have been established as advisory bodies to the Board of Directors. The purpose of the Nomination and Compensation Committee is to research the selection of candidates for the post of Director, or for possible termination, and to clarify the process and standards for deciding Directors’ compensation. The committee is chaired by the Chairman of Benesse, and consists of the President and three or more Independent Directors. 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, along with external specialists. The Group Company Officer Nomination Committee is responsible for requests regarding the selection or termination of representative directors for major operating companies and Chief Officers at Benesse. The committee also establishes compensation systems and decides individual compensation packages for these officers. The Company President, Vice Presidents, Chief Human Officer (CHO), and Group Controller (GC) all sit on this committee, as well as Corporate Auditors when necessary.

In principle, the Board of Corporate Auditors meets every month. The board follows audit guidelines set by the Board of Corporate Auditors, and places an emphasis on preventative audits. The Board aims to audit effectively through a shared understanding of key management issues with senior management, and by actively offering its opinion on these matters.

For internal audits, Benesse has an Internal Audit Department. In accordance with annual audit plans, the department audits the Company and its operating companies, and based on the results, provides assessments and recommendations. The Internal Audit Department reports the results of these audits to senior management and the Corporate Auditors.

The Corporate Auditors and the Internal Audit Department enhance mutual cooperation by exchanging business reports and other information, as needed, in a timely manner. The Internal Audit Department also attends meetings of the Board of Corporate Auditors as necessary.

For financial audits, Benesse has appointed independent auditor Deloitte Touche Tohmatsu, which conducts constant audits of the Company’s accounts. The certified public accountants responsible for auditing Benesse’s accounts are Shinji Murakami (first fiscal year), Hiroyasu Kawai (first fiscal year), and Mitsuyasu Nakagiri (sixth fiscal year). The Corporate Auditors and the independent auditor work to deepen cooperation by exchanging information as necessary, including holding regular joint meetings where business and other reports are presented. Joint meetings are typically held four times annually, and serve as forums for the discussion of audit plans and the status of audit implementation.

With respect to business execution, Benesse has established the SBCs and other management committees in each business field to examine, report and decide on important matters, and to report on business performance. These committees are attended by the President, the Vice Presidents, Chief Officers, and Corporate Auditors, who offer their opinions on the issues discussed. Especially important matters are placed on the agenda of the Board of Directors and researched further, allowing Benesse as the holding company to supervise business execution across the entire Group. In line with internal regulations, any items requiring deliberation must be put to these management committees, a step designed to enhance decision-making transparency and clarify accountability.

Additionally, Benesse has established the Group Growth Strategy Committee, the Organizational and Human Resource Committee, the Business Investment Committee, and the Risk and Compliance Committee. Each committee was designed to serve a specific purpose. The Group Growth Strategy Committee examines matters concerning the Group’s medium- to long-term business strategies, while the Organizational and Human Resource Committee researches human resource-related issues, including Group management candidate training. The Business Investment Committee is responsible for examining the acquisition or disposal of important Group business assets, while the Risk and Compliance Committee is charged with promoting Group-wide risk management and compliance activities.

Benesse strives to remain a corporate group that provides real value to society. We therefore conduct timely and appropriate training programs to make all Group officers and employees aware of the Benesse Group Code of Conduct, and we require every employee to adhere to this code. The Group has also established, and operates, the Speak Up Line – a system for reporting violations of the code. In formulating the code we consulted widely with Group officers and employees to create a document that reflects the Group’s values and the standards each employee should use in making decisions in their work.

The Board of Directors has passed resolutions in accordance with Article 362, Paragraph 5 of the Companies Act that define the basic policies of the Internal Control System, which is based on the Benesse Group Code of Conduct. The resolutions also set out the general outline of the changes to the system that are required to comply with the Companies Act.

For risk management, Benesse has developed a simple and unambiguous response structure designed to quickly convey information to senior management in times of crisis. The structure is based on procedures for managing risks that apply to the entire Group. In information management we follow regulations governing document management and related manuals, requiring important information to be stored for at least 10 years.

As part of an internal control system for a corporate group, Benesse Holdings oversees management and business execution performed by Group companies in accordance with regulations for supervision of Group company management. At the same time, the Company’s Chief Financial Officer (CFO), CHO, Chief Risk Management Officer (CRO) and GC act as needed to offer advice and make requests regarding matters that need to be addressed on a Group-wide or cross-divisional basis. Along with these Chief Officers, Benesse has established the posts of Chief Marketing Officer (CMO) and Chief KIBAN Officer (CKO), the latter being responsible for supporting infrastructure development and IT. Taken together, these appointments reflect efforts to boost management efficiency and enhance synergies Group-wide.