Outside Directors’ Roundtable Discussion

As the business environment undergoes significant changes, companies are required to address unprecedented governance challenges with a sense of urgency in order to enhance corporate value over the medium to long term. In this discussion among three outside directors, the directors share their thoughts on the expectations and challenges surrounding governance management and sustainability management at the WILL GROUP.

Outside Directors Sharing Valuable Insights

• I was appointed as an Outside Director of the WILL GROUP just this year. The Company is in the temporary staffing and permanent placement businesses with various business domains under its umbrella. I believe the company possesses significant latent corporate value that has yet to be fully communicated externally. Additionally, the Company could enhance its communication about how it aims to contribute to society through its businesses. I only came to fully appreciate the Company's fascinating qualities after joining the Board, and I would like to see these aspects shared externally as a compelling narrative that highlights its attractiveness. With the shift in leadership last year to a new generation, the organization feels more energized now, and I am eager to contribute to this momentum as well.
• I am also in my third year as an Outside Director of the WILL GROUP, and what I have observed throughout my time here is that the company is growing exactly as expected. A young management team has taken the reins from the leadership that grew the company into one listed on the Prime Market of the TSE. Despite the pressures of his role, President Sumi is fearlessly steering the company forward to new challenges. I also aim to work alongside the team to think about the company's direction and work to ensure there is consideration of how the company is being perceived externally.

Culture of Transparency and Open Discussion on the Board of Directors

• One of the most distinctive features of this company's Board of Directors is that it is both a serious forum and a place for frank discussions. Outside Directors are often seen as representatives of shareholder interests, and at some companies, this results in certain information being withheld from them. However, at this company, management consults openly with Outside Directors, sharing both the good and the bad without trying to hide anything, and that motivates us to do our best as part of the team. At Board meetings, the agenda and discussion points from the preceding Management Committee meetings are also shared with us, ensuring transparency.
  This likely stems from the fact that the company has cultivated a team of many young executives who take a sense of ownership in their roles. This company culture was cultivated over time as the current management team's members grew as individuals alongside the growth of the company itself, learning to discuss successes and failures candidly and to take action with a sense of urgency. I hope this spirit is passed on when training the next generation of leaders as well.
• One aspect of the company that has impressed me, even before I was appointed to this position, is its robust approach to succession planning for businesses. Although a company with a quarter-century of history, it approaches succession nominations in a systematic way and has replaced the majority of the top executives and supporting members of management, which is something other companies may not be able to do. On the subject of remuneration, the company has a dedicated Remuneration Committee that determines the remuneration of directors and executive officers, and even at the subsidiary level, independent processes have been established for determining compensation. As Mr. Koshizuka mentioned, there is a compensation structure in place that fosters a sense of ownership and personal responsibility. However, establishing a similar structure for executives overseas presents significant challenges, primarily due to tax complexities arising from the company’s status as a Japanese entity. This is an area that requires further thoughtful consideration.
  I have no complaints about the level of information-sharing before and after Board meetings. I can ask questions whenever something is unclear. Furthermore, the Board of Directors is not just a place for lively discussions; there is a healthy sense of tension from President Sumi as he works to represent the executive side of the company.
• This year, President Sumi announced a downward revision of the targets in the Medium-Term Management Plan. This reflected the company’s rapid growth, which later plateaued due to labor shortages both domestically and internationally, as well as changes in the HR industry. As a result, the company decided to take a step back in order to position itself for a future leap forward. I agree with this decision from the perspective of ensuring the company’s sustainable growth, as it is part of a larger plan to recoup strength before a renewed push forward. Of course, it is a move that could unsettle investors, and we have thoroughly discussed this matter in Board meetings.

• While we engage in a variety of discussions at the Board meetings, a Board of Directors has no purpose if it cannot produce conclusions to those discussions. We have a responsibility to provide solutions to problems, and moving forward, we will focus on how the company can grow and maintain its competitive advantage.
• I sometimes reflect on the value of my role and the purpose as an Outside Director, but at this company, management is open to our opinions and suggestions, and welcomes them positively. This enables us to have actual discussions about the future and makes this role fulfilling. Additionally, there are frequent internal company events, such as one titled “Meet the Outside Directors,” which I attend alongside employees. This event attracts many young and energetic individuals. I feel that this open and honest company culture is reflected in the atmosphere of the Board meetings as well.
  The company also provides ample learning opportunities for both executives and employees, serving as a unifying force within the organization. This includes workshops and events encouraging interests beyond the temporary staffing sector, which is another notable aspect of this company.

Challenges in Global Governance and Communication of Information

• One of the current challenges facing the company is global governance. Until the year before last, the company benefited significantly from overseas sales. However, since last year, the focus has shifted, with the Domestic Working business, particularly the construction sector, becoming a key driver. Previously, we respected the autonomy of overseas management team in managing their operations. However, given the current business environment, there is now a need to strengthen overseas governance. Moving forward, we will collaborate closely with the management team to develop growth strategies that are better tailored to the unique characteristics of each country and region.
• This challenge is not unique to this company. The reality is that many Japanese investors do not understand many different aspects of overseas businesses, so they cannot invest in them. In this case, the company's significant efforts to enhance overseas operations have not been recognized by investors because, as Mr. Koshizuka said, much of the management was entrusted to local professionals, making the results less visible.
  Another reason is that the strength of the Overseas Working business is not being well-communicated. We need to clarify how we intend to focus on and develop our Overseas Working business to improve investor understanding and raise the company's valuation. That said, the company’s commitment to global strategy and taking on the challenge of overseas operations deserve recognition. While investors tend to be somewhat critical of Japanese companies’ overseas ventures, there are HR market opportunities throughout the world, so I hope investors will take a more supportive perspective.
• WILL GROUP has established a unique position overseas. For example, in Australia, a significant portion of our clients come from the government and banking sectors. If we were to imagine that this took place in Japan instead, it is akin to Japanese government agencies and banks relying on overseas temporary staffing companies. Essentially, we are doing that same thing abroad. However, this unique strength is not easily understood by the general public. The typical reaction is often unimpressed, making it challenging to promote this effectively. How can we communicate this unique market position, this rare type of strength, in an effective way? That is a major issue facing the company right now.

Message to shareholders and investors

• WILL GROUP is not just a company that serves as intermediary or permanent placement company. We support the long-term growth of individuals and work to enhance their value. We deliver human resources to society, indicate pathways for career advancement after securing a job, and even offer education and training during that process, providing opportunities and information almost as though we are growing a koi fish, which grows and transforms over time, our approach to career development fosters continuous growth and success. Our role is not merely transforming A into B; we grow A into B and then evolve it further into C. What attracted me to this company is its philosophy of “adding value to society.” As a temporary staffing company, I want us to grow while cherishing this philosophy. This mindset has already permeated the company like the company conscience, and young employees with admirable hearts and minds work in jobs that contribute to society.
• In that way, WILL GROUP is a company that values people. While temporary staffing services are often perceived as simply filling in gaps where workers are needed, we go beyond that to connect people with one another. This, I believe, is what really increases our corporate value. That said, we cannot climb a mountain without equipment. It is crucial that we understand what assets we already have before we expand our business. If WILL GROUP's business starts with "Working,” then proceeds to “Interesting,” “Learning,” and “Living,” and creates a breadth of sectors in this way, it will be able to grow and evolve in a unique way. I hope this company continues to strive toward that vision.
• The WILL GROUP contributes to the human capital of both its clients and itself. By taking individuals who start as temporary workers and growing them into full-time permanent employees, we also contribute to the human capital of society as a whole. President Sumi has expressed his desire to achieve this vision, and we too will support him in making it happen.