Interview with the Chair of the Board of Directors

Last fiscal year, various issues of concern in Japan to our stakeholders came to light that I take very seriously. I decided to accept the role of Chair of the Board to tackle management issues from a supervisory standpoint, because I hope my experience as a leader of one of Japan’s leading financial institutions might be of some help to the management of the Group.

I believe a core matter to address is communications but there are three we need to address. First is to revitalize communication, then restructure internal controls and reform our execution.

On the first issue and ensure the Board of Directors of the holding company fully grasps how the Group's philosophy, plans, and policies were being understood and implemented, we asked Group Chief Financial Officer Masahiro Hamada and Group Chief Human Resources Officer Shinichi Hara to become new directors from June 2024. I expect them to provide the Board of Directors with fresh perspectives and more precise information. Together with Group Chief Executive Officer Mikio Okumura, this executive team is responsible to properly communicate to the Board of Directors progress within Sompo Group.

As an organization, a company is established by strong interactions between vertical and horizontal information, that is, through communication. An organization is a group of people, and I believe in the wisdom of moving forward while checking, using diverse information from all directions, whether the path our organization is taking is correct. In a company, the vertical threads are very strong and reporting lines are clear, but the problem lies with the horizontal lines. It is very important but challenging task to always ensure sufficient communication to obtain neutral, unembellished information.

Every organization faces challenges in communication, and I have never found it to be easy. If we create an environment where everyone can speak in an open, frank way, the Group should be able to get off to a quick start towards reforms. It is the first point I would like to focus on as Chair of the Board of Directors.

To restructure the internal control system, I believe the Board of Directors, and especially the external directors, must provide strong support. Already opinions have been shared and some measures initiated to strengthen the third line of defence, but I would like to make these more concrete and effective.

With Mikio Okumura’s appointment as Group CEO to transform the Group, our third issue is to support reforming our execution. The Board of Directors must closely monitor whether transformations are moving in the right direction and progressing ahead of plan. A system of checks and balances is necessary, but I believe that a major part of oversight is creating an environment in which the executives can make bold decisions for the betterment of the company and in the interest of shareholders and other stakeholders. It is necessary therefore to clearly express our thoughts on risks, and I intend to make my stance clear on what should not be done but, otherwise, we must respect the senior management team that is leading the Group 24 hours a day, 365 days a year.

In rapidly changing and competitive times, I expect the Group CEO to demonstrate leadership and work with a sense of urgency and believe an important role of the Board of Directors is to encourage him to create an environment for things to move forward smoothly and with a sense of urgency.

One main themes for the Board of Directors is the business improvement plan. Since assuming my position as Chair in April 2024, we have been monitoring progress via monthly reports, discussing all the issues we are aware of and confirming our direction.

I particularly keen we change what needs to be changed, and execution remains a problem where the Board of Directors is actively monitoring the nature of the problems and progress being made. We are a Group with diverse businesses, and the scope covered by the Board of Directors of Sompo Holdings is quite broad. Up to now, our approach has been to focus on important points and discuss them from a broad and high-level perspective. However, for this fiscal year at least, I think we need to look at how the employees on the front lines of each business understand and perceive the situation.

For example, this year, the Group's Purpose has been rephrased as “For a future of health, wellbeing and financial protection.” How the employees on the ground understand and truly internalize it is important to me. What we need to do is to take advantage of the individuality of each person and create an environment that allows expression of that individuality within the organization. Until now, the vertical thread of the company has been too strong in some areas, but if we can grasp the real situation on the ground and strengthen horizontal communication, I believe we can make Purpose more meaningful and channel it into true Purpose-driven management.

First, is a firm communication framework integrating the vertical and horizontal threads I mentioned earlier. Globally, we have a very large number of employees, and the Company is built on the strength of each and every one of them, so it is essential we have an operating environment in which they can freely and vigorously discuss issues and solutions.

Another challenge is creating added value as a Group business. We are living in an era of accelerated evolution in which our environment can completely change from one year to the next. On a global scale, natural disasters continue to increase mainly from the effects of climate change, and there are issues such as how to ensure personal safety. In developed countries, issues related to nursing care and health are emerging with declining birthrates, aging populations, and declining working-age populations. Our Group is a rare entity that is trying to tackle these essential issues in society of securing lives and pursuing wellbeing. How we can leverage Sompo's strengths to create added value will set us apart from other companies; simply creating the same thing as others will inevitably lead to commoditization.

We need to sharpen our focus on what makes our business different. There are numerous societal challenges, but that also means there are countless opportunities. As evident from the diversity of our business operations, I believe Sompo Group has many advantages that will enable us to seize these opportunities.

Accordingly, I intend to communicate closely with the executive team and occasionally offer advice, to support this transformation and revitalize the Group to grow our corporate value.