OSAKI ELECTRIC carries out a new growth strategy to continuously improve corporate value in a changing business environment.
We asked two independent directors about OSAKI ELECTRIC’s strengths, and their evaluations and expectations for the Mid-term Management Plan.
―From your perspective as independent directors, what are OSAKI ELECTRIC’s strengths and challenges?
Takashima OSAKI ELECTRIC has been a stable supplier of high-quality electric meters to major power companies over decades. It’s a highly respectable company with great track records. Since taking my position as an independent director, I took it as my responsibility to remind the company how favorable the business environment has been, and I have continued to point out to the Board of Directors that they should not take the company’s good position for granted.
Kasai I agree. I think that being in a good position has been our greatest strength. By establishing close relationships with its customers, the OSAKI Group can estimate future demand up to several years ahead and the technology required to meet the upcoming demand, making it easier to formulate management strategies. Looking ahead, it will be necessary to take on challenges in new markets, anticipating needs and developing new businesses.
―What are your thoughts on OSAKI’s business environment and the management issues associated with it?
Takashima In Japan, replacement demand for smart meters has run its course and is temporarily on the downturn. On the other hand, in 2012 we acquired EDMI, the Singapore-based smart meter company, and expanded our global business. I think this was a well-timed acquisition. The engine of our future growth is in the global market. The biggest issue is how quickly we can establish a business base that will expand sales and profits globally. It is important to make bold changes in the management and corporate culture to achieve our vision of becoming a “Global Energy Solution Leader.”
Kasai For OSAKI, expanding business in the global market is the key to its future growth. We, the Members of the Board at OSAKI ELECTRIC, must remind ourselves that global business operations are very different from Japan. EDMI has excellent human resources who are familiar with global markets. While OSAKI ELECTRIC has been successful in Japan, to become a truly international company, a stronger global perspective must be integrated into the management structure. I will firmly support our global growth, utilizing my own many years of experience in international business development.
―OSAKI ELECTRIC has announced its first Mid-term Management Plan. Which of the factors did you most place importance when formulating the Mid-term Management Plan?
Takashima As the company undergoes major changes in its business environment, it is important to determine the company’s medium-to long-term goals and formulate specific tactics to achieve them. Based on this perspective, I regard the Mid-term Management Plan as important and valuable to the Group. I also note that the president himself explained the strategy to the shareholders and investors, as well as delivered the message to employees that the OSAKI group must change. In my role as an independent director, I believe my mission is to check the progress of the Mid-term Management Plan and to monitor the plan-do-check-act (PDCA) cycle. There will be times where some adjustments should be made to the strategies, and I will make it my responsibility to thoroughly evaluate these adjustments.
Kasai Since I joined the Board, I have continued to point out the importance of setting operating profit targets. In the past, business strategies and targets were discussed based on sales and gross profits at in-house meetings, but from a stakeholder’s perspective, strategies to expand operating profits are important. I believe we have answered to stakeholders’ expectations when the Company presented its Mid-term Management Plan with mid-term operating profit targets.
―OSAKI ELECTRIC established a new Nomination and Remuneration Advisory Committee in February 2019. Please tell us your thoughts regarding corporate governance.
Takashima Four of the seven members of the newly established Nomination and Remuneration Advisory Committee are independent directors and auditors. I serve as a Chairman of the Committee. With the new committee established, I expect we will become more objective and fair in the eyes of our stakeholders when looking at the composition of the Board of Directors, and the evaluation and the functionality of the board meetings. There are many items that should be addressed to strengthen governance, and we will address them one by one and increase management transparency.
Kasai I think that the composition of the Board of Directors will change as the business changes. When the value of global business increases within the Group, I expect, officers outside of Japan would join the Board to reflect the opinions of the international market. We are also aware of diversity in the Board members from a gender-free perspective.
―What are your future aspirations and missions as independent directors of the Board?
Takashima I will advise and support the management team in operations that will improve ROE. OSAKI ELECTRIC, like many Japanese companies, used to prioritise financial soundness by returning debt. We should now utilise capital effectively, thereby increasing corporate value. I will continue to monitor and give advice on management plans, progress and performance.
Kasai OSAKI ELECTRIC has been actively investing in future development, such as by acquiring EDMI, as well as launching new businesses and establishing an open innovation laboratory for collaborating with other industries. Each and every employee plays a leading role in realizing growth. We will continue to work together to take on new challenges and provide support for future growth.