Tackle Changes by Recognizing Absolute Strengths That Can Be Demonstrated in a Challenging Environment

This is now my seventh year in office as an External Director and Audit and Supervisory Committee member. During this period, the world has seen sweeping changes, and the assumptions we had made in the past do not hold anymore, making it increasingly difficult to predict what will happen. Our company has made significant decisions and taken actions in the past year, such as capital and business alliances. At the same time, we have been asked to take on concrete initiatives for wide-ranging market demands concerning SDGs, ESG, TCFD, decarbonization and DX, and others. Addressing these demands requires investment in management resources, especially human resources, which is an unavoidable path for companies listed on the prime market of the TSE.

Under such circumstances, we have successively reviewed our systems and carried out organizational restructuring, including the operation of the Board of Directors. However, we are known within and outside the Company for our corporate culture of solidity and honesty, which has not allowed us to make bold changes by anticipating market changes. This corporate culture of solidity and honesty is an essential element for the company, giving us a sense of security and trust; however, we are undeniably conservative and weak in our willingness to take on the challenges of change and innovation. We also have a tendency to think that the industry or the situation we are placed in is unique compared to others, which leads to a follow-the-leader mentality and hinders innovation. I believe the size and position of our company in the industry are well suited to anticipate changes in the market and industry, and expect us to make faster and bolder changes.

Bold changes are essential for building future-oriented business strategies. The shift away from simple outsourcing implies that construction companies are taking on business risks on our own. It is necessary that we conduct studies and take initiatives from an unconventional perspective. This is true for not only new businesses such as those in the environment and energy sector, but also for businesses in the construction, development, and real estate sector. As the environment surrounding us is expected to become even more challenging in the future, if we do nothing because the risks are too significant, we will inevitably face decline and perish. The entire organization must take on challenges with determination while assessing the limits of the company’s risk-taking capacity. I hope that all of us will recognize the absolute strengths we can demonstrate in a challenging environment and leverage those strengths to take on the challenge of change and have sustainable development as a company with overall capabilities that provides new value.

Develop Human Resources Who Can Respond Flexibly to New Trends and Changes

After my appointment as an External Director and Audit and Supervisory Committee member last June, I have been working towards smooth communication and building a relationship of trust; one year has passed since then. While face-to-face interaction has become difficult during the COVID-19 pandemic, through exchanges of opinions with the Board of Directors and with General Managers of Business Divisions, as well as through my interactions with the people onsite during branch office audits, I can strongly feel our corporate culture of solidity and honesty and a culture that places importance on cordial thoughtfulness.

Now that a year has passed since the start of the “Medium-term Management Plan 2023”, the development of human resources for the younger generation to respond to environmental changes and bring a sustainable enhancement in our corporate value has become a challenge. It is desirable that we develop human resources who can flexibly respond to the trends and changes of the new era with a long-term perspective and a sense of speed, while taking advantage of our strengths, namely our advanced technological capabilities and solidity that we have cultivated over the years.

Respond Flexibly to Change, Identify and Strengthen the Company’s Fundamental Competencies

In recent years, unexpected and unforeseeable changes in society, the economy, and the environment are occurring frequently. For companies to address such unexpected changes, experience alone is not sufficient, and “flexibility” in ideas and actions is required above all. As a newly appointed External Director, I want to confirm and strengthen our “fundamental competencies”, which form the foundation for creating this flexibility. I would like to bring to light the following four points regarding Nishimatsu Construction’s fundamental competencies.

I also want to encourage all employees to improve the organization’s fundamental competencies, increase its overall capabilities, and keep an eye on changes happening outside the company and in other industries. If you find something suitable, try implementing it in our own company. I would like to contribute to Nishimatsu Construction’s growth and improve the quality of management by providing appropriate advice on necessary management decisions to further enhance our corporate value.

Building a Company With Overall Capabilities Through New Challenges and Mutual Communication

I intend to fulfill my role with a deep understanding of the various issues faced by our company, drawing on my past management experience in the manufacturing industry.

The environment surrounding companies is dramatically changing. While the market in Japan stagnates and shrinks and labor shortages are becoming increasingly severe due to the maturing economy and aging population with a declining birthrate, there is a strong demand for strengthening corporate governance, diversification of values, and ESG management. Outside Japan, the international economy is being severely impacted. Raw material prices are soaring due to divisions in the international community and the growing tendency to put one’s own country first, which was triggered by the situation in Ukraine.

I am confident that steadily implementing the medium-term management plans already formulated and enhancing our corporate value to become a “company with overall capabilities” will enable us to respond to various environmental changes.

“A company is only as good as its people”, and it is of utmost importance that each employee, in their role, not be bound by preconceived notions but should instead be able to respond quickly by visiting worksites, knowing actual products and actual reality. With respect to management, we should spare no effort in investing in human resources. I want to encourage all employees, including executives, to enhance corporate value while improving mutual communication.

I want to contribute as much as possible to the various initiatives that we must implement for the sustainable growth of Nishimatsu Construction through opportunities to interact with senior management and employees, and by gaining an understanding of worksites.