A Message from an External Director
It is my strong impression that
the SEGA SAMMY Group is an organization with a strong sense of
honor and responsibility and the ability to work together towards its goals.
Evaluation of governance framework
I have spent many years working in risk and crisis management and compliance-related consultancy, and before that I was with the National Police Agency. This background makes the general field of risk management my specialist area, and my radar is constantly tuned to risk, whether from regulatory, geopolitical, or other sources. My role at SEGA SAMMY involves giving advice and making suggestions mainly in the area of risk management, but also from the perspective of diversity as a woman.
One thing that I value highly about SEGA SAMMY’s management system is that it allows discussion to continue until the external directors are satisfied. It is noteworthy in particular that there is a body set up especially to promote this approach, the Group Management Committee, which is a subcommittee under the Board of Directors. The committee meetings focus on agenda items before their presentation to the Board of Directors, allowing time to discuss and examine them in thorough detail. Being able to discuss matters adequately at the committee meetings means that the Board of Directors is left with the clear role of taking the final decision, which smooths the decision-making process.
In fall 2022, a management camp was organized for directors and executive officers. Eating and sleeping under the same roof and having the time to discuss a wide range of subjects at length gave us the chance to share our individual ideas and personalities in a way that is not possible at the regular meetings of the Board of Directors. I think this very significant experience has helped improve teamwork among the directors and has also further enhanced the opportunities for external directors to contribute with their wide-ranging experience and knowledge.
Looking ahead, one issue I see is the need for more in-depth discussion of risk management.
In 2022, alongside the launch of the Group Governance Division, the Group Risk and Compliance Subcommittee was established, which reports to the Group Management Committee. This has enabled detailed information and data on risk to be gathered from the frontline for analysis by senior management. However, although this does mean that a risk management framework is taking shape, discussion somehow ends up centering on risk that is already apparent, with discussion of potential risk an afterthought. This makes me feel that further improvement is needed. Going forward, the SEGA SAMMY Group may find itself encountering all kinds of unaccustomed risk in the course of its business expansion. I consider it essential to analyze and quantify this future potential risk. If the impact of a potential risk on business is identified, a considered response can be implemented if the risk does emerge, and if the extent of the risk is known, an appropriate level of risk can be accepted as a potential path to growth.
I also would like to see Group governance strengthened. The SEGA SAMMY Group has made rapid progress with globalization in recent years and now has a large number of overseas subsidiaries. To achieve further major advances in overseas markets from this position, the Group needs to strengthen the connection with headquarters and ensure that its values are shared across all Group companies. To do so, I believe that SEGA SAMMY should further increase opportunities for communication with its overseas organizations so that they acquire a firm understanding of the strategy and policies of Japan headquarters. From a defensive standpoint, the auditing systems of overseas subsidiaries are also critical. Given the differences in language, business practices, and legal systems, reliable audit of overseas subsidiaries is never easy, but the first step must be to train up human resources able to carry out global audit. As audit experience is a useful skill for corporate management, and not only in the overseas context, I think it would be a good idea to promote it actively as a key accomplishment in the study program for executive management candidates.
In the two years since I became involved in the management of SEGA SAMMY, I have seen progress each year with strengthening of governance. Being able to evolve rather than fearing change is one of SEGA SAMMY’s most distinctive features. Going forward, I would like to see it continuing to take rapid action in this area to put in place a more advanced governance framework.
Looking to sustainability activity to boost corporate value
With the establishment of the Group Sustainability Subcommittee in 2022, directors are kept informed of the status of initiatives to address material issues and of their progress as measured by key performance indicators. With adequate opportunity now for related discussion, the result is that sustainability governance has improved with remarkable speed. One task going forward is to visualize the connection between current sustainability activities and management strategy and to feed that in to long-term and sustainable corporate value increase. If this connection is made clear, it will boost the confidence of shareholders and investors in the Group’s sustainability activity and also allow employees to devote themselves to these activities wholeheartedly.
Meanwhile, I believe that creating a supportive work environment that promotes active career opportunities for women will become an increasingly important issue for the SEGA SAMMY Group. In the Group’s business areas, half of its potential customers are women, so the ability to offer products and services that appeal to women is a major factor in achieving growth. I think that women are naturally more likely to be attuned to other women’s values and sensibilities, which means that incorporating the unique perspective of female employees in business activities is a crucial point. The SEGA SAMMY Group Mission is Constantly Creating, Forever Captivating. To realize this mission, I believe that it is important to create an environment where employees can work with motivation. Realizing a workplace that is supportive to female employees will also have advantages for male employees, such as making it easier for them to take childcare leave. Seen in this light, I think it has major benefits for both men and women, and SEGA SAMMY is in fact moving rapidly ahead with human resources initiatives that include enhancing the workplace environment in this way. The executive team is strongly committed to this and I hope to see focused initiatives continue in this area.
An exciting future for the SEGA SAMMY Group
Thanks to the concerted efforts of all its employees, the Sega Sammy Group is making excellent progress with the medium-term plan. However, so far this only reflects a small part of the Group’s growth potential. I look forward to seeing the Company continue to forge ahead, overcoming issues one by one while keeping a firm grip on the reins.
The Entertainment Contents Business, where overseas development is just taking off, is expected to produce the long-awaited new global IP that will be the growth engine of the Group. I think this advantage should be followed through with more active growth investment in mergers and acquisitions and in acquiring new technology.
The Pachislot and Pachinko Machines Business has achieved a marked improvement in profitability by steadily driving structural reform and implementing the initiatives of the medium-term plan. I am very impressed by this achievement. I hope to see this sector support the growth of the Group as a whole by continuing to generate stable profit. At the same time, I hope the Group will actively embrace the challenge of developing new business fields.
One point that occurs to me in this connection is that, in the exploration of new businesses, I would definitely like to see more active sharing of expertise and knowledge between SEGA SAMMY’s business companies as members of the same corporate group. I think that would result in further acceleration of growth for the Group as a whole.
It is my strong impression that the SEGA SAMMY Group is an organization with a strong sense of honor and responsibility and the ability to work together towards its goals. Moreover, instead of adopting a purely defensive approach, its corporate culture welcomes new challenges and takes them comprehensively on board. To reinforce that culture, I am committed to working hard to fulfill my role as external director, focusing on areas such as risk management where my experience and knowledge can be of benefit. I am confident that all SEGA SAMMY stakeholders can look forward to seeing the Group make great advances from now on.
※This article is excerpted from the INTEGTARED Report 2023.