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The Role of the Board of Directors in Supporting Joshin’s Reinvention
Naito: Changing our corporate name was not simply a change of words, but rather an important decision that was made to express the kind of company that we want to become in the future as the new Joshin. Particularly symbolic were the proposals generated from the project, which was mostly made up of young employees. These future leaders of Joshin gave deep thought to the future of their own company going forward and made recommendations to management. The fact that the Board of Directors accepted these proposals and carried them through to a decision is itself very significant.
Kawano: I also have a high regard for that process. When studying the corporate name change, rather than deciding on the conclusion in advance and presenting it, a framework was created in which young employees could think for themselves. Joshin’s most valuable asset is the deep relationship with customers that we have cultivated over the years. While protecting this value, we will make changes that will transcend conventional business and organizational boundaries. Changing the corporate name was an important milestone in sharing this purpose across the entire organization and clarifying our goals as the new Joshin.
Takahashi: The momentum for the name change grew within the company, and the final corporate name change was the culmination of discussions among the project team made up of young members. As my colleagues have both mentioned, management and employees showed strong determination to drive transformation as the new Joshin, each from their own distinct standpoints. While we need to let go of the things that are no longer suited to the times and change the things that need to be changed, we must also be steadfast in protecting the value of Joshin that has been passed down to us. We need to protect the trust and confidence that we have earned from our customers, and the Wholehearted Customer Service that we deliver based on our corporate motto of “Thoughtfulness.” We must continue unwaveringly along this path, going beyond conventional appliance sales to evolve into a “local electronics store that is also a mass retailer” that supports every aspect of our customers’ lives.
Naito: To achieve our goal of becoming a “local electronics store,” it’s essential to have a system where the business execution side makes decisions for themselves and then the Board of Directors supervises them appropriately. In 2025, we transitioned into being a company with an Audit and Supervisory Committee, and we delegated most of the decision-making authority over business execution to individual Directors or the Board of Executive Officers. However, it did not function as originally designed right from the start. Even after delegating authority, the business execution side tried to find out what the President or Board members thought, and the Board of Directors sometimes asked for excessively detailed reports. There needs to be a better common understanding of the boundaries between monitoring and intervening in business execution.
Takahashi: The last year has been one of trial and error for the business execution side as well. They were unsure of what to report, to what extent, and in what way, sometimes focusing solely on activity reports, while in other cases narrowing down the key points too much and failing to communicate information required for decisions. Nevertheless, the Board of Directors and the business execution side have gradually reached a shared understanding over the year of the targets of confirmation by the Board and the scope of actions that the execution side should decide for themselves. As our direction is further clarified, the Board of Executive Officers will decide for itself how to achieve our goals, and the Board of Directors will oversee the progress and risks. I believe that each of these roles starting to work in tandem has been one factor behind the recent improvement in our results.
Kawano: I feel that discussions at the Board of Executive Officers have also changed in obvious ways. Each member has become able to describe in their own words the issues within their areas of responsibility and the actions that should be taken next. The metrics that should be checked by the Board of Directors have also been expanded beyond just net sales and profit margins to encompass leading indicators such as the number of active members* and the trends of customers who use both physical stores and e-commerce. Execution and supervision are not in opposition to each other. As we work toward implementing our shared goals, a relationship is taking shape in which each side contributes with a sense of speed from its own standpoint.
* Active members: Customers who have purchased products or services from Joshin at least once in the past year
Naito: To enable the Board of Executive Officers to think and make decisions for itself, the management talent responsible for this must also change. Many of the current members of the Board of Executive Officers are professionals who come from store management. Even though this is a major strength, to reform existing business models there is a need to bring in outside perspectives and to develop the ability to make decisions from the standpoints of capital efficiency and company-wide optimization. In the area of store investments too, discussions are becoming even more conscious of capital efficiency and investment payback than before. Instead of intervening in decisions about opening or closing individual stores, the role of the Board of Directors is to check whether the judgment criteria and yardsticks of the business execution side are clear.
Kawano: Experiences cultivated in store management should be incorporated into management decisions from a company-wide perspective. To do this, we must develop our current human resources while also appointing other people with a diverse range of experiences to be managers, including personnel from corporate administrative functions, mid-career hires, and women. Similarly, the Nomination and Compensation Committee is discussing succession planning and how to select and develop the next generation of management talent. That said, reform is not something that happens at the managerial level only. It’s important that we transform into an organization where the frontline employees who know local customers the best can identify issues for themselves and propose new services.
Takahashi: The development of management personnel is an urgent issue. We started an initiative at Joshin that selects the next generation of candidates in different stages and develops them while specifying their expected roles. Key themes going forward will be to provide opportunities for these candidates to gain experience that fosters their growth, while also developing a manager’s perspective by increasing their contact points with the Board of Directors. In parallel with developing the next generation in this way, it’s also essential to convert the frontline capabilities of the current executive officers into managerial skills and combine diverse insights from both inside and outside the Company. We need to deepen the pool of next-generation talent while also improving the capability of the current system to execute reforms. I believe that keeping both of these wheels turning is precisely what will give Joshin the foundation for sustainable growth.
Naito: Instead of competing by doing the same things as the major players in the industry, Joshin should take on the challenge of generating its own unique value. Becoming a “local electronics store” is one of our key concepts as we seek to do this. The Board of Directors should not put a stop to taking on challenges because certain risks are present, but rather encourage appropriate risk-taking by the management team. Even so, the Board must monitor and verify whether the policies are producing the expected benefits based on the KPIs and capital efficiency. It’s also important to increase dialogue with our investors and leverage outside perspectives, including capital efficiency, in our discussions at the Board of Directors.
Kawano: If we can become a “local electronics store,” then I believe that Joshin will deliver significant social value. As the number of elderly people living alone increases, daily life presents many difficulties, such as changing lightbulbs, using home appliances, having someone check in on them, and making use of digital devices. Joshin has earned the trust of customers to visit their homes through deliveries and installation work. These contact points do not need to end with the delivery of the product, but can be taken a further step by asking customers if they are facing any other problems, which greatly expands the value that we provide. By expanding such initiatives, we can bring about peace of mind for living in a super-aged society and help achieve carbon neutrality in the household, while also supporting the active participation of senior human resources.
Takahashi: After listening to you both speak, I feel anew that we must make the “local electronics store” a reality. Rather than focusing solely on selling products, we must become a company that fully engages with customers’ problems and solves them. We will combine our real-world resources (personnel, stores, and delivery/installation capabilities) with digital technologies to confront the challenges that our competitors avoid or cannot take on. Through such actions, we will build the trust and confidence that make people contact Joshin if there is anything they need, further strengthening our relationship with customers. Based on the foundations arising from these efforts, we will drive sustainable growth and increase medium- to long-term corporate value, while also making sure that we fully communicate our goals and progress to shareholders and investors. With the business execution side and Board of Directors aligned in the same direction, we will steadily implement our transformation into the new Joshin.
