Outside Director Evaluation of Effectiveness and Findings
From left: Outside Director Masataka Inoue, Outside Director Junko Kono, Mina Ito, Michiaki Kurihara
Roundtable Discussion with Outside Directors
The DyDo GROUP’s Purpose and Business Portfolio Strategy
—What are your thoughts on the current portfolio management of the DyDo GROUP, given the significant changes in each business sector?
The “Medium-Term Management Plan 2026” is positioned as the “Growth Stage” toward achieving our “Group Mission 2030.” As our Domestic Beverage Business faces challenges, we have been discussing what is needed to reach the next “Achievement Stage.” Portfolio management is not just about governance, risk management, or HR issues. It is time for us to rethink the purpose and value of our long-standing businesses. We need to ask ourselves why we operate these businesses and what value we aim to deliver in the future.
Exactly. When we look at our current portfolio in light of the Group Mission 2030, focusing on International Beverage and Orphan Drug Businesses makes sense. However, these areas require long-term investment, so the Group must have the financial strength to sustain that. That is why revitalizing the Domestic Beverage Business, which should be generating cash, is urgent. Without cash flow, even the best vision is just a dream. Also, while our International Beverage Business is currently performing well, its future is uncertain. We need to clarify the purpose of our overseas operations and strive to realize our mission: “For DyDo GROUP to create enjoyable, healthy lifestyles for people around the world.”
Mr. Inoue has been leading discussions at the Board of Directors regarding the “Renewing Growth in the Domestic Beverage Business,” and we fully support that. One major challenge is the rising cost of raw materials, especially coffee been. We need to revisit what kind of products can deliver unique value. On the other hand, our Smart Operations are a strength. Continuing to evolve and achieve operational excellence is key. For the International Beverage Business, we should also identify our true strengths—such as our founding spirit of “creating happiness and prosperity together” and operational excellence—and apply them globally.
In our Orphan Drug Business, we launched Firdapse® in January 2025. We began considering entry into a pharmaceutical business in 2017, and chose to focus on orphan drugs due to their high social significance and specialization. Remarkably, we obtained manufacturing and marketing approval for a new drug in just five years from the company establishment and three years from the decision to introduce the product. Delivering our medicine to patients suffering from rare diseases is a prime example of our mission in action.
—As the profit structure of the business portfolio changes, will the allocation of management resources also change?
Our International Beverage Business is performing well and currently surpasses the Domestic Beverage Business in operating profit. As Mr. Inoue mentioned, we need to carefully assess the sustainability of this performance. From a portfolio management perspective, it is important to allocate resources to growth areas. However, since resources are limited, deciding how to distribute them between existing businesses and new growth areas is a critical decision for our Group.
Exactly. From the perspective of enhancing our management resources—not just reallocating them—it is clear that our Domestic Beverage Business, which should be generating cash, must be made more resilient. When I joined the company as an outside director nine years ago, the Medium-Term Management Plan at the time was mainly focused on doing things “better” or “more” than before. Since then, I have continued to make proposals, and now we are aiming to build a competitive advantage that clearly outperforms other companies. What is crucial, though, is the specifics of that advantage. What kind of form would give us overwhelming strength? We need to refine our core strengths and share a concrete image of what that ultimate form looks like. By executing that vision, we can reinforce our management resources and gain the capacity to invest in the businesses we truly want to grow—such as the International Beverage Business. I believe it is essential that we continue discussions around how to prioritize these efforts.
Human Capital Management for Sustainable Growth
—What are your thoughts on DyDo GROUP’s approach to human capital management?
In times of transformation like now, it is essential to have diverse professionals who can lead change. Developing, promoting, and engaging talent across the Group is crucial. In April 2024, we introduced “DyDo Career Create” to support employees in shaping their own careers. We aim to build systems that encourage people to raise their hands—whether they want to try a different department or take on overseas challenges.
Having worked in foreign firms, I find the long-term talent development culture in Japanese companies very appealing. That said, the foreign approach of reshaping talent based on changes in the business model also makes sense. For example, in the vending machine business, the required teams differ depending on whether we focus on operational improvement or AI development. So, our hiring and training concepts must evolve accordingly. DyDo’s strength lies in long-term development, but we also need to align our talent portfolio with future strategies and foster a culture where employees step up to new roles in line with the company’s vision.
I agree. Especially in expanding our International Beverage Business, we need a solid group of global talent. Creating a selection system for overseas assignments and nurturing future global leaders is one way to do this. Employees with high “Ambition,” as promoted in “DyDo Career Create,” constantly seek growth. Providing an environment that supports this not only helps individuals achieve their goals but also strengthens the company’s long-term competitiveness.
From a capability standpoint, strengthening management skills is key. If employees understand how to apply the basic PDCA cycle, they can adapt to new or overseas businesses. Management skills can be developed in any department, which is a big advantage.
Human capital management is not just about talent strategies—it also involves creating an inclusive organizational environment. While our Holdings’ Board of Directors is diverse, we hope to see more young people, women, and seniors thrive across Group companies.
Regarding senior professionals, DyDo Pharma’s success was partly due to assembling experienced talent and enabling them to fully utilize their skills. Providing such opportunities is vital. For many seniors, staying connected to society and feeling that their experience is valued brings fulfillment. At the same time, developing young talent—who will be future leaders—is equally important. Since their growth takes time, fostering a culture where seniors and juniors learn from and support each other is key to sustainable organizational growth.
Roles and Effectiveness of Outside Directors
—What do you think is the role of outside directors?
Outside directors have two main responsibilities: increasing shareholder value and preventing its loss due to misconduct or other issues. Regarding the first point, we provide oversight and advice on what is needed and what steps to take to realize the future vision of the company through portfolio management. If each employee understands how their work contributes to the company’s goals, they will find more meaning in their jobs.
I agree. As Mr. Inoue said, our basic role is to supervise and support the executive side in achieving the company’s goals. Recently, outside directors are also expected to actively participate in formulating medium- to long-term strategies by leveraging their diverse backgrounds. At DyDo, I believe it is important for outside directors to be involved from the planning stage of the next Medium-Term Management Plan.
I agree with both of you. After the strategy is formulated, monitoring its progress from an objective, holistic perspective is also essential. In today’s fast-changing environment, it is natural for strategies to be adjusted during execution. Since it can be hard for executives to backtrack on decisions, outside directors can offer advice from a broader viewpoint.
I share the same view. Supporting the realization of the company’s future vision and being involved from the strategy planning stage are key roles. Each outside director brings a unique background, so we are expected to offer advice from different perspectives based on our expertise and experience. Regarding the two responsibilities Mr. Inoue mentioned, I believe we should supervise and actively support management decisions from both a legal and a strategic standpoint.
—How would you describe the atmosphere of the Board of Directors?
Although board meetings are time-limited, we have free discussions with President Tomiya Takamatsu beforehand, where we exchange views on various topics. For example, we recently discussed “Effectuation*,” a decision-making approach useful in uncertain environments, and how it could apply to our business development. We also have opportunities to visit group companies, which helps us better understand the strengths of the DyDo GROUP and engage in meaningful discussions during the Board of Directors. I think the atmosphere is very positive.
Effectuation is gaining attention as a practical thinking method for creating new value. It is useful not only for entrepreneurs but also for launching new businesses within existing companies. Experienced talent plays a key role in its success, and DyDo Pharma is a great example. At the Board of Directors, each outside director actively shares insights based on their career and experience. There is a healthy culture of open discussion, where everyone feels comfortable expressing their views.
Yes, the Board of Directors and the free discussions allow for open and honest conversations. This openness is a unique strength of DyDo. I hope we can continue to bring in objective perspectives that may not be visible from within the company.
It is great that the president actively listens to outside directors. That makes it easier for us to share our opinions. We are all working with the desire to make DyDo GROUP even better, and we will continue offering advice that contributes to the company’s future.
*Note:
Effectuation is a general decision-making theory proposed by Professor Saras Sarasvathy, based on her research into expert entrepreneurs. It emphasizes the idea that the future is inherently unpredictable, and instead of trying to forecast it, decision-makers should focus on using the resources they already have to flexibly shape the future.
