Nurturing a culture of trust
Messages from the Outside Directors

Our new medium-term business plan, the HASEKO Evolution Plan, has commenced. At its core, we have established the commitment to “fulfill social responsibility from all ESG perspectives and contribute to the realization of a sustainable society.” Furthermore, in establishing sustainability management, we have long defined our approach as “balancing the creation of social value and the growth of the Group by solving various challenges through our business, thereby enhancing corporate value,” with a core vision for the Company of “nurturing a culture of trust.”
Recently, however, an incident occurred in which a Group company was subject to an on-site inspection by the Japan Fair Trade Commission on suspicion of violating the Antimonopoly Act. This is an unacceptable situation for a company striving to fulfill its social responsibility and nurture a culture of trust. We will thoroughly reexamine whether there are any actions within our immediate surroundings that are inappropriate or lack transparency —actions we could not explain to our company, family, or friends. With renewed resolve, we will pursue the HASEKO Evolution Plan to achieve the outstanding goals we have set as a well-governed, excellent company.
The year 2027 marks Haseko Corporation’s 90th anniversary. The trust that the Company has built over 90 years through the efforts of our predecessors is a tremendous asset, but it can be lost in an instant with a single misstep. By keeping in mind the saying, “three years to build a castle, one day to destroy it,” we will conduct our daily business with integrity and fairness.

This fiscal year saw the launch of our new medium-term business plan, the HASEKO Evolution Plan. Regarding management metrics, we have incorporated target figures not only for ordinary profit but also for ROE, reflecting a change in management’s mindset to one focused on improving capital efficiency.
In formulating the plan, we held multiple meetings where members of the Board of Directors freely exchanged opinions on each theme. During this process, we analyzed market growth potential and competitors for each business portfolio, engaging in earnest discussions on how to leverage the Group’s comprehensive strengths to enhance productivity and drive growth. Amidst increasingly challenging business conditions facing the Company, including population decline, rising costs of land and materials, and labor shortages, our business strategy encompasses a wide range of initiatives to drive further growth in our core Construction-Related Business, alongside our Real Estate-Related Business and our Condominium Management and Operation Business.
Drawing on my experience as a lawyer and outside director, I intend to continue advocating for the thorough implementation of compliance and the further enhancement of corporate governance as a representative of shareholder interests. I will also supervise whether plans are being steadily executed and actively voice my opinions. In addition, should business risks or the environment change after the plan is formulated, it is crucial that management responds with a sense of urgency. Furthermore, the executive team has indicated its intention to begin discussions on ROIC at future meetings of the Board of Directors, and I expect that conducting more in-depth discussions on the business portfolio will contribute to the sustainable growth of the Company.

It has been five years since I joined the Company as an outside director, and through discussions at meetings of the Board of Director and elsewhere, two things have become strongly apparent to me. The first is that this is a company that once went through some tough times. In January 1999, its share price fell to just 13 yen.
From there, it fundamentally revised its management policies and worked together as one to steadily implement various turnaround measures, transforming into the “new Haseko.” The difficult experiences of that period continue to be passed down to employees who joined after the management crisis, and this is something that I am often reminded of not only in meetings of the Board of Directors but also in conversations with employees in various settings. The other thing that strikes me is that it is a company with a unique business model. Through conversations with employees, I sense their confidence and pride in being a company that possesses something unmatched — not merely a condominium construction firm, but a company involved in land acquisition, sometimes even in stages preceding that, and engaged in various customer follow-up even after a condominium is completed. However, continuing corporate activities solely on that basis offers little hope for significant future growth. It is time to expand the Company’s business into fields where it already has a proven track record and where future growth is anticipated, such as the Real Estate-Related Business, Condominium Management and Operation Business, and Overseas Business. The five-year medium-term business plan coinciding with former President Ikegami’s tenure successfully achieved its targets, including for operating profit.
I expect President Kumano to build upon this foundation and actively yet steadily pursue new business initiatives. As an outside director, I intend to continue providing necessary advice and proposals as I have done to date.

In April of this year, Director Kumano assumed the position of the Company’s new president. On his appointment, he stated that the theme he wishes to focus on during his time as President is capital efficiency. With the Company having faced a management crisis in the 1990s, it lacked capital flexibility and therefore focused its turnaround efforts on the construction industry, which requires relatively less capital. During that period, the emphasis was on management metrics such as gross profit and gross profit margin. These simple metrics were easy to understand, making them ideal as a focus for a collective effort that could be shared with all employees.
However, with the Company having recovered its capital base in recent years, and as it expands its real estate business once again to pursue new growth, continuing to operate based solely on the same metrics as before could potentially lead to a decline in corporate value. As such, President Kumano’s New Year’s statement can be seen as a timely policy announcement reflecting the recent changes in the Company’s business model, where new metrics such as the cost of capital, efficiency, and the present value of investments have become increasingly important. While preserving the vitality and precious DNA of the frontline teams, who work strenuously to achieve their gross profit targets no matter what, I would like to support the company-wide adoption of a capital efficiency-focused mindset as quickly as possible, as well as ensuring that the market recognizes and values this shift.

The world faces unprecedented major risks, including extreme weather events and armed conflicts. Meanwhile, Japan is experiencing rapid population decline. Amid such circumstances, it is crucial to adopt a strategic perspective that goes beyond mere business continuity — one that views these changes as new opportunities and strives to create value for the future.
The Haseko Group’s medium-term business plan, the HASEKO Evolution Plan, also aims for evolution by combining “succession” and “change.” As an outside director, I will work toward making this a reality.

Skills matrix for outside directors

Skills matrix for outside directors, please click the Related Information link below.

Related information

• Nurturing a culture of trust:Management Team