Sakuraba I was involved in food administration at the Ministry of Agriculture, Forestry and Fisheries for quite a few years, and I have one particularly memorable experience with the NISSIN CEO. As people became more health-conscious, CEO Ando and I discussed whether the demand for less salt in food products would increase. After that discussion, NISSIN FOOD PRODUCTS developed and marketed a reduced-salt product for CUP NOODLES. I was surprised at the speed with which they moved. I recall being impressed with how the company actively listened for feedback and opinions from outside sources.

Ogasawara After attending my first board meeting, I also felt that NISSIN management actively incorporates outside perspectives. I think NISSIN is flexible enough to listen to objective opinions.

Sakuraba This flexibility and speed are the greatest advantages of the NISSIN FOODS Group. In addition to strategies that include launching a variety of products in succession, NISSIN has been quick to address health, the environment, and other sustainability issues. Having founding family members at the top makes this speed possible. My role as an outside director is to help elicit those strengths for further corporate management growth.

Ogasawara I was working in impact investing when approached to become an outside director. Impact investing refers to investments aimed at solving social and environmental issues. ESG investing would be a similar term used in companies that are ESG-conscious, but impact investing means investing in companies that have a positive impact on society and the environment, in addition to economic benefits. Even then, I knew about the social impact of the NISSIN FOODS Group on health through products such as KANZEN MEAL. I accepted the position of outside director in the hope that I can be of some assistance in balancing economic interests with positive social and environmental impacts.

For the NISSIN FOODS Group to continue to be a sustainable business and generate profits over the medium to long term, the company must visualize and quantify the impact on society and the environment. I offer my insight for this purpose.

Ogasawara We looked over the three-year period of the Midto Long-Term Growth Strategy 2030, which began in FY 3/2022, revising the targets and other details. I commend the company in particular for raising the ROE target from 10% over the long term to 15% by 2030 in response to the need for management that is more conscious of the cost of capital.

Sakuraba Yes. However, the somewhat firm impression regarding target values early in the drafting led to more discussions. As one of the leading companies in the industry, having an ambitious plan is important. A company must go beyond what everyone assumes will be attainable and take on more challenges.

Ogasawara Fostering the corporate brand as a group has become a recent discussion topic for the board of directors. I’m not exaggerating when I say that the NISSIN FOODS Group operating companies are skilled in marketing and have grown through successful product branding. The CUP NOODLES brand is well established, as is the Hiyoko-Chan character of the CHICKEN RAMEN brand noodles. Looking at the NISSIN FOODS Group as a whole, however, gives the impression that other brands are somewhat weak. I think strengthening those other areas with the creative power typical of the NISSIN FOODS Group would be well considered.

Sakuraba Indeed, when we look at the operating companies, we think of NISSIN FOODS, KOIKE-YA, and MYOJO FOODS by the company name, but the NISSIN FOODS Group as a whole is a picture slightly out of focus. Even today, the NISSIN FOODS Group pursues a variety of initiatives in Planetary Health and Human Well-being, but even here, communicating these initiatives to the outside world is a challenge. With Planetary Health, for example, the main component of CUP NOODLES containers is paper. Many customers seem to think the containers are made of styrene foam, so it seems the company is not communicating effectively. The company must also communicate the use of RSPO-certified palm oil, which helps prevent deforestation, protects biodiversity, and respects human rights. The communication must go beyond a logo mark on the container.

Ogasawara Under Human Well-being, I would like to see NISSIN FOODS better highlight its participation in the establishment of the Optimized Nutri-Dense Meals Association.

Sakuraba Such efforts are very important, as they convey very well the enthusiasm of the food industry to collaborate and contribute to well-being.

Ogasawara After becoming an outside director, I was surprised to see such advanced initiatives after looking at the ESG-related issues in detail. From the outside, the impression of CUP NOODLES and similar products is quite strong, which overshadows the image of the company as one pursuing advanced sustainability management. I think the company has some more work to do in communicating those efforts.

Sakuraba The NISSIN FOODS Group Overseas Business is growing at a rapid pace. Overseas Business sales exceeded 30% of total consolidated sales for FY 3/2024, while the ratio of core operating profit was more than 50%. In the process of developing rapidly as a global company, mechanisms and human resources development will be important topics.

Ogasawara How will the company transform its corporate aspects as it rises to a higher stage and makes more money overseas? I sense a challenge there. The company recently launched the NISSIN-style job-based model, which I want to focus on moving forward.

Sakuraba I receive business reports directly from the heads of major group companies in Japan and abroad. More often than not, these reports talk about the market. I think there should be more on the agenda regarding governance.

Ogasawara Seeing the rapidly growing contribution of Overseas Business is a wonderful development. However, organizational development overseas must not be a secondary priority. I think the company is at a stage requiring positive measures, including reviews of various issues and hastening the development and hiring of overseas human resources. These measures can be viewed as organizational growing pains.
Local hires serve as the presidents of NISSIN FOODS (U.S.A.), NISSIN FOODS DE MEXICO , and INDO NISSIN FOODS, but that’s not the case in other countries. Even in large-market, high-potential countries such as Indonesia, a Japanese national serves as president. Of course, I won’t deny the point of view that calls for establishing a system to generate solid sales and profits first, after which the reins are passed to a local hire as president. However, the idea of globalization by delegating the responsibility to people who understand the local market is also valid.

Sakuraba Developing people is a major topic for the organization and is linked to governance and compliance. Therefore, we, as outside directors, must keep a close eye on overseas governance, human capital, and other initiatives.

Sakuraba I think outside directors offer more opinions and advice to the board of directors at NISSIN compared with other companies. In cases when we feel efforts in the reported cases are weak, we request more details and updates on response measures, and that the reports come in a timely manner.

Ogasawara The Management Advisory Committee proposal regarding the ratio of female managers came from input from outside directors.

Sakuraba The low ratio of female managers continues to be an issue. I think the company needs to raise the ratio of female managers, not only through promotions, but also through external hires. At the same time, I think the company has made a lot of progress over the past three to four years in terms of diversity.

Ogasawara When I receive reports and look at documents, I try to be aware of any viewpoints that might be missing. This is an important role for outside directors.

Sakuraba I believe that effective governance of the NISSIN FOODS Group is in place since the majority of the board consists of outside directors. Of course, we understand that some investors may question the inclusion of internal directors as members of the Management Advisory Committee. However, the committee is chaired by an independent outside director and the majority of the committee consists of independent outside directors, so I do not see any particular problem with the current structure. Succession planning, including the skill set of the CEO, is discussed regularly by the Management Advisory Committee, which continues to develop several candidates. We also receive reports on measures to develop and expand the management talent pool for key posts such as directors, executive officers, presidents of operating companies, and chief officers.

Ogasawara I believe that companies led by founding families are more thoughtful and articulate in their purpose. However, such companies could be susceptible to arbitrary management decisions or may stick to unprofitable businesses. Our role as independent outside directors is to monitor the situation to ensure something like that does not happen.