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Stakeholder Engagement

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Stakeholder Engagement

The NESIC Group is feeding the opinions and requests of our stakeholders to our management team and using them in our businesses.

Major communications opportunities

Major engagement opportunities by stakeholder are as follows:
We have been holding stakeholder dialogues once annually based on ISO 26000 by inviting experts.

Stakeholder Dialogue

Continuing our practice from 2015, we organized a stakeholder dialogue (a dialogue on the company’s business activities and related CSR activities), inviting Hideto Kawakita, CEO, "the International Institute for Human, Organization and the Earth [IIHOE]" and Editor and Publisher, “Socio Management”.

  • Date: May 24, 2017
  • NESIC Representatives:
    Tetsujiro Arano, Senior Vice President & Member of the Board
    Masamitsu Kisaki, Associate Senior Vice President and Member of the Board
    Komei Sakanashi, Senior Vice President
    Tokuo Yamamoto, Associate Senior Vice President
    Heads of relevant corporate staff divisions

    *Posts as of May 24,2017

Summary of Dialogue

Business Conditions in the Fiscal Year ended March 31, 2017 and Sustainability Initiatives

Presentation by Tetsujiro Arano, Senior Vice President and Member of the Board

・Outline of Results for the Fiscal Year ended March 31, 2017
・Forecast for the Fiscal Year ending March 31, 2018
・Overview of Sustainability Initiatives

Comments on the Activities and Initiatives at NEC Networks & System Integration Corporation

(Hideto Kawakita)
I would like to add a few comments regarding the NESIC’s activities and initiatives, as outlined in the presentation.
Regarding the reforming of work style, success or failure will depend on the company’s ability to engage in medium-term consultation from the dual perspective of “reforms to continuing work” (employee retention) and “reforms to productivity.” Most companies’ personnel divisions are fumbling in the dark when it comes how long to spend on reforms, what sort of return they should be getting, how much to invest to achieve that return, and which systems and practices to reform. I believe that NESIC would be better coming up with solutions from a medium-term perspective.

In the mega solar sector, NESIC needs to also think about ways in which you could share the returns with to the local communities where facilities are installed, rather than focusing on the success of mega solar at the expense of local communities. In one case, a university has established a business model whereby revenue from generating solar power is given back to the communities via local authorities. When someone asks what solutions a business such as this offers, NESIC shouldn’t be focusing solely on energy, or emphasizing the amount of money it is making, rather than any contribution to society. It is essential for the business to adopt an approach that includes the company’s contributions and efforts to the local community, as part of the process of providing solutions to social issues.

The NESIC Group Statement echoes initiatives being undertaken by great many companies. There is one particular Japanese company in the electronics sector that serves as an outstanding example. When the company extends statements like this to overseas branches and group companies, it doesn’t merely provide them with a version translated at head office. Instead, it gets statements translated by local employees who have been appointed as “promotion leaders” at each individual branch or company. The company holds regular meetings in order to share initiatives with one another and highlight successful examples. A majority of the executives at the company’s overseas subsidiaries are local employees too. This creates a framework in which statements can be rolled out evenly across the group, by sharing them with subsidiaries in other countries for instance. This example shows how effective it can be to share and establish values as a process involving all group employees, both domestic and overseas.

Regarding compliance, I’d like to propose to introduce a framework that recognizes the length of your clean compliance record. Just as you monitor the amount of time that has passed without an industrial accident, creating a framework that would positively recognize how long you have maintained a clean compliance record would encourage people to share initiatives.

“Creating Medium- and Long-term Value in Line with Social Trends”

(Hideto Kawakita)
Next, I’d like to talk about the importance of providing society with value on a medium- to long-term basis as a company, in line with social trends.

First of all, you need a basic understanding that the only way to improve sustainability, both as a company and as a society, is to evolve, rather than continuing as present and maintaining the status quo. In your case, key points would be whether you can take on board social trends from a medium- to long-term perspective when creating new businesses in place of your basic operations.

For example, auto manufacturers have set out their own visions in light of the Paris Agreement. As well as hybrids, these are aimed at producing fuel cell vehicles, electric cars and other models that emit no CO2 by the year 2050. To achieve this, it will be necessary to come up with solutions that include transforming our energy supply infrastructure, not least replacing existing gas stands with hydrogen stations. If we view social trends on a long timeline like this, we start to see major changes, that might seem impossible right now. You need to be thinking about the company’s medium-term plans on a longer timeline and in greater depth. NESIC needs to predict what the world will be like in 2030, for instance, and think about what sort of value you can create and how you can contribute. NESIC needs to think carefully about what to preserve, and what to nurture, in order to achieve that.

NESIC should also take the time to think about what you can do to tackle social issues that need to be resolved, as outlined in NEC’s seven themes for social value creation, as well as the SDGs.

Take Japan’s aging population as an example. Rather than viewing that as a “problem,” an approach geared towards tackling social issues would view this as a market opportunity, prompting the question “what can we do for people who are dealing with this issue?”
Rather than thinking of this in the context of management planning, you should see it as an ambition or challenge, so that you can showcase your determination to take on that challenge and create a better society.

You should be working back from the future with regard to your customers too, and advising them “you will need to evolve like this on a medium- to long-term basis, and change the way you work, if you want to survive.” I hope to see you doing that ahead of other companies, and engaging in initiatives that will be truly appreciated.

Personnel Initiatives

(Yohei Otani, General Manager, Personnel Relations Division)
Since setting out the “EmpoweredOffice” concept for reforming our offices in 2007, we have now been working on the challenge of reforming working practices for ten years. We have run trials on working from home and other forms of telecommuting twice now, as well as a trial using work management software developed in-house from November 2016 to April 2017. Based on the results, we are planning to introduce these schemes for all employees from July. The aim of this full-scale introduction is to improve productivity and efficiency. We will also be analyzing data on how employees work, so that we can review and improve working processes at the same time. Our own experiences will then pave the way for us to offer solutions to our customers.

(Hideto Kawakita)
In the field of HRM, it is important to set your sights on your human resources portfolio for the future, and then continue to work back from that.
Looking at figures for men and women in work in Japan, the declining number of working men has been offset up to now by a growing number of women entering the workforce. In the future however, the number of women in work is going to start declining too. In terms of specific industries, figures are falling in sectors such as construction and manufacturing, while the biggest increase is in the field of medicine and welfare. As it stands however, there is no financial leeway to employ the number of people that will be required in the welfare sector in the future. This means that reforms to working practices in this field will be unavoidable.

As the working population continues to decline, HRM divisions will have to embrace human resources diversity. If you look at the GDP of different countries, Japan’s share (presence) is increasingly diminishing, while the likes of India, China and the ASEAN countries are on the increase. It is going to be essential to draw on assistance from people throughout the region in the future. The question of how to develop Japanese human resources capable of working overseas is therefore a crucial one. If you can’t encourage more junior and senior high school students to take an interest in working with systems, or to enjoy working with people from other countries, NESIC might find yourself in trouble by the time we get to 2030.

Efforts to reform working practices are currently being focused on administrative areas for the most part. However, in the welfare industry for example, it is clear that there is an insufficient working population available. Unless companies focus intently on initiatives such as robot suits to assist with nursing care, or robots capable of talking to elderly people, the industry may struggle to keep going. The extent to which you can assist with interfaces in the workplace in this manner will play an important role in reforming working practices in the society.
Once you introduce new working systems, such as telecommuting, the employees using those systems will find themselves thinking, “maybe we could try changing this too…?” and will most likely start to come up with new ideas. I think the HRM division should be trying to take on board ideas like that. As telecommuting enables employees to work more closely with your customers, NESIC can capitalize on what you learn from that and turn it into business. You can then provide society as a whole with even greater value, which I think is a wonderful thing.

(Yohei Otani, General Manager, Personnel Relations Division)
Could you suggest any good examples of initiatives aimed at reforming working practices at other companies?

(Hideto Kawakita)
In terms of customer service, there are examples in which companies have logged details of each customer interaction (who and what) and shared those details within the organization, so that they can be checked. This has a preventive effect from the point of view of compliance.
From the standpoint of internal communication, I have seen cases in which companies have made it possible for employees to communicate with senior staff several tiers above their immediate superior, so that they can access a wider range of support. This can be effective in terms of mental health. I think keeping logs would provide you with useful data too.

(Mr. Sugimori, Personnel Relations Division)
We are working to improve operational efficiency using AI. To do that, we are planning to gather and analyze data on how employees go about their work, and who is connected to whom.

(Hideto Kawakita)
Lots of companies are struggling on recruiting disabled employees. It’s important to extend service for as many years as possible once employees have been recruited. What sort of initiatives are you implementing in that respect?

(Ms. Komoda, Personnel Relations Division)
We don’t find that there is much of a difference between disabled and able-bodied employees in terms of length of service. We monitor experienced employees once they have been recruited, and arrange interviews at some point three to six months after they start work with us. We use this as an opportunity to identify any issues that are likely to discourage the employee from staying in their job, and provide feedback at an early stage to their workplace, so that any issues can be resolved.

(Hideto Kawakita)
Another effective option is to use communities (peer groups) with other colleagues, to show disabled employees that senior colleagues have continued working for the company. I suspect that one challenge for the future will be having to determine whether or not to employ those with severe disabilities if working from home, especially as telecommuting becomes more common.

(Komei Sakanashi, Senior Vice President)
As part of reforming working practices, we are planning to look at reducing work hours, which is likely to be a key issue as the working population continues to decline. It has also been useful to hear about telecommuting from the employment development side of things, in terms of recruiting people who would struggle to commute to work, rather than just allowing existing staff to work from home.

CSR Procurement Initiatives

(Shigeo Imai, General Manager, Procurement Division)
As well as complying with ISO 20400 and carrying out advance research into its contents, we have continued to encourage sustainability amongst our suppliers through measures such as formulating a set of Supply-Chain CSR Guidelines.

As a new initiative for last year, we sent out CSR questionnaires to 80 of our main suppliers, focusing on labor-related issues.

This had the effect of raising awareness of our procurement policy, and had a good response rate to questions regarding health and safety management in the workplace. At the same time, the results also highlighted a number of suppliers that need to do more with regard to social and local contribution activities, CSR initiatives, and setting up whistle-blowing schemes to report illegal activities. We are therefore planning to continue monitoring the situation and carrying out initiatives in the future.

Looking ahead, we also intend to work on measures targeting suppliers from a hardware point of view. As these mainly consist of distributors and trading companies, we will have to approach things from a different perspective.

(Hideto Kawakita)
It’s great to hear that you are making progress with initiatives. It will be important to keep on sharing best practice in the future too. It might also be a good idea to create a subcommittee or some other kind of forum to discuss CSR, as a developmental way to promote mutual benefit for all. As this is something that other suppliers will require, it would be efficient to get companies within the same industry together to learn more.

The greatest pressure in terms of supply chain management will be driven by demands from end customers. Some companies with a significant share of the global market are requiring guarantees all the way through to all suppliers in the whole supply chain. Making good use of demands from suppliers such as these is another effective tactic.

Sustainable and CSR procurement is now subject to ISO 20400, but France has already set out its own domestic standard. Other European governments and local authorities meanwhile are requiring companies to do more about CSR as part of procurement. The fact that European companies are placing such strict demands on suppliers is not just because of consumers, but because they are subject to conditions in areas such as government procurement too. Rather than telling all suppliers to do the same thing, you will have to start by prioritizing suppliers, and then carry out risk assessments and due diligence in stages.

(Tetsujiro Arano, Senior Vice President and Member of the Board )
Sustainability tends to be viewed in terms of the costs required for a company to fulfill its potential within society. Today’s discussion however has given me a renewed sense that sustainability can be seen as a business opportunity, or even as a weapon to outmaneuver the competition.
I hope that we can bear things like this in mind as we move forward with each of our businesses, focusing particularly on reforming working practices.

Hideto Kawakita
CEO, the International Institute for Human, Organization and the Earth [IIHOE]
Editor and Publisher, “Socio Management”

I would like to extend my sincerest gratitude for this invaluable opportunity once again, following on from last year and the year before. I would also like to thank those responsible from key divisions such as procurement and personnel for joining me.

As I have said numerous times during these talks, in terms of major priorities in management and CSR going forward for any company in the ICT sector, it is more important to encourage employees to keep on working for the company, to improve productivity and reduce the environmental impact from the company, users and society as a whole, and to encourage suppliers to also address CSR, than working to reduce your own environmental impact and to make a contribution to society.

Just as the president has said, “corporate activities should help to resolve issues facing society as a whole, and contribute to the sustainable development of society and the entire world.” Employees responsible for sales, services and maintenance, who come into contact with a wide range of users, customers and other members of the community, should be actively and routinely promoting CSR. That is the essence of your management. NESIC’s Group Statement mentions “(enabling) communities throughout the world to enjoy a safe, secure and plentiful tomorrow” and “continually facilitating more welcoming and convenient communications and supporting a connected society.” To put that into practice, NESIC needs to reaffirm the fact that information security, reduction of environmental impact, and human rights all form part of the quality guarantee NESIC offers to its users, customers and society as a whole. I would like to see you promoting initiatives along those lines in the future.

Similarly, I have heard about progress with initiatives from members of staff from both HRM and procurement during these talks, including telecommuting trials, procurement guidelines and supplier questionnaires. The fact that we have been able to exchange opinions regarding how best to proceed is sure to be of huge benefit in the future. Even in the face of an increasingly uncertain global market, there is growing demand for companies to assume social responsibility throughout the value chain, including suppliers. In fact, ISO 20400, the international standard for sustainable procurement, was published in just April this year.

If we look ahead to the 2020s, Japan will have an aging, dwindling population by then. The country’s declining working-age population in particular will becoming an increasingly serious issue. Customers, users, and the Japanese economy itself will have to branch out overseas. In other words, you will need to redouble efforts to encourage employees to keep on working for the company and suppliers, and to embrace a diverse range of human resources, rather than merely continuing along your current trajectory. To cater to an increasingly diverse market and customer base, it is going to become more and more important to have people from different cultural backgrounds and with different values, so that they can offer solutions to management and encourage them to take action. Rather than passively following in the wake of social change, I would like to see you adopt a ten-year strategy with real foresight and drive, based on securing and developing the right amount of personnel, in the right locations, with the right skills. I would like to see you actively taking steps in that direction.

I also have high hopes in the field of renewable energy, where you are already expanding installation and management as part of a forward-looking strategy for the future. I hope you will continue with research and development geared towards extending product life spans, improving disposal and recycling resources.

Hideto Kawakita

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