Here, we present a summary of a roundtable talk among the four members of the Audit and Supervisory Committee—Director Eiji Kawamura and Outside Directors Susumu Kitsunai, Yoichi Sato, and Kyoko Oyanagi—in which they discuss the future direction of the Kaga Electronics Group.

Kawamura

　Despite the Company being commonly referred to as an “owner run company,” the Board of Directors has always been very proactive when it comes to engaging in discussions. Fiscal 2025 ushered in our transition to a Company with an Audit and Supervisory Committee, bringing together experts in various fields—a certified public accountant, a lawyer, and a labor and social security attorney—all of whom have helped further improve the quality of discussions within the Board of Directors.
　Over the past decade, we have significantly expanded our business scale through strategic M&A activities. Governance practices tailored to this scale are in place, and we take pride in the efficiency and effectiveness of our board operations.

Kitsunai

　My transition from an auditor to an Audit and Supervisory Committee member has changed nothing in terms of my approach within the Board of Directors. While my expertise lies in accounting, I have always voiced my concerns in other areas as well. As an auditor, I participated in discussions with the mindset of directly contributing to resolving issues despite my inability to cast a vote. Now that I also bear the added responsibility of exercising voting rights, my commitment to governance remains steadfast.

Sato

　The Company has achieved significant growth since its humble beginnings, deeply ingraining the founder’s character and approach to work into its corporate culture. In our current bid to proactively break into overseas markets and expand our scale, we are entering a pivotal transition period during which substantial change is inevitable—both for the Company itself and from a governance perspective.
　Among the topics discussed at board meetings are ways in which the Company can reach new heights.

Oyanagi

　We view the transition to a Company with Audit and Supervisory Committee to be an important step toward enhancing governance and improving management transparency. I intend to place strong emphasis on a human capital management perspective, focusing particularly on creating an environment in which diverse human resources, including women in leadership roles, can fully utilize their skills. As an external expert, I aim not only to oversee the soundness of management but also to continue providing concrete advice to help the Company become a corporation beloved by society.

Kawamura

　Drawing on nearly 20 years of experience managing administrative departments at the Company, including as head of the Finance & Accounting Department, I oversee how earned funds are utilized and whether operations are conducted appropriately. While we have set the medium-to-long-term goal of achieving net sales of ¥1 trillion, we are also paying close attention to ways we can grow while improving our profitability as pursuing sales growth at all costs can sometimes be counterproductive in that regard.
　Many of our past M&A deals have involved bringing companies with profitability challenges into the Group, setting time limits for improvements, and turning their finances around. We expect such deals to increase going forward.
　What matters the most to our shareholders when it comes to M&A is whether or not they will see a proper return on their investment. As such, we intend to continue to turn any company that enters the Group, even those with poor financial returns, into profitable entities capable of enhancing our earnings power.

Kitsunai

　With more and more of our business coming from overseas, it is becoming increasingly important to determine how to leverage governance effectively while advancing our overseas operations and how to secure and nurture human resources capable of addressing these challenges.
　Having spent many years involved in overseas business, I intend to provide solid advice on this matter.

Sato

　The Company’s growth thus far stems from its salespeople engaging in diverse activities for the sake of its customers, rather than merely focusing on sales. As such, it’s undeniable that internal rules and procedures have sometimes taken a backseat. When you reach the scale of a company with net sales of ¥1 trillion, a management approach that prioritizes profit above all else is unsustainable. At times, it becomes necessary to strengthen the management foundation and rebuild the governance structure, even if it means accepting a slight decline in profits.
　We are entering an era of exceptionally harsh societal scrutiny. Even the disciplinary action system, which underpins the very foundation of the organization, can, depending on the circumstances, potentially pose a threat to a company’s survival. Therefore, we believe that continuing to demonstrate the Company’s outstanding sales capabilities while consciously advancing with governance on a daily basis is precisely what will lead to becoming a ¥1 trillion company.

Oyanagi

　As a member of the Diversity Promotion Committee, my contributions focus on leveraging our human capital and the Group’s strengths from a future-oriented perspective. To achieve our goal of becoming a ¥1 trillion company, rather than merely expanding in scale, it is essential to create an organization that enables growth for every employee and transforms diversity into a competitive advantage. To this end, I intend to propose human resource strategies that incorporate external perspectives while supporting sustainable growth.

Kawamura

　The Company has been in business for nearly 60 years now and, although it pains me to say it, retains a very old-fashioned mindset among its veteran employees—myself included. This hinders our ability to keep up with the times.
　Companies operate through teamwork, so instilling a mindset of mutual respect is crucial. How effective the preventive measures we’ve established will be depends entirely on people’s willingness to change. Therefore, it is crucial to establish a framework that allows for issues to be easily brought to the attention of the Personnel Department when they arise. From there, department heads can be notified—creating a work environment in which problems do not go unreported.

Oyanagi

　Harassment often stems from such rigid mindsets as “that’s not how things were back in my day.” Therefore, it is important to remain keenly aware of changing times and adapt accordingly, reflecting the diversification of values and work styles.
　As Audit and Supervisory Committee members, we will closely monitor management to ensure they adequately understand that harassment poses not only significant legal and reputational risks to the Company, but also directly impacts the motivation and productivity of each employee, and that they are thoroughly implementing measures to prevent reocurrence. Furthermore, we intend to advise on ensuring that the training and whistleblowing systems are not merely perfunctory, but lead to effective, substantive initiatives.

Sato

　A recent anonymous internal survey conducted shows a great deal of employee concern regarding the Company’s handling of the matter, with many viewing the subject as important to its overall future. Therefore, our continued firm stance both internally and externally will serve as a crucial test. As an Audit and Supervisory Committee member, this is an area on which I intend to place particular emphasis.

Kitsunai

　Our corporate culture is somewhat outdated. While in Japan our improvement efforts have made great strides, the incident unfortunately took place overseas, where oversight from the Head Office is limited.
　At this juncture, we are actively expanding into overseas markets and must thoroughly ensure that measures to prevent the reoccurrence of such an incident are implemented and do what we can to not dampen the spirits of those eager to go abroad and make their mark.

* In December 2024, an internal investigation committee was launched following the publication of articles in certain online media outlets regarding conduct resembling power harassment that occurred at the Company’s subsidiary in China. Mr. Hashimoto served as chairperson with Mr. Kawamura, Mr. Sato, and Ms. Oyanagi serving as its members. The committee investigated and verified the facts, imposed disciplinary measures on the officers and employees found to have committed misconduct, and proposed measures to prevent their reoccurrence.