Mizkan Group net sales outside of Japan grew to more than 50% when we acquired our US pasta sauce brands in 2014. Our group business structure had long been reliant on the Japanese business, but now our business is distributed across three regions: Japan and Asia, North America, and Europe. As our operations become increasingly global, we will not let time differences, distance, and any other differences between our companies get in the way. Together, we are strengthening, evolving, and embedding Mizkan Corporate Governance to realize sustainable growth through Mizkan-style management.
Our call to action for Mizkan Corporate Governance:
“Share what you do and grow our improvement community to achieve personal growth”
Our call to action
We believe that the purpose of corporate governance is fulfilling our accountability to all stakeholders. From Mizkan Group management to team members in all locations, all Mizkan employees must be able to explain their work to their managers, colleagues, and external stakeholders.
We encourage our team members to think about how they are answering our call to action:
Share what you do and grow our improvement community to achieve personal growth
- Can you explain what you do to your colleagues and family?
- Are you producing work you can proudly share with your friends and family?
- Have you been able to work collaboratively and cross-functionally to make improvements by sharing what you do?
- If not, why?
Our message is “share what you do, and communicate with each other.” We aim to ensure that all Mizkan team members have a real appreciation of how their roles and day-to-day work contribute to strong corporate governance which is the foundation for Mizkan’s growth and success.
The Two Principles, Kokoroe, Common Management Principles, and the SENOBI concept
The knowledge we have built up since our establishment is expressed in Kokoroe and the Two Principles. The term “SENOBI” refers to both the concept of and actions for making steady progress by enthusiastically challenging oneself to attain stretching but achievable goals.
Putting the Two Principles into action
Mizkan Corporate Governance fuels our corporate aim of “sustainable growth through Mizkan-style management” by embedding “Mizkan style.” There are three mechanisms for doing so. Out of the three, the “mechanism for putting the Two Principles into action” impacts the other two and is the most important.
Key to the “mechanism for putting the Two Principles into action” are Trinity initiatives. When applying this tool, the first step is to assess the actual situation using the sangen principles (genchi, genbutsu, and genjitsu) and make operational processes visible using Business Flow Charts. The next step is to refer to Group Policies and make improvements to the “Trinity.” The “Trinity” is made up of Rules, Roles, and Operational processes. Each defines the work we do from different angles. We use all three to visualize operations and continuously make improvements that are stretching but achievable.
In order to improve operations, we feel that it is particularly important to identify and redefine the following points:
who to share information with, who makes decisions, and who provides final approval.
We use Business Flow Charts to visualize operational processes. Instead of visualizing all operations, we focus on the operations that people have highlighted as needing improvement. After visualizing the actual state of the operation, we hold cross-functional discussions and make improvements. We have three main categories for operations that require improvements:
- Day-to-day operations that are causing difficulties for front-line staff
- Operations that have unclear decision-making processes
- Operations where there have been incidents that require investigation to identify: 1) causes, and 2) solutions/preventative measures
Rather than setting our sights on best practices, we make sure we get the basics right by visualizing actual conditions. Then, we identify improvement points that are stretching but achievable to drive resolution of issues and continuous improvement.
Procedures and Rules
The key operations covered by our Group Policies are broken down into smaller and more specific operations in our 48 Group Procedures. The Group Procedures set out what must be observed by all Group employees.
For each region, the Group Procedures are broken down into even more specific Area Rules that must be observed by employees. These number more than 100, and take into consideration the business activities of the company, applicable laws, and business customs. The main purpose of Area Rules is to define the roles and scope of decision making and approvals as identified through the Business Flow Charts.
In all our regions, we have defined the roles of all managers and above. In the role-definition process, managers define team member roles based on the responsibilities stated in the Group Procedures and Area Rules. From FY19, we are introducing “Mizkan-style role evaluation,” which will reflect how much each team member has fulfilled their role.
Decision making, sharing of information, and audits for sound management
Audit Structure in Mizkan Group consists of four (4) types of audit
- Audit by Corporate Auditors: Audit of management practices by Corporate Auditor and external Corporate Auditor
- Audit by Board Member: Audit by MH Board Member with relevant expertise and experience in Mizkan
- Audit by Mizkan Holdings: Audit of execution of Operations, Rules and Roles in each Area
- Area Audit: Audit led by the Area to make improvements internally
Our risk-management regulations set out Mizkan’s risk-management framework based on our Risk and Compliance Management Policy and Procedures. We are constantly strengthening both our global risk-management framework and preventative measures to minimize risks that could threaten the Mizkan Group. As part of this, we have established a Risk and Compliance Management Committee which includes Mizkan Holdings Directors and the Chief Financial Officers of Mizkan businesses in each Area. The committee helps minimize risk by advising on recognized risks and potential threats in each region. We also have whistleblowing mechanisms in each country in order to prevent, quickly detect, investigate and correct any irregularities, as well as bolster compliance-oriented management.
- The requirement to publish a tax strategy was part 2 of Schedule 19 of the UK Finance Act 2016.