Masataka Mitsuhashi, Independent Director
- Profile
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Since his appointment as an Independent Director of Nippon Paint Holdings Co., Ltd. (NPHD) in March 2020, Masataka Mitsuhashi has played an important role as the Audit Committee Chairperson. His achievements include the establishment of the Audit on Audit system, which is our group audit system underpinning Asset Assembler model.
Mr. Mitsuhashi also served as a member of the Independent Special Committees for the acquisition of 100% ownership of the Asian JVs and the Indonesia business and the transfer of the European automotive coatings business and the India business, which were established in March 2020 and June 2021, respectively. At these committees, he provided objective and expert opinions that contributed to thorough deliberations.
He has improved and diversified discussions of the Board of Directors by using his nearly 40 years of experience involving accounting audits and M&A related professional services as a Certified Public Accountant (CPA) at accounting firms. Mr. Mitsuhashi has extensive insight gained by supporting corporate initiatives from the perspective of ESG and sustainability for the creation of long-term corporate value.
Please tell us about your strengths and skills.
My strengths, firstly, include many years of experience in performing out accounting audits as a CPA at the audit firm PwC Japan. I am also well versed in key elements of risk management based on my involvement with due diligence for M&A transactions. Based on this knowledge, I gave advice at the Independent Special Committees established for the transactions in 2020 and 2021 with Wuthelam Group, our major shareholder, from the perspective of the protection of minority shareholders and based on my accounting audit and due diligence experience.
Secondly, I have given advice to various companies as an ESG and sustainability expert. This allows me to provide information at the Board of Directors about global trends and stakeholders’ concerns involving ESG and sustainability and to help effectively determine solutions for issues. Based on Asset Assembler model, Nippon Paint Group has built an autonomous sustainability structure with Global Teams established based on Materiality under the Co-Presidents. I will give advice to help the management teams to take sustainability actions more progressively and efficiently.
Thirdly, I can use my management experience at PwC as a partner. PwC is a global company with flat organizational structure and has a management approach based on mutual trust. This approach has similarities with our Asset Assembler model, which is predicated on mutual trust with local management. Establishing a system for appropriate risk management that underpins this mutual trust is vital for the viability of this model. As the Chairperson of the Audit Committee, I have worked on establishing the Audit on Audit system, in which our partner companies, which are consolidated subsidiaries of NPHD, create their own trustworthy audit systems. These systems are then audited by NPHD. This allows each partner company to autonomously make management decisions using sound vigilance and to perform risk management with agility.
As the Advisor to the Governance Advisory Committee of NPHD, I was involved with the institutional design process when we shifted to a Company with Three Committees (Nominating, Compensation and Audit) in 2019 and was subsequently elected as an independent director of NPHD. I believe my most important roles are to continue driving governance reform at NPHD by leveraging my strengths and to support the Co-Presidents by contributing to the decision-making process of the Board of Directors.
What are the strengths and appeal as well as the challenges faced by NPHD, which is dedicated to MSV as its sole mission?
I believe the key strength of the Nippon Paint Group is the solid relationships of trust between NPHD and group partner companies and among group partner companies. NPHD does not centrally control group partner companies. Instead, NPHD unleashes the potential of all partner companies, which are autonomously managed by excellent management teams. I believe this framework will lead to the maximization of the EPS of the Nippon Paint Group as a whole and, by extension, the achievement of MSV. In fact, there are many partner companies which have continued to grow after joining the Nippon Paint Group. These accomplishments are an important element for attracting excellent management teams going forward. The Audit Committee will create many opportunities to communicate with the senior management of our group partner companies in order to further deepen our mutual trust.
Lastly, I believe it is essential that we always bear in mind during discussions of the Board of Directors that we should not use logic that favors local management and be certain we are making appropriate decisions based on reasonable grounds. This is vital precisely because of our Asset Assembler model, which is a distinctive NPHD style of governance characterized by reliance on mutual trust. I will point out issues and provide advice especially from the viewpoints of accounting, risk management, ESG and sustainability, which are my areas of specialty. In addition, I will perform monitoring and submit proposals through the Audit on Audit system to ensure that NPHD as well as every group partner company incorporates these viewpoints in their decision-making.