Masayoshi Nakamura, Independent Director

Q.1

Please tell us about your strengths and skills.

In my role on the Board, I bring extensive M&A advisory and capital market financing expertise, which I gained through my work at major US investment banks. My contributions to the Board also draw on my management experience at Mitsubishi UFJ Financial Group (MUFG). As a member of MUFG’s management, I took part in building the group’s global investment banking operations and eventually in overseeing the formation of Mitsubishi UFJ Morgan Stanley Securities, following MUFG’s investment in and partnership with Morgan Stanley.

The beginning of my career at major US investment banks dates to the mid-1980s, a period that marked the emergence of M&A transactions involving Japanese companies. My primary objective then was to develop and solidify the financial advisory business within the Japanese market. Over a 20-year period as an M&A banker, I led more than 100 cross-border and domestic M&A transactions across various industries to completion. Among the deals I advised were the formation of a joint venture between a leading Japanese electronics manufacturer and an American entertainment firm, the acquisition of a Chinese brewery by a Japanese beverage company, the delisting of a U.S. investee company by a prominent Japanese IT service provider, and a European automotive OEM’s investment and capital alliance with a Japanese automaker amid the global restructuring of the auto industry. Through these experiences, I was able to gain insights into the dynamics of the global M&A and capital markets. I am proud to say that, later in my role of managing MUFG’s investment banking business, I could take advantage of these insights and help Japanese companies cultivate additional routes to access the global capital markets.

I became an Independent Director of NPHD in 2018, and since then, the company has executed numerous M&A transactions. In these projects, I tapped into my experiences to assess the deals’ strategic importance for us from a broad perspective. I worked to identify the areas requiring caution, and encouraged the management team to boldly take on the challenge of assembling superior assets for the company.

The fundamental role of an M&A advisor, a profession that forms the foundation of my career, is to guide the clients’ management teams in ultimately arriving at the proper decisions. In most cases, management teams do not simply follow the counsel of advisors and external experts when it comes to decision-making. In this sense, the sole mission of an M&A advisor is to help the management reach an appropriate decision on its own by providing advice in a clear and well-organized manner. I have always made a conscious effort to embrace and fulfill this responsibility.

The same holds true for my role as NPHD’s Board Chair. Our Co-Presidents are the ones handling business execution, and we, the Independent Directors, support the Co-Presidents in their bold pursuit of opportunities. In leading the Board meetings, I place importance on conveying the essential perspectives and advice of the Independent Directors and ensuring that sufficient discussions are being conducted while ultimately respecting the Co-Presidents’ own judgments. I contribute to fostering an environment where all Directors, myself included, can effectively perform their duties.

I consider it my professional mission to enhance the presence of Japan’s capital markets globally by helping elevate the capital market activities of Japanese companies to global levels. As an Independent Director, I will make full use of my experience and contribute to the Group’s growth and expansion worldwide, while working towards achieving MSV.

Q.2

What are the strengths and attractiveness as well as the challenges facing NPHD, who promotes MSV as its sole mission?

As previously mentioned, my lifework as a professional is to enhance the presence of the Japanese market and companies in the global capital markets, including the M&A field, in terms of both quality and scale.

The six Independent Directors, including myself, have long delved into professional themes in their respective disciplines. These encompass a variety of key areas, including corporate governance from the legal perspective, financial audit, internal control systems, information technology, human resource development, global business management, corporate valuation, M&A deal execution, and post-merger integration. Such experts in their respective fields support the MSV vision championed by Chairman Goh and are entrusted by the shareholders to serve as Directors of NPHD. Based on the in-depth understanding of MSV—the sole mission for managing NPHD, our Board consistently asks each of the Group’s partner companies what they want to do and why. In this way, the Board supports the management team’s unwavering pursuit of MSV. Simultaneously, the Board must utilize the expertise of each Director to assess the prospective risks and returns of our M&A endeavors for further asset assembling and thereby guide the management team in making the most appropriate decisions.

We currently have a nine-member Board of Directors, down one from ten in March 2018. Over the course of the years, we transitioned to a Company with Three Committees (Nominating, Compensation, and Audit). In five years, we have welcomed seven new members to the Board, while eight have retired from their positions. The evolution reflects our commitment to assembling a highly specialized and diverse Board. Furthermore, we have in place a simple, stripped-down internal control system, incorporating a risk assessment survey known as Control Self-Assessment tied to our Global Code of Conduct, and a whistleblowing hotline established and operated at each of the partner company groups. Our autonomous and decentralized management approach, based on mutual trust backed by this internal control system, enables group audits through the “Audit on Audit” framework.

The greatest mission of our Board of Directors is to maintain a governance framework that encourages our executives to continue taking appropriate risks boldly for the pursuit of MSV. As the Lead Independent Director, I call the Independent Directors’ meetings as often as Board of Directors meetings are held. Our Independent Directors’ meeting is a place for open and frank discussions; we do not prepare an agenda or take minutes. As Board Chair, I factor in the output from these discussions and seek to fully utilize the knowledge and insights of each Director in the deliberations and decision-making processes of our Board meetings, while also maintaining the independence of the Independent Directors. By fulfilling these functions, I hope to live up to the trust of our shareholders.