Toshio Morohoshi, Independent Director

Q.1

Please tell us about your strengths and skills.

One of my strengths is my knowledge and experience about the transformation of business models, processes and corporate culture as well as international business with my more than 20 years of experience managing global companies. I was CEO of many types of IT companies including Japanese companies in the U.S., foreign-affiliated companies in Japan, and a Tokyo Stock Exchange listed company. I achieved many significant short-term turnarounds of company earnings through transformation of business models. I worked in the U.S. for 11 years. I was also responsible for the overall global strategy of Fujitsu Limited, which is a leading global electronics manufacturer, as Board Director of Fujitsu companies in six countries. I believe this part of my career gave me diverse international business experience. Furthermore, I was involved with the development of IT systems and provision of IT solutions for businesses in various sectors from the standpoint of supporting the management of client companies.

Since I was elected as Board Director, NPHD has completed numerous M&A deals. The acquisitions of DuluxGroup and Cromology, in particular, were opportunities for Nippon Paint Group to not only achieve geographical expansion of operations but also acquire the adjacencies business such as adhesives. I gave support and advice for combining different corporate cultures, such as by sharing good practices of process transformation with the management team of NPHD.

In addition, as an Audit Committee member, I thought that it was important for the growing Nippon Paint Group to carry out audits of group partner companies efficiently and effectively by using IT. Therefore, the Committee established the Audit on Audit system, in which our partner companies, namely NPHD consolidated subsidiaries, create their own trustworthy audit systems, and then audited by NPHD. Moreover, I proposed the establishment of the Digital Committee, where each Partner Company Group head of IT participates to discuss future IT strategy. With these initiatives, I gave advice to the management team to encourage the transformation of IT processes and the corporate culture for business.

I have been a member of the Nominating (Advisory) Committee since I sat on the Board of NPHD. My experience in corporate management and global business supported me to play a major role in governance reform for the transition to so-called Company with Three Committees based corporation and the establishment of the management structure of Board Directors and Executive Officers including candidates for next president.

Q.2

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

Since I became Board Director of NPHD, I have engaged in open and lively discussion with other board directors and the management team. MSV is what makes it possible for Board Directors with diverse backgrounds to work together for addressing challenges facing NPHD. For MSV pursuit, Board holds intensive discussion to share the corporate values. I believe this is a major strength of NPHD. Another unique aspect of NPHD is that Mr. Goh, who is the representative of our major shareholder Wuthelam Group, is also on Board. At NPHD, alignment of the major shareholder and the Board of Directors enable both to focus on business growth and protecting the interests of minority shareholders with the same corporate values.

However, I think NPHD needs to overcome two challenges to achieve MSV.

The first challenge is the transformation of business processes and corporate culture to accelerate the growth of existing businesses. The key to the success of Asset Assembler model is the autonomous management of group partner companies. Managing all these companies from headquarters is not consistent with our business model. However, I believe we need a platform for healthy discussion among people well versed in the paint and coatings business. The Digital Committee started by mutually sharing information about operations in each region. The committee has now become a forum for reviewing strategies at a high level. This is an example of the creation of a platform for supporting transformation in the IT field. In addition, I will continue to submit proposals to the management team for the establishment of frameworks that can underpin the autonomous transformation and growth of group partner companies.

The second challenge is the transformation to an Asset Assembler. As the Nippon Paint Group pursues the expansion of operating regions and business domains, including the adjacencies arena, new partner companies with different characteristics may join our group. Nippon Paint Group will be required to build a relationship based on mutual trust with colleagues with different backgrounds and bring out their potential while welcoming them together as Group partner companies. Whether the Nippon Paint Group will be successful or not in doing so will be a test of its Diversity & Inclusion initiatives.

The paint and coatings as well as the adjacencies businesses are attractive sectors with stable growth opportunities worldwide. I believe that Nippon Paint Group, as an Asset Assembler, will become a corporate group with even more global companies with unique strengths. My aspiration is to make Nippon Paint Group an attractive corporate group that earns the trust of capital markets and investors by constantly working on the transformation of its corporate culture and business processes. I am very motivated by the growth and development of Nippon Paint Group. I will remain committed to contributing to our group by supporting the management team with my global corporate management experience.