Message from Outside Director

Excellent System for Achieving a Higher Level of Governance

Free and open-minded discussion is essential for enhancing corporate governance. Since becoming an outside director of DOCOMO in 2013, I have acted accordingly and tried to share my view when anything that I believe is important from the perspective of general shareholders comes up as a discussion topic.

Generally it is said that, in Japanese companies, board members' discussion tends to focus on monthly, quarterly or annual business results, and this seemingly hinders strategic discussions over the medium to long term. DOCOMO instead has what we call an "after-school" system, in which all board members gather after an official meeting for a frank exchange of views on medium- to long-term business strategies, formation of a required corporate culture and other topics not on the meeting agenda. I think it is an excellent system of operation, which fully leverages the functions of the Board of Directors.

Through this system and other means, we have had animated discussions on a business "selection and concentration" strategy for several years. As examples of business "selection," DOCOMO has withdrawn from the joint ventures with the Indian conglomerate Tata Group and sold Radishbo-ya Co., Ltd., a subsidiary providing a natural and organic food home delivery service in Japan. In contrast, more efforts are still needed in terms of business "concentration", which involves investment in new fields and M&As. I believe that DOCOMO can exercise more appropriate business management by promoting "selection and concentration" in a balanced manner while looking five years and 10 years ahead.

Toward a Paradigm Shift to Autonomous Service

There are two aspects to the role of an outside director. One is to "create value" by providing a broad range of advice based on one's knowledge and experience, and the other is to "maintain discipline" by monitoring any conflict of interest among a company, its management and majority shareholders. DOCOMO has a distinctive governance characteristic of being a subsidiary of NIPPON TELEGRAPH AND TELEPHONE CORPORATION (NTT) partially owned by the Japanese government. NTT holds more than 60% of DOCOMO's shares, while the Japanese government owns a one-third stake in NTT. In spite of this unique standing, DOCOMO has maintained an independent and appropriate relationship with its parent and with other shareholders since I became a member of the board, and there have been no major issues in relation to conflict of interest between these parties.

As such, I think creating value counts more in my role as an outside director. In the world of information and communication, a paradigm of ubiquitous networking, which was advocated at the turn of the century, was replaced by a paradigm of smart platforms with explosive growth in the use of smartphones. Currently, it is undergoing another drastic shift toward autonomous service*. What is needed now are the technological capability to flexibly utilize artificial intelligence (AI), the Internet of Things (IoT), and other new information technologies; knowledge and skills on serviceology (scientific and engineering approach to a service) to create effective services; global business deployment capability; and power to co-create value by delivering the outcomes to customers.

Once, DOCOMO led the creation of ubiquitous networks. Now, its task over the medium to long term is to think carefully about what to seek and what strategic moves to make toward a paradigm shift to autonomous service. While carrying out this task, I strongly expect that DOCOMO will work to produce next-generation leaders with an entrepreneurial spirit in fields yet to be explored by any company.

* Autonomous service: ICT systems that are designed to operate at a certain distance from the user and behave independently, as if they had a will of their own, for the purpose of providing advanced services to the environment and the user