Outside Directors Roundtable Talk

Note: This page includes content from the Integrated Report 2026.

Our Company has transitioned from structural reform into a growth phase, and through discussions incorporating diverse perspectives at the Board of Directors level, we have strengthened the effectiveness of our governance. As the issues we face expand, including the advancement of growth strategies and the strengthening of global competitiveness, improving the quality of decision-making through substantive governance has become increasingly important. In this roundtable, the Outside Directors discussed the role of the Board of Directors, growth strategies, and issues to be addressed to enhance corporate value going forward.

Evaluation of the Transition to the New Management Structure

Q.What discussions took place at the Nomination and Remuneration Committee regarding the appointment of President Kuniyasu? Would you also please share your views on the new management structure?

Sonoda
Needless to say, the appointment of President Kuniyasu was not decided overnight. The Nomination and Remuneration Committee has considered the succession plan for the entire management team, including Chairperson Yamamoto, from a long-term perspective. We have continued discussions while always keeping in mind what kind of structure should be in place to lead the Company’s future management.
In the process leading to the decision, we continuously emphasized to the executive team the importance of human resource development. At the same time, the committee members themselves sought to carefully assess each candidate’s skills and aptitude. I understand that the decision was made comprehensively, based not only on discussions at Board of Directors meetings but also on close observation of comments and conduct in various day-to-day meetings.

Fudaba
I have watched President Kuniyasu’s progress since around the time he became an Executive Officer and then a Director. He was one of several candidates, but as I observed him continuously, I came to appreciate his growth, including the way he built his career primarily in technical fields and later gained broad experience in areas such as quality assurance and corporate planning.
The final appointment was determined by the Nomination and Remuneration Committee. However, it is also true that the executive team had systematically developed talent as a foundation for that decision. On that basis, the committee members evaluated him from multiple perspectives and selected President Kuniyasu. Going forward, I look forward to seeing him fully exercise his leadership as President in his own way.

Ueda
Former President and current Chairperson Yamamoto steadily addressed serious issues through bold structural reforms. He also made the results tangible and clearly indicated the direction in which the Company should move by launching new products and technologies and advancing the brand strategy. President Kuniyasu supported that reform process on the front lines, and I have observed his qualities while working with him over the past year. I believe it is highly appropriate that he should take responsibility for the next stage of growth as Chairperson Yamamoto’s successor.

Sonoda
The Company holds informal meetings between Outside Directors and Executive Officers. Separate from Board of Directors meetings, these meetings provide opportunities for each Executive Officer to explain their own issues and themes, and they are held on an ongoing basis. Through these opportunities, we have been able to engage directly with candidates to succeed the President as well as with the next generation of leaders. This succession is the result of efforts to build mutual understanding and repeatedly assess their respective qualities and aptitude.

Fudaba
Because I serve as Chairperson of the Board of Directors, over the past year I have received explanations from President Kuniyasu on each Board agenda item and have deepened my understanding of his character through repeated one-on-one discussions. I believe what is required of a top executive is the ability to face difficult situations with sincerity and without avoidance. President Kuniyasu has taken responsibility for important matters such as the Long-Term Corporate Strategy “R.I.S.E. 2035” and the acquisition of the DUNLOP brand, and he has explained frankly not only the positive aspects but also the challenges. This attitude makes him highly trustworthy.
While clearly defining the division of roles with Chairperson Yamamoto, it is vital that we demonstrate both internally and externally that decision-making authority is clearly unified.

Ueda
The future management strategy is as set out in “R.I.S.E. 2035,” and its steady execution is essential.
We expect that he will accurately grasp changes in the business environment, set the direction for the sustained enhancement of corporate value, and lead the organization accordingly.
In addition, I believe his important roles include appropriately identifying risks and making swift decisions while fulfilling accountability, developing the next generation of management talent, and continuously fostering a sound and open corporate culture. It will be important to build on the relationships of trust with stakeholders established by Chairperson Yamamoto, incorporate diverse views, ensure a decision-making process that does not become insular or one-sided, and promote management that emphasizes dialogue.

Sonoda
We have been working on structural reforms under the current management structure, and I recognize that the major issues have largely been organized and that a certain path forward is now becoming visible. Chairperson Yamamoto’s emphasis on dialogue with the market, enhancement of investor relations, and proactive information disclosure have also become an important foundation for the Company. I expect these efforts to continue to be strengthened.

Evolution of Board Discussions and Related Issues

Q.How do you evaluate the mechanisms and culture that support Board discussions? Please also share your views on how Outside Directors should be involved.

Fudaba
Since I became Chairperson, Board meetings have tended to take more time. However, I view this positively, as it reflects not only the large number of agenda items but also the fact that each Director actively expresses views from diverse perspectives and that discussions are extremely lively. Outside Directors, in particular, ask multifaceted questions and provide advice based on their respective expertise. I appreciate that the quality of discussions at the Board of Directors as a whole has improved year by year. Leadership has had a major influence behind these changes. During Chairperson Yamamoto’s time as President, an attitude of listening to diverse opinions became firmly established, and I feel this has led to positive changes in the way the Board of Directors conducts its discussions.

Sonoda
From the perspective of engaging in discussion, I believe the Company has two major strengths. First, through informal meetings with Executive Officers, we can directly access information and data close to the front lines. Second, off-site meetings introduced in recent years provide opportunities before Board meetings to organize issues, receive interim reports, and exchange views. I feel that these initiatives have improved the quality of discussions at Board meetings. In addition, Internal Directors actively express their views not only on their own areas of responsibility but also on other areas, resulting in open and active discussions. I also feel that one of the Company’s distinctive strengths is that, under the leadership of Chairperson Fudaba, frank and candid views are exchanged effectively within a limited timeframe.

Ueda

Fudaba
At Board meetings, it is important to maintain the atmosphere of candid, open, and active discussion that has been established to date. At the same time, I recognize that there is room for improvement in terms of what should be discussed. In particular, to appropriately monitor the progress of “R.I.S.E. 2035” and the new President’s management policy, we need to clearly define the issues to be reviewed on an ongoing basis and organize the framework for discussion by using off-site meetings and other opportunities in addition to Board meetings.
From the perspective of increasing management speed, it is also important to consider how decisions are made by the executive side before matters are submitted to the Board of Directors. We need to review authorities and processes, including which meeting bodies make decisions, who is responsible for decisions, and the scope of that responsibility, and build a structure that enables swift decisionmaking. Structural reforms have produced certain results, but highly challenging issues remain. It is important for the executive team and the Board of Directors to discuss these issues repeatedly while appropriately sharing roles, and to resolve them steadily.

Sonoda
I recognize that speed will be a very important factor in how the Board of Directors operates going forward. Decision-making requires a certain amount of information and background explanation, and while enhancing materials is important, preparing them can also create an excessive burden. As the Company advances DX initiatives, further operational streamlining is desirable. This is an important issue not only for the operation of the Board of Directors but also for the way the executive team that supports it conducts its work.

Ueda
With regard to the future role of outside directors, I believe the foundation is to represent the common interests of shareholders and convey capital market perspectives to management. At the same time, when looking inside a company, there are often issues that are difficult for management to see. I recognize that many corporate misconduct cases may be rooted in such less visible problems. Therefore, it is also an important role of Outside Directors to pay attention to the perspectives of employees and the front lines, and to make visible issues that are difficult for management to see or that may be overlooked. In other words, we are required to focus on risks arising from corporate culture that may lie behind decision-making. Such risks may, in some cases, shake the foundations of management, and it is our responsibility to bring them to light from an independent perspective before they materialize.

Evaluation of Growth Strategies Centered on the DUNLOP Brand

Q.From the standpoint of Outside Directors, please share your views on growth opportunities and risks related to the global development of the DUNLOP brand.

Fudaba
While I recognized the importance of global expansion from my experience in corporate management, I did not fully appreciate the significance of making an investment of this scale in the acquisition of the DUNLOP trademark rights and related assets. However, through repeated discussions and reviews, I deepened my understanding of the brand’s history and value, as well as its positioning within our future growth strategy. I now recognize it as one of the important pillars of our medium- to long-term management strategy.
Investments of this kind are meaningful only when they are integrated with assumptions and numerical plans for future growth. Continuous monitoring of whether steady progress is being made in line with the plan is important, and I believe this is a role that the Board of Directors, not only the executive side, must fulfill. Additionally, for our Company, the DUNLOP brand is something that we once owned and later regained, so in a sense, this also represents a renewed challenge for us. In that sense as well, this initiative is an important undertaking that we absolutely must turn into concrete results.

Sonoda

Ueda
I believe that leveraging the DUNLOP brand will lead to significant growth opportunities. By enhancing brand value in an integrated manner, with the tire business at the core and including the Sports Business and Industrial Products Business, the Company should be able to further strengthen overall trust, advance differentiation, and contribute to enhancing customer value through long-term relationships with customers.
Enhancing brand value will also serve as an important foundation for acquiring talent, collaborating with external partners, and creating new businesses, thereby generating a virtuous cycle of medium- to long-term growth. Moreover, a brand is not merely something communicated externally; it is embodied through the actions of each employee. Therefore, I believe the key to enhancing brand value is to align brand strategy with corporate culture and create an environment in which employees can autonomously embody the brand.
At the same time, in light of uncertainties associated with changes in the social environment, I recognize the importance of advancing the brand strategy under a consistent policy without being swayed by short-term fluctuations.

Perspectives on Organization and Human Capital Supporting Global Strategies

Q.What kind of transformation do you think is necessary in terms of organizational culture and human resources for the Company to continue growing globally?

Sonoda
From the perspective of human resources, I believe three elements are particularly important: the spirit to take on new challenges, the flexibility to accept diverse values, and communication skills. As we develop our business globally, these capabilities will be essential because values and needs differ from market to market.
At the same time, how to turn the skills of individual employees into organizational strength is a separate challenge, and I recognize that management leadership is important to achieve this. Based on these elements, we are also required to make flexible judgments in response to changes in the environment and revise policies as necessary. Risks often materialize in unexpected ways, and I believe that being an organization capable of responding swiftly according to the situation is essential for competing globally.

Fudaba
In addition to the points raised by Director Sonoda, as a global company, we need to pay close attention to risks such as misconduct at overseas bases and delays in information sharing. Important management issues include the possibility that challenges may arise not only on the front lines but also at the management level, and whether so-called “bad news” is shared in a timely manner. To address these issues, developing global talent is important; however, in addition to that, I believe it is essential for top management themselves to engage directly and repeatedly in dialogue with the leaders of overseas bases in order to deepen those relationships. It is important to increase organizational unity through close communication with top management, whether at bases in Japan or overseas.
I believe that Chairperson Yamamoto’s efforts, during his time as president, to visit bases both in Japan and overseas and engage directly in repeated dialogue at sales and production sites were highly meaningful in deepening understanding of the organization. Such efforts are not easy, but I recognize that they play an important role in narrowing the distance with the front lines. Outside Directors are also provided with opportunities to understand the front lines, and the ability to feel the connection between management and the front lines is one of the Company’s distinctive characteristics. Through the accumulation of these efforts, I recognize that the Company needs to build a framework in which each base makes decisions while sharing a global perspective.

Ueda
Human resources are not costs to be managed, but strategic capital that creates corporate value. It is vital that we enhance employee engagement and foster a corporate culture that encourages diverse learning and challenges.
While organizational culture is an important management foundation, we also need to be mindful that, depending on its nature, it can become a factor that inhibits constructive communication. For example, a culture that places excessive emphasis on performance may induce inappropriate conduct and hinder fact-based, constructive communication. In this respect, the concept of “Bad News First/Fast” set out in the Company’s Corporate Code of Conduct has significant meaning. Sharing issues and problems at an early stage and turning them into organizational learning contributes to improving transparency and also helps build an environment in which employees can express their opinions with psychological safety.

Enhancing Governance and Corporate Value

Q.How do you think the new management structure and the evolution of governance will lead to the enhancement of corporate value over the medium to long term?

Sonoda
I believe it is important to increase the precision of early risk detection, based on the steady continuation of the governance mechanisms we have built to date. This is also connected to the concept of “Bad News First/Fast,” and we need to improve our sensitivity to signs of problems so that we can detect them quickly. At the same time, in decision-making, it is also important to fully incorporate diverse perspectives and deepen discussions based on them. Through these efforts, I would like us to further enhance the effectiveness of governance.

Fudaba
Under the new management structure, the lineup of Internal Directors and Executive Officers, including President Kuniyasu, is now in place. It is important to fully discuss and move forward with what kinds of mechanisms and operating structures this team will build going forward. In addition, to achieve sustainable management over the long term, it is essential to develop talent while constantly keeping in mind the next management team and the structure beyond that. Management decisions are not completed within just a few years, and many themes must be pursued with a view to the next 10 years. In that sense as well, I believe that steadily developing talent who will carry the Company forward will serve as a foundation that supports the Company’s medium- to long-term growth.
At the Company, the Sumitomo Business Philosophy has permeated the front lines, and proactive activities from a long-term perspective have taken root. I feel that this culture nurtures people and provides fertile ground for developing the next leaders. There are many individual issues to address, such as generating results from the DUNLOP brand and strengthening overseas production bases. At the same time, I believe that valuing a long-term approach to developing people and the organization will form a foundation for sustainable growth.

Ueda
In recent years, the term governance has become widely recognized, and its importance goes without saying. At the same time, however, I sense concern that governance may become limited to the establishment of systems and formal compliance, becoming a mere formality. I believe governance is not a fixed destination, but a process of continuously updating itself in response to changes in laws and regulations, social norms, and the business environment.
Therefore, rather than being bound by superficial forms, it is important to autonomously design the mechanisms needed according to our business characteristics and stage of growth, and to enhance their effectiveness. For example, improving capital efficiency is an important theme. However, if excessive emphasis on shareholder returns suppresses investment in human resources or research and development, it may undermine medium- to long-term growth opportunities.
From this perspective, I believe that governance in its essence means working to enhance governance autonomously and continuously while providing reasonable explanations as necessary. As an Outside Director, I recognize that it is important to communicate substantive initiatives externally, rather than emphasizing formal compliance.

Aspirations as Outside Directors

Q.As Outside Directors, what do you wish to protect from a medium- to long-term perspective?

Sonoda
The Company has significant strengths in technological capabilities. In recent years, we have developed a number of technologies that we can proudly present externally, including ACTIVE TREAD, the new technology featured in the all-season tire SYNCHRO WEATHER; sensing technologies that leverage analytical technologies; digital simulation technologies cultivated over many years; and vibration control technologies. I recognize that we have now entered a phase in which these strengths can finally be translated into growth. To achieve the various targets set out in “R.I.S.E. 2035,” I believe it is important for the entire Company to work together as one. As an Outside Director, I would like to support these efforts from an external perspective by maintaining appropriate governance while encouraging initiatives that leverage our technological strengths to drive growth and enhance corporate value.

Fudaba

Ueda
I recognize that the structure of Chairperson Yamamoto, who has led reforms to date, and President Kuniyasu, who supported those reforms while also having experience in technical fields, represents a transition at an extremely appropriate time as the Company shifts its focus from reform to growth.
As an Outside Director, I recognize that greater involvement in investor relations activities will be crucial going forward, and I would like to be proactively involved. Investor relations activities aimed at dialogue with investors are not merely venues for communicating information. They are also important opportunities to directly understand the evaluations and expectations of investors and capital markets. Through such dialogue, I will deepen my own learning and actively engage in these activities as opportunities to communicate that the Company continues to take on challenges, thinks independently, and acts on its own initiative.