Enhance Corporate Governance – Time for a Change
We believe CEO Mr. Kishimoto, who is now 76 years old and has served as a board member for 22 years and CEO for 13 years, is not prepared to make the necessary bold changes needed to see Hokuetsu succeed into the future. Hokuetsu shareholders need a new CEO who is ready to take bold action to create A Better Hokuetsu.
Mr. Kishimoto has steered the Company’s focus on printing paper over the last 13 years – a strategic decision which has not helped in an increasingly paperless world.
Recently, Hokuetsu has moved to invest in carbon board and sanitary paper, but this has been too little, too late.
During Mr. Kishimoto’s tenure, the salary of the average Hokuetsu employee has decreased by 13%.
In 2015, an employee of Hokuetsu embezzled funds. The Company lost JPY2.4bn on the incident.
Since Mr. Kishimoto became CEO in 2008, he has resigned all the other senior directors. We understand this was done in order to preserve his role and maintain his tyrannical rule over the Company.
We believe one of the reasons that the Company’s assets and the core business are not being valued properly in the market is the Company’s anti-takeover measure. Hokuetsu should abolish its poison pill, in line with best standards of corporate governance.
There is no diversity on Hokuetsu’s board and we believe Hokuetsu should hire a Director with knowledge in Biomass power plant investment and finance.
Finally, Hokuetsu’s Directors are not incentivized enough to pursue growth. Hokuetsu’s compensation scheme is below even the average Japanese standard. We are in favor of increasing that to at least the average in Japan of 21%.
