Feature Interview

September 2015

Arc Communications' External Directors: 10 Years, Looking Back and Forward

"Japan's Corporate Governance Code" - adopted by the Tokyo Stock Exchange (TSE) this June - states that, as a general rule, listed companies in the First and Second Sections of the TSE should have two or more external directors. By appointing outside directors from its very inception in 2005, it can be said that Arc Communications (hereinafter referred to as "Arc") was ahead of its time.
In this issue, our President has interviewed our three external directors to celebrate Arc's 10th Anniversary. This was an opportunity to look back on the role and the functions they perform in similar SMEs, and to discuss the future of Arc.

From left to right: Matsuzaki, Mase, Ohsato, Shinbori

Yoko Mase: Graduated from the International Christian University, then received an MBA at Kellogg School of Management at Northwestern University. Worked at Bain & Company. Arc's external director since 2005.
Susumu Shinbori: Graduated from Keio University. CEO & President of Proceed One. Arc's external director since 2009.
Hitoshi Matsuzaki: Graduated from The University of Tokyo, then received an MBA at The University of Chicago Booth School of Business. Works in a foreign-capital financial institution. Arc's external director since 2014.
Mariko Ohsato: CEO & President, Arc Communications Inc.

The Origin of Arc's External Directors and Their First Impression of Ms. Ohsato

Ohsato: I'm very grateful for your support, thanks to you we are now celebrating Arc's 10th anniversary.

Matsuzaki: I have only been an external director for six months now, but what would you consider the key to safely reaching the ten year milestone?

Ohsato: To be blessed with great customers. To be blessed with great partners: translators, temporary staff, small offices/home offices, vendors, etc. To be blessed with great employees. I am very grateful to everyone who sent us at Arc, their frank feedback - including the harsh opinions -, as it helped us to grow. The external directors greatly helped in forging Arc.

Shinbori: What brought you to appoint external directors when you established the company?

Ohsato: There were three reasons. First of all, because, without fail, owner presidents tend to run wild. (Laughs) So I wanted a "chaperone." Secondly, I wanted advisers for when I had to make decisions all by myself. Third, being a small structure, I thought that external and fresh opinions would be necessary.

Mase: Your expectations toward the external directors were fairly clear.

Ohsato: Can you tell me how you perceive me, and your feelings about undertaking this position?

Mase: I met you in 2001, at a Kellogg Club of Japan alumni reunion. You had a sparkly and bright presence, quite a fascinating senior. You came to me when you launched Arc in 2005, and at the time I was preparing to start up a venture myself too, so it felt like I could learn much from that position. Since then, despite being your junior, I have been in a position where I can open-heartedly express all my opinions.

Shinbori: When I first met you, I was impressed by how dynamic you were: you were participating in ski orienting competitions all the while working as a president. Before taking on this position as an external director, I used to coach you by telephone twice a month, helping you organize your ideas. Then I remember the subject of joining the external directors being brought up, as a natural progression.

Matsuzaki: My first impression was that of a straightforward person with a voice that really carries. Then I thought, "just the right amount of impudence, age unknown." (Laughs) You seemed to be constantly energetic, but later I also realized that you like "theoretical thinking." We have external advisers at my workplace as well, and you approached me at the time when I was interested in how to establish a more meaningful communication with these advisers. It was during a time when there was growing interest amongst businesses in general on how the monitoring of a company by its external governance can contribute to improving the company's performance. I accepted the position because it gave me the opportunity to personally participate in this aspect which was sure to be an insightful experience.