Daiichi Life Group, Inc. (8750) Earnings Call Transcript & Summary

It is time. So let me start the event. Everyone, good afternoon. Thank you very much for attending Dai-ichi Life Holdings Special IR meeting on Governance, taking time out of your busy schedule. Today, Outside Directors, Bruce Miller, Rieko Sato; Senior Managing Executive Officer, Kohei Kai; Executive Officer, Group CFO, Taisuke Nishimura; Executive Office Business Head, New Fields of Business, Akifumi Kai, are present. Mr. Masao Muraki who is a senior analyst at SMBC Nikko Securities is joining us as a moderator. And this is online event, but some of the sell-side analysts are present in person. First, the Outside Directors, Mr. Miller and Ms. Sato will talk about the governance for 20 minutes. And after that, there will be a panel discussion for 25 minutes. And then we will have a Q&A session in Japanese. We have up to 1 hour and 30 minutes for the event. The IR materials are already available on the website. The event will be shown on the website as archives later. Now Mr. Miller and Ms. Sato will start the explanation.

Can I start? Let me introduce myself briefly. I'm Bruce Miller. I'm Outside Director. I became Outside Director of the Dai-ichi Life Holdings in 2022. In April 2018, I became Outside Director of the TAL, the subsidiary of Dai-ichi Life Holdings, and I've been serving for about 7 years. And I'm also a Chairman of the Foreign Investment Review Board of Australia. I will be Outside Director of the Impax next month. So I had a very close connection with the business in the past, but I've never worked in a private company -- company in the private sector. In -- from 2011 and 2016, I was -- I worked for the Foreign -- Department of Foreign Affairs and Trade of Australia. And apart from my life story, I would like to share with you my experience as an ambassador. Around 2014 and 2015, our administration promoted the growth strategy and stewardship code, governance code worked out and the corporate governance in Japan had a very changing moment. Decision-making and the outside directors would play a very different roles compared to the past, but I was wondering whether that would be the case. And after a few years, I became outside director. And I could -- I felt that it's an opportunity for me to see from inside the company that the real change is happening to the corporate governance in Japan. So there's the communications and discussions at the Board of Directors meeting, and I would like to touch upon it. So the Board of Directors in Japan, people may expect that there aren't much confrontations and there aren't many challenges. And that was the kind of preconceived ideas. However, I spent like 2.5 years as an outside director. I think that they are having a very in-depth discussions, and there is opportunity for outside directors to speak very outspokenly. Of course, it's not perfect, but of course, we can say that I do not agree or I have different opinions. So I thought I should read between the lines if I participate in the Board of Directors meeting in Japan, but that was not the case. It is an environment where I can candidly voice my opinions. The remuneration and also the middle -- medium-term plan and the discussion of purpose, we had different types of discussions. And when we need to go deeper into these topics, we dig deeper in discussions. And I would like to give you some examples. The discussions about the purpose was very active. So that was partnering with you to build a brighter and more secure future. That sounds very simple, but it took a long time to complete this purpose. And the process was very important. So we listened to the discussion from the executive team a couple of times, and we had a common understanding that the purpose is very important and the participation of the employees is also important. So the executive team created focus group and reported the results to our Board of Directors meeting, and we discussed based on that report. And we also thought about the English description of the purpose. We had to think about how we can communicate our purpose to customers outside Japan and also the new company name. We are going to have a new company name, but we went through the same procedure throughout the world. We were wondering whether our new name will be accepted. We are trying to transform ourselves from insurance company to insurance service company, and we discussed these topics. In the new medium-term plan, in order to work out the plan, we talked about the asset succession and bonding, and there are several pillars of the discussions. And I would like to stress that from the basic point, we started the discussions. So if you have to build this business from a scratch, what we should do. That was part of the discussion. And one of the example is that the asset formation and succession field, if we want to work more, what kind of human resource would be necessary or what kind of capabilities would be required. So in order to establish a good governance, what is required? And do we have the culture to nurture asset management culture. And these are still theme that we should work on and digitalization and utilization of IT are also part of discussions, whether the environment is ready for IT and should be managed as a group or should that be left to individual companies? And how can we save cost by introducing IT. So we discussed this several times with executives in charge of IT. And also, we talked about the risk reduction as well. So we talked about the profit of the company in the medium to long terms, and we need to strike a balance between the investment and the return to investors. So I think that both the Board of Directors and also the executive team are playing their roles very well. It's not -- at first, I thought we would just accept what they say. But well, we have to listen to -- we are there listening to the opinions from outside and try to think about whether to go ahead with the plan or change that. So it's a very positive way. So I think the directors are very independent and behaving very independently. So that are the very active discussions about the Board of Directors meeting. And now I would like to talk a little bit about the Benefit One. So at the time of the M&A of Benefit One, what questions did we ask? I think there are major -- 5 main things. The first is the assumption of the valuation, synergy and PMI process and the regulatory risk, the risk coming from the changes in regulations and the working out of alternative plans and the corporate culture match, so whether their corporate culture would match with that of Dai-ichi Life Holdings. So we have looked at several M&A cases since I became outside director and 3 M&A has successfully done. We had a lot of the other questions about governance for those opportunities. And to what extent we should actually cover the responsibility is another one. For traditional companies, alternative finance, the organization and the culture is a little bit different. It's quite free and independent culture and how can we actually combine those cultures into our own culture. We had a long discussion on those themes because our organizational culture is very good, so we don't want to break that, but internal control is very necessary. So constructive discussions was actually conducted. And regarding the ShelterPoint purchase opportunity, well, there was actually the focus on the challenge of the regulational risk. In the business -- the group business in New York, DBL it's the short-term income protection law is actually very important for that business. And what will be the change or the risks of the change in the regulation? And will it be impacted by the change of the government? We actually talked about those things in a deep manner. And the executive officers collected information and analyzed the risk thoroughly, and they gave us the feedback, and we could be convinced about the opportunity. Synergy and PMI for Benefit One, the deal, it was a very important challenge. As you know, this deal is quite interesting, and you actually remember that there was a very interesting development. The holdings, the insurance business and the business expansion is one of the strategic goals for the holding. And for the future of domestic business, including Board members, when they actually create mid-term plan, we had a deep discussion and strong platform is necessary and the extension of the business beyond the insurance business that was actually talked about. Well, Benefit One is something that they have been following for a long time, and there was actually the case study provided by executive officers in Board. And in 2023, there was actually TOB against Benefit One by other company. We were a little bit surprised with that. And however, reaction was actually -- was not what was actually expected. The executive officers believed that the Benefit One is very important business opportunity for the company, and there's no alternative to Benefit One. That's why we actually decided to come up with the unsolicited TOB. In purchasing the business, we had a lot of discussions. However, in the Board, because of the BOD rule, well, we actually focused on the alternative opportunities and synergy and PMI. In any kind of M&A opportunity, this could be very the case. The due diligence that was not possible as usual for this opportunity. So this was a little bit special case. Now I'm actually taking too long time. But I just want to emphasize one more thing. The executive officers and the external officers that we actually have built a very good trustworthy relationship. For example, today's presentation by myself, I actually made this by myself, and I didn't actually share that with the executive directors. And they didn't ask me to share the content of today's presentation. That means that we have a very strong trust between us. So probably there could be some kind of mistakes in my presentation. So there was no actually opportunity for them to correct or maybe they can actually correct now. Thank you.

Thank you very much. Now I'd like to ask Sato-san to give us a brief remark.

Well, thank you very much for your introduction. My name is Rieko Sato. And probably you can actually see my resume. Well, I'm a lawyer and I've been -- I never have been involved in the management of the companies. But for a long time, I've been actually acting as an auditor, for example, for Ajinomoto. And since then, I've been involved in some manner in the company's management. In case of the lawyers that you are actually usually appointed as a member of the Audit Committee. So I've actually been in that role for many companies. In case of Dai-ichi Life, in the beginning, before they become holding organization, I actually became the external Director for Dai-ichi Life. And in the following year, when the holding was actually set up, they actually moved to the Audit Committee company. So I became the Audit Committee member as External Director. You probably know about the audit -- the company -- Audit Committee company. However, well, there is a little bit difference between us and other companies. Well, I am actually Outside Director, and I am the Chair of the Audit Committee. 2021 to '22, between outside directors and executive directors, there was a big argument or the discussion. For example, the Chair of the Board should be external director or Audit Supervisory Committee chair should be external director or Compensation and Nomination Committees, those committees chairs should be external directors or maybe majority of the members should be outside directors. We had a lot of discussions on that theme. And as a result, we have current structure. But the Chair of the Audit Supervisory Committee is the external director and also Chair of the Nomination and Compensation Committee will be external director and external director should take a majority of the members. So outside directors number in the Nomination Advisory Committee and the Remuneration Advisory Committee is actually less than majority. And for Remuneration and the Nomination Advisory Committee nonmembers are all the observers and they can participate in the committee meetings. So all external directors are kind of members and can be actually access to the discussions of all committees. As a result, in 2023, when Kikuta-san became CEO, was actually realized -- materialized. Now on the next page, the Audit and Supervisory Committee, you can actually see the communication between external and inside director. In June 2022, after the AGM, I became the Chair of the committee. And at that time, well, the Audit Committee is actually -- is responsible to audit and supervise the management. So I thought what I should do. Internal directors and executive officers, we have to do hearing with them. And we actually expanded the scope of discussions. And with the external directors as well, I actually proposed that the discussion should be made with them. However, internally, because they never did that before, so reaction was -- or initial reaction was that why do we have to do that? And I was actually asked to wait for 1 year, but probably that's actually equal to the fact that we won't do that at all. So we -- I tried to actually convince them and eventually, they agreed with me. So since 2023, we started dialogue with the executive directors. So first, external directors and the executive directors, we actually started communication for 1.5 hours or so. So the -- our responsibility is to supervise the audit. But the executive directors is something covered by the Kikuta-san. So it's a job of Kikuta-san, and that will be actually the responsibility for us as well. And also Dai-ichi Life's, the directors, the important director members, we actually communicate with them as well. In the first year, we actually conducted such a dialogue for 20x or more. And in last year, 22 meetings were held. And for this year, 22 dialogues will be held. In the beginning, they were quite stiff and they were quite nervous. What will be the questions that I'm going to receive and what should I answer? But over time, well, they actually believed that they can be free and they can actually answer to the other questions that the companies or the external directors would like to ask. So we had more open communication. And since last fiscal year, not only external directors, but the internal directors will be the subject of this dialogue. So if the internal directors are there in person, maybe that could be a pressure for the people who come to speak. So I'm asking the internal directors to participate online. So thanks to that, I think communication is becoming very smooth. And the Board of Directors meeting, you often imagine the Board meeting of [indiscernible], but it's very different. Every time the secretariat shuffled the seats. At first, we used to draw a lot, but that takes time. So they assigned a seat at random. So we have to confirm the seat at first when we came in. And then every time you see -- you sit next to different persons, different directors, so you can have different types of communications. And we decided to have a coffee break. It's very difficult to keep on discussing for a long period of time. So maybe we will make coffee ourselves. So please give us a coffee maker and a cup and then some sweets. Then that was accepted. So if you have a break, there's always somebody and you can have some communication there. So we -- I wanted to make the communication between outside and inside directors smooth. So I think I could contribute to that point. And this year, Mr. Kikuta is trying to enhance the communication with outside directors. And once in 2 months, he is holding a lunch meeting. It's a lunch meeting, so we have a boxed lunch and then have a kind of chat with Kikuta-san and talk about some of the topics that are becoming very trendy. So compared to other companies, the inside and outside directors and also executive directors are having a very good communication. However, as Miller-san said, it does not mean that we have become too casual or relaxed, but we would like to have a communication with kind of healthy tension. And I think that is kept very nicely. So we've talked for 24 minutes. So I would like to stop here. Thank you very much.

Now we would like to start the panel discussion. And we would like to ask Muraki-san to moderate the panel discussion. Muraki-san, please go ahead.

So I would like to ask some questions. First, I would like to ask a question to Sato-san. So you focused on the communication with the executive team. The holding company and DL and other subsidiaries may have some difference in perception and also the management by the holding company is changing. So subsidiaries may find it very worrisome. And do you see that kind of trend?

The overseas subsidiaries, especially are communicating well, but sometimes I feel that the very delicate nuance is not very well communicated. So Audit and Supervisory Committee has to have a visit for the audit in Singapore or in New York, so we talk with the governance department of each location. But it seems that the communication is very well, but sometimes I feel that the priorities are not very well communicated there. So when I came back from the visit, I talked to Yamaguchi-san or Kikuta-san to give a feedback. And as the results, they communicated with the subsidiaries of the overseas and then they can better understand the priorities of the holding company, and then they can work out the plan again. And then that was communicated back to the holding company. And the Japanese subsidiaries, domestic subsidiaries, sometimes find it that the request from the holding companies are somehow imposing, maybe the viewpoint are different between holding company and subsidiaries. So when I go visit them for the audit, they say that the holding companies say this, but -- so maybe the managers of the holding company and the subsidiaries are communicating well, but the employees are somehow feeling some concerns. So the feedback is necessary for the owners of the domestic businesses and what kind of -- it's very important to understand what kind of worries and frustrations are there and holding company should pay attention to them.

So I read your interview in the integrated report. So you talked about how to choose the executives for the overseas subsidiaries and the governance tools and how to have a common KPIs across the group. And you said that you would like to think about these points. So have there been any progress on these points?

As for the human resource, so the director in charge of the human resource is thinking about how to utilize overseas personnel in the group. And as a result, they are hiring very good people for appropriate positions, but recruiting people overseas is still a challenge. And the KPIs for performance evaluation, the holding company has been doing a trial and errors, and we are seeing that in the committees. And we have a middle and long-term strategy committee and the human resource plan is also considered there. So currently, they're using their own KPIs. And I think these KPIs may be working. But from now on, this needs to be adjusted depending on the situation or the environment. So I would like to watch very closely these KPIs.

And Miller-san, I would like to ask you a question. So it's about acquisition of Benefit One. When you make a proposal, you already thought about that a lot. And after the proposal and after the announcement, what happened? That is not described in the integrated report. We -- when we look at the media report, it seems that Dai-ichi Life Group made a proposal and -- but the Benefit One personnel was somehow puzzled and they did not show very positive response. So can you tell us about the negotiations that took place between Dai-ichi Life Group and Benefit One as an expert of negotiations? What kind of information we received from the executive team? And what kind of advice did you give them?

Thank you very much. I don't think that they were puzzled or they gave negative response. I think that was unexpected for them. So that's out of blue. So they are just wondering what they should do. It was the 4:00 on Friday. And they had a TOB proposal from another company. So they had to think about them as well. But I don't think that their response was not favorable. And almost every day, the executive directors gave us a report. Regarding the process, Kikuta-san and the other executive in charge, almost every day or every day, literally, they went to see them to talk about synergy and visions to be shared. So with the explanations, their reactions to our proposal became positive. That's what I understood. I might sound repetitive, but we receive a lot of information and report from executive directors, and they are on time and in time reporting and information. Almost in real time, they actually give us information. Well, regarding the details of the negotiation process, probably you should ask Mr. Kai because Akifumi Kai is actually that was leading the negotiation. So as an outside director, I -- or 2 to 3 times a week, I received information on this case, and we discussed every time we received information and executive directors went back to the negotiation after the feedback from us.

Regarding reporting. Because this was unsolicited at the TOB, I think that kind of information provision was something natural. So without pre-agreement, you conducted M&A. But looking back this deal, did you learn anything or challenges that you discovered?

Yes. The Board of Directors members talked about this unsolicited TOB. Does this lead to reputation risk? How are we viewed by the market? So there are some concerns on the other external directors, including myself. But as a lesson, probably we were too worried because I think that this actually went very smoothly for METI's guideline was in place and unsolicited TOB is okay. That was the message from them. So probably our worry was excessive. And well, at the early stage, we talked about the Benefit One internally. That was a good thing. Even with the third-party TOB, just in 2 weeks, we could build an agreement internally and we actually could embark on the deal.

So the balance between the investment and the return to shareholders, I think that the market is quite interested in that as well. So first question to Mr. Miller and to be followed by Sato-san. The current mid-term business plan, I think the focus is actually on the improvement of the capital efficiency than investment. That's why you actually prefer a return to shareholders. So after this plan is made, there are many changes. For example, Nippon Life and Medi Assist Life that conducted large-scale M&As. And at DL, the equity risk was reduced or was decided to be reduced drastically recently. So probably before the next mid-term plan is devised, I think that you should be more aggressive about the strategic investment for growth. Do you have such a discussion internally? Or are there actually disagreement on this internally, including your own view? Please share that with us.

Yes. for the next M&A, well, I was thought not to mention on any of them. But yes, you're right. Cost of capital has to be exceeded by the efficiency of the capital. That's the biggest goal for us, for the company. That's the goal of the current mid-term business plan. It was fiscal year 2026. And we are going to expand the profit. And after that, we expand strategic investment. That's actually described in the integrated report. That's all true. As one of the outside directors for Dai-ichi Holdings, among life insurance companies were actually one of the first movers to extend the business overseas. In the last 15 years, the company did a lot of the investments overseas. And currently, they are working on that as well. So they haven't stopped the extension overseas. So I don't think that they don't pay attention to overseas M&As anymore. Well, I shouldn't actually touch upon the other companies' situation. But Dai-ichi Holdings is a stock company and the capital efficiency is very important. So the current goal is appropriate. More recent M&As, this is just my own view, but I think that there is a tendency that the most recent M&As are too expensive. Well, basically affordable and available, with appropriate price and available for sale, these are the important criteria for the deals. That's it.

Nippon Life and Medi Assist Life, they are mutual companies. So how can they actually be such a big M&A possible for them. But setting that aside, well, should the focus be on the growth investment or return to shareholders? That's one of the discussions in the Board of Directors' meetings. Among external directors, particularly for buybacks, it's actually payback of the capital. So some people is quite suspicious about that. Having said that, in the current stage, the cost of capital has to be exceeded by the capital efficiency. That's the consensus, which is already built in BOD, Board of Directors. But of course, some people say that the growth investment is necessary, but growth investment requires opportunities, and you are not really sure when the opportunities come up. Even though you want to do the investment for growth, nobody knows that opportunities are available just now. So you have to be always ready. Probably that's all you can do. So in order for -- in order to wait for the opportunities, the capital efficiency should be improved. So I think it's a balance. For instance, in 2030, the market capitalization should be raised to JPY 10 trillion and JPY 600 billion of the adjusted profit, that's the Kikuta-san's target, and that's shared by all employees, and we are actually striving for that goal. Having said that, just with organic growth, can we reach that goal? As Board of Directors, we are quite suspicious. In respect some kind of M&As and the growth investment will be necessary. That's consensus in the Board. But where and how and when, about those details, there were some early-stage pipelines for those deals, some mid- to the long-term strategic gathering would talk about. So we don't have such a detailed discussions on that.

So in 2030, you have a vision for 2030? So you were thinking about purchasing a company that is not insurance companies. It seems that Dai-ichi Life Group is more interested in purchasing noninsurance companies. What do you think about that? Are you all of the same opinion?

Well, everyone has a different opinion. In a country of the early stage, life insurance business is very important and some people think that we should focus on life insurance business in such country. And other people may think that we should more focus on asset management business or the medical insurance and health care. And others think that we should refine our market in Japan. So among the outside directors, they have different opinions about that. Miller-san, what do you think about that?

So I have the same opinion as Sato-san. So among the directors, so where and what kind of business we should invest in is whether Asia Pacific is the best or the U.S. is the best, Europe is the best, asset management is the best or the life insurance is the best. So there are diverse opinions. And it's just like repeating what Sato-san has said, but there are diverse opinions about that. But available case is limited. So we have to look at the case and make a decision. So we can focus our attention to the case and whether if that is a good case, maybe we will discuss that.

So I would like to ask you about the governance. So you introduced a CXO and the group head system very quickly, and you switched to this system in a short period of time. In the integrated report, there is a conflict between legal entities and CXOs. Such quick changes may bring both a good result and also the problems. And what do you think about this?

So in the Audit and Supervisory Committee, so it's one of the key issue for the audit. So far, it's working well in some parts. And at other points, we see conflicts. So that's the reality. Just as you said, CXO and group head systems and where the manager of the subsidiaries should stand and no one knows the relationship and no one knows, and that's the answer. So there is a protection business in domestic market. And Kai-san would be doing that, but Neo First and Dai-ichi Life used to be totally different companies. But it seems that it become easier for supervising these 2 with a kind of horizontal axis. And Mr. Barnham is the Chief Digital Officer, and we used to have a digital investment separately by each companies, but Mr. Barnham can supervise the digital investment across the group so we can avoid the inefficient investment. And we can invest more efficiently in digital -- digitalization and IT. And Mr. Kikuta says that healthy conflict is quite a natural thing. And it seems that people think that conflicts do happen.

As I said at the beginning, not just the holding company, but I'm an outside director of the TAL, the subsidiary of Dai-ichi Life Holdings and as execution of the CXO system, I can look at that from a viewpoint of outside company. And I think CXO system is a very good thing. There was no FEMA-based control before. So because of the introduction of CXO system, the control started to work. I think it was because of the problem of the communication, but TAL has been successful subsidiary and contributed significantly to the profit of the group. And then senior executives wondered why they have to talk to new people. We are very successful and maybe only the CEO or the President should talk about it. We have the President of the company. So that person should be responsible. But I think it has started to settle down. So Kai-san is responsible for compliance and Barnham-san is responsible for IT and communication for Wada-san and HR for Numata-san, and they visit subsidiaries and then communicated with the departments who are responsible for each of these themes. And the communication was very effective and useful and people are beginning to realize that. So it took some time. But in the past 1 year, I think it's moving towards a good direction. Compared to the previous system, there was a worry that it will become more bureaucratic. But after implementing this system, I could see that was not the case. There's still freedom in doing our work. So I think it's working pretty well.

Thank you very much. Good explanation. Now back to you.

Now we would like to start the Q&A session. So about the corporate governance of our company. [Operator Instructions] Now let's get started. Mr. Watanabe from Daiwa Securities.

I'm Watanabe from Daiwa Securities. So effectiveness, I would like to ask you about the effectiveness of outside directors. So is there any gap in the amount of information between executive officers and directors? And what will be the major point of discussions? And what kind of information are required? And on the executive side, we may not see some challenges and risks. And we are seeing some scandals in the general insurance companies, and we could see some bad practice that lasted for a long time. And what kind of risks or challenges do you think life insurance companies have today?

Thank you very much for that question, the information gap and what are the focus of the discussion and what is required for secretariat and also the risk that the executive cannot recognize and any risk awareness from the external directors' point of view. So for that, Sato-san, please.

Thank you very much for your questions. For the focal points of dialogue between external and inside directors, well, of course, it depends on the parties in the dialogue. For example, based on the mid-term business plan, well, of course, the executives have their own challenges. For example, for this fiscal year, business was recovering. However, in case of Dai-ichi Life, the value of new business was not really growing. And for the reform of the marketing people and the number of the salespeople actually went down and the profit went down. So these are the challenges. And then the person in charge of Dai-ichi Life, we actually asked him or her what will be the progress of the reform for sales activities and in order to recover value of new business, what kind of measures were you taking, or based on the matrix management system, what are the dialogues with the business owner in domestic businesses and what would be the conflict with them? These are the questions that we tend to ask. Well, there are many perspectives. So it's difficult to sum up in one word, but we always try to ask the relationship with the business owners and the CXO. Are there any conflicts with them or issues with them, then please let us know. That's the question that we always ask. And what we require for secretariat? Well, you're talking about secretariat for BOD, the management, right?

Yes.

Business secretariat for the BOD, it has actually expanded since 2 years ago. In 2022 or '23, I think there was only one person organization or general affair administration was actually doing that job. But for this fiscal year, it was expanded drastically. So many people were involved. For example, for materials for BOD meetings, in the past, they were not really available on time, but that wouldn't be the case at all currently. And secretariat of BOD, the chairman, the chair of the BOD, they actually are trying to set the agenda with the chair. And for chairman and for secretariat, for example, this is the theme or the topic that they would like to talk about. So the long-term and the strategic committee might actually deal with that topic. So through secretariat, the external directors can ask that kind of a thing, then they actually liaise with the chair or the chairman to that so that they can actually sort out the topics to be discussed in BOD or other meetings. So they are kind of liaison or the hub of communication with the outside directors. So a very smooth organization and operation. And your next question, any risks that the executive officers might overlook? Well, the common sense in the industry is actually not common sense of the society. For example, it was the case for FujiTV scandal. Then what will be the case for life insurance industry. It's very difficult to come up with any specific one. But in the past, this is just my personal view. Well, life insurance companies, for example, 4-person, family and the father is working and there are 2 children. And in the case of death of husband, they like to leave something. So the death protection should be actually big. That's the -- probably the common framework for life insurance. And for that purpose, the salespeople visit the household to propose life insurance policies. But to begin with, now there are not so many typical family of that nature. For younger people, usually, it's double-income household. And there are some people who don't have a family. So I think that the needs in the society is more diversified. So that's probably one of the risks, which are not really recognized by the other people in the industry. I'm sure that my answers are not really helpful.

Can I add something? Not too much to be added, but well, regarding the information gap between external and internal directors, if it's only BOD, the information that we can get as external director might be limited, and we would like to have more information. That's why dialogue with the executive directors will be important. One example, CXO system, CXO and business owner, they do hearing with the executive directors and other CXO and with other executives, whether they can actually have a good communication. So that's the one of the subjects of the hearing. Well, the Board of Directors meeting could not get that deep information on that. So well, that kind of deep dive that was possible with the dialogue. This new CXO system, whether it's functioning well or not, or we could actually do some kind of search or investigation and the information as a result of the investigation, I think we are better informed. And for your second question, executive officers overlook some of the risks. One of the responsibilities for outside directors is actually to take advantage of the common sense of the society because if you are in the company all the time, you might actually overlook something for the sake of customers, do we do something proper? We can actually ask that kind of question, and we can actually tell them that what you are doing is not really based on the common sense. So of course, every company has compliance function. So -- but just a tick box system, tick box approach is not sufficient. This action is really for the sake of customers or for some internal issues. Can we actually treat your colleagues in that way? So against the common sense, you have to evaluate, and we actually bring our insight from outside company to contribute to the company's culture if we do that well. So that's all I have. Regarding Secretariat of Board of Directors meeting, when I appointed as a director 2.5 years ago, we actually received information or materials just on the previous night. Well, I could read the Japanese, but not as fast as other Japanese colleagues. So it was really troublesome for me to receive the documents on the previous night. But now it's much better. I have more time to read through and I can be more prepared for the Board of Directors. So that's because of the improved efficiency and efforts of the secretariat. That's all.

Thank you very much. The next question Mr. Takemura from Morgan Stanley, UFG Securities.

I'm Takemura, and I would like to ask 2 questions. The first question is, I'm not sure whether this is appropriate for asking today, but you talked about M&A. So I would like to ask you about the environment for M&A. So you talked about whether the mutual -- it is appropriate for mutual companies to do M&A, but we are seeing many large-scale M&As these days. And when you think about M&A, do you think about whether this M&A can be obstacle for the business or you have different targets depending on the company, so you don't have to worry about that? And do you think that would affect your decision? And the second point is you talked about the governance of overseas subsidiaries, and that was very interesting. So you aim to be a global top-tier company. And when you think about the governance of overseas subsidiaries, is there anything that need to change if there's any? So you talked about the human resource and there was some tension when you introduced the CXO system, but if there's anything you can think of, can you share with us?

So the first question is that the other companies are having a large-scale M&A and would that be an obstacle for us or maybe we shouldn't have to worry about it? So that's the question about the M&A environment today. And the second question is about the governance of the overseas subsidiaries. Do we need to improve it? And that's the question. So Sato-san, can you answer that question?

So maybe I should answer first and give Miller-san time to think. So the environment for M&A today, well, it seems that competitors are having large-scale M&As. And so -- but we've never thought about whether that would be an obstacle for us or not. We have the target for 2030 and what we should do to achieve it. So executive team are doing a lot of studies and they are thinking about the pipelines. And you cannot find the opportunities all the time. So when the opportunity comes and if that matches the direction we are going, then we will think about it. But if it's not, the executive team will say that this is not appropriate. So considering our goals, we have to think whether that would be suitable or not. And the governance of overseas subsidiaries, the current overseas subsidiaries of Dai-ichi Life Group is under not the centrally controlled system, but they're more like a federation. So the managers of each company is responsible for the management of the company. So it's possible that the director of the holding company would serve also as a director of the subsidiaries, but we are not doing that at this moment. We are encouraging autonomous management of the subsidiaries. It does not mean that we are very detached from them, but we have a regional office in Singapore and in New York. So this is an office that takes care of the subsidiaries in the region, including the governance of these subsidiaries. They are like a midpoint company between holding company and subsidiaries. And within the holding company, Mr. Yamaguchi is responsible for overseas businesses and they visit overseas subsidiaries and communicate with the managers of these overseas subsidiaries. I think it's a very hard work. Clark-san became the Head of Singapore and Mr. Clark-san used to be the top of TAL and Clark-san is overseeing the Asia Pacific businesses. So Yamaguchi-san said that it's a little bit of burden off his shoulders. I met Yamaguchi-san in the lounge of an airport, and he looked so tired. So I asked him if he was okay.

So the first question, I think it's not an obstacle for us. The M&A by the mutual companies are not obstacles for us. We don't want to buy a company at too high a price. It does not mean that we have to buy a company, but when there's a good company, then we would think about doing a due diligence. As I have already said, we have only limited opportunities. So in the coming 1 or 2 years, we may see some opportunities. So there's no decisions made whether that should be an asset management business or which region or things like that. And the second point, as Sato-san said, I think the word federation is very nice. I'm from the Australian Federation. So Federation system is always nice. So each country has a different environment and different situation. And in case of life insurance and asset management, they have different regulations depending on the country, and the reality of the country is very important. So what we can do in Japan may not be able to do in other countries like Singapore and New York. So by implementing CXO system, so I think the control could be better. So we should make efforts so that the system would work well. So it is not the timing to implement a new form of governance. CXO is still new. So we need to implement it properly.

Thank you very much. Mr. Niwa from Citigroup Global Markets Japan.

I'm Niwa from Citi. Well, it may overlap with the questions other people asked, but I would like to ask 2 things. The one point is the executives and second is the customer-based financial service in Japan. The first is the human resource. So I would like to ask you about your commitment to diversity. Mr. Kikuta said that you would like to create a Safari park of human resource, and that would be a desirable state. However, if that would optimize the corporate value or not is a big question. So it seems that you are promoting the people who matches the culture of Dai-ichi Life Group. And how do you think about it? And as a side stories in the U.S., we are seeing the setback of diversity. And how is that discussed in Dai-ichi Life Group? And the last point is about the life insurance business operations. You talked about the common sense. And so we are worried whether the common sense of the general insurance company would spread to banks and life insurance companies. So if you have to adjust the comparison sales, then there will be a risk factor for the bancassurance. In the short term, you may not have the problem, but in the mid- to long term, how do you see that? And how do you prepare for it?

Thank you for your questions. Regarding the taken -- the utilization of the executives and the development, for Dai-ichi Life Group, mid-carrier hires, actually, they hired a lot of mid-carrier employees. In that sense, they like to welcome different kinds of people in the company. For example, well, those who are in the -- who are working in Nippon Life for the corporate planning that came to the company. So I don't know how it happened, but Dai-ichi Life Group is welcome to anybody and the environment that anybody wants to work is something that company is paying attention to, led by CEO Kikuta-san. And Kitahori-san is Director of the Dai-ichi Life Group and Ochiai-san is another female member of Dai-ichi Life. Of course, it's not limited to female directors. But for example, there are some people with foreign nationalities in the Board as well. So in terms of diversity, Dai-ichi Life is quite advanced. On the other hand, in the United States, there is a kind of a shift in terms of the concept of DEI. Some people are actually pushing back DEI concepts. I'm aware of that. And Sogano-san, who is in charge of sustainability, actually gave us the warning. So for protective in the U.S. about D&I, whether that word or the terminology can be used, and that's something that they pay more attention to more careful about. But I haven't actually followed up what will be the actual situation in the United States. And regarding the customer-oriented services for domestic business, that is actually related to fiduciary duty. Agency business is very competitive currently. As you know, or comparison-based the promotion or recommendation, what would be the impact on that? I can't really have a prediction on that. But Mr. Uehara, the President of Neo First, I think that according to him, I think they have appropriate countermeasures for that. And for bancassurance, I think it's similar. We actually visit Frontier Life and listening to the President, Akashi. I think that they had appropriate plan for that as well. Regarding the human resources, if there is any good human resource, I think we should take it from other companies even. As Sato-san said, I don't know the percentage, but I think that many people are actually hired as a mid-career. As I said in my career, I was actually working for Foreign Ministry of Australia, and they were actually using a lot of the people from the bottom. And actually, I was one of them, but I could feel it was not really efficient. So what Kikuta-san is doing currently is something that I really appreciate. You have a lot of the diversities in the human resources. Just because you've been building your career from the scratch in the same company, we are not really sure how talented you are. And if you need some human resources, I think you can actually get it from other companies. And at the higher level, senior level like Barnham-san or Wada-san, they actually came from other companies and Coates-san as well. He's in charge of compliance, and there are some people underneath them, those people, many of them are from other companies, and they are doing very well. But having said that, those who've been working at Dai-ichi Holding for a long time, and many of them are really talented. So how we can actually efficiently combine those people is one of the challenges. But in the last several years, I think this company is managing very well in terms of the human resources. Diversity concept has been actually a little bit receding. Just because with new administration in the United States, I don't think that there is any change to the importance of sustainability. To begin with, why do we have a policy of diversity? Because we want good human resources because we like to grow company. It's not -- of course, human rights issue is very important, but the direct reason for us to adopt diversity policy is that because we would like to have good talent. So as Sato-san said, in disclosure, sometimes we adjust the wording, but I think basic policy hasn't changed. On the second point, I don't think I have anything to add. But with competition, how we can actually keep fiduciary duty, that's important. In a competitive environment, well, we understand that the salespeople are really at the limit, but the fiduciary duty is there with us all the time. So what is the best interest for customers? That's something that we have to be mindful. So good balance is necessary.

So next from BofA Securities, Tsujino-san.

I'm Tsujino. The topics we haven't covered so far today. The outside directors have wonderful skill sets. We understand that. On the other hand, materials are basically made by the company, and I think you actually are getting the information from those materials. So I have a question. For example, for Protective business, how much value is being created? And after the purchase of the business, what happened? Any suspicions or questions? If you're based on the perspective of companies, probably you might actually miss some information. Do you have that kind of question in your mind? And do you ask about those questions to the company? Well, this could be a rude question, but do you have that kind of suspicions not only based on the materials that you are provided by the company, but if you are proactively doubt that kind of materials or the information, that will be probably beneficial. Does that happen? And if you have any concern or kind of vague or kind of nudge in your mind about the information of the company, please share that with us.

Thank you very much. So for the question, for example, for Protective business, the information provided by executives are not only their perspectives, but as an independent director, you like to actually have different perspectives, and there might be a lot of questions arising from that. So what do you do with that kind of questions? So Sato-san, please go ahead.

Thank you for the question. It's a bit difficult to answer that question. In case of the Protective's business, so it's been 10 years since the Dai-ichi Life Group purchased Protective. So it's been a long time since we purchased Protective. So -- and how much value it has created. So we asked that question and we reviewed the purchase of Protective. Just as Tsujino-san said, at first, we thought it's a company that does M&A. That was a misunderstanding. I saw that Protective buys a closed broker insurance and just they keep buying like that. And we visited the company for audit and then we received materials about the company, and then we found that it's not true. And so after purchasing Protective, we wanted to review whether the purchase has created a new value on creating more profit. So because of the PE fund, it's becoming very difficult. So we asked that question. And the direction of asset management business, we asked which way the company is going in terms of the asset management business. And the executive team is preparing the explanation to us. Any other examples? So human resource strategy, and there are many other minute things. But these are the 2 or 3 things that I remember, Protective, human resource and asset management business. So we ask these questions as outside directors and asking for the information.

I'm very much interested to hear what the result of the study was and what kind of reaction you took.

Personally, maybe it's not something that I should talk about here. But if the economic-based numbers are used, maybe the numbers would change. And maybe the U.S. company may not be content and -- but the method is used in Europe and in other parts of the world. It's becoming common in other parts of the world. So if you want to manage the value creation around the world, what would happen? So maybe there will be a second round for this. But you asked for the review, and I think that's a very good thing, and that was quite helpful to know that. That's quite right. So we reviewed Protective's purchase. And at that time, we visited Protective for the audit, and we could understand dissatisfaction of the Protective. So we brought that back to Dai-ichi Life Group. And so we thought about the profit target and so on. And the executive team did very deep discussions about that and the result was fed back to us. So you could understand the dissatisfaction, but they might not have the right to complain. So one thing to add is that -- so I think you think that we look only at the materials provided by the executive team, but that is not true. So in case of Protective, TAL or Indonesian company or Indian company, as an outside director, we look at the economic situation of the country and also the asset management and life insurance markets. And this information are available, and we collect that kind of information and use that information for the Board meeting. So I think outside directors are responsible for collecting such information and understand the situation better. And one more thing I would like to add. So outside directors always suspect that whether all these numbers or all these descriptions are true or not. So when we read the materials provided by the executive team, I always suspect whether these are true or not. So we read the materials, but it does not mean that we believe everything written there are true.

It's time, but there are 2 more people who is raising hand online so quickly and maybe one question each. JPMorgan Securities, Sato-san.

I'm Sato from JPMorgan. In the Board meeting, you might be experiencing the increasing activism of the shareholders. I do not mention specific names, but at your company, I understand that is a very important theme. I'm not saying that it can be a threat to your company, but it is a very good discussion partner. But the latest shareholders' meeting the top approval rating was 80%, and that's not very high. So it's possible that they may have a high stake and that can be casting a decision-making vote. So do you discuss how to respond to them?

Thank you very much. So it's about the discussion at the Board meeting concerning the increase of activism. Thank you very much. As you may know, our large shareholders are very famous activists. So we need to pay attention to their opinion. And we think their opinions are very important. And outside directors were appointed by the shareholders. So what shareholders say needs to be considered very carefully. And as a result, the executive team is trying to have dialogue with shareholders, large shareholder. And the result is shared among the outside directors as well. When we receive our opinion at the Board meeting that is discussed at the Board meeting.

So because time is limited, maybe this would be the last question. Mr. Sasaki from Nomura Securities.

I'm Sasaki from Nomura Securities. I would like to ask a question to Miller-san. As the role, the shareholders expect to outside director is to become a backstop. So it seems that you are sharing information very well with the other directors. But among the resolutions at the Board meeting, how often do you express opposition? How many times? And what kind of oppositions you've made? And if there's no, that will be okay. But can you share with us that how did you express your opposition at the Board meeting?

Thank you very much. In Board of Directors' resolution items, how many actually object the proposal from the executive side. So Mr. Miller, please?

Well, in the last 2.5 years, it didn't happen. But up until -- leading up to the resolution in the discussion, of course, that we actually stated that the different views that we have. And as a result of the discussions, we could actually agree on the item and reach consensus. So in my own experience, I didn't have any occasion that we actually had voted objections against the proposal. Thank you.

Thank you. So I think it's time to close today's special IR meeting for the governance of Dai-ichi Holding. Thank you very much for your participation. [Statements in English on this transcript were spoken by an interpreter present on the live call.]