Recruit Holdings Co., Ltd. (6098) Earnings Call Transcript & Summary

[Interpreted] Good afternoon. It is time for us to get started. So thank you for joining Recruit Holdings investor update, [indiscernible] Prosper Together. So I am going to be the MC, I'm Shen from IR and PR. First, our Director and CEO, Senaha, will be talking about the third pillar of recruitment management strategy, Prosper Together, along with the 5 sustainability commitments that bring the strategy to life and provide visibility into our sustainability governance structure. Then together with the external members of the Sustainability Committee, Honda-san, Aron-san and Yves-san, she will share -- they will share highlights from recent committee discussion, provide prospective on future challenges and provide insight on the governance supporting strategy. We will also answer questions from the participants right at the end. [Operator Instructions] Now this session will be recorded. And also the presentation material that we'll be [ projecting ] will be obtained from our website. Now let's begin with Senaha's presentation.

[Interpreted] So I am Senaha, Ayano Senaha, Director of the Board and COO of Recruit Holdings. Thank you for joining us today. So it is our first initiative to invite the external committee members of Sustainability Committee to explain and also to discuss over the topic of sustainability efforts at Recruit. But before that, I'd like to take this opportunity to explain in brief what we do in terms of our sustainability efforts, before we enter into the panel discussion. The third pillar of our management strategy Prosper Together, which is all about sustainable growth shared by all the stakeholders. Now Recruit Group from the time of the founding of the company back in 1960, we have been trying to address all the negative aspects of the society at large. And from 2021, coinciding the launch of the new management as the matching leader in the space of HR, we wanted to display and also make the leverage on the influence that we can cast over the society and connect that to the sustainable growth of ours as well and based on the pillar of Prosper Together. And at the same time, we have announced the 5 sustainability commitment. As to the environment in the short run, carbon neutrality is to be achieved. And in long run, by 2030, inclusive all the value chain, we have a set goal to achieve for carbon neutrality. As to the social impact, by FY 2030, we would like to, by far, shorten the time required to match the job seeker to the job. In other words, we want to have the time required to get hired. So in other words, the matching is not going to be enhanced because there are a number of challenges that we cannot address, but just enhancing the matching. So this is why in the labor market, there are challenged job seekers that are facing barriers. So we would like to help 30 million job seekers facing barriers get hired by 2030. Another goal is that by FY 2030, all the Board members and also senior management as well as management and employees, we would like to increase 50% of the women occupying those roles in order to achieve gender parity. So progress on these 5 goals for FY 2023, we reported in May when we make an announcement for Q4 and fiscal year 2023 earnings result briefing. And also I would like to share some of our sustainability governance structure. So Sustainability Committee has been established as one of the advisory board -- body to the Board of Directors to discuss over the topic of various different sustainability challenges in light of social trends, in addition to discussing progress of the 5 ESG goals. So as to the members of the Sustainability Committee, I am the Chair of the committee. And we have Idekoba from the Executive Committee, CEO; and also Chairman of the Board, Minegishi-san; also CEOs of the management companies of the 3 [indiscernible] we use and leaders in charge of promoting each [ committee ] goal and in addition to the 3 external experts or the external members who will be joining us today. Now as to the sustainability initiatives, we are gratified in expressing that we have now been recognized as a leading global companies in sustainability initiatives. We are happy that this perception is increasing. And also, this is really thanks to the professional advice that has been provided by the external committee members. And also, they question us, they challenge us and thanks to their challenge and questions and also their feedbacks, we have been making such a progress. So we would like to, of course, talk about what goes on at the committee level, what is the atmosphere like and what we discussed at the committee level so that we can reinforce our effort in achieving our goals of sustainability. And also at the same time, we would like to, of course, entertain your questions, right, at the end of the session. So from [ here ] onwards, I would like to introduce the 3 external committee members who are participating today and ask them each a brief question. So we'd like to start with Aron. [indiscernible] is the President and CEO of BSR, a nonprofit organization established from a sustainability in the global businesses. And the BSR company is a nonprofit organization and has been providing consulting services in ESG-related matters. And since 2021, I have been on the Sustainability Committee. And regarding BSR as a company, so there are about 300 members to BSR. And BSR is providing consultation services to these members. So in a global perspective, you are very well versed in the [ rules ] related to ESG. And I think you are one of the most knowledgeable person in this area. And there will be translation available into Japanese. So we will be switching over to the Japanese line now. So thank you for coming all the way to Japan to be with us today.

It's a pleasure to be here, and I appreciate your kind introduction.

[Interpreted] and now as an introductory question for the day from the perspective of an expert who knows this world inside out, meaning the sustainability themes, how do you evaluate our efforts?

Well, I think Recruit Holdings has done a wonderful job of understanding global trends in sustainability and also the [ class ] changing set of disclosure regulations that are being established in many jurisdictions around the world. In the sustainability community, that's just one example of how Recruit is bringing in perspectives from outside the business, understanding what's most relevant to business today to recruit today and also understanding how things are changing and what will be important in the medium term and the long term. The other thing I would say is that Recruit has done an exemplary job in focusing on the matters that are most material, most relevant to its business, which is, I think, a very [Audio Gap]

[Interpreted] Switching over to the English line now. So Senaha-san, go ahead, please.

[Interpreted]Okay. I'd like to move on to Mr. Yves Serra. Yves-san has been living in Japan for some years, so you're very fluent in Japanese.

[Interpreted] Well, not that much.

[Interpreted] Well, and I think you're very Japanese in that response already. So Yves-san, I would like to introduce Yves-san to you as well. So Yves Serra-san is head in Georg Fischer which is based in Switzerland, and he was serving as a president CEO until 2019 and since 2020 has been serving as the Chairman. And since 2020, Yves-san has been on the Sustainability Committee. And the company, Georg Fischer, it has various business lines, including piping systems used to transport water and other materials. And in 2020, in the Wall Street Journal's most sustainable company ranking, Georg Fischer became #9 in the world. So it has very advanced ESG initiatives. And Yves-san has been leading that initiative as the management team. One more thing is, I think Europe is most advanced in terms of initiatives and sustainability and also in terms of regulations. So based on his experience, we are being given some advice from Yves-san. So a question to you, Yves-san. So you have been leading Georg Fischer. And I think including company, there are many leading companies in Europe in ESG. So compared to the European companies, how do you assess the sustainability initiatives of Recruit Group? Please be frank in your views.

[Interpreted] Thank you. Well, in my opinion, Recruit, you're not engaged in sustainability activities just because there are regulations and laws. The topic of sustainability is something that you address in a very proactive way, which is very critical. And having done that, you are integrating sustainability into management in a very good way. For example, you have a very well thought through goals. For example, having the time to get hired, that goal is a goal that is very much in line with the business model that Recruit has and I think the employees are motivated to work towards that goal. And also, as you achieve that goal, I think you are also able to differentiate yourselves with the competitors. So that is going to be a major source of increased revenues for you. And at the same time, well, you are able to make the best social contribution and the best economic contributions at the same time. So in that sense, you have hit the sweet spot -- because in Europe, in the area of sustainability [Audio Gap] advance in that area.

[Interpreted] Thank you. Like you've mentioned, so we want to really contribute to the society as we do our business, and we want to contribute to society as we do to our core business and we want to generate the economic returns. And we are often excited about that. So we always want to go back to that basic and engage in activities. So next, I would like to invite Ms. Keiko Honda and Ms. Keiko Honda has been the member of Sustainability Committee since 2020. And since 2022, she has been serving as the outside Director of the Board of our company. So I'm sure many of you are familiar with Ms. Honda. Thank you very much for joining. So Ms. Honda has been -- initially you were working with foreign financial institutions and [indiscernible] company before becoming the Vice President and the CEO of the World Bank Group's MIGA, Multilateral Investment Guarantee Agency. And currently, she is an Adjunct Professor and Adjunct Senior Research Scholar on ESG investment at Columbia University. So based on her experience, she has been providing us advice as to how our ESG initiatives can also contribute to enhancement of corporate values and also how that can be communicated to the external world. So Honda-san, you are the only person among the members of the Sustainability Committee, who is also serving on the Board and also in other committees that's reporting to the Board. So maybe you can talk about the discussion that takes place in these different bodies of Recruit. What is the atmosphere?

[Interpreted] Thank you. Well, at the Board meeting and also in the Sustainability Committee meetings, there are some things that -- 2 things that I was very surprised about. #1, the executives and employees have very high aspirations and lofty goals. And secondly, the discussions are very frank and candid. There's very candid discussions -- and that's very active. And I think that it is a testament to the fact that the diversified perspective are being respected in the decision-making process because it means that you have members who are like-minded, then you are more likely to come to an agreement in consensus. And maybe it's more efficient. However, there are some things that you may overlook or miss. So you have highly inspired employees or members in the committees and the initial phase of the Sustainability Committee, I thought I said that there are many ways you can contribute to the society. But I said that there should be some things that should be prioritized that is the corporate value enhancement should be something that should be taken into account when you try to solve the societal challenges. But although it's very challenging, you have been able to embrace that concept and very grateful. Now simplified hiring is one of the goals that you have set that is having the time to get hired. It's a challenging goal but you are trying to pursue that as an initiative, and that's very excellent. So in reality, that is so true, at the Sustainability Committee, we are always pressed for time because our discussions becomes so active. And I'm terribly sorry that I do not do a good job of timekeeping as the chair. But it's just that people do not kind of speculate and give a negative kind of consideration to others, in other words. And this is why I thank you very much for your contribution at all time.

[Interpreted] So let us now move into panel discussions so Senaha over to you.

[Interpreted] So as to the panel discussion, the first topic on the extension of what we have been discussing so far, we would like to talk about the Sustainability Committee activity itself. So as a premise, at the time of Sustainability Committee, what kind of agenda has been the topic, is what I want to share at the outset. So at our company, we hold Sustainability Committee twice a year. And in this fiscal year, we held the first committee meeting in November and then second just recently in early March. At each Sustainability Committee meeting, we report on and discussed the progress of our 5 ESG goals. And also -- at the end of this fiscal year, in other words, by end of this month, it will be 3 years since we set the 5 goals, and we discussed the progress we have made thus far. So as I mentioned at the beginning of this presentation, we will report on our progress when we announce the 2023 fiscal year financial results briefing session in May. And at the Committee, in addition to the progress that we have so far made on the 5 ESG goals, just has been mentioned by Aron-san earlier, we discussed global trends in sustainability, and that's what we discuss. And in the case of this year, so sustainability disclosure regulations. The laws have come in force. And so therefore, we had discussed about the response and also materiality assessment as well. We are also discussing how we are promoting the responses, responsible use of AI as well in response to the AI-related regulations that are moving ahead in Europe. So with that being said, let us get on with the discussion. So looking back on this year's discussion that we had at the community level, is there anything that is particularly memorable? And what questions or comments you had and you had kind of shared. So if we can get started with Yves-san.

[Interpreted] Well, as an impression, well, Recruit is really acting as one. When it comes to this sustainability topic, you are fully committed. In other words, it is totally aligned to the purpose of your company. I think all your goals is very much aligned to the purpose. And this is really truly motivating for all the employees. And the second thing is that the discussion is very open. Back in November of last year, the topic that we have discussed was, those 30 million people who face challenges, obstacles in getting the job. We have discussed what can be done. So in order for you to make a positive contribution to the globe, you need to incorporate the refugees category into such effort, I made a mention of that. And already in March of this year, you have made enough preparation to incorporate this category of refugees as part of this 30 million job seekers facing barriers and obstacles. So being an external committee members, I'm truly grateful that you do pay a lot of respect to our opinions.

[Interpreted] Well, thank you. As a matter of fact, talking about these refugees, supporting the refugees, in other words, how we can go about supporting them? At the time of the Committee meeting, we have discussed over this topic and you have given us the feedback and there were a number of efforts that has already been put in place in supporting 30 million job seekers that are facing barriers so to allow them to get a job or get hired. At our German affiliated company, we have created this new kind of organization that works on international recruitment. So of course, we have some language barriers. So therefore, they're making use of, like devices to help with the translation and supporting all these refugees, not just matching against the jobs, but also after they have started to work at whatever the workplace it may be, we are also extending the helping hands in assisting them so that they can blend into the workplace. And so therefore, it is great that we receive these kind of feedbacks and also opinions from the external members at the committee level, and we have been able to discuss over these topics. So it was too valuable for us. Thank you, Yves-san. So Aron-san, over to you. So we will be switching the interpretation device now. So Aron can you share your most memorable moments from this year's Sustainability Committee discussions?

Yes. And I have had the privilege of serving for 3 years. I would say overall that Recruit does a very good job of bringing data forward in soliciting real opinions. And therefore, the discussions, I believe, have a great deal of integrity. In this year's series of meetings, we did focus on the climate objective. And of course, Recruit is not a heavy manufacturing company, but the company has taken on the important task for every company everywhere in the world of reducing emissions, including ultimately Scope 3 and aiming for carbon neutrality. So this is a Paris-aligned goal. This takes on Scope 3, and it's an illustration of the ambition that I think is present. One of the things that we discussed this year that I found to be particularly important is the role of carbon credits. Carbon credits are used by great many companies, and there are serious questions about the availability, the ultimate cost and ultimately, the integrity of carbon credits. And so this was a very, very important topic because the ultimate goal should be absolute emissions reductions transcending ultimately the need for carbon credits, and that's a conversation that we had over the course of our meetings in the most recent series.

[Interpreted] thank you. As you mentioned, I think we all discussed and agreed that actual reduction is much, much more important than utilizing carbon credit. So we'll keep having that discussion going forward. Anything else?

Well, we also spent time on ESG ratings and rankings. And if you track the performance of Recruit over the last several years, the trajectory is up. And it's very impressive. We know that this has been an area of focus. And of course, having high ratings are very good and Recruit can take pride, whether it's MSCI or Sustainalytics or others in an overall increase in ratings, focusing on a wide range of ratings and rankings. So no cherry picking, no selecting only certain ones, but looking at things comprehensively, which is very important. Engaging the entire organization in delivering information. And that is an, I think, an underrated aspect of the ratings and rankings because this is a mechanism for having the entire company involved in the sustainability journey and sustainability objectives. And so this is a way that the ratings and rankings are also very important in terms of internal process. But at the end of the day, a good score, it's a little like education, good grades are great, but the learning is the most important thing. And I think the progress that the ratings reflect for Recruit is something that I think is a very good signal.

[Interpreted] Switching the translation line again. Senaha-san, please?

[Interpreted] Okay. So finally, Honda-san, I have a question to you. What has impressed you in the committee meeting discussions?

[Interpreted] Well, for me, I have 4 points actually regarding the Sustainability Committee of Recruit. One, is that you have quantitative targets. Number two, so, many companies do have quantitative targets, but you also have deadlines for that target. So other companies do not have time lines, but you do. Number three, as even Aron-san have been talking about, you actually very closely monitor the progress. And generally speaking, you are making progress, but there are variability in progress, and you do monitor it and report it to us honestly. And finally, you disclosed it not only to us the members of the committee, but also to the investors. So as Senaha-san just mentioned, during this year's Sustainability Committee meetings, we did look back on the past 3 years since we set these sustainability goals. And like I said earlier, the progress can vary. I mean in all 5 goals, you have made progress, which is an impressive thing, especially -- and you are very open in sharing that with the stakeholders and I have a very positive view about having -- disclosing it very openly. I think everybody will enjoy it.

[Interpreted] Well, thank you for these positive comments, but I want to be honest here. For example, last year, in July, we had a ESG fireside chat. And there were some delays in some of the goal, and we were very open and we felt what is making that delay in making progress. We shared that with investors and ultimately, some of the institutional investor had made a comment. So you have very lofty ideas, but there are some challenges that you're facing and you're very honest about some of the bigger points but also the challenges of [indiscernible] the aggressive goals. And sometimes, we cannot make the progress that we would like to make, but we want to Prosper Together, that together part is very important. So including the market participants, we want to work together with you and also share what is not going well.

[Interpreted] Yes. So progress is not the same across the board. There are some that made good progress, but the others where there's some progress, but maybe more room for the future. Well, and another thing that I'm impressed with one thing we talked about in the Committees, compared to 3 years ago, the understanding and concepts on sustainability is much different in the society in general. So the goals that you set 3 years ago, well, sustainability in the society is something that Recruit can consider. But maybe you don't need to pursue those from the current concept. For example, the emissions of greenhouse gases, for example, it's not really that relevant, but gender parity is more relevant because it's really at the core of your business at Recruit. And it's very important that you make progress in gender parity. So as you go along, there may be some challenges, and then you may have ideas about how to go over these challenges. So of course, you want to try to promote employment and I think those goals can also contribute to the employment and hiring of the people. So I think that's very great. And I'm looking forward to your progress. And I am rather [indiscernible]. So I think that even before the equal opportunities law in Japan, I know that it has been very difficult to achieve gender parity, but [indiscernible] in one of your Group's -- Recruit Group companies was a female. So I'm sure you've had a lot of experiences, but at the same time, you have had experiences in how to overcome these problems. And I think you can leverage those experiences. And I think that can contribute to your company, to Japan and also the world for that matter.

[Interpreted] Thank you very much. We talk about this all the time, but we want to contribute to society while we also enhance our core business and make profits. We always talk about it in the Sustainability Committee meetings. Thank you very much. Now I'd like to move on to the next question. So in the first question, we talked about what we talked about during the Sustainability Committee meeting this year. But secondly, the future. So what will be the important topics in terms of ESG and sustainability going forward for Recruit Group? So well, Honda-san, please, can you tell me?

[Interpreted] Well, sustainability can have different definitions. Actually, there's no globally standardized definition of sustainability, meaning that each company have their own definition of sustainability. And when they do that, they try to also understand what they can contribute to the society from their perspectives. But I think Recruit, I want you to be a step ahead of that as Senaha-san was saying, and I always talk about this. But what Recruit can do in your initiatives, it should contribute to the corporate value of your company, and that should be a part of your core business. That's what you should be doing because I think what I like about Recruit is having the time to get hired. That is a goal that you have set. For job seekers, if you're not working for 3 months, it will be very difficult to make a living and you may go over the poverty line in some cases, and from the employers' point of view, there's a shortage of workforce, which is a big issue in Japan and also globally. And it's not just Japan, but in Korea, China, Italy or Germany or Spain or Portugal. The population is decreasing, so there is a huge issue of labor shortage. And because of labor shortage, you cannot do business or there is a lost income. So there are some issues like this. So if you can break through that, then it will be beneficial to not only Japan, but all the industrialized countries and developing countries. So I think you can come up with a good answer.

[Interpreted] Yes, having the time to get hired. That topic is something that I talked about in the fireside chat. It's actually a data that nobody has ever gathered before. And we are still trying to overcome some of the challenges associated with measuring data in this area. So having the time to get hired. That's matching efficiency. And that means that you can double the opportunities for monetizing. That is one of the motivations of the setting the goal. But even after 3 years, we have not been able to measure this accurately yet, I'm afraid. But we are making some progress a little by little. And in May, we will provide you with an update. So please look forward to that. Thank you very much. I have a question to Aron. Let me now change the translation line. So next, I would like to ask Aron the same question. So what do you think will be very important for us, for the company in the future among the numerous sustainability themes?

Yes. I think that the rise of regulation on sustainability is one of the most important developments in this aspect of business for a very, very long time. And so this is something that is going to take some years to work its way through the system. And so for Recruit to be ahead -- to understand and be ahead of the regulations and to be prepared, you spoke about verifying information, to be ready for a world where that is going to be more important. And quite frankly, in our network, we have over 300 member companies. Many of them are either a little bit behind or maybe taking a very narrow compliance-oriented approach. Now of course, compliance is important. But I would say it's necessary, but not sufficient. And so I think Recruit is already, and I believe will continue to think not only about the letter of the law, whether it's what's required by the Japan Securities Agency or European regulations in the CSRD, the landscape is changing. And to think about the spirit of the laws and think about how working within these regulations can actually strengthen your ambition and help inform your strategy.

[Interpreted] thank you. I think that point is critically important. So yes, we do need to comply. But also we do need to understand that intent behind the establishment of the regulations so that we can act appropriately as a corporate citizen. So thank you for that point. Anything else?

Well, I think we may want to talk about AI and the intersection of human rights and artificial intelligence. And this is something that is already on the agenda of the Sustainability Committee, already on the agenda of the company. And clearly, it's relevant for Indeed's business. It creates opportunities to deliver better products to help more people, to help more employers. How that's done, however, is crucially important.

[Interpreted] thank you for the other topic too. I think, we have unique data sets, especially at Indeed, we operate in over 60 countries, and we have data from job seekers and also employers and we use them to better match job seekers with the jobs. But I think because we utilize those data more and more, we do need to make sure that we use AI responsibly. So I think that's something that we keep having open dialogues with many stakeholders.

[Interpreted] So we have just switched over the translation line. So back to Senaha, again. So any kind of topics that we need to be mindful of going forward?

[Interpreted] So I think there are 2 topics that we need to be mindful of in thinking about the future of Recruit. We have set wonderful, of course, sustainability goals. Why we would continue to do our best in achieving this. But also we have to think about the monetization of this effort as well. And the second is how to respond to the increasingly stringent sustainability disclosure rules as well as AI regulations as well. So I really want you to be good at responding to these moves. So these are the 2.

[Interpreted] Thank you. As a matter of fact -- well, thank you very much for mentioning the topics of such as AI, the regulatory landscape changes. And you have mentioned all these topics to be of importance to Recruit going forward at the time of Sustainability Committee as well as today, so how much of resources inclusive of energy and passion is to be dedicated to these topics. So how we can progress and advance our products and services and introduce them to society and thereby making contribution to the society at large. So we would like to, of course, continue this discussion going forward at the Committee level. There are -- I would like to ask more questions to the 3 of you, but I think timing is running out very fast. So therefore, at this point in time, we'd like to move on to Q&A session, entertaining questions from the participants. So we'd like to entertain questions from the floor now.

[Interpreted] [Operator Instructions] So we have received a lot of questions through Google. So let us entertain the first question. So I think it is a very important topic to be responsible in making use of the AI. And there is -- there seems to be a move towards stinginess to be introduced for the AI regulation. So what are we to do? What -- how are you responding as Recruit?

[Interpreted] Thank you for the question. Well, on this topic. To begin with, this topic of AI, so after all, it is a machine learning. So therefore, in the society where we reside, of course, there is a constant and continuous machine learning so the bias that exist in the society, there's a risk that AI may amplify this bias. So this is something that we need to take seriously, and this has been discussed as one of the very important topic at the Sustainability Committee. And that's where we stand. We do take this matter very seriously. And this is quite unique because it is very rare that we have been discussing over this topic at 2 different committees. And just as have been mentioned, so EU's AI Act is going to be enforced and the hard law, in fact, is now being institutionalized. And because of technology advancing really fast, so it is not just about compliant to the rule. That will not be sufficient. So it means that we have to be ahead of the curve by -- and this is discussed at the risk management committee as well as sustainability as a result. So these are the steps that we are currently taking. Now going into the specificity of the activities and also the direction at the Recruit level, what happens. So we do have the human rights policy. So based on the human rights policy, for example, at Indeed, so we do have the principle of human rights as well, but also we do have the Recruit's direction and policy as well. So each of the businesses, SBUs, whatever that proves to be relevant, we have put them together as policy and directions. Now going into further details, which is something to do with the product and services. So before the product or services get released, so we would access, the bias, the nature of the bias, magnitude of the bias. And so fairness in monitoring will be conducted through human eyes, we will be measuring from data to output. Is it safe enough or is it not biased? So now that the topic was raised in your question, I would like to share something that came to our joy. So AI may perhaps amplify the bias and how can we avoid this, I think was your question. So after all, AI, more than human, it seems [ sensitive ] that they are less in terms of the bias as compared to human. So we would be, of course, conducting various different tests in order to measure this magnitude of the bias -- and in the case of domestic market in Japan, we do have the Asian business in Japan. So of course, we do function to be the agent. So that between the job seekers and the employees, rather than matching by human eyes, as a result of AI matching between the 2, in the case of this exercise, the bias against age was reduced as a result of making use of artificial intelligence. So in conjunction to this responsible way of making use of AI, in fact, we'll be able to lessen the bias as a result of using AI. So this was a very positive sign. So it is important for us to continue to study this so that we'll be able to make use of AI so that it will be for the better and will bring about positive contribution. So at the committee, Aron, was kind enough to share.

Sure. And I think what you just said was very important. The learning process because this is changing so rapidly, as you say, changing faster than regulation can possibly keep up. So the kind of testing and learning that you just described is very important. What I would say is that for Recruit, as for any company, it's important to think about an approach that involves 3 different elements. # 1 is what can you do as an individual company, which you just described. And I'm sure this will be an ongoing topic of discussion with your investors. The second is what are the industry ecosystems? Because every company has an interest in seeing the technologies advance in making sure that there's societal support for innovation. And I believe that industry understandings will be very important. This is not an area that has to be subject of competition that other companies will also have an interest in seeing guidelines and principles established. And then the third is being an active participant in public policy setting because governments may not have the same understanding of the technology that the developers of the technologies do. So business has an important role to play in terms of how a common set of societal expectations and principles and guidelines that are flexible will be established. So that's the road map in my opinion, and one that Recruit can contribute to.

[Interpreted] Thank you, especially for the second point. Thank you.

[Interpreted] Thank you very much. Next, I have a question also from Google form. So next question is about the Board. So in the Board and the Committees, there are outside Directors and members, are they able to speak up. And there are many former CEOs and Executives, so is there a risk that they are focused on the Executive side? Or are they really making effective contribution in the discussion?

[Interpreted] That's a very interesting and good question. Thank you very much. So first of all, well, on the contrary, there are people who are experienced in business and corporate management in other companies, so that means that they also have a different perspective or they have very critical minds. So we appreciate that. So the diversity of their views, Board diversity is something that Honda-san talked about. So why we need that diversity? We need the diversity of opinions. That's why we have these different diversities like gender and age groups and the nationalities as well. So -- and another thing is we don't talk about this too much to the outside world. But the advisory body to the Board, the Committee, such as the Sustainability Committee or there's a nominating governance committee and the Chairperson is an independent. Board member, Izumiya-san and also in the Compensation Committee, the chair is Totoki-san from Sony. So the Chair of these committees are Independent Directors and the members of the committees, a majority of them are the outside Directors and the Executive side is on the minority side. So the oversight function, they are very, very, very strict in their oversight functions. They are really -- they have their eyes very widely open to monitor us and oversee us. So from an independent perspective, maybe could you share with us your very candid views, well, Honda-san?

[Interpreted] Yes, Recruit Board, there is a -- 2 differences between the major companies in Japan. No CPAs among the Board members. And secondly, both the inside and outside Board members are diverse. So outside Directors, the gender diversity, the nationalities diversity. And also age is also relatively varied. Many -- well, some of the companies listed in prime of TSE. And there are some members who are in their 70s, 80s, but at Recruit, there are people in their 30s even maybe recently, she has matured to become 40s, and there are some in 70s, and also the the educational background is also very different. So people don't just have like-minded members. So they don't -- there has to be a lot of discussion before they come to a decision, which may not be efficient, but I think there is very candid discussions and very heated discussions which I think would find -- would be something very interesting to the investors.

[Interpreted] yes, that's true. In the discussions in the Board and also in the executive side, there's a diversity of opinions, that's true. So it can get everywhere. I mean, the discussions can go to all these different places. However, that is probably the cost of diversity because of the diversity of communication. But there may be deferring opinions, but if you discuss enough and come to a decision, disagree, but commit. So there are a lot of different views, but once you make a decision, then that then that's the important part because then we can go ahead with that decision. And we can do that in Board meetings, and it's probably a secret to good corporate governance. Thank you.

So would like to entertain one other question from Google form. So Indeed's PPA has concluded, I understand. So social impact target was, of course, half the time required to get hired. So would it impact as PPAs closing is going to impact us?

[Interpreted] Well, such a good question, which means that this person has a keen interest in the development of our businesses. Thank you for your interest. So some people may not know about this PPA, pay per application. At Indeed, by a click you'll be able to get hired. So this is what we are aspiring to achieve. So this is part of [indiscernible] of the effort for simplifying hiring. So in order to shorten the period that is required to get hired, we have carried out the test. So pay per application, PPA, was conducted as a test. So it was a test. So the result was pretty positive, and this was why we had expanded the size, the scope of the test. But the way in which PPA was utilized, unfortunately, was something that was -- some part of it was not expected. So therefore, it was a PPA, so pay per application. So those customers that made -- the job seekers who had made use of PPA, as a result, they were able to shorten the time required to get hired. And thereby, we thought that we would be able to make a positive contribution to the social impact target, I think was the question. At all time, you see 500 or so A/B tests is up and running at Recruit. So PPA was one of these 500 or so A/B test. It was one of the major tests. Unfortunately, however, there are some fast test that goes well, goes in line with our expectation, whereas there are some that may perhaps be out of us our expectation as well. So we would continue to evolve our product and services. And in so doing, we would like to conduct tests along the way as we do right now. So that we will be able to expand the scope of the test going forward. If it gets closer to go live, so at some point it in the future, we'll be able to share the outcome of these tests, so please look forward to it. And that's all I can share at this point in time, sorry about this.

[Interpreted] Okay. Thank you very much. So we would like to entertain some other questions that has been put forward through Zoom. So please ask the question through a Japanese line, should you have a question in Japanese. And please make sure that you choose the right language in asking the question. So from JPMorgan Asset, [ Omi-san ], over to you.

[Interpreted] I have 2 questions to ask. First of all, so in your management target, you have incorporated sustainability effort in order to enhance enterprise value that was mentioned during the course of the session. In order to accelerate this effort, and also to enhance the enterprise or corporate value further, is there anything more you can do? I'd like to ask the question to Yves -san especially. And that is the first question of mine. And the second question is -- and this is a question that I'd like to ask Honda-san about. So I know that you have become the committee member as an expert -- outside expert. But now that you have come on board as well, you are the Independent Director. Is there any kind of new -- kind of discovery on your part and any advice that you have provided as a result?

[Interpreted] Thank you very much for asking the question. Well, as a Secretary, well, I have been instructed to answer or respond to the question. First of all by Senaha and then over to our committee members, but I think you have asked response. So let us ask to respond to this question.

[Interpreted] So Recruit has set the wonderful target and objectives. So it is important for you to realize it and also achieve it. And thereby, you will be able to generate the value and I'm sure economic value, thereby will be generated, which means that you'll be able to, of course, uplift, raise the top line as well as the profit. So therefore, I think on a company by basis, acting as one, I really want you to exert your effort, of course, achieving the goals, wonderful goals, that is I think very much needed.

[Interpreted] So the second question, the new kind of findings on the part of Honda-san. So over to Honda-san.

[Interpreted] So for me, well, my specialty area is to assess the corporate value and they went to our bank and started to get involved in sustainability-related areas. So the first thing I thought of when I joined the Sustainability Committee is, like I said earlier, within the framework of sustainability, there were some things that you thought were important, and you've set goals in that framework. But the audience, I think here are institutional investors. So most of it is material factors. Some were not material factors, however, so having said that, the material factor is being sought and then based on that material factor, you try to understand how that is relevant to your core business. And we all thought about this in a discussion in a Sustainability Committee and then try to leverage it in the business -- core business of Recruit. That's what we have been doing in the last couple of years. So I actually would like to ask Senaha-san, how you feel Senaha-san?

[Interpreted] Well, for me, so the advice has been provided to us from directors and outside members of the committee. Well, I'm always constantly thinking about how the sustainability is relevant to our business. And we really get very critical advice from the members. When we first set our target, we wanted to contribute to society, of course, and many companies do and many companies would also make profit, but the growth of the business should also be good for the society. So doing both, and that's very challenging to achieve. But exactly because of that, we wanted to achieve that. We set the goal so that we can contribute to society through our core business. But some areas we have not been able to take measurements of how to do it. But that's the reason why we think it's valuable to take 10 years to address and achieve these challenging target. So I think the strongest value from these members of the committee is that what we can do to contribute to society, make everybody happy through our core business, we get questions all the time during the committee meetings. And we always are able to go back to basics and go back to the track that we are on.

[Interpreted] I would like to say a few words also. Senaha-san, you're very modest. But you've been saying that -- well, if I look at it neutrally, measuring the time to get hired. I think you're making progress in that area significantly. And also in the business units, well, sustainability in the headquarters, of course, but the actual operating companies of the business, now you're taking your time to address this. And my impression is that we are able to work together with the people in the business units.

[Interpreted] Thank you very much. Thank you for that question.

[Interpreted] So we have many more questions on Google and also Zoom, sorry. As usual, we're running out of time. I'm very, very sorry. We have to close this question-and-answer session at this point in time, I'm very, very sorry. So Senaha-san, could you just wrap up now?

[Interpreted] Yes, actually, it's past the allocated time. So the outside members of the Sustainability Committee, you have any additional comments or advice, could you ask Aron-san, first of all?

I will be very brief. Recruit will, I believe, stay ambitious, stay humble and stay focused on business relevance.

Yves-san?

[Interpreted] [indiscernible] so in a short time period, I think you were successful in integrating the sustainability goals onto the management goal. So I want you -- well, congratulations on mobilizing the entire company. In that regard, I want you to continue this journey going forward.

[Interpreted] So Honda-san, so closing remarks from you.

[Interpreted] So employment is about any -- your bread and butter after all. And in order for you to keep your living, I think it is absolutely necessary for one to be employed. So this is why -- it is one of the important social factor, and that is -- there is a great probability of impacting the corporate value as a result. And this is why I have great expectations of Recruit.

[Interpreted] Thank you. So the time is over. So 1 hour went really quickly. So over to Senaha-san, again.

[Interpreted] So with this, thank you very much. We have carried out this investor update over the 3 days. Thank you very much for your participation. So this concludes the session. Thank you so much for joining us. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]