IR Top Page > IR Presentation Materials > Annual Report > Digest Version > Conversation | An External Director's Perspective on Capcom's Governance
"Matsuo"
Capcom's external directors are a collection of capable individuals
with experience in the private and public sectors and expertise in law,
accounting and many other areas.- "Tsujimoto"
A company must always strive to differentiate itself; otherwise, it will never be competitive. However, if this becomes the only focus of corporate activities, the company runs the risk of becoming a specialty concentration and losing its grasp on social common sense. To avoid this, we would like our activities and decisions in each area judged by people with a rational mind and the highest degree of good sense.
- "Matsuo"
Capcom is noteworthy for their higher than usual ratio of external directors.
- "Tsujimoto"
Our directors are very busy on the front lines, and their time is limited. We request assistance from as many people as we can, which enables them to focus on their areas of expertise and make decisions in less time.
- "Matsuo"
It certainly is the case that, all our different areas of expertise alone can make the monthly board meetings quite lively. Yet, it is precisely the fact that we external directors have no background in home video games, and occasionally ask somewhat naive questions, that the discussions truly become productive.
- "Tsujimoto"
You’re right, internal discussions with no outside perspective are dangerous, as they may cause a company to miss something important. In fact, it's the same in game development. Even if a top creator tells everyone in the company that his game is the best, it doesn’t mean anything unless the customer who purchases the game says it's the best. To move beyond mere internal subjective discussion, another important perspective to consider is the objectivity of quantitative data.
- "Matsuo"
During the four years that I have been an external director, Capcom has made significant advances in the use of quantitative data for the visualization of management. Right now, you can tell what is going in the world just by looking at numbers. This is how a clear separation of management and execution was achieved.
"Tsujimoto"
I think senior management can’t get directly involved with operations. If they do, they lose sight of the big picture. It doesn't matter how effective a manager might be—you can't judge what you can't see. Problems accompany risks involved with attempting any new endeavors, but what is important is discovering those problems as quickly as possible. If I am in the place where it is easiest to see, I can soon discover problems.- "Matsuo"
At Board of Directors meetings, highly transparent materials are prepared for external directors to aid ease of understanding. Numbers don't lie, and problems are easy to find in the data. Plus, the explanation from the executive in charge really helps to clarify many of the points. Incidentally, at this board meeting, we created the Business Audit Committee, a mechanism that approaches risk management from a non-traditional angle.
- "Tsujimoto"
In terms of management oversight, in addition to corporate auditors, there are auditing firms and internal control systems, but when it comes to taking a close look at the details of an operation, in many cases only the people who work in those operations are truly familiar enough with them to properly understand them. For this reason, we selected three veterans with different operational backgrounds for the Business Audit Committee. The committee is directly controlled by management, and reports to the Board of Directors in the event of a problem involving management risks.
- "Matsuo"
There have been many companies that narrowly escaped crisis because they mishandled the initial response to a risk management or compliance problem. The key factor is to have people with the proper crisis training strategically positioned and ready to make the correct decisions.
- "Tsujimoto"
From your perspective, what issues does Capcom face in terms of corporate governance?
- "Matsuo"
One of Capcom's special qualities is that it is a tremendously creative organization, and a young company—young in so many ways. The external business environment is changing as diversity and individuality among the development staff and other employees remains extremely strong internally. Capcom needs to create a corporate governance structure that will ensure the preservation of this internal diversity and individuality.
- "Tsujimoto"
We are also actively developing projects overseas in extremely short timeframes.
- "Matsuo"
It is important to always fine tune your governance structure so that it is in step with business expansion. At present, even if Capcom doesn't have the details of each individual rule spelled out, the awareness and direction of the overall Group is extremely sensible and steady. At the same time, the rules of the traditional company don't apply to a young, creative business like Capcom. Going forward, Capcom must create the corporate governance structure that best matches its corporate culture.
- "Tsujimoto"
The management environment in the game industry is rapidly changing. I often say "the landscape will change", that a year later, the landscape will be completely different. However, if anything, I think this is a chance for Capcom. We are going to further strengthen our governance structure in all our business domains and regions.
As the landscape continues to change, I'd like to continue to ask the external directors for their unerring judgment and advice based on their various expertises with respect to Capcom management decisions.
- "Matsuo"
Yes, of course. When the company is going through changes, it is my responsibility to ask "is everything really alright?" I am sure the landscape will change significantly going forward, and we will be there to discuss it in all seriousness.
- "Tsujimoto"
I sincerely appreciate that. Thank you very much.
