NK Report 2023 e
NK Report 2023 e
NK Report 2023 e
REPORT 2023
Human Rights/ Enhancing Information Disclosure Nihon Kohden’s Contributions Financial and
NIHON KOHDEN REPORT 2023 Nihon Kohden’s Value Sustainability Governance Quality Human Resources Environment and Shareholder Return to the Community Corporate Data 1
Contents
Nihon Kohden’s Value ・・・・・・・・・・・・・・・・・・・・・・・・ 2 Quality ・ ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 50 Financial and Corporate Data ・ ・・・・・・・・・ 96
Management Philosophy ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 3 Improving Safety and Reliability ・・・・・・・・・・・・・・・・・・・・・・・・・ 51 Message from Director Responsible for Accounting ・ ・・・ 97
Trajectory of Nihon Kohden ・ ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 4 Ensuring Fair Trade Practices ・ ・・・・・・・・・・・・・・・・・・・・・・・・・・ 56 Financial / Non Financial Summary・ ・・・・・・・・・・・・・・・・・・・・ 98
Introduction of Nihon Kohden’s Business・ ・・・・・・・・・・・・・・・ 5 Overview by Product Category (Consolidated)・・・・・・・・・ 101
Main Products of Nihon Kohden・ ・・・・・・・・・・・・・・・・・・・・・・・・ 6 Human Rights/Human Resources ・・・・・ 60 Management’s Discussion and Analysis・ ・・・・・・・・・・・・・・ 102
Corporate Value Creation Model・ ・・・・・・・・・・・・・・・・・・・・・・・・ 7 Respect for Human Rights・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 61 Company Information・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 104
Value Creation Compass toward 2030・ ・・・・・・・・・・・・・・・・・・ 8 Initiatives to Enhance the Value of Human Capital・ ・・・・ 68
Vision towards 2030 for the Future・・・・・・・・・・・・・・・・・・・・・・・ 9
Nihon Kohden’s DHS (Digital Health Solutions) Vision・・・・ 11 Environment 76
・ ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Progress of Three-year Business Plan・ ・・・・・・・・・・・・・・・・・ 12 Environmental Philosophy and Policy・ ・・・・・・・・・・・・・・・・・・ 77
Message from Management・ ・・・・・・・・・・・・・・・・・・・・・・・・・・・ 16 Environmental Management・ ・・・・・・・・・・・・・・・・・・・・・・・・・・・ 79
Disclosure Based on TCFD Recommendations・ ・・・・・・・・ 82
Water Resource Conservation・ ・・・・・・・・・・・・・・・・・・・・・・・・・ 87
Sustainability ・ ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 20
Providing Environmentally Friendly Products・・・・・・・・・・・・ 88
Sustainability Policy・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 21
Stakeholder Engagement・ ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 29
Enhancing Information Disclosure
and Shareholder Return 89
・・・・・・・・・・・・・・・・・・・・ How to use this report
Governance 30
・ ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Enhancing Information Disclosure and Shareholder Return・・・・ 90
Enhancing Corporate Governance・ ・・・・・・・・・・・・・・・・・・・・・ 31
To the table of contents page
External Evaluation・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 93
Board of Directors・ ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 37 To page just shown
To previous page
Message from Outside Directors・・・・・・・・・・・・・・・・・・・・・・・・ 39 Nihon Kohden’s
Ensuring Thorough Compliance・・・・・・・・・・・・・・・・・・・・・・・・・ 42 Contributions to the Community 94 ・・・・・・・
To next page
Strengthening Risk Management・ ・・・・・・・・・・・・・・・・・・・・・・ 45 Nihon Kohden’s Contributions to the Community・・・・・・・ 95
Human Rights/ Enhancing Information Disclosure Nihon Kohden’s Contributions Financial and
NIHON KOHDEN REPORT 2023 Nihon Kohden’s Value Sustainability Governance Quality Human Resources Environment and Shareholder Return to the Community Corporate Data 2
Management Philosophy
ME (Medical Electronics or Medical Engineering) is the union of medicine and engineering. With the unshakable conviction that “curing disease is something that transcends politics
ME is a common abbreviation in recent years but the founders of Nihon Kohden began working in and national borders, and we will never have any regret putting all our energy into this goal.”
medical electronics around 1945, long before this phrase was born. Nihon Kohden produced a number of state-of-the-art medical electronic equipment.
The neuromuscular tissue of a small bird was the impetus behind the founding of Nihon As medicine evolved, Nihon Kohden’s products branched out into many areas. However, the
Kohden. original vision did not change and it still inspires the Company’s engineers.
The late Dr. Yoshio Ogino, founder of Nihon Kohden, was doing research in electrical engineering
when one day he happened to see an experiment involving stimulation of the neuromuscular tissue Medical electronic equipment developed by the Company has been used in clinical practice in
of a small bird. He was struck by the wonder of biology and remarked that “to measure part of a more than 120 countries and saved a lot of lives of patients.
living body requires several hundred times the sensitivity and at least two decimal places more We continue to leverage its core strengths: capacity to develop technologies rooted in medical
than the equipment developed by the leading electrical engineering experts in Japan.” practice; broad client base inside and outside Japan; high-quality products and services, and
He wondered if it might be possible to apply a higher level of engineering to the subtleties of development, production, sales, and service systems to support them; and powerful brand
biology and study the human body. cultivated over many years. Moving forward, the Company will continue to create and provide
And furthermore, if this union of medicine and engineering could be used for saving human life. value for patients and medical professionals, contributing to the world by fighting disease and
With this powerful inspiration, he studied medicine and in August 1951 founded Nihon Kohden. improving health with advanced technology.
Human Rights/ Enhancing Information Disclosure Nihon Kohden’s Contributions Financial and
NIHON KOHDEN REPORT 2023 Nihon Kohden’s Value Sustainability Governance Quality Human Resources Environment and Shareholder Return to the Community Corporate Data 4
(¥billion)
200.0
Since its foundation in August 1951, Nihon Kohden has grown steadily by tackling healthcare issues and
Trajectory of Nihon Kohden contributing to society through the development, production, sales, and service of medical devices.
March 1952 September 1960 March 1974 February 1984 December 1990 May 2003 August 2018 February 2022
Launched the world’s first electric Launched Japan’s first multi- Applied for patent in Japan for the Launched the world’s first all Launched Japan’s first digital ECG Launched the world’s first Launched the world’s first mid- Launched the Japan’s first fully
ophthalmodynamometer, the purpose monitoring recorder world’s first pulse oximetry. telemetry fetal monitor, telemetry monitor, the WEP- mainstream-method CO2 sensor to range bedside monitor that can automatic AED produced in Japan,
MOB-1. (polygraph), the OMF-7201. 8430/8440. be used for non-intubated patients. display echo images by connecting the AED-3250.
the RM-150. an ultrasound probe, the CSM-1700.
June 1955 August 1965 November 1976 April 1985 March 1991 June 2009 June / September 2019 July 2022
Launched the world’s first Launched Japan’s first battery- Launched the world’s first Launched the world’s first Launched the world’s first digital Launched the Japan’s first Launched the Company’s first Launched the Company’s first
electrocardiograph with electronic powered defibrillator, telemetry systems, the WEP-6000. combined respiration monitor, multi-parameter telemetry bedside automated external defibrillator, ventilators, the NKV-330 and patient monitor specialized for
recording, the MC-1C. the MDV-1. the OMR-7101. monitor, the BSM-8502. the AED-2100. NKV-550. neonatal resuscitation, the
NRM-1300 BreathCue, in Japan.
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NIHON KOHDEN REPORT 2023 Nihon Kohden’s Value Sustainability Governance Quality Human Resources Environment and Shareholder Return to the Community Corporate Data 5
97 80 80
Patient monitor
Ventilator
Laboratory
80
80 98
Waiting room
80
AED
80
AED
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NIHON KOHDEN REPORT 2023 Nihon Kohden’s Value Sustainability Governance Quality Human Resources Environment and Shareholder Return to the Community Corporate Data 6
CO2 sensors
cap-ONE is a CO2 sensor developed for
safer respiratory management which
measures the amount of CO2 in expiration.
Weighing only 4 g, this ultra-compact and
lightweight sensor can also be used with
newborn babies. In addition, we have
developed a mask that permits CO2
measurement while supplying oxygen,
which reduces the burden on patients and
Electrocardiographs In-vitro diagnostic equipment contributes in reducing medical costs.
The electrocardiograph, the most common testing In the IVD field, we have developed blood cell counters and
Bedside monitors equipment for diagnosing heart disease, is widely used devices that measure HbA1c, an indicator of diabetes, as
in various medical settings. Nihon Kohden supports well as CRP*1 and ESR*2, which indicate the degree of
Bedside monitors continuously display vital signs such as ECG (electrocardiogram), body
medical professionals in the diagnosis of heart disease inflammation in the body. We also develop and produce
temperature, SpO2 (arterial oxygen saturation), and NIBP (non-invasive blood pressure).
with equipment designed for ease of handling and various in-house reagents. We will continue to explore
These devices are deployed in various medical settings such as operating rooms, intensive
capable of customization according to site and test unique technologies that enable accurate measurement
care units, and general wards. Nihon Kohden offers a wide range of bedside monitors,
specific requirements. Nihon Kohden’s with a small amount of blood, as well as operability and
from simple monitors for family doctors to in-hospital transport monitors and advanced
electrocardiographs provide users with digitized functionality that support medical professionals.
monitoring systems with centralized monitoring functions.
examination data and a variety of analytic information 1 CRP: C-reactive Protein.
based on our unique technology. 2 ESR: Erythrocyte Sedimentation Rate.
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Creation Model attain sustainable development and enhance the corporate value of the Group.
Operating Overseas
Long-term Vision margin sales ratio
15% 45%
Sales
370%
growth
by Nihon Kohden
Current ratio
¥134 billion
(FY2022) Domestic Sales ● Return to shareholders
Human Capital Overseas Sales ¥63 billion
High-quality (Overseas Sales Ratio) (32.0%) Human Capital
Social Issues ● Diverse employees products and Capacity to ● Job creation
Number of employees 5,751 services supported develop Operating income ¥20 billion
● Demographic changes by integrated technologies ● Fostering a corporate
Of which, Overseas 1,641 people development, rooted in medical (Operating income margin) (10.2%)
● Changes in structure of culture in which employees
diseases
(As of March 31, 2023) production, sales, practice Net income ¥13.8 billion take pride in contribution to
and service
● Climate change/Natural ROE 10% healthcare and to our mission
Intellectual Capital
disasters
Intellectual Capital
Proactive R&D investment
●
Medical Issues
R&D costs ¥ 6.2 billion Results in FY2022 ● Technology such as AI and
(FY2022) Physiological Measuring green technology, that is the
● Increases in medical Equipment source of value co-creation
● Innovative technological
expenses Net Sales Composition ratio
development capabilities
● Ensuring quality of The ECG-3250 Social Capital
medical care
Number of new products
released
13 items ¥ 43.2 billion 21.0% Electrocardiograph ● Improving quality of life
(FY2022)
(QOL) for patients
Trends in Medical Manufacturing Capital/ Broad client base A powerful brand
Patient Monitors ● Improving resuscitation rates by
Device Industry Social Capital inside and outside cultivated over
Net Sales Composition ratio
expanding access to AEDs
Number of bases in Japan and overseas Japan many years The CNS-2101
Al
g
Accelerating digitalization
in
&
●
¥ 80.8 billion
in
39.1%
St
114 sales offices
Central Monitor
Natural Capital
M
at
a
ist
at
Changes in logistics In Japan
ic
D
●
s
environment Overseas 26 group companies Treatment Equipment
● Realizing a carbon-free
society
Over120 countries
● Response to new
Areas in which
work-styles products deployed (As of March 31, 2023) Cr s Net Sales Composition ratio
ea on The AED-3250
uti
● Tighten laws/regulations
te v l ¥ 44.4 billion 21.5% Automated External
Natural Capital o
a lue by hS Defibrillator
Production Capital
CO2 Emissions per unit of sales Digital Healt Value chain which pursues
5.88 t-CO /¥100 million
●
Other Medical Equipment
2
the highest level of quality in
(FY2022)
Net Sales Composition ratio the world
Recycling rate 97.4% ¥ 38.0 billion 18.4% The MEK-9200
Automated
(FY2022)
Hematology Analyzer
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Toward Better Patient Outcomes and Improving the Economy of Medical Care
The Value Creation Compass is our new value creation model that represents how Nihon Kohden will work to solve medical
and social issues by 2030. Nihon Kohden will combine our original technologies and clinical expertise with advanced
technology in collaboration with global partners, to create valuable solutions that help solve issues in clinical sites.
Nihon Kohden will combine our original technologies and clinical expertise with advanced technology in collaboration
Vision towards 2030 for the Future with global partners to create valuable solutions that help solve issues in clinical sites.
Accessible Intelligent
Patient oriented
Intelligent Connected
How do we bridge the final distance between AEDs Can we eliminate human error in operating rooms with
and people to save every life possible? advances in technology?
We have been working to widely deploy AEDs to improve the Surgery is a beacon of hope for patients who want to live.
survival rate. However, human error in operating rooms is still a cause of
But still we have challenges to address; training for first death. Especially in emerging countries, the mortality rates due
responders, reducing fears about AED use, sensing technology to human error are estimated to be 100 to 1,000 times higher
for early detection of cardiac arrest, a mobile app-based than in developed countries. We believe we will be able to solve
volunteer first responder network, and utilization of on-scene this serious issue. Utilization of patients’ vital signs and stable
data and vital signs. We aim for a future in which the number of anesthetic management may be able to reduce the mortality rate
sudden cardiac deaths is one-third of the current level, through due to human error to one-hundredth of the current level.
step by step efforts to reduce the psychological and physical Our aim is improving the safety of surgery by developing
barriers to AED use. advances in technology and delivering these technologies
We are working hard to achieve a future where everyone can beyond national borders to patients all over the world.
use AEDs without hesitation.
Accessible Optimized
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How do we design ICUs where patients can recover in Can we connect medicine and life, so that people can How can we create a medical system with both
peace and with dignity? enjoy their time wherever they desire? quality and efficiency so that patients, families, and
ICUs are intended to save patients’ lives and help them make an Patients feel anxious even when they want to go home; “My healthcare professionals all thrive?
early recovery. However, can patients really recover in peace, condition may get worse because I won’t be able to receive the Hospitals are working on improving their productivity and
surrounded by a lot of machines and tubes? same treatment as when I was in hospital.” or “Emergency management. Medical workers want to spend as much time as
Our ideal room offers patients a place to rest not only their situations may cause a burden for my family.” Providing possible for patients. Our goal is a “Win-Win” relationship in
bodies but also their mind. The changes in patients’ conditions homecare with the same quality as hospital care will enable the which everyone is happy. We collect and utilize the data from
can be appropriately monitored to provide treatment at early early prediction and prevention of deteriorative conditions such medical devices deployed in hospitals to allocate resources
stages. The temperature of the bed and the room brightness can as heart failure. Since many people live with illnesses in aging appropriately and optimize operation of the devices.
also be comfortably adjusted according to the patients’ population, we aim to reduce the burden on patients, their This will enable medical workers to concentrate on patients and
conditions. We aim to design such an optimal environment for families and hospitals by reducing readmission rates. improve patient outcomes. As a result, patients can smoothly
each patient and realize ICUs that are friendly to patients, We will continue to watch over the daily lives of people return to their daily lives after a short hospital stay.
families, and medical workers. recovering from illness to help them enjoy their time wherever We aim to increase the “satisfaction with medical care” of all
they desire. stakeholders by helping hospitals improve efficiency.
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Remote Algorithmic Nihon Kohden is promoting the DHS (digital health solutions) Vision to realize its Long-term Vision toward 2030, BEACON 2030.
monitoring medicine
Currently, we are investigating the creation of new customer value to solve specific issues in two areas: DHS Vision for Acute
Care and DHS Vision for Regional Medical Care.
Medical device
Decision-making
data integration support
Under the DHS vision for acute care, we aim to provide application and services that utilize patients’ vital sign data and medical
Monitoring of
device information in step with technological advances. In the area of medical device data integration, we will develop a platform
critical conditions
for data input, including the use of new technologies such as medical device connectivity and wearable devices to obtain
patients’ vital sign data. In the area of remote monitoring, we will contribute to the development of telemedicine by enabling
Time to mainstream adoption medical professionals to recognize, judge, and intervene with patients at a distance, in line with the progress of network
technology and cloud computing. We plan to utilize the information acquired using the technologies of medical device data
DHS Vision for Acute Care integration and remote monitoring to gradually develop solutions that only Nihon Kohden can provide.
DATA
Nihon Kohden’s core technology is the Human Machine Interface, which is its unique data acquisition technology and the basis
Prehospital for utilizing data such as patients’ vital signs. Going forward, we will create solutions that contribute to improving patient
outcomes and economy of medical care by enhancing our data collection capabilities, strengthening our data analysis
Testing and Diagnosis
technologies and our ability to create algorithms, and integrating the HMI technology and medical equipment with network
Semi-automated Monitor installed
defibrillator in ambulance technologies such as remote monitoring.
ECG EEG
Under the DHS vision for regional medical care, given Japan’s declining birthrate and aging population, there is a growing need
Surgery and treatment for a system that accepts high-risk patients from acute care hospitals to second line hospitals and convalescent hospitals. We
aim to realize our DHS vision to support regional medical care by providing an IT system platform that links regional medical care
support hospitals and general practitioners, leading to early detection and intervention for diseases.
Ventilator Defibrillator
Home care
In its Three-year Business Plan, BEACON 2030 Phase I, which started in April 2021, Nihon Kohden
strengthens its business foundation toward realizing its Long-term Vision BEACON 2030. To embrace Basic Policy in Three-year Business Plan
sustainability across business and corporate activities, which is the basic policy of BEACON 2030 Phase I,
we are working to ensure strict compliance and strengthen group governance, improve the profitability of Embrace sustainability across business and corporate activities
existing businesses and make strategic upfront investments, and establish global supply chain
management and strengthen core functions of operations. The following is an overview of the progress of
FY2022, which was the second year of this plan. Ensure strict compliance and strengthen group governance
Management
to reinforce the management structure
Operations
Establish global supply chain management and strengthen core
Create a better future for people and healthcare by solving global functions of operations to lay a foundation for global growth
Long-term Vision medical issues
Targets for FY2029 Operating margin: 15% Overseas sales ratio: 45%
Apr. 2027 - Mar. 2030 : Realize BEACON 2030
Three-year
Apr. 2024 – Mar. 2027 : Invest for growth
Business Plan
Apr. 2021 – Mar. 2024 : Strengthen foundation
Targets for FY2023 ending March 2024 (consolidated)
Core Values are shared by Nihon Kohden staff worldwide, which Sales ¥ 197billion Domestic
sales ¥ 134 billion Overseas
sales ¥ 63 billion
Core Values help to connect them and contribute to promoting our Management
Philosophy, Long-term Vision, and Three-year Business Plan.
Operating income
(Operating income margin) ¥ 20 billion (10.2%) ROE 10%
Integrity / Humbleness / Diversity / Initiative / Customer Centric / Goal Oriented / Creativity
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Review of Progress in FY2022 In FY2023, which is the final year of this plan, the Company aims at achieving a highly profitable
In FY2022, we worked on continuing to supply products globally by implementing reforms to its supply structure that can regularly secure a gross profit margin of 50% or more and an operating income
chain management to respond to the product supply issues due to the shortage of semiconductors and margin of 10% or more. As higher prices of components, utility costs, and personnel expenses are
the Shanghai lockdown. As a result, Nihon Kohden posted record highs in sales in FY2022. Operating expected, the Company will implement reforms to its supply chain management and optimize its selling
income exceeded its original forecast. Domestic sales decreased due to a reactionary decline in demand prices.
for patient monitors and ventilators, large numbers of which had been installed to treat COVID-19
patients in FY2021. On the other hand, sales of Physiological Measuring Equipment and hematology
instruments increased favorably as the number of testing and surgical procedures showed a recovery Embracing Sustainability across Business and Corporate Activities
trend and capital expenditure by medical institutions resumed. Internationally, there were loss of To foster an organizational culture that promotes sustainability as the essence of our business, we have
business opportunities and delays in supplying new models due to the product supply issues in the first held a total of 28 Sustainability Discussions globally since October 2022 in which approx. 3,000
half of FY2022. In the second half of FY2022, sales recovered thanks to the launch of new mid-range employees have participated. In addition, we disclosed information in accordance with the TCFD
bedside monitors and a mask-type ventilator in the U.S. and yen depreciation. recommendations and identified key human rights issues.
For further details, please refer to the Sustainability page.
■H
igher prices of components
Gross Profit Margin 51.2% 53.2% ■U
nfavorable product mix 51.3% 50% or more
Management: Ensure Strict Compliance and Strengthen Group Governance structure through the creation of high customer value, improvement of productivity, and the timely
To ensure strict compliance, we have implemented recurrence prevention measures in response to the launch of new products. In FY2022, we introduced a patient monitor specialized for neonatal
compliance matter that occurred in Japan in January 2021 and will continue to monitor the progress of resuscitation and an EEG amplifier with enhanced network capabilities in Japan, and an ECG with
their implementation. To strengthen our group governance, we promoted implementation of the Global built-in wireless LAN both in Japan and internationally. In the U.S., we launched mid-range bedside
Business Management Policy and started to develop a sophisticated company-wide risk management monitors and a mask-type ventilator. In certain overseas markets, we also introduced a mid-range
framework. For further details, please refer to the Ensuring Thorough Compliance page. ventilator developed by Nihon Kohden OrangeMed, Inc., in the U.S. Internationally, the Company
strengthened its business structure. The Company decided to reorganize its U.S. subsidiaries into a
holding company structure, and acquired Software Team Srl in Italy, a software development and sales
Business: Improve the Profitability of Existing Businesses and Obtain the Resources company which collects data and alarms from medical devices such as patient monitors and forwards to
to Invest Strategically mobile phones.
To improve the profitability of existing businesses, we introduced in-house products and services with
high customer value. As a common policy across all businesses, we aim to realize a highly profitable New Products Introduced in FY2022
Establishment of a highly
● Expand the provision of medical
Diagnostic Equipment Business
profitable structure
Products Monitor (MD Linkage) The NRM-1300, The EEG-1260, The ECG-3250, The NKV-440, Ventilator, in AED use detection and notification
Resuscitation monitor for Electroencephalo- Electrocardiograph, in certain overseas markets service by AED Linkage, only in Japan
Business neonates, only in Japan graph, only in Japan Japan and internationally
Cardiology
Improve productivity
Sensor ● Establish a new common design
Products Technology platform
Treatment ● Promote standardization and common
Hematology Equipment parts Acquired Software Team Srl, Italy in November 2022
Instruments Business ● Ensure strict lifecycle management
To establish a global information system, we completed the linkage of backbone systems in overseas to head office network
subsidiaries to the head office network. As part of our corporate digital transformation (CDX), we started
□ Started introducing PLM/ □ Acquired a new plant site in
introducing PLM/MES*1 systems.
MES systems Tsurugashima City, Saitama Prefecture
We also strengthened compliance with the latest laws and regulations for medical devices as well as (Acquired a new plant site in March 2023, Construction: Planned
● Reduce workload and costs by to start in Spring 2024 and be completed in Spring 2025,
establishing a PSIRT*2 to enhance the security of our products and services and strengthen our
promoting DX in R&D and produc- Operation: Planned to start in 2026)
response to security incidents. tion departments ● Manufacturing consumables such as
sensors and R&D of automated produc-
1P
LM: Product Life-cycle Management, tion technology
MES: Manufacturing Execution System
2P
SIRT: Product Security Incident Response Team
□ Established PSIRT
● nhance cyber security of products and
E
services, and strengthen our response to
security incidents
Review of FY2022
In FY2022, in response to product supply issues caused by the shortage of semiconductors and the
Representative Director Shanghai lockdown, all employees worked together to continue product supply by changing designs
President and CEO using alternative components and temporarily increasing product and component inventories. As a
result, consolidated net sales reached a record high and operating income exceeded the initial plan.
Although there was a reactionary decline in COVID-19-related demand from FY2021 both in Japan
and internationally, demand for our products, consmables and services remained steady in Japan
due to the establishment of healthcare systems to respond to emerging infectious diseases, and the
promotion of work style reforms for medical staff. Internationally, there are moves toward the
development of post-COVID-19 healthcare systems in each country, and demand for medical
equipment that contributes to improving the quality and efficiency of medical care remains steady.
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Progress of the Three-year Business Plan (Major Initiatives and Results for [Management] Focus on thorough compliance as a top priority
FY2022) In response to the compliance matter that occurred in 2021, we have worked over the past two years
■ Basic Policy in Three-year Business Plan, BEACON 2030 Phase I to introduce the recurrence prevention measures, based on our firm pledge to never allow a similar
incident to occur. All recurrence prevention measures, such as a donation website and website for
dealers, have been introduced and implemented. We will continue implementing recurrence
Embrace sustainability across business and corporate activities prevention measures and monitoring the progress of their implementation. In accordance with the
Ethical Company Declaration, we will foster an organizational culture that values ethical behavior
above all else and strive to grow into a company that is trusted by society.
Ensure strict compliance and strengthen group governance
Management
to reinforce the management structure
● Reviewed applications received through the donation website
First
Improve the profitability of existing businesses and obtain the half ● Established website for dealers (due diligence, pledge to comply with laws, and
Business announcement of whistle-blowing channel)
resources to invest strategically for sowing seeds of new growth
Establish global supply chain management and strengthen core Second ● Conducted compliance training by outside experts
Operations half
functions of operations to lay a foundation for global growth ● Conducted compliance study sessions in each division
In FY2022, the second year of our Three-year Business Plan, we worked toward strengthening our [Business] Introduce new products with high customer value
business foundation by promoting measures from the three standpoints of management, business, To improve the profitability of existing businesses, we worked to strengthen the ventilator business,
and operations to realize our Long-term Vision. which led to an increase in our presence during the COVID-19 pandemic. In FY2022, we started
production and sales of a mask-type ventilator, the NKV-330, in the U.S. and launched a new mid-
range ventilator, the NKV-440, in Thailand. The first two types of in-house ventilators, the NKV-
330/550, were widely installed in clinical practice around the world during the COVID-19 pandemic,
contributing to the treatment of many patients.
In our patient monitoring business, we launched mid-range bedside monitors, the CSM-1500/1700
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series, with enhanced cyber security functions in the U.S. market. Our first resuscitation monitor for Toward FY2023, the final year of the Three-year Business Plan
neonates, the NRM-1300, was also introduced in Japan. This monitor was developed in the project FY2023 is the final year of the Three-year Business Plan, BEACON 2030 Phase I. We will promote
which supports R&D of medical devices/systems and healthcare by the Japan Agency for Medical strengthening our foundation, the theme of Phase I, improve the profitability of existing businesses, and
Research and Development (AMED). It assists to support appropriate bag valve mask ventilation for a cultivate new business areas.
newborn infant who is not breathing. In April 2023, the Company newly established the Corporate Quality Management Operations by
In the creation of new businesses, we are working to expand our product portfolio in the area of integrating the Quality Control Division, Global Quality Management Division, and Product Quality
digital health solutions (DHS) amid the accelerating DX in medical fields. In November 2022, we Control Division. We will establish a system of supervision and instructions in quality management and
acquired Software Team Srl, Italy, a provider of alarm management solutions. In April 2023, we build a consistent quality management system throughout the Group, from quality measures to post-
reorganized our U.S. subsidiaries into a holding company structure to strengthen our governance marketing monitoring. In addition, the Strategic Technology Division was newly established under the
structure and operations in the U.S. business, which is driving our growth. Strategic Technology Operations, and the Production Engineering Division was incorporated into the
Strategic Technology Operations. To address increasingly complex supply chain issues, it is important
to develop strategic design concepts such as promoting standardization and common parts at the
[Operations] Promote business process reform in R&D, production, and logistics design stage. Therefore, we will strengthen cross-divisional functions in common technology, production
departments technology, regulatory affairs, and cyber security measures.
A groupware was introduced throughout Group companies as part of efforts to improve the efficiency We are also actively engaged in human capital management. In April 2023, we introduced a new role-
of Group-wide operations and strengthen the security of internal IT systems. To supply highly based personnel system for general employees. We will
competitive products in a timely manner, we started introducing PLM/MES* systems and are working utilize a personnel evaluation system and human resource
to build a system to centrally manage information related to the product lifecycle from R&D, development program based on our globally shared Core
production, and post-market response after shipment. Values to improve the engagement of each employee. In
To strengthen our global supply chain management (SCM), we acquired a site for a new plant for addition, a talent management system will be implemented
consumables in Tsurugashima City, Saitama Prefecture, in March 2023. The plant will be used as a to build a foundation for utilizing human capital
production site for consumables such as sensors, for which demand is expected to further increase information. Given current concerns about higher prices of
in the future, and as an R&D center for automated production technology. Tsurugashima City is components and utility costs as well as the business
located close to the Advanced Technology Center (Tokorozawa City, Saitama Prefecture) and the deterioration of medical institutions due to a shortage of
Eastern Japan Logistics Center (Sakado City, Saitama Prefecture); therefore, our R&D, production, medical professionals and higher interest rates, demand
and logistics departments will work together to expand and upgrade the production and supply for solutions that contribute to improving the quality and
system. efficiency of medical care is increasing around the world.
PLM: Product Life-cycle Management, MES: Manufacturing Execution System
We will strengthen our foundation by improving
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organizational productivity, expanding our product portfolio, and enhancing our solution proposals. We
also promote transformation into a highly profitable structure that can regularly secure a gross profit
Raise awareness throughout the community by providing sustainabil-
margin of 50% or more and an operating income margin of 10% or more. Education ity education opportunities not only to employees, but also to medi-
cal institutions, distributors, and suppliers.
Foster a Corporate Culture that Promotes Sustainability as the Essence of Our Contribute to the promotion of sustainability of medical institutions
Business Healthcare and healthcare systems by providing technologies and services in
In FY2022, the newly established Sustainability Promotion Team played a central role in various addition to solving medical issues through our business.
activities. I have facilitated the Sustainability Discussions for all employees, which have been held 28
Strive to solve environmental issues by developing environmentally
times and attended by more than 3,000 employees. I was very impressed by the high level of awareness
Environment friendly products and building an ecosystem that includes product
of sustainability among employees around the world and their strong desire to contribute to local collection and recycling.
communities through our corporate activities. Through the panel discussion, we gained an awareness of
issues common to all companies from the three perspectives of education, healthcare, and environment.
For example, from an environmental perspective, the participants in the Sustainability Discussions
expressed opinions that in order to provide customers with solutions that lead to environmental
measures, we should develop products that take the environment and sustainability into consideration Continue to Pay Stable Dividends over the Long Term
from the design stage as well as creating an ecosystem that includes used product collection and Nihon Kohden recognizes that returning profits to shareholders is one of management’s most
recycling. In particular, hundreds of thousands of AEDs are installed around the world each year, many important tasks. The basic policy on distribution of profits and dividends is to maintain stable and
of which are discarded at the end of their service life without ever being used. I believe that if many of continuous dividend payments while retaining necessary reserves for future business expansion.
our employees are keenly aware of this issue and we can create an ecosystem that not only supplies Based on the business performance in FY2022, the Company decided to increase the ordinary
products but also collects them for reuse or recycling, we can further increase the customer value of our year-end dividend by 21 yen from the previous forecast of 20 yen per share to 41 yen per share. As a
AEDs. result, the full-year dividend for FY2022 was 61 yen per share, including the interim dividend of 20
We plan to develop our awareness of these issues into specific action plans, which will be reflected in yen per share.
the sustainability promotion targets in the next Medium-term Business Plan. In consideration of business performance, the full-year dividend for FY2023 will be 61 yen per share.
I appreciate your continued support.
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Sustainability
We aim to realize a sustainable society and increase
our corporate value by further strengthening
the coordination between business strategy and
sustainability strategy, and creating both economic
and social value.
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As a medical equipment manufacturer, Nihon Kohden strives to contribute to a sustainable society and enhance its corporate value, by taking on the
Sustainability Policy challenges of solving social issues such as fighting disease and improving health through its business and corporate activities.
Sustainability at Nihon Kohden Nihon Kohden’s management has set KPIs (Key Performance Indicators) and assigned departments for
In recent years, activities aimed at achieving the UN Sustainable Development Goals (SDGs) have been each materiality. We aim to realize a sustainable society and increase our corporate value by further
promoted in order to respond to various cross-border social issues. The medical care we are involved in strengthening the coordination between business strategy and sustainability strategy, and creating both
is becoming more and more complex due to various problems such as the aging society in developed economic and social value.
countries, rising medical costs, lack of basic medical care in emerging countries, and widening medical
disparities.
Under these circumstances, Nihon Kohden defined 12 sustainability key issues (material issues) to be The Process of Defining Material Issues
addressed through business and corporate activities. The Company also incorporated these nonfinancial For further details on the process of defining 12 material issues, please refer to our website.
targets into its Three-year Business Plan, BEACON 2030 Phase I, in order to contribute to global social https://www.nihonkohden.com/sustainability/nk_sustainability/policy.html#process_materiality
issues and SDGs.
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Sustainability Policy
Improve resuscitation
rates by expanding
access to AEDs Utilization rate is the rate of out-of-hospital cardiac
[Actual] arrests responded to by laypersons using AEDs
Utilization rate in CY2021: Utilization rate in CY2022:
Utilization rate of AEDs in Actual utilization rate of AEDs in Japan and (all AEDs, including our products).
Japan 4.2% Japan 4.1%
Japan and the U.S. the U.S. for 3 years Data cited from: Fire and Disaster Management
U.S. 9.0% U.S. 10.2%
(No numerical target (follow-up item)) Agency of the Japan Ministry of Internal Affairs and
Communications website, U.S. AHA journals, etc.
Started operations:
[Target] 0 centers
Promote training in epilepsy diagnosis in Started operations:
Start operations at four local education ー Conducted six out of the total 23
Indonesia 0 centers
centers by the end of FY2023 lectures. Continue discussions to
educate 4 physicians.
Provide educational
opportunities for
medical professionals [Target]
in emerging countries ・ Cumulative number of hosting countries ・ Number of hosting countries: ・ Number of hosting countries:
for 3 years: Over 5 countries (North 3 countries 4 countries
Number of educational seminars held,
America, Latin America, Europe, Asia, (Rate of progress 60%) (Rate of progress 100%)
hosting countries, participants (including ー
Middle East) ・ Number of participants: ・ Number of participants:
online programs)
・ Cumulative number of participants for 3 28k 57k
years: (Rate of progress 28%) (Rate of progress 86%)
Over 100k
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Sustainability Policy
Sustainability Policy
[Actual]
Number of advance notifications before Actual cumulative number of notifications Number of notifications: Number of notifications:
Only in Japan
trouble with products occurs for 3 years 1,973 cases 686 cases
(No numerical target (follow-up item))
[Target]
Number of contract hospitals: Number of contract hospitals:
Number of network-oriented products Cumulative number of contract hospitals
Only in Japan 149 hospitals 166 hospitals
sold like LAVITA*6 for 3 years:
Eliminate health (Rate of progress 25%) (Rate of progress 53%)
Over 600 hospitals
disparities through
telemedicine
R&D investment in realization of remote
(*) ー
support for ICUs
[Target]
FY2021:
Establish operational policy and start survey Conducted survey of
Improved 1.4 point compared to
Employee satisfaction (Only in Japan) ー approximately 4,400 all
FY2021
Foster a corporate FY2022: employees in Japan
culture of pride in Publication of survey results and subsequent
contributing to implementation of ongoing surveys
healthcare House of education by job level provided by the
[Target] Phoenix Academy (Human Resources Development Education hours per person: Education hours per person:
Develop human resources who can
Cumulative hours of education for 3 years: Center). This training content will enable new 18.6 hours 18.2 hours
succeed globally
Over 45 hours per person employees and managers to acquire the knowledge (Rate of progress 41%) (Rate of progress 82%)
and skills required for each level.
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Sustainability Policy
[Target]
Japan Japan
FY2021: 1. C onducted the second survey
Set up a system and start the survey with more detailed and
Japan:
FY2022: expanded items to be
Started the survey
1. Conducted the second survey with more surveyed
Net Promoter Scores ー U.S.
detailed and expanded items to be 2. Improved 1.3 points compared
Pursue the highest Improved 12 points compared to
surveyed to FY2021
level of quality in the FY2020
2. Maintain and improve scores U.S.
world across the value U.S. Improved 12 points compared to
chain Strive to achieve a 1-point improvement FY2021
every year
[Actual]
Cumulative number of products recalled We have set and are working on achieving a quality
Number of recalls 6 cases 2 cases
for 3 years target of “zero recalls for 200 days or more.”
(No numerical target (follow-up item))
[Target]
Establish and strengthen compliance
Zero occurrence of serious incidents of ー 1 case (Japan) 0 case
programs of the Group
non-compliance
[Actual]
Monitoring implementation of the Global
Ensure strict Establish and promote the Global Established and started
Business Management Policy for Continued implementation of
compliance and Business Management Policy in overseas ー operating the Global Business
managers of all overseas subsidiaries over various measures
strengthen group subsidiaries Management Policy
the next 3 years
governance (No numerical target (follow-up item))
[Actual]
Continued implementation of the
Strengthen internal control over domestic Introduce system controls for pre-order Introduced and started operating
ー global compliance program
sales processes and monitor their application the system controls
measures
(No numerical target (follow-up item))
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Sustainability Policy
・ CO2 emissions:
[Target] ・ CO2 emissions:
38.7% reduction compared to
・ FY2023: 15.2% reduction compared to 34.1% reduction compared to
FY2020
FY2020 per unit of sales (ISO 14001 FY2020
・ Collect and disclose CO2
CO2 emissions certified sites, Scope 1, 2) ー ・ Collect and disclose CO2
emissions:
・ Collect and disclose CO2 emissions for emissions:
Preparing for third-party
the whole group by end of FY2023 Preparing for third-party
verification, including system
(Scope 1, 2, 3) verification
implementation
[Actual]
・ Number of models in next 3 years ・ Number of models: ・ Number of models:
Realize a carbon-free (No numerical target (follow-up item)) 63 series 75 series
Number of models and sales ratio of
society [Target] ー ・ Sales ratio of environment- ・ Sales ratio of environment-
environment-friendly products
・ Cumulative sales ratio of products for 3 friendly products: friendly products:
years worldwide: 19.9% 19.1%
Over 20%
[Target]
FY2021: FY2022:
Amount of waste from disposal of FY2023:
ー 21.3% reduction compared to 0.7% reduction compared to
products and parts 8% reduction of products and parts
FY2020 FY2020
retirement compared to FY2020
1. e sCCO (estimated Continuous Cardiac Output): Nihon Kohden’s unique technology which can estimate cardiac output continuously based on ECG and pulse waves obtained from pulse oximetry. Previously, cardiac output could not be measured without inserting a catheter into the pulmonary artery. But now, with routinely monitored
parameters, non-invasive and continuous estimates can be made without pain or strain on the patient.
2. S ynthesized 18-lead ECG: Synthesized 18-lead ECG uses the 12-lead ECG waveforms to mathematically derive the waveforms of the right chest leads (V3R, V4R, V5R) and back (V7, V8, V9). The measurement procedure is the same as the standard 12-lead ECG but more information can be obtained. 18-lead synthesized ECG is
expected to be useful in detecting right ventricular infarction and posterior infarction.
3. iNIBP (non-invasive blood pressure measurement algorithm): Nihon Kohden’s unique non-invasive blood pressure measurement algorithm using a linear inflation technology that completes the measurement while the cuff is inflating. This algorithm was developed with the concept of reducing the burden and stress of patients and
medical personnel involved in blood pressure measurement as much as possible. Compared to previous measurement methods, it can measure faster and does not apply more pressure than necessary, reducing the burden and stress on the patient.
4. A larm report: This is a report that objectively evaluates the type and frequency of alarms based on alarm information from telemetry systems and central monitors. This report is expected to contribute to improving the medical environment by reducing the occurrence of false alarms.
5. M D Linkage (Medical device remote monitoring system): This is a network system that automatically sends error messages and self-test information generated by medical devices to our server via a remote terminal. By automatically detecting equipment abnormalities and failures and notifying us, we can respond quickly and
contribute to reducing product downtime.
6. L AVITA (Medical and nursing care network system): This is a network system that can easily collect patient vital data, automatically send it to a cloud server, and share information in real time with various people such as medical workers and social workers. By collaborating with various medical institutions through LAVITA, it is
possible to provide the support needed for comprehensive community care.
(*) We have not set individual investment target figures for each KPI, but the cumulative three-year investment target for the whole Nihon Kohden Group is expected to be approximately 20 billion yen.
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Sustainability Policy
Advice
management ● Compose of the president, operating
with advice officers, and general managers
directions. The Sustainability Promotion Meeting is held four times a year to establish and promote that reflects ● Formulate basic policy
annual plans based on the policies and directions formulated by the Sustainability Promotion Committee external ● Identify issues and discuss measures Compliance Quality Control Environmental
perspectives Committee Committee Committee
● Discuss and formulate KPIs
and reports on the progress of those plans to the Sustainability Promotion Committee. Members of the ● Three external
Sustainability Promotion Meeting, who represent the departments in charge of each materiality, report experts
Sustainability Promotion Meeting Cooperate
on the progress of sustainability activities and exchange opinions with other members at regular
● Formulate and promote annual plans
meetings. The Company strives to implement sustainability activities in its daily business operations, in ● Training and awareness-raising
close coordination with the Compliance Committee, Quality Control Committee, and Environmental
Committee. The Advisory Board Meeting is held twice a year to discuss and advise on overall Business Units and Subsidiaries
sustainability promotion. ● Implementing progress management of annual plans ● Training and awareness-raising
Furthermore, in order to raise awareness of the SDGs within the Company, we take actions such as
educating employees in Japan and overseas through webinars.
Sustainability Policy
Holding Advisory Board Meetings Providing Opportunities for Education and Training on Sustainability
At the third Advisory Board Meeting held in December 2022, we received advice on the environment and To foster awareness of sustainability promotion among all employees, Nihon Kohden provides training
human rights at Nihon Kohden, as well as measures to promote sustainability and raise awareness on sustainability when employees join the Company. In FY2022, one training session for new employees
among employees. In particular, our Sustainability Discussions, held for all employees both in Japan and and two training sessions for mid-career hires were held, with a total of 194 employees attending.
internationally, were highly evaluated for their effectiveness and originality. We also conduct e-learning education on sustainability to all executives and employees once a year in
Japan. In FY2022, an educational video by outside director Hidemitsu Sasaya, a professor at Platform
for Arts and Science, Chiba University of Commerce, was distributed to further promote understanding.
Holding Sustainability Discussions In FY2022, 4,051 participants took the course through webinars and 497 participants with paper-based
To foster a corporate culture in which sustainability is the core of its business activities, Nihon Kohden has materials.
held the Sustainability Discussions for all employees (28 sessions with over 3,000 participants in Japan and
internationally from October 2022 to March 2023). We aim
to quickly build a structure in which every employee has a Joined UN Global Compact
sense of ownership and commitment to promote In July 2015, Nihon Kohden signed on to the United
sustainability toward creating a better future for people and Nations Global Compact. By engaging in corporate
healthcare, as stated in our Long-term Vision, BEACON activities that adhere to the Ten Principles of the United
2030. Nations Global Compact in four areas of human rights,
Several employees who expressed positive opinions on labor, the environment, and anticorruption, Nihon Kohden
sustainability in a preliminary questionnaire were selected seeks to earn the trust of society and to contribute to a
as panelists, regardless of position or age. The President sustainable society.
Discussion in Tokyo
himself served as a facilitator to exchange opinions on
sustainability, including how Nihon Kohden can contribute
to the sustainability of its customers.
Participating employees commented: “Thinking about
sustainability from various angles made me realize many
things,” and “I realized the importance of making further
contributions to society through my daily work.” We will
continue to accelerate our efforts to promote sustainability.
Discussion in Mexico
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Nihon Kohden operates its business that places importance on all the Company’s stakeholders.
Stakeholder Engagement The Company also aims to maintain and develop a sound relationship with stakeholders by proactive communication.
Growing as a Company and Establishing Trust Nihon Kohden’s Stakeholder Engagement Initiatives
To realize the Company’s Management Philosophy, Nihon Kohden is committed to creating value with
all stakeholders, including customers, shareholders, investors, business partners, local communities, Stakeholder Main Communication Method Main Responsibility and Issues
and employees, in all aspects of our business, such as products, services, technology, financial
strength, quality of employees, and other points. In planning and promoting sustainability initiatives, we Offer of products and services with safety
● Daily sales activities and security
also work to grow as a company that establishes trust and be well recognized by all our stakeholders. In Quality improvement of products and
● Call center
addition to its citizenship activities and information disclosure through its business activities, Nihon ● Net promoter score survey
services
Customers Enhancement of customer satisfaction
Kohden also leverages the opinions and requests of stakeholders in its future business activities as part ● Customer satisfaction survey
● Academic seminars Response to customer complaints
of its efforts to be a trusted member of society.
● ME (medical electronics) workshops
In April 2023, Nihon Kohden established a Multi-Stakeholder Policy to govern our efforts regarding Disclosure and offer of adequate
information of products and services
returns to employees and consideration for our business partners.
● Daily procurement activities Open and fair trade
● Human rights due diligence Identification of human rights risks in
Business Partners
Mutual Understanding through ● Questionnaire of sustainable business transactions
Dialogue with Our Stakeholders Sustainable opportunities for
procurement Promotion of sustainable procurement
dialogue and disclosure of
Patients information to the market ● General shareholders meetings Enhancement of corporate value
Expectations for Nihon Kohden ● Earnings presentations Appropriate shareholder returns
Shareholders and
Shareholders ● Company briefings
and Customers Investors Timely and appropriate disclosure
● Events for individual investors
Investors
● Website for investors Response to Social Responsible Investment
Governance
We enhance corporate governance by establishing a
management structure aiming at improving the
soundness, transparency, and efficiency of
management.
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Enhancing Corporate Governance Nihon Kohden strives to strengthen its corporate governance with the aim of continually enhancing its corporate value.
The Board consists of a total of eleven directors (including one female director), eight directors excluding The Company has established a Nomination & Remuneration Committee, which is a voluntary advisory
Audit & Supervisory Committee members (including two outside directors) and three Audit & Supervisory committee under the Board, to ensure the transparency and objectivity of the management. All three
Committee members (including two outside directors). The Board has monthly meetings to resolve committee members and the committee chair are appointed from outside directors. The Nomination &
matters pursuant to the Companies Act and makes decisions on the conduct of important business for Remuneration Committee deliberates on the proposal of the candidates, remuneration of directors, and
the Nihon Kohden Group as well as supervises directors’ performance of their duties. succession plans in response to requests from the Board, and submits the proposals to the Board.
■ Audit & Supervisory Committee For further details on the corporate governance, please refer to our website.
The Audit & Supervisory Committee consists of three directors, including two outside directors and one https://www.nihonkohden.com/information/philosophy/governance/governance_structure.html
full-time member. Each Audit & Supervisory Committee member conducts audit activities in accordance
with the audit policy, audit plan, and division of duties established by the Audit & Supervisory
Corporate Organization and Internal Control System
Committee. Each Audit & Supervisory Committee member attends the important meetings such as the
Management Council and audits the performance of duties by directors by investigating the conduct of
business operations and status of assets at the Company’s main offices as well as reports on audit Shareholders Meeting
results from the Internal Auditing Department. The Audit & Supervisory Committee cooperates with the Appointment/ Appointment/Dismissal Appointment/Dismissal
Accounting Auditor and the Internal Auditing Department. The full-time member of the Audit & Dismissal
Supervisory Committee has many years of experience in finance and accounting departments and Board of Directors Meeting
(11 members)
possesses a considerable degree of knowledge about finance and accounting. Directors, excluding Audit & Supervisory Consultation
Nomination &
(1 corporate director,
Committee members
2 outside directors)
Audit (6 corporate directors, 2 outside directors) Remuneration Committee
Proposal
■ Management Council
Committee
Cooperate Risk Management
The Management Council, at which directors and operating officers attend, are held once or twice a Committee
month in order to undertake the management activities based on the policy approved by the Board as Representative Directors Sustainability Promotion
Committee
well as aiming at prompt decision making and flexible business operation. The Company has introduced
Management Council
an operating officer system that provides a clear segregation between managerial decision making and Compliance Committee
supervisory functions on the one hand and the execution of operations on the other, and there are Report Quality Control
Audit Committee
sixteen operating officers (including two female operating officers) who are not serving concurrently as
Cooperate Operating Officers ICT Committee
directors.
Internal Auditing Business Units/Subsidiaries Environmental
Department Committee
Internal Audit
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Nihon Kohden has established the policy on determining the amounts and methods of calculation of As regards restricted stock remuneration, the Company shall, in principle, allot shares of the Company’s
directors’ remuneration which would further link with performance and shareholder value as well as aiming common stock every year, after concluding an agreement on allotting restricted stock between the
at the transparency in management and ensuring growth and profitability in mid- to long-term. The method Company and each director (excluding Audit & Supervisory Committee members and outside directors).
for determining the policy is established through resolution by the Board of Directors based on a report of The number of shares of restricted stock to be allotted shall be determined based on the position of the
the Nomination & Remuneration Committee, which is a voluntary advisory committee under the Board. allottee. To encourage the sharing of value with shareholders over the mid- to long-term, the transfer
Remuneration of directors shall be linked to shareholder value so as to function effectively as an restriction period shall be from the grant date of the restricted stock to the date when each director
incentive for continuously improving the Company’s corporate value. Remuneration of each director retires from the position of director or operating officer.
shall be determined at an appropriate level based on their respective responsibilities.
Remuneration of directors (excluding Audit & Supervisory Committee members and outside directors) ■ he ratio by types of compensation for directors (excluding Audit & Supervisory Committee
T
shall consist of a base salary as fixed monthly compensation, bonuses as performance-based members and outside directors)
compensation reflecting short-term business performance, and restricted stock remuneration as an The ratio by types of compensation for directors shall be reviewed by the Nomination & Remuneration
incentive to continuously improve the Company’s corporate value over the mid- to long-term. Committee, based on the remuneration levels of benchmark companies whose business scale is similar
Remuneration of Audit & Supervisory Committee members and outside directors, who are responsible to the Company. The weighting of performance-based compensation shall be higher for the higher
for supervisory functions, shall consist of the fixed monthly compensation only. positions. While respecting the report by the Nomination & Remuneration Committee, the Board of
Directors shall determine the details of remuneration for each director within the range of the ratio by
■ The fixed monthly compensation types of compensation indicated in the report. The amount of remuneration shall be determined by
The fixed monthly compensation shall be determined based on the director’s position, responsibilities, resolution of the Board of Directors, which shall have the authority to determine the amount of basic
and years served as director, comprehensively taking into consideration the level of other companies, salaries for each director as well as the evaluation and allocation of performance-based compensation
the Company’s business performance, and the level of employee salaries. based on the performance of the business for which each director is responsible. The Board of Directors
shall consult the Nomination & Remuneration Committee on the draft remuneration plan and obtain a
■ Performance-based bonuses report from the Committee to ensure that the Board exercises its authority appropriately. The Board of
Performance-based bonuses shall reflect key performance indicators (KPI) to raise awareness of the need to Directors shall also resolve the number of shares to be allocated to each director as restricted stock
improve the Company’s business performance in each fiscal year. The target performance indicators and remuneration based on the report of the Nomination & Remuneration Committee.
their values shall be in line with the medium-term business plan and set at the time of the formulation of the
plan. The target values shall be reviewed as appropriate in accordance with the report of the Nomination & ■ The remuneration of Audit & Supervisory Committee members
Remuneration Committee in response to environmental changes. The degree of achievement of the target The remuneration of Audit & Supervisory Committee members shall consist of fixed monthly
values shall be used as a common evaluation index for all directors. Individual evaluations shall be conducted compensation only from the perspective of placing importance on the independence and objectivity of
according to each director’s area of responsibility. The amount of bonuses shall be calculated based on a management. The amount of remuneration for each Audit & Supervisory Committee member is
variable payment rate of 0% to 200% and the bonuses shall be paid at a fixed time each year. determined by consultation among the Audit & Supervisory Committee members.
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Board of Directors
11 4 5 6
10 8
9 2 1 3 7
Served as Director for 11 years Served as Director for 15 years Served as Director for 8 years Served as Director for 6 years
Attendance at Board Meetings 18/18 (100%) Attendance at Board Meetings 18/18 (100%) Attendance at Board Meetings 18/18 (100%) Attendance at Board Meetings 18/18 (100%)
Date of birth May 28, 1970 Date of birth March 22, 1959 Date of birth June 17, 1959 Date of birth July 15, 1962
Apr. 1995 Joined the Company Apr. 1983 Joined the Company Apr. 1983 Joined The Saitama Bank Ltd. Apr. 1985 Joined the Company
Apr. 2007 President of Nihon Kohden Europe GmbH Apr. 2003 President of Nihon Kohden Kansai Corporation Jun. 2009 Operating Officer of Saitama Resona Bank Limited Apr. 2002 General Manager of Marketing & Business
Apr. 2011 General Manager of Marketing Strategy Apr. 2007 General Manager of Sales Operations Jun. 2011 Senior Operating Officer of Saitama Resona Bank Limited Development Department
Department Jun. 2007 Operating Officer Jun. 2013 Corporate Director and Senior Operating Officer of Oct. 2003 President of Nihon Kohden America, Inc.
Jun. 2011 Operating Officer Jun. 2008 Corporate Director and Operating Officer Saitama Resona Bank Limited Apr. 2008 General Manager of General Affairs and Human Resources Department
Jun. 2012 Corporate Director and Operating Officer Apr. 2011 General Manager of International Operations Mar. 2014 Retired as Corporate Director and Senior Operating Officer of Jun. 2008 Operating Officer
Apr. 2013 General Manager of International Operations Apr. 2013 General Manager of Service Business Division Saitama Resona Bank Limited Apr. 2011 General Manager of Accessories & Consumables Business Operations
Jun. 2013 Corporate Director and Senior Operating Officer Apr. 2014 General Manager of Customer Service Operations Apr. 2014 Joined the Company Apr. 2013 Corporate Director & Senior Operating Officer of
Nihon Kohden Tomioka Corporation
Oct. 2013 CEO of Nihon Kohden America, Inc. Jun. 2015 Corporate Director and Senior Operating Officer Jun. 2014 Operating Officer and responsible for Internal Auditing Department
Apr. 2014 President of Nihon Kohden Tomioka Corporation
Jun. 2015 Representative Director, President and COO Apr. 2016 General Manager of Sales Operations Jun. 2015 Corporate Director and Senior Operating Officer
Apr. 2017 General Manager of Import Business Operations
Jun. 2017 Representative Director, President and CEO Jun. 2017 Representative Director and Executive Operating Apr. 2017 Chief Compliance Officer (current position)
Jun. 2017 Corporate Director and Operating Officer
(current position) Officer (current position) Apr. 2020 General Manager of Global Corporate Administration Operations
Apr. 2019 General Manager of Corporate Strategy Division
(current position) Apr. 2020 General Manager of US Operations (current position)
Apr. 2022 Corporate Director and Executive Operating Officer (current position) Apr. 2022 Corporate Director and Senior Operating Officer (current position)
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Served as Director for 6 years Served as Director for 1 year Served as Director for 3 years Served as Director for 1 year
Attendance at Board Meetings 18/18 (100%) Attendance at Board Meetings 13/13 (100%) Attendance at Board Meetings 18/18 (100%) Attendance at Board Meetings 13/13 (100%)
Date of birth March 20, 1966 Date of birth April 22, 1958 Date of birth April 26, 1965 Date of birth May 24, 1953
Apr. 1988 Joined the Company Apr. 1984 Joined the Company Apr. 1988 Joined Mitsubishi Corporation Apr. 1977 Joined the Ministry of Agriculture and Forestry
Oct. 2003 President of Nihon Kohden Europe GmbH Apr. 2009 General Manager of Engineering Department 2 of Apr. 1993 Registered as an attorney (Daini Tokyo Bar (currently the Ministry of Agriculture, Forestry and
Apr. 2007 General Manager of Sales Promotion Division, Biomedical Instrument Technology Center Association), Joined Anderson & Mōri (currently Fisheries)
International Operations Apr. 2014 General Manager of Engineering Department 2 of Anderson Mōri & Tomotsune) Jul. 2005 Councillor, the Ministry of the Environment
Apr. 2008 Managing Director of Nihon Kohden Trading Biomedical Instrument Business Operations Oct. 1999 Joined Mori Sogo Aug. 2006 Minister’s Secretariat, the Ministry of Agriculture,
(Shanghai) Co., Ltd. Oct. 2016 CTO of Defibtech, LLC (currently Mori Hamada & Matsumoto) Forestry and Fisheries
Apr. 2011 General Manager of China Operations Apr. 2017 General Manager of Biomedical Instrument Business Apr. 2020 Joined Kowa Law Office (to present) Jul. 2007 Director-General of the Kanto Regional Forest Office
Jun. 2011 Operating Officer Operations Jun. 2020 Outside Director of the Company (current position) Mar. 2008 Retired the Ministry of Agriculture, Forestry and Fisheries
Apr. 2013 General Manager of Asia and Middle East Operations Jun. 2017 Operating Officer Mar. 2021 Outside Director of FUJIYA CO., LTD. May 2008 Joined ITO EN, LTD.
Apr. 2015 General Manager of International Business Apr. 2020 Senior Operating Officer and General Manager of (current position) Jul. 2010 Corporate Director of ITO EN, LTD.
Operations (current position) Technology Development Operations Jul. 2014 Managing Executive Officer of ITO EN, LTD.
Jun. 2017 Corporate Director and Operating Officer Apr. 2022 General Manager of Strategic Technology Operations Dec. 2018 Representative Director of Office Sasaya Co., Ltd.
Feb. 2019 President and CEO of Nihon Kohden America, Inc. Jun. 2022 Corporate Director and Senior Operating Officer (current position)
Apr. 2022 Corporate Director and Senior Operating Officer (current position) Apr. 2019 Retired as Advisor of ITO EN, LTD.
(current position) Apr. 2019 Visiting Professor at the Graduate School of Information
& Communication (currently the Graduate School of
Social Design)
Apr. 2020 Professor at Platform for Arts and Science,
Chiba University of Commerce (current position)
9 Shigeru Hirata 10 Shigeru Kawatsuhara 11 Kazuo Shimizu Jun. 2022 Outside Director of the Company (current position)
Outside Director Independent Director Outside Director Independent Director
Corporate Director Audit & Supervisory Committee Member Audit & Supervisory Committee Member
(Full-time Audit & Supervisory Committee Member)
Served as Director for 2 years Served as Director for 7 years Served as Director for 3 years
Attendance at Board Meetings 18/18 (100%) Attendance at Board Meetings 18/18 (100%) Attendance at Board Meetings 18/18 (100%)
Attendance at Audit & Supervisory Committee Meetings 22/22 (100%) Attendance at Audit & Supervisory Committee Meetings 22/22 (100%) Attendance at Audit & Supervisory Committee Meetings 22/22 (100%)
Date of birth May 12, 1961 Date of birth February 14, 1952 Date of birth May 16, 1959
Apr. 1985 Joined the Company Apr. 1975 Joined Toko, Inc. Apr. 1983 Joined Nippon Yusen Kabushiki Kaisha
Apr. 2011 General Manager of General Affairs & Human Apr. 2002 Senior Manager of Sales Department 1, Sales Oct. 1989 Joined Asahi Audit Corporation
Resources Department Operations, Toko, Inc. (currently KPMG AZSA LLC)
Jun. 2011 Operating Officer Apr. 2004 General Manager of Sales Center, Toko, Inc. Oct. 1992 Joined Shimizu Susumu Certified Tax Accountant
Apr. 2014 General Manager of Human Resources Department Jun. 2005 Corporate Director and General Manager of Sales Office
Apr. 2016 General Manager of Finance Department Center, Toko, Inc. Mar. 1993 Registered as a certified public accountant
Apr. 2020 Deputy General Manager of Global Corporate Apr. 2008 President of Toko, Inc. May 1994 Registered as a certified tax accountant
Administration Operations and General Manager of May 2014 Chairman of Toko, Inc. Jan. 2003 Joined Ernst & Young Shinnihon Tax
Finance Department Mar. 2015 Senior Advisor of Toko, Inc. (currently Ernst & Young Tax Co.)
Jun. 2021 Corporate Director (Full-time Audit & Supervisory Apr. 2016 Part-time Advisor of Toko, Inc. Sep. 2013 Joined Shimizu Accounting Office (to present)
Committee Member) (current position) Jun. 2016 Outside Director (Audit & Supervisory Committee Representative Partner of Ryoh-koh Audit Corporation
Member) of the Company (current position) (current position)
Jun. 2020 Outside Director (Audit & Supervisory Committee
Member) of the Company (current position)
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The following are messages from the four outside directors and the overview of meetings of outside directors to exchange
Message from Outside Directors opinions.
Faced with the difficulties posed by a changing economic environment, including the uncertain global Due to the need to coexist with COVID-19, full-scale Green Transformation (GX), and the Ukraine crisis,
situation and higher prices of components and resources, in FY2023, Nihon Kohden entered the final people’s awareness of health, the environment, and safety is changing dramatically. In these times of
year of its Three-year Business Plan, BEACON 2030 Phase I. Regarding one of the key strategies drastic and accelerating changes, it is becoming increasingly important for companies to respond
outlined in the Three-year Business Plan, “Ensure strict compliance and strengthen group governance,” appropriately to the rules and regulations regarding sustainability that are fast becoming mainstream.
we continue to be required to address a range of issues in line with the globalization of management. We need to accurately address ESG and the SDGs, through measures such as business and human
From an attorney’s perspective, I will strive to help Nihon Kohden make further progress through rights initiatives and ensuring compliance in our domestic and international supply chains, as well as
discussions at the Board of Directors meetings while constantly reviewing governance and compliance TCFD and human capital-related disclosures. Everybody in Nihon Kohden needs to work together to
from an external standpoint. Moreover, M&A is an effective tool in global business development. I will ensure we address both sides of an issue: searching for opportunities and avoiding various risks. As a
leverage my experience of involvement in several M&As to consider each deal as a director of Nihon sustainability expert, I will use my knowledge and experience to meet the demands of a wide range of
Kohden and support its global expansion. stakeholders, including investors.
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FY2023 is the final year for strengthening the foundation in the Three-year Business Plan, BEACON 2030 In FY2022, as the Company flexibly responded to the shortage of parts and higher prices of resources
Phase I. In the past few years, COVID-19-related demand and the weak yen have had a positive impact due to Russia’s prolonged invasion of Ukraine, Nihon Kohden achieved operating results that exceeded
on the Company’s sales and income. On the other hand, the increased inventories to respond to the its plan. Meanwhile, we have shifted our U.S. subsidiaries into a holding company structure and are
shortage of parts and the Ukraine crisis, as well as higher prices of components and logistics costs, steadily developing overseas markets, reforming supply chain management, and enhancing
have scarred the Company. I believe that this year, in the post-COVID-19 world, management management efficiency and group governance. During this period of change, it is especially important to
competence will be tested more than ever before. We expect our recurring business to increase due to identify and manage risks from a global perspective. As a member of the Audit & Supervisory
the increased installations of medical equipment. However, while it is essential to respond to tightening Committee, I will supervise the soundness of the directors’ execution of their duties and keep a close
regulations on medical equipment in various countries, keep a close eye on the political situation, and eye on the effective functioning of the compliance and governance structure both in Japan and
manage risks, we need to achieve the goals of the Three-year Business Plan and strengthen the internationally. I will also make recommendations to ensure that executives take appropriate risks,
foundation for the next phase. To achieve those goals, I will work diligently to supervise the management contribute to healthcare and society through technology, and increase the corporate value of the
and provide appropriate advice covering compliance, the environment, and other matters, as an outside Company.
director.
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■ Overview Regarding the main agenda item, “The results of the evaluation of the effectiveness of the Board of
Nihon Kohden has been holding regular meetings for outside directors to exchange opinions and build a Directors,” the board members exchanged their opinions on the following topics.
common understanding since FY2016.
FY2022
With a membership composed entirely of independent outside directors, these
● Review of the term of office of outside directors
meetings are held on a regular basis and are designed to exchange opinions
Aims and build common understanding from an independent and objective ● Establishment of a structure to promote foreign nationals to executive positions
standpoint. The meetings aim at encouraging outside directors to engage in ● Enhancement of briefings to outside directors
lively discussions at the Board Meetings.
● Consideration of the Nomination & Remuneration Committee’s reporting to the Board of Directors
Four independent outside directors, including two members of the Audit &
Members
Supervisory Committee In addition, since FY2021, we have held free discussions, to exchange opinions without setting limits on
themes. Three discussions were held in FY2022, and discussions are also scheduled to be held three
times in FY2023. The meetings are very meaningful as they allow outside directors to freely debate and
Dates for Meetings In FY2022, two meetings were held in May and December. share each other’s recognition on various topics such as Nihon Kohden’s corporate culture, the
globalization of human resources, and the effectiveness of the Corporate Governance Code.
May. The results of the evaluation of the effectiveness of the Board of Directors
Agenda
Dec. Update on the progress in improving the Board’s effectiveness
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Ensuring Thorough Compliance We practice fair and legitimate businesses activities with high ethics.
The Chief Compliance Officer (CCO) is responsible for management, operation, and implementation of Internal Reporting System Internal Reporting Hotline
the compliance program throughout the Company. The Divisional and Local Compliance Officers are Nihon Kohden forbids all forms of retaliation
empowered and authorized to implement, ensure, and enhance the compliance program in each division against individuals who make reports through
Compliance Committee
or subsidiary. The CCO carefully selects these individuals and regularly communicates with them to their supervisors or an internal hotline service in
verify that global policies are implemented. good faith. However, to alleviate any concerns on Report Feedback
the part of the employees making reports, the
Internal Reporting Hotline
Company accepts anonymous reports. In (internal and external channels)
Compliance Training response to the revised Whistleblower Protection
Every year, the Company conducts compliance training for all executives and employees at the Act, which took effect in Japan on June 1, 2022, Report Feedback
workplace level in each division and subsidiary in Japan and overseas (Approximately 5,600 participants the Company has established new rules to
Nihon Kohden Group Employees
in FY2022). Executives and employees first conduct self-study using prescribed materials to check their strengthen the protection of whistleblowers and
level of understanding. Next, we read the materials and discuss it with colleagues in order to deepen further enhance its internal reporting system.
their understanding of compliance. As necessary, Local Compliance Officers in overseas subsidiaries
provide additional training in accordance with local laws, regulations, and policies in each country. In
Preventing Corruption
addition, compliance study sessions are held in each division according to business such as
harassment, Pharmaceutical and Medical Device Act, and sales activities. Furthermore, since FY2021, The Nihon Kohden Code of Ethics and Conduct prohibits any act of illegal bribery or corrupt act towards
compliance training by outside experts has been held on selected compliance risk topics of high Japanese and foreign public officials and ensures compliance with laws and regulations preventing
importance for all executives such as managers of domestic branch offices and domestic business corruption in every region in which Nihon Kohden engages in business, including bribery- and
operations. corruption-related laws in Japan, the Foreign Corrupt Practices Act (FCPA) in the United States, and the
Bribery Act in the United Kingdom. Furthermore, Nihon Kohden has established the Anti-Corruption
Policies, which prescribe detailed rules and procedures to prevent bribery, and ensures thorough
adherence thereto. The Company also asks business partners, including overseas distributors, to
understand and cooperate with Nihon Kohden’s anti-corruption efforts and provides them with the
Nihon Kohden Code of Ethics and Conduct and educational materials related to anti-corruption.
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Initiatives for Global Compliance Formulate and Implement Measures to Prevent Recurrence of Bribery Case
Nihon Kohden introduced the Global Compliance Program in 2017 and is working to ensure thorough In response to the bribery case involving a former employee of the Company that occurred in Japan in
compliance throughout the Group, including overseas sales subsidiaries. In FY2022, we held training for January 2021, meetings of the Committee for Implementation and Management of Recurrence
managers of overseas sales subsidiaries and quarterly online meetings for Local Compliance Officers Prevention Measures, which includes outside members of the Investigation Committee, were held ten
and issued newsletters. We also conducted risk assessments for all overseas subsidiaries to confirm the times. All recommendations of the Investigation Committee have been introduced and implemented.
status of implementation of the Global Compliance Program and identify risks to be addressed in the From FY2023, the Compliance Committee will replace the Committee for Implementation and
future, in order to achieve zero occurrence of serious incidents of non-compliance. In the Three-year Management of Recurrence Prevention Measures in monitoring the status of the establishment and
Business Plan, we will establish more robust compliance structure by addressing the following implementation of preventive measures and ensuring strict compliance.
initiatives: to ensure strict compliance and strengthen group governance and to strengthen internal
control over domestic sales.
1. Strengthening of Governance (4) Establish mutual check procedures with dealers
For further details regarding compliance, please refer to our website. (Completed in October 2022)
(1) Review of the organization
https://www.nihonkohden.com/sustainability/governance/compliance.html ● Established the Compliance & Legal Department in
● Mutual pledge to comply with laws
the Global Corporate Administration Operations
● Periodic questionnaires
(April 2021) ● Establish a whistle-blowing channel for third parties
(Introduced in November 2021/Now operating successfully) ● Ensure that all employees are aware of the internal
reporting hotline
(Newly established lawyer hotline: February 2022)
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Strengthening Risk Management Nihon Kohden strives to make improvements to risk management to ensure it can respond appropriately to various business risks.
Message from Operating Officer The risks present in the execution of business activities have been classified into nine types, and the Risk
I believe that my role as the operating officer in charge of risk management is Management Divisions and Risk-Related Committees have been assigned to each risk type. The Risk
to visualize as much as possible the risks that could become obstacles to Management Divisions provide training and support to operating divisions and subsidiaries with regard to their
Nihon Kohden’s sustainable growth and enhancement of corporate value, and assigned risk types, and report the system improvement and promotion status to the Risk Management
develop and implement countermeasures before the risks become apparent, Supervisory Division. The Risk-Related Committees report to the Board of Directors and Management Council
as well as building and strengthening an advanced company-wide risk on matters including assessments of management system appropriateness, validity, and effectiveness for
management structure to minimize losses. related risk types. The Internal Audit Department reports to the Representative Directors and the Board of
The risks a company faces are not only those inherent within the company, but Directors on risks discovered during audits. In FY2023, the Company will develop a company-wide
nowadays are also more broadly defined, including cyber risks and geopolitical sophisticated risk management framework. The Board of Directors will discuss the important risks and
risks. I will actively supervise the Risk Management Divisions and the Risk- response policies identified by the newly established Risk Management Committee.
Related Committees to control the manifestation of risks and conduct various Fumio Izumida Risk Management Framework
drills to ensure that we can take appropriate actions against external risks such Operating Officer,
as geopolitical risks in accordance with the Business Continuity Plan (BCP). General Manager of Corporate Report
Strategy Division Board of Directors
Through these activities, we aim to ensure the smooth conduct of our business Risk-Related Committees
activities and contribute to realizing our Long-term Vision and achieving the Report
Representative Director Risk Management Committee
targets of the Three-year Business Plan. We appreciate your continued support in these endeavors.
Sustainability Promotion
Management Council Committee
Direction Report
Approach to Risk Management Compliance Committee
Implementation of risk Assessment of the
To ensure the sound and smooth operation of business, Nihon Kohden has established a management management and effectiveness of the Personal Information Protection
reporting on status of management systems Committee
framework to prevent risks in overall business operations and has prescribed methods for dealing with implementation for each risk, etc.
Risk Types Information Disclosure Risks Risk of losses due to inappropriate disclosure of information
The Risk Management Regulations, which set forth the basic policies for risk management, classify risks
into the nine types of risk shown in the right table. Strategic Risks Risk of losses due to incorrect business strategies
Risk of being liable for compensatory damages or decrease in its corporate value due
Human Rights Risks
to human rights violations by the Company or its business partners
Response in the Event of a Risk
The response to be taken when a risk occurs has been set forth in the regulations established for each
risk type.
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as part of its own security measures is required to protect patients’ and customers’ information and
financial assets from cybersecurity threats.
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Quality
As a manufacturer of medical equipment which are
responsible for saving lives, we aim to supply
products and services that provide customers with
safety and peace of mind.
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As a manufacturer of medical equipment which are responsible for saving lives, we aim to supply products and services that
Improving Safety and Reliability provide customers with safety and peace of mind.
(2) We will improve customer service as well as software and manufacturing quality to pursue (3) We will work to shorten downtime and reduce failure rates to achieve high product availability.
customer value. To increase the utilization rates of products used by our customers, we will work to reduce the failure
To enhance services for our customers, we will work to improve daily operations, increase efficiency and and re-repair rates. We will also promote the prompt provision of replacement devices in the event of
speed, and respond to customer feedback in an appropriate and timely manner. In addition to third- malfunctions and the reduction of delivery times of repair parts and repair times.
party evaluations of software design, we will work to reduce product failures after shipment by analyzing
problems in the product manufacturing process and taking measures to prevent their recurrence. (4) W
e will work on human resource development to achieve quality targets and pursue customer
value.
Nihon Kohden has obtained ISO 9001:2015 certification for its quality management system and ISO To achieve the above quality targets and pursue customer value, we will develop human resources by
13485:2016 certification for its medical devices and in vitro diagnostics. The Company has also obtained providing practical training across all Nihon Kohden departments.
numerous certifications and accreditations including the Medical Device Single Audit Program (MDSAP)*
certification. Our Reliability Center has obtained laboratory accreditation in accordance with ISO
17025:2017. In addition, the Company has responded to the Medical Device Regulation (MDR) effective
in May 2021 and the In Vitro Diagnostic Medical Device Regulation (IVDR) effective in May 2022 in
Europe.
DSAP is a program to realize a single survey on the compliance and validity of QMS surveys introduced by medical device regulatory authorities in
M
five countries: U.S., Canada, Brazil, Australia, and Japan.
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Strengthen Our Global Quality Management System ISO 9001/ISO 13485 Certification in the Nihon Kohden Group
Nihon Kohden is working to strengthen its quality management system and regulatory affairs functions
ISO 9001 ISO 13485
for obtaining approval in each country in order to supply products globally in a timely manner. Quality Management Medical Device Sector
System Standard
Quality Management System
Certification Date Certification Date
President
Nippon Bio-Test Laboratories Inc. May 2014 -
Direction Report
Neurotronics, LLC - October 2009
Product Sales and Overseas Overseas Overseas Nihon Kohden Europe GmbH November 1995 November 1995
Development Production Service
Purchased Logistics Sales Production Development
Departments Departments Department
Department Department Companies Companies Companies Nihon Kohden Firenze S.r.l. December 1995 December 1999
General
General General General Manager of General General General General
Managers of Managers of Manager of
Domestic
Manager of Managers of Managers of Managers of Software Team Srl July 2013 July 2013
Product Service/ Overseas Overseas Overseas
Development Production Purchased Sales Maintenance Sales Production Development
Department Shanghai Kohden Medical Electronic Instrument Corp. December 1995 December 2003
Quality Quality Quality Quality Quality Quality Quality Quality
Control Control Control
Control Control Control Control Control Committees Committees Committees Nihon Kohden Malaysia Sdn. Bhd. - April 2015
Committees Committees Committee Committee Committee in Overseas in Overseas in Overseas
in in in in in Sales Production Development
Departments Departments Department Department Department Companies Nihon Kohden India Pvt. Ltd. August 2018 August 2018
Companies Companies
Net Promoter Score (NPS) Surveys NPS Survey Results in FY2022 (Overall Score)
(%)
One of the material issues in sustainability at Nihon Kohden is to pursue the highest level of quality in the 0 20 40 60 80 100
world across the value chain. We set Net Promoter Score* as a KPI and started the survey in FY2021. In
FY2022, we conducted the second survey. The overall NPS survey score in FY2022 improved by 1.3 NPS
21.7 52.5 25.7
-4.0
points to -4.0 from -5.3 points in FY2021.
In terms of individual scores, the score for Contribution to Operational Efficiency improved by 0.1 points
and the score for Cost-effectiveness of After-sales Service worsened by 0.2 points, indicating that ■ Promoters ■ Passives ■ Detractors
improvement is needed. Through the NPS survey, we will make continuous improvements by analyzing
areas that need improvement and taking measures to address then, including those areas that have
NPS Survey Results in FY2022 (Individual Scores) 10-point scale for each item FY2022 FY2021
been highly evaluated by our customers. As a partner to medical institutions and medical professionals,
we will continue to work together with them to solve healthcare issues.
Corporate Image and Contribution to Customer Satisfaction with Sales and Services
The NPS® survey is conducted to quantify the degree of attachment to and trust in a company or brand, which has traditionally been difficult to measure, Value Degree of
in order to evaluate the customer’s experience at the point of contact with the company and apply it to improvements through future business activities. understanding of
Brand image Ability to propose
Since the NPS® survey has a high correlation with business growth rates, it is used by listed companies in the U.S. and Europe and is attracting attention Technological Cost-effectiveness of customer needs
in Japan as a new indicator alongside customer satisfaction. Contribution to 7.8 development after-sales services 7.5
appropriate products
and services
medical safety capability
NPS® is calculated by the following method.
Repair response in the 7.1 7.5
Customers were asked to rate the service on a 10-point scale, with 9 to 10 being “promoters,” 7 to 8 being “passives,” and 0 to 6 being “detractors.” The 7.7 7.5 event of a failure and Adherence to
percentage of promoters (%) to the total number of respondents was subtracted from the percentage of detractors (%), and the resulting number is the promptness in arranging for delivery deadlines
NPS value, which is expressed between -100 and +100. an alternative device and provision
Contribution to
NPS® is a registered trademark of Bain & Company, Fred Reichheld, and Satmetrix Systems (now NICE). operational Product cost- 7.8 7.5 of necessary
information when
Net Promoter System, Bain & Company’s Website efficiency effectiveness needed
https://www.bain.com/consulting-services/customer-strategy-and-marketing/customer-loyalty/ 7.7 7.1 Support such as
explanation of
operation after 7.8 7.4 Ease of obtaining
information on
purchase of products and
products services
7.6 7.7
Contribution to Product quality, 7.8 7.7
medical use stability, and Support at the time Ease of understanding
durability of installation explanations
7.9 7.7
8.1 7.8 Ease of making inquiries Abundance of
Intention to Product functionality, knowledge
continue to use performance,
and ease of use
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DIC is an accreditation program established by the Japan Society of Medical Instrumentation (JSMI) to cultivate personnel who can contribute to patient
M
safety and the improvement of healthcare quality.
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Ensuring Fair Trade Practices We aim to achieve fair business practices across the entire value chain including our business partners as full participants.
Adherence to the Nihon Kohden Sustainable Procurement Standards ■ Results of the Sustainability Questionnaire in FY2022
Nihon Kohden provides regular compliance training to all of its employees to ensure they have correct In FY2022, we asked 100 of our business partners to answer our Sustainability Questionnaire and were
understanding and awareness of sound and fair business practices. Departments involved in grateful to receive cooperation from all of them. The questionnaire consisted of 22 questions in six areas:
procurement provide annual training on specific laws and regulations affecting their operations, such as legal compliance and fair operating practices, human rights, quality, the environment, information
the Fair Competition Code and the Act against Delay in Payment of Subcontract Proceeds. In FY2022, management, and sustainability. In terms of questions about legal compliance and fair operating practices,
58 people attended these training sessions. and human rights, initiatives and implementation were underway, planned or under consideration in more
Nihon Kohden requests business partners to conduct self-assessment on their environmental and than 90% of our business partners. In previous questionnaires, multiple business partners reported that
quality activities, and, moreover, checks business partners’ understanding of and adherence to the they have engaged in social contribution initiatives. We continue to work with our business partners to
Nihon Kohden Sustainable Procurement Standards through their answers to the Sustainability deepen mutual understanding of our sustainable procurement standards and ensure fair trade practices.
Questionnaire conducted every year. Opinions expressed through the Questionnaire are fed back to (%)
procurement departments and utilized to realize fair and responsible procurement. 0 20 40 60 80 100
Human rights 98 2
Quality 79 7 8 6
The environment 65 14 16 5
Information management 73 12 14 1
Sustainability 57 15 27 1
■ Initiatives and implementation underway ■ Initiatives planned or under consideration ■ No initiatives or introductions ■ No relation
Human Rights/ Enhancing Information Disclosure Nihon Kohden’s Contributions Financial and
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In FY2022, we conducted a Supplier Questionnaire for approx. 76 suppliers both in Japan and
1. Establishment and operation of environmental management systems as the basic policy
internationally and got responses. on environmental initiatives
The results of the survey revealed significant differences in the status of initiatives among suppliers. 2. Appropriate management in place to ensure compliance with environmental laws and
While many suppliers are working to build systems and implement various measures in the areas of regulations
3. Identification of cases of non-compliance
Human rights, Quality, and Governance, many are facing challenges in the area of the Environment, 4. Reduction of Green House Gas emissions
such as climate change response initiatives and environmental data acquisition. Environment 5. Reduction of chemical substances specified by laws and regulations in manufacturing
processes and products
6. Initiatives for waste reduction activities
■ Measures to reduce risks 7. Sustainable and efficient use of resources (energy, water, raw materials, etc.)
For suppliers with low scores, we are considering taking actions such as providing feedback on the 8. Management of wastewater and exhaust and reduction of air, soil, and water pollution
9. Initiatives to reduce water consumption
survey results and requesting improvements. Additionally, several suppliers have reported events in the 10. Initiatives for biodiversity conservation
areas of Health and Safety and Information Security that have the potential to develop into serious
incidents or accidents. In those cases we will promptly confirm the facts and support the supplier in 1. Basic policy on human rights
taking appropriate corrective measures. 2. Promotion system for respect for human rights
3. Identification of cases of non-compliance
4. Identification and assessment of risks regarding respect for human rights in operations
5. Prohibition of forced labor practices or acts and hiring of underage children
6. Management of night work and hazardous work
7. Appropriate management of foreign workers
Human Rights 8. Prohibition and appropriate management of discrimination and harassment
9. Prohibition and appropriate management of discrimination in employment
10. Appropriate management of employment of persons with disabilities
11. Proper wage payment and compliance with laws and regulations
12. Appropriate management of working hours
13. Appropriate measures regarding the right to organize, collective bargaining, and
collective action
14. Establishment of consultation and reporting channel for human rights
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1. Establishment and operation of quality management systems as the basic approach to 1. Promotion system for information security
quality and safety of products and services Information 2. Identification of cases of non-compliance
2. Identification of cases of non-compliance Security 3. Initiatives to protect personal information
3. Compliance with the safety standards specified by laws and regulations 4. Defensive measures including protection against cyber-attacks
Quality
4. Responsible marketing and advertising
5. Supplier’s responsibility for the supply chain
6. Advance measures and response procedures for responding to emergency situations
7. Advance measures and response procedures for handling a recall or complaint For further details, please refer to our website.
https://www.nihonkohden.com/sustainability/engagement/suppliers/nk_procurement.html
Human Rights/
Human Resources
We respect the human rights of all stakeholders and strive
to foster a corporate culture in which employees take pride
in their contribution to healthcare and to our mission.
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Respect for Human Rights We strive to contribute to a sustainable society by promoting respect for human rights.
Message from Operating Officer We conduct employee satisfaction surveys to foster a corporate culture of pride in contributing to
My role as the operating officer in charge of human resources is to healthcare, which is one of material issues for sustainability in the Three-year Business Plan. The
achieve sustainable growth for Nihon Kohden by realizing diversity in FY2021 survey was conducted for approximately 4,400 employees in Japan. The ratio of positive
employees and work styles. respondents was higher for Empathy with Vision and Value, while the ratio of positive respondents was
To achieve this goal, we need to create comfortable and fulfilling relatively lower for Career Support. We conducted a similar survey in FY2022 as well as holding
workplaces, and I am focusing on the following four initiatives. meetings by department to explain the survey results and implementing measures to improve
satisfaction levels in each department. In addition to continuing the survey, we plan to promote group-
wide initiatives, introduce case studies on efforts to improve satisfaction in each department, and initiate
● Promoting work style reforms through increased engagement surveys at overseas subsidiaries. We are committed to creating a work environment that is comfortable
● Promoting diversity & inclusion and rewarding.
● Implementing human rights due diligence
Kenji Furukawa
● Promoting anti-harassment measures and restraining misconduct
Operating Officer,
Deputy General Manager of
Global Corporate Administra-
tion Operations,
General Manager of Human
Under the Three-year Business Plan, BEACON 2030 Phase I, we are Resources Department
working to foster a corporate culture of pride in contributing to healthcare,
by introducing a new personnel system and expanding our international
training program based on the Core Values of the Company. In terms of
sustainability promotion, we have identified human rights and human resources as one of 12 material
issues to be addressed and are working to resolve these issues through our corporate activities.
Regarding human rights due diligence, we have developed an internal structure to identify, prevent, and
mitigate negative impacts on human rights. In FY2021, we conducted a questionnaire survey at each
company of the Nihon Kohden Group in Japan and overseas, as well as at our suppliers. In FY2022, we have
created a risk map based on the questionnaire survey results to evaluate and identify human rights risks at
Nihon Kohden. We will continue our efforts to reduce human rights risks, establish internal and external
reporting channels and response processes and structures, conduct ongoing questionnaire surveys at Group
companies and suppliers in Japan and overseas, and provide internal awareness training.
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Basic Approach to Respect for Human Rights In addition to supporting the Children’s Rights and Business Principles (CRBP), Nihon Kohden provides
The Nihon Kohden Charter of Conduct, which the Company and its executive officers and employees products and services that contribute to the protection of children’s rights and ensure their safety
have a duty to abide by, states that we have respect for human rights at all times. The Nihon Kohden through its business activities. To protect the right to life under the Convention on the Rights of the
Code of Ethics and Conduct sets out the ethical and responsible actions we will take to guarantee Child, we have developed and provide electrodes and sensors that are gentle enough for the delicate
respect for human rights. In July 2015, Nihon Kohden signed the UN Global Compact. We are skin of low-birth-weight infants to support their health and growth.
committed to contributing to a sustainable society through promoting initiatives in accordance with the We will continue our efforts to protect children’s rights by providing electrodes with friendly designs that
Ten Principles of the UN Global Compact in the four areas of human rights, labor, the environment, and reduce the anxiety of children suffering from diseases and by promoting the adoption of our resuscitation
anti-corruption. monitor for neonate to reduce the mortality rate and serious
Recently, society is paying more attention to corporate responsibility and respect for human rights in sequela of newborn babies.
accordance with the globalization of corporate activities. As it is essential for Nihon Kohden to respect he United Nations Global Compact, the Convention on the Rights of the Child, the Children’s
T
the human rights of stakeholders, we established the Nihon Kohden Group Human Rights Policy in Rights and Business Principles, the Convention Concerning the Prohibition and Immediate
Action for the Elimination of the Worst Forms of Child Labor (ILO Convention No. 182), etc.
December 2020. Nihon Kohden strives to contribute to a sustainable society by promoting efforts to
respect human rights based on this policy.
The Vitrode N, Disposable Electrode
The TL-273T/274T, Disposable SpO2 probe
For further details on the Nihon Kohden Group Human Rights Policy, please refer to our website.
https://www.nihonkohden.com/sustainability/social/rights.html
Human Rights Due Diligence ■ Human Rights Impact Assessment/Human Rights Risk Assessment
Nihon Kohden has established a human rights due diligence structure to identify, prevent, and mitigate In promoting sustainability initiatives, Nihon Kohden engages with all of its stakeholders, including
negative impacts on human rights. customers, shareholders and investors, business partners, local communities, and employees.
In FY2021, as part of our efforts to strengthen the promotion of sustainability management, we conducted Therefore, human rights risks are also expected to include a wide variety of issues such as
a questionnaire survey about the environment, human rights, quality, and governance at each company of discrimination or harassment based on race or gender, overwork, child labor, the leak of personal
the Nihon Kohden Group in Japan and overseas, as well as at our suppliers. We have also confirmed the information, and environmental pollution.
status of human rights-related efforts, identified relevant issues, and formulated a three-year road map. We focused on approximately 30 human rights issues for impact assessment based on the United
In FY2022, based on the results of the questionnaire survey, we evaluated human rights risks and identified Nations Global Compact, the ILO Declaration on Fundamental Principles and Rights at Work, the
key human rights issues, taking into account their impact on our business. Stakeholder Engagement Program of the Caux Round Table Japan Committee, and the Handbook for
Since the situation surrounding human rights is constantly changing, we will continue our efforts to obtain Management that Respects Human Rights formulated by the Japan Business Federation (KEIDANREN).
the latest human rights information and standards, and periodically review our procedures and our In the FY2022 analysis, we evaluated these 30 human rights issues by stakeholder on two axes,
prioritization of issues related to human rights as necessary. severity*1 and likelihood of occurrence*2, based on the results of past questionnaire surveys.
1 Severity: Evaluates the extent of the impact of a human rights risk when it occurs, and the time and cost required to remediate the risk after it occurs.
2 Likelihood of occurrence: Evaluates the likelihood that a human rights risk will occur.
Overview of Our Human Rights Due Diligence
5 2
Identifying and assessing
Disclosure of
information
1 negative impacts on
business relationships
Developing a
Human Rights
Policy and
4 Roadmap
3
Tracking implementation Preventing and mitigating
status and results negative impacts
■ Identification of human rights risks We recognize that items that were not identified as key human rights issues are also human rights issues
As a result of the evaluation of the impact of approximately 30 human rights issues, we have identified that need to be monitored on an ongoing basis.
“Excessive and unreasonable working hours” as well as “Sexual harassment, power harassment, and We also evaluated the impact of human rights issues on Customers/Patients, Local communities/Society,
harassment related to pregnancy, childcare, and nursing care, etc.” as the Group’s key human rights issues. and Suppliers/Partners, and identified key human rights issues affecting these groups.
We will regularly reevaluate these critical human rights issues to prevent or mitigate negative impacts.
❶ Sexual harassment, power harassment, and harassment related to pregnancy,
Identified human rights risks Executives/ childcare, and nursing care, etc.
Employees
❷ Excessive and unreasonable working hours
❶
Large
➐ Child labor, night work for young workers, and hazardous work
Executives/Employees Customers/Patients ❿ Lack of safety of products and services due to inadequate quality checks and
inspections
Suppliers/Partners
As measures to reduce and mitigate human rights risks, we will continue to monitor domestic and As a measure to reduce and mitigate human rights risks, Nihon Kohden has conducted annual
overseas Group companies and suppliers, and systematically work to reduce risks. questionnaire survey and monitoring of Group companies and suppliers in Japan and overseas.
At domestic and overseas Group companies, we will promote risk reduction efforts concerning Going forward, we will identify domestic and overseas Group companies as well as suppliers with high
excessive and unreasonable working hours and sexual harassment, power harassment, and harassment levels of risk based on the key human rights issues identified in FY2022 and the results of each
related to pregnancy, childcare, and nursing care, etc., which we have identified as key human rights questionnaire. We will also conduct on-site audits and provide feedback on the results of the surveys
issues. and collaborate to create remediation plans to systematically reduce risks.
For further details on the results of the Supplier Survey in FY2022, please refer to the Ensuring Fair
Risk Measure Trade Practices page.
To reduce excessive and unreasonable working hours, such as long working hours and
continuous work, we started full-scale operation of the Flextime System and Teleworking
Excessive and
System in January 2023 to promote flexible work styles and improve productivity. We also
unreasonable working
monitor monthly overtime hours and continuously implement necessary measures to
hours
reduce the risk of long working hours, such as issuing reminders and guidance to
departments that exceed the standards related to the long working hours.
Sexual harassment,
In addition to conducting harassment education through e-learning for all executives and
power harassment,
employees, we provide harassment training on how to handle harassment reporting and
harassment related to
consultation is conducted annually for all newly appointed managers. By continuing these
pregnancy, childcare,
training programs, we will reduce the risk of harassment.
and nursing care, etc.
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Initiatives to Respect Human Rights ■ Human rights Education and Training for Enployees
In accordance with the Nihon Kohden Group Human Rights Policy, we are working to prevent all forms Nihon Kohden has conducted workplace training and e-learning education for all executives and
of discrimination and harassment. employees to prevent harassment and ensure compliance with labor-related laws and regulations, as
In FY2022, no human rights violations or harassment leading to disciplinary dismissal from employment well as to promote understanding of human rights risks and human rights policies.
occurred. We also strive to prevent human rights abuses through training for newly appointed managers that
includes a lecture on preventing harassment as well as procedures for responding to harassment reports
■ Structure and consultations. In addition, we prohibit discrimination on the basis of gender identity and sexual
Nihon Kohden’s human rights initiatives are orientation, and deepen employees’ understanding of LGBT people and other sexual minorities through
Sustainability Promotion Committee
discussed by the Sustainability Promotion (Key human rights-related matters discussed by the Company Newsletter.
Committee, which is chaired by the Deliberative the Committee are submitted to and reported to The number of executives and employees who have participated in human rights training in FY2022 was
body the Board of Directors in accordance with the
President, and the results of the discussions Standards for Procedures for Requesting 4,485.
are reported to the Board of Directors. The Deliberations and Making Decisions.)
Corporate Strategy Division and the Human ■ Considerations for Social Minorities
Resources Department play a central role in Nihon Kohden is committed to eliminating discrimination against LGBT people (sexual minorities) and
Corporate Strategy Division, Human Resources
the implementation of human rights Secretariat other social minorities as well as realizing a comfortable and fulfilling work environment that recognizes
Department
initiatives within the Company. diversity.
Initiatives to Enhance We believe that each employee’s ability to maximize their potential and fully demonstrate their capabilities leads to sustainable personal
the Value of Human Capital and organizational growth. We will foster an organizational culture in which diverse human resources can play an active role.
In its Management Philosophy, Nihon Kohden aims to create a fulfilling life for our employees. We Introduced a New Personnel System
believe that each employee’s ability to maximize their potential and fully demonstrate their capabilities With a view toward realizing our Long-term Vision for 2030, we are promoting the development of
leads to sustainable personal and organizational growth. We will foster an organizational culture in which human resources who embody our Management Philosophy, Long-term Vision, and Core Values as well
diverse human resources can play an active role. We aim to promote the sustainable growth of as aiming to establish a human resource management system that is globally consistent and coherent.
individuals and organizations, improve productivity, and create new value through human resource In April 2021, we introduced a new role-based personnel system for managers and established an
investments including human resource development and workplace environment improvement. expert course to facilitate the promotion of highly skilled persons, in addition to a management course to
To realize the Long-term Vision, BEACON 2030, it is important for employees working at Nihon Kohden develop management level employees.
to have a sense of satisfaction and pride in contributing to healthcare, to act autonomously, and to In April 2023, we also introduced a new personnel system for general employees. Through a role grading
continue to take on new challenges. As a foundation for the Company and employees to meet each system based on the size of the work roles expected of each employee, we will create opportunities for
other’s expectations, we introduced a new personnel system, human resources development programs, ambitious and skilled employees to actively take on challenges and grow themselves. Along with the
and various systems to realize flexible work styles, to increase employee engagement and foster an introduction of a new personnel system for general employees, we also extended the retirement age to
organizational culture that leads to more challenges and growth. 65 in stages and revised the reemployment system.
■ Management Philosophy Training at Overseas Subsidiaries As a measure to strengthen governance in terms of human resources, we formulated the Global Human
We believe that it is important for employees of the Nihon Kohden Group with different backgrounds from Resources Management Guidelines in March 2022. All Group companies follow the same policies and
various cultures and languages around the world to act in accordance with common goals and Core Values. standards for personnel management to avoid personnel management risks. The Human Resources
Nihon Kohden provided educational materials to the entire group and started an education program about Department at the Nihon Kohden Head Office and the human resource managers of each Group company
its Management Philosophy throughout the Group in 2019. Each employee can systematically learn about hold individual meetings so that each HR department can function effectively as a partner for the
the history of the Company’s foundation, Management Philosophy, and Core Values. The program provides development of business activities. In addition to making improvements in areas that do not conform to these
an opportunity for employees to deepen their guidelines, we will establish a structure for each HR department to collaborate on a global basis through
understanding of the Company culture and regular communication.
recognize the value and meaning of their jobs. In
addition to the education program about its ■ Core Values
Management Philosophy, Nihon Kohden has also
developed various unique measures in each country
to promote understanding of its Core Values and
instill Nihon Kohden’s DNA.
The Global HR meeting has been held biannually
since FY2021, bringing together human resources
and education managers from each Group company
Core Value Awards held in Brazil
to share each country’s unique measures for
spreading the Management Philosophy and Core
Values, as well as to discuss new employee training
and the fostering of corporate culture. In December
2022, Nihon Kohden established the Core Values
Promotion Project in Japan through an internal open
recruitment system. The project members from
various divisions and job categories are studying
“how to help employees around the world
understand and practice the Core Values,” and are
creating and developing measures to achieve this
goal. Online Global HR Meetings
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Diversity & Inclusion Promotion ■ Promotion of Women’s Participation and Career Advancement
In accordance with Act on the Promotion of Women’s Active Engagement in
Professional Life, Nihon Kohden has formulated an action plan and
Policy promoted the development of a workplace environment in which women
By respecting diversity and creating a workplace environment in which each individual can can play an active role. Nihon Kohden has also promoted initiatives to
demonstrate his/her full potential, we seek to improve job fulfillment, create new value, invigorate realize a comfortable and fulfilling work environment for not just
the organization, and enhance corporate value. women but all employees of Nihon Kohden, so that each employee can
demonstrate their abilities to the fullest. We obtained the Women’s
Participation Promotion Act certification mark called Eruboshi from the
Nihon Kohden has established Diversity as one of its Core Values and promotes diversity & inclusion to Minister of Health, Labour and Welfare in 2021.
realize its Long-term Vision, BEACON 2030. We develop the new potential of our teams by leveraging
diversity based on empathy and trust. We respect the individuality of each person and strive to create We formulated an action plan for 5 years from April 1, 2021 to March 31, 2026 and set a target of
workplace environment where a diverse range of people can work with vigor and enthusiasm, regardless of increasing the ratio of female managers to at least 12% and the ratio of male employees taking childcare
gender, age, disability, nationality, race, other diverse attributes, values, or work styles. leave to at least 30%.
The ratio of female managers in FY2022 was 8.6% in the parent company, which was an increase of 0.7
points from the previous fiscal year. Female executives account for 11.1% of all executives (1 female
outside director and 2 female operating officers).
To encourage male employees taking childcare leave, prior to the revised Child Care and Family Care
Leave Law which is being enforced in stages from April 2022, we worked to raise awareness within the
Company by publishing information on the rate of childcare leave taken in the Company Newsletter,
together with interviews with male employees who have taken childcare leave and an overview of the law
revision. In addition, we have formulated a new guidebook for male employees to help them balance
childcare and work. We have also decided to subsidize a part of an employee’s wage for the first month of
childcare leave starting from FY2022. As a result of these efforts, the ratio of male employees taking
childcare leave in FY2022 was 38.9%, exceeding the Company’s target. Additionally, we have introduced
a spousal maternity leave system as our unique system to support male childcare, and the combined
take-up rate of this system with childcare leave was 81.4%. We will continue to develop an environment
where any employee who wishes to take childcare leave can do so, regardless of their workplace or job
category.
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■ Mentor System
Since FY2015, Nihon Kohden has established a mentoring program covering mainly newly appointed
managers and other female employees in mid-career. Mentors with extensive knowledge and industry
experience help them resolve career development issues and support their personal growth. The
program aims to help expand female employees’ horizons and strengthen their internal networks
through dialogue with mentors, as well as develop their humanity, judgment, and leadership skills, and Exchange of opinions on the theme of balancing childcare and work
motivate them to set themselves more ambitious goals. The program has been expanded to include
male employees since FY2021 to support the career development of a larger number of human
resources.
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Topics
■ Targets and Results for Ensuring Diversity in Core Human Resources
Current status
リスクの定義 Target Achievement period
(As of March 31, 2023)
Holding a Seminar on Unconscious Bias Management
The ratio of female managers*1 8.6% 12% or more April 2026
In October 2022, Nihon Kohden held a diversity promotion seminar for supervisors entitled
Unconscious Bias Management. The seminar has been held three times for the managers of 1 female director,
Appointment of female directors and
2 female operating 4 persons or more April 2026
domestic sales branches and area services. For the first time, this fourth seminar was attended operating officers*2
officers
by 115 managers in each R&D department. Through a lecture and work on the impact of
The ratio of female directors and
unconscious bias on people and organizations, participants were able to confront their own 11.5%*4 30% or more End of June 2030
operating officers
unconscious bias. It also provided an
opportunity for managers who do not normally The ratio of foreign nationals in CXO*3 or Maintain the current
53.3% 50% or more
interact with each other to share their workplace higher positions at overseas subsidiaries status
situations.
The ratio of mid-career hires in Maintain the current
We will continue to implement training programs 42.6% 40% or more
management positions*1 status
to promote diversity & inclusion, aiming to
1 Employees at the parent company and domestic sales branches.
realize a workplace environment where each 2 Directors and operating officers at the parent company.
and every employee can play an active role 3 C-suite such as CEO, COO, CTO, CFO.
4 As of June 30, 2023.
freely and vigorously without being constrained
by unconscious bias or prejudice. ■ Differences in Wages between Male and Female Workers
Unconscious Bias Management Training
Ratio of Women’s Wages to Men’s Wages in FY2022 There are no gender differences in the Company’s wage
structure or system. However, there are differences
Total workers 69.8%
between men and women in terms of job classifications
For further details on human resource development, diversity & inclusion promotion, and work-life balance, please refer to our website. Permanent employees 74.7% and management ratios, resulting in differences in
https://www.nihonkohden.com/sustainability/engagement/employees.html wages. In order to realize the Company’s goal of “an
Part-time and fixed-term
contract employees 91.2% organization where each individual can maximize their
potential and fully demonstrate his/her full potential,” we
Parent company only. The figure is calculated in accordance with the
provisions of the “Act on the Promotion of Women’s Active will work on measures to promote diversity & inclusion,
Engagement in Professional Life” (Act No. 64 of 2015).
such as increasing the ratio of female managers.
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The program aims to encourage employees to make effective use of the time before and
Refresh Day
after work for personal relaxation, by setting aside days with shorter working hours.
Abolition of designated The previous Casual Days (Wednesdays and Fridays) were abolished to allow
Casual Days employees to work in workplace appropriate attire regardless of the day of the week.
A system where the Company subsidizes a part of an employee’s wages for the first
Wage Subsidies during
month of childcare leave, in addition to the childcare leave benefits from
Childcare Leave
unemployment insurance.
Trophies for the Good Job Award Good Job Award ceremony
For further details on programs to support work-life balance, please refer to our website.
https://www.nihonkohden.com/sustainability/engagement/employees/reform.html
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Employee Satisfaction Survey We will continue to promote initiatives to realize a healthy society. The employee absence rate was 0.5% in
Nihon Kohden has set Employee satisfaction as a KPI in order to ■ The Ratio of Positive Respondents FY2022.
foster a corporate culture of pride in contributing to healthcare, FY2022 FY2021
which is one of material issues for sustainability in the Three- Examples of health support payment
Empathy with Vision and Values
year Business Plan. In FY2022, as the survey in FY2021, an Various cancer examinations, stomach examinations, osteoporosis examinations, hepatitis virus
76%
employee satisfaction survey was conducted for all 4,400 73% 59% examinations, abdominal ultrasound examinations, brain examinations, dental examinations,
Motivation Workplace
employees of the Nihon Kohden Group in Japan. The ratio of Environment comprehensive medical examinations, smoking cessation outpatient services, etc.
positive responses was calculated for all 46 items in eight
56% 70%
categories. As a result of company-wide and departmental Career Leadership /
measures implemented based on the results of the FY2021 Support Organizational Harassment Prevention Initiatives
Management
survey, we surpassed the FY2021 levels in all eight categories in Nihon Kohden aims to contribute to the world by fighting disease and improving health with advanced
FY2022. In particular, Empathy with Vision and Values and 72% 78% technology and to continue to be an ethical company that is widely trusted by society. In its Ethical
Organizational Human Relations /
Human Relations/Solidarity continued to show higher levels of Culture 67% Solidarity Company Declaration, the Company declares that Nihon Kohden respects the human rights of all
Evaluation /
satisfaction. On the other hand, the ratio of positive respondents Compensation people, and do not discriminate or commit any acts which infringe on the personality or dignity of an
for Career Support and Workplace Environment was still individual. The Company also strives to prevent harassment by clearly prohibiting it in the Nihon Kohden
relatively lower, albeit higher than in FY2021. We will share the survey results and employee opinions Code of Ethics and Conduct, Nihon Kohden Group Human Rights Policy, and Employment Regulations.
with all executives, and continue to implement related measures on both a company-wide and In order to prevent harassment and quickly resolve it when it occurs, we have established an internal
departmental basis. consultation counter as well as an external consultation counter which anyone can feel free to consult,
and we respond appropriately to consultations. At the time of consultation, we make every effort to
ensure that the privacy of the consultees and actors is strictly observed, and that they are informed that
Health Management of Employees they will not be treated unfavorably in any way for reasons such as the content of the consultation or
To help our employees realize an optimal work-life balance, we have introduced a regular health examination their cooperation in confirming the facts. In FY2022, there were 11 harassment consultations and 16
system, established a medical office staffed by industrial physicians, and implemented a stress management grievance consultations.
testing to ensure that employees can engage in their work in a mentally and physically healthy way. We are In response to the enforcement of the Power Harassment Prevention Law in June 2020, we have also
working to build a system that allows us to identify employee health risks early and provide appropriate support. conducted regular e-learning programs regularly for both general employees and managers to ensure a
With the aim of further improving the health of employees and their families, we have increased the amount proper understanding of the revised law and harassment.
of partial coverage of expenses for optional tests during annual health examinations (health support We will continue to implement e-learning in FY2023 and aim to complete 100% implementation by
payment) since FY2021, added temporary employees to the list of eligible employees, and expanded the strengthening progress checks. Harassment training is also provided to newly appointed managers to
scope of coverage to include family health examinations for dependents of employees. ensure proper understanding of harassment and to prevent its occurrence.
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Environment
We strive to realize our environmental philosophy
and a carbon-free society through our business ac-
tivities and the actions of our employees.
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We enhance the environmental activities through our business activities and the actions of employees to realize a
Environmental Philosophy and Policy sustainable and carbon-free society.
Environmental Management
Medium- to Long-term Environmental Targets <The entire Nihon Kohden Group> Established: April 1, 2023
In conjunction with the Japanese Government’s declaration that it will pursue carbon neutrality by 2050, <The scope of ISO 14001 Certification Only>
we have set environmental targets for FY2023, FY2030, and FY2050. 1. Enhance production efficiency and reduce environmental impact by improving operational efficiency
We work to realize a carbon-free society by reducing CO2 emissions in our business activities and Reduce environmental impact, including energy use, CO2 emissions, and waste emissions
providing environmentally friendly products. generated throughout the product life cycle (Scope 1, 2, and 3*2), by setting specific targets in line
with the operations of each site and division and raising productivity.
Environmental Target for FY2050 2. Reduce environmental impact and prevent pollution in our business activities
● We aim at zero greenhouse gas emissions throughout the entire product life cycle (carbon neutrality
2-1. Establish calculation standards in order to achieve third-party certification of CO2 emissions
by 2050) by reducing greenhouse gas emissions from business activities, providing environmentally (Scope 3).
friendly products, and cooperating with business partners in the supply chain. 2-2. Promote the development of environmentally friendly products and achieve targets based on
product assessment plans and evaluation tables for all newly developed products.
Environmental Target for FY2030
2-3. Reduce defect rates and reduce CO2 emissions in production processes. (Target values are
● We will set environmental targets for FY2030 based on SBT*1 and take action to achieve them with
based on environmental targets at the Tomioka and Kawamoto sites.)
the aim of realizing carbon neutrality by 2050. (These targets will be revised when the target values
2-4. Manage water usage linked to production volume to reduce the volume of water consumed in
based on SBT are finalized.)
the production process. (Tomioka site)
(We are aiming at a 46% reduction compared to FY2013 within the scope of ISO 14001 certification.)
3. Continuously reduce energy consumption and CO2 emissions in our business activities to
● As a response to water resource protection, we will set and achieve targets based on an
realize a carbon-free society
understanding of water usage of the entire Nihon Kohden Group.
3-1. In consideration of the increase in sales and production, limit the year-on-year increase in
energy use on a per unit basis and CO2 emissions on a per unit basis to 1.6% and 2.0%,
1 Science Based Targets are greenhouse gas emissions reduction targets set by each company for 5 to 10 years in the future in line with the levels sought
under the Paris Agreement. respectively.
3-2. Establish an operational structure utilizing an environmental information management system
Environmental Targets for FY2023 Established: April 1, 2023 to improve the accuracy of data on energy use and resource inputs by the Nihon Kohden
Group and set base data for SBT certification.
<The entire Nihon Kohden Group>
4. Contribute to creating a recycling-oriented society
s a response to climate change, the following targets have been set based on material issues and
1. A
Promote the 3R’s of reduce/reuse/recycle and achieve the following:
KPIs for sustainability:
In consideration of the increase in sales and production, limit the year-on-year increase in total
1) Reduce CO2 emissions per unit of sales by 15.2% compared to FY2020.
waste emissions to 0.8%, improve waste emissions on a per unit basis by 2.0% year-on-year,
<Target: Scope 1 and 2*2 within the scope of ISO 14001 certification>
and achieve a recycling rate of 97.2% or more.
2) Measure and disclose CO2 emissions for the entire Group by FY2023. <Target: Scope 1, 2, and 3*2>
2. A
s a response to water resource protection, we will work on the effective use of water resources. 2 Scope 1: All direct emissions from the Company’s use of fuel.
Scope 2: Indirect emissions from the use of energy (mainly electricity) produced by other companies.
Scope 3: Other indirect emissions in the Company’s supply chain.
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Environmental Management
For further details on requests to our suppliers, environmental conservation, and evaluation of chemical substances,
Environmental Management Internal Environmental Auditor please refer to our website.
Committee Administration Unit
https://www.nihonkohden.com/sustainability/environment/green.html
Non-production Sites Production Sites
■ Site
Environmental Management
Administration Unit
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Environmental Management
Targets and Results of the Environmental Management Program Four ISO 14001 certified sites (Ochiai/Tokorozawa, Tomioka, Kawamoto, Tsurugashima). Attainment Rates: ✓✓✓100% attainment ✓✓At least 80% attainment ✓Less than 80% attainment
Attainment
Environmental Goal FY2022 Targets Result
Rate
1. Enhance production efficiency and Reduce environmental impact including energy use, CO2 emissions, and waste emissions At each site (Ochiai/Tokorozawa, Tomioka, Kawamoto, and Tsurugashima), we
reduce environmental impact by generated throughout the product life cycle (Scope 1, 2, and 3), by setting specific targets in line ✓✓ worked to improve productivity based on operational targets and promoted reduction
improving operational efficiency with the operations of each site and division and raising productivity. in environmental impact.
3-1. W e promoted the expanded use of renewable energy sources to reduce CO2
emissions. We also improved the operation of air conditioning systems and
3. Continuously reduce energy production equipment at each business site in response to the Cool Biz and Warm
3-1. In consideration of the increase in production of some specific consumables such as reagents
consumption and CO2 Biz campaigns as well as renovated facilities in accordance with our medium- to
and electrode pads, limit the year-on-year increase in energy use on a per unit basis to 2.3%
long-term plan. We achieved the targets, reflecting a 3.3% reduction in energy use
emissions in our business and improve CO2 emissions on a per unit basis by 0.6% year-on-year. ✓✓ on a per unit basis and a 6.9% reduction in CO2 emissions on a per unit basis
activities to realize a carbon- 3-2. Collect data on energy use and resource inputs by overseas Group companies and set base
compared to the previous fiscal year.
free society data for SBT certification.
3-2. We have completed collecting energy and input resource data from overseas
Group companies. In order to set science-based targets, we are in the process of
finalizing the basic data.
Promote the 3R’s of reduce/reuse/recycle and achieve the following: We achieved the targets. The total waste emissions decreased by 3.6% and the
4. Contribute to creating a In consideration of the increase in production of some specific consumables such as reagents and waste emissions on a per unit basis decreased by 4.2% compared to the previous
recycling-oriented society electrode pads, limit the year-on-year increase in total waste emissions and waste emissions on a ✓✓✓ fiscal year due to improved production efficiency and reuse of resources, and the
per unit basis to 2.5% and 1.1%, respectively, and achieve a recycling rate of 97.1% or more. recycling rate was 97.4%.
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Endorsement of TCFD Recommendations Meeting is held four times a year to establish and promote annual plans based on the policies and
Nihon Kohden defined sustainability key issues (material issues) to be addressed through business and directions formulated by the Sustainability Promotion Committee and reports on the progress of those
corporate activities. The Company also incorporated these non-financial targets into its Three-year plans to the Sustainability Promotion Committee. Based on its Three-year Business Plan, Nihon
Business Plan, BEACON 2030 Phase I, in order to contribute to addressing global social issues and Kohden’s management has set material issues and KPIs related to sustainability and assigned
SDGs. As addressing climate change is one of the most critical social issues facing global society and departments for each materiality. Members of the Sustainability Promotion Meeting, who represent the
one of the most significant management issues for us, Nihon Kohden expressed its support for the departments in charge of each materiality, report on the progress of sustainability activities and
recommendations by the Task Force on Climate-related Financial Disclosures (TCFD) in May 2022 and exchange opinions with other members at regular meetings. The Advisory Board Meeting is held twice a
disclosed related information in July 2022. We will address climate change with integrity to realize a year to discuss and advise on overall sustainability promotion, including actions on climate change.
carbon-free society as stated in our material issues and disclose information in line with the TCFD
recommendations.
For the full text of the Nihon Kohden Group’s disclosure in line with the TCFD
recommendations, please refer to our website. Strategy
https://www.nihonkohden.com/sustainability/environment/tcfd.html To understand the impact of climate change on business activities in Japan and internationally, Nihon
Kohden has analyzed risks and opportunities mainly by management and members of the Sustainability
Notice regarding disclosure of information in line with TCFD recommendations (press release) Promotion Committee and Sustainability Promotion Meeting. Based on analysis of a 1.5°C and 2°C
https://www.nihonkohden.com/news/22071202.html scenario as well as a 4°C scenario, we have identified transitional and physical risks and opportunities
over the short-term to FY2023, medium-term to FY2026, and long-term to FY2029.* We have also
examined the business impact and possible countermeasures.
Governance A 2°C scenario is to limit the global average temperature increase to 2°C above pre-industrial levels.
A 1.5°C scenario is to hold the increase in the global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the
To promote sustainability, Nikon Kohden has established the Sustainability Promotion Committee and temperature increase to 1.5°C above pre-industrial levels.
A 4°C scenario estimates the global average temperature increase to be 4°C above pre-industrial levels.
Sustainability Promotion Meeting. In July 2021, Nihon Kohden has also established the Advisory Board
consisting of external experts to incorporate outside perspectives on sustainability activities including
measures to address climate change.
The Sustainability Promotion Committee holds a meeting twice a year and formulates the policies and
directions including measures on climate change. The president, who is the chairman of the Sustainability
Promotion Committee, has the authority to evaluate and manage measures to mitigate climate change,
and regularly reports to the Board of Directors about the progress and evaluation of the annual plan. The
Board of Directors supervise the Company’s measures on climate change. The Sustainability Promotion
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■ The outlook with a 1.5°C to 2°C scenario - Potential impact of climate change on our business ■ The outlook with a 4°C scenario – Potential impact on our business due to climate change
In the medical industry, demand for environmentally friendly products and digital health solutions will In a society where carbon-free policies are not progressing well and extreme natural disasters are
increase because of strengthening laws and regulations and increasing customer awareness of the intensifying, it is expected that the healthcare system will need to be strengthened, especially in the
need to realize a carbon-free society. Costs are expected to increase as a result of the need to meet areas of disaster medicine and emergency medicine. On the other hand, the procurement of parts, the
this demand, but further business opportunities are expected if our response is handled properly. supply of products, and sales and service activities may be disrupted significantly.
In our analysis of the 1.5°C to 2°C scenario, we made assumptions about how the strengthening of carbon-free In our analysis of the 4°C scenario, it is assumed that carbon-free policies will not be strengthened in each
policies in each country and region in response to climate change would affect the industries we are involved with. country and region in response to climate change, average temperatures will continue to rise, and physical
With the development of a carbon-free society, we can expect tighter regulations in each country and region, risks will increase as natural disasters become more severe.
including carbon taxes and emissions trading. Since our medical equipment manufacturing is mainly assembly The Nihon Kohden Group operates its business activities throughout Japan and around the world. In the
line production, we do not emit a large amount of greenhouse gases (GHG) on our own, but our suppliers do event of natural disasters and shortage of water or other resources associated with climate change, or the
emit a certain amount of GHG in their parts manufacturing process. If carbon pricing and environmental spread of infectious diseases in each region, the procurement of parts, the supply of products, and sales
labeling, including parts, become mandatory in the future, and the impact of such labeling expands, there is a and service activities may be disrupted, which could have a profound impact on the operating results and
risk that it will become difficult to provide medical equipment to customers at stable prices. In particular, the financial condition of the Nihon Kohden Group.
intensification of these initiatives in Europe may affect our ability to achieve the 45% overseas sales ratio On the other hand, in the medical field where we provide our products and services, the importance of
targeted in our Long-term Vision, BEACON 2030. disaster medicine and emergency medicine is likely to increase even further due to the increase in natural
In addition, as we work to reduce CO2 emissions, we plan to introduce equipment and technologies using disasters and infectious diseases caused by climate change. Society demands that medical equipment,
renewable energy and energy conservation, as well as relocate to high-efficiency offices. We expect the which is vital to human life, continue to be supplied smoothly and operate stably even in the event of a
corresponding costs to continue to increase. On the business front, we expect an increase in R&D and capital large-scale disaster. We have contributed to enhancing healthcare systems around the world by providing
investment to realize digital health solutions with low environmental impact, as well as higher prices for raw defibrillators that are robust and durable even in times of disaster, telemetry systems and ventilators that
materials such as resins used in product housings and restrictions on the use of certain substances. In addition, contribute to infection control. In recent years, by providing IT system solutions and promoting the Digital
there is a risk of lost sales opportunities if the development of environmentally friendly products, for which Health Solution vision, we have been working to improve productivity in clinical practice and reduce indirect
demand is expected to grow in the future, is delayed, or if we are unable to meet the conditions for tender on CO2 emissions through the effective use of medical resources.
medical equipment from an environmental perspective. Assumptions for each 1.5°C to 2°C scenario 4°C scenario
scenario analysis
On the other hand, the increase in the cost of dealing with a carbon-free society is expected to be temporary, and
We assume that social changes, as part of a We assume that extreme disasters and
therefore costs are expected to decrease in the long-term perspective. For example, cost reductions from reducing global carbon-free initiative which limits the infectious diseases will increase and affect our
part counts, optimizing components, improving productivity and shortening lead times can all be expected. As one average temperature increase to 1.5 to 2°C, will business due to a 4°C increase in the average
Social dimensions result in changes in laws and regulations, and temperature, even though the Paris Agreement
of material issues and KPIs for sustainability, we have set a target of the sales ratio of environmentally friendly technological innovation, affecting our and various policies to reduce greenhouse
products to be 20% or more (cumulative total for three years from FY2021), and are strengthening development of business. gases will be implemented.
environmentally friendly products. We believe that by expanding our efforts to realize a carbon-free society, we can Transition risks: IEA (International Energy Agency): STEPS (The Stated Policies Scenario),
NZE (Net Zero Emissions by 2050), SDS (Sustainable Development Scenario)
avoid worsening financing conditions and divestment by financial institutions and investors. Reference Physical risks: IPCC (Intergovernmental Panel on Climate Change), SSP2 (Shared Socioeconomic
Pathways), RCP4.5, RCP6.0, RCP8.5 (Time period is 2030 to 2050)
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Global Warming Scope 1(t-CO2) 4,684 4,797 4,539 Water supply 57,811 60,858 62,657
Prevention
Scope 2(t-CO2) 7,610 5,874 4,828 Surface water of rivers and lakes 0 0 0
Greenhouse gas emissions(t-CO2) 12,294 10,672 9,367 Other (such as rainwater, seawater,
0 0 0
well water, spring water)
Energy Saving Total input energies(GJ) 246,771 245,486 240,393 Total amount 57,811 60,858 62,657
Waste Reduction Total waste emissions(t) 710.5 759.4 732.5 Water Discharge (m3) FY2020 FY2021 FY2022
In-house recycling rate (%) 96.9 97.3 97.4 Sewerage 38,406 37,265 39,738
The NRM-1300 is 90.7% smaller and 64.6% lighter per unit compared to earlier The ORG-2100 is 92.1% smaller and 88.6% lighter per unit compared to earlier
models. The number of parts used was reduced by 72.8%. Power consumption models. By reviewing the raw materials used, the recyclability rate of the product
was also reduced by 3.3%, resulting in energy conservation. Lead-free solder was increased to 82.6% from 60.0% for the earlier model. Lead-free solder was
adopted to comply with the RoHS Directive. adopted to comply with the RoHS Directive.
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Enhancing Information
Disclosure and
Shareholder Return
Our management is highly transparent through appropriate
information disclosure and we strive for stable long-term returns
to shareholders.
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tasks. The basic policy on distribution of profits and dividends is to maintain stable and continuous We hold our general shareholders’ meeting on a date that does not conflict with those of other
dividend payments while retaining necessary reserves for future business expansion. The priority for companies to ensure that shareholders can attend. On the day of the meeting, we exhibit medical
distribution of profits is: i) investment necessary for future business expansion used in R&D investments, devices and explain the features to shareholders. At the shareholders’ meeting held in June 2023, we
capital investments, M&A or alliances, and development of human resources, ii) dividends, and iii) share exhibited a fully automatic AED, a resuscitation monitor for neonate, and a mask-type ventilator. We
buybacks. The Company sets a target consolidated dividend payout ratio of 30% or more. Share have posted a video of the presentation by the Chairman on the day on our website.
buyback is considered in a flexible manner, taking into account comprehensively future business For foreign shareholders, convocation notices (including a business report), notice of resolutions, and
deployment, investment plan, retained earnings, and stock price level. Based on its business voting results are translated into English and posted on the external website.
performance in FY2022, the Company decided to increase the full-year dividend by 21 yen from the
previous forecast to 61 yen. Additionally, the Company acquired ¥999 million of own shares in May and ■ Earnings presentations / Business strategy briefing
June 2022 and cancelled 500 thousand shares of treasury shares in June 2022. Nihon Kohden holds financial results briefings (interim and full-year results) for securities analysts and
institutional investors and organizes teleconferences (1st and 3rd quarters) where we discuss the
Company’s performance and strategy. Videos of the presentations, materials, and Q&A summaries are
Information Disclosure Policy posted on our website and made available to all shareholders and investors. From May 2020, all
The Nihon Kohden Corporate Charter of Conduct requires that we aim for highly transparent management financial results briefings were held by conference calls or online in order to prevent the spread of
by fair and proper disclosure of corporate information to shareholders and society. We disclose Nihon COVID-19. In March 2023, the Company held a small online meeting with an officer and persons in
Kohden Group-related information in a timely, appropriate, fair, and easy-to-understand manner. We seek charge of the ventilator business.
to deepen understanding and trust from all stakeholders and gain appropriate evaluation of the Company.
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■ Company briefings and events for individual investors ■ Relationship with Shareholders and Institutional Investors
We hold Company briefings for individual investors so that they can The President, general manager of the Corporate Strategy Division, and persons in charge of IR have
see our management strategy and business operations and extend meetings with institutional investors in Japan and overseas by making visits to investors, accepting visits
their long-term support. In FY2022, we held one in-person meeting as requested, and by phone.
and two online meetings while taking into account the status of
COVID-19. We also updated Nihon Kohden’s video series on our
In-person meeting held in Osaka with the
website. cooperation of the Securities Analysts Association Status of Dialogue with Shareholders
of Japan
In FY2022, the Company had around 250 meetings with institutional investors, including around
100 meetings with shareholders. The topics of the dialogues were quarterly financial results and
forecasts, as well as medium- to long-term growth strategies, capital policies, and initiatives to
strengthen corporate governance and embrace sustainability.
● Although the global situation is severe, I hope ● I hope the Company will accelerate the expansion of its
that all employees will make a concerted effort business globally.
to support the development of the Company. ● I expect the Company to secure earnings and pay stable
● As the Company that invented the pulse dividends.
oximeter, I look forward to the Company’s ● The shareholder newsletters are simple and easy to read.
contribution to society and medicine. ● New products were well explained with pictures for better
understanding.
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Change in Dividend per Share and Number of Dialogues with Institutional and Major Shareholders (as of March 31, 2023)
Consolidated Dividend Payout Ratio Individual Investors in FY2022 Number of Shares
■ Dividend per Share Consolidated Payout Ratio・ Shareholding Ratio
● Meetings with institutional investors and securities analysts: Shareholders (Thousands of
■ Special Dividend ■ 70th Anniversary Commemorative Dividend (%)
shares)
(yen) (%) Approx. 250 meetings including approx.
80 160 100 meetings with shareholders The Master Trust Bank of Japan, Ltd. (trust account) 13,480 16.02
67 ● Number of responses to annual shareholder survey: Custody Bank of Japan, Ltd. (trust account) 4,567 5.42
60 61 120 572
55 15 Saitama Resona Bank, Ltd. 4,193 4.98
● Company briefings for individual investors (3 sessions):
40 20 13 80 State Street Bank and Trust Company 505103 2,887 3.43
35 35 35 35 35 Live viewing: Approx. 280 viewers,
In-person: Approx. 80 attendees JP Morgan Chase Bank 385151 2,341 2.78
35 39
20 33 33 40
29 27 30 26 24 ● Nihon Kohden’s introduction video series for individual investors: JP Morgan Chase Bank 380055 1,998 2.37
30% Approx. 700 views AVI Global Trust PLC 1,771 2.10
0 0
FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 RBC IST 15 PCT NON LENDING ACCOUNT - CLIENT ACCOUNT 1,523 1.81
MUFG Bank, Ltd 1,325 1.57
Nihon Kohden Employee Shareholding Association 1,272 1.51
Change in Share Price Ownership Breakdown (as of March 31, 2023) (Note) The above list excludes Nihon Kohden’s treasury stock of 4,104 thousand shares. Each shareholding ratio is calculated excluding treasury stock.
External Evaluation We are working to enhance our corporate value by strengthening our efforts to promote sustainability and enhancing information disclosure.
FTSE4Good Index Series, FTSE Blossom Japan, and FTSE Blossom Japan Sector
■ Index*2
Relative Index*1 The MSCI Japan Empowering Women Index (WIN) is
Created by the global index provider FTSE Russell, the FTSE4Good Index Series, a stock price index created by MSCI and is
FTSE Blossom Japan, and FTSE Blossom Japan Sector Relative Index are composed of companies that promote high level of gender diversity and women’s participation and
designed to measure the performance of companies demonstrating strong advancement in the workforce. Nihon Kohden has been selected as a constituent of The MSCI
Environmental, Social and Governance (ESG) practices. FTSE Russell evaluates Japan Empowering Women (WIN) Select Index for four consecutive years since 2020.
companies in the areas of corporate governance, health and safety, anticorruption,
■ ISS ESG Corporate Rating
and climate change, and its constituent companies meet various criteria related to
The ISS ESG Corporate Rating is a sustainability rating by ISS ESG, the
environment, society, and corporate governance.
responsible investment arm of Institutional Shareholder Services Inc., a
Nihon Kohden, as a result of assessment according to the FTSE Russell ESG rating
world’s leading proxy advisory firm. The rating is based on ESG
criteria, has been a constituent of the FTSE4Good Index Series and the FTSE
(Environment, Social, and Governance) factors.
Blossom Japan for four consecutive years since 2017 and for two consecutive
Nihon Kohden has been rated as “Prime” in the Health Care Equipment &
years since 2022, respectively.
Supplies industry in 2021.
The Company has also become a constituent of the FTSE Blossom Japan Sector
Relative Index for two consecutive years since 2022, which is designed by FTSE
■ CDP Rating in the Areas of Climate Change and Water Security
Russell to measure the performance of Japanese companies demonstrating
In December 2022, Nihon Kohden received a B rating from the Carbon
relatively excellent ESG practices in each sector.
Disclosure Project (CDP), a non-governmental organization that works
■ MSCI ESG Leaders Indexes*2 internationally to disclose information on environmental assessments, in
The MSCI ESG Leaders Indexes are ESG comprehensive index the areas of Climate Change and Water Security.
created by MSCI and designed to represent the performance of
companies that have high Environmental, Social and 1F
TSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that Nihon Kohden Corporation has been
independently assessed according to the index criteria, and has satisfied the requirements to become a constituent of the FTSE4Good Index Series,
Governance (“ESG”) ratings relative to their sector peers. FTSE Blossom Japan and FTSE Blossom Japan Sector Relative Index. Created by the global index and data provider FTSE Russell, the Index is
Nihon Kohden has been selected as a constituent of the MSCI ESG Leaders Indexes for eight designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices. FTSE4Good Index
Series, FTSE Blossom Japan and FTSE Blossom Japan Sector Relative Index are used by a wide variety of market participants to create and assess
consecutive years since 2016. responsible funds and other products.
2T
he inclusion of NIHON KOHDEN CORPORATION in any MSCI index, and the use of MSCI logos, trademarks, service marks or index names herein, do
not constitute a sponsorship, endorsement or promotion of NIHON KOHDEN CORPORATION by MSCI or any of its affiliates. The MSCI indexes are the
exclusive property of MSCI. MSCI and the MSCI index names and logos are trademarks or service marks of MSCI or its affiliates.
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Nihon Kohden’s
Contributions to the
Community
We strive to be a good corporate citizen respecting all
cultures and customs through active contribution to the
community.
REGIONAL CONTRIBUTION
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We strive to be a good corporate citizen respecting all cultures and customs through active
Nihon Kohden’s Contributions to the Community contribution to the community.
Social Contribution to Local Communities ■ Donations to Support Earthquake Victims in Turkey and Syria
■ Greening Promotion Activities in Brazil Nihon Kohden Group extends its deepest sympathies and condolences to all those who have suffered
Nihon Kohden Brazil has designated every August as Sustainability Month. In FY2022, they distributed devastation in Turkey and Syria due to the earthquake in February 2023.
tree seeds of various species native to Brazil to all employees and business partners in Brazil. The Nihon Kohden Group donated ¥5 million through the Japan Committee for UNICEF to support the
President of Nihon Kohden Brazil commented, “With deforestation in the Amazon becoming an issue, victims of the earthquake.
it is necessary for all people to work together to protect the Amazon forests and achieve sustainability. We sincerely hope for swift recovery of the people and areas affected by the disaster.
Therefore, we wanted to share the importance of environmental protection not only with our
employees but also with our business partners. This little green initiative has also given us a sense of ■ Received the Medal with the Dark Blue Ribbon for Our Support in Response to the Situation in Ukraine
peace of mind.” In October 2022, Nihon Kohden received a Medal with Dark Blue Ribbon from the Japanese
The Nihon Kohden Group will continue to promote environmental conservation activities as part of our Government for its donation to the Japan Committee for UNICEF (United Nations Children’s Fund) in
contribution to society. March 2022.
This donation was to support the humanitarian crisis in Ukraine*. The Medal with Dark Blue Ribbon is
awarded to individuals and corporations who have donated private funds for the public good, and was
received through the Committee in December 2022.
Our support in response to the situation in Ukraine (Donation of relief fund) (Press release)
https://www.nihonkohden.com/news/22033001.html
Tree seeds of Brazilian were origin Business partners helping to grow the seeds that were distributed
distributed
Certificate of Merit for the Medal with Dark Blue Ribbon We received the Medal with Dark Blue Ribbon through the Japan
Committee for UNICEF.
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Financial and
Corporate Data
We aim at further growth while maintaining and
strengthening our stable financial base, even in the
changing business environment.
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Role of Director Responsible for Accounting Additionally, the Company implemented share buybacks amounting to ¥999 million from May to June
I believe that my role as the Director responsible for Accounting is to 2022 and cancelled 500 thousand shares of treasury shares in June 2022.
continuously enhance the corporate value of Nihon Kohden from a
financial perspective. The Director responsible for Accounting is also in
charge of maintaining an appropriate balance between growth strategy Setting of Financial Indicators
and a solid financial foundation while supporting the operation of risk We use consolidated return on equity (ROE) as one of its management indicators to maximize corporate
management and internal controls. value and shareholder value, and have set a target of 10% in our Three-year Business Plan, BEACON
Aiming to further strengthen group governance throughout the entire 2030 Phase I. The ROE for FY2022 was 10.6%.
Nihon Kohden Group, I have promoted implementation of the Global To practice cost-conscious management, we have adopted NPV and IRR as investment decision criteria
Business Management Policy and started to develop a sophisticated and started evaluating new investment projects in FY2022. We set our target IRR at 10%, which
company-wide risk management framework. In addition, through the exceeds our cost of capital. The Board of Directors will verify the progress and effectiveness of
Tadashi Hasegawa
promotion of corporate digital transformation (CDX), we will reinforce the Corporate Director, investment projects. To respond to increased demand due to the COVID-19 pandemic and the shortage
business structure from a financial perspective, and further strive in Executive Operating Officer, of semiconductors, we have increased inventories of finished goods and parts. It has resulted in a longer
General Manager of Global
management to improve corporate value through sustainable growth. Corporate Administration cash conversion cycle, 235 days in FY2022. In FY2023, we will optimize the inventory level and aim at
I hope to enjoy your continued support in the future. Operations, 190 days, a similar level to FY2021. The medium-term target is 150 days, considering uncertainties in
Chief Compliance Officer
the global business environment.
In order to achieve the target, we will focus on improving profitability by implementing the Three-year
Approach to Cash Use and Profit Distribution Results Business Plan. We will also improve working capital by reducing cash conversion cycle, including
Nihon Kohden recognizes the return to shareholders of cash generated through its business activities as measures such as reduction of inventories and faster debt collection, as well as establishing investment
one of its most important management policies. Regarding the distribution of cash, our basic policy is to decision criteria and enhancing shareholder return.
maintain stable and continuous dividends for all shareholders over the long term, bearing in mind the
securing of internal reserves necessary for future business expansion. Our priorities are i) investment
necessary for future business expansion used in R&D investments, capital investments, M&A or
alliances, and development of human resources, ii) dividends, and iii) share buybacks. We aim for a
consolidated dividend payout ratio of 30% or more. Also, our fundamental policy is to flexibly consider
buybacks of the Company’s shares, comprehensively taking into account factors such as future
business expansion, investment plans, the level of cash held in reserve internally, and share price trends.
The year-end dividend per share for FY2022 increased by 21 yen from the initial forecast of 20 yen to 41
yen. As a result, the full-year dividend was 61 yen per share, including the interim dividend of 20 yen.
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NIHON KOHDEN REPORT 2023 Nihon Kohden’s Value Sustainability Governance Quality Human Resources Environment and Shareholder Return to the Community Corporate Data 98
Fiscal year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Business results
Net sales 120,718 132,538 153,194 160,803 165,522 166,285 174,249 178,799 185,007 199,727 205,129 206,603
Operating income 12,027 13,484 17,547 15,921 16,438 13,585 14,517 15,044 15,503 27,094 30,992 21,120
Income attributable to owners of parent*1 7,621 9,151 12,346 11,142 10,516 9,149 9,154 11,191 9,854 18,243 23,435 17,110
Financial position
Current assets*2 82,742 95,181 106,515 118,389 112,929 119,235 120,687 132,211 129,020 156,140 171,875 172,500
Current liabilities*2 30,714 39,028 41,248 45,654 42,901 45,006 44,601 48,346 40,319 50,608 50,804 46,568
Total assets*2 99,403 116,800 130,917 146,755 144,270 152,806 157,910 169,717 167,786 193,030 210,201 216,728
Net assets 67,911 76,256 88,512 99,304 97,671 103,887 109,355 116,087 121,774 138,986 156,381 167,604
Cash flows
Cash flows from operating activities 7,559 13,189 9,383 12,505 10,765 11,356 10,843 9,819 9,217 13,945 25,699 (2,513)
Cash flows from investing activities (2,338) (6,959) (4,421) (4,689) (7,802) (6,344) (3,346) (3,258) (4,607) (2,946) (4,303) (7,647)
Free cash flow 5,220 6,229 4,962 7,815 2,962 5,011 7,497 6,561 4,609 10,999 21,396 (10,161)
Cash flows from financing activities (2,726) (1,174) (3,436) (3,267) (9,488) (3,517) (4,628) (3,074) (3,054) (3,007) (7,300) (7,485)
Cash and cash equivalents 21,304 26,683 28,808 34,113 27,283 28,560 31,285 34,697 35,913 44,356 60,095 43,988
Per share information
Net income (Yen)*3 173.49 208.31 281.03 126.83 120.12 106.81 106.92 131.43 115.72 214.21 276.51 203.28
Dividends (Yen)*4 44.0 52.0 70.0 70.0 35.0 35.0 35.0 35.0 35.0 55.0 67.0 61.0
Other
R&D costs 5,583 6,424 7,108 5,745 5,910 6,466 7,226 7,243 6,731 6,357 5,711 6,200
Number of employees (Persons) 4,057 4,360 4,495 4,616 4,776 4,934 5,031 5,169 5,357 5,531 5,639 5,751
Number of shares issued at end of year (Thousands of shares)*5 45,765 45,765 45,765 45,765 89,730 89,730 89,730 88,730 88,730 88,730 88,730 88,230
Key performance indicators
ROE (%) 11.7 12.7 15.0 11.9 10.7 9.1 8.6 9.9 8.3 14.0 15.9 10.6
Operating income margin (%) 10.0 10.2 11.5 9.9 9.9 8.2 8.3 8.4 8.4 13.6 15.1 10.2
Dividend payout ratio (%) 25.4 25.0 24.9 27.6 29.1 32.8 32.7 26.6 30.2 25.7 24.2 30.0
1 The figures for FY2014 or earlier periods represent net income. 3 Effective April 1, 2015, each share of common stock was split into two shares. The Company calculates net income per share on the assumption that the stock split was conducted at the beginning of FY2014.
2 Since the beginning of FY2018 ended March 31, 2019, the Company has applied the partial amendments to the Accounting Standard for Tax Effect Accounting 4 Effective April 1, 2015, each share of common stock was split into two shares. The figures for FY2014 or earlier periods represent dividends per share based on the number of shares before the said stock split.
(ASBJ No. 28, February 16, 2018). These accounting standards apply to FY2017 figures retrospectively. 5 Effective April 1, 2015, each share of common stock was split into two shares.
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Net Sales/Overseas Sales Ratio Operating Income/Operating Income Margin Income Attributable to Owners of Parent/ROE Total Assets/Net Assets
■ Net Sales Overseas Sales Ratio ■ Operating Income Operating Income Ratio ■ Income Attributable to Owners of Parent ROE ■ Total Assets ■ Net Assets
¥ 216.7
(Billions of yen) ¥ 206.6 (%) (Billions of yen) (%) (Billions of yen) (%) (Billions of yen) billion
205.1 billion
210.2
200 199.7 40 30 20 20 200
30 193.0
185.0 ¥ 167.6
174.2 178.7 169.7
15.9 167.7 billion
15.1 ¥ 21.1 157.9 156.3
34.3% 13.6 14.0
33.5 billion 138.9
31.3 20 ¥ 17.1
billion 116.0 121.7
27.2 27.4 9.9 109.3
100 26.5 20 15 30.9 10 10 100
8.3 8.4 8.4 8.6 8.3
27.0
10.2% 23.4 10.6%
10
18.2
15.0 15.5
14.5 11.1
9.1 9.8
0 0 0 0 0 0 0
FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022
R&D Costs Capital Investment/Depreciation Net Income per Share Dividends per Share/Payout Ratio (consolidated)
■ R&D Costs ■ Capital Investment ■ Depreciation ■ Net Income per Share ■ Dividends per Share Payout Ratio (consolidated)
■ Special Dividend ■ 70th Anniversary Dividend
(Billions of yen) (Billions of yen) (Yen) (Yen) (%)
10 10 300 100 40
¥ 8.2
276.51
billion
7.2 7.2 ¥ 6.2 214.21
6.7 6.3 ¥ 203.28 33 26 67 30%
billion 30
5.7 24
27 55
5 5 150 50 15 20
¥ 3.6 131.43
106.92 115.72 20 13
3.4 3.3 3.5 3.5 3.5 3.5 3.2 3.4 billion 35 35 35
3.0 3.0
¥ 61
35 39
0 0 0 0 0
FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022
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Number of Employees (Consolidated)/Percentage Percentage of Female Managers*1 Employment Rate of Persons with
of Employees Working outside Japan Disabilities*1
■ Number of Employees Percentage of Employees Working outside Japan Percentage of Female Managers Employment Rate of Persons with Disabilities
(Persons) (%) (%) (%)
6,000
5,751 40 10 5
5,531 5,639 Persons
5,169 5,357
5,031
8.6% 4
28.5% 7.9
7.3 7.6 3
27.7 28.5 28.4 7.2
3,000 26.4 20 5
6.7
24.9
2 2.35%
2.39 2.36
2.14
1.99
1 1.62
0 0 0 0
FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022
Total Energy Consumption Volume of Greenhouse Gas Emissions/ Total Waste Emissions/
(Barrels of Oil Equivalent (BOE))*2 CO2 Emissions per Unit of Sales*2 In-House Recycling Rate*3
■ Production Sites Non-production Sites ■ Volume of Greenhouse Gas Emissions CO2 Emissions per Unit of Sales ■ Total Waste Emissions In-House Recycling Rate
Physiological Measuring This category includes electroencephalographs This category includes patient monitors
Equipment (EEG), evoked potential and electromyogram such as central monitors, bedside Patient Monitors
measuring systems, electrocardiographs (ECG), monitors, wireless monitors, remote
polygraphs for cath lab, diagnostic information access software and other equipment,
Sales % change YoY systems, related consumables such as recording clinical information systems, related Sales % change YoY
FY2022
¥ 43.2 billion +9.1% ¥ 80.8 billion -4.8%
papers, electrodes and EP catheters, and EEG-1260 CNS-2101 consumables such as electrodes and
maintenance services. Sales by Central Monitor sensors, and maintenance services.
Electroencephalograph
Product
Category
Japan
43.2 growth and sales of ECGs also increased, while sales of and Services Devices telemetry systems compared to FY2021 when demand increased. 84.8 80.8
37.5 39.6 Sales of clinical information systems increased favorably and sales 78.8
diagnostic information systems decreased.
47.3% 52.7% of consumables such as sensors also increased.
50
25
International
International
Sales of EEGs increased favorably, while sales of ECGs Sales decreased compared to FY2021 when demand increased.
decreased in all regions because there was an impact on local Sales in all regions decreased on a local currency basis but sales in
0 Physiological 0
production due to the lockdown in Shanghai. the Americas and Europe increased on a yen basis.
FY2020 FY2021 FY2022 Measuring FY2020 FY2021 FY2022
Equipment
(Billions of yen) Sales decreased due to lower sales of ventilators and AEDs. 18.4% (Billions of yen)
50 Demand for ventilators to treat COVID-19 patients has settled Sales of installation and maintenance services for medical 50
Japan
45.1 44.4
Japan
43.3
down and replacement demand for AEDs was in trough. Sales of devices and hematology instruments increased favorably, while 38.1 37.1 38.0
defibrillators, and sales of ablation catheters in other treatment sales of locally purchased products decreased.
equipment increased favorably.
25 25
International
International
Sales increased favorably, as sales of AEDs showed strong
growth in all regions, supported by steady demand. Sales of Sales of hematology analyzers and reagents increased
0 ventilators and defibrillators decreased, as demand to treat significantly in Latin America and Europe. 0
FY2020 FY2021 FY2022 COVID-19 patients has settled down. FY2020 FY2021 FY2022
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each country. However, the global economic outlook remained uncertain due to higher prices of components Nihon Kohden concentrated on enhancing sales activities which match each market; the acute care
and resources, supply chain disruption, and tight monetary policy in the U.S. and Europe. In Japan, the hospital market, the small and mid-sized hospital market, and the clinic market. The Company also
burden on medical institutions fluctuated in accordance with the number of COVID-19 patients. Changes to focused on consumables and services business as well as strengthening its marketing and service
the healthcare system to respond to emerging infectious diseases and work style reforms for medical staff capabilities, creating customer value propositions that contributed to improving medical safety, patient
were also implemented in conjunction with the medical treatment fee revision that occurred in April 2022. outcomes, and operating efficiency. Domestic sales decreased due to a reactionary decline in demand
Medical equipment companies were strongly required to provide solutions which contribute to infection for patient monitors and ventilators, large numbers of which had been installed to treat COVID-19
control measures as well as improving the quality and efficiency of medical care. Internationally, overall patients in FY2021. On the other hand, sales of Physiological Measuring Equipment and hematology
demand for medical equipment which contributes to easing medical staff workload remained steady amid instruments increased favorably as the number of testing and surgical procedures showed a recovery
the growing shortage of nurses especially in the U.S. and the U.K. trend and capital expenditure by medical institutions resumed. Sales in the university and clinic market
increased, while sales in the public hospital and private hospital markets decreased. Sales of AEDs in
the PAD markets also decreased. As a result, domestic sales decreased 0.4% over FY2021 to ¥135.7
Review of Operations billion.
FY2022 was the second year of the Three-year Business Plan, BEACON 2030 Phase I. The Company
formulated the basic policies of the plan as follows: i) Embracing sustainability across business and ■ International
corporate activities, ii) Ensuring strict compliance and strengthening group governance, iii) Improving the Sales increased on a yen basis due to yen depreciation, while sales in all regions decreased on a
profitability of existing businesses and making strategic upfront investments, and iv) Establishing global comparable basis. It was affected by a reactionary decline in sales of Patient Monitors and ventilators
SCM and strengthening core functions of operations. compared to strong demand in FY2021 in regions where the spread of COVID-19 had resurged, as well
The Company introduced a patient monitor specialized for neonatal resuscitation and an EEG amplifier as the Shanghai lockdown from the end of March to the end of May 2022. In the Americas, sales in the
with enhanced network capabilities in Japan, and an ECG with built-in wireless LAN both in Japan and U.S. increased on a yen basis. Sales in Latin America decreased, mainly in Mexico and Chile. Sales in
internationally. In the U.S., the Company launched mid-range bedside monitors and a mask-type Europe decreased on a comparable basis and increased on a yen basis. Sales in France and Spain
ventilator. In certain overseas markets, the Company also introduced a mid-range ventilator developed decreased, while sales in Germany and the U.K. increased favorably. Sales in Asia & Other decreased
by Nihon Kohden OrangeMed, Inc, in the U.S. Internationally, Nihon Kohden strengthened its business due to the reactionary decline in Egypt, India, and Vietnam where sales showed strong growth in
structure. The Company decided to reorganize its U.S. subsidiaries into a holding company structure, FY2021. Sales also decreased in China, where patient monitors were installed due to the COVID-19
and acquired Software Team Srl in Italy, a software development company which collects data and resurgence in December 2022, but not enough to cover the impact from the Shanghai lockdown. As a
alarms from medical devices such as patient monitors and forwards to mobile phones. As a result of result, international sales increased 3.0% over FY2021 to ¥70.8 billion.
these measures, overall sales for FY2022 increased 0.7% over FY2021 to ¥206.6 billion.
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Cost of Sales, SGA Expenses, Operating Income, and Income Attributable to ■ Liabilities and Equity
Owners of Parent Company Total liabilities decreased by ¥4.6 billion compared to the end of the previous fiscal year, mainly due to a
Cost of sales increased 4.8% over FY2021 to ¥100.6 billion. The gross profit margin deteriorated by 1.9 decrease in accrued income taxes. Total net assets increased by ¥11.2 billion compared to the end of
percentage points to 51.3% due to higher material and component prices and a change in the sales mix, the previous fiscal year, mainly due to an increase in retained earnings. Equity ratio increased by 2.9
gross profit on sales decreased 2.9% over FY2021 to ¥105.9 billion. SGA expenses increased 8.6% percentage points to 77.3%.
over FY2021 to ¥84.8 billion due to the strengthening of human resources, as well as an increase in
traveling expenses resulting from the normalization of sales and service activities. The ratio of SGA ■ Cash Flows
expenses rose 3.0 percentage points to 41.1%. R&D costs increased ¥0.5 billion year on year to ¥6.2 Funds used in operating activities totaled ¥2.5 billion (revenue of ¥25.6 billion in the previous fiscal year),
billion. The ratio of R&D costs to sales increased 0.2 percentage points to 3.0%. As a result, operating This is mainly due to income before income taxes of ¥24.7 billion, an increase in inventories of ¥8.5
income decreased 31.9% over FY2021 to ¥21.1 billion. Income attributable to owners of parent billion, an increase in trade receivables of ¥4.7 billion, a decrease in trade payables of ¥2.4 billion, and
decreased 27.0% over FY2021 to ¥17.1 billion. income tax payments of ¥10.3 billion. Funds used in investing activities increased by ¥3.3 billion year-
on-year to ¥7.6 billion. This is mainly due to the purchase of land, property, plant and equipment such as
promotional products, amounting to ¥7.4 billion. Funds used in financing activities increased by ¥0.1
Assets, Liabilities, and Equity billion year-on-year to ¥7.4 billion. This is mainly due to cash dividends paid of ¥5.7 billion and purchase
■ Assets of treasury shares of ¥1.0 billion. Cash and cash equivalents at the end of FY2022 were ¥43.9 billion,
Total assets at the end of FY2022 increased by ¥6.5 billion compared to the end of the previous fiscal down ¥16.1 billion from the end of the previous fiscal year.
year. Current assets increased by ¥0.6 billion from the end of the previous fiscal year, mainly due to a
decrease in securities (negotiable certificates of deposit) resulting from the purchase of inventories and ■ ROE
fixed assets, as well as an increase in inventories of raw materials and products to ensure a stable ROE in FY2022 was 10.6%, remaining above the target of 10%. The decrease from 15.9% in the
supply. Fixed assets increased by ¥5.9 billion compared with the end of the previous fiscal year, mainly previous fiscal year was due to a decline in the net profit margin as a result of lower operating income.
due to an increase in land and construction in progress for the acquisition of land for a new
Tsurugashima plant and construction of a new plant at Nihon Kohden India Pvt. Ltd.
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Company Information
Company Overview (as of March 31, 2023) Subsidiaries: 31 companies (as of March 31, 2023)
Common Name NIHON KOHDEN Sales and Promotion Group General Affairs and Staffing
Nihon Kohden America, Inc. * E-Staff Corporation
Official Name NIHON KOHDEN CORPORATION Nihon Kohden Mexico S.A. de C.V. E-Staff Insurance Services Corporation
Nihon Kohden Latin America S.A.S.
Incorporated August 7, 1951 Nihon Kohden Do Brasil Ltda. Other
Nihon Kohden Europe GmbH RESUSCITATION SOLUTION, INC *
Capital Stock ¥7,544 million Nihon Kohden Deutschland GmbH
Nihon Kohden France Sarl
Net Sales ¥206.6 billion Nihon Kohden Iberica S.L.
(Consolidated) (Fiscal year ended March 31, 2023) Nihon Kohden Italia S.r.l. Europe
8
Nihon Kohden UK Ltd.
Type of Business Development, production, and sales Nihon Kohden Singapore Pte Ltd
Subsidiaries
of medical electronic equipment NKS Bangkok Co., Ltd. *
Nihon Kohden Korea, Inc.
Americas
Employees 5,751 persons
(Consolidated) Development, Production, Sales, and Sales Promotion
Nihon Kohden Tomioka Corporation
11
Subsidiaries
Nippon Bio-Test Laboratories Inc.
Beneficks Corporation Asia
Company Information
Published by
Corporate Strategy Division, Nihon Kohden Corporation