Integrated Report 2025 Conversation: Leveraging Individuality and Innovation to Create value that resonates with the senses

Takashima When I became President  in 2020, our stock price and business performance were not in good shape, partly due to the Corona disaster. With a sense of crisis that there was no future for us if things continued as they were and that we had to change, we changed our company name as a banner of change.

Pedersen I heard that artience is the name of the company given to it by Art & Science.

Takashima Yes. Until now, we have been advocating science, but in a world where technology and AI will be the center of the future, we thought it was important to focus more on "people." In addition to science, the company name expresses the meaning of becoming a company that provides value that resonates with the senses (emotional value), that is, "art," such as being close to the heart and sharing emotions. In addition, art also includes the idea of the liberal arts, which "accepts diverse solutions," and I think it was a good name.

Pedersen That's interesting. Normally, the name doesn't tell the story, but at artience, the company name itself speaks for its philosophy. That's great.

Takashima "Create value that resonates with the senses, build a future where all people can live enriched lives" is our raison d'être. We are pursuing these two things. In the course of discussions on the theme of "what is the value of sensitivity?" at in-house roundtable discussions, my own way of thinking has changed. In the past, I thought it was the universalization of identity, but now I think that the value of sensitivity is to wish for the happiness of others. In dialogue with employees in the field, they said, "It is a joy to see what we have created out into the world and it is being used, and that is the value of sensitivity." The point of view is outside. Thinking about altruism. That's what I learned from my conversations with employees.

Pedersen said at the World Future Conference held in the United States in 1997 that it was the era of the "experience economy" from now on. It's a real sensibility. It means that the company that provides a good experience will win. In that sense, the emotional value of artience is wonderful.

Pedersen It seems that the overseas ratio of business is increasing, but artience is probably better than "TOYO INK" overseas. What is the reaction of employees?

Takashima Some employees were particular about ink. Overseas, especially in Asia, ink is still the main business. On the other hand, there are many people who see it in a very positive way. For the past two years, I have been holding roundtable discussions with young and mid-level employees at our bases, and what surprised me was that the employees in India had a very positive outlook. The name of the India-based company is "TOYO INK India", but we have also said that we want to change it to artience, and they agree with us, including our philosophy.

Pedersen Thinking about Art & Science seems to be an interface for communication.

Takashima  We have been distributing video ads since January 2025, and in them, we convey the message that "we are not a manufacturing company," "we create excitement," and "we create joy." Then, an employee at the factory sent me an email directly saying that something was wrong.

Pedersen It's wonderful to have a corporate culture where you can say such things directly to the president.

Takashima Yes, I was happy. Rather, this company name directly conveys that it emphasizes manufacturing and is a company name with an eye on evolution. Thanks to the increased opportunities for dialogue, I feel that things have changed little by little.

Pedersen Major companies in Japan tend to cut sharp individuals due to their organizational culture, but in the future, it is important to bring out sharp individuals and work toward their goals. I believe that organizations where human resources who can play an active role in their own goals will survive.

Takashima Our company's management philosophy is "People-oriented management". There is an individual and there is a whole. Individuals should never be sacrificed for the sake of an organization. We are currently working on a corporate transformation, but we will never change this philosophy.

Pedersen  It is important for companies to let the potential of each blossom and not let their lives go to waste. Human capital management tends to become a formality. I think the most important thing is to make the most of "people" as capital so that individuals can maximize their abilities and continue to take on challenges.

PedersenI feel that there are few people with leadership in Japan. Ideally, an organization that backs up people who have the courage to step into unexplored territory. Seventy percent of them may fail, but I fear that there will be no future for Japan's industry unless we take on major challenges.

Takashima TOYO INK CO., LTD. Group's core operating companies, originally had a strong corporate culture of top-down management, but this is where things are changing the most. More and more proposals are coming out from the field. One of them is a new system called "CX Center". While reducing the number of employees by one-third, they are using DX to provide technical services and receive orders, and they are working on it with the assertion that they will increase customer satisfaction.

Pedersen  sounds good. The liberation of the individual is something that could not be done in a top-down organization. It will take 5 to 10 years to see results, but I think the company will change dramatically, so I hope you will continue to take on challenges.

Takashima In another case study, we have been holding a business idea contest (currently "IPPO") since 2021 as a mechanism to support people who want to take on challenges. It's the fourth time, and it's getting better and better. The most common application is from TOYO INK, but after 4~5 years of suffering from shrinkage in the printing market, I am really hungry. The company's performance has improved, and investors say it's a surprise.

Pedersen It's great because it's hard to turn a Business Contest into an outcome. I think that intrapreneurs and in-house entrepreneurs are suitable for Japan companies. We will maximize the degree of freedom while having a certain amount of resources. It's important to become an organization that embraces a variety of work styles and challenges.

Takashima In general, it seems that the number of entries for business contests decreases after a few years, but at our company, on the contrary, it continues to increase. Some of them feel like they have a lot of potential. I want to increase the number of success stories, so I would like to create a system to support them more. For a certain project, there were no marketing or sales people, so when we recruited within the company, several people immediately raised their hands. I think we can create a system where everyone can support such a person's dream.

Pedersen  It's a system in which the top management shows the direction, the middle management supports it, and the subordinates on the front line can play an active role.

Pedersen Japan companies are good at auditing, risk management, and compliance, but I am worried that if we focus only on that, we will not be able to innovate. Free opportunity exploration is supported by high ethics and has governance to back up. The question is whether each leader can ensure a culture of integrity in the field.

Takashima The difference in ethics and governance of companies seems to be evident in the attitude of using generative AI. In 2024, we launched a company-wide "Task Force for Promoting the Utilization of Generative AI," which has become an issue in terms of materiality, and we are actively trying to take on challenges while searching for rules. However, I hear that some companies restrict or prohibit the use of AI in order to minimize the risk of system inadequacies and information leakage.

Pedersen The  rule is something to back up, not to suppress. It would be great if this shift progressed.

Takashima You started with the reform of Board of Directors as a governance reform, but do you think it will change the company?

Pedersen changes. First of all, the selection of people is important. I work Outside Director for several companies, and some of them have strategy discussions, and some companies have overnight training camps. At one company, I'm also the chairman of the Sustainability Committee committee. Having Outside Director experts and experience can lead to very interesting discussions. Creative governance.

Takashima It is very good to have a professional in a field that the company emphasizes serve as Outside Director. When we talk to our Outside Director, they tell us that they want to be more involved and do their part more.

Pedersen That's right. I'd like to go further into Outside Director as time allows.

Pedersen Japan not only has technical and financial capabilities, but also has a non-Western view of nature and the Omi merchants' idea of "three-way goodness". I came to Japan in 1995 because I thought that Japan could show a different path to solving sustainability issues than the Western style. However, I think that today's Japan companies have been swept away by neoliberalism, global financial capitalism, and shareholder capitalism, and have not been able to fully utilize their original potential. I think your company's "sensibility value" can stand up to that.

Takashima As president, I focus on Eiichi Shibusawa's "Analects and Arithmetics," which is based on the idea that social contribution and the pursuit of profits are not trade-offs, but compatible. It is not only the economic interests of shareholders, but also the contribution, and I think it can be said that it is true shareholder capitalism.

Pedersen That's right. That's why listed companies have to make very difficult decisions.

Takashima There is an anti-ESG trend in many parts of the world right now, but as a manufacturer, we have a responsibility to prevent global warming, but we also see business opportunities there. Our sustainability vision ASV2050/2030 pursues both, and we have no intention of reversing it.

Pedersen That's good. We live in an era where ESG activities are not valued in the market unless they are linked to business. In a sense, it is the ultimate evaluation to connect to business. While valuing shareholders as stakeholders, I think it is different for management to be swayed.

Takashima Now that global business is progressing and more than 50% of sales and 60% of operating income are overseas, the Human Resources Department is working on a mechanism to increase the mobility of global human resources. More than 60% of our employees are overseas national staff, so I think that by seeking talent from the world, innovation and corporate value will increase. In addition, both our Board of Directors and Group Management Committee are all Japan people, so I think that is a big challenge.

Pedersen The globalization of  headquarters is a major challenge for many Japan companies. Some companies have dared to place their global HR centers overseas. It seems that they have hired a certain number of foreign employees at the head office, which makes you feel that the number of foreign employees has increased.

Takashima Regarding overseas bases , we hold a conference called the "Global Management Forum" twice a year in Japan, where top management from overseas companies gathers in Japan. There are women on the board of directors overseas, but there are not many of them.

Pedersen The Global Management Forum is a very good initiative. You should definitely keep going. As with the number of female executives, it is essential to hire a large number of female employees at once, as was the case with the hiring of foreign nationals mentioned earlier. Without such symbolic and bold initiatives, the pace of change will not accelerate.

Takashima Our company still has a small percentage of women, so we are strategically setting targets and working on them.

Pedersen Historically, there have been few women in the  technology and manufacturing sectors, but I feel that in many cases, women are better than men at empathizing and thinking from the user's point of view, no matter what kind of business they are in. Incorporating more and more of these perspectives will lead to artience enhancing its ability to create sensual value.

Takashima Since becoming artience, the number of applications for employment has also increased with women. I hope that the sense of art and science resonates with them.

Pedersen It must be resonating with . It is a symbolic company name that symbolizes the transformation of the entire company, and it makes me want to look forward to the future.

Takashima We received a lot of praise and a lot of important insights. Thank you very much for your time today.