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Message From Outside Directors

The TEPCO Group adopted a holding company system in April 2016. Chisa Enomoto, Corporate Officer, Head of Social Communication Office, sat down with Outside Directors Fumio Sudo and Hideko Kunii to hear their thoughts on where the Group is headed.

[ Doubling Productivity ]

Enomoto: As Outside Directors, what do you see as the reasons for the TEPCO Group's push to double productivity?

Sudo: Dramatically improving productivity is a pressing task facing the TEPCO Group. The Comprehensive Special Business Plan, established in April 2012, called for mobilizing all Group resources to promote the revitalization of Fukushima. Specifically, the Group would accept support from the national government in the form of ¥1 trillion in investment from the Nuclear Damage Liability Facilitation Fund (as it was then called); work with financial institutions and shareholders on issues related to financing and the dilution of voting rights; and cut costs by ¥3.4 trillion over 10 years. The plan has since been amended, in large part because of the increasingly urgent need to drastically improve productivity in order to advance revitalization in Fukushima.
The total funding TEPCO will need to secure to continue addressing the effects of the Fukushima accident will be much greater than the initial estimates. In the TEPCO reforms proposed at the end of 2016, the necessary funds are estimated at not just double, but three to four times the earlier projections.

Enomoto: Because it provides a public utility, TEPCO uses a special fee structure, the comprehensive cost method. As a result, I think its cost awareness has been somewhat different from that of an ordinary private-sector company. Changing that corporate culture is crucial. To double productivity, I think that TEPCO must set quantitative targets and take comprehensive measures to change the ways its employees work. Quantification can also help enable women to succeed in the workplace. For example, while it's a common problem that is by no means limited to TEPCO, there have been cases in which employees' performance reviews have been negatively affected by their legitimately utilizing the system for reduced working hours for child care. An important part of reforming work practices is eliminating this kind of unfair, opaque evaluation.

Sudo: The quantification of work is essential to changing the corporate culture. On average, a TEPCO Group employee works more than 2,000 hours per year. Compare that with Germany, where average working hours amount to less than 1,500 a year, while productivity is said to be 1.5 times that of Japan. Clearly, we must seek to improve productivity.
This will not happen simply by cutting out overtime; the goal is to raise productivity so that the work gets done without the need for overtime. To do so, I think TEPCO will need to develop better job descriptions.
I often say that we cannot manage what we cannot measure. By this I mean that we can't create management metrics for things that we haven't quantified. If employees can quantify the results of their own work, they can create a culture that encourages improving on those results each year. This could provide the foundation upon which TEPCO could build world-class productivity.

[ Fukushima: Responsibility and Revitalization ]

Enomoto: As Outside Directors, how do you feel that the TEPCO Group ought to go about fulfilling its responsibilities to Fukushima?

Enomoto: I think that there is a common tendency to focus on the construction of public buildings. These buildings matter, of course, but revitalization means not just rehabilitation to how things were, but also fostering community in new ways, so it's important that we take a more comprehensive view. As part of that, I think we may need to develop more active ties with local Fukushima women.
To date, Group employees have participated in initiatives to support the local residents in Fukushima on more than 300,000 occasions. I've heard from many employees that these experiences helped them gain a truer understanding of where things stand there. Going forward, we must continue to reexamine how TEPCO can most efficiently be of help to the people of Fukushima.

Sudo: The people involved and the mechanisms employed in revitalization are key. Revitalization is an area where quantification is challenging, but we must find ways to do so in order to raise productivity. I hope that TEPCO will carefully look into ways to achieve even greater multiplier effects to maximize the impact of the funds it invests.
In many European and American companies, half of the personnel responsible for communication with local communities are women. We need to make efforts to reach that level. The people at the Fukushima Revitalization Headquarters, led by Representative Yoshiyuki Ishizaki, are working very hard. I hope to see those efforts taken a step further, though, with the quantification of revitalization in order to better serve and empower local communities in Fukushima.

[ Diversity ]

Enomoto: How do you think the TEPCO Group is doing in terms of its efforts to remove barriers to success for women in the workplace?

Kunii: Before the 2011 earthquake and tsunami, TEPCO, like many other Japanese companies, was working to make it easier for women to excel professionally. However, it seems to me that all the focus was on women's needs, and efforts to change attitudes among men were severely lacking.
Raising the rate of male employees who take leave or reduced working hours for child care could help transform the corporate culture. Setting numerical targets to quantitatively develop a new culture is an important form of positive action TEPCO could take to achieve global-level parity on this front.

Sudo: I think that the lack of effective job descriptions is a significant reason that the rates of male employees taking leave or reduced hours for child care have been slow to rise. Job descriptions represent a tool to help dramatically increase productivity, fulfill TEPCO's responsibility to Fukushima and promote diversity all at once.

Kunii: It's important to actively recruit women for technical positions, too. Women with technical training are few to begin with, so the Company has to signal that it wants to hire women for such jobs. The International Monetary Fund's Managing Director, Christine Lagarde, said that "Women can save Japan." We need to make this into "Women can save TEPCO" by not just bolstering the Group's number of female employees, but also enabling women to take more active roles within the Group. We should let women know how they can contribute, and provide opportunities for them to advance their careers and network.

Kunii: To make networks, you have to make time. Employees who spend all their time at work may find it impossible to expand their networks.
Developing effective job descriptions and quantifying work can multiply productivity, helping to free up time that can be spent with family or invested in one's own future. This is absolutely crucial to enabling both the Group and individuals to make real social contribution. I look forward to seeing what TEPCO's employees can do.

(March 2017)

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