Outside Director Interview

As a member of "Council of Experts Concerning the Follow-up of Japan's Stewardship Code and Japan's Corporate Governance Code," Mr. Yoichiro Iwama had contributed to revising "Japan's Corporate Governance Code" and others. He has deep insights in corporate governance and has provided valuable advice and supervision to IIJ's management. We spoke with him about IIJ's governance structure and the challenges it faces in achieving medium- and long-term growth.

Q1: What are your thoughts on the IIJ's governance of Board of Directors?

Our governance is well ensured by various discussions based on multiple perspectives between full-time directors who are familiar with IT industry, especially Internet, and diverse independent outside directors.

As a company with abundant potential for sustainable growth, we always pay attention to what our governance should be, make a thorough effort to recognize each business risk and disclose to stakeholders including investors, and keep in mind to ensure effective governance.

The independent outside directors' opinions, including the evaluation of effectiveness of the Board of Directors, are actively incorporated and communication between company auditors and outside directors is active as appropriate. Therefore, I believe we always make an effort to enhance our governance.

Q2: What is your assessment of IIJ's business growth and execution status?

We continue to realize strong growth based on our highly competitive technological foundation.

While setting up ambitious targets, the importance of strengthening our response to changes in the business structure is growing as we see an increase in large-scale projects for enterprise clients, and we are working on establishing an appropriate and effective project management system.

As for the execution status, under the leadership of the top management, full-time directors in charge of technology, sales and administration are appropriately fulfilling their respective roles and driving business growth.

I also consider that investor interests have been growing along with our growth, and we are actively engaged in investor relations activities. I believe that the importance of high-quality dialogue with institutional investors, especially long-term investors, will continue to grow even stronger.

Q3: What are your thoughts on the mid- to long-term challenges of IIJ?

The growth trend is strengthening with the increase in the number of large-scale projects. On the other hand, many of these projects are provided in the form of "Service Integration," in which systems integration is provided with network services that are mainly developed in-house. Therefore, as the project process become longer durations and more complex, the high-quality project management is necessary and we need to strengthen our monitoring in cooperation with the executive department and the Board of Directors.

I recognize that we are taking appropriate measures for business sustainability. This is an issue that must be continuously addressed, and the Board of Directors should appropriately supervise this issue including verification of its effectiveness.

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