Oasis Management Company Ltd. (hereafter referred to as “Oasis Management”), an investment management firm and shareholder of Kao Corporation, recently issued a statement concerning the director candidates proposed for election at Kao’s 119th Ordinary General Meeting of Shareholders. In response, Kao wishes to clarify its position and reiterate its commitment to long-term shareholder value and corporate governance.
At Kao, we are consistently focused on maximizing shareholder value and corporate growth through a strategic, long-term approach. Our board of directors and management team continually assess and refine our business strategy to drive sustainable performance. A crucial part of this strategy involves engaging in open and constructive dialogue with all stakeholders, including shareholders, and incorporating diverse viewpoints to address ongoing challenges. This open engagement is vital to our commitment to enhancing corporate value.
Kao has been evolving its board nomination process to ensure an optimal composition of directors who can best contribute to the company’s continued success. In line with this commitment, the Committee for the Examination of Nominees for Directors and Audit & Supervisory Board Members spent over six months evaluating potential candidates before finalizing the current slate of nominations. Importantly, this process was concluded prior to any director candidate proposals being made by Oasis Management.
As part of our standard procedure, the announcement of director and auditor candidates was scheduled for December 2nd, the designated date for disclosing Executive Officer information. This date clearly indicated that David Muenz, a Director who also serves as an Executive Officer, would be stepping down from his Executive Officer role at the end of December. However, he will remain a Director until the General Meeting of Shareholders in March. This timing is fully consistent with Kao’s established practices for transparency in governance.
We have provided a detailed explanation of our selection process to Oasis Management to ensure clarity. Furthermore, regarding specific director candidates nominated by the company at the end of November, we are proceeding with a thorough screening process in accordance with the criteria outlined by the Committee for the Examination of Nominees for Directors and Audit & Supervisory Board Members. We have communicated the details of this process directly with Oasis Management. Despite these efforts, Oasis Management has made certain claims that we feel are inaccurate and misleading. These include allegations that “the Directors refused to be transparent,” that “Kao’s offer to interview the candidates is clearly disingenuous,” and that “Kao has taken an approach to director nominations that falls well short of the due process expected from public companies.”
One key assertion from Oasis Management is that “Kao has announced that it has significantly delegated authority to management, and thus abandoned its oversight function.” This claim stems from our announcement on December 2nd. However, it is important to clarify that this reflects our existing governance framework, which allows for the delegation of authority within the limits established by Japan’s Companies Act. This delegation enables efficient decision-making while preserving the board’s critical oversight responsibilities. It is not an indication of any structural changes to our governance model.
Kao has long been dedicated to maintaining a high standard of transparency and effective governance. This commitment remains unwavering, and we continue to prioritize the implementation of our K27 strategy. Our goal is to enhance our corporate value and achieve long-term growth for the benefit of all shareholders.
In conclusion, Kao will continue to focus on strengthening its governance processes, optimizing the composition of its board, and ensuring effective oversight. We are committed to advancing the interests of our shareholders and all stakeholders through strategic decision-making and sustained efforts to increase corporate value. We welcome ongoing engagement and dialogue with Oasis Management and other stakeholders as we work together to achieve these objectives.
