Dialog Between Outside Directors: The Board of Directors That Formulated the Group Growth Strategy—Shinobu Matsui x Junko Seto

Following a series of management reforms, the Panasonic Group newly announced its Group Growth Strategy in May 2026. Effective implementation of this strategy requires a board comprised of directors from inside and outside the company who engage in substantive discussions that transcend their respective roles. As the transformation advances across the Panasonic Group, what kind of discussions have been taking place within the Board of Directors—where outside directors are the majority—and how has the Board been engaging with the executive team? Outside directors Shinobu Matsui and Junko Seto discuss the behind-the-scenes process of formulating the Group Growth Strategy and the role of Board oversight in driving sustainable growth in corporate value.

Note: This is an edited excerpt from the Panasonic Group Integrated Report 2026; please refer to the report for the full text.

Shinobu Matsui

Outside Director

Previously worked as a Certified Public Accountant at a major auditing firm. Has held key positions, including Director (currently serving as Senior Executive Officer and CHRO), at Uzabase, Inc. Has served as an Outside Director of the Company since June 2021 and was appointed Chair of both the Nomination Advisory Committee and the Compensation Advisory Committee in June 2025.

Junko Seto

Outside Director

After holding senior positions at multinational companies and other organizations, she served as Executive Officer and CFO of Asahi Group Japan, Ltd. (at the time of the interview) and is currently Executive Officer and CFO of YORK Holdings Co., Ltd. She was appointed an Outside Director of the Company in June 2025.

In June 2025, Mr. Sawada became the first outside director to be appointed Chairperson of the Board of Directors, while the Company’s outside directors have come to constitute a majority. What changes have you observed in the oversight and effectiveness of the Board of Directors?

Matsui: It has been five years since I became an outside director, and even in the early days of my appointment, I found it quite easy to express my opinions. I have felt that the Board operates in an open manner. That said, even though discussions at the Board meetings were lively, I noticed that few inside directors spoke up, and most of the comments came from outside directors. I believe this was because the Board had been positioned as a place for hearing the opinions of outside directors on the agenda items that the executives had already discussed thoroughly in advance before presenting them. Therefore, before the Group Management Reform in February 2025, most of the agenda items submitted to the Board were those that had already been extensively discussed by the executives and were nearly finalized. As outside directors, we were particularly aware of how this made it difficult to delve into more fundamental issues. It felt as though agenda items were being submitted to the Board not for discussion but simply for approval. I therefore informed the Board that it would be difficult to give an opinion when agenda items are brought to the Board only at the final stage and requested that we would rather have them presented even if they are still only half developed. In this way, we worked to improve the situation. In particular, since Mr. Sawada, an outside director, became Chairperson of the Board, some agenda items have begun to be submitted to the Board before the executives have reached a conclusion. Given the Company’s conscientious corporate culture, there was initially some hesitation about submitting agenda items to the Board under such circumstances. However, the number of cases where both inside and outside directors actively engage in discussion has increased significantly, and I can sense that the effectiveness of the Board has certainly improved.

Seto: I became an outside director of the Company in June 2025, so I have only experienced the Board after these changes took place. Even from my perspective, having worked for many years at foreign-affiliated companies, I remember being surprised at the time of my appointment by how much more active the discussions were at Board meetings than I had expected. As Ms. Matsui mentioned, discussions at Board meetings sometimes begin from differing opinions, and there is no set policy for resolving them. For example, when the Group Growth Strategy, announced in May 2026, was being formulated, the proposal was first submitted to the Board with the executives still holding differing opinions. Those differences were actually what helped reveal the fundamental issues, allowing us to engage in high-quality discussions. At the Company’s Board meetings, both inside and outside directors exchange a wide range of opinions, including those for and against, when discussing important agenda items that can influence the Group’s direction. Even in such Board meetings, Mr. Sawada’s facilitation as Chairperson helps organize the key points, enabling high-quality discussions that lead to effective decision making.

Matsui: When opinions were divided at Board meetings, we would often ask Mr. Kusumi, “What do you want to do?” seeking his views as the Group’s top executive. In this way, the Board fulfills its supervisory function while respecting the views of the top executive officer. Also, since Mr. Sawada assumed the role of Chairperson, an objective perspective has been brought to the content of agenda items and the timing to be submitted to the Board. I feel there is a healthy and productive tension between Mr. Sawada and Mr. Kusumi.

Fiscal 2026* was a year in which we implemented the Group Management Reform and formulated a Group Growth Strategy. How do you view the changes in the executive team?

Matsui: Driven by a strong sense of urgency over prolonged weak growth and a stagnant stock price, the Group Management Reform was formulated through pressing, time-bound discussions over a three-month period and was successfully completed in fiscal 2026 owing to the strong determination of the Company’s executives. The Board closely supervised the entire process, which led to the establishment of the current profit foundation. In the past, discussions by the Board regarding the Group Growth Strategy would likely have been conducted only by the holding company. This time, however, the presidents of the operating companies also took part, and the strategy was formulated through repeated discussions across the entire Group. I had previously sensed that a degree of sectionalism existed between the holding company and the operating companies, as well as among the operating companies themselves—perhaps as a negative side effect of autonomous responsible management. However, as discussions on the Group Growth Strategy progressed, those barriers seemed to have been removed.

*In this content, fiscal years refer to the years ending March 31 of the stated year.

Seto: For example, during the discussions on the Solutions area, the three presidents of the operating companies in that area each presented their initiatives to the Board. Through those presentations, we realized that the initiatives, which had previously appeared separate, actually shared common elements and were interconnected. The three presidents of the operating companies most likely gained significant insights and valuable learnings from listening to one another. I am convinced that each of them has developed a sense of ownership not only as the head of their own operating company but also as a leader in the Solutions area, enabling them to think about what the Group’s solutions business ought to look like.

Matsui: I think there was, to some extent, a perception among the operating companies that the holding company was responsible for the Group’s overall strategy, while the operating companies should concentrate on their own businesses. Now that the Group Growth Strategy has been discussed and formulated collectively, there has been a shift toward a sense of ownership—an awareness that they themselves are responsible for shaping the Group’s future.

Seto: The future of the Panasonic Group is now being considered not only by Mr. Kusumi, the Group CEO, but by the entire executive team together. While the Group Management Reform was developed and implemented out of a sense of crisis, for the Group Growth Strategy, a sense of ownership—not only for one’s own business but for the Panasonic Group as a whole—will be the key to achieving the strategy.

How do you plan to exercise the Board’s supervisory function in fiscal 2027?

Seto: As someone with a background in finance, I tend to approach matters from the perspective of profit structure and capital allocation. In fiscal 2027, the decision regarding the strategicinvestment of 500 billion yen in the AI infrastructure business—as announced in the Group Growth Strategy—will be of critical importance. The Board should engage in thorough discussions on this matter and closely monitor the execution functions of the business. We must actively engage in discussions on both fronts: risk management, focusing on how to respond flexibly to shifts in market conditions, and strategic revenue management, focusing on how to maximize opportunities when demand grows faster than planned supply capacity. As with past large-scale strategic investments, it is important that we continue checking whether pre-established KPIs and milestones have been achieved. At Board meetings, we intensively discuss not only capital allocation but also the business portfolio. In fiscal 2026, there were a notable number of proposals submitted to the Board related to the liquidation of past investments. Something that can generally be said about Japanese companies is that they tend to be homogeneous and are good at coming together in one place and moving forward with a shared mindset. On the flipside, they often struggle to deal with western corporate culture and key overseas strategic bases. We are no exception, and I have become acutely aware that we share this tendency. Taking these factors into account, we ask the executive team to conduct a deep dive into the structure and associated challenges of past M&A and strategic investment deals, and then we discuss them at the Board of Directors. Drawing on lessons learned from the past, it is crucial that the Board tailor its oversight to the nature of each deal. In addition, to realize the Group Growth Strategy, the business model in the Solutions area must be transformed. There is a certain gap between the capabilities required for a solutions business and those the Company has developed through its traditional one-time hardware sales business model. We will continue to establish appropriate KPIs and monitor them to bridge this gap and ensure the successful completion of the transformation.

In fiscal 2027, the Company’s executive compensation system was overhauled and included the introduction of performance-based stock compensation and changes to the relative size of compensation. Could you tell us about the background and objectives of these changes?

Matsui: In June 2025, the structure of the Nomination and Compensation Advisory Committee was reviewed and divided into two separate committees: the Nomination Advisory Committee and the Compensation Advisory Committee. I serve as Chairperson of both committees. The Company’s stock price has been on an upward trend since 2026, but before that, it had lagged behind competitors for an extended period. We had long considered increasing the weighting of stock compensation to encourage the management team to run the business with a stronger awareness of the capital market’s perspective. The Company introduced a restricted stock compensation system in 2019, but since the number of shares granted was fixed regardless of earnings, we realized that it did not provide enough incentives. Therefore, starting in fiscal 2027, the Company introduced performance-based stock compensation in addition to the existing restricted stock compensation. The only evaluation indicator for that is relative TSR (Total Shareholder Return), and the number of shares granted will not increase unless performance exceeds that of TOPIX and peer companies. In addition, the relative size of compensation has been revised significantly. For example, in the case of our Group CEO, if basic compensation is set at 1, the ratio of stock compensation, which was previously 0.5, has now been raised to 2. On the other hand, taking into account the implementation of the Group Management Reform in fiscal 2026, the total compensation level remains unchanged when viewed based on the standard amounts before and after the revision of the executive compensation system. As a result, the amount of basic compensation has been lowered, while the proportion of performance-based compensation has been increased.

Seto: The Panasonic Group’s management team has always maintained a strong commitment to earnings and stock price, and I believe that the revision of the executive compensation system will further strengthen that commitment. It is important for the management team to be in the same boat as shareholders and investors, working together as one to achieve sustainable growth in corporate value.

Matsui: Previously, the evaluation indicators for short-term incentive compensation for the presidents of the operating companies were based solely on the metrics of the operating companies. This time, we have included consolidated adjusted operating profit for the entire Group as a performance metric. This change enables the presidents of the operating companies to adopt a Group-wide perspective and provides added motivation to help realize the Group Growth Strategy. In April 2026, each operating company president assumed the role of executive officer at the holding company. From a compensation standpoint as well, this allows them to adopt a Group-wide perspective and ensures effective governance of nomination and compensation matters.

Seto: Another notable change is that a portion of outside directors’ compensation is now delivered in the form of restricted stock awards. The Company’s outside directors have a great deal of passion for the Panasonic Group and a strong desire to help move the Company forward. With the introduction of stock compensation, outside directors can perform their role of supervising business execution with an even stronger commitment to achieving sustainable growth in corporate value.

(Please refer to P49 of the for more information about executive compensation.)

Matsui: At this point, I am of the view that the Board of Directors at Panasonic Holdings operates very effectively and that a strong corporate governance framework is in place, but it is difficult to say whether it will still be effective 10 years from now. Both the way business is conducted and the approach to governance will continue to evolve with the times. With that outlook in mind, the Board will continue to pursue effective forms of governance that remain relevant in the years ahead.

Seto: The Company’s Board of Directors has a deeply rooted culture of continuous improvement, which I believe will help it adapt effectively to various changes in the future. On top of that, following the formulation of the Group Growth Strategy, I am strongly convinced that the Company’s direction has become clear, the Group has begun to undergo real change, and the speed of decision making has increased. We hope you will continue to follow the Panasonic Group’s transformation.

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