The successful implementation of Shiseido's management vision hinges on the people who carry it out. In other words, the development of interesting and talented people is directly linked to management.
When it was founded, Shiseido was widely known for its devotion to human resource development. That organizational culture has been passed down through our history and endures today, as reflected in the "Shared Education" Declaration adopted in 2006. The declaration seeks to cultivate people by linking the self-realization of workers and the growth of the company. We also established the "sense of beauty, autonomy, and the ability to change" as indicators of the skills and sensibility that we seek to cultivate, comprising a specific definition of what is meant by "interesting and talented people." Finally, we are working to create an environment where employees can develop through a process of mutual growth that is reinforced by daily guidance and training, personnel assignments, and evaluations by their supervisors.

In accordance with its "Shared Education" Declaration, Shiseido opened a corporate university called Ecole Shiseido in 2006 and launched a variety of training initiatives to implement the Company's human resources development policy and oversee companywide training. Approximately 100 training programs were offered in fiscal 2008, including professional training in a variety of fields, new employee and management training that cuts across fields, and training to develop the skills required in upper management positions. While the president serves as the chancellor of the university, corporate officers take the lead in developing a pool of interested and talented employees by serving as the deans of the faculties in the university that correspond to their own areas of responsibility.

voice

Shiseido is pursuing gender equality initiatives as one of several management strategies aimed at energizing employees and creating an organizational culture conducive to worker performance.
Shiseido's active involvement in gender equality initiatives stems not only from a concern with human resources issues but also from a desire to increase trust of the Company on the part of employees, an important group of stakeholders, by going above and beyond legal requirements. We are also working to enhance the Company's standing in society at large by pursuing advanced initiatives that reflect Shiseido's true character.
In fiscal 2007, we created a Subcommittee on Gender Equality under the Corporate Value Creation Committee chaired by the president. The new subcommittee is charged with developing the Company's Gender Equality Action Plan and keeping tabs on progress in its implementation.

We began implementing Phase 2 of Gender Equality Action Plan 15 in fiscal 2007. All of the Company's employees are working together to address the four issue areas of fostering a culture of gender equality, training and promoting leaders, reviewing how employees work, and helping employees balance work and parenthood. Energy and resources are also being focused on advancing the plan's 15 goals concerning social contributions for fostering the next generation.

Shiseido refers to individuals in management positions with subordinates that they evaluate as "leaders," and as of April 2009 female employees account for 18.7% of all domestic Group leaders (see "Personnel Data"). This is by no means a high value given Shiseido's status as a cosmetics manufacturer. The Company is working to increase this percentage by establishing numerical targets for participation by female employees.
Specifically, we anticipate increasing the percentage to 30% by 2013 through fostering the development of female leaders via a combination of on-the-job training (OJT), evaluations, training and personnel transfers that take into consideration the circumstances and needs of individual employees. The Company sees this goal not as a firm quota but rather as a nonbinding target.
Personnel transfers remains an unresolved issue related to training and promoting female leaders. Because the number of female course employees nationwide is comparatively high at 812 (as of April 2009), we created a new system for use by both male and female employees. With the exception of certain items that specifically target women, we developed the Gender Equality Action Plan 15 that applies to both male and female employees to enable equal treatment of both genders rather than resorting to preferential treatment for women.

Shiseido has introduced seven new or redesigned personnel programs to provide support for balancing work, childcare and family life under the Gender Equality Action Plan 15 in April 2008. We responded to employee requests by broadening the scope of assistance to include employees with children in lower elementary grades, a group that had not been covered under the previous system. Other efforts have sought to create a more employee-friendly workplace environment, for example by establishing rules governing transfers of employees with childcare and nursing care responsibilities and by making changes to existing childcare programs to reflect actual conditions and facilitate their use by employees. Thanks to these mechanisms, we have progressed to the second step of the plan, a stage where women are able to continue working instead of quitting to have and raise children.
Going forward, Shiseido will continue to strive to become a company where women can advance their careers while raising their families.
* Established in 2007

Shiseido seeks to realize WLB so that each and every employee can perform his or her job in an energetic and fulfilling manner, regardless of gender or age. The process of reviewing how employees work is intended to help both the Company and individual employees experience meaningful growth by enhancing the ability of employees to pursue their personal interests and social activities during time gained through increases in efficiency. Those employees can then bring multifaceted values, knowledge, character, sense of beauty, information, and contacts to bear in their jobs.
At a meeting to announce the Company's fiscal 2007 management philosophy, the president instructed department managers and worksite leaders to plan activities to review the way employees work, achieve gender equality, and implement human resources development. As a result of the active pursuit of these initiatives, worksites have developed exemplary programs. Additionally, Shiseido’s head office has been carrying out an initiative since April 2009 to switch off lights at 10 p.m., and is in turn re-examining how employees work while considering employee welfare from a health perspective.
Shiseido will continue these worksite activities on a group-wide basis in fiscal 2009 so that all employees have a chance to experience WLB in their jobs.

TOPICS

Shiseido Unofficially Selected to Receive 3rd Nikkei Parent-Friendliness Award

Shiseido has been informed that it has been unofficially selected to receive the 3rd (2008) Nikkei Parent-Friendliness Award from Nihon Keizai Shimbun, Inc. The award has been presented by Nihon Keizai Shimbun since 2006 in recognition of private companies, local governmental agencies, private organizations, neighborhood associations, and other groups that are actively involved in supporting parenting and childcare.
Shiseido has worked aggressively to develop and enhance an environment conducive to responsible parenting and childcare based on its philosophy of balancing work and personal life, for example by introducing a pioneering maternity/paternity leave program (1990). Other measures in this area have included the establishment and opening to nearby companies of Kangaroom Shiodome, an in-house childcare facility (2003); the introduction of the Kangaroo Staff system nationwide to dispatch personnel to retail locations to relieve Beauty Consultants taking time off to raise their children (2007); and collaboration with other companies as one of the founding members of the School for Balancing Work and Personal Life (fiscal 2004 to 2006). In 2007 when the company received the “KURUMIN”(Next generation accreditation mark).
In fiscal 2008, Shiseido introduced and revised a number of programs, for example by excluding employees taking time off to raise children from consideration for job transfers that would require them to move; and by establishing programs to let spouses accompany their partners when transferred inside Japan and take time off for overseas transfers. Other initiatives to inform all employees about these new programs and to create an environment conducive to their active utilization by employees raising or considering having children include launching a campaign promoting male involvement in childcare, and publishing the Guidebook of Support Systems for Balancing Work with Childcare and Nursing Care (A4-size, 32 pages).
Shiseido considers this award to be a comprehensive endorsement of its approach to parenting and childcare. Specifically, its efforts to link parenting and childcare support measures not to isolated events, but to a broader program of reform in its organizational culture based on a recognition that those issues demand a companywide response. As well as its success in involving local communities by working in solidarity with other companies to create an environment conducive to parenting and childcare.
Shiseido will continue to strive to promote the balancing of work and personal life and to create a work environment that is supportive of parenting and childcare: for example by rectifying long work hours and encouraging the active involvement of men in childcare. This reflects the company's belief that the ability of individual employees to pursue their jobs with enthusiasm regardless of gender and age, and to experience a variety of value systems in the community and at home increases their appeal as people, leads to the creation of better jobs and new value, and ultimately drives corporate growth and development.

Kangaroom Shiodome,
an in-house childcare facility

Campaign to promote male
involvement in childcare
From New Father Album

Shiseido introduced the Kangaroo Staff program in 2006 as a way to support retail activities during evening hours by having temporary workers take the place of Beauty Consultants (BCs) working in customer service so that they can take time off to care for their children. This program has enabled us to create a workplace environment that allows BCs who have difficulty balancing the competing demands of work and childcare to have children with peace of mind, secure in the knowledge that they will be able to care for them while pursuing Shiseido's 100% customer-oriented philosophy at work.
When the program was first introduced, approximately 600 Kangaroo Staff members provided support for about 500 BCs who took advantage of the child-rearing work hours program. In April 2009, the Kangaroo Staff program was expanded to about 1,000 staff to provide support for approximately 650 BCs taking time off to raise their children.

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Shiseido is pursuing personal development as it strives to achieve its vision of filling the Company's organization with interesting and talented people. It is of paramount importance that each and every employee be able to work in a fresh and lively manner, healthy in body and spirit, and we believe that healthy living is the foundation of personal development.
We have established targets to guide the practice of health management, an approach that promotes employee health from a business management perspective based on the belief that healthy living is in the interest of both the individual and the Company. Working toward these targets, in May 2007 we published a pamphlet entitled Achieving Physical and Mental Health and announced future policies to all employees. The pamphlet, which begins with a foreword from President Shinzo Maeda, provides information concerning Shiseido's basic health management policy, health management programs, and the importance of prevention and primary prevention efforts (prevention of disease and health promotion). It also includes a declaration from the Company concerning four health projects: preventing adult-onset diseases, discouraging tobacco use, providing mental healthcare, and practicing health management for women.

While sharing the aforementioned four health programs across the Shiseido Group, to ensure these programs function effectively, the Company is holding a Hygiene Council seminar (initaited in Janaury 2008) twice annually to discuss the companywide promotion of health programs. Participants include the human resource managers of Shiseido Group companies, industrial physicians, occupational health nurses, regular nurses and other industrial health staff, labor union representatives, staff from the Head Office Personnel Department and health insurance union representatives.

Shiseido believes it is the willingness of individual employees to meet challenges and take action that drives reform of the Company forward. We launched the Chie-Tsubaki Proposal System in June 2006 to enable all employees to participate in the reform process by submitting ideas on how operations can be improved. This initiative has collected more than 180,000 suggestions so far.
The system provides a mechanism for evaluating proposals made by employees based on their creative problem-solving and improvement efforts. Proposals that receive a favorable evaluation are presented directly by the submitting employee to the Company's president and directors, who evaluate the proposal and recognize the employee's contribution. Individuals and worksites that are actively involved in submitting ideas on an ongoing basis are also recognized.
By continuing this initiative, the Company is seeking to increase individual employees' awareness and willingness to take action, thereby creating an organizational culture in which individuals can make improvements, no matter how small, on their own initiative, and to foster the development of thoughtfulness toward other employees.
Proposals that can be implemented horizontally across the organization are applied companywide to help gain new customers and streamline operations.

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Carrying out activities by always considering “what can be done to make customers more happy.”

First Place, Annual Individual Proposal Award<*> (Beauty Category), Fiscal 2008

Akiko Yamamoto, AYURA Partner

AYURA Laboratories Inc.

Sales counter staff are undertaking concerted efforts to carryout activities to create better storefronts by always considering “what we can do to make customers more happy” and “what kinds of activities are required to ensure more customers visit our stores.” Amid this effort, the Chie-Tsubaki Proposal System gave us the ability to recognize opportunities for resolving mistakes or answering small questions without leaving them in a gray zone.
We will continuously work to better prepare storefronts while communicating minor small issues as well as improvement points with all senior staff members. We will also propose such achievements to the Chie-Tsubaki Proposal System to ensure all customers who visit AYURA stores leave with a satisfied smile.

I feel that the Chie-Tsubaki Proposal System is indispensible for my professional growth and workplace development.

First Place, Annual Individual Proposal Award (General Category), Fiscal 2008

Masato Yamaguchi, Kuki Factory

Since I was chosen as a member of the improvement promotion activity group at my workplace, I took the initiative to evaluate my own work habits as my first step to contributing to the program and have always sought to be conscious if there are any points that could be improved. The Chie-Tsubaki Proposal System is significant in terms of enhancing my skill level and workplace development as well as building relationships of mutual trust among colleagues. I hope to continuously promote this actvity in order to further achieve growth.

The Chie-Tsubaki Proposal System, which embodies members’ ideas is being utilized to build an open work environment where employees can accept each other, share positive experiences and realize greater improvements.

First Place, Outstanding Workplace Award<*>, Fiscal 2008
Business Administration Department, China Business Division, Head Office

Each and every member of the China Business Division sincerely reviews individual issues and takes actions with a strong intention of “creating a better company or operation as much as possible” along with submitting proposals via the Chie-Tsubaki Proposal System. Division supervisors can often be seen offering advice to subordinates with a Chie-Tsubaki proposal in their hands. At the same time, they are often not satisfied with achieving just one improvement, and instead tie-in various improvement proposals to realize greater progress. Additionally, respective proposals are shared during divisional meetings, thereby seeking to raise motivation by congratulating each other on achievements.
(Takumi Katayama, General Manager of Business Administration Department, China Business Division)

*Annual Individual Proposal Award: An award recognizing employees who have submitted proposals on an ongoing basis throughout the year. Awards are presented in both Beauty and General categories.
*Outstanding Workplace Award: An award recognizing business offices or divisions, whereby many employees have participated in improvement activities and submitted a large number of proposals throughout the year.

Shiseido has embarked on a series of reforms to transform itself into a 100% customer-oriented company. Key to this endeavor is a reorganization of the activities of about 10,000 Beauty Consultants (BCs) who are capable of breathing new value into products developed in response to customer needs, and communicating that value directly to customers. We eliminated sales targets for BCs in April 2006 as part of this ongoing effort and replaced them with a satisfaction-based mechanism for evaluating customer service. Feedback from customers is provided to individual BCs on a monthly basis and used to enhance the level of service and customer satisfaction by enabling them to reflect on their own activities and identify areas for improvement. Following this approach, BCs can ask themselves how many customers they helped become more beautiful each day, and whether those customers were satisfied with the service they received. All Company employees have focused their energy and resources on improving day-to-day customer service and trust.

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In January 2006, Shiseido established the Hanatsubaki Factory Co., Ltd., a special subsidiary<*> staffed primary by developmentally challenged individuals, as part of an effort to create a workplace where all employees can actively engage in work. Currently, 22 developmentally challenged individuals are working at three sites, including in Sumida, Shiodome and Osaka.
Staff members at the Sumida site are working to process makeup products such as Kesho-Wakusei and Integrate applying labeling and packing them for shipment. At Shiodome Workplace and Osaka Workplace, workers help create a clean, comfortable office environment by providing services such as cleaning Shiseido offices, collecting recyclables, and disposing of confidential documents. Reflecting the high regard in which their services are held inside the company, employees received the fiscal 2007 Shiseido President’s Award for Special Service.
Going forward, Shiseido is committed to redoubling its occupational development initiatives in order to promote the independence and employment of persons with disabilities.

*Special subsidiary: A company established under Japan’s special subsidiary system with the goal of promoting the employment of individuals with disabilities. Special subsidiaries offer jobs and facilities that have been specifically designed to accommodate workers with disabilities.

Employees perform production work
at the Sumida Workplace.

Employees collect recyclables
at the Shiodome Workplace.

Employees organize forms
at the Osaka Workplace.

In August 2008, Shiseido held its fourth Bring Your Children to Work Day since 2006. A total of 87 children enjoyed a program including experiences like workplace visits, business card exchanges, a “Transformation through the Magic of Hair and Makeup” activity and quiz contests. The children were thrilled by the special welcome they received. In addition to the goals of cultivating the next generation of leaders and encouraging family understanding, the eventful day also helped foster mutual understanding and communication among employees.

Children visit a workplace and
exchange business cards

Children at the “Transformation
through the Magic of
Hair and Makeup”activity

Talking with President Maeda

Composition of Personnel in the Shiseido Group (Domestic) (as of April 1, 2009)

Change in No. of Leaders and Ratio of Female Leaders

*Leader: Since fiscal 2006, Shiseido has defined the "leader" post separate from the qualified manager position evaluated based on an ability-based qualification scheme. Managers who manage and evaluate their staff are collectively referred to as "leaders".

Percentage of Developmentally-Challenged Employees

Work-related accidents