7-Eleven Parent to Revamp Board of Directors Amid Activist Investor Pressure

IRVING, Texas — Seven & i Holdings, the parent company of 7-Eleven Inc., is changing up its board of directors.

The decision to make the changes follows "constructive discussions with domestic and overseas institutional investors and shareholders in order to globalize its businesses and implement reforms in consideration of the voices from capital markets," according to the Tokyo-based company.

As a result of engaging with its investors and shareholders, the company made the following decisions:

• A majority of the board of directors will be independent outside directors in order to ensure the effectiveness of its supervisory function.
• Five candidates (two female and three non-Japanese nominees) will be nominated to newly assume the office of independent outside directors. This will result in a total of eight independent outside directors, including re-appointees.
• Internal directors will be reduced by two to a total of six to strike a balance between business management and supervisory function.

As Reuters reported, Seven & i said the board revamp is intended to add diversity and bring in new skills as the company pursues growth outside Japan.

The company will also continue reforms of its business portfolio, and it has hired a financial adviser to conduct a strategic review of its Sogo & Seibu department store unit, the news outlet reported.

The changes to the board come nearly a year after San Francisco-based ValueAct Capital, which took a 4.4-percent stake in the company last spring, pushed for a restructuring of Seven & i.

In a May 2021 letter to investors, ValueAct Capital said the 7-Eleven business could be worth more than double what its parent is currently valued at if the company restructures itself to focus on the convenience stores or if 7-Eleven is spun off.

Irving, Texas-based 7‑Eleven operates, franchises and/or licenses more than 13,000 stores in the United States and Canada. In addition to 7‑Eleven stores, 7‑Eleven Inc. operates and franchises Speedway, Stripes, Laredo Taco Co., and Raise the Roost Chicken & Biscuits locations.

In February, ValueAct presented a four-step strategic transformation plan for Seven & I. The plan called for:

1. A bold strategy to focus on 7-Eleven and to restructure the non-core businesses without limits.
2. Completing the sale of Sogo & Seibu and announce intention to separate Ito-Yokado through a sale or spin-off with plans to rapidly restructure the company to focus on its food retail operations.
3. Exiting the remaining non-core businesses while maximizing value and paying due consideration to stakeholders until the convenience store operations are all that remain.
4. An operational review of 7-Eleven outside of Japan, including the U.S. expense base and fresh food opportunity, as well as the international growth opportunity, culminating in new targets and a roadmap to achieve them.

It also pushed for Seven & i to transition its board to be comprise of a majority of outside directors.