Governance

Risk Management

Basic policy on risk management

Under the motto of “Reliability, Confidence, Optimism,” the Group considers it its corporate mission to “contribute to enhancement of fair capital competitiveness of the clients (the publicly-traded companies, investors and market participants) and the growth of the global economy.” To this end, the Group seeks to improve its corporate value by emphasizing the establishment of good relationships with all stakeholders including shareholders, business partners, and employees.

To achieve this goal, the Group believes it essential to reinforce and enhance its corporate governance, and aims to ensure sound, efficient and transparent management. The Group is thus working to identify and classify as risks all possibilities that could cause physical, economic or reputational damage or disadvantage to the Group. At the same time, the Group thoroughly examines risks that are expected to arise from changes in the business environment to enable it to develop the necessary structure, etc., for managing such risks appropriately.

Risk Management System and BCP (Business Continuity Plan)

In the Group, the head of each organization, including senior general managers and general managers, identifies operational risks on an organizational basis, analyzes and evaluates these risks, and reports them to the Group Risk Management Committee. If a risk that needs to be addressed is discovered, the Group Risk Management Committee oversees risk management and supports risk management in each organization by designating a person responsible in each organization to address the identified risk and having him or her take the necessary measures.

 Group Risk Management Committee

In June 2023, the Company established a Group Risk Management Committee to identify and evaluate any presumed risks in the Group’s business activities and examine countermeasures. Chaired by the director in charge of the Administration Department, the committee is composed of the heads of the business divisions of Group companies and other appropriate members. It meets, in principle, after each quarter and when necessary upon the initiative of the chairperson to confirm issues regarding Groupwide risks and monitor the progress of improvement measures. In addition, the committee will consider, make recommendations on and monitor the establishment of an enterprise risk management (ERM) framework. The results of the review are reported to the Board of Directors through the Representative Director, President and Chief Executive Officer.

 BCP (business continuity plan)

To ensure the continuity of its business operations, the Group has formulated a BCP that covers the following risks: widespread catastrophes caused by natural disasters, epidemics of infectious diseases and partial shutdowns of social infrastructure, etc.; localized damage from fires and terrorist attacks, etc.; and system failures of the Group, etc. In the event of an anticipated risk, the Group will minimize the impact on its business partners by establishing an action list for each phase of the disaster, including an immediate response, a response by the Disaster Countermeasures Headquarters and a response to ensure a rapid recovery, and will strive to continue operations to the greatest extent possible or to restore them as quickly as possible.