KOKUSAI ELECTRIC Group Business Risk Management Policy
Purpose
This Policy seeks to complement the KOKUSAI ELECTRIC Way to manage risks surrounding the business of the KOKUSAI ELECTRIC Group (hereinafter, “the Group”) in an integrated and strategic manner and promote the sustainable improvement of its corporate value.
Basic Policy
The Group promotes business risk management as a comprehensive initiative not only to avoid losses (defense), but also to achieve goals through strategic activities (offense).
(1) Sustainable improvement of corporate value
The source of our sustainable growth is the creation of innovation through Technology and Tai-wa. We identify risks early that may impede our business activities, and take steps to prevent and mitigate them.
We actively accept risks that are necessary to obtain growth opportunities after conducting appropriate risk evaluation and determining they are acceptable.
(2) Business continuity and crisis response
If our business activities are suspended, we will promptly work to prioritize and resume them.
We formulate and operate an effective business continuity plan for unexpected crisis events and business risks that may undermine our corporate foundation. Even at normal times, we strive to continually strengthen our ability to respond to crises and restore business operations through preparation and training.
(3) Trust from stakeholders
We engage in business activities in accordance with social norms and corporate ethics as well as laws and regulations of each country while identifying and managing risks appropriately with a view to not losing trust from stakeholders.
We fulfill social responsibility through proper and highly transparent information disclosure and sincere Tai-wa, solidifying trust in the Group as an irreplaceable entity.
Related Information
Risk Management
Major risks and countermeasures
As well as reviewing the impact of each identified risk on business continuity and the effectiveness of countermeasures, we conduct regular risk assessments in all departments to identify new risks that may arise as social situations and the business environment change.
The results of risk assessments are discussed by the Sustainability Committee, which reports its findings to the Board of Directors. We are continuously striving to strengthen risk countermeasures and business continuity plans to ensure that they are thorough.
| No. |
Risk classification |
Possible situation |
Initiatives for risks |
|---|---|---|---|
| 1 |
Politics and economy |
Restrictions on business activities due to the impact of policies of countries and regions on economy, industry, security, etc. |
|
| 2 |
Pandemics |
Stagnation of business activities due to clusters of infections within the Company, travel restrictions to other countries and regions, etc. |
|
| 3 |
Market needs |
Long-term market stagnation or poor financial performance of the Company due to inability to keep up with rapid changes (increase or decrease) in demand |
|
| 4 |
Products and quality |
Failures of customers’ products due to defects of the Company’s products; deterioration of trust due to occurrence of safety or environmental incidents |
|
| 5 |
Intellectual property |
|
Collaboration among various departments led by the intellectual property strategy department and with external experts and responses |
| 6 |
Response to environmental issues |
|
|
| 7 |
Procurement and production |
Stagnation of production activities and delivery delays, cancellation of orders received, etc. due to delays or stoppages of the supply of procured parts |
Preparation of alternative measures by strengthening daily collaboration with customers and business partners; shift to procurement from multiple vendors |
| 8 |
R&D |
Decline in product competitiveness and poor financial performance due to inability to lead or keep up with competition in technological development |
|
| 9 |
Compliance |
Administrative penalties due to non-compliance with laws and regulations of countries and regions, need to pay compensation for damage, and deterioration of reputation and trust in society |
Regular monitoring by the Compliance Committee and internal audits, etc.; establishment of points of contact for consultation with external experts |
| 10 |
Human resources |
Stagnation in securing and developing human resources; decline in competitiveness due to outflow (retirement) of excellent human resources |
|
| 11 |
Large-scale disaster |
Stagnation of production and parts supply due to damage to the Group’s production sites and business partners |
|
| 12 |
Information security |
System shutdown and information leakage due to cyber-attacks and unauthorized access, resulting in business stagnation and deterioration of social credibility |
Continuous improvement led by the Information Security Committee in terms of both employee awareness and countermeasures for systems |
