Crucial Issues for Corporate Survival
Risk Management Basic Policy
We are promoting risk management in accordance with the following action guidelines with the aim of contributing to the achievement of our management strategic goals through recognizing the various risks involved in the Nissan Chemical Group, preventing the occurrence of loss risk and minimizing the impact of their occurrence.
- We place top priority on the safety of the lives of officers and employees of the Nissan Chemical Group.
- We consider risk management as an important management issue, and engage in the activities from a company-wide perspective.
- All officers and employees of the Group shall be sufficiently aware of risk management, strive to improve their abilities, and endeavor to prevent the occurrence of loss risk.
- We promptly share the information on risk throughout the Group.
- We make efforts to respond promptly and accurately to the occurrence of loss risk and to minimize losses.
Goals of Risk Management
- Ensuring the Safety of Human Resources
- Surviving as a company
- Sound preservation of assets
- Securing the credibility of stakeholders
- Maximizing business opportunities and opportunities to make achievements, and avoiding the loss of these opportunities
- Ensuring compliance and pursuing efficiency, accuracy, and effectiveness in the execution of business operations
The Risk Management & Compliance Office under the Corporate Planning Department has been established as a specialized organization to promote continuous improvement in all of our risk management activities.
In addition, the Risk Management & Compliance Committee, which is held twice a year, has been established as an organization to enhance the effectiveness of risk management, and to maintain and promote compliance.
The committee is chaired by the Chief Risk Management Officer (CRO), who is appointed at the Board of Directors meeting, and is composed of the Risk & Compliance Managers of each division / department, plant / laboratory, and domestic consolidated subsidiary appointed by the CRO.
The Risk & Compliance Managers periodically conduct risk identification and assessment, formulate countermeasure plans, conduct self-assessment for status of implementation of the countermeasure plan and subject, formulate improvement plan, and regularly perform education and training at each division / department, plant / laboratory, and domestic consolidated subsidiary. The important matters related to risk management and countermeasure plans, etc. are approved at the Board of Directors meeting after discussion at the committee.
Identified Group Major Risks
We clarified risks taking into account the business characteristics of each division and the surrounding businesses, including global political, economic and social conditions.
Subsequently, risk assessment was conducted from the viewpoint of probability and impact on the business. By following the assessment, risk map was created and Group Major Risks were identified. The contents of major risks were deliberated at the Risk Management & Compliance Committee and approved at the Board of Directors meeting.
Overall Risk Assessment Process
Group Major Risks and Countermeasures
|Group Major Risk||Summary of Risk||Countermeasures against Risk|
|Delay or Discontinuance of Product and Technology Development||Risk of the failure of payback of invested capital to R&D due to being unable to launch the product under development||Manage go / stop about research targets based on periodic evaluation|
|Advent of Innovative Technology||Risk of the losing competitive power due to advent of innovative technology with low cost||Set research targets based on the latest technology information|
|Failure of the Business Portfolio Strategy||Risk of decline in business performance due to the failure of the business portfolio strategy||Minimize risk by improving risk assumptions when formulating strategies|
|Difficulty in Procurement of Specific Raw Material||Risk of being unable to supply the product to customer due to the discontinuance of specific raw material||Confirm procurement situation, discover issues and implement countermeasure for stable procurement|
|Revision or Strengthening of Law or Regulation||Risk of unwilling discontinuance of sales of product, or unwilling change in business or capital investment plan due to revision / strengthening of law or regulation||Enumerate related laws and regulations and establish an infrastructure for obtaining law revision information|
|Typhoon / Torrential Rain||Risk of increasing expenses to plant restoration and decreasing production volume due to direct onslaught on main plant by large-scale typhoon||Revise / improve the countermeasures that make early recovery and business continuity possible|
|Earthquake / Tsunami||Risk of suspension of business activities and the death or injury of many employees due to catastrophic earthquake occurring at the location of business site|
|Fire / Explosion||Risk of suspension of business activities and the death or injury of many employees, and being sued by neighborhood resident for the damage by fire / explosion at plant||Revise "No Fires, Explosions, or Chemical spills" measure|
|Quality Defect / Recall||Risk of reimbursement for large expenses by customer and discontinuance of transactions||Continue to implement "no recalls and no falsification cases" measure|
|Infringing or Being Infringed of Intellectual Property Rights||Risk of being subjected to a large amount of damages and product injunction claims from other company due to infringement on other company’s patent||Create an IP verification process to reduce the risk of infringing of other company's patent|
|Cyber Attack||Risk of shut-down of operations for a long period of time, and losing credibility of customer and society because of leak of customer’s or the Company’s confidential information by cyber attack||Examine and implement countermeasures from the perspectives of prevention, damage minimization, and education|
|Delay in Human Resource Development||Risk of personnel shortage which occurs in each division due to delay in the human resource development||Establish an ideal model of manager as well as a training system|
|Insufficient Governance of Overseas Subsidiary and Office||Risk of losing credibility due to detection of fraud at overseas subsidiary and office caused by inadequate control||Formulate group policy on company regulations and share group philosophy and policies|