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Risk Management
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 by the Risk Management & Compliance committee and agreed at the board meeting.
Risk Map (Excerpt)
| Group Major Risk | Summary of 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 |
| Advent of Innovative Technology | Risk of the losing competitive power due to advent of innovative technology with low cost |
| Failure of the Business Portfolio Strategy | Risk of decline in business performance due to the failure of the business portfolio strategy |
| 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 |
| 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 |
| 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 |
| Earthquake / Tsunami | Risk of suspension of business activities and the death or injury of many employees due to massive 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 neighboring resident for the damage by fire / explosion at plant |
| Quality Defect / Recall | Risk of reimbursement for large expenses by customer and discontinuance of transactions due to PL accident which occurs with product containing material provided by the Company |
| 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 |
| 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 |
| Delay in Human Resource Development | Risk of personnel shortage which occurs in each division due to delay in the human resource development who will be responsible for the growth of the Company |
| Insufficient Governance of Overseas Subsidiary and Base | Risk of losing credibility due to discovery of impropriety management at overseas subsidiary and base caused by inadequate control |
