Risk Management
Basic ideas and policies
The Resonac Group is striving to build a system to control risks in both ordinary times and emergencies and to minimize the detected risks. Also, aiming to take actions before the materialization of risks, we are working on the establishment of a system to manage risk-related information in a collective and central manner for the efficient and effective escalation of important information to top managers, thereby supporting them in making decisions on business strategies and resource allocation.
Promotion system
Important issues related to risk management are discussed and examined at the Risk Management Committee, which is an advisory body for the CEO. The Committee reports the results of deliberations on important management issues to the Management Committee and the Board of Directors.
The Resonac Group has adopted a risk assessment, response, and review process that is compliant with the ISO 31000 standard. Once a year, a comprehensive identification of risks, including potential risks associated with business activities, and an evaluation of risks (risk inventory) are conducted at more than 140 frontline organizations, such as sections and groups. Results of risk inventory activities are reviewed at the site level by the top leadership of the respective division, plant, or Group company before being registered in the Group’s risk management system. Registered risks may be identified as serious risks based on their potential frequency or degree of impact. The Risk Management Committee deliberates on the directions of countermeasures for identified serious risks and their appropriateness before reporting its findings to the Management Committee and the Board of Directors. The risk management departments of business sites then carry out the measures approved through this process. Of the risks examined by the Risk Management Committee, strategy risks are overseen by the CSO and the CFO, while operational and hazard risks are overseen by the CRO. These officers coordinate with business divisions to address the respective risks.
Moreover, the perspective of risks management is installed within the scenario planning and business intelligence functions of the CSO, to effectively embed risk management into management strategies. The chief officer organizations act as risk oversight divisions by drafting risk scenarios and countermeasures for their respective areas of risk responsibility. Business divisions, meanwhile, take risk inventory of the subsidiaries they oversee. In these ways, risk management is conducted on a Groupwide scale.
Resonac’s Definition of Risks
Resonac divides risks into three categories: strategy risks, operational risks, and hazard risks. Strategy risks are then further subdivided into risks of changes in the assumptions on which strategies are based and risks that the established strategies cannot be implemented as intended. Passive risk management based on the conventional focuses of safety and compliance will not be enough to ensure ongoing improvements in corporate value; it will also be necessary to engage in aggressive risk management that entails promoting appropriate risk taking. Based on this recognition, the newly integrated company will judge risks from a comprehensive perspective and reflect these judgments in management strategies.
Risk Inventory Activities
In 2021, the RSA Archer® Suite* was introduced as a shared tool for integrated management for use by both former Showa Denko and former Showa Denko Materials. This decision was made after a comparative assessment of the risk management systems of both companies.
Approximately 3,000 serious risks from among the risks threatening both companies have been registered in this system. These risks were then categorized based on their potential frequency and degree of impact, to identify serious and priority risks. Risks that are judged to have both an incredibly high frequency and a potential degree of impact have been positioned as top risks. The risk phenomena and response plans for the top risks were discussed among the relevant divisions, with information shared, and reports were issued to the management committee. Moreover, the results of assessments through the system were shared with Companywide managers to help mitigate frontline risks.
- * A risk management system provided by RSA Security LLC
Specific Risks and Countermeasures
Enhancement of business continuity plans (BCPs)
We at the Resonac Group are aware of the importance of ensuring our business continuity as our responsibility as a supplier, recognizing the fact that the availability of our products has an impact on society at large. While expanding our business domain, we have been making BCPs based on the idea that we need to build a business system that is highly resistant to disasters and other crises both in Japan and overseas.
We make specific BCPs in consideration of the features of each of our businesses and products and work to implement equipment-related measures and build systems for disaster control and mitigation, and improve stockpiling plans in preparation against possible disasters, and to clarify and solve problems by continuing the aforementioned “risk inventory” activity to make risk assessments. We are thereby managing our business in a manner that enables us to continue it while giving first priority to people’s lives. Moreover, we regularly conduct drills to foster collaboration for BCPs between the divisions, plants and Group companies, through which participants can share the lessons learned, problems and best practices. We also incorporate the findings made through the drills in our BCPs.