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Governance

Risk Management

To respond appropriately to various risks surrounding the Group and to operate its business stably by minimizing damages, the Group strives to improve risk sensitivity and risk control capabilities. As one aspect of efforts to enhance its governance system, in FY2019, the Group reviewed its risk management mechanisms and built a more highly effective and reliable risk management system, and is conducting risk reduction activities at all Group business locations both in Japan and overseas.

Risk Management

We are working to improve our sensitivity to risk and our risk control capabilities to ensure the stable operation of business. We are also applying our risk management system throughout the Group and engaging in risk reduction activities at all Group business sites, both in Japan and abroad.

Risk Management Activities

Basic Perspective

The Group conducts risk management activities aimed at controlling factors that could exert a negative impact on our business performance and providing steady support for sound business operations throughout the Mitsubishi Materials Group. To assure achievement of these goals, we are conducting activities under the following three basic policies:

Basic Risk Management Policies and Objectives

  1. Responding to high priority risks:
    Prioritizing risks and implementing measures accordingly
  2. Identifying unrecognized risks:
    Using risk management records to establish a comprehensive overview of all risks
  3. Sharing risk information:
    Disclosing the details of Group risks to all concerned parties

Implementation Structure

While critical risks inherent to each field of business are identified by individual business divisions, the Group identifies and evaluates serious, high priority risks at a management level which share a high degree of commonality across the Group and which are expected to have a severe impact on the Group’s business management. The critical risks to be prioritized by the entire Group and the contents and response approaches of critical risks to be tackled by each business division are discussed at length by the Company’s Sustainable Management Office, Executive Officers’ Meeting and the Board of Directors, and defined on an annual basis. Each business site formulates activity implementation plans in accordance with this. These plans then undergo review by the Governance Deliberative Council before being put into action.A structure is in place by which the content of these activities is shared with members of management and relevant departments, and progress is monitored on a regular basis by the Sustainable Management Office, Executive Officers’ Meeting, and the Board of Directors. Additionally, information on risks identified as part of risk management activities is provided for use in internal audits, and a system is in place to have risks that have been pointed out in audits, etc. added as necessary to the risk management scope. Strict PDCA management is applied to this entire system. With regard to training, we are striving to boost our sensitivity to risk and enhance and raise the bar concerning our risk control capabilities by implementing training sessions, both in Japan and abroad, that feature both internal and external consultants.

Procedure for Identifying critical risks

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Risk management system

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Risk Handling Roles and Responsibilities According to Level

Critical risks are classified into four categories according to the attributes of each, with roles and responsibilities set for each level (management level, relevant departments, companies and other business divisions, and business sites). In an effort to ensure that all critical risks are addressed without fail, we have established a system that enables business sites to receive sufficient support if it proves difficult for them to address risks on their own, upon consultation with the parent company, overseeing business division, and relevant specialist departments

Roles and responsibilities according to level for each critical risk

重大リスクごとの階層に応じた役割と責任

Business Risks

The table below shows the main risks the management of the Group has recognized, based on this system, as having the potential to significantly impact the Group’s business results and financial situation. The contents of these risks are indicated in the “Business and other risks” section of the Consolidated Financial Results.

Name of risk Probability of occurrence Level of impact
International situation, overseas economic situation Medium Large
Market trends Medium Large
Fluctuations in raw material and utility prices Medium Large
Procurement Medium Large
Climate change High Large
Natural disasters and abnormal weather Medium Medium
Occurrence of violations of pollution and environmental laws and regulations Medium Large
Infection (COVID-19) High Large
Information security High Medium
Financial risks Medium Large

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Crisis Management Activities

Basic Perspective

We are striving to strengthen our crisis management systems to facilitate prompt, accurate responsiveness to emergency situations, including natural disasters, accidents, terrorist attacks and pandemic events. Besides operating crisis management related rules that apply to the entire Group, we formulate business continuity plans at all our consolidated subsidiaries in Japan and overseas, with the aim of minimizing the impact on customers of any crisis that might occur through swift restoration and continuation of operations. We also receive the latest global information on crisis management and expert advice from an external consulting company, and have established a system that enables employees dispatched overseas and stationed regionally to receive advice on action to take in the event of an emergency, as well as direct safety assurance services and medical services. Other efforts include the deployment of a safety guidebook that considers the risks faced by each country and region, and the implementation of security checks in countries and regions deemed particularly high risk. In addition, our Crisis Management Activities include serious operational risks such as quality scandals, business legal violations, information leaks, cyber attacks, and breaches of trust, in addition to natural disasters, accidents, acts of terrorism, and pandemics, etc., which were already covered by the activities. To ensure that the system can respond to a wide range of crisis situations, it defines how to respond to each type of crisis situation, clarifies roles and responsibilities, and provides a framework that organizes the items to handle on a timeline.

Crisis Management System

The Group implemented a crisis management system both in Japan and abroad in order to help quickly assess the safety of employees and the scope of damage at business sites in the event of a disaster or other crisis, and to share this throughout the Group. This has made it possible to initiate prompt and adequate initial response, and has also allowed us to leverage the Group’s network to provide support, etc. from sites near disaster-afflicted areas.

Crisis management system

Crisis management system

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Information Security

The Group defines information security as one of the issues in management, and aims to conduct safe business by ensuring information management, including the handling of personal information.

Basic Policy

The Group defines information security as one of the issues in management, recognizes the personal information of customers and business partners to be the most important information asset, and strives to reduce the risk of information leakage, loss, and destruction.

Management System

In order to ensure compliance with the Group information security management policy, we have defined Group Information Security Management Regulations, Information Security Measure Standards, Confidential Information Management Regulations, and various implementation procedures that must be complied with

Group Information Security Management Regulations:

Basic rules regarding the construction and operation of a management system for Group information security, for the goal of protecting the information assets owned or managed by the Group from theft, leakage, modification, or destruction, and minimizing corporate loss

Information Security Measure Standards:

Standards defining information security countermeasures for electromagnetic information assets that the Group must follow

Confidential Information Management Regulations:

Basic rules regarding the handling of personal information and basic indicators on management methods for maintaining the confidentiality of information assets in general

Scheme of Information Security Policy and Documentation

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In addition, “Information Security Panels” are set up to establish, adopt, operate, monitor, review, maintain and improve our information security policy, and information security managers are assigned to the Group and group companies to operate and monitor them.

Operating Organization for the Information Security

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Various Information Security Compliance Initiatives

Our information security activities involve enhancing and expanding our information infrastructure with an eye towards business continuity in the event of a large-scale disaster, strengthening our technical measures for information systems, and introducing and operating management systems. Technical efforts include enhancing our protective measures for preventing damage from attacks that leverage known vulnerabilities, as well as our risk reduction measures, which include enhancing defense in depth and the early detection of damage from new threats such as targeted attacks. In order to counter the rising threat of ransomware, we have introduced a system for forcibly applying updates and patches for vulnerabilities of the Group and all Group companies, including overseas companies. On the management end, we strive to maintain and improve our level of security by implementing the PDCA cycle of performance evaluations and employee education on a continual basis. As security threats continue to worsen, we will continue to comprehensively, efficiently, and appropriately investigate and implement a variety of technical countermeasures.

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COVID-19 Infection Prevention and Business Continuity

Basic Policy

The Group implements various measures under a common group policy to prevent important business from stopping, which prioritizes the prevention of employee infections and the prevention of the spreading of infections at business sites and in the local community.

  1. We will make every effort to prevent infections and the spread of infections in order to prioritize the health of employees and the safety of the workplace.
  2. We will conduct business activities according to the requests and instructions of national and regional government, and each of our employees shall act with awareness in their personal lives.
  3. We will continue our business to ensure the production and supply of products that support society and prevent interruptions to our recycling business, and thereby meet the demands of our customers and society
  4. We will take efforts for responding to COVID-19 as an opportunity to implement workstyle reforms, and improve productivity.

Task Force

When the spread of infections was recognized in China in late January 2020, the Group established a task force at the head office, which promotes unified handling across the Group. The task force formulates preventative measure guidelines and group action policies according to the status of the pandemic around the world and deploys them to all business sites, centralizes information on the health of employees, the situation and policies/regulations of various countries and regions, impact on business sites, and impact on the supply chain, etc., shares that information with top management, and conducts monitoring to ensure that the Group can handle changes to the situation swiftly and appropriately

Measures for Preventing Infection and the Spread of Infection

The Group implements various measures for ensuring the health of all employees and maintaining workplace safety in Japan and overseas, as well as preventing the spread of infection in the various regions where we conduct business.

  1. Dissemination of infection prevention measures in the workplace and thorough health management of employees.
  2. Dissemination of the procedure to follow when an individual is infected or suspected to be infected.
  3. Full-scale operation of working from home at offices, restrictions on using public transport, and utilization of satellite offices.
  4. Restrictions on business trips, meetings, and events, and promotion of remote meetings via the Web.
  5. Evacuation of employees stationed overseas, depending on the regional status of the epidemic, movement restrictions, standard of medicine, and state of medical services, etc.

Business Continuity

In order to continue producing and supplying products that support society and important businesses such as the recycling business, thereby meeting the demands of our customers and society, the Group is implementing various measures as appropriate given the current status of the pandemic and requests from national and regional governments, based on business continuity plans for each of our business sites.

  1. Offices identify which work is important and continue to function, with all important work performed from home in principle and limiting office attendance to the minimum necessary number of BCP members.
  2. Production sites identify which work is important and must be continued and implement a system for doing so based on multiple scenarios that take into account employee commuting restrictions and operation restrictions resulting from the spread of infection within the community.
  3. Supply chains are enhanced by diversifying raw material suppliers and outsourcers, using multiple distribution routes, enhancing cooperation with customers, etc.

Resilience

In order to respond to major changes in the business environment and business structure and the severe impact to the real economy that is expected to have long-term consequences, the Group is implementing various measures for increased competitiveness, such as further enhancing cooperation with markets and customers, migrating to new work styles such as teleworking, improving management speed via digital transformation, and rebuilding business models.

▼This data is only available in Japanese on the website.

MMC