Enterprise Risk Management
Key Philosophy and Activities
The Group regards risks as “factors that could inhibit the achievement of business plans” and works to minimize impact or damage by accurately identifying all risks associated with our business activities worldwide. We are establishing a system based on the belief that it is also an important risk management activity to positively take advantage of these risks as opportunities to maximize returns.
With a director who supervises and promotes risk management from a companywide perspective, and a risk management division serving as the secretariat, the heads of Business Sectors, Group companies and the Administrative Division take the lead in identifying risks to the Company proactively and regularly. In so doing, we understand risks in advance and consider rapid countermeasures in the event of the realization of those risks in order to manage risks and opportunities appropriately.
Risk Management System
The risks* in the business environment surrounding the JVCKENWOOD Group are increasingly diverse and complex, and the Group has established a risk management system to formulate and implement enterprise-wide risk mitigation measures. The Chief Executive Officer is directly responsible for this system.
The Group's risks management process operates on the cycle described below (see diagram).
1. We have established the Company-wide Risk Management Committee hosted by the Chief Executive Officer (CEO), chaired by the director in charge of risk management, and composed of directors and heads of administrative divisions designated by the chairman. Based on business risks faced by business sites and identified by each business unit and region, as well as management issues and business issues, we will formulate measures to resolve “global important risks that should be addressed with the highest priority” extracted in light of their impact on business, urgency, and degree of incident, and designate an officer in charge of managing the relevant risks as the officer responsible for promoting countermeasures as a company-wide measure at the management level.
2. The officer responsible for promoting countermeasures implements a cycle to deploy and improve measures against “global important risks” to business units and regions and monitors progress as business initiatives to be achieved during the current consolidated business year.
3.All the divisions in the Group implement annual risk surveillance to assess “business base risks” based on their impact on the business, frequency of occurrence, and status of response, and formulate and implement countermeasures. In addition, each division implements a cycle of monitoring and improving the progress of countermeasures.
From FY 2022 to FY 2023, we selected supply chain management and enhancement of information security as important risks, and appointed an executive officer in charge as a responsible person. The Board of Directors also receives reports on the status of responses to the identified important risks, and these are appropriately managed and supervised.
Image of risk management structure
Business Continuity Management (BCM）
Numerous risks confront our business, the risk of earthquake and other natural disasters, the spread of infectious diseases, and global expansion of terrorisms among the most pressing. In the face of these risks, JVCKENWOOD's first priority is to preserve human life, but it also bears a responsibility to its stakeholders to have systems in place that will enable it to continue to provide products and services. The Group has articulated basic policy for business continuity in its Business Continuity Plan (BCP), which serves as the foundation for its Business Continuity Management (BCM). BCP-related units work actively to refine the plan in a PDCA cycle, conducting BCP exercises to identify issues and revising the BCP accordingly. One example is infectious diseases. The Company updated its infection control manuals and other existing materials, took measures to prevent the spread of the disease, and worked to minimize its impact and ensure the continuity of business. To enhance risk management in its international activities, it worked in collaboration with local production centers and sales companies to conduct desktop exercises involving ESG incidents during emergency situations and develop manuals covering the issues identified. One result these efforts was the swift, smooth evacuation of personnel at the early stages of the Russia-Ukraine crisis.
Basic policy on Business Continuity Plan (BCP)
Contribute to the security and safety of society through sustained business operations by promptly restoring business activities after an emergency occurs.
In March 2017, JVCKENWOOD received certification from the Association for Resilience Japan based on the guideline issued by the National Resilience Promotion Office, Cabinet Secretariat, as a business operator contributing to the building of national resilience against disasters (Resilience Certification) in recognition of its endorsement of the objective of promoting the building of national resilience and active engagement in efforts related to business continuity. As a result of ongoing activities of disaster prevention and mitigation and business continuity plans (BCPs), we passed the renewal examination after the review of the documents on its improvements and interview with our executive on March 31, 2023. JVCKENWOOD will continue to work to further enhance the quality of BCM in the future.
Certification as Organization Contributing to National Resilience (Resilience Certification)
Registration Certificate (obtained on March 31, 2017, updated on March 31, 2023)
Climate Change Risk Management
Since FY2023, we have been strengthening our risk management system to address climate change risks in line with the TCFD recommendations.
The JVCKENWOOD Group recognizes climate change as a risk to its business operations and implements company-wide climate change initiatives aimed at mitigating this risk under the leadership of the Sustainability Management Office at its Head Office .
Transition risks*1 and physical risks*2 arising from climate change issues are classified separately from general risks and assessed in terms of material issues, and managed in an integrated manner with other risks."
*1: Risks arising from the transition to a low-carbon society
*2: Risks arising from physical changes due to climate change
See the page linked below for specific initiatives.
Responses to Climate Change
*In addition to foreign exchange fluctuations, international taxation, geopolitical risks, emerging country risks, large-scale disasters, procurement, intellectual property lawsuits, etc., a wide range of risks are also covered such as human rights issues, information security and climate change, which have been increasingly recognized as risks in recent years.