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Risk Management

Aiming to further strengthen the risk management system to increase sensitivity to risks and improve the quality of risk management activities

Basic ConceptA structure able to address constantly changing risks and crisis

The Sekisui Chemical Group has been advancing the development of a system to unify risk management, to prevent risks from occurring, and crisis management, which involves responding to major risks that have occurred. Through this unification, we are endeavoring to put in place a structure and system that will allow to properly address risks and crises that are in a constant state of flux in line with the status of the organization. We largely completed preparation of an environment for such activities in fiscal 2013 and moved on to make qualitative improvements in activities beginning in fiscal 2014. The revised Companies Act was enacted in May 2015, requiring corporate groups to work on strengthening their internal control systems.

Risk Management at the Sekisui Chemical Group

Strengthening the Risk Management (preventing risks before they occur) SystemEnhancing risk awareness via a PDCA cycle

Number of Organizations Employing Risk Management Activities / Percentage of Sales

In contemporary corporate activities, which are growing in complexity, it is impossible to ascertain accurately all the risks that could arise in the future. The Sekisui Chemical Group continues to run through the plan-do-check-act (PDCA) cycle of risk management in accordance with ISO 31000 the international standard on risk management, considering increasing employees' sensitivity to risks to be essential to addressing such risks.

These activities began in fiscal 2011 at 27 organizations, business divisions under division companies. The number of organizations employing these activities has increased from year to year. By the end of fiscal 2017, we expect a total of more than 170 organizations, consisting of affiliates in Japan and around the world participating. We forecast that these companies will account for about 98% of consolidated net sales. In fiscal 2016, we prioritized undertaking activities to reduce high-level risks in each department. In fiscal 2017, we plan to improve the effectiveness of these activities by pursuing inter-departmental collaboration and working in tandem with specialized departments.

Strengthening of the Risk Management SystemA new crisis management system

Average Utilization Rate of Disaster Prevention Systems at Business Sites in Japan

33-item disaster prevention checklist

33-item disaster prevention checklist

In fiscal 2011, the Sekisui Chemical Group thoroughly revised its crisis management system, utilizing its experience with the Great East Japan Earthquake. It has continued to improve the system since then.

Specifically, we conduct drills based on the emergency task force procedures at least twice a year conduct annual training for all employees using the emergency initial response procedures, and use disaster prevention checklists to improve disaster prevention systems at all of our roughly 800 sites in Japan. The average score in self-evaluations of all business sites for disaster system utilization rates based on those provided by the Cabinet Office was roughly 41% as of January 2012. Afterward, however, this increased to around 91% in fiscal 2015 and roughly 92% in fiscal 2016 as a result of upgrades to specific measures, thus enabling the Company to keep its system utilization rate at over 90%.

Business Continuity Planning (BCP)Basic concept of BCP

BCP is business strategy. The Sekisui Chemical Group, with its broad range of businesses operated via the Division Company system, has taken the fundamental stance of having business managers (heads of business divisions, operating company presidents, etc.) decide on their own necessities BCP in light of their unique business traits. For the Group, we have established guidelines for business continuity management (BCM) as a support system for creating checklists and other components of BCP. For business managers, we recommend creating BCP and BCM policies based on these guidelines and the ISO 22301 standard for BCM.

Overseas Crisis Management StructureSupport structure for overseas crisis management organizations

Based on internal rules for overseas safety management, the Sekisui Chemical Group has set up a scheme for Global Crisis Management Organizations with the director in charge of overseas crisis management scheme, followed by the head of overseas crisis management office, regional heads and heads of individual sites. Centered on this organization, we support personnel traveling or stationed overseas as well as local employees by sharing crisis management information, raising awareness of issues in a timely fashion, and implementing measures in response to emergency situations such as issuing guidance on travel restrictions.

As the number of business sites increases every year, we are periodically reviewing and updating crisis management manuals for each plant and office location with support from overseas crisis management departments.

In addition, we have prepared a support structure involving contracts with crisis management companies to provide security assistance and medical assistance in the event of a specific risk occurring overseas, such as riots, terrorism, and epidemics.

Moreover, we are raising awareness of risks overseas by holding seminars for employees being reassigned to overseas positions and by explaining our overseas crisis management system.

With the rise in business trips and reassignments to frontier regions in recent years, we are enhancing communications with overseas diplomatic establishments, creating and distributing crisis management handbooks for 20 regions, and describing the types of risks and degree of danger in each region.

In fiscal 2016, we created a training program for employees being transferred overseas and managers as well as commenced an e-learning course to ensure the participation of all employees. In addition, we held counterterrorism seminars three times for around 200 employees in order to prepare them for terrorist threats spreading worldwide.

Posting of safety management supervisors to nine overseas regions

Posting of safety management supervisors to nine overseas regions

VOICEEnhancing Safety Measures in Cooperating with Departments and Overseas Risk Management Offices

VOICE

Monica Elizondo Martindel Campo
Administrative Manager
General Administration Dept.
Sekisui S-Lec Mexico SA de CV

Established in Mexico in 1971 to manufacture and sell intermediate films, Sekisui S-Lec Mexico is engaging in large-scale capital investment with an eye to capturing future demand growth. Expecting a rise in business travelers from Japan as construction progresses, we urgently undertook safety measures in the local area. The Company subsequently examined safety measures for those staying here by undertaking a project centered on the S-Lec Film Division, Corporate Overseas Crisis Management Office, and me personally in the local area. We pursued in stages such initiatives as compiling public safety data, drafting a crisis management manual, and improving safety training aimed at eliminating concerns over public safety in Mexico, all of which helped us to upgrade a system for receiving expatriate staff at the end of 2016. Through this project, we have raised awareness of safety for all Sekisui Chemical Group employees. In my role as Administrative Manager, I plan to enhance safety measures with a constant sense of urgency to ensure that Sekisui Chemical employees can carry out their duties in comfort.