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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. 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 Conducting 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 2016, we expect a total of more than 150 organizations, consisting of affiliates in Japan and around the world participating. We forecast that these companies will account for about 93% of consolidated net sales. Looking ahead, we plan to improve the quality of the activities through efforts including education and training for the risk managers responsible for risk management promotion at each business site and sharing of effective risk management measures.

VOICEFostering sensitivity to risk by visualizing risk management activities

VOICE

Hiroshi Nakanishi
HR & Administration Division
Sekisui Fuller Company, Ltd.

Ten years have passed since Sekisui Fuller was founded. Over the next ten years, as the company’s corporate brand is established, in fiscal 2014 we began in earnest to strengthen risk management at the behest of senior management, which said that risk management will be essential in new business development in the years ahead. At Sekisui Fuller, we are sharing each division’s risk management progress charts with all areas throughout the company and working on the visualization of our activities. As a result, I feel that employees’ sensitivity is certain to increase by, for example, raising new risk management themes at the monthly sales and production meetings. The business continuity plan (BCP) implemented in December 2014 calls for enhancing risk management as a part of PDCA.

Strengthening of the Risk Management SystemA new crisis management system

Average utilization rate of disaster prevention systems at business sites

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.

We have conducted drills based on the emergency task force procedures at least twice a year, and we have reviewed the systems and operations described in related manuals, as well as conducting annual training for all employees using the emergency initial response procedures and using disaster prevention checklists to improve disaster prevention systems at all of our roughly 800 sites in Japan. While ideally we should aim for a utilization rate of 100% for a disaster prevention system, the average score in self-evaluations of all business sites as of January 2016 was roughly 91%. This represents an improvement from the 40% score in January 2012 when we began self-evaluations, thanks to continuous improvements along with periodic surveys every January. In fiscal 2016, we aim to add momentum to activities at some business sites that have lagged behind in improvements.

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 pyramid scheme for overseas crisis management organizations with the director in charge of overseas crisis management at the top of the pyramid, followed by the head of overseas crisis management departments, 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 15 regions, and describing the types of risks and degree of danger in each region. In fiscal 2015, we worked to reinforce our frontier region support structures in Mexico, India and China in accordance with our business strategies.