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Risk Management
Basic stance
In keeping with the global expansion of business, DENSO is striving to strengthen risk management as part of its internal control system to help minimize risk. Specifically, emergence of circumstances with the potential to cause damage to corporate management are classified as risks (situations in which risks have not yet been realized) and crises (emergency situations in which risks have already been realized). For the former, efforts focus on nipping risks in the bud before they have the chance to manifest themselves; for the latter, DENSO strives to make an initial response and response for restoring business operations in a prompt and appropriate manner.
Priority areas in fiscal 2009 were raising awareness of risk management on the part of the workplace leaders who form the backbone of our approach to risk management and the promotion of a Business Continuity Plan (BCP). In particular, as part of our BCP, we significantly revised the manual Response to Tokai Earthquake (formulated in 2002) that outlines initial response prioritizing human life into the Earthquake Response Manual. The new manual clarifies a restoration plan (expansion of targeted scope) in case of simultaneous earthquakes in Tokai and Tonankai aimed at the early resumption of business amid difficult circumstances as well as basic action procedures and requirements (full description) for employees in assigned areas. In April 2009, 800 employees from the Toyohashi Plant (Aichi Prefecture) took part in large-scale training to assess the appropriateness of the new manual and determine areas requiring improvement.
Promotion structure
We have established a Risk Management Meeting, which
cuts across organizational boundaries; selected 58 risk
items with the potential to impact life, credit, business activities
or property; and designated a responsible department
for each. These departments continuously review and
enhance our prevention and business restoration measures.
We have also assigned risk managers to domestic and
overseas companies subject to our managerial consolidation
rules as well as Group companies in which DENSO Corporation is the largest shareholder. These companies
work to enhance management and conduct voluntary
reviews using a Risk Management Self Diagnosis Sheet for
each corresponding risk item while sharing information with
DENSO Corporation. We are constantly working to upgrade
our risk management based on support from key functional
departments and regional headquarters.
●Risk management structure
●Major risk items
| Accidents and mistakes due to internal factors |
e.g., environmental pollution, labor accidents, expansion of customer complaints, employee issues, disputes over personnel issues, confidential information leaks, product recalls, bad debts, traffic accidents, production impediments, information system failures, violations of contract obligations |
| Legal violations |
e.g., antitrust law violations, foreign exchange law violations, tax evasion, patent infringement, crimes and scandals of directors and employees |
| Accidents or incidents due to external factors |
e.g., buyout of DENSO shares, derivative action, product liability lawsuits, contingencies, transportation problems, cyber terrorism |
| Natural disasters Events outside of human control |
e.g., volatility in financial markets, natural disasters, events outside of human control, disaster at supplier |
Expanding activities to spread and raise awareness
Since the awareness and conduct of the managers who are our workplace leaders are essential in risk management and crisis response, in fiscal 2009 we also conducted training directed toward department managers as well as factory managers, managers of production department sections and managers at domestic Group companies. The training was attended by 67% of the targeted managers. In addition, we newly incorporated a risk management curriculum into our site manager education program for employees scheduled for transfer as president in order to strengthen risk management at overseas sites. We also sought to ensure proper responses to fires, traffic accidents and earthquakes by requiring that regular employees carry the Risk Management Handbook with them at all times.
Response to new types of influenza
In line with fears regarding the spread of new types of influenza in the past few years, DENSO formulated a basic policy and response manual (first issued in November 2006; currently 3rd version) at relevant departments from the perspective of infection control, and worked to increase awareness among employees. We also launched a company-wide contingency organization as a result of the group infection that struck Indonesia in August 2008 and formulated an action plan for each phase. We created an action plan for each Group company in China and other parts of Asia, which were deemed high-risk areas.
In line with the outbreak of a new type of influenza in April 2009, we formulated action plans in Mexico, the United States, Canada and Europe, and implemented countermeasures that included infection control. We will examine action plans and execute concrete countermeasures while closely monitoring the situation, especially since a considerable number of infected persons has been confirmed in Japan and Australia.
●Crises countermeasures structure
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