In keeping with the global expansion of business, the DENSO Group 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.
We selected 55 risk items with the potential to impact life, credit, business activities or property; and designated a responsible department for each. Activities for ongoing improvement in the risk management system and structure and permeation of risk management are now the domain of the CSR Promotion Meeting, while the Risk Management Meeting deals with initial response when a crisis or emergency situation arises. We also form specialized contingency organizations depending on the extent of the situation and degree of urgency, which facilitates agile response to minimize damage.
We integrated the traditional roles of the general risk manager into those of the CSR leader at domestic and overseas companies subject to our managerial consolidation rules as well as Group companies in which DENSO Corporation is the largest shareholder, and appointed risk managers for each risk item under that umbrella. We are constantly working to upgrade our risk management based on support from key functional departments and regional headquarters.
Crises countermeasures structure
We have established procedures for setting up a crisis countermeasures committee for earthquake, typhoon and heavy rainfall to ensure swift response when a crisis arises.
|In cases of an earthquake above level 5.0 on the Japanese scale in a city, town or village that DENSO has production facilities||In cases when the secretariat holds a meeting and recommends setting up a committee to a general manager if the typhoon looks set to strike land||In cases when the secretariat holds a meeting and recommends setting up a committee to a general manager after assuming the amount of rain will exceed 50mm an hour and a warning has been issued|
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 2013 we also conducted risk management training directed toward newly-appointed department managers as well as factory managers, section managers of production department. The training was attended by 55 managers. In addition, we continued to provide risk management education for associates scheduled for transfer as president of local corporations in order to strengthen risk management at overseas sites. A total of 11 associates took the course.
We also sought to ensure proper responses to fires, traffic accidents and earthquakes by requiring that all associates carry the Risk Management Handbook (first version formulated in 2004) with them at all times. The content of the handbook has been revised and distributed to all associates to further stimulate awareness at the individual level.
Responding to increasing risk along with the development of our global business
We learned that along with the globalization of the supply chain, the impact of a risk occurring in one region, such as the 2011 Great East Japan Earthquake and flooding in Thailand, can spread to other regions and become a major risk. On this basis, from the perspective of Group global management we are stratifying our risk management items in the following manner and strengthening our risk responses.
(1) Major risks shared in common globally
- Items requiring response across the Group via company-wide cross-sectional functions because the impact of a risk occurring in one region spreads to all regions.
- Uniform management globally led by DENSO headquarters.
(2) Major risks specific to particular regions
- Regional headquarters identify major risks within the region based on the frequency of occurrence and the level of impact on businesses continuity.
- Activities toward the 2015 targets
Strengthening earthquake disaster risk response (formulate Business Continuity Plan)
Commence strengthening of earthquake disaster risk response measures (formulate Business Continuity Plan (BCP)* for the entire DENSO Group from the perspective of business continuity management. Ascertain areas subject to the BCP in the following manner and prepare an emergency situation manual and complete countermeasures for disaster reduction.
(1) Visualization of actions ranging from “initial actions to restoration” in the event of an emergency situation.
(2) Countermeasures for reducing disasters
(Devise countermeasures for key infrastructure and countermeasures for high-risk components in terms of procurement from the perspectives of substitutability and plant locations.)
* Business Continuity Plan (BCP)
A plan for restoring business operations within a target time frame and minimizing damage to business in the event that business is interrupted due to a major disaster such as an earthquake
BCP formulation and implementation
Fiscal 2013 activities