GovernanceRisk Management
1. Philosophy
2. Risk Management System
3. Risk Management Measures
- (1) Identifying Risks and Selecting Important Risks
- (2) BCM (Business Continuity Management)
- 1) Formulation and Operation of BCM Procedures
- 2) Major Earthquake Preparations
- (3) Enhancement of Initial Response to Emergencies
- 1) Crisis Management Training
- 2) Disaster Management Training at each plant and laboratory
- 3) Safety Confirmation System
- 4) Infection Preparedness
- 5) Responses to Legal Risks and Compliance Risks
- (4) Enhancing Information Security
1. Philosophy
JSR Group believes that preventing a major crisis from occurring and minimizing its impacts on business activities is an important management role. The Group has formulated Risk Management Policies and established a Risk Management Committee through which it actively pursues risk management activities.
2. Risk Management System
JSR Group manages risk by largely classifying it into two types: risk related to business strategies and risk related to business operations.
For risk related to business strategies, we engage in risk management through deliberations and decisions made in important meetings, such as those of the Board of Directors, Executive Committee, and Business Issues Committee. Please click on the following link for the roles of each committee and other details.
For risk related to business operations, we establish Risk Management Policies and engage in risk management centered on the Risk Management Committee.
The risk management system is incorporated into the internal control system. The status of the internal control system’s execution is reported to the Board of Directors. JSR has a Corporate Audit Department that continuously verifies and evaluates the preservation and operation of internal control for the entire JSR Group as required by the Companies Act and Financial Instruments and Exchange Act. It also ensures that risk in existing business does not exceed permissible levels. The department additionally maintains and strengthens internal control levels for the entire Group and conducts internal audits to ensure the appropriate and efficient execution of operations.
3. Risk Management Measures
(1) Identifying Risks and Selecting Important Risks
Since FY2009, JSR Group has fulfilled group-wide annual risk management procedures using its unique risk management system under the initiative of the Risk Management Committee. For each division of JSR Group companies in and outside of Japan, we identify and evaluate all potential risks, and formulate measures to control such risks.
Utilizing a risk map that represents level of business impact and frequency of occurrence, we identify risks that could have a significant impact on business continuity and organize them risks into the JSR Group Risk Factors. By monitoring and regularly reviewing risks that senior management has personally ascertained, we are building and maintaining a system for prevention and crisis preparedness.
Conceptual diagram of risk map
Click on the following link for information on the risks that could impact on JSR Group's business performance, financial standing, cash flow, etc.
(2) BCM (Business Continuity Management)
1) Formulation and Operation of BCM Procedures
JSR has formulated BCM procedures that summarize the BCM/BCP* systems in place for both peacetime and emergency situations. These procedures define the BCM organization and the actual BCP, which includes stipulations on target recovery times, and BCP activation and cancellation standards. They also define the organizational structure that takes effect during activations of the BCP, and corresponding priority businesses and operations.
Moreover, we maintain a stable supply of funds on hand to allow us to manage our businesses flexibly if a major risk arises. We also acquire issuer ratings and commercial paper ratings from rating agencies each year. JSR's rating information is available on rating agencies' websites as well as the JSR website.
Amid concerns of a global economic slowdown resulting from the COVID-19 pandemic, we issued three types of unsecured straight bonds with a total value of 35 billion JPY on May 28, 2020.
* BCM: Business Continuity Management/BCP: Business Continuity Plan
A BCP defines activities that need be conducted before the occurrence of an emergency situation that may threaten the survival of a company (large-scale natural disaster, explosion/fire, terrorist attack, etc.), judgment criteria and action guidelines that enable business continuity in the event of such emergencies, and other matters necessary for ensuring the continuity and early restoration of important businesses. BCM is a management system that has been developed to operate and continuously improve the BCP through a PDCA (plan-do-check-act) cycle.
2) Major Earthquake Preparations
JSR Group adopted a mid-term business plan in FY1995 concerning preparations for a major earthquake and has been conducting systematic activities to enhance those preparations. After FY2006, we began a seismic retrofitting project focused on high-pressure gas facilities in our plants, and installed an earthquake early-warning system at all JSR business sites. Based on lessons learned from the experience of the Great East Japan Earthquake, we are further reinforcing the anti-seismic capabilities of our buildings and implementing safety measures by incorporating the perspective of countermeasures against tsunamis. These initiatives are scheduled for completion by FY2020.
(3) Enhancement of Initial Response to Emergencies
1) Crisis Management Training
Once a year, JSR holds crisis management training with the participation of “headquarters for accident and crisis control” members. The first such training took place in 2004. In FY2020, training was held for members in charge of accident prevention at JSR's three plants and the Tsukuba Research Laboratories. The purpose was to strengthen the response capabilities of headquarters for accident and crisis control in each of these business establishments.
Crisis management training
Crisis management training
We conducted “blind scenario” simulation training that focused on events that could happen on the day of a disaster. Participants were envisioned to be members of the headquarters for accident and crisis control at JSR’s Chiba Plant after the plant was damaged by an earthquake of “6-upper” in Tokyo (earthquake striking the northern area of Tokyo Bay). Each participant took the initiative to gather information and set response guidelines in an ever-changing situation, and thereby confirmed his or her obligation to consider company-wide safety as well as the importance of decision-making standards for making appropriate responses in an emergency.
*Blind scenario format
A drill format that gives participants a constantly changing disaster or damage situation based on an undisclosed scenario, and then asks them to independently consider, identify, and execute responses.
2) Disaster Management Training at each plant and laboratory
JSR Group conducts disaster management and evacuation training and drills on a regular basis. It is imperative that we minimize the impacts of emergencies and ensure business continuity in such situations.
General disaster drill staged at the JSR Yokkaichi Plant
General disaster drill staged at the JSR Yokkaichi Plant
3) Safety Confirmation System
In FY2009, JSR introduced a safety verification system that uses employees’ mobile phones and smartphones. The system can promptly ascertain the safety of employees in the event of a large-scale earthquake or other disasters. In FY2011, we began expanding the system's coverage to include domestic Group companies and the families of JSR employees.
Training using this system is conducted regularly, and JSR is prepared for large-scale and wide-area disasters.
4) Infection Preparedness
We stockpile masks in preparation for an epidemic of influenza or another infectious disease. We sent masks and other protective equipment to all of our business bases in response to the COVID-19 pandemic that began in January 2020. We endeavored to minimize the pandemic’s effects on manufacturing, R&D, distribution, and other Group business activities that support the world’s key industries.
We also provide necessary information such as the announcement of flu outbreaks.
To prevent flu infections from spreading in our workplaces and to also make sure that the cases of influenza that do occur stay minor, we invited doctors and nurses to JSR's Head Office and the Yokkaichi, Chiba, and Kashima Plants to administer vaccinations to those who desired one.
5) Responses to Legal Risks and Compliance Risks
Click on the following link for information on our responses to legal risks and compliance risks.
Response to COVID-19
In view of the COVID-19 pandemic’s spread, we established a COVID-19 Response Committee led by the President at the end of January 2020. The committee’s first actions were to gather information in China, determine responses to be taken by local subsidiaries, and provide support. As it became clear that the pandemic was spreading to Japan and the rest of the world, we set up a BCP (Business Continuity Plan) Committee in mid-February. The committee quickly completed various measures taken with recognition that JSR Group is part of a materials industry that supports key industries around the world. They included establishing a code of conduct for maintaining operations at important manufacturing and R&D centers of the Group in Japan, Asia, Europe, and the United States; enforcing the supply of protective equipment and its use; stopping visits from outside personnel; sharing information with employees throughout the world; and establishing work-from-home environments at all business bases. The details of the BCP Committee’s actions are also being shared with outside directors and auditors.
While respecting cultural differences and individuality of JSR business bases around the globe, we are striving to manage the crisis and maintain our business by engaging in speedy and integrated information management within the BCP Committee and linking it to appropriate action. We are also endeavoring to post information concerning stakeholders on the “JSR’s Response to COVID-19” on the JSR website and to disclose new information as it becomes available.
(4) Enhancing Information Security
JSR Group adopted an Information Security Policy and is working to implement appropriate information management by informing all personnel of the policy.
Information Security Policy
- The JSR Group, by complying with laws and regulations and by observing other social norms relating to the handling of information, will protect information that belong to the JSR Group, its customers, business partners and other third parties.
- The JSR Group will strive to develop and actively use its information assets for the efficient execution of its business. The Group's officers and employees will only use these information assets for the purposes of their work and within the scope of their authority.
- The JSR Group will improve organizations and systems, provide education on information security, thoroughly disseminate this policy and related regulations, and implement measures to ensure information security.
- The JSR Group will implement appropriate human, organizational, and technological measures and work to prevent unauthorized access to information assets from outside the company, as well as leaks, falsification, loss, theft and destruction of information assets.
- If an information security-related problem occurs, the JSR Group will promptly identify the cause and take measures to minimize damage and prevent recurrences.
- The JSR Group will periodically assess and review its information security measures to respond appropriately to changes in external environments.
JSR Group is continually working together with external experts to increase our level of security and protect corporate information assets from cyber-attacks. In FY2014, we issued an Information Security handbook to raise employee sensitivity to information leakage risks and help ensure that employees are aware of and follow rules regarding information security. We also conduct targeted attack drills using fake viruses to raise prevention awareness. In addition, we are engaged in raising awareness of the content in the Information Security handbook through e-learning and workplace meetings.
Additionally, we created a new Cyber Security Management Office in August 2019 to strengthen our information security management (including that of Group companies) and improve employee training and enlightenment as well as employees' ability to respond to incidents.
Information security handbook
