Risk Management
Basic Concept
Yamato Kogyo Group believes that by appropriately addressing the various risks surrounding our corporate activities from prevention to resolution, we can fulfill our social responsibilities, improve the level of trust, and contribute to achieving our Vision 2030. We prioritize risk management activities that focus on preventing potential risks while respecting the autonomy and initiative of each of our Group companies. In the event of an unforeseen situation, we basically adhere to the “BAD NEWS FIRST” approach to ensure that any inconvenient information is promptly communicated from the frontline. We believe that fostering an open corporate culture and taking prompt and appropriate action will not only help us avoid risk, but also lay the foundation for trust in the Yamato Kogyo Group.
Structure
Our Group’s risk management system is built upon both the Basic Policy on Risk Management and the Business Crisis Management Regulations. The Basic Policy on Risk Management outlines fundamental measures and roles for promoting risk management activities. The Business Crisis Management Regulations provide specific responses to be taken in unforeseen circumstances. By following these policy and regulations, we are working to prevent risks, minimize losses, and ensure quick recovery for each Group company in the event of a crisis.
We have developed a globally integrated risk management system led by Yamato Kogyo’s Board of Directors, which is responsible for overseeing the Group’s overall risk management system. The executives and employees of each Group company keep a close eye on risks in their daily business activities and focus on identifying and assessing potential risks, appropriately responding to them, improving response measures, and monitoring the process.
In the event of an unforeseen situation, we will promptly establish a task force headed by the representative directors and presidents of each Group company. This task force will then respond to the situation in collaboration with an information communication team and an external advisory team, including legal counsel. With this system in place, we prevent and minimize the spread of damage.
In July 2023, we established the Risk Management Department, an organization dedicated to risk management to enhance our response to cross-Group and other potential risks, as well as to further advance our risk management practices and accumulate know-how within the Group. The department promotes activities to identify and assess risks and take appropriate countermeasures against them toward achieving our Vision 2030. The details of these activities, including best practices, are reported to Yamato Kogyo’s Management Committee and other relevant bodies as appropriate, and we are working to make effective and continuous improvements through feedback from management, including external directors. In addition, we have created a manual based on the initiatives we have implemented since the establishment of the department, and we are working to make our risk management system operate proactively and continuously.
BCP (Business Continuity Planning) Initiatives
Our Group has established the regulations on disaster response and has a system in place to take rapid action in the event of emergencies. We regularly conduct drills for various disaster scenarios, including fires and earthquakes, organized by the Yamato Steel Safety and Environment Department. These drills ensure the effectiveness of our disaster countermeasures. In April 2024, we introduced a safety confirmation service to secure means of communication and strengthen our rapid information gathering system in the event of a disaster. By regularly conducting a safety confirmation drill, we strive to raise awareness of disaster prevention. In the event of a real abnormal situation, we will prioritize protecting and saving lives, quickly restoring business operations, and maintaining public trust by establishing a disaster prevention headquarters to minimize damage and deal with the situation.
Initiatives to Foster a Risk Culture
Our Group believes that fostering a corporate culture in which all employees take the initiative in risk management and engage in it on an ongoing and daily basis is essential to promoting risk management activities. We therefore view providing education and training as an important part of our initiatives to foster such a culture and are working to instill the purposes and roles of risk management in employees. In December 2024, we provided risk management training programs for our Group’s management and supervisors by inviting external lecturers, with approximately 80 participants. In the training program for management, participants deepened their understanding of the relationship between corporate value enhancement and risk management as well as our Group’s policy on risk management activities.
Risk management training program
They also analyzed trends to be closely monitored and developments in disclosure information. In the training program for supervisors, participants deepened their understanding of the perspectives necessary to promote risk management activities and the actions required to play a leading role in promoting them. The training programs were well received by participants, with over 70% expressing satisfaction; however, it became clear that the level of understanding of risk management varies among individuals and that there are issues in applying what they learned to their actual work. Going forward, we will continue to work on fostering and establishing an effective risk culture by expanding the scope of trainees and providing role-specific training programs.