Risk Management Framework
The SHO-BOND Group has risk management rules and a Risk Management Committee to guide events that can have a major impact on business activities and reduce exposure to these risk factors. Risk management also includes measures to minimize damage and losses if a crisis occurs and to prevent incidents from happening again.
The Risk Management Committee, which is chaired by the president, has the following responsibilities: (1) Identify risks and implement preventive measures; (2) Act as an emergency response headquarters when a crisis may occur; and (3) Oversee actions throughout the group to prevent incidents from happening again. The Risk Management Committee submits its suggestions and reports to the Executive Committee and reports are then submitted at meetings of the Board of Directors in order to give the entire the SHO-BOND Group access to information concerning risk.
Risk Management Process
The Risk Management Committee has established the following process to periodically evaluate risk factors. This risk management process is constantly reexamined to reflect current changes in the social and business environment.
| Process | Explanation |
|---|---|
| 1Risk identification | Business risk factors of the SHO-BOND Group are divided into Risk Categories and specific potential problems are identified for each risk factor. Magnitude of risk is defined as “the impact of an incident” multiplied by “the probability of the incident happening.” |
| 2Risk analysis and monitoring |
Studies to determine numerical and other indicators for individual risk factors and the methods for monitoring them. Monitoring for changes in “the impact of an incident” and “the probability of the incident happening.” Estimates of changes in risk exposure by using a qualitative analysis of changes in regulations, amendments to laws, government financial policies and other items that are difficult to measure numerically. |
| 3Risk control |
Prepare lists of business tasks that every business unit performs periodically in order to measure and monitor risk factors. Next, check to confirm that risk factors are being controlled by these business tasks. |
| 4Risk evaluation | By using the reports from business units, the executive in charge of risk management assesses the magnitude of every risk factor and submits a report to the Risk Management Committee. The Risk Management Committee determines priorities concerning the magnitude and categories of risk factors and discusses methods for the efficient management of risk. |
| 5Responses to incidents |
Emergency response manuals to be prepared for incidents. Perform studies concerning crisis management activities, such as direct responses to incidents, crisis management meetings, reports to government offices and agencies, public announcements about emergencies, and other responses to incidents. |
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