We seek to understand and manage the range of risks attributable to our business activities, mitigate the damages and losses if such risks were to actually occur though the exercise of appropriate risk management, and maintain and enhance Nabtesco Group’s corporate value. With this stance in mind, we undertake risk management on a group-wide basis.

We have systems in place to ensure that profits, losses, asset efficiency, quality and disasters, among other matters, are reported to the Board of Directors properly and in a timely manner with respect to the execution of duties. By leveraging these systems, we strive for the early identification of risks and the minimization of losses.
With an eye on the sustainable enhancement of corporate value, we have in place a number of organizations under the direct supervision of the CEO that are responsible mainly for deliberating important matters, including the CSR Committee, Risk Management Committee, Group Quality & PL Committee and Group Environment, Safety and Health Committee.
The CEO appoints chairpersons and committee members and corporate departments perform administrative duties for the committees. Each chairperson is a member of the other three Committees as a member, facilitates collaboration, and provides reports at management meetings such as Executive Officers Committee and Board of Directors regarding the initiatives taken by the Committees periodically (approximately twice a year). By doing so, we manage risks appropriately on a group-wide basis.

Administrative organizations of the Committees

• CSR Committee (administrative organization: Corporate Communication Dept.)
• Risk Management Committee (administrative organization: Legal & Compliance Dept.)
• Group Quality & PL Committee (administrative organization: Quality Promotion Dept.)
• Group Environment, Safety and Health Committee (administrative organization: Environment & Safety Dept.)

• Related lingThe composition of the committees

Risk Management

The administrative organizations conduct group-wide risk assessments to extract, analyze and evaluate risks once a year, and report results to their respective Committees.
The Committees identify material risks based on the reports and make decisions regarding plans to address the risks. The administrative organizations monitor/audit the measures taken by the audited departments, and provide feedback to them and the Committees. By repeating this process cycle, we properly manage risk.

Risk Management Cycle

The following lists principal risks that are deemed to have potential impacts on the Group’s business performance and financial position.

Every year, Nabtesco assesses the risks faced by the Group companies in Japan and in other countries. We identify serious risks, and each department in charge of risk plans and implements measures based on their expertise.

The following are some of the serious risks that have been identified and the measures taken to address them:

• Related linkBusiness risks FY2019/12 Securities report（1.55 MB）

If a serious incident has a significant impact on the Group’s business activities, such as their termination or suspension, the department in charge of the risk reports to the CEO and related departments without delay. The CEO reports to the Board of Directors and Audit & Supervisory Board promptly, establishes an emergency response headquarters and takes command of risk management.
The emergency response headquarters, which will be headed by the CEO as the General Manager, deals with the incident quickly and works to solve it while at the same time reporting to the Board of Directors on the matter, including on countermeasures taken to address the issue.

Specific matters that cause losses for the Group are defined as incidents. We seek to minimize the impact of incidents through the reporting and sharing of information on these incidents through a series of regular meetings.
Reports on the occurrence, details, and causes of incidents as well as measures to address them and the losses incurred, among other things, are provided to the administrative organizations, the Executive Officers Committee and the Board of Directors. By doing so, we share information on the measures to reduce the occurrence of incidents.

The Emergency Response Division

Incident Reporting Route

The Nabtesco Group has been working to improve its business continuity plan (BCP) to ensure it is capable of restarting businesses promptly even if its main operation facilities suffer serious damage due to a large disaster or other crises.

We assessed the risks regarding the operation of facilities in FY2015. The results confirmed that the Group and its many suppliers faced the material risk of being hit by a natural disaster such as an earthquake. Consequently, reviewing and improving the BCP became an urgent issue.
In FY2016, we established the BCP Administrative Office, improved the business continuity system for overall manufacturing operations, and conducted a policy review. In FY2017, we began to implement drastic changes to the BCP at our main domestic facilities. In addition, we started to advance procurement BCP initiatives to secure key materials and components necessary for stable production, with an eye toward reducing supply chain-related risks in the event of an emergency.

Resilience Certification for Contribution to National Resilience (30th domestic manufacturer to be certified)

In FY2018, we installed BCP offices within bases, thereby establishing an organizational structure able to collaborate with the BCP Administrative Office. Then, we started to take action in earnest to achieve the Group-wide mid-term objective of all main operation facilities acquiring resilience certification for contribution to national resilience (the Resilience Certification), which was established by the Cabinet Secretariat in 2016 as a system for assessing the effectiveness of initiatives for business continuity.
As result, the Iwakuni Plant of Toyo Jidoki Co., Ltd., one of our Group companies, acquired Resilience Certification in FY2018, followed by the rest of our domestic manufacturing facilities (9 plants) becoming certified in FY2019.