Risk Management

Risk Management

Basic Policy

Risk management is an indispensable presence necessary for achieving business continuity and progress, while also fulfilling the social responsibilities of the company. Therefore, to increase the trust of society, Shimadzu established a risk management system that encompasses corporate ethics and compliance, cultivated a corporate culture that respects corporate ethics and compliance, and has been engaged in activities for ensuring that business risks are properly managed.

Risk Management System (including compliance with laws and the corporate code of ethics)

The Shimadzu Group has established a “Shimadzu Group Risk Management Regulation” that specifies systems, responsibilities (job authority and responsibilities), and activities related to risk management. Under the direction of the President, who is the chief officer responsible for executing business processes, a Risk Management and Corporate Ethics Board convenes twice a year to deliberate, decide, and monitor important issues as the highest deliberative body for risk management. For decisions approved by the board, the director in charge of risk management coordinates the departments responsible for risk management or special committees in charge of risk management issues across the entire Shimadzu Group by providing the support and guidance necessary for respective departments and Group companies to voluntarily engage in activities. For Group companies outside Japan, the corresponding regional corporate head offices in the United States, Germany, China, and Singapore serve to manage activities, provide training, provide support, and monitor issues related to risk management at Group companies under their jurisdiction.

Risk Management System

Risk Management Systems at Group Companies outside Japan

Risk Management Activities

Shimadzu Group risk management activities involve both preventing risks before they occur and responding to risk events after they occur. The overall company, each department, and each Group company uses a PDCA cycle to manage and monitor risks based on periodic risk identification and assessment results.

1. Prevention Activities

The Shimadzu Group has currently identified“ raising compliance levels” and “reducing risks related to business execution” as important measures and is engaged in rebuilding corresponding capabilities and verifying/inspecting the current status.
In FY 2021, ethics and corporate compliance status surveys were conducted at Shimadzu Corporation and Group companies in Japan to identify current issues. In addition, risk management promotion managers were assigned in each department to enable first-line personnel to proactively reduce risks and resolve risk events.
In FY 2022, the risk management promotion officer will address the risks identified by each department and the departments responsible for respective risks provide training and create systems for voluntary learning in each department.

2. Responding when a Serious Risk Appears

An emergency communication system has been established to ensure an appropriate response in the case of a serious risk. Based on the general rule to communicate the first report as soon as possible, if necessary a response task force chaired by the President is established for implementing response measures.

Examples of Activities

The respective departments and various committees responsible for risks engage in activities to promote their respective specialized areas of risk management. The following describes some of those measures.

Managing Business Law Violation Risk (Legal Department/Official Approval Committee)

In some cases, production, sales, or other operation activities require obtaining legal or government approval through specific screening procedures. Referred to as permits and licenses, the Shimadzu Group currently has permits and licenses for about 90 laws and regulations, such as Japan's Pharmaceutical Affairs Law, Measurement Act, Aircraft Manufacturing Industry Act, and Construction Business Act. Such permits and licenses not only must be obtained appropriately, but also maintained in compliance with the applicable laws, such as by obtaining qualified personnel, satisfying permit/license requirements, and following the renewal process. Therefore, to ensure we understand and inspect the legal and regulatory compliance status of all Shimadzu Group companies, the Official Approval Committee meets periodically to review our compliance status. Also, any concerns identified regarding permits and licenses are promptly and appropriately addressed through cooperation between the applicable company, relevant departments, and the Official Approval Committee.

Managing Natural Disaster Risk

Shimadzu has established regulations and manuals that specify instructions for initial response to major earthquakes, storms, flooding, or other natural disasters that cause major damage to business operations, and implementing routine countermeasures for such disasters, such as disaster training and workplace safety measures. In addition, training and other measures are regularly implemented based on the content of those regulations and manuals.

Security Confirmation System

A system for each employee to report their safety status using their mobile phone in the event of a large earthquake or other major disaster was introduced at the Head Office and Group companies in Japan, with training conducted periodically.
Smooth confirmation of employee safety helps achieve a faster and more appropriate initial response.
Also, it is used to manage employee health as a measure against COVID-19.

[Implementation of training using KPI safety confirmation system (in Japan)]

Response rate during FY 2021 training
1. April 2021: 97.6%
2. October 2021: 97.5%
Target response rate: 96% or more: Achieved

Security Confirmation System

Conducting Disaster Training

At the Head Office, mass evacuation training assuming an earthquake is conducted periodically to firmly instill initial actions and increase awareness of risk management. In addition, periodic hands-on fire extinguishing training is conducted using simulated fire extinguishers and fire hydrants that actually discharge water. Desktop initial response training is also conducted for disaster response task forces.

Conducting Disaster Training

Stocking Disaster Provisions

Food, blankets, temporary toilets, and other supplies for daily life are stocked at the Head Office. Disaster rescue supplies, such as pickaxes and hydraulic jacks, and supplies for supporting service locations, such as portable gas cans, are also stocked.

Stocking Disaster Provisions

Business Continuity Plan / BCP

Shimadzu considers the occurrence of a major earthquake a major corporate risk. Therefore, we have established a business continuity plan for ensuring the safety of personnel, minimizing damage, recovering quickly, and fulfilling our responsibility to supply products to our customers.
In an emergency, a head office task force, headed by the President, to coordinate the Group companies and five subordinate divisional task forces, headed by respective division General Managers, to coordinate each division are established for leading business continuity and recovery measures.

Preparation of Recovery Plan

A business recovery plan is prepared for each division. A recovery plan is prepared separately for buildings, utilities, production lines, procurement, service, and other functions, to ensure a quick recovery of business operations.

Preparation of Recovery Plan

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