Risk Management

Approach

Lion Group’s business activities entail a wide range of risks. To avoid and minimize losses caused by the actualization of risks, we have appointed a Director Responsible for Risk Management (the director responsible for the Corporate Planning Department) who comprehensively controls and supervises risk for the whole Lion Group.

Basic Policy for Risk Management

1. Management and employees strive to prevent the actualization of risks that could harm Group business operations as part of their normal duties based on Lion’s basic policy for internal control systems.

2. In the event that a risk actualizes, we strive to minimize losses and harm to employees, shareholders, customers, local communities and other stakeholders.
3. We report actualized risks to top management immediately and promptly take steps to understand the situation, elucidate the events and factors that led to it, and develop measures for improvement in order to prevent recurrences.

The Lion Group’s Rules and Other Structures Relating to the Management of Risk

Response under Normal Conditions

1. The director responsible for the Corporate Planning Department has overall responsibility for the risk management of the Group. The Corporate Planning Department comprehensively manages the Group’s risk.
2. The Auditing Office audits the status of risk management for each department within the Group and reports its findings to the Executive Committee and the Board of Directors.
3. Each department periodically identifies its own risks and implements appropriate risk management measures (encompassing avoidance, transfer, reduction and acceptance). For management risks with the potential to significantly impact business activities, the director of the Board responsible for the relevant department considers appropriate risk management measures, which are then deliberated on by the Senior Executive Committee and Executive Committee for implementation.

4. For the management of risk related to the environment, quality assurance, and accidents and disasters, the administrative offices for the deliberative bodies with responsibility for the respective areas (the Sustainability Promotion Council, CS/PL Committee,* Safety, Hygiene and Disaster Prevention Meeting, etc.) are designated as the departments with responsibility for risk. These departments consider preventive countermeasures, with deliberation by the Executive Committee when necessary, and implement risk management. Furthermore, the Group Risk Officer (General Manager for Special Mission in the Corporate Planning Department) participates in the meetings of the deliberative bodies to confirm from an objective, overarching perspective that they are advancing appropriate, timely measures.

5. Each of our plants is ISO 14001 certified and is actively engaged in quality control and environmental conservation.

* CS/PL Committee
A cross-departmental committee focused on customer satisfaction (CS) and product liability (PL) to promote quality assurance activities

Response in the Event of Emergency

Emergency Response System (a system of manuals outlining countermeasures against earthquakes or influenza and other infectious diseases), the relevant facts are reported to the president and Audit & Supervisory Board members. At the same time, the directors of relevant departments collect all pertinent information, formulate response measures, clarify causes, determine countermeasures and submit reports on these actions to the Executive Committee and the Board of Directors.

Business Continuity Plan (BCP)

Lion works to build and maintain systems to minimize damage and to ensure the continuation of business operations so that it can provide products to customers even in the event of a major earthquake, storm or flood damage, an outbreak of infectious disease (pandemic) or other such contingency. In the event of an emergency, we will discuss how to set in motion business continuity plans based on the Emergency Response Systems.

Basic Policy

(1) Secure the safety of employees and their families
(2) Continue priority businesses and key operations to minimize business damage
(3) Carry out corporate social responsibilities and contribute to local communities

Key Points of Plan

(1) Priority business: Consumer Products Business
(2) Priority operations: Operations necessary for continuation of product supply
(3) Target timeframes for restoring operations and organizational chains of command

Implementing Risk Management

The Lion Group has positioned the 13 risks as shared risks to be managed on a priority basis Group-wide because they have the potential to significantly impact the Group’s management performance and financial status. Other risks have been defined as departmental risks to be dealt with by each department, mainly by officers. The status of risk response is assessed twice yearly by each department. The Corporate Planning Department compiles the results and reports them to the Board of Directors and Executive Committee. The status of each department’s risk management is further assessed by the Auditing Office via business operations audits.

For more information on the 13 risks and Lion’s main initiatives to address them, please refer to here.