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 Executive Management Board identifies and evaluates management risks that have the potential to significantly impact business activities, and the whole Group works to mitigate or otherwise address these risks. For management risks that arise during the fiscal year, the director responsible for the relevant risk area investigates countermeasures, which are deliberated by the Executive Management Board for risk management.
3. For the management of risk related to the environment, quality assurance, accidents and disasters, the Sustainability Promotion Council; CS/PL Committee;* and Safety, Hygiene and Disaster Prevention Meeting respectively consider preventive countermeasures, which are deliberated by the Executive Management Board and the Executive Committee as necessary, for risk management.
4. Each department identifies and works to mitigate or otherwise address its own risks. In addition, all Group plants have received ISO 9001 and ISO 14001 certification and are actively working on quality management and environmental conservation.
5. The director responsible for risk management reports on the progress of risk management to the Executive Committee and the Board of Directors. The Auditing Office audits the status of risk management for each department in the Group and reports its findings to the Executive Committee and the Board of Directors.

* 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 Executive Management Board annually identifies and evaluates risks that have the potential to significantly impact the Lion Group’s management performance and financial status, and designates these as “management risks.” The whole Group works to mitigate or otherwise address these risks (the 13 risks) through dedicated committees and systems in each department. For risks specific to individual departments, the relevant departments designate and evaluate them as “individual risks” and investigate countermeasures throughout the year, which they then implement. The director responsible for risk management reports on the progress of risk management to the Executive Committee and the Board of Directors as necessary. The Auditing Office audits the status of risk management for each department in the Group and reports its findings to the Executive Committee and the Board of Directors half‐yearly.

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