Core concept
To guarantee the efficacy and efficiency of UNISOL Group operations, as well as appropriate financial reporting, we have developed a system for appropriate risk management and are promoting risk management Group-wide.
Risk management system
In accordance with internal regulations, the Company has established a Risk Control Committee, chaired by the President and Representative Director, which meets twice a year. The committee is structured on a Three Lines of Defense model, with the President serving as chair, division heads and other personnel appointed by the President, and headquarter unit chiefs acting as the secretariat and second line of defense. The committee regularly examine the risk assessments conducted by each division across the Group and reports significant risks to the Board of Directors. The Board of Directors uses these reports to oversee the effectiveness of risk management and directs necessary control activities.
A key feature of the UNISOL Group risk management framework is the clear definition of organizational roles under the Three Lines of Defense model, ensuring the effective operation of company-wide risk management centered on the Risk Control Committee. We continue to strengthen our risk management processes to ensure this framework operates in close coordination with the Board of Directors’ monitoring activities.
Board of Directors
Based on risks submitted by the HD Risk Control Committee, the Board assesses priorities from an executive perspective and designates high-priority items as company-wide material risks. It then directs the implementation of appropriate control activities.
HD Risk Control Committee
This Committee comprehensively assesses business-specific company-wide material risks aggregated by the secretariat, focusing on those with the greatest potential impact to the Group from a holistic management perspective. It then deliberates these high-priority risks considering their likelihood of occurrence.
HD Risk Control Committee Secretariat (Risk Administration Division)
This Secretariat brings together risk-related information within the purviews of our first and second lines of defense and clarifies the departments with primary responsibility for each risk. It then facilitates discussions to strengthen risk control measures.
Risk Control Committee and Secretariat of the subsidiaries
This Committee and its Secretariat meet to receive reports on the status of responses to risks specific to each company and to share information on material risks for the Group as a whole.
1st line: Factories and business units of subsidiaries (risk owners)
We assess strategic, operational, and crisis risks within our business units, prioritizing them using potential impact and likelihood of occurrence as indicators, and then implement control activities.
2nd line: corporate divisions of HD and subsidiaries
The 2nd line monitors 1st line risk management, aggregates risk-related information falling under the purviews of both the 1st and 2nd lines, reports to and consults with the HD Risk Control Committee Secretariat, and more. Through this mutual collaboration with the 1st line, it promotes and strengthens Company-wide risk management.
3rd line: HD Internal Audit Office, internal audit divisions and personnel in charge of internal audits at subsidiaries
These divisions and personnel review the progress of our Company-wide risk management, including the status of risk control carried out by our 1st line and whether the 2nd line is functioning effectively in its support role. It reports to our President, Board of Directors, and the Audit and Supervisory Committee.
Business and other risks
The primary risks concerning the company’s business environment, accounting conditions, and other related factors that management believes may have a material impact on its performance are outlined below. Having recognized the possibility that these risks may occur, we will continue with efforts to prevent their occurrence and take action should they do so. For more information, please see sections on business and other risks in our annual securities reports (only in Japanese).
- Market trends
- Sustainability
- Legal regulations, etc.
- Securing human resources
- Information security
- Disasters
- Management of subsidiaries and associates
- Strategic investment
- Business strategy and management plan
- Data breaches
- Industrial accidents and serious traffic accidents
Note: The above list in not exhaustive and does not represent all of the risks that may be faced by the UNISOL Group.