Risk Management
To preempt various risk events that could affect the business operations of the TOK Group, and to minimize the impact of their materialization, the Group has strengthened its risk management, focusing on mitigation of risk factors and preemptive measures. In addition, we have established a contingency management framework to mitigate damage resulting from emergencies.
Risk Management System
The TOK Group Risk Management Committee plays a central role in reviewing the risk management system and formulating risk management policy. To appropriately handle the different risks, TOK established the TOK Group Risk Management Rules and the TOK Group Emergency Response Standards. Based on the Rules and the Manual, the company implements preventive measures at normal times by identifying the risks that may result in serious outcomes, analyzing such risks, and determining, implementing, and evaluating actions required, among other risk management activities in the categories of management risks, social risks, and disaster/accident risks
Risk Management Committee Diagram
※ Chaired by the President and Chief Executive Officer
Strengthen the risk management structure
The Group reinforced the recognition of the importance of risk assessments in corporate activities and crisis management when risks materialized in the wake of the Great East Japan Earthquake and established a specialized committee to respond to the disaster. Subsequently, as globalization expanded, TOK expanded the form and renamed it the TOK Group Risk Management Committee as part of building a system to respond to a wide range of risks including disasters, accidents, and environmental risks across the TOK Group.
In the fiscal year ended December 2023, efforts weremade to reduce risks that were considered to have a high impact on business continuity based on the risk assessment of the previous fiscal year (such as risks in material supply and occupational health and safety). In April 2024, TOK newly established the ERM Department with the aim of comprehensively managing risks across the entire Group, and the Group will strengthen its efforts to respond to rapidly changing economic security and related issues. The Group will continue to promote risk reduction activities for sustainable development.
Enhance the safety confirmation system
The Group believes that the business continuity plan (BCP) begins with the safety of all employees. In Japan, TOK operates a safety confirmation system to confirm whether Group employees are safe in the event of natural disasters, including major earthquakes. Safety confirmation drills are conducted every year to ensure the smooth and efficient operation of the system and to raise awareness among all employees. In the fiscal year ended December 2023, four drills were implemented, and the response rate was maintained at a high level in all sessions.
Large-scale natural disaster preparedness
Based on lessons learned from the Great East Japan Earthquake and the Kumamoto Earthquake, TOK has established a BCP that envisions damage simultaneously striking the headquarters and multiple sites from earthquakes directly beneath the greater Tokyo area. TOK reviews its BCP every year to ensure that it is grounded in actuality by estimating actual damage that may disrupt order taking and placement, product shipment, and essential utilities.
As other disaster preparedness measures in FY 2023/12, TOK completed flood prevention work at sites with the highest risk of flooding and started the operation of initial response guidelines on the occasions with anticipated flooding risks. In FY 2024, the TOK Group plans to review the BCP in preparation for the Nankai Trough mega earthquake.
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