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 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 risks that may cause 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
Initiatives to strengthen risk management system
Reaffirming the importance of contingency management after the Great East Japan Earthquake, the Group has taken steps to address various risks, including disasters and other accidents and environmental risks, with the establishment of the Contingency
Management Committee (present Risk Management Committee). In 2016, the TOK Group Risk Management Committee was established to deal with a broader range of risks in accordance with the Company’s global expansion.
In FY 2021/12, efforts were made to reduce risks that were considered to have high impact on business continuity based on risk assessment in the previous fiscal year (such as risks in material supply and continuous production). The COVID-19 Response Center, headed by the president, led activities to continue the production and supply of products while assuring the safety of employees. Starting in FY 2022/12, the Company will promote risk reduction activities toward the long-term development of the TOK Group, including the strengthened measures for chemical substance management risks and global warming risks.
Strengthened crisis management
The Group believes that the business continuity plan (BCP) begins with the safety of our employees. In Japan, TOK operates a safety confirmation system for confirming 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 this system and to raise awareness among employees. In the fiscal year ended December 31, 2022, 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 put in place 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 so 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 2022/12, TOK mostly completed flood prevention work at sites with the highest risk of flooding and started the formulation and operation of initial response guidelines on occasions with anticipated flooding risks.