Risk Management

Basic Stance

In keeping with the global expansion of business, the DENSO Group is striving to strengthen risk management as part of its internal control system to help minimize risk.

Specifically, the emergence of circumstances with the potential to cause damage to corporate management are classified as risks (situations in which risks have not yet been realized) and crises (emergency situations in which risks have already been realized). For the former, efforts focus on thwarting risks before they have the chance to manifest themselves; for the latter, DENSO strives to make an initial response as well as a response for restoring business operations in a prompt and appropriate manner.

Promotion Structure

DENSO regularly confirms the improvements made to its risk management structure and framework via the Risk Management Meeting. Taking into consideration the conditions of the Company and trends in the external environment, DENSO discusses and determines the direction of important activities to comprehensively manage Groupwide risks and crises. In addition, DENSO has created the Crisis Communication Manual in order to respond promptly and accurately in the event of a crisis to clarify standards for situational judgment, reporting criteria, reporting routes, and internal/external responses.

Furthermore, specialized contingency organizations are formed depending on the extent of the situation and degree of urgency, which facilitates agile responses to minimize damage.

Moreover, at domestic and overseas companies subject to our managerial consolidation rules as well as Group companies in which DENSO CORPORATION is the largest shareholder, CSR leaders of each company work to upgrade our risk management based on support from key functional departments and regional headquarters.

Risk Management Structure (Normal Operations)

Crises countermeasures structure

Specific Initiatives

Ascertaining Risks and Clarifying Response

DENSO makes efforts to constantly ascertain the risks it faces and manage these risks from the perspectives of damage mitigation and business continuity. The Company has selected 42 risk items related to life, credit, business activities, and property based on frequency of occurrence and level of impact. The Company designates responsible departments for each risk item and clarifies various factors pertaining to these items, including level of impact, reason for occurrence, preventive measures, initial response, and recovery efforts. The Company also strives to enhance its preventive measures, initial response, and recovery efforts. DENSO revises its risk items appropriately, giving consideration to the issues currently facing society as well as the frequency of risks occurring at DENSO and the level of impact they have on the Company.

Initiatives in Japan

(1) Expanding activities to raise and spread awareness among employees

To prevent risks before they occur and minimize damage when a crisis arises, it is important that employees maintain a daily awareness of risks and take appropriate actions when a crisis occurs. A variety of awareness activities aimed at promoting employee understanding and enhanced awareness of risks are conducted at DENSO CORPORATION and domestic Group companies.

Specific Permeation and Awareness Activities (DENSO CORPORATION)

Fiscal

2005~

Risk Management Handbook

Clarification of actions to be taken in the event of an earthquake, fire, or traffic accident. All employees are required to carry the handbook on a daily basis.

Fiscal

2007~

Risk management training for management-level employees at DENSO CORPORATION

Conducted risk management training for newly appointed department managers as well as factory managers and section managers of business groups. (Number of persons taking training course in fiscal 2017: 163)

Fiscal

2009~

Risk management education for top management at overseas subsidiaries

Provided risk management education for employees scheduled for transfer as president of local corporations in order to strengthen risk management at overseas sites. (Number of persons taking education course in fiscal 2017: 12)

Fiscal

2017~

Risk management training for newly appointed directors at domestic Group companies

Conducted risk management training for newly appointed directors at domestic Group companies. (Number of persons taking training course in fiscal 2017: 24)

 (2) Strengthening earthquake disaster risk response (formulation of business continuity plans)

In the near future, a massive earthquake is expected to strike Japan. At DENSO CORPORATION and domestic Group companies, we have commenced the strengthening of Groupwide earthquake disaster risk countermeasures focused on business continuity management (the formulation of business continuity plans [BCPs]). We are engaged in the creation of an emergency situation manual and disaster reduction countermeasures from the perspective of visualizing actions, ranging from initial actions to the restoration of operations in the event of an emergency, and countermeasures for reducing disasters (countermeasures for key infrastructure and countermeasures for high-risk components in terms of procurement from the perspectives of substitutability and plant locations).

We are also developing permeation and awareness activities (initial response and safety confirmation system drills) that incorporate employees and their families based on the concept of placing top priority on human life.

BCP: Business continuity plan. In the event that operations are interrupted by an earthquake or other large-scale natural disaster, BCPs are designed to minimize damage to the Company’s business by aiming to restore operations within a targeted timeframe.

Key Initiatives (★ Also being implemented at DENSO CORPORATION)

Implementation of initial response drills (evacuation, fire extinguishing, rescue)

Annual implementation of initial response drills at each building at every plant (total of 78 locations).

 

Drills using the employee safety confirmation system

Introduced the employee safety confirmation system to accelerate the confirmation of employee safety in the event of a large-scale disaster. Implement drills twice per year for registering with the employee safety confirmation system assuming the occurrence of a disaster. From 2012, set up a message board where members of families can confirm each other’s safety.

Information communication drills

Annual implementation of information communication drills using emergency communication devices to communicate with domestic Group companies.

Implementation of disaster prevention awareness questionnaire ★

Each year we implement a questionnaire to confirm employee disaster prevention awareness and uncover any related issues as well as to provide enlightenment through the questionnaire. (Number of respondents in fiscal 2017: Approximately 1,000 persons)

Initial response drill
Home Disaster Prevention Manual for raising awareness among employees and their families

Future Initiatives

We will continue to upgrade risk management and promote awareness to prevent the emergence of risk and to minimize damage when risk emerges.

Especially during fiscal 2018, we will promote activities to visualize the management status of risk items and strengthen proactive countermeasures (prevention and initial responses).