Governance

The Group will establish effective governance frameworks to ensure the transparency, objectivity, and fairness of the management of the companies and earn society’s trust everywhere it operates.

Risk Management

The Group is globally engaged in the paint and coating business and believes that appropriately understanding and managing risks is essential to the sustainable growth of the business. With this belief, it has established a risk management system based on the basic policy of the internal control system.

System of Risk Management

The Company appropriately and continuously monitors risks associated with the execution of the Group's business through reports and deliberations at important meetings, including those of the Board of Directors, the Executive Management Committee, and the Important Japanese Partner Company Presidents’ Committee. In the fiscal year ending December 2020, it has newly established the Risk Management Committee, chaired by the Representative Executive Officer and President, in place of the CSR Committee, which has been established in the past. The committee deliberates on the management of important risks related to the safety, environment, and compliance of the Group and the continuous review and improvement of the internal control system. Moreover, the Audit Department, which is responsible for the Group's internal audit function, has established a system that monitors the effectiveness of the Group's internal control system. When establishing the Risk Management Committee, in order to correctly grasp the actual status of the Group's risk management system and activities, the Company reconfirmed, assessed, and analyzed the actual status at domestic and overseas partner companies. It also created and improved risk management manuals and related tools based on approaches in ISO 31000, which is an international standard for risk management, and COSO. In addition, it comprehensively grasped risks in the entire Group and assessed and analyzed the seriousness of the risks based on common standards. Thus, it is striving to maintain and improve an environment where it can reasonably address the risks. The Company regularly holds Risk Management Committee meetings to set and implement themes to reduce serious risks. It has also set up subcommittees in a timely manner so that individual Group companies and departments can work together, thus working to reduce risks. The Risk Management Committee is also responsible for cross-group crisis management. In January 2020, it established the New Coronavirus Infection Control Headquarters at the Head Office of the Company. Under the direction of the Representative Executive Officer and President, who chairs the committee, it has advanced efforts to raise funds, implement business continuity plans, and expand business opportunities in collaboration with domestic and overseas partner companies, while giving top priority to ensuring the health and safety of executives, employees, and their families.

Partner Companies and Our Functional Divisions

Monitoring and Review
: Monitor and review the effectiveness of each process, and spiral them up.
Risk Assessment Risk Treatment
1. Risk Grasp
Grasp Risks systematically and comprehensively by using the “Risk Classification Table”
2. Risk Analysis
Assume the level of each risk based on the “Risk Criteria” (judge on risk’s magnitude and occurrence frequency)
3. Risk Evaluation
Create a “Risk Map” to visualize the status of risks and material risks
4. Risk Treatment
Based on the results of risk assessment, decide on risk treatment policy and address risks
Cooperation 矢印
Support, cooperation and Information sharing
矢印
Support, cooperation and Information sharing
矢印2
Support, cooperation and Information sharing
Report on the results of risk assessment
矢印2
Support, cooperation and
Report on the results of risk assessment
NPHD/Risk Management Committee

Monitoring and Review
Promote spiral-up by monitoring and reviewing group-wide activities.
1. Risk Grasp
Grasp Risks systematically and comprehensively by using the “Risk Classification Table”
2. Risk Analysis
Assume the level of each risk based on the “Risk Criteria” (judge on risk’s magnitude and occurrence frequency)
3. Risk Evaluation
Create a “Risk Map” to visualize the status of risks and material risks
4. Risk Treatment
Based on the results of risk assessment, decide on risk treatment policy and address risks

Risk Management Activities

In the Group, each partner company and functional division of the Company independently follows the cycle of risk management activities to effectively respond to risks and seeks to improve the cycle spiral through monitoring and reviews. The Risk Management Committee also follows the cycle of risk management activities related to the entire Group through support to, cooperation and information sharing with, and report reception from partner companies and the Company’s functional divisions. Thus, it works to appropriately respond to important risks and promote the improvement of the cycle spiral based on monitoring and reviews.

Risk Management Committee
Chairman:Representative Executive Officer President

In response to the consultation of the Representative Executive Officer and President, shall deliberate matters relating to continuous review and improvement on the systems for the management of internal control and important risks concerning safety, environment, and quality, etc., of the Group.
BCM(Business Continuity Management) Subcommittee
Establishment of a system to implement BCM processes, including the settle and implementation of BCP(Business Continuity Plan), and continual improvement, and examination and proposal of important issues
Information Management Subcommittee
In response to various security risk incidents, to consider and propose the urgent establishment of a structure for risk reduction
Security Trade Control Subcommittee
To consider and propose measures for trade control , the viewpoint of security based on international treaties,international export control regimes, and foreign exchange and foreign trade laws
Others
矢印
Support,Cooperation,Information sharing
Partner Companies
Risk Management Committee
Implemented support, alliances, and information sharing with the Nippon Paint Holdings Risk Management Committee to build a smooth risk management system for the group.
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