Governance

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

Risk Management

Risk management system

Important meeting structures

The Nippon Paint Group regularly convenes important meetings such as Board of Directors meetings and regional Executive Committee meetings. The Representative Executive Officers & Co-Presidents participate in important Executive Committee meetings to keep up to date with the status of the Group’s business operations.
The Representative Executive Officers & Co-Presidents identify risks when business risk factors emerge, and respond to these risks by monitoring the risks appropriately and continuously while sharing risk information with the Board of Directors (*1).

*1: 5 of the directors have risk management experience and skills.
For more information, please see Required experience/skills for the Board of Directors.

Global risk management

To enhance risk management across the Nippon Paint Group globally, we established the Basic Policy on Global Risk Management (effective January 1, 2022) which designates the Representative Executive Officers & Co-Presidents as the executives with the highest level of responsibility for risk management.
We also established a risk management system based on autonomous risk management through self-inspections by the Partner Company Groups (*2).

Through a self-inspection of its own risk management system, each Partner Company Group autonomously clarifies points for improvement and the lead time required to achieve improvements, identifies important risks by using a risk-based approach, and reports the identified risks to the Representative Executive Officers & Co-Presidents.
The Representative Executive Officers & Co-Presidents determine the status of implementation of the group-wide risk management system by region and by business and participate in important Executive Committee meetings to perform effective risk monitoring, give directions for risk responses and develop management strategies that integrate responses to material risks.
In addition, the Representative Executive Officers & Co-Presidents convene Global Risk Management Committee meetings to deliberate on the management of the Group’s material risks and the ongoing review and development of internal control systems for risk management, including governance and compliance. Results of these meetings are reported to the Board of Directors.

We have established a crisis management system to promptly respond to risks according to their levels of impact by clarifying the classification of crises (*3), reporting standards and persons responsible for reporting and responding to each classification of crises when they occur.

*2  Significant subsidiaries or group of subsidiaries designated by Nippon Paint Holdings.
*3  Classified into (1) Local crisis and (2) Group-level crisis. The heads of the Partner Company Groups are entrusted to handle Local crisis situations, while the Representative Executive Officers & Co-Presidents give commands and orders to respond to Group-level crisis situations.

Diagram of Global risk management

Risk management activities

The Nippon Paint Group defines risks as incidents that underlie business activities and threaten corporate activities, and monitors risks from the standpoints of both the probability of occurrence and the extent and magnitude of damage.

Specifically, each Partner Company Group evaluates its risk management system based on the list of selected self-inspection items that are necessary for identifying business risks, and uses the evaluation results to effectively and efficiently achieve their business goals.
For self-inspection items that need improvements, improvement plans and lead time will be reported to the Representative Executive Officers & Co-Presidents, and progress will be monitored at important meetings and in the risk management report in the next year. The effectiveness of self-inspections will be checked by comparing the results with the business audit results and at the Global Risk Management Committee and other meetings.
The Partner Company Groups select their material risks based on the results of self-inspections and the external environment. The selected material risks will be reported to the Representative Executive Officers & Co-Presidents and used for monitoring management and establishing management strategies of the Partner Company Groups.

Diagram of Risk management  activities

Environmental and social activities

The Nippon Paint Group believes that the process of achieving Maximization of Shareholder Value (MSV) is predicated on the fulfillment of its environmental and social responsibilities. Based on this conviction, we conduct many environmental and social activities.

Environmental activities
The Nippon Paint Group has established the Global Team with members from our key partner companies around the world that works directly under the Directors, Representative Executive Officers & Co-Presidents. The Global Team conducts activities to identify environmental issues and measures.
We are implementing many environmental measures including climate change responses based on the Group-wide policies that have been established.
Please see here for the details.

Examples of activities concerning the strategy for climate change risks and opportunities available here.

Social activities
The Nippon Paint Group aims to achieve sustainable growth based on market growth, brand empowerment, and good relationships with communities by investing in communities through its value chains. In addition, we conduct business activities to support and promote sustainable development of every region in which the Nippon Paint Group operates.
Since our founding we have retained a firm commitment to bringing colors, comfort and peace of mind to people around the world.
Please see here for the details.

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