Creating a Group-wide risk management system
Along with the globalization of economies and the transformation of societies, the risks faced by companies have become more diverse. Konica Minolta has created a Group-wide risk management system in order to clarify various corporate risks and to minimize their impact on its businesses. The Group also conducts business continuity management, taking measures to ensure that businesses are able to continue uninterrupted in the case of a natural disaster or other unforeseen circumstances.
Risk management system
Konica Minolta, Inc. has established a management system in which the President and CEO is responsible for risk management and crisis management. In April 2010, the company strengthened its system for assessing a range of possible risks without serious omissions and developing full countermeasures. A system was also established for reporting and issuing instructions during a crisis.
Building a Risk Management System
Making executive officers responsible for managing various risks.
The executive officers are responsible for managing various risks including strategic risks, financial risks, risks pertinent to environmental regulations and hazard risks. They identify and evaluate risks and develop and monitor countermeasures in their respective spheres of management. In addition, the Risk Management Committee, chaired by an executive officer appointed by the Board of Directors, is convened periodically (twice a year). The Committee examines the risks identified by each executive officer, as well as the countermeasures in place, and checks to ensure that the risk management system is functioning effectively, making revisions where necessary. The Group responds as a whole to risks judged to be particularly important, led by an executive officer appointed by the chairperson. The activities of the Risk Management Committee are periodically reported to the Audit Committee.
Building a Crisis Management System
Establishing a system for minimizing the business and social impact of crises
Konica Minolta has established a system for minimizing the business and social impact of crises that may arise from a range of risks by taking prompt and appropriate action and by releasing information. The Crisis Management Committee, chaired by the executive officer for crisis management appointed by the Board of Directors, discusses and formulates crisis countermeasures and procedures for action.
Furthermore, the emergency contact system has been enhanced to enable the President and CEO, in addition to the executive officer for crisis management, to assess the situation and make decisions quickly. A system has also been established to enable the President and CEO to take leadership in critical areas in a crisis.
|1||Defective products, recalls, product liability lawsuits||Design errors (faulty products, health hazards), errors in manufacturing processes (faulty products, foreign substances contained in products), etc.|
|2||Defective services||Inappropriate explanations, discriminatory attitudes toward customers, etc.|
|3||Personnel-related problems||Ambiguous performance evaluation standards, unfair transfers, human rights infringements such as employment discrimination and harassment, crimes/scandals involving employees, etc.|
|4||Labor-related problems||Labor disputes, unfair labor practices, child labor, forced labor, occupational health hazards, employee deaths or suicides caused by overwork, etc.|
|5||Corporate negligence||Pollution (soil, wastewater, odors), industrial accidents (health and safety hazards, accidents), etc.|
|6||Company's unethical conduct||Contacts with illegal groups, scandals, internal disputes, M&A, etc.|
|7||Inappropriate decision-making on management and marketing||Risks involved in investments, loans, bonds and transactions; excessive competition, etc.|
|8||Corporate crimes||Illegal acts (violations of Antimonopoly Act, Premiums and Representation Act, Subcontract Act, Tax and Commercial Laws, etc.)|
|9||Intimidation and other crimes committed against the Company||Obstruction of business (inserting foreign substances in products, etc.), robbery, subversive activities, etc.|
|10||Economic and social disturbances||Oil crises, major power failures, sharp declines in stock prices, etc.|
|11||International/political upheavals||War, coups, trade conflicts, etc.|
|12||Disasters and epidemics||Earthquakes, storms and floods, fires, epidemics, etc.|
|13||Rumors concerning management instability||Incorrect information in mass media, spreading rumors through various channels, including the Internet, etc.|
Business Continuity Management (BCM)
Establishing measures for business continuity in the event of a major natural disaster
One of the most important responsibilities of an enterprise is to maintain or rapidly resume its essential business operations in the event of a major disaster or accident. Konica Minolta is working toward this goal at Group companies worldwide, as well as in its supply chains.*
At Konica Minolta, each business division and subsidiary, including the Business Technologies Business, which is Konica Minolta’s core business, and Medical Devices, for which there is a high need during disasters, formulates a business continuity plan (BCP), laying out a specific plan of action for such an event. The Group has also established an initial response system to decide the necessity of putting the BCP into action by gathering information such as the damage situation immediately after a disaster.
Specifically, in the event of a major earthquake in Japan, the basic policy is to keep supplying consumables and products as much as possible so as to not inconvenience customers, while continuing to provide support services to existing customers. Toward that end, the Group is striving to increase the level of its business continuity system by decentralizing production sites for primary consumables, conducting risk assessments on suppliers, and securing alternatives and inventory for key parts with big risk. In addition, a backup structure has been established for call centers in Eastern and Western Japan so that they can provide backup to each other. This enables the company to continue to provide customer support even if one center were affected by a disaster. The Group also works on preparing responses in case of an infectious disease epidemic, such as new strains of flu for which there are concerns about a global outbreak. Further, various drills are conducted to increase the quality of these kinds of BCM.
- Supply chain: The series of activities involved in delivering a product or service to a customer, ranging from procurement and production to distribution and sales.
Reinforcing BCM Following the Great East Japan Earthquake
The Group's major sites escaped severe damage in the Great East Japan Earthquake that struck on March 11, 2011, and the BCP did not have to be implemented. However, for the first month after the disaster, the president of Konica Minolta, Inc. held an Earthquake Response Meeting every morning to gather information, give appropriate instructions, and ensure consistent information disclosure.
Thereafter, it improved the initial response system in light of reflections on the series of responses it took, including revising the initial response manual and reaffirming the roles of relevant parties. In the event of a large-scale earthquake, the Group will set up a secondary headquarters, with the function of collecting information, in its SKT R&D building, which has a high level of base isolation, located in Hachioji, Tokyo. The secondary headquarters will respond in cooperation with the central headquarters at the head office. During a Group-wide disaster prevention drill conducted every year, the hypothetical epicenter of an earthquake is supposed, and initial response procedures are carried out to confirm how well they work in actual practice. For the drill conducted in November 2015, the assumed scenario was an earthquake occurring directly beneath Tokyo.
Also, based on Tokyo Metropolitan Government regulations that went into force in April 2013, the Group has been improving its disaster prevention equipment and strengthening its measures for persons having difficulty returning home.