Risk Management

Basic Stance/Policy

We maintain a forward-looking risk management structure that actively involves management in order to support appropriate risk-taking by executive staff.

Policy

We facilitate assertive governance with elements of bold risk-taking.

Risk Management Committee

The Risk Management Committee convenes annually and is headed by the CEO. The committee, which is attended by outside directors and legal counsel, approves the annual activity plan and works to establish, promote, and maintain the risk management structure by controlling risks throughout the entire Group.

Risk Management System
Figure

Activities and Results (Including Goals)

Risk Management Activities

We prevent risks and minimize losses by instituting controls for risk categories, managing and reducing unavoidable risks, and otherwise managing risks across the entire Group in order to facilitate assertive governance with elements of bold risk-taking.

2020 Activities

Scroll left or right to view.

Activity Description
BCP Promotion Council
  • The BCP Promotion Council established under the Risk Management Committee in 2018 was restructured so that the Production Division will take the lead in its promotion.
  • This year, the meeting for those in charge of BCP promotion was delayed as a precaution for the coronavirus. However, they did coordinate with the Material Purchasing Unit to strengthen the supply chain.
  • To quickly assess the status of our supply chain when a natural disaster such as an earthquake or heavy rain occurs, we adopted Rescue Web Map, which determines which suppliers are in affected areas.
  • A review of THK and its domestic and international Group companies was conducted to uncover, identify, categorize, analyze, and evaluate the risks of which each company and department is aware, and the results were reported to the Board of Directors.
  • In consideration of the global spread of the coronavirus, we reevaluated risks arising from infectious diseases.
  • The medium- to long-term financial sense and future outlook of primary cross-held stocks were verified.

Reviewing risk assessments

We have performed risk assessments to appropriately control our business risks. More specifically, we created a risk map and evaluated risks by identifying known risks in each department, categorizing them, and calculating their likelihood and impact. The results of those assessments were analyzed by the Risk Management Committee and reported to the Board of Directors.

Other

We verified the medium- to long-term financial sense and future outlook of primary cross-held stocks in consideration of their returns and risks. In addition, the Investment Subcommittee examined investments and other corporate activities for the future in order to support appropriate risk-taking.

Information Security

Policy

Establish, instill, and maintain the THK Group information security structure

Information Security Management

The standing Information Security Committee, chaired by the CEO, convenes four times per year. Although the outside directors and legal counsel participated remotely due to the coronavirus, this committee made decisions concerning policies related to the establishment of information security systems, and it deliberated on responses to information security concerns.

Complying with laws protecting personal information

When the GDPR (General Data Protection Regulation) entered into force in May 2018, we set up a fixed structure that included the establishment of a privacy policy and internal regulations that comply with the GDPR. As other legislation protecting personal information continues to be enacted in various countries and regions, we will properly manage personal information by confirming which laws apply to our Group and amend our privacy policy to establish a structure that safeguards personal information around the world.

Information System

Before the state of emergency was declared in Japan, we anticipated the need for remote work and took steps to make that transition. To that end, we established an even more advanced security environment including an e-mail license upgrade, anti-spam measures, account verification and cloud access management, and a virus detection framework. We also regularly monitor the Management Console logs for unusual activity.

Measures to enable remote work included:

  1. Procuring new laptops
  2. Obtaining additional SSL VPN licenses to enable access to internal systems
  3. Reconfiguring the network to boost its speed and performance when connecting from outside
  4. Providing mobile routers to employees without internet access at home
  5. Preparing handsets for connecting with Teams meetings, internal phone calls, and external Skype phone calls

In addition, we modified the network on the Technology Center floor for the value chain teams to use as a headquarters office space kept separate from other departments.

BCP

Basic Stance/Policy

As a component manufacturer, we are responsible for supplying parts to customers, no matter the situation. We have formulated a BCP (business continuity plan) to minimize damage and ensure a rapid business recovery in the event of a disaster, such as a large-scale earthquake (an earthquake registering at least 6 Lower on the seismic intensity scale, or one that brings about significant destruction).
This past year was one of coping with how the coronavirus upended both the business environment and everyone’s way of life. On the other hand, this experience has made evident the depth of harm that natural disasters bring and the threat they pose to business continuity.
In order to fulfill our responsibility to supply products even during a disaster, we introduced a system to quickly identify components that are impacted by the supplier’s location.
We also participated in a gathering held by the Disaster Risk Reduction Industry Conference of Japan in order to begin promoting BCP activities that involve working with the National Research Institute for Earth Science and Disaster Resilience and other participating organizations. We will continue to improve our business continuity management in order to fulfill our social responsibility.

Policy

As a company that supports industry around the world, it is our essential social responsibility to minimize any negative impact on society by fulfilling our responsibility to supply parts even in the event of unforeseen disasters.

Activities and Results (Including Goals)

BCP Strategies for a Large-Scale Earthquake
Activity Description
Supplying products
Servers
Earthquake-proofing
Emergency supplies
Safety drills

Back-up Facilities

Including Group companies, THK currently possesses 12 manufacturing facilities in Japan and 25 overseas. In the event of a disaster at one factory, we have designated back-up facilities to produce the impacted product lines. Depending on the circumstances of the disaster and with the exception of a few specialized products, we have established a framework to immediately initiate production at the back-up facilities.

Expanding Production Capabilities of International Group Factories

We are enhancing our ability to provide products by expanding our current factories and constructing new ones based on market demand for our products and our global strategy. As a result, we have strengthened our ability to respond to disasters.

BCP measure: Maintaining main and backup servers in separate data centers

All of our data is stored and managed at two data centers in Japan to function as backups so that our sales and production activities can continue even after an earthquake or other natural disaster.

BCP measure: Practicing switching to backup servers in case main servers were to go down (once per year)

We have a schedule for rehearsing the process of switching over to backups in the event of a problem with our main equipment due to an earthquake or other natural disaster. We use a combination of practicing with the actual equipment and tabletop exercises with the staff in charge.

Earthquake-proofing: Installing equipment to prevent toppling of shelves that hold components, fixtures, and tools (Production facilities)

At our production facilities, we install equipment to prevent the toppling of storage shelves.

We also install seismic isolation systems for important machines, production tool racks, and more.

Image
Coordinate measuring machine with seismic isolation system installed

Earthquake-proofing: Installing equipment to prevent toppling (Sales offices)

We earthquake-proof items by installing equipment to prevent them from toppling.

Image
Cabinet with equipment installed to prevent toppling

All production and sales facilities: potable water, food, sanitary items, emergency supplies, and rescue equipment

All business locations are equipped with emergency supplies.

Image
Emergency supply room at the Yamagata plant

Safety drill: Annual drills at all locations

All production facilities perform emergency drills.
Sales offices perform emergency drills according to their tenant requirements.

Image
Fire-fighting exercise
Image
Nighttime emergency drill

BCP Response

To prepare for flooding that could occur due to the recent extreme weather conditions, the THK Wuxi plant prepared sand bags and purchased emergency supplies (including water, food, and rain gear) for people who might be stranded at work. The facility also ran a drill to practice setting up sand bags to keep water from getting inside the plant.

Image
Image
Image
Left, center: Emergency supplies for flooding. Right: Practicing setting up sand bags
PAGE TOP