Risk Management

For information about our management approach and initiative for risk management, please see here（PDF：224KB）pdflink.

List of Risks

Risks Covered

The Kawasaki Group defines risks as “factors or phenomena that hinder the execution of business operations or the achievement of organizational goals” and works to manage all risks classified as either external risks or internal risks (with the latter further classified as strategic risk or business risk), while giving due consideration to the potential beneficial effects associated with strategic and other risks.

List of Risks Covered

Risk category Risk name
External risk
 Hazard Major disaster
Accident (caused by third party)
Politics/Society Government or social stability
Legal or regulatory amendment
Technology Technological innovation
Market environment Competitor companies
Customer needs
Economic Economic recession
Stakeholders Shareholders/activists
Harmful rumors
Human rights issue Child labor/forced labor
Internal
risk
Strategic
risk
 Vision Effectiveness of vision
Decision making Expansion into new business areas
Capital investment
Research and Development
Corporate acquisition/merger
Organization Effectiveness of organizational structure
Brand Kawasaki Value (brand)
Corporate governance Supervising of management
Business risk
(by division)
 Sales Sales strategy
Collection of accounts receivable
Customer response
Development Development themes
Development capabilities
Design Design not coordinated with other
relevant divisions
Design capabilities
Design quality
Procurement Enforcement of CSR Procurement
Guidelines
Procurement at appropriate price
Securing of stable procurement
partners
Management of procurement
partners
Warehouse Inventory management
(materials, work in process, products)
Production Insufficient production capacity
Production process management
Production facilities
Engineering operations Management of individual
commissioned projects
Quality assurance Deficient product servicing
Logistics Management of logistics channels
Export and import procedures
Overseas Country risk
Business customs
Domestic operating
sites		 Operation/maintenance
Specific local conditions
Accounts Accounting methods
Financial reporting
Tax affairs
Financial affairs Interest rate rise
Foreign exchange rate fluctuation
Capital procurement
Financial management
Management of pension assets
Company stock
Credit rating
Management Budget/planning/management
Evaluation of business performance
Consistency of goals and strategies
Public relations Media response
Legal affairs Contract conditions
Response to legal action
Information processing/
IT		 Information leakage
Network/system failure
Information infrastructure
CSR CSR activity
External reporting Evaluation of internal controls
Information disclosure
Environment CO2 emissions
Environmental pollution
Compliance Irregular action by organization
Irregular action by employees
Harassment
Compliance with corporate ethics,
social norms, laws and regulations
Anti-monopoly and fair trade laws
Export management
Social contribution Social contribution activity
Business risk
(crossdivisional)
 Personnel/labor Human resources/
personnel deficiency
Safety and health management
Labor management
Personnel employment conditions
Human rights issues
Business operations Management capabilities
Affiliated company management
Communication
Powers/restrictions
Operational efficiency
Outsourcing
Intellectual assets
(knowledge/expertise)
Intellectual property
Operational alliances
Security
Information sharing
Credit management
Work environment

Group-Level Risks

In fiscal 2019, data on major risks identified by the internal companies and business divisions were collated, and the Corporate Risk Management Committee then identified 18 categories of major risks that could have a serious impact on operations. These risks are subject to monitoring in March of every year by the Head Office division responsible for monitoring. Based on the Group-level risks identified, decisions are made as to which risk factors to disclose as “business risk and other risk” in the Securities Report and other disclosures. The risk categories are reviewed every year.

Risks Identified as Group-Level Risk for Fiscal Year Ending March 31, 2020

Name of risk Head Office division responsible
for monitoring
Human risk Personnel Department / Human Capital Development Department
Procurement risk Procurement Division
Quality management risk TQM Department
Labor, safety and health risk Safety & Health Management Department
Incomplete market response risk Corporate Control Department
Individual commissioned project management risk Corporate Planning Department
Foreign currency risk Finance Department / Corporate Control Department
Major disaster risk Risk Management Office
Information leakage risk IT Strategy Planning Center / General Administration Department
Country risk Marketing Division
Intellectual property risk Intellectual Property Department
Contract risk Legal Department
Production management risk Manufacturing Improvement Center
Compliance risk CSR Department
Development and design risk Corporate Technology Division
Environmental contamination risk Environmental Affairs Department
Revised law and regulation risk Corporate Planning Department
Aging equipment risk Corporate Control Department / Construction Control Department

Risks Requiring Group-wide Action

In fiscal 2019, within Group-level risks, we specified five items as risks requiring Group-wide action. To deal with these risks, each division at the Head Office responsible for action is designated to take the main role in formulating and implementing response measures in their area of responsibility.

Risks Specified as Risk Requiring Group-wide Action for Fiscal Year Ending March 31, 2020

Name of risk Head Office division responsible for monitoring
Human risk Personnel Department / Human Capital Development Department
Quality management risk TQM Department
Labor, safety and health risk Safety & Health Management Department
Individual commissioned project management risk Corporate Planning Department
Country risk Marketing Division

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