The Mitsubishi Chemical Group has built a risk management structure headed by the President as Chief Risk Management Officer. The Chief Risk Management Officer is responsible for developing the Mitsubishi Chemical Group Risk Management System and ensuring that it operates and manages risk effectively, thereby helping maintain and enhance the corporate value of the entire Group. Meanwhile, Executive Officers in charge of research, production, operations, technology and other departments operate and develop the risk management systems of their assigned departments or Group companies, and provide them with guidance and support on risk management.
The Risk Management Committee, established to assist the Chief Risk Management Officer, meets once a year, in principle, and is also convened whenever necessary. The Risk Management Committee, comprising the Chief Risk Management Officer, executives responsible for unit risk management and Corporate Auditors, deliberates important matters relating to the development and operation of the Mitsubishi Chemical Group's risk management system, management targets for major risks, risk control measures, and other matters related to risk management. The Risk Management Committee also reports progress in these activities to MCC's Board of Directors and MCHC's Chief Risk Management Officer on a regular basis.
The Risk Management Committee also monitors the development and operation of risk management systems at each MCC Group company and, if it identifies any risk factors that should be shared with other Group companies, it urges Group companies to eliminate or mitigate such risk factors.
At least once a year, each of Mitsubishi Chemical Corporation's units and Group companies identify and assess the risks they are facing and introduce risk control measures to continue to strengthen risk management.
Risks are identified in three categories – external risks from sources like natural disasters, market trends and the legal and regulatory environment; business process risks from sources such as production, financing, and marketing activities; and internal risks from sources like governance and human resource factors. Each risk is then assessed in terms of impact, for example, financial loss, human loss, or loss of public trust, and in terms of frequency of occurrence.
Additionally, in fiscal 2010, risks which, were they to materialize, would seriously impact on the Mitsubishi Chemical Group were extracted from risks identified by management as priorities for the MCC Group and risks that ought to be addressed given the social situation, and the Risk Management Committee confirmed the details of these risks and risk control measures. These were also reported at the management meeting of Mitsubishi Chemical Holdings.
In fiscal 2011, the MCC Group will continue to develop its risk management system and ensure its stable operation. The Group will also work to mitigate the key risks facing the MCC Group by taking action for compliance, overseas business expansion, raw material procurement, product supply, the transportation of hazardous materials, and other areas, and by implementing specific control measures for these risks.Mitsubishi Chemical Corporation endeavors to formulate business continuity plans for continuing or quickly restoring operations and minimizing negative impacts on customers and business partners in the event risk becomes a reality, for example, in a natural disaster or other major calamity.
In fiscal 2007, we began formulating our BCP based on model products whose production would be threatened by the impact of a major earthquake in Japan's Tokai or Tonankai regions. In fiscal 2008, responding to the international standardization of BCP and demands from customers, BCP preparation guidelines were created, establishing basic ideas on the Mitsubishi Chemical Group's requirements for BCP preparation.
At the same time, we also drew up a manual of countermeasures to minimize damage in the event of an earthquake with its epicenter in the Tokyo metropolitan area or a new influenza pandemic, and formulated BCPs to enable departments to continue important operations during such a crisis. At the time of the pandemic outbreak of a new type of influenza (A/H1N1) in the spring of 2009, we set up a task force and took action in accordance with the manual of countermeasures we had prepared. These included gathering and conveying information on employees' health issues and other information to facilitate the execution of operations, and limiting overseas business travel.
At the time of the Great East Japan Earthquake in March 2011, we based our response on the manual we had prepared for a Tokyo earthquake. Our task force at head office coordinated our response and each department played its assigned role to understand the extent of the damage and support the recovery of affected areas at MCC and Group companies. Based on the lessons we learned about systems for confirming employee safety and contacting employees in the Great East Japan Earthquake, we are revising our assumptions of the extensive damage that would be caused if an earthquake were to hit central Tokyo or the Tokai region as predicted in the future, and overhauling our BCP accordingly. Through these revisions, we are ensuring that, even in the event of disaster, our head office will continue to function, enabling us to discharge our responsibility to maintain supplies of products which, if interrupted, would have a major social impact, such as supplies of products to vital service providers.
