Omron 2013 Annual Report Download - page 24

44 Omron Corporation Integrated Report 2013 45
Where We're Headed
Endeavor
to achieve
the targets
Fulfi ll corporate
social responsibility
Ensure continu-
ing existence of
the Companies
business lines and horizontally between the corpo-
rate headquarters and regional head offi ces, making
for a closely coordinated global vertical-horizontal
matrix management system. As one facet of these
efforts, the Corporate Ethics & Risk Management
Committee has been established under the Execu-
tive Council of the Company. In addition, we have
appointed risk managers at all Omron Group com-
panies around the world, and we are utilizing our
global network to share risk information and discuss
response measures in the course of daily activities.
At the same time, directors take on the perspective
of shareholders and other investors from which they
monitor executive departments to determine wheth-
er or not they are functioning properly. Directors also
advise these departments in conducting their duties.
Further, in the event of an occurrence that threat-
ens the continuation of our business, a Company-
wide Emergency Response Headquarters must be
established. In preparation for such an occurrence,
directors and executive offi cers develop ordered
lists of possible candidates for heading this Emer-
gency Response Headquarters ahead of time.
—What kind of risks do you identify
as serious?
Sakumiya: For fi scal 2013, risks assigned the
S rank are business continuity risks, including re-
sponse to avian infl uenza and the risk of violation of
laws in countries of operation. A-rank risks include
the risk of fraud within the Company; the risk of
violating environmental laws and regulations;
the risk of violating personal data protection laws;
and the risk of failure to properly manage subsidiar-
ies in emerging countries.
—How are measures to respond to
S-ranked business continuity risks
progressing?
Sakumiya: The Great East Japan Earthquake reaf-
fi rmed the importance of ensuring the continuity of
business operations under any circumstances, and,
to this end, Omron chose to revise its business
continuity plan (BCP). The revised BCP prescribes
specifi c measures regarding recovery time and
level objectives, methods of recovering relevant
functions, and measures to prevent their loss.
Six major functions are considered in the BCP:
(1) corporate headquarters, both global and re-
gional; (2) business headquarters; (3) production;
(4) procurement and distribution; (5) IT; and (6) the
safety of operating bases.
For example, with regard to (3) production
functions, we have established that the production
volumes of all business companies should be recov-
ered to predetermined levels within a defi ned period
of time. For accomplishing this goal, we are in the
process of considering detailed procedures for
setting up alternative production sites, securing
necessary parts and production facilities, and devel-
oping backups of necessary information documents,
including manuals, and standardizing such docu-
ments. Furthermore, over the two years since the
earthquake, Omron has made particular progress
in defi ning concrete procedures pertaining to
(1) corporate headquarters functions, and full-
fl edged drills related to these procedures have
already begun.
However, these actions require investments of
both time and money at operating sites. As such, it
is common for companies to prioritize short-term
ticular emphasis on both of these categories.
To summarize, risk management activities
throughout the year are conducted in this order: the
identifi cation of risks; the analysis of risks; the des-
ignation of signifi cant risks; the establishment of
plans for response, verifi cation, revision, and report-
ing to the Board of Directors; and then fi nally rel-
evant disclosure. In other words, this process
forms a risk management plan-do-check-act (PDCA)
cycle. Going forward, Omron will reinforce these
activities and further instill them into its global man-
agement activities.
—What systems are being put in
place to facilitate global risk manage-
ment efforts?
Sakumiya: For executive departments, the Global
Resource Management Headquarters plays a key
role in advancing initiatives as the Company works
to develop stronger team relations vertically among
Need for Integrated Global Risk Management
response gear for people living nearby disaster
zones. In these ways, Omron is conducting activi-
ties that give form to its corporate philosophy.
—Could you please provide an
overview of Omron’s risk manage-
ment systems?
Sakumiya: Omron’s basic risk management
policies are defi ned within the Resolution by
Board of Directors of Maintaining an Internal
Control System, and these policies are listed in
the Company’s Business Report and Corporate
Governance Report.
The basic fl ow of the risk management systems is
as follows. Every year, we identify and analyze the
various risks we are facing from a global perspec-
tive. We then rate these risks, with the greatest
threats to the Group being assigned an S rank, and
those risks that pose lesser but still represent sig-
nifi cant threats being ranked as A. We place a par-
Traditional frameworks unable
to address unpredicted risks
Need for
Integrated
Global risk
management
Globalization of
various business
activities
Increased
exposure to risks
Supply chains
spreading across
national and
regional boundaries
Rise in suddenly
realized risks and
unpredicted risks
No uncovered major risks
I
II
III
IV
RM’s positioning is not clear
in management of the Omron Group.
RM is to be integrated into the management of the Omron Group.
(RM’s positioning is to be clearly defi ned.)
RM is executed by each business unit
based on its own understanding.
Intra-Group RM activities are to be integrated under
a common framework.
RM is not a routine activity at genba (operating sites)
but is an extra non-routine activity. RM is to be integrated at genba (operating sites).
Dispersed risk information makes it diffi cult
to have a bird’s eye view of the whole situation. Global risk information is to be integrated throughout the Omron Group.
BCP drill at Emergency Response Headquarters Meeting of risk managers
* RM = Risk management