Risk Management

• Risk Management Initiatives
• Risk Management Promotion System
• Approach Toward Risk Management

Risk Management Initiatives

The Yamaha Group is engaged in efforts to develop and improve its risk management promotion structure and system in order to boost risk response capabilities and to realize healthy and transparent management. The Group implements risk management promotion based on the following policies.

1. We shall establish organizations and frameworks for risk management and work to enhance responsiveness to risk in order to maximize corporate value.
2. In risk management activities under normal circumstances, we shall identify, evaluate, and mitigate risks and conduct awareness-raising activities such as education and training to instill a greater awareness of and foster a greater sensitivity toward risks.
3. We shall prioritize people’s safety when risks manifest themselves as crises and coordinate with local communities to ensure sincere, appropriate, and speedy responses to minimize adverse impacts. In addition, we shall strive to ensure the stable supply of products and services, continue business to the greatest extent possible, and contribute to the sustainable development of society.
4. After addressing risks, we shall analyze the reasons they occurred and how they were addressed in order to ensure they do not occur again.

Risk Management Promotion System

Under the supervision of the Board of Directors, Yamaha Corporation has established the Risk Management Committee as an advisory body to the president. The committee discusses risk management-related matters from a Companywide perspective and reports the results of these discussions to the president. In addition, the Working Group for BCP and Disaster Prevention Management, Working Group for Financial Management, Working Group for Compliance, Working Group for Export Control, and Working Group for Information Security have been established under the Risk Management Committee. Chaired by an executive officer, these working groups set activity policies and monitor activities related to important Companywide themes. The Board of Directors receives and reviews regular reports on discussions by the Risk Management Committee, the effectiveness of risk management frameworks, and the progress of related measures.

In the case of the materialization of a serious risk with the potential to have a Companywide impact during the course of business activities, a Risk Countermeasure HQ led by the president will be set up to address the risk.

Risk Management Promotion System

Approach Toward Risk Management

The Risk Management Committee categorizes the various risks identified in relation to the Yamaha Group’s business into four categories: external environment risk, strategic risk, operational risk (business activities), and operational risk (support activities). The materiality of risks is assessed based on the projected scale of damages and frequency of materialization. In addition, the level of control is evaluated for each risk category, material risks requiring priority response are identified, and the divisions responsible for managing these risks are designated in order to promote risk mitigation activities and thereby improve overall risk control levels. The identified risks are reviewed on an annual basis and the need of introducing new risks into the framework is assessed.

Categorization of Business Risks

Risk Map

Response to Climate Change

In June 2019, the Yamaha Group declared its endorsement of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and commenced initiatives for analyzing the impact of climate change on its finances and disclosing related information.

Business Continuity and Disaster Response Initiatives

In preparation for large-scale natural disasters, accidents stemming from external causes, and other emergency situations, the Yamaha Group has formulated business continuity plans (BCPs) and implements other business continuity management efforts through the Working Group for BCP and Disaster Prevention Management. This working group is responsible for developing business continuity policies for responding to natural disasters and other emergency situations. In the event of an emergency, an Emergency Response HQ will be set up to examine potential measures for ensuring Groupwide business continuity. In addition, the Group BCP Policies & Rules establish basic policies for minimizing the effect on business when a risk event occurs through the rapid implementation of appropriate countermeasures.

Moreover, BCPs are formulated on an individual business site level, and drills and other activities are used to assess and refine these plans in pursuit of higher levels of effectiveness.

Financial Management Initiatives

The Yamaha Group is globally promoting internal control activities centered around financial management, such as the Groupwide standardization of operational processes. The Working Group for Financial Management is responsible for the development and implementation of frameworks for ensuring the reliability of financial reporting, protecting Company assets, and mitigating taxation risks. This working group also monitors operations across the entire Group to ensure that they follow the Group Internal Control Policies & Rules and other regulations.

Compliance Initiatives

The Working Group for Compliance both promotes compliance throughout the Group and monitors the business execution of divisions and Group companies to ensure legal compliance and ethical operations.

Export Control Initiatives

The Yamaha Group has established provisions for trade security control in its Compliance Code of Conduct as compliance measures pertaining to international trading. The Working Group for Export Control has established export control regulations and import and export procedure regulations. This working group also engages in discussion and decision-making regarding Groupwide export control policies and advances the development of processes for managing exports through the promotion of appropriate management in the Group’s export activities. Meanwhile, steps are taken to mitigate the risk of legal violations in import and export activities through enhanced management of technologies stipulated in risk-related regulations as well as the development of systems for managing exports from China and India.

Information Security Initiatives

The Yamaha Group perceives information security as a critical aspect of risk management. The Working Group for Information Security has defined policies pertaining to the tracking of information security measures regarding personal information, the identification of vulnerabilities, guidance, information management, and the improvement of management levels.

Occupational Health and Safety and Environmental Risk Management Initiatives

In order to prevent occupational accidents and environmental pollution, the Yamaha Group has enacted the Group Occupational Health and Safety Management Policies & Rules and the Group Environmental Management Policies & Rules, and performs risk assessments at factories and other business sites. In addition, regular monitoring, audits, emergency response training, and other activities are carried out under the guidance of dedicated occupational health and safety and environmental preservation staff members. Meanwhile, the Group Facility Policies & Rules stipulate basic policies for facility management. Based on these policies, we conduct risk management as necessary to safeguard people’s lives and the assets of the Company and to ensure that our facilities and equipment can be used with peace of mind.