Risk Management

The Yamaha Group is engaged in efforts to develop and improve its risk management promotion structure and systems in order to boost response capabilities toward risk, and to achieve healthy and transparent management. The Group implements risk management promotion based on the following concepts.

  1. We shall establish a structure and framework for risk management and work to enhance responsiveness to risk and maximize corporate value.
  2. We shall identify, evaluate and reduce risk through risk management activities during ordinary times, conduct awareness-raising activities such as education and training, and instill a greater awareness of, fostering a greater sensitivity to risk.
  3. We shall prioritize people's safety when risks manifest themselves as crises, and coordinate with the local community to ensure sincere, appropriate and speedy response as a means to minimize all adverse impact. In addition, we shall strive to ensure the stable supply of products and services, continue business to the 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.

Classification of Risk

The Yamaha Group classifies the various types of risks related to its business in accordance to the chart below and promotes activities to reduce risk based on its importance evaluation.

Classification

[ picture ] Classification

FY 2019 initiatives

In FY 2019, after evaluating and analyzing the importance, frequency of occurrence, and control levels of risks facing the Company, we identified important risks which should be prioritized, established a division in charge of risk management, and increased control levels.

[ picture ] FY 2019 initiatives

Yamaha Corporation established a Risk Management Committee as an advisory body to the President and Representative Executive Officer. This committee deliberates on matters related to risk management from a company-wide standpoint and reports its findings to the President and Representative Executive Officer. Within this committee we also established the following working groups such as the working groups for the business continuity plan (BCP) and disaster countermeasures, financial management, compliance, export screening, and information security have been established to address companywide important issues.

Risk Management System

[ picture ] Risk Management System
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Business Continuity Management (BCP: Business Continuity Plan)

In preparation for large-scale natural disasters, fires, infectious disease outbreaks, and other emergency situations, the Yamaha Group has made a number of business continuity management efforts, including the formulation of a BCP. The Group BCP Standards establish the basic policy, responsibilities, and specified rules for a prompt and appropriate response when risks such as disaster, etc. manifest in order to minimize the impact of this risk on business.

Main Efforts
Topic FY 2019 Achievements
Formulation of a basic policy and rules Formulated Group BCP Standards and Group BCP Guidelines
Drafting of a BCP and conducting training (1) The Disaster Management Headquarters conducts the response for the entire Yamaha Group during emergencies. In order for this organization to function effectively during emergencies, the Group held Headquarters BCP training sessions. Based on the results of these sessions, we improved response procedures
(2) In order to ensure the effectiveness of current response measures and improved BCP effectiveness, conducted Regional Disaster Management Headquarters and Earthquake Initial Response Training ("blind scenario" training) from 2016 that puts participants in a situation where business is stopped immediately after a disaster occurs. The Company also conducted training based on the scenario of an intensity 7 earthquake to improve initial response capabilities at sites. Made improvements to the BCP initial response procedures manual based on training results
(3) At global sites of the Group, formulated individual BCPs which established response procedures, etc. during emergencies and precautionary countermeasures to respond to risks on sites
Develop infrastructure (1) Implemented a 3-year earthquake resistance plan based on building earthquake proofing standards established in FY 2016; completed earthquake resistance improvements for Group-held buildings
(2) Formulated the Yamaha Equipment Earthquake Resistance Standards, which are applied when introducing new equipment
(3) Implemented an employee safety check system; held periodic training for the system to operate effectively during emergencies
[ photo ] Disaster Management Headquarters BCP Training
Disaster Management Headquarters BCP Training
[ photo ] Regional Disaster Management Headquarters Earthquake Initial Response Training
Regional Disaster Management Headquarters Earthquake Initial Response Training

Internal Controls

The Yamaha Group is making efforts for the global promotion of internal control activities centered around financial management, such as standardization of operational processes for the entire Group, etc. The Working Group for Financial Management confirms that operations follow the Group Management Charter and various regulations across the entire Group.

Compliance

The Yamaha Group established the Working Group for Compliance to take a central role in deliberations and decision-making related to compliance matters. This working group will both promote compliance in the Group and monitor business execution in each division and Group Company to ensure legal and ethical operations. It will also execute measures to maintain healthy business activities through employee education, awareness-raising, questionnaires, and the establishment of help lines for internal reporting and assistance services.

Export Control

The Yamaha Group has established provisions for national security-related trade control in its Compliance Code of Conduct as compliance measures pertaining to international trading.

A Working Group for Export Screening has been established to formulate export control regulations and regulations for import and export procedures among others, and establishing a work process related to export control. Yamaha is also working to educate its employees on and improve their awareness of the importance of export control in the company by conducting export control seminars led by industry experts.

Environmental Risk Management

In order to prevent environmental contamination, the Yamaha Group carries out a range of activities that include regularly monitoring its plants, conducting environmental audits, and providing emergency response training.

Information Security

The leakage of personal information and other important information held by a company has the potential to not only damage third parties but also become a case of gross negligence that can harm the company's reputation.
The Yamaha Group perceives information security as a critical aspect of risk management. The Information Security Working Group has put together a policy on information management and is working to enhance the quality of this management by keeping track of the current management system while identifying vulnerabilities and guiding efforts to address them. In addition to having established rules for the usage and management of the information system as part of the Compliance Code of Conduct, the subcommittee is working hard to ensure employees understand the importance of preventing inadvertent data leaks and protecting against hacking by third parties.