SUBARU is undertaking risk management as one of its key priority management issues, not only to address emergency situations when they arise but also to deal with various risks that have a serious impact on daily corporate activities, as well as to minimize damage when risks emerge.
The automotive industry is ushering in a major transformation, which only occurs once in a hundred years. The SUBARU Group, which operates businesses globally, is aiming to enhance the resilience of its management infrastructure by ensuring the sustainability of its businesses by quickly tackling changes in world affairs. At the same time, the Group must boost its measures to minimize its human, social and economic losses. Amid this environment, it is essential to strategically conduct risk management throughout the Group to conduct business activities. We therefore believe it is important to create a SUBARU Group that has an infrastructure that is resilient to risk to enhance our corporate value.
To prevent the emergence and expansion of risks to the SUBARU Group, the Chief Risk Management Officer (CRMO) appointed by the Board of Directors leads risk management and compliance activities, reporting their status to the Board of Directors.
As a system to promote risk management, SUBARU has appointed risk management officers (job grade of Chief General Managers) for each department and established the Risk Management and Compliance Committee. This committee is chaired by the CRMO, and its vice-chairperson is the vice president in charge of the duties of the Risk Management Group, comprised of the Risk Management and Compliance Office and the Legal Department. At this committee, members deliberate, discuss, make decisions, and exchange/communicate information on important matters.
The CRMO leads corporate Group-wide efforts to enhance risk management with professional support from experts in corporate departments, such as the Risk Management and Compliance Office and the Legal Department. In this leadership role, the CRMO works closely with the Corporate Planning Department, which performs division-encompassing functions, as well as different divisions and companies. The Audit Department audits execution of tasks by each division and subsidiary in a planned manner.
Risk Management System
Risks Associated with Business Activities
At the SUBARU Group, we extract and identify key risks associated with our business activities and consider measures to combat them.
The major business risks are listed below.
Please note that this is not an exhaustive list of all risks relating to the SUBARU Group.
Risks related to changes in the economic and financial environments
① Economic trends in major markets
② Exchange rate fluctuations
③ Financial markets fluctuations
④ Change in raw material costs
Risks related to industries and business activities
⑤ Focus on specific businesses and markets
⑥ Changes in the demand and competitive environment in the market
⑦ Responsibility related to products, sales and services
⑧ Supply chain disruptions
⑨ Intellectual property infringement
⑩ Information network security
⑫ Stakeholder communication
⑬ Respect for human rights
⑭ Secure and train human resources
⑮ Climate change
Risk of regulations and events in various countries that impact other business activities
⑯ Political, regulatory and legal procedures in various countries that impact business activities
⑰ Impact of disasters, war, terrorism, infections, etc.
Risk Management Initiatives
In FYE March 2022, the Risk Management and Compliance Committee, as part of its initiatives during times of normalcy, promoted activities for controlling risks during daily operations. It did this by prioritizing high-impact issues while maintaining a strong awareness of the Risk Map created in FYE March 2021 under our Group-wide Risk Management Policy and Risk Management Code of Conduct formulated for each department. Furthermore, to manage risk in a way that is optimized for the entire Group, we held risk management workshops mainly for risk management officers and employees in charge of risk management. We also brought in an external institution for a third-party diagnosis of committee activities, working to improve risk literacy for committee members and invigorate committee activities.
In addition, at the Coronavirus Countermeasure Headquarters established in February 2020 as a response to COVID-19, we continued to collect and share relevant information inside and outside the Company, and reviewing the effectiveness of responses in emergency situations. This countermeasures headquarters was closed at the end of March 2022, and we now take the necessary countermeasures within our ordinary business activities as part of our management structure in the with-COVID era.