In accordance with the SCREEN Group Code of Risk Management and other relevant in-house rules, SCREEN Holdings is engaged in initiatives aimed at identifying and mitigating business risk and, as the holding company, has in place a system for assessing the status of risk management for the entire Group.

Risk Management Structure

In order to mitigate risk with the potential to negatively impact the SCREEN Group’s corporate value, we have established a risk management structure, which includes the SCREEN Holdings President as the Risk Management Group Chief Officer, the Chief Officer of Sustainability Promotion as the Risk Management Officer, and the presidents of each SCREEN Group company as Risk Managers. Every organization within the Group identifies and categorizes risks into different categories, including Governance, Human Rights, Labor Practices, the Environment (including Climate Change), Fair Business Practices, Consumer Issues, and Community Engagement, and then evaluates each to come up with measures, which are implemented to address it.

Further Enhancement of Risk Management Effectiveness

In the fiscal year ending March 31, 2021, we established a Group Risk Management Committee, which is responsible for identifying big-picture risks for the SCREEN Group as a whole, identifying those which are critical risks, and setting the direction of risk management action to be taken. We adopt a “three lines of defense” approach: the first line of defense is the Group business operating companies; the second is the holding company organizations and functional support companies; and the third is the auditing department. In line with this we designate individual risk managers and management roles and establish a governance structure for sharing risk-related information between operations sites and senior management.
We are undertaking the following based on this structure.

  • Categorizing and creating lists of ESG-focused Group risks(approximately 160 risk items)
  • Evaluating the manifestation and impact of risks over the past three years and identifying critical Group risks
  • Directing the Group companies, as the first line of defense, to reexamine their own organizational risks, based on the Group risk list, and to then take action to mitigate those risks
  • Directing the holding company organizations and functional support companies, as the second line of defense, to utilize their individual, specialized functions in monitoring and managing risks, based on each organization’s allocation of roles, in order to help support the first line of defense and, thereby, prevent the manifestation of risks
  • At the semiannual meetings of the Group Risk Management Committee, reviewing Group risks and critical Group risks; checking their management status; discussing what measures are needed to address them; and reporting / advising on the results to the holding company’s Board of Directors

Critical Group Risks

  • Major Issues for Monitoring

Changes in surrounding environment

  • Business trends / economic conditions
  • Financial and economic policies
  • Industry trends / markets

Compliance
Information security

  • Responsiveness to legal / regulatory revisions
  • Information leak / hacker countermeasures

BCP
(business continuity plan)

  • Effectiveness of response to intensifying disasters / pandemics
  • Strengthening of supply chain management

Human resources management

  • Status of hiring and training of key personnel
  • Issues in successor training and status of response
  • In-house penetration of work style reforms

Safe work environment

  • Eradication of occupational accidents and incidents
  • Status of response promotion throughout the entire supply chain

Quality assurance system

  • Customer satisfaction improvement, quality complaint reduction
  • Establishment and operation of an adaptive quality assurance system

Environmental measures

  • CO2 emissions reduction (responding to SBT)
  • Development of technology to reduce environmental impact

Promoting Information Security

Recently, the increasing frequency and sophistication of cyber attacks and other such incidents have reinforced the fact that information security risks represent a serious business challenge, and we are continually working on stronger measures to ensure our information stays secure. We have put in place a Group-wide information security structure overseen by SCREEN Holdings’ Chief Officer of Business Strategy, who works in conjunction with the representatives of the different Group companies to create Group-wide rules and guidelines, as well as a medium- to long-term IT roadmap.
Given the ever-changing nature of the information security risk environment, we regularly review our information security rules and guidelines. We also work to improve IT literacy among all executives, employees, temporary personnel, and everyone else in the SCREEN Group through a variety of means, including annual information security training, which is updated with the latest information.
We pursue measures that will enable us to conduct our business safely, securely, and without interruption, such as establishing a dedicated, in-house consultation service capable of promptly investigating and addressing risks identified from information securityrelated incident reports, as well as conducting year-round, round-theclock monitoring of our in-house network infrastructure.

Managing Trade Secrets

The SCREEN Group has established Groupwide methods and internal rules regarding the management of trade secrets as well as usage standards. These measures, which are applied across all processes, facilitate the appropriate management and use of trade secrets and prevent leaks. Trade secrets received from outside the Group are also managed and used in accordance with these internal rules and standards. To ensure thorough, effective trade secret management, we work to educate Group employees through classes, e-learning and other training and by distributing the Securing Confidential Information and Trade Secrets Handbook.

Business Continuity Plans (BCP)

When it comes to catastrophic earthquakes, typhoons, flooding and other natural disasters, infectious disease pandemics, factory accidents, and other risks with the potential of interrupting business operations, the SCREEN Group’s first priority is ensuring the safety of its employees and their families, followed by ensuring the prompt resumption of business operations in order to meet our product and service supply obligations to our customers. Towards this end, we work to develop and implement effective BCP.

Preparation of Emergency System
We have put in place a safety confirmation system that uses mobile phones and smartphones to facilitate confirmation of the safety status of employees following a large-scale disaster and to facilitate a rapid response in line with the damage situation. Based on the email replies from employees, we can determine the magnitude of human casualties and direct disaster damage and then work to guarantee the safety of employees, which is most essential to business continuation.

Strengthening Seismic Resistance of Facilities
For our operations sites in Japan we undertake a variety of measures, including seismic resistance evaluations, building reinforcement, dismantling of aging facilities, immobilization of equipment and facilities, and introduction of seismic-resistant machinery and equipment.

Resilience of Parts Procurement
With regard to critical parts that have limited suppliers, we are promoting substitution to generic alternatives or access to more than one supplier. At the same time, in order to maintain stable parts procurement, during the design stage we work to prevent the inclusion of parts that have limited suppliers.

Preparation of Complementary Production Systems
Based on lessons learned from large-scale disasters and supply chain interruptions, we endeavor to put in place complementary production systems that incorporate and manage domestic and overseas production sites, as well as parts suppliers, in order to prevent significant damage to our business. In addition, we have acquired ISO 22301 certification for business continuity management systems (BCMS), and we develop BCP based on these standards.

Response to the COVID-19 Crisis

In response to the Japanese government’s designation of the novel coronavirus disease (COVID-19) as a “designated infectious disease,” the SCREEN Group has established a Group Emergency Headquarters within the SCREEN Holdings head office, which is overseen by the SCREEN Holdings president. We have also established local emergency headquarters at operation sites in Japan and overseas, as well as established business recovery headquarters at our business operating companies. All of these headquarters are used to check on the health of people connected with the SCREEN Group, to mitigate workplace infection risks, to ensure the redundancy and distributed operation of production systems, to provide online support to customers, and to facilitate other measures that will ensure business continuation.
The policies adopted by the Group Emergency Headquarters are immediately shared with the other Group companies worldwide, and the Group companies submit reports as needed to the Group Emergency Headquarters about the socio-economic, sales, procurement, production, and other situations in their respective countries. By ensuring that the Group Emergency Headquarters’ policymaking and dissemination is carried out swiftly, the Group as a whole is able to carry out its response swiftly.