In accordance with the SCREEN Group Code of Risk Management and other relevant in-house rules, the SCREEN Group is engaged in initiatives aimed at identifying and mitigating business risk, and 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 risks with the potential to negatively impact the SCREEN Group’s corporate value, we have established a group-wide risk management structure headed by the SCREEN Holdings president, with the president of each group company responsible for managing risk at their own company. 
The Group Risk Management Committee is at the center of this structure, conducting risk management operations, establishing risk management policies, identifying risks inherent in the entire Group, and monitoring their status with the aim of preventing and minimizing damage to corporate value. The committee also identifies group key risks in response to changes in the business environment each fiscal year to determine the direction of risk management and prevent these risks from materializing.
Group key risks are selected for the current fiscal year from among the items on the Group Risk List through discussion by the Group Risk Management Committee and finalized by resolution of the SCREEN Holdings Board of Directors. Furthermore, taking an approach built around three lines of defense,* we have designated risk managers for individual risks and their specific roles as part of a governance structure for sharing risk-related information across all levels of operations, all the way up to senior management.
* The first line of defense is borne by the group business operating companies, etc., the second line of defense by the SCREEN Holdings’ administrative departments and functional support companies, and the third line of defense by the internal audit department. 

● Risk Management Structure and Roles
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Further Enhancement of Risk Management Effectiveness

In the fiscal year ended March 31, 2024, as in the previous fiscal year, the four business operating companies on the first line of defense and relevant members of the second line of defense held talks, with the second line reviewing risk items, mainly group key risks, and supporting risk reduction activities. In order to apply consistent risk assessment standards throughout the Group, in the fiscal year ended March 31, 2024, we established risk assessment criteria. Using these criteria, we are further enhancing risk management through such efforts as discussing the appropriateness of the first line of defense’s risk assessment results, the adequacy of specific measures, and details of related support.

●Group key risks (FY2025/03)

Business Continuity Plans (BCPs)

The SCREEN Group is well-prepared for disasters, including natural disasters such as earthquakes and flooding caused by typhoons and heavy rains, as well as infectious disease pandemics, with top priority placed on ensuring the safety of its employees and their families. To ensure that we can fulfill our responsibility to supply products and services to clients even in the event of a catastrophic disaster that could affect business continuity, we have acquired certification under ISO 22301, an international standard for business continuity management systems (BCMS), and have in place a system for implementing effective business continuity plans (BCPs) to quickly resume business operations.

Emergency System

Our safety confirmation system can be used by supervisors in an emergency to promptly check the status of their team members. We also have a disaster information sharing system that helps emergency headquarters members, including senior management, share the extent of damage quickly and accurately.
We conduct regular emergency safety confirmation, disaster response, and evacuation drills. The emergency headquarters members also take part in comprehensive simulations at regular intervals. These efforts improve and strengthen our emergency system. As of March 31, 2024, all group companies in Japan and abroad have established their own BCM rules and BCPs and are advancing coordinated business continuity measures accordingly.

Strengthening Manufacturing Base

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. Based on lessons learned from large-scale disasters and supply chain interruptions, we endeavor to put in place production systems that complement production sites as well as parts suppliers, in order to prevent significant damage to our business. At the Hikone Site in Shiga Prefecture, which produces semiconductor manufacturing equipment, we have taken seismic-isolation measures in the factory and are in the process of constructing production systems that can also handle high winds and flooding.

Stable Procurement

We are also working to strengthen our BCPs with respect to suppliers. Specifically, we have introduced a system to check the impact on suppliers in the event of a disaster, strive to replace critical parts available only from limited suppliers with generic alternatives, and diversify our procurement sources and logistics partners, among other measures. Our BCP efforts also extend throughout the value chain, such as enhancing the field service structure to enable us to quickly respond to the needs of clients affected by disasters.

Strengthening Information Security Control

SCREEN considers cyberattacks and other information security risks represent a key management issue. Under the leadership of SCREEN Holdings’ Senior Corporate Strategy Officer, we are continuously working to strengthen information security by formulating and implementing group-wide rules and an IT roadmap, which sets forth medium- to long-term policies.
Types of cyberattacks and information security risks are changing on a daily basis. In response to these changes, we are globally operating round-the-clock monitoring for swiftly detecting and responding to suspicious behavior on computers and servers. Recognizing that protecting information security is our social responsibility, we are taking measures to ensure smooth business continuation, including exercises simulating responses to potential incidents.
Moreover, we regularly review information security rules and guidelines and work to improve awareness among all employees, as well as temporary personnel and everyone working with the SCREEN Group, through such means as annual information security training, which is updated with the latest information.
The SCREEN Group has established a risk management framework to strengthen information security control, as part of our efforts to upgrade security to a level conforming to NIST SP 800-171, which encompasses risk management in the supply chain, including contractors.