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 SCREEN Holdings (HD), 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 companywide, cross-cutting risk management structure which includes the HD Representative Director, President while making the presidents of each SCREEN Group company responsible for managing risk at their own companies. The Group Risk Management Committee, which meets twice a year as a general rule, discusses the status of risk management efforts and necessary countermeasures and reports them to the HD Board of Directors.
In addition, the Group Risk Management Committee discusses the risks on the Group Risk List that have (or will highly likely have) particularly large effects, and selects them as the Group key risks for the current fiscal year. We then have them approved by HD Board of Directors to make a final determination.
Under the Group Risk Management Committee, to prevent and minimize damage to corporate value, the SCREEN Group identifies the risks inherent in the entire Group and their status, determines the direction of risk management by identifying the Group key risks in response to changes in the business environment each fiscal year, and prevents risks from materializing. As a specific example, 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 administrative department and functional support companies; and the third is the internal audit department. In line with this, we designate individual risk managers and management roles and establish a governance structure for sharing risk-related information between the front line and senior management.

 Risk Management Structure and Roles

Risk Management Structure(E).png​​​​​​​

Further Enhancement of Risk Management Effectiveness

We have reviewed our Group Risk List to enhance the effectiveness of our activities to reduce the FY2024 Group key risks as determined by the process described above.
In addition to that, starting from FY2024, we have established a new risk assessment criteria to ensure that the same criteria are used throughout the SCREEN Group to assess risks. Group key risks As in the previous fiscal year, we are implementing a scheme in which the first line of defense identifies risks subject to risk reduction activities at the beginning of the fiscal year and confirms the progress of said activities during the fiscal year. Backing this up, the second line of defense reviews each risk and related activity and offers further reduction measures.

Group Key Risks (FY2024​​​​)

Risk category Overview of the Group Key Risks

1. Management plan

Sudden changes in customers’ capital investment trends

2. Compliance with laws and regulations for trade

Conformity with regulations and export/import-related legislation associated with U.S.-China friction

3. Supply chain management (SCM)

Disruptions in SCM

4. Technologies and products

Decrease in market share

5. Information systems

Problem related to information security

6. HR policies

Securing capable human resources

7. Development of the next generation

Delays in the development of the next generation

8. Safe working environments

Occurrence of occupational accidents and injuries

9. Climate change

Failure to reduce CO2 emissions as planned

Business Continuity Plans (BCPs)

When it comes to recently intensifying catastrophic earthquakes, typhoons, flooding and other natural disasters, infectious disease pandemics, 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 clients. Towards this end, we acquired ISO 22301, which is an international standard for business continuity management systems (BCMSs), and work to develop and implement effective BCPs.
In response to COVID-19, the SCREEN Group has continued anti-pandemic measures worldwide led by the Group Emergency Headquarters, which is overseen by the SCREEN HD President. We implemented various business continuity actions to reduce infection risks at offices and production sites while conducting additional workplace vaccination events for Group employees and their families, as well as suppliers. Group-wide responses have ended as COVID-19 was reclassified as a Class 5 infectious disease in Japan.

Preparation of Emergency System

We have put in place a safety confirmation system that uses mobile phones and smartphones and a disaster information sharing system that helps Emergency Headquarters members assess the situation quickly and accurately. After a large-scale disaster, these systems will allow us to confirm the safety of employees and respond rapidly in line with the damage situation. Based on the safety information received from employees via the system, 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. In addition, we regularly implement safety confirmation drills and emergency response and evacuation drills. In FY2023, the Emergency Headquarters conducted a comprehensive drill assuming a massive Nankai Trough earthquake and identified issues to be addressed. This has led to improvements to strengthen our emergency system.

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 Plant 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

With regard to critical parts that have limited suppliers, we are taking a double-track approach by promoting substitution with generic alternatives or access to more than one supplier. At the same time, in order to maintain stable parts procurement, we share long-term forecasts and other information and work to prevent the inclusion of parts that have limited suppliers during the design stage.

Strengthening Information Security Control

Cyberattacks and other incidents have reinforced the fact that information security risks represent a serious business challenge. SCREEN Holdings’ Chief Officer of Corporate Strategy presides over the Group’s information security control, continuously working to strengthen it 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 have globally deployed endpoint detection and response (EDR), a solution for detecting suspicious behavior on computers and servers, and round-the-clock monitoring of our networks. Recognizing that protecting information security is our social responsibility, we take measures to ensure smooth continuation of business, including exercises simulating responses to potential incidents by our computer security incident response team (CSIRT).
In addition, we regularly review information security rules and guidelines and 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 that is updated with the latest information.
In this fiscal year, a team dedicated to information security was formed to strengthen our information security control. This is a part of our efforts to upgrade security to a level conforming to NIST SP 800-171, a set of security standards in the U.S. that encompasses risk management in the supply chain, including contractors.