Risk Management

Risk Management

Basic Approach to Risk Management

Sharp positions risk management as one its most important efforts in fulfilling corporate social responsibility, which entails meeting the expectations of stakeholders through the sustainable development of business.

Sharp has formulated the Rules of Business Risk Management as a basic approach to risk management. In the Rules, risk items that could have a major impact on management are identified and managed as “specific risks” through the creation of a risk management system. For each specific risk, a functional department responsible for risk management across the entire company and business units and affiliated companies responsible for risk management in their respective business domains collaborate to minimize risks and to prevent risks from actually occurring.

To be able to respond to changes in the business environment and market, Sharp is constantly defining and revising specific risks, evaluating and grading them, working to prevent them from occurring, and considering and formulating responses should they occur. The results are reviewed by the general manager of the Corporate Strategic Planning and Control Group and reported to the Internal Control Committee, which is chaired by the president & CEO. Reports to the Internal Control Committee include overviews of and countermeasures to the below-mentioned major risk incidents, and their numbers. The content of reports to the Internal Control Committee is also relayed to the Board of Directors.

Response to Occurrence of Major Risks

The Rules of Business Risk Management prescribe rules for response if a major risk incident does come to pass. Taking prompt and appropriate action when an emergency situation occurs works to minimize loss and to prevent the damage from spreading not only across the company, but also to society at large. These emergency rules also specify action items to be implemented to ensure prompt and appropriate information disclosure to stakeholders. When a major risk incident occurs, depending on its severity and priority level, a report is made to the president, head of the Corporate Strategic Planning and Control Group, head of the Finance and Administration Office, full-time audit and supervisory committee members, and heads of relevant departments.

In fiscal 2023, 95 major risk incidents were reported. Improvements were made to the Sharp Group’s management system based on rules related to risk management. At the same time, rules on responses in the event of major risk incidents were reinforced. We will continue and step up these efforts in fiscal 2024.

Promoting Business Continuity Management

Sharp has formulated BCPs(business continuity plans) to expedite the continuation or early recovery of business in a large-scale disaster, such as an earthquake or an outbreak of an infectious disease. Basic policies for BCPs shared across the Sharp Group are “First priority to human life,” “Proactive program and program for recovery from disasters,” and “Support for local community and business connections.” Besides periodically reviewing these basic policies, Sharp seeks to maintain and improve the business continuity performance of its organization through reviews to account for organizational and business changes and through drills. If, in the event of a major disaster, a significant impact on its business activities is anticipated, Sharp will establish an emergency headquarters at the head office to support and work with Sharp sites in affected areas and to implement an initial response focused on ensuring the safety of employees and their families and a business continuity and recovery response.

In fiscal 2023, at major manufacturing bases in Japan, we checked the details of BCPs and the status of periodic BCP reviews and drills. We also surveyed problems discovered and continued to step up business continuity measures.

Going forward, Sharp will continue to work towards business continuity management as responses to all forms of disasters and pandemics.