Risk Management

Fiscal 2025 Objectives	Fiscal 2025 Achievements	Self-Evaluation	Priority Objectives for Fiscal 2026
Continue to ensure compliance by business units and affiliated companies with the rules for reporting major risk incidents to executives and relevant departments	In the event of a major risk incident, promptly took action in accordance with the rules for reporting to executives and relevant departments; conducted regular monitoring and analysis across the Sharp Group and, based on the results, continuously formulated and reviewed measures to prevent recurrence	★★	Analyze response models from past cases and perform ongoing review and enhancement of response measures to minimize and appropriately manage fraud risks

Self-evaluation: ★★★ Achieved more than targeted / ★★ Achieved as targeted / ★ Achieved to some extent

Basic Approach to Risk Management

We position risk management as one of our key efforts in meeting stakeholder expectations, fulfilling social responsibilities, and achieving continuous business growth.

We are building a business risk management system based on our Rules of Business Risk Management. As well, we have identified and are managing a total of 118 specific risks that could have a major impact on management. These are classified into five categories: external business environment, financial, legal, labor, and business activities.

For each specific risk, functional divisions 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 keep up with changes in the business environment and market, we annually revise, evaluate, and grade specific risks. The goal is to prevent them from occurring and to study, introduce, and put into action responses should these risks occur. The formulated responses are reviewed by the general manager of the Corporate Legal 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.

Business Risk Management System

Number of Specific Risks and Their Classification (As of May 2026)

Classification	Example of Specific Risks	Number of Risks
External business environment	Natural disasters, infectious diseases	12
Financial	Finance-related risks	13
Legal	Breaking laws or rules, business-related scandals	31
Labor	Problems related to hiring of employees, labor management, and human rights	14
Business activities	Problems related to products, services, quality, material procurement, confidential information leaks, the environment	48
		118

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 a major risk incident occurs works to minimize social impact and to prevent the damage from spreading across the company. 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 deputy chairman, president & CEO, CFO, CTO, head of the Finance and Administration Office, head of the Corporate Legal Group, head of the HR and Administration Department, head of the Internal Audit Division, full-time audit and supervisory committee members, and heads of relevant departments, among others; status updates are shared; and the status of implementation of measures to prevent recurrence is confirmed.

In fiscal 2025, 127 major risk incidents were reported. In cases where major risks occurred in the Sharp Group, rules on reporting them were thoroughly communicated and reinforced across business units and affiliated companies. We will continue and step up these efforts in fiscal 2026.

Promoting Business Continuity Management

We have formulated and operate 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,” “Disaster preparedness and recovery measures,” and “Support for local community and business partners.” Besides periodically reviewing these basic policies, we seek to maintain and improve the business continuity performance of our 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 our business activities is anticipated, we 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 2025, 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. In fiscal 2026, we plan to expand the scope of the survey to include our major overseas bases.

We will continue to strengthen our business continuity management in preparation for all types of disasters and pandemics.