Fundamental approach
Aiming to strengthen the company-wide risk management system, the Group has established basic rules for risk management and has designated a responsible department for each risk to manage it. Should a serious risk occur or potentially occur, an emergency task force headed by the President and Chief Executive Officer is immediately convened in accordance with the above rules. We have a system to strive to minimize damage by taking immediate action in addition to receiving guidance and advice from outside experts (corporate lawyer, tax accountants, etc.) as necessary, and to take measures to prevent recurrence.
Examples of business risks and mitigation measures
Revisions to systems and other items affecting the business climate
Risk that, although official rates (medical and nursing care fees) are not set for our mainstay hospital and nursing care beds, revisions in systems related to the public-sector medical insurance system or long-term care insurance system and the impact of periodic public-sector rate revisions could reduce capital investment by the medical institutions that are the end customers of the Group.
Mitigation measures
Reinforce efforts in the field of health promotion based on our technology and knowledge cultivated over the years in the medical and nursing care fields.
Business expansion in overseas markets
Risks that generally are not potential problems for operation in Japan, such as revisions to export and import regulations, underdeveloped technological and manufacturing infrastructure, and difficulty securing human resources.
Mitigation measures
Gather daily information on political, economic, and social conditions and related regulations in the countries where our production and sales sites are located, and in the regions where we sell our products (in particular, stricter enforcement and changes in environmental regulations, product safety and quality regulations, and medical device registration regulations in each country), and implement necessary responses.
Procurement of certain materials
Risk of being unable to procure materials in a timely manner due to delays or interruptions in the supply of materials essential to the Group, resulting in a shortage of such materials.
Mitigation measures
Expansion of suppliers, potential suppliers of supplies, and alternative measures. Adoption of general-purpose parts.
Defects in products or parts (products, etc.)
Risk that an unforeseeable defect in a product, etc. occurs, leading to a large-scale free replacement (recall), resulting in significant cost burdens and a decline in the Group’s social credibility.
Mitigation measures
Development of a robust system for product quality control, including manufacturing in accordance with international standards for quality systems and various in-house standards. Signing up for liability insurance.
Natural disasters, etc.
Risk that a natural disaster such as an earthquake or a large-scale fire causes serious damage to the production sites of the Group or its suppliers, resulting in suspension of operations or delays in or reductions of production and shipments.
Mitigation measures
Formulation of a business continuity plan (BCP) in the event of a major earthquake, preparation of a safety confirmation system and emergency communication networks, and periodic training.
Information security
Risk that events exceeding expectations, such as large-scale failures of cloud services or networks or cyberattacks, cause suspension of information systems or information leaks, resulting in a decline in the Group’s social credibility.
Mitigation measures
Along with signing up for liability insurance, implementation of efforts such as enhancing employees’ information security awareness.
