We are working to prevent risks that could have grave consequences for management and to minimize damage in adverse events. For these purposes, we identify risks in each function and make decisions on how to respond in meetings of the Board of Directors, Internal Controls Committee, and various general councils.

An Internal Control Committee headed by the company president identifies key risks, determines measures to counter them, and checks on the progress in executing these measures. In this way, these measures are made more effective.

In addition, initiatives to deal with key risks or unexpected risks due to political instability or other external factors are discussed regularly by the Board of Directors, and continuous improvements are made.

Moreover, Risk Management and Response Guidelines have been established. These guidelines show the actions taken to adopt to prevent potential risks and to respond to problems appropriately and quickly.

Operating foundation risks (primarily handled by CRO) and business strategy risks (primarily handled by CFO) based on the business environment are assessed from the perspective of impact on operations (financial impact, etc.) and possibility of occurrence (frequency), and key risks are identified.

Key risks are reflected in company policy as important action items, and initiatives are made to mitigate or prevent risks.

A crisis management system has been put in place for the event of a massive disaster, such as the predicted Nankai Trough earthquake or natural disasters due to climate change. This system is based on the principles of human life first, community support, and early recovery. Specifically, in addition to infrastructure and system measures based on the Crisis Management Project, resilience training has been conducted more than 180 times for directors and members of antidisaster departments since FY2013. These efforts are based on the company’s belief that improving the skills of response personnel is essential. Specific procedures for the recovery of affected buildings, facilities, and processes have also been established, and for alternative production in a production recovery system.

Recovery training for design drawings and other data is also carried out so that product development can be continued even after disasters. In addition, workshops to strengthen crisis management not only in Toyoda Gosei companies but also at Group companies and suppliers are conducted regularly. Assessments using anti-earthquake measure implementation status check sheets, clarification of weak points with graphs, presentation of responses taken at Toyoda Gosei and other companies, and cooperative preparation of business continuation plans (BCP) are carried out.

In response to global risks that occur not only in Japan but also in other countries (e.g., parts and raw material shortages, the Ukraine conflict, etc.), we are taking necessary actions on a global basis to quickly assess the situation (weekly BCP reports) both in Japan and overseas. Standardization is also underway so that domestic and international locations can take measures on their own initiative, and we are enhancing our ability to respond to key risks seen in the business environment of each company.