Risk Management

Risk Management Initiatives
Basic Approach

Risk Management Initiatives

JUKI has established and operates a risk management system to appropriately address all risks of the JUKI Group. The system is centered on a Management Strategy Council that deals with strategic risks, a Crisis Measures Headquarters for business continuity, and a Risk Management Conference consisting of executive officers and the heads of business units and group companies.
JUKI conducts annual policy reviews and quarterly risk assessments and risk monitoring activities to respond to changing risks associated with political and economic conditions, quality assurance, environmental regulations, information security, security control, compliance, and occupational health and safety. In the event of a major risk event, the Board of Directors discusses the details reported on the risk response and makes continuous improvements.

Basic Approach

Significant Risks and Response Methods

Item	Risks	Response Method
Political and Economic Conditions	Adverse effects of unanticipated demand fluctuations caused by political systems, economic conditions, conflicts, and economic fluctuations in the countries and regions of the world where we do business.	Take countermeasures based on reports and information gathered from each business site at a Group Management Meeting held twice a year.
Business Activities	Changes in industry trends in production and sales activities, in the competitive environment, in customer needs, in laws and regulations, in the business infrastructure for logistics, etc.	Reflect the analysis and measures to be taken at a Risk Management Meeting held four times a year. Establish an internal response system and take prompt action as appropriate. Strengthen the supply chain by establishing a flexible and lean logistics structure linked to sales and production strategies
Financial Markets	Impacts on the prices of products sold and materials procured in foreign currencies stemming from conversion and transaction risk linked to exchange rate and interest rate fluctuations.	Assess the occurrence of foreign exchange risks at monthly foreign exchange meetings and gather information. Take countermeasures by allocating foreign currency revenues from exports to settle imports, using forward exchange contracts, basing financing on interest rate levels, and controlling interest-bearing debt.
Research and Development Activities	Changes in the social environment and market needs	Find new needs and leverage use cases in the market by building close relationships with customers. Strengthen R&D centers close to the market. Use open innovation to ensure that research and development are resilient to changes in the market environment.
Intellectual Property Protection	Insufficient action in certain areas where property protection is difficult Unintentional infringement of the intellectual property rights of another company	Establish an appropriate management system in the Intellectual Property Department
Product Liability	Product liability risks not covered by insurance	Strengthen quality measures at a Group Quality Assurance Meeting held six times a year and deploy daily quality-improvement activities.
Environment	Further strengthened legal regulations on various environmental issues in each country	Assess the status of environmental regulations in each country at a Risk Management Conference held four times a year, and take countermeasures. Formulate green procurement guidelines that go beyond legal compliance and conduct activities to reduce environmental load based on the company’s policies.
Security Control	Tighter Regulations due to Changing International Conditions	Assess the status of environmental regulations in each country at a Risk Management Conference held four times a year, and take countermeasures. Establish an in-house structure and respond promptly as appropriate.
Securement of Human Resources	Low birthrate and aging population in Japan Rapid changes in labor markets overseas Impact on business due to a lack of human resource development	Secure and develop human resources on a global scale at more than 30 subsidiaries and affiliates in Japan and overseas.
Hazards	Natural disasters such as earthquakes and floods, and various other types of disasters such as global epidemics (pandemics) of infectious diseases Material and human losses due to war and terrorism	Establish a management system through the formulation of a business continuity plan (BCP) Establish an in-house structure and respond promptly as appropriate.
Significant lawsuits, etc.	Lawsuits on consumer protection, privacy and various other legal regulations	Keep abreast of legal and regulatory trends in each country and obtain up-to-date information. Have the division in charge of legal affairs take prompt action.
Information Risks	Accidents such as leaks of customer information and confidential business and technical information	After securing the confidentiality of various types of information and establishing a management system, take appropriate safety countermeasures against unauthorized access, falsification, destruction, leakage, and loss.
Credit of Business Partners	Hindrance to debt collection due to unforeseen circumstances or bankruptcies of business partners	Review the credit management of business partners based on financial information.
Impairment Accounting	Application of fixed asset impairment accounting due to a significant decline in the market value of fixed assets or a deterioration in business profitability	Take countermeasures after monitoring the performance of each subsidiary and identifying any signs of such a decline or deterioration.
Hostile Buyout	Damage to corporate value due to a takeover bid (TOB) for shares or the purchase of a large number of shares in market transactions	Improve profitability and financial position with a view to reducing the risk of a hostile buyout. Enhance corporate value. Disseminate and disclose information in a timely manner to gain the trust of shareholders.
Spreading of False Rumors	Spreading of false rumors, slander, libel, or other falsehoods via the Internet, etc. to sully the reputation of the company, Loss of trust and corporate image	Conduct proper business operations on a daily basis. Take appropriate action by fact-finding and legal processes.
Labor Risks	Occupational accidents stemming from poor labor management and deterioration of employee health due to long working hours A decline in the company’s social credibility	Promote labor management that takes account of the safety and health of employees while complying with laws and regulations. Take countermeasures after monitoring the status of labor management at a Risk Management Conference held four times a year.
Compliance	Criminal, civil, and administrative liabilities and declines in social credibility due to violations of laws and regulations, etc.	Build and operate a compliance system in accordance with the “Compliance Regulations” Ensure the Code of Conduct for every employee