Basic Approach of Risk Management
At the PERSOL Group, we consider risk management activities as essential not only for minimizing losses and damages when risks arise but also for preserving and increasing the Group’s corporate value. In order to actively control risk, we have implemented the Group Risk Management Rules, which are applicable to the entire Group including our overseas operations. We have also implemented the Group Crisis Management Rules to ensure that we are able to respond promptly and appropriately when risks arise.
We are perpetually reviewing and enhancing our risk management activities as the environment surrounding the PERSOL Group continues to evolve at an accelerated pace.
Risk Management Structure and Process
1. Risk Management Committee
The PERSOL Group established the Risk Management Committee as a cross-group organization that complements and strengthens the functions of the HMC (Headquarters Management Committee) of PERSOL HOLDINGS.
The committee is convened every quarter with members including the Representative Director, President and CEO and other executives and Internal Control Implementation Managers. The committee discusses the Group Significant Risks, which will be described below, as its agenda. Its activities also include the monitoring of the status of risk management at the functional divisions of PERSOL HOLDINGS, the Function Unit (FU), and the Strategic Business Units (SBUs).
In addition, the status of the activities of the committee is reported to the Board of Directors.
2. Risk Management System
The PERSOL Group has built a risk management system based on the three lines of defense model and the status of risk management by the Second Line is reported to the Group risk management division within PERSOL HOLDINGS and the Risk Management Committee.
- First Line (Group companies): At the point where risks occur; executes risk management in business activities and daily activities.
- Second Line (Administrative Division): Monitors and supports the risk management activities of each Group company.
- Third Line (Internal Audit Division): Provides reasonable assurance regarding the effectiveness of risk management independently from the First and Second Lines.
In addition, depending on the natures of risks, the division of roles between PERSOL HOLDINGS and the SBUs/FU is as follows.
- Group-wide risk: Each functional division of PERSOL HOLDINGS manages the risk across the Group (mainly operational risks)for effective group-wide risk measures.
- SBU-/FU-specific risks: For risks based on SBU-/FU-specific business and regional characteristics, a risk management representative (=SBU/FU Internal Control Implementation Manager) is assigned in each SBU/FU to autonomously manage risks within each SBU/FU.
3. Management Process for Group Significant Risks
Among the PERSOL Group’s risks, those which are deemed particularly significant in light of the Group’s management situation and corporate strategies are selected as the Group Significant Risks.
The purpose of selecting Group Significant Risks is to make measures to address these risks a management issue and to allocate management resources to them as a priority. For the selected Group Significant Risks, officers of PERSOL HOLDINGS are designated as risk owners (those who assume final accountability for the risks) to address these risks more effectively.
On the selection of Group Significant Risks, a decision is made based mainly on an evaluation from the viewpoint of "degree of impact" and" probability of occurrence", with weaknesses of risk control measures (vulnerabilities) and social expectation and concern also taken into consideration.
For a description of the selected Group Significant Risks, please refer to the excerpt material from the Annual Securities Report.
