Risk Management

The PERSOL Group has established the Group Risk Management Regulation and is working as a group with the aim of contributing to the appropriate organizational management, maintenance and improvement of corporate value of the PERSOL Group through risk management activities.
Based on this approach, we identify risks that hinder the maintenance and improvement of corporate value and the execution of business strategies and reduce risks by taking appropriate measures. We believe that preparing to take prompt and appropriate responses in the event of an arising risk lead to the trust of our customers, business partners and other stakeholders.

With the transition to the SBU (Strategic Business Unit) system in April 2020, we are strengthening our risk management based on the idea that "the first line is the owner of business risk management."

The risk management structure is built on three lines of defense. The concept of each defense line are as follows.

• First Line (Group companies): At the point where risks occur, executes risk management in business activities and daily activities.
• Second Line (Functional 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 Line.

In addition, regarding the Second Line, the risk management divisions are set as follows, depending on the content and nature of the risk. These risk management contexts are reported to the Group risk management division within PERSOL HOLDINGS and the Risk Management Committee.

• 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 with SBU and FU-specific business and regional characteristics, a risk management representative (= Internal Control Implementation Manager) is assigned in each SBU and FU to autonomously manage risks within each SBU or FU.

※ Abbreviation for “Function Unit”

The Risk Management Committee was established in April 2020 as a cross-group organization that complements and strengthens the functions of the HMC (Headquarters Management Committee) of PERSOL HOLDINGS.
The committee members are the CEO (Chief Executive Officer) and other executives who lead each SBU and FU as well as the Internal Control Implementation Manager. They discuss overall risk management of the entire Group and significant risks, and monitor the status of risk management in the SBU and FU.