Risk and Compliance Management
Policy and Basic Approach
To earn the trust of our shareholders, customers, the local community and all our other stakeholders, and to fulfill our corporate social responsibilities, it is crucial to effectively engage in risk management and compliance promotion structure.
In February 2006, the Mitsui Chemicals Group formulated its Group Action Guidelines, which provide the basis for the actions of all its personnel, and laid out the guidelines “always act in good faith” and “have a high regard for people and society” as its two mainstays. In accordance with these action guidelines and risk management rules (company regulations), we carefully control all risks that could potentially threaten our business activities, to earn the trust of our stakeholders and to fulfill our corporate social responsibility.
The Mitsui Chemicals Group Risk Management Policy
- To confirm that all employees are fully aware of the importance of risk management
- To confirm that a structured and systematic risk management system is in place
- To confirm that the line management of risks is firmly entrenched and that definitive steps have been taken to employ a PDCA cycle
- Line managers steadfastly carry out PDCA procedures as a part of efforts to manage the risks that arise in the natural course of daily business activities
- All employees who have come into the possession of risk-related information report to their line managers in a timely manner
- All employees proactively share with other departments any risk-related information that has come into their possession while also seeking cooperation
- Each and every employee must take the initiative and realize that he or she maintains the same responsibilities as the officer in charge of risk management. Every effort must be made to constantly fine tune sensitivities toward risk
System and Responsible Officers
The director in charge of the Risk & Compliance Committee is the responsible officer.
We have introduced the Mitsui Chemicals Group Risk Management System to quickly identify risks and prevent them from materializing. Within the annual budget of each Group company or division, we are specifying the top priority risks, based on risk models and procedure documents and steadily implementing measures and controls for risk.
We also use tools such as compliance checklists that are designed to monitor the progress of risk management measures to implement a risk management PDCA cycle steadily and prevent risks from materializing.
To maintain and operate the Risk Management System, the Risk & Compliance Committee was establisdhed with responsibility for putting in place specific policies, strategies, and plans that address risk as well as compliance concerns.
In addition to sharing measures, management targets and the status of achievements with regard to top priority risks, this Committee considers and supports appropriate countermeasures in response to priority issues that have newly emerged or that are considered to have a large impact on the entire Group, or on an as needed basis.
Structure of the Group Risk Management System
Composition of the Risk & Compliance Committee
|Chair||The responsible director in charge of the Risk & Compliance Committee|
|Members||Responsible director in charge of the Corporate Sustainability Committee, Responsible director in charge of the Corporate Administration & Legal Division, General Manager of the Internal Control Division, General Managers of the Planning & Coordination Divisions in each Business Sector, General Manager of the Planning & Coordination Division, General Manager of the Corporate Communications Division, General Manager of the Corporate Sustainability Division, General Manager of the RC & Quality Assurance Division, General Manager of the Corporate Administration & Legal Division, General Manager of the Human Resources Division, General Manager of the Affiliates Coordination Division, General Manager of the Information System Division, other members appointed by the Chairperson|
|Secretariat||Corporate Administration & Legal Division|
The Risk Management System has been incorporated into the Group’s internal control systems. The status of internal control system implementation is reported to the Board of Directors.
We established the Internal Control Division to continually monitor and assess the implementation and operational status of internal controls within the Mitsui Chemicals Group, as required under the Companies Act and the Financial Instruments and Exchange Act, and to ensure that operational risks are kept within tolerable levels at all times. In addition to maintaining and improving internal control standards throughout the Mitsui Chemicals Group, internal audits are conducted to ensure that operations are being carried out appropriately and efficiently. Furthermore, any important matters arising from the results of audits are shared with the Risk & Compliance Committee. The Internal Control Division specifically focuses on the following areas.
- Self-assessment-based internal audits relating to legal and regulatory compliance
- The conduct of self-assessment-based internal audits relating to legal and regulatory compliance; the introduction and operation of internal audit processes based on the aforementioned self-assessment-based internal audits with respect to business divisions as well as affiliates in Japan and overseas
- Compliance with the Financial Instruments and Exchange Act (submission of internal control reports)
- The implementation of annual assessments to determine the effectiveness of internal controls relating to financial reporting; the establishment of internal controls as well as operating policies including their assessment with respect to the Company in accordance with the implementation standards of Japan’s Financial Services Agency.
Goals and Results
|Incidence of major legal and regulatory violations||Mitsui Chemicals Group||0||0||◯||0||0
Review and Challenges
Having decided on KPIs for social and environmental targets under the 2025 Long-term Business Plan, we state the figures for major legal and regulatory violations, including those that affect the Group’s social standing, business operations, earnings and other key parameters. No major violations occurred in fiscal 2018. However, our domestic subsidiaries, Shimonoseki Mitsui Chemicals, Inc. received a notice from Yamaguchi Prefecture on August 5, 2019 that it would be subject to legal procedures in accordance with the High Pressure Gas Safety Act. This relates to multiple problematic leaks found at the company’s high-pressure gas production facilities. In response to these events, we would like to sincerely apologize for causing significant concerns among many people, including local residents, the authorities and customers. We are treating this incident very seriously. In line with the administrative action that is set to come down from the authorities, we will settle on a plan aimed at preventing any future incidents of this sort and will then devote our entire organizational structure to implementing this plan. To further ensure that no repeat incidents occur, we also intend to thoroughly review our legal compliance on a group-wide level.
With regard to risk management, we established countermeasures for those fiscal 2018 priority issues that had yet to be achieved. These countermeasures were then discussed in detail by the Risk & Compliance Committee and incorporated into the priority issues for the following fiscal year. Going forward, we will endeavor to change our business portfolio and expand business, while uncovering new risks that arise in response to changes in the external environment and minimizing those risks.