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Governance

Compliance and Risk Management

OMRON’s global promotion of compliance and risk management through integrated risk management initiatives

Basic Policy

Promoting compliance and risk management globally through integrated risk management initiatives

Based on OMRON Group Rules for Integrated Risk Management, the OMRON Group promotes compliance and risk management at the global level. Specifically, OMRON identifies and analyzes global compliance and other Group-related risks, specifying significant risks and devising measures to deal with them.

Should a significant risk occur, the Crisis HQ will be set up to deal with that risk through an organizational approach. To quickly assess frontline risk information, the risk reporting system and Whistle-blower System are in operation.

Integrated Risk Management Policy

OMRON’s basic policies for integrated risk management are defined in the Basic Policy on Maintenance of Internal Control System resolved by the Board of Directors as follows:

  1. 1. We will integrate and carry out risk-related activities from a global perspective for the purpose of securing the continued existence of the companies and enabling them to achieve their targets and fulfill their corporate social responsibilities.
  2. 2. Based on the OMRON Group Rules of Integrated Risk Management, we will endeavor to avoid, reduce, and transfer losses by collecting risk information, conducting risk analyses, and implementing countermeasures against risks.
  3. 3. We will identify critical risks to the Group and enable Groupwide responses through the Executive Council.
  4. 4. In a time of crisis, we will make reports in accordance with established procedures and form response teams necessary to address the crisis.

Integrated Risk Management Framework

Establish Global Promotion Structure

At the OMRON Group, the Corporate Ethics and Risk Management Committee is tasked with promoting compliance and risk management in an integral manner. Consisting of members from the OMRON global headquarters and business companies as well as regional headquarters overseas, the committee deliberates on measures on a quarterly basis for implementation.

A risk manager in charge of compliance and risk management is in place at each Group company across the world. These risk managers use OMRON’s global network to exchange risk information and quickly devise and take action in response to changes in internal and external environments by combining the efforts of frontline staff and the management team.

The progress in risk management, including initiatives to address significant risks, is regularly reported to the Executive Council and the Board.

Activity Cycle for Integrated Risk Management

Initiatives

Categorizing the entire spectrum of risks that impact management and financial performance

At the same time as starting our VG2020 long-term vision formulated in 2011, we also launched our existing integrated risk management program. We are becoming more attuned to risk and confronting any risks as they emerge in the face of a faster pace of change in the operating environment and rising levels of uncertainty.

OMRON faces a variety of risks as we expand across the globe. In response, we have categorized the entire spectrum of risks that impact management and financial performance. Having categorized these risks, we then chart their interrelationships. (For details, refer to Businesses and Other Risks)

We use this framework as a link between management and the working level, in order to, alongside management, address issues that cannot be resolved at the working level. Accordingly, we have created the OMRON Risk Book – Risk Scenario 100 — a business risk casebook aimed at using previous case examples to look forward, and have shared them group-wide. This will use case examples from others as object lessons in increasing our sensitivity to risk. Additionally, our VG2.0 medium-term management plan includes measures related to business risk management that supports innovative creation.

Businesses and Risk*

Setting the most Critical risk, and Strengthening Risk Response

In fiscal 2018, we conducted a global risk analysis, picked out critical risks to our group, decided upon departments responsible for countermeasures, and systematically promoted initiatives to counter these risks.

Specifically, this set failure to respond to crises, global information/IT security, and quality issues as most critical risks, and support for RBA*1, geopolitical and country risks, and vulnerability of management in emerging economies as important risks.

For failure to respond to crises, we are strengthening our capabilities to respond to risks by means such as crisis communications, media response training, and rapid reputation detection through monitoring of social media.

Next, for the risk of global information/IT security, given the increasing numbers of cyberattacks in recent years and strengthened laws worldwide related to the protection of personal information, we have started to rebuild our global information security management system. Fiscal 2018 has seen data transfer agreements and other improvements to management systems based upon the implementation of GDPR*2. Additionally, we have also increased our responses to cyberattacks through measures such as cyberattack training.

Furthermore, for geopolitical and country risks, we keep a keen eye on diplomatic incidents occurring worldwide and on the current state of affairs, use careful scrutiny of multifaceted information to rapidly respond to trends and measures in each country, and take measures within the Group.

  • *1 RBA: Responsible Business Alliance. Name changed from EICC in October 2017. A corporate alliance that addresses ethical and other issues in the supply chain.
  • *2 GDPR: General Data Protection Regulation, EU legislation on the protection of personal information. This regulates personal protection and the free exchange of personal data when handling these, and applies to EU member states.

Whistle-blower System

Implementing Whistle-blower System globally based on fair treatment and guaranteed protection of whistle-blowers

The OMRON Group implements a Whistle-blower System as the framework for monitoring ethical conduct across the Group.

Such notifications are accepted from a wide range of personnel, including executives, employees, and temporary employees; their families; as well as retired personnel and suppliers. Besides handling whistle-blowers at a dedicated department within the company, an external law firm is also commissioned to accept reports from whistleblowers. Outside Japan as well, Whistle-blower Systems are available at major sites in the regions of the Americas, Europe, Greater China, Korea, and Asia, and are implemented in the same manner as in Japan.

Regarding the implementation of the Whistle-blower System, the internal regulations clearly state strict maintenance of security and protection of whistleblowers from any detrimental treatment. OMRON also informs employees of the availability of the hotline through bulletin boards and during employee training.

In fiscal 2018, a total of 44 whistle-blowing reports were made in Japan, and 39 abroad. This shows steady global penetration and proper functioning of the whistle-blower system.

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