Risk Management

The NGK Group considers uncertainties which may affect achievement of the Group Vision to be risks. We have established an approach of handling risks according to their type, which enables us to control these risks by appropriately recognizing and preventing them, and to minimize losses caused by risks that do materialize.
Moreover, when risks that have a big impact on management occur, the committee tasked with handling the risk according to the Basic Rules of Crisis Management will lead the way in collecting information and ascertaining the situation. The NGK Group will then work to minimize the negative impacts, analyze the causes, and prevent recurrence. For extremely serious risks, the executive officer in charge of the Sustainability Management Dept. will convene a response meeting attended by the President to respond to the risk.

In FY2023, the NGK Group established a new Risk Management Committee chaired by the President, and is comprehensively managing the Group's significant risk issues under the supervision of the Board of Directors in accordance with the risk management process described below. Risk Management Committee members perform management activities which include providing direction and support to each division and department for handling risks in the area they are responsible for. In addition to crafting and carrying out risk countermeasures, each business group and division also constantly monitors the materialization of risks and reports these results to the Risk Management Committee. At least once a year, the Risk Management Committee reports to the Board of Directors about risk management activities. Through this, the Board of Directors is able to supervise these efforts and verify the effectiveness of the risk management structure. The risk management structure in question, is managed independently of the Audit & Supervisory Board.

Risk Management Structure

The Board of Directors views uncertainty that affects the achievement of the NGK Group Vision as risk, and has decided on a concept of risk management to serve as our policy concerning risk management. It determines the approach to take on initiatives depending on the classification of risks as “risks NGK should take” or “risks NGK should avoid.” Under this approach, the Risk Management Committee periodically analyzes and evaluates risks, then identifies and reviews the material risks that should be managed based on changes in the internal and external environment, with reference to the COSO-ERM Framework*. It has also established a risk management structure and method for formulating and implementing countermeasures against risk and monitoring the manifestation of risks via the committees and departments in charge of managing risks. Once a year, we identify the risk factors impacting our business operations in both a top-down manner by management, and a bottom-up manner by each department, in order to identify and review critical risks. We check the level of impact of each risk, changes in the likelihood of their occurrence, and whether we are aware of new risks, then review our risk assessment. Through these efforts, the Risk Management Committee manages the risks facing the NGK Group in an interdisciplinary manner, and reports to the Board of Directors.
In order to flexibly address risks that have suddenly increased in importance due to abrupt changes in the internal and external environment, we make sure we are able to respond by adding them in a timely manner to the list of targets to be handled by the Risk Management Committee. Following the change of administration in the United States in FY2024, we held discussions focused on tariff policy and its impact on our business with outside experts at Risk Management Committee meetings.

Material Risk Management Cycle

At NGK, we have established the BCP Countermeasures Headquarters under the direction of the President as an organization to carry out operation and maintenance of our business continuity plan, with the aim of respecting human life and cooperating with the local community. It promotes our business continuity plan (BCP) throughout the entire NGK Group. Measures taken in preparation for putting our BCP into operation include the establishment of multiple manufacturing bases and procurement sources, damage mitigation measures related to buildings and equipment, and employee safety assurance. We also conduct emergency drills based on scenario plans presuming a major disaster such as a large earthquake in the Nankai Trough with the aim of enhancing our ability to cope with a crisis in the event a disaster occurs. During these drills, participants are instructed to take real action according to the plan. This helps us to identify even small issues with each process and procedure and use our findings to improve the BCP. In addition, the BCP Secretariat leads the way in working to ensure business continuity by collecting information early on and implementing countermeasures in response to procurement difficulties stemming from the spread of infectious disease or changes in the global situation.

BCP Organizational Structure