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Corporate Governance

Risk Management

Risk Management

DFF Inc., 三越伊勢丹HD 総務部総務法務DIV, 三越伊勢丹HD 総務部広報株式DIV, 三越伊勢丹HD 総務部コンプライアンスDIV, 三越伊勢丹HD 秘書室, 三越伊勢丹HD 監査役室, 三越伊勢丹HD 人事部人事企画DIV, 三越伊勢丹HD 人事部人事DIV, 三越伊勢丹HD 人事部労務DIV, 三越伊勢丹ヒューマン・ソリューションズ 人財開発事業部

Risk Management

Our Views on Risk Management

  • At the Isetan Mitsukoshi Group, we have established our Basic Regulations on Risk Management to implement overall risk management for all Group companies. Under these regulations, we implement measures both for risk management during normal times and for crisis management during times of emergency.
  • As a measure for promoting risk management, we create a risk map each year to visualize the risks facing the Group and strengthen policies for minimizing the impacts of risks that are realized. More specifically, we identify target risks, which vary depending on changes in the Groups environment, and implement measures to counter them.
DFF Inc., 三越伊勢丹HD 総務部総務法務DIV, 三越伊勢丹HD 総務部広報株式DIV

About Risk Management System

About risk management system

  • At the Mitsukoshi Isetan Holdings General Administration Department, we centrally manage the risks surrounding the entire group and promote management.By connecting quickly to customer response and formulating measures to prevent recurrence, we are building the foundation for the PDCA cycle of risk management across the group.
  • During normal times, this department engages in activities aimed at managing risks to corporate value, quality,safety, health, and labor;
    ensuring thorough compliance;improving the quality of internal control;
    and enhancing corporate governance.
  • This department responds promptly and flexibly to any risks that are realized.

◇ Roles of the Compliance and Risk Management Promotion Committee

  • To improve the effectiveness of the Compliance and Risk Management Committee, which existed until FY2017, we have converted this entity into the Compliance and Risk Management Promotion Committee in FY2018. To minimize the impacts of risks that are realized and prevent the occurrence of risks, this committee is promoting initiatives for realizing the integrated risk management of all Group companies by monitoring action plans related to individual risks and how they are addressed.The Compliance and Risk
  • Management Promotion Committee is chaired by the president and is held twice every year, with members from each department head appointed by the chair.
    Audit Supervisory Board members and people from related divisions also participate in meetings of this committee to share information.

◇Project

1)Business Continuity plan (BCP)

We have formulated a business continuity plan (BCP) by assuming major natural disasters (such as earthquakes and flooding) and pandemics. We also conduct training to improve the effectiveness of the BCP in a well-planned manner and verify its effects in our efforts to continue improving the plan.

2)Cyber Risk Measures

An organization that plans and promotes cyber risk measures across the group, focusing on governance, employee education and training, routine defenses, and review of routine surveillance flows.

Concerning information systems and related information owned and managed by the Group internally, we have formulated standards on measures for handling and managing them and ensuring compliance in the Regulations on Information Security Management with the aim of protecting the systems and information from risks including those of accidents, crimes, and negligence.
DFF Inc., 三越伊勢丹HD 総務部総務法務DIV, 三越伊勢丹HD 総務部広報株式DIV, 三越伊勢丹HD 総務部コンプライアンスDIV

Risk management in relation to business, etc.

The Isetan Mitsukoshi Group is aware of the following risks in relation to business, etc. that may have a major impact on the decisions of investors.

Risks relating to trends in demand

Demand in the department store business and retail specialty store business, which are our main businesses, can negatively impact the Groups results and financial status due to being greatly impacted by climatic conditions, economic circumstances such as economic fluctuations and consumer trends, and competition with other companies, etc. both domestically and in other countries in which we operate.

Risks relating to international business expansion

With regard to international expansion, we operate department stores in Southeast Asia, China, Taiwan, the USA, and Europe. Items in local currencies including the net sales, expenses, and assets of these stores have been converted to yen in order to create consolidated financial statements, so their value after conversion may be affected by the exchange rate at the time of conversion.
Furthermore, international business expansion carries risks such as the following:

  • (1) Unexpected changes to laws and regulations
  • (2) Disadvantageous political or financial factors
  • (3) Potentially disadvantageous tax systems
  • (4) Social disorder due to terrorism, war, or other factors

Risks relating to public regulations

In countries in which we operate, a range of government regulations apply, such as permission to conduct business or invest, and the Group is subject to laws relating to fair trading, consumers, tax, foreign exchange control, the environment, and recycling.
If we are unable to comply with these regulations, it may lead to our activities being curtailed and an increase in costs.

Risks relating to natural disasters and accidents

Department store business and retail specialty store business rely on physical stores for international expansion, and natural disasters and accidents, etc. can have a negative impact on the continued operation of stores.
We have created the Basic Plan on Earthquake Response and a business continuity plan as measures to respond to disasters and accidents, and we are enhancing our capacity to respond in the event of a major earthquake, including initial response and subsequent business continuity.
However, a large earthquake occurring in Tokyo may negatively affect the Groups results and financial status as there is a risk of immense damage to employees and buildings, etc. due to our main stores being concentrated in the Tokyo Metropolitan Area.

Risks relating to commodity exchange

Retail specialty store business conducts transactions aimed at customers (consumers), so if products with defects, such as faulty products and products that cause food poisoning, are sold, we may be subject to public regulation, and we may incur costs from paying damages for product liability or default on obligation, etc.
Furthermore, such an event may negatively affect the Groups financial status, such as by reducing sales due to the loss of trust of consumers.
Also, we conduct transactions with companies, focusing on the out-of-store sales department and other business wholesaling, and if costs arise, such as having to pay damages for product liability or default on obligation, etc., or it becoming impossible to recover accounts receivable due to the insolvency of the other party, and it may negatively affect the Groups results or financial status as the price per sales contract to corporate customers is high.

Risks relating to operating data centers

The Isetan Mitsukoshi Groups systems are mainly controlled by data center computers, and we have taken steps such as installing dual power lines and telecommunications lines, undertaking earthquake-proofing work, and controlling intruders. However, serious damage to facilities due to natural disasters or accidents, etc., damage to telecommunication lines, impediment to power supply, or damage due to an intruder or the negligence of an employee, may negatively affect the Groups results or financial situation as it may impede the work of the Group.
The Group has located its systems at external facilities with highly safe data center specifications in order to mitigate these operational risks.

Risks relating to customer information leaks

The Isetan Mitsukoshi Group retains and processes the personal information of customers, mainly in the department store and retail specialty store business, the credit, finance, and customer organization management business, and the information services business. Management of personal information is conducted in strict adherence to the internal management system; however, if information is leaked externally due to criminal activity, etc. it is conceivable that we would incur costs due to damages payable to individual customers or reduced sales due to loss of public credibility, and this may negatively affect the Groups results or financial situation.

DFF Inc., 三越伊勢丹HD 総務部総務法務DIV, 三越伊勢丹HD 総務部広報株式DIV, 三越伊勢丹HD 総務部コンプライアンスDIV, 三越伊勢丹HD 秘書室, 三越伊勢丹HD 監査役室, 三越伊勢丹HD 人事部人事企画DIV, 三越伊勢丹HD 人事部人事DIV, 三越伊勢丹HD 人事部労務DIV, 三越伊勢丹ヒューマン・ソリューションズ 人財開発事業部