To appropriately manage various apparent and latent risks relating to our corporate activities, the Group comprehensively identifies and evaluates risks, and implements mitigation measures. By promoting risk management, we strive to prevent risk materialization and minimize losses in the event of an incident.
Compliance
We consider compliance a priority issue in delivering fair business activities and ensuring legal compliance and high ethical standards. In particular, operations related to proper waste disposal are based on environmental laws and regulations as well as governmental licenses, and we require our employees to act with a highly compliant mindset at all times. We are conducting activities to raise the legal compliance awareness of each and every staff members through education and communication, along with rules and manuals related to compliance.
Business continuity management
Various factors such as large-scale disasters risk impairing the functions needed for business continuity. We have formulated a business continuity plan (BCP) as an action plan to achieve quick restoration of mission-critical functions after a disaster. We are also conducting systematic business continuity management activities to constantly improve the BCP and business continuity endeavors.
Information security
Laptops and tablets used by the Group’s sales force are equipped with the latest security measures. This means that, even if a device is lost or stolen, the possibility of information leakage is virtually zero thanks to technology such as remote data wiping.
Internal reporting system (Whistle-blowing system)
To quickly identify and resolve problems such as unlawful or unjust behavior, we have set up the Asahi Hotline. All employees working at domestic and overseas Group companies can directly report to either our internal hotline or an external law firm anonymously. We take corrective action after investigating reports, taking care not to reveal the identity of the person reporting or the person being reported.
Avoiding All Interactions with Organized Crime Groups and other Anti-Social Forces
The following statement is part of our Corporate Governance Policies, and all our executives and employees are familiarized with this statement. “We will never have any relationship, including business relationships, with anti-social forces that threaten the social order and sound corporate activities. In the event of an illegal request, we will take a firm attitude and respond to it organizationally in accordance with the laws and internal rules.”
Anti-corruption measures
As one of the Goals of our Group Philosophy, the ARE Group Way, we have declared the establishment of a globally trusted corporate brand. Group staff members endeavor to ensure that they do not engage in any transactions that could result in bribery, such as providing benefits to a business partner or competitor for personal gain.
Moreover, the Group has established a Responsible Precious Metals Management Policy. It has declared and implemented a policy of avoiding transactions that could result in money laundering or fraudulent transactions in the precious metals supply chain. Asahi Pretec also conducts regular employee training on this topic.
Risk Management
Group-wide oversight and auditing by directors
ARE Holdings has established a system to appropriately oversee and audit Group companies from every angle to ensure they are operating properly. Important executive decisions by Group companies are carefully deliberated and determined by the Executive Committees of each Group company, of which the representative directors of the Group companies are members. Particularly important matters are submitted and reported to the ARE Holdings Board of Directors. Directors who are Audit and Supervisory Committee members also participate in management meetings at Group companies and actively provide input. The management situation and sales activities of Group companies are regularly reported to the Board of Directors of ARE Holdings. In addition, the company’s Audit Department audits Group companies on a regular and ad-hoc basis, and the resulting audit reports are shared with the Audit and Supervisory Committee and relevant departments
Strengthening group risk management
Compliance is essential to maintaining trustworthy corporate activities. The Group therefore ensures legal compliance and thorough adherence to corporate ethics. While the ARE Group Way emphasizes taking on challenges and we continue to expand into new areas, we must also acknowledge the increasingly diverse demands and values of society. To pursue sustainable growth going forward, the Group must not only comply with laws and regulations, but also enhance management of all kinds of risks. While risk management is practiced at business locations, management standard-setting and location monitoring must be separated and performed independently. Recognizing this, ARE Holdings decided to enhance its organizational response capabilities by introducing a unified management framework for the Group. As a result, the Audit Department was placed under the Audit and Supervisory Committee to enhance the independence of the function responsible for checking and monitoring business execution. We have also established a General & Legal Affairs Department and taken other steps to bolster the framework to minimize various legal risks at our business locations. We will continue to further enhance our risk management system going forward.
Establishment of a group risk management department
In April 2021, a Group Risk Management Department was created to properly identify potential risks in the Group’s business execution processes and business structures, evaluate risks in business activities, and implement mitigation measures across the Group. The department implements compliance risk management for each business unit from an independent perspective, and strives to ensure appropriate governance in collaboration with the Audit Department. We have also established a compliance and safety system under which we hold Internal Control Meetings and Safety Management Meetings regularly to prevent risks from materializing.
Strengthening risk management in our North American refining business
In North American Refining Business, we are working to establish a model to expand our business into related areas, using refining as a platform. In particular, we will continue to aggressively promote financial services such as prepayment transactions, and we will also develop new financial products. To do this, we first need to establish strong mechanisms to ascertain and monitor the credit risk of our business partners. In addition, identity verification (Know Your Customer, a.k.a. KYC) procedures are becoming increasingly important to prevent the funding of organized crime and terrorism. Accordingly, we will work to strengthen credit risk management of business partners and enhance systems at individual sites as we promote the expansion of our North American Refining Business, which is one of our growth drivers.