Risk Management

Promoting company-wide risk management activities that cover operations around the world.

• Fundamental Stance
• Promotion Organization
• Basic Framework
• Corporate Major Risks in Fiscal 2011
• Corporate Major Risks in Fiscal 2012
• Main Measures for Enhancing Risk Responsiveness

Panasonic promotes company-wide risk management activities that cover operations around the world. The aim is to take preemptive actions to eliminate “sources of failure,” which means anything that could impede the accomplishment of business goals. Underpinning this risk management are principles of Panasonic founder Konosuke Matsushita: “Worry earlier and enjoy later than people,” “Cause of failures lie within oneself,” “There is always a 'sign' for everything,” and “Small things can create big problems; you must be alert for signs of change and act accordingly.”

At Panasonic, risk management to eliminate sources of failure functions in tandem with the establishment and execution of management strategies that can create sources of success. Combining these two functions better enables us to accomplish business objectives and increase our corporate value. Disclosing risk information in public in an appropriate way and improving the transparency of our activities, as well as reducing risk by taking preemptive countermeasures gives customers and other stakeholders as well as communities and the public greater confidence in the Panasonic organization.

[Role of Risk Management in Business Management]

Panasonic has a Global & Group (G&G) Risk Management Committee that is chaired by the company president and includes Directors and Executive Officers who oversee corporate functions and divisions. In addition, corporate functions coordinate their efforts through committees associated with risk management. This provides a basis to promote measures throughout the company to deal with risks and to give assistance to business domain companies, related companies and regional headquarters. Risk Management Committees are also established by these business domain and related companies and regional headquarters. Collectively, these units create a global risk management system that spans the entire Panasonic Group.

[Panasonic Global and Group Risk Management Promotion Framework]

Panasonic has three levels of management cycles for risk management: the G&G Risk Management Committee, business domain and related companies, and related functions. We conduct risk assessments once a year in an integrated and comprehensive manner—risks that could affect business management are identified and then evaluated in terms of a single, global set of standards incorporating the potential impact on business operations, probability of risk occurring and other factors, after which the priority of countermeasures is determined. The G&G Risk Management Committee is responsible for identifying Corporate Major Risks that could affect the Panasonic Group based on these assessments. Among these, risks that are particularly important are classified as closely monitored major risks, and the G&G Risk Management Committee directly monitors progress made concerning countermeasures and other activities targeting these risks. Taking this approach allows reinforcing and speeding up of risk containment measures for the entire Panasonic Group. In addition, all business domain and related companies and related functions identify major domain and function risks for their respective activities.

The G&G Risk Management Committee, business domain and related companies and related functions cooperate as necessary in order to enact countermeasures with speed and accuracy for the three categories of major risks that they respectively identify. Going one more step, we monitor the progress of the countermeasures and make constant improvements.

[Basic Framework for Risk Management]

[Corporate Major Risks for FY2011]

Disclosing our major risks to the public is a key component of improving our transparency. Each year, we publish a set of Corporate Major Risks, a list determined by the G&G Risk Management Committee that describes our highest priority global risks. For fiscal 2012, we added natural disasters (earthquakes, tsunamis, etc.) to our list of Closely Monitored Major Risks due to the Great East Japan Earthquake disaster, and we initiated a medium-term plan to review our earthquake and tsunami countermeasures at our coastal area factories. In addition, we increased the scope of our management of risks related to wars, civil strife, and conflicts (including terrorism).

[Corporate Major Risks for FY2012]

In 2005, Panasonic began developing a Business Continuity Plan (BCP) centered on the concept of our development, manufacturing, and sales value chain. We developed a BCP for infectious diseases, new types of influenza in particular, and when the outbreak occurred in 2009, we took action to prevent infection and its spread, and reduced the effect on our business while reducing the threat to human life.
When the Great East Japan Earthquake struck in March 2011, we immediately established the Corporate Emergency Headquarter and promptly began collecting information and mobilizing the entire Panasonic Group to deliver aid to the stricken area and study management issues. Our BCP that addresses the risk of large-scale natural disasters, and earthquakes in particular, was already in place at all our business domain companies, and at factories and other locations emergency measures have been implemented based on this BCP.

Strengthening Disaster and Accident Countermeasure System

Panasonic has established the Disaster and Accident Measure Committee under the G&G Risk Management Committee to lead efforts to strengthen the framework for responding to major risks such as earthquakes, floods and other natural disasters, and large-scale accidents, including fires and explosions. A 24-hour global system reports to management in the event of an emergency situation and information is shared among major departments. The committee also provides support for any response as necessary. Various working groups established under this committee cooperate with related departments to explore countermeasures in readiness for the materialization of risks.