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Risk Management

Basic Policy for Risk Management

Sumitomo Electric has established the Risk Management Committee, which is chaired by the President, and promotes the measures that mitigate various risks associated with our business activities such as risks related to safety, disaster, quality and environment. The Risk Management Office serves as the organizer. If risks come to the surface, the crisis management system will be formed promptly and appropriately based on the Basic Policy of Risk Management.

Basic Policy of Risk Management
  • Giving top priority to ensuring quality and safety, as a product and service provider
  • Maintaining favorable relations with stakeholders, including customers, shareholders, local communities and employees
  • Ensuring that compliance with laws and regulations and adherence to corporate ethics constitute the basis of the Sumitomo Electric Group's management
  • Honoring the Sumitomo Business Spirit, the Sumitomo Electric Group Corporate Principles, and the Sumitomo Electric Group Charter of Corporate Behavior

Risk Management System

Risk Management System

Risk Management Activities

In accordance with the risk categories below, Sumitomo Electric takes inventory of risks in each unit and affiliate every year and promotes planning and implementation of measures to address significant risks and insufficiently controlled risks. Thus, Sumitomo Electric is following risk management procedures consistently to raise the group-wide risk management level.

Risks to our Group are classified as follows in our risk reduction initiatives.

Risk Categories
Major category Middle category Minor category
Externally generated risk Non-financial risk
  • Disaster risk, crime risk
  • Political and country risks, etc.
Financial risk
  • Credit risk
  • Market risk; e.g. interest rate, exchange rate and material prices
  • Liquidity risk, etc.
Internally generated risk Strategic risk
  • Competitive strategy risk, etc.
Operational risk
  • Product quality and safety risks
  • Occupational hazards, facility accident and safety risks
  • Environmental risk
  • Compliance risk
  • Violation risk
  • Labor, human rights and personal information risks
  • Financial information credibility and asset protection risks
  • Information and communication system risks
  • Intellectual property rights risk
  • Reputation risk, etc.

Business Continuity

As part of the Company's risk management efforts, Sumitomo Electric developed business continuity plans (BCPs) in fiscal 2007 to ensure that our business activities can be continued even in the event of an emergency, such as an earthquake, influenza pandemic and fire, and that we can resume operations at the earliest possible time. Furthermore, we promote business continuity management (BCM) to keep the BCPs updated and provide employees with practical training, thereby preparing them to respond to emergencies.

Emergency Drills

Emergency Drills
Emergency Drills

The Sumitomo Electric Group enhances disaster awareness of employees by implementing joint emergency drills twice a year (in the daytime and at night). These are evacuation drills, including confirming the safety of employees and simulating the initial response to emergency situations. Besides these drills, we are expanding the communications equipment available (introducing satellite mobile phones and digital walkie-talkies), reviewing measures to prevent disasters and preparing for situations in which it is difficult for employees to return home.

Sumitomo Electric Group Basic Policy for Business Continuity

① Ensuring the safety of human life

We will give top priority to ensuring the safety of human life of customers, employees, suppliers, residents in local communities and other stakeholders.

② Stable supply of products and services

We will stably supply products and services required by societies to fulfill our responsibility as a supplier.

③ Respect for compliance and corporate social responsibility

We will fulfill our corporate social responsibility by respecting compliance and by acting in accordance with the Sumitomo Spirit, the Sumitomo Electric Group Corporate Principles and the Sumitomo Electric Group Charter of Corporate Behavior.

Information Protection

Personal Information Protection

With regard to information on individuals such as customers, business contacts and employees involved in the course of business, the Company declares that it will observe laws and regulations relating to personal information protection and other codes, and will establish voluntary rules and frameworks. This is stipulated in our Personal Information Protection Policy, which was implemented in April 2005. To effect the above declaration, the Company also set forth the Personal Information Protection Rules. Through employee education programs and other means, the Company works to develop and improve the in-house system for personal information management.

* Please see the following page for our Privacy Policy.Personal Information Protection Policy

Strengthening of Our Information Security Management System

In terms of information security, Sumitomo Electric considers in-house information systems, as well as all information handled by such systems, to be important assets. In October 2003, the Company formulated the Information Security Policy, which declares that the Company will appropriately protect and manage such assets. The Company also strives to continuously improve the information security management system, by establishing security measure standards, including information leakage countermeasures and risk management measures. Moreover, conscious that we have a social responsibility to maintain a high level of security in our products, in October 2016 we launched the “SEI-CSIRT Office” as a means of further strengthening information security management to encompass our products and production equipment.

Information Security Policy
As a part of the Sumitomo Electric Industries Group, based on its management concept, we aim to be a company that is trusted at all times, and shall make following efforts for information security in order to contribute in making a safe and secure society and environment.
  1. Provide excellent products and services with sufficient consideration for information security and respond the customer’s requests
  2. Securely protect information received from customers and business partners
  3. Securely protect company’s information assets required in manufacturing and office work
  4. Strive for constant growth by nourishing information security human resource and conducting continuous employees training
Revised in October 2016

The company also provides education on information security for all employees every year to ensure observance of the rules. Our conventional efforts to strengthen information security include encryption of the hard drive of laptop computers, supply of safe and secure file transfer service and restriction on data storage in portable electronic media. And our efforts are not limited to administrative operations. To improve security in our production equipment, we limit the devices that can be connected to equipment and have stepped up measures to combat viruses, while in the area of products and services, we are tackling vulnerabilities, developing secure products, and so on.

Security Trade Control

Sumitomo Electric has set forth internal rules on security trade control to ensure compliance with export control regulations aimed at international security, and established an export control system headed by a representative director.
Our export activities are conducted after proper screening of individual business transactions and obtainment of necessary export licenses such as comprehensive export license.
Our employees and persons concerned are provided with position-based training, as well as periodical training, which deals with the latest cases, and training at the time of their appointment to the position, so that they are aware of their responsibility for security trade control and obtain necessary knowledge.
We also conduct audits in the Company and its affiliates in Japan and overseas constantly to monitor proper export activities.

Intellectual Property Protection

Sumitomo Electric seeks protection of the company's own technology by proper management of technical know-how, as well as acquisition of the intellectual property rights (IPRs) such as patent rights or design rights. At the same time, we pay scrupulous attention and respect to the IPRs of other companies.
To this end, we have developed a rule on handling of intellectual property, and provided the intellectual property department with functions to support business units or R&D units including those in our subsidiaries such as discovery of inventions, investigation of prior arts and IPRs of other companies, formulation of strategy and response from the perspective of intellectual property-related laws and regulations. In order to improve IPR consciousness throughout the Group, we hold a Group-wide Intellectual Property Right Convention every year to commend the strategic applications that are highly expected to contribute to our business performance as well as the cases that have effectively utilized IPRs to greatly improve business results. We also organize in-house training programs that match the experience and level of proficiency of each employee, and publish the company magazine“ IP news” five times a year.
Moreover, we promote 1) analysis of the rights owned by Sumitomo Electric and other companies, 2) IPRs application based on the business plan or safeguarding know-how against disclosure and 3) countermeasure to IPRs of other companies, through concerted efforts among respective divisions, R&D units and the intellectual property department at“ IP strategy meetings” or“ IP committees” of each division. In recognition of these efforts to develop an intellectual property management system aimed at establishing and executing our intellectual property strategy, we received FY2013 Intellectual Property Achievement Award.

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