Risk Management and Compliance

Risk Management

At Chori, we take measures under normal circumstances to identify potential risks in our business activities so we can mitigate such risks and prevent crises before they occur. We have established a system for taking appropriate measures in the event of a crisis that could have a significant impact on our business and formulated our Risk Management Rules to enable swift and accurate responses to such emergencies while maintaining control of the situation and regaining a state of normalcy as quickly as possible. Under the direction of the president, CEO & COO, who assumes overall responsibility of the Company’s risk management activities, measures are taken to identify material issues pertaining to potential risks, mitigate such risks, and prevent such risks from occurring while formulating various methods to detect risks in advance and providing the necessary education and training in a voluntary and systematic manner. In addition, efforts are made to follow up on the results of our crisis response, verify its effectiveness, and uncover and improve on any issues.

The management team at Chori has classified the major risks that are believed to have a significant impact on the financial position, business results, and cash flow of the consolidated company according to the risks listed below, each of which will be assigned a committee or division responsible for preventing their occurrence.

Ensuring of Thorough Compliance

Rules concerning compliance systems, such as the Guidelines for Corporate Behavior, shall be established to set compliance with laws and regulations and social ethics as a code of conduct of our business. In order to make all directors, executive officers, and employees of the Group fully aware of the initiatives for compliance, corporate divisions shall collaborate to hold compliance training and other training programs. The Legal Compliance Committee, with the president, CEO & COO as the chairman, shall discuss important matters regarding the compliance of the Group and report the results to the Board of Directors and the Executive Committee as necessary. In the event of a significant legal violation or compliance violation on the part of a management executive, in accordance with the laws and regulations and the Articles of Incorporation, the Governance Committee shall deliberate on the dismissal of the management executive in question and the Board of Directors shall adequately discuss and consider his or her dismissal based on those results.

A system of contact has been established throughout Chori whereby executives and employees (including contract, temporary, and other employees) can receive consultation and report on compliance violations and other matters. In this way, we have established a framework for reporting incidents by ensuring the full confidentiality of whistleblowers, who are able to receive consultation either in-house or through an external point of contact depending on the nature of the incident.

Internal Whistleblower System