Risk management

GOLDWIN continues its efforts to enhance risk management and corporate governance by establishing different types of internal committees, such as the ESG Management Committee and Governance Committee, to address various risks intrinsic to management issues. For any risks pertaining to management decisions, such as decisions on management strategy, among the broader risks impacting the corporate value of GOLDWIN, we obtain advice from external experts, including law offices, as needed, and the relevant division analyzes and examines how to proceed. Furthermore, officers and employees endeavor to avoid or mitigate risks with the advanced understanding of information and changes to the situation that could lead to risks in the course of their daily work, but the rules also required them to immediately report to the division responsible for crisis management if there are unavoidable circumstances that they cannot prevent. The division responsible for crisis management shall gather and analyze information, examine measures and the policy to prevent a reoccurrence, and establish a system to give instructions and orders to officers and employees on the actions required to resolve the crisis. In March 2020, as COVID-19 was spreading, we endeavored to prevent major incidents or the further spread of the virus by establishing the COVID-19 Countermeasure Committee, in which the General Manager of Corporate Strategy and Planning Division was the chairperson, to give prompt instructions and decisions.

Main risks and countermeasures

Risks Overview Countermeasures
Product liability risks Social value could potentially deteriorate leading to negative consequences for GOLDWIN Group’s performance due to product liability issues arising in the Group’s product or supply stage. ● Production and supplies in line with quality control criteria
● Enrollment in product liability insurance
Risks when handling personal information GOLDWIN Group retains personal information on its customers since a portion of sales comes from mail-order sales. Should this personal information be leaked outside our organization due to contingencies such as external hacking, it’s conceivable that GOLDWIN Group’s sales could decline due to the Group’s disrepute or a fine, such as for damages, could be incurred, leading to negative consequences for the Group’s performance. ● Cyber measures
● Reminder emails sent within the company
● Configuration of highly secure strategic spots that can block external attacks such as targeted attacks
● Individual PC encryption
● Data management using a cloud environment and limited use of external storage such as USB memory sticks
● Verification of security measures at subcontractors
● Thorough personal information management
● Access history management
● Establishment of internal control systems and internal regulations, which are the responsibility of officers
Risks from large-scale and other natural disasters Unforeseen natural disasters, changes in the political and economic climate, the prevalence of infectious diseases and epidemics, legal or regulatory changes, terrorism, war and other social upheavals in the countries or regions in which GOLDWIN has expanded might impact sales and activities for collections. In such circumstances, there might be negative consequences for GOLDWIN Group’s performance or financial position. ● Positioning initiatives for environmental issues as a top priority and setting targets for 2030 and 2050
● Review and reinforcement of building equipment
● Securing equipment for accommodation, food and beverages
● Introduction of safety confirmation system
● Establishment of disaster prevention radio connecting each location
Intellectual property right risks Since GOLDWIN possesses intellectual property rights, including many trademark rights, an infringement of these intellectual property rights or the like may lead to negative consequences for product development or a damaged brand image. Moreover, litigation for infringements of intellectual property rights could require a considerable amount of time and money to resolve, which might adversely impact our financial situation and business performance. ● Development of a control system for intellectual property protection
● Infringement investigation during product development and technical implementation etc.
● Implementation of education and awareness-raising activities on intellectual property rights for employees
● Collecting information on infringements due to counterfeits
Risks to human resource development and security Our personnel form the management foundation at GOLDWIN Group. Therefore, if we don’t continue to secure and train personnel as planned or if we cannot secure the appropriate workforce due to future population shifts, this may cause obstacles to the execution and development of the business, which might impact the Group’s performance. In addition, if the laws on the treatment of employees were to be revised, including revisions to different labor laws and social insurance, compliance costs and labor costs could increase, leading to negative consequences for GOLDWIN Group’s performance. ● Entrenching the reduction of overtime work and improved productivity (efficiency)
● Addressing the disparity between non-regular employees and full-time employees
● Encouraging the employment of senior citizens
● Permission to moonlight
● Improving employee health
● Promotion of women’s advancement in the workplace
● Reemployment of retirees
COVID-19 risks The spread of COVID-19 has made a major impact—weakening inbound demand and dampening consumer confidence due to the quarantine. If the shortened business hours and temporary closings at directly managed stores continue for the long term due to the state of emergency declaration to prevent the future spread of COVID-19, this could lead to negative consequences for our performance. ● Limits on the number of people entering stores, placement of disinfectant at the entrances, daily employee temperature checks, hand sanitizing, mask wearing, frequent handwashing, gargling
● Promotion of teleworking