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Focus Area 6Corporate governance
The Future That We Envision
Earning the trust of stakeholders and society, through transparency in management and proactive information disclosure
In today's business environment, enterprises can achieve sustainable growth by continuously strengthening their internal control and risk management systems while proactively disclosing pertinent information. The Olympus Group, which operates globally and engages with diverse stakeholders across various countries and regions, identifies corporate governance as a key Focus Area among its materiality topics. Our company is committed to ensuring transparency in management, enhancing resilience and risk management, and disclosing information in an appropriate, fair, and timely manner.
- Materiality Topics
WhyWhy are we taking these actions?
To strengthen the foundations of sustainable growth
Olympus Perspective 1: Improvement of Internal Control System and Information Disclosure
Improving information disclosure and internal control systems is at the heart of our corporate responsibilities.
A company, as a social entity, carries the responsibility of fully implementing its management philosophy. It must continuously improve the effectiveness and efficiency of its operations while continuously enhancing the reliability of its financial reporting. To gain the trust and understanding of all stakeholders, it is crucial to disclose information related to management policies, financial circumstances, and business and sustainability activities in an appropriate, fair, and timely manner.
Olympus Perspective 2: Effectve Risk Management
Aligning company strategy with enterprise risk management
Recent years have seen dramatic changes in the business environment in which enterprises operate. These shifts have been compounded by an increase in risk factors that include natural disasters, rising geopolitical tensions, and cyberattacks. Therefore, to continue its business operations and promote its management strategy, it is vital that a company establishes an effective enterprise risk management (ERM) system capable of appropriately and accurately identifying, assessing, and managing various risks. Olympus is cognizant of the importance of regularly identifying risk factors—including potential and emerging risks—and continuously strengthening ERM, in order to minimize losses when risks become apparent, and to prevent risks from materializing whenever possible.
HowHow will we achieve this?
Initiatives promoting improvement of internal and management systems, and of information disclosure
Approach 1: Strengthening Governance Structure
Creating systems to ensure soundness of management
To ensure the soundness of management, Olympus is strengthening its functions of information disclosures and monitoring. Additionally, since 2011, the company has been working to enhance its management oversight function, through the separation of management oversight and execution. Our corporate transformation plan, named “Transform Olympus” and launched in 2019, has involved Olympus transitioning in fiscal 2020 from a Company with an Audit & Supervisory Board, to a Company with a Nominating Committee, etc.
As part of our corporate governance reforms, we have increased the number of external members serving on our Board of Directors to at least half the total number of directors (as of fiscal 2017). Presently, independent external contractors comprise the majority of the Board of Directors, and since fiscal 2016 the board has been chaired by an independent external director. The Board of Directors meets at least once every three months, and as necessary, to make decisions relating to basic management policy; internal control systems; and other important matters, and to supervise the execution of duties by directors, executive officers, and other senior personnel.
〈Related Materiality Topics〉Corporate governance and reporting transparency / Diversity in Board of Directors
Approach 2: Strengthening Risk Management
Integrated management of Risk & Controls, Compliance, Privacy, and Information Security functions
The Olympus Group promotes proactive risk management, by balancing active risk-taking to drive value creation and sustainable growth with diligent efforts to prevent incidents, minimize losses, and ensure compliance.
We are also working to further strengthen our business continuity and crisis management procedures, in order to minimize impact on corporate value when risks materialize.
In April 2023, the Olympus Group launched a new global organizational structure, which integrates the four functions of Risk & Controls, Compliance, Privacy, and Information Security relating to Governance, Risk, and Compliance (GRC) into a single, global GRC organization. Additionally, the group began the process of enhancing its ERM methodology. All critical functions, or units, within the group now assess their global risk portfolio based on this new methodology. Specifically, five calibrated risk categories—strategic (incl. external risks); operations and product; financial; governance; and IT and digital—are assessed according to three risk evaluation criteria: exposure; vulnerability; and velocity (how soon the company would be affected by a given risk, should it materialize).
The results of these evaluations are incorporated into our business, fiscal, and corporate strategies, in pursuit of the Olympus Group’s objectives. We shall continue to proactively disclose our efforts to strengthen governance, including risk management, both in our securities reports and on our homepage.
〈Related Materiality Topics〉Corporate governance and reporting transparency
WhatWhat specifically will we do?
Initiative Example 1: Delivering Aligned Assurance
As the business environment has evolved dramatically, risks faced by companies have become both more diverse and more volatile in recent years. Accordingly, it is increasingly vital that Olympus, as a global manufacturer of optical and digital precision technology for medical devices, uses advanced risk management. In April 2023, the Olympus Group established a global Governance, Risk and Compliance(GRC) organization to manage risks in an integrated manner across the enterprise. Our head of GRC explains this organization’s purpose and mission, as well as the Olympus Group’s approach to risk.