Furukawa Electric Group has established the Basic Regulations on Risk Management and Internal Control to comprehensively identify risks in business activities, prevent or mitigate potential losses to an acceptable level, and appropriately address factors that may impact the achievement of strategic objectives, thereby enhancing corporate value, ensuring stable growth, and maintaining sound business operations.

The Group has formed the Risk Management Committee chaired by the President, with the General Manager of Risk Management Division serving as Vice Chair and executive-level members serving as committee members. This committee deliberates on issues related to risk management, internal control, and compliance across the Group, while also overseeing and promoting activities carried out by each relevant division. The committee is organized by the General Manager of Risk Management Department and, in principle, convenes twice a year.

The Group’s Risk Management Committee takes a comprehensive view of risks through assessments from both management and operational perspectives and identifies important risks that require company-wide response. Among these, “climate change,” “people and organization,” and “human rights and labor practices” are recognized as material risks from management perspectives and are addressed accordingly. Additionally, risks deemed particularly critical—such as quality management, occupational health and safety (including employees’ health), environment, disaster prevention and business continuity management (BCM)—are managed intensively through dedicated subcommittees established under Risk Management Committee. This structure reinforces our Group-wide risk management system for business operations. In addition to these systems, when making key decisions by the Board of Directors and Management Committee, and through review requests for management approval, potential risks associated with each agenda item are explicitly described in materials and duly considered in the decision-making process.

To identify and prioritize risks that require focused response by evaluating business risks across the entire organization, the Group conducts a comprehensive annual risk assessment. This includes identifying risks and evaluating their likelihood and potential impact (risk assessment) at each organizational unit, such as business divisions, business locations, and subsidiaries and associates. The results are reported to Risk Management Committee. To continuously expand and deepen our risk controls, each responsible department undertakes control activities addressing specific risk items—including those included in the “Business Risks”—and evaluates the outcomes of those activities. A consolidated evaluation of these control efforts is compiled and reported annually to Risk Management Committee.

Toward “Building a governance system to strengthen risk management,” identified as a material issue of risks, we have set “the ratio of follow-up on risk management activities for all risk domains” as a sustainability indicator and target. These are established as part of the sustainability indicators and targets to achieve the “Furukawa Electric Group Vision 2030” and the “Medium-term Management Plan 2022–2025 (2025 Medium-term Plan).”

Furukawa Electric Group, fully aware of its social responsibility, has formulated a Business Continuity Plan (BCP) and works on Business Continuity Management (BCM) based on the following basic policy in order to minimize damage and continue business activities even in the event of unforeseen risks such as natural disasters and infectious diseases, etc.

The Group is deeply aware of its social responsibility to protect human life and safety from disasters such as fires and earthquakes, and to continue its business operations. We place the highest priority on respect for human life, and continuously make efforts to mitigate damage and prevent secondary disasters as well as compliance with laws and regulations. We aim to clarify the roles of all employees, from management to staff, and to raise the level of our fire and disaster prevention activities in cooperation with the entire Group.

In the event of a crisis such as a large-scale disaster, Furukawa Electric Group will establish Emergency Response Headquarters, headed by the president, and Site Response Headquarters that defines each department's roles and clarifies them as necessary. We have prepared an initial response manual, stockpiled necessary supplies, and established a system for communication and safety confirmation, and conduct periodic drills.

In the event that a business site suffers extensive damage due to a natural disaster, etc., it is necessary to smoothly coordinate with the head office's emergency response headquarters and work as a team to achieve business restoration as quickly as possible. To prepare for such scenarios, the Company conducts annual collaboration exercises between the head office (emergency response headquarters) and business sites (affected areas). In FY2024, we conducted an exercise assuming a partial failure in the ERP (core information system), connecting business sites and the head office remotely. We categorized the causes of the failure into a “system update” (expected to have a short recovery period) and a “cyberattack” (potentially requiring a longer recovery period), and examined response measures for early restoration in each case. We will steadily address the issues identified during the exercise, enhance employee training, and strive to further strengthen the resilience of critical business continuity.

In order to strengthen the business continuity activities, we are actively working to obtain ISO22301 certification, the international standard for the business continuity management systems (BCMS). So far our “laser diode products business” (Chiba Works), “copper wire products business” (Mie Works), and “copper and copper alloy products (the original products) business”(Nikko Works), have acquired the certification.

Information security is considered one of the highest priority risks Furukawa Electric Group has to handle. Therefore, all related divisions are working together to address it from the perspectives of information systems, intellectual property protection, and information management. In response to recent trends in economic security and increasing societal demands for confidential information protection, we established the “Special Committee on information security” in FY2025 to strengthen our confidential information protection system and initiated related activities.

As a technical measure against cyber security risks, which are becoming more sophisticated and serious every year, we introduced an EDR system^*1 in FY2021, which monitors the behavior of PCs and other terminals and blocks unauthorized external communications, in place of conventional anti-virus software. As an organizational measure, in FY 2017 we began the activities of the "Furukawa Electric CSIRT^*2" to promptly respond to incidents, large and small, of the Group. In preparation for a situation in which Group companies and supply chains are targeted and damage expands, we are exploring ways to respond to incidents involving group companies. In FY2024, we conducted cyber incident response training in collaboration with the CSIRT organizations of several domestic affiliates. In the future, we intend to expand the training to other major group companies, aiming to establish a group-wide global cyber security system.

Regarding the obligation to report to the Personal Information Protection Commission stipulated in the revised Personal Information Protection Law, we have established this in the relevant internal regulations and brought it to the attention of employees during the information security awareness month. In addition, the entire Furukawa Electric Group is taking measures to comply with overseas personal information regulations in China and Vietnam. In China, the Personal Information Protection Law went into effect in November 2021, and we have alerted our offices in China, provided guidance on how to respond, and took action when personal information is transferred from the local site. Subsequently, we confirmed the compliance of personal information in and out of China regarding the Standard Contracts for Cross-border Transfer of Personal Information and related guidelines finalized in March 2024, and we are taking action on this matter at the Company and local offices. In Vietnam, after confirming the implementation of the Personal Data Protection Decree enacted in June 2023, the Furukawa Electric Group formulated a policy to comply with the decree in March 2024, and our local Group companies are currently responding to it.