We identify company-wide material risks across organizational boundaries and implement a wide range of initiatives to hedge and control risks. The Chief Operating Officer of each business unit and regional business unit is responsible for managing risks in their business domain within the authorization delegated to them as part of the performance of their duties. Meanwhile, Corporate Staff Divisions provide support to business units and regional business units regarding the aspects of risk management that they are in charge of while also monitoring the company-wide position and reporting to management. In addition, the major committees pertaining to the execution of business and implementation of internal control develop risk management structures on a company-wide basis and handle significant risks as advisory bodies and subordinate organizations to the Corporate Management Committee.
Mitsui has established an integrated risk management system that centrally manages company-wide risks, through the Portfolio Management Committee under the Corporate Management Committee. Under the integrated risk management system, the Corporate Staff Divisions, which act as the secretariat, manage risks from a company-wide perspective. Specifically, we coordinate with related divisions, identify material risks in light of the frequency of occurrence, expected damage scale and company-wide risk tolerance, and take corresponding measures. In the fiscal year ended March 31, 2021, these efforts were reported to the Corporate Management Committee and the Board of Directors through the Portfolio Management Committee.
Mitsui Risk Management Structure (image)
Material Risks as of End of March 2021
In addition to these specific material risks, Mitsui has identified the following major risks that could adversely impact its financial health, operating performance, and cash flows.
General Risks that are Not Unique to Our Own Risk
- Risk of changes in global macroeconomic factors
- Risk associated with laws and regulations
- Risk due to competition
- Risk associated with constraints of human resources
Recognized Risks, but the Impact is Not Significant
- Interest rate risks
- Risks regarding pension costs and defined benefit obligations
The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the carrying value of assets and liabilities and the disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.
For details, please refer to our Annual Securities Report for the fiscal year ended March 31, 2021 (P.60).