Approach to Risk Management and Risk Management System
Approach to Risk Management
ORIX allocates resources in line with Group-wide risk preferences based on management strategies and the strategies of individual business units. We also allocate more resources to business units with growth potential while controlling our balance sheet. We optimize the risk-adjusted allocation of resources by precisely profiling the characteristics of various risks relevant to Group business initiatives worldwide and managing them intelligently according to type and degree of impact.
Risk Management System
The Board of Directors makes decisions about the risk management system as part of the overarching internal control system. ORIX has the requisite risk management systems and techniques in place to address a wide array of risks both comprehensively and individually. These include executive bodies and departments in charge of risk management, comprehensive rules and regulations, investment standards, and limits on value at risk for deals along with relevant reporting and monitoring systems. The Board of Directors receives an annual report on the operational status of the internal control system and its component risk management system.
Group-wide Risk Management System (As of June 30, 2023)
Executive bodies manage risk under the supervision of the Board of Directors. These bodies and their responsibilities are as follows.
| Executive Bodies | Roles |
|---|---|
| 1. Executive Committee | Deliberates on capital policy, asset and liability management, accounting and taxation, compliance, personnel, and other important management matters. Reports to the Board of Directors as necessary. |
| 2. Sustainability Committee | Deliberates on important matters related to sustainability. Reports to the Board of Directors as necessary. |
| 3. Investment and Credit Committee | Deliberates on specific investment and lending transactions. Deliberates in the Executive Committee and reports to the Board of Directors as necessary. |
| 4. Information Technology Management Committee | Deliberates on important matters concerning fundamental IT policies and strategies as well as the introduction and maintenance of IT systems. |
| 5. Disclosure Committee | Aggregates important information, considers needs and methods for timely disclosure, and coordinates disclosure. |
| 6. Group Executive Officer Committee | A forum for all executive officers to share important information related to Group business administration. |
| 7. Business Unit Strategy Meeting | A forum for business unit managers to discuss strategy and changes in the business environment with top management. |
Internal control-related functions laterally identify, analyze, and manage Group risks under their control. They also help business units manage risk.
Business units autonomously manage risk in line with business strategies and plans. They regularly verify risks and returns according to the progress of projects and changes in the external environment.