Sustainability
Risk Management ／Compliance
》 Main Goals 》 Value Creation Process
》 Materiality（Material Issues）
》 ESG Data
》 GRI Content Index 》 Outline of Activities
》 Website accessibility policy
》 Health and productivity management
》 Initiatives for Achieving SDGs 》 TCFD
》 Improvement of service quality
》 Annual Report(Integrated Report)
Summary of Major Risks and Countermeasures
Artner has defined a clear system for managing different risks in which we classify and define management risks, and each responsible division identifies and analyzes the risk situation for each type of risk. Under this system, the various kinds of risks are managed through the Compliance and Risk Management Meeting. Management and countermeasures for each type of risk are clarified and managed in the meeting.
Development of the Internal Controls System
The Company has developed an internal control system in accordance with the basic framework of the internal control system established by the Board of Directors.
| The Compliance and Risk Management Meeting | At Artner, we have implemented the Compliance and Risk Management Meeting, chaired by the President and CEO, as part of a system aimed at thoroughly educating employees regarding all applicable laws and regulations and the Articles of Incorporation, and also ensuring such compliance. |
|---|---|
| Internal Whistleblowing System | We have set up an internal whistleblowing system, under which Directors, employees, and other people engaged in work for the Company can report corruption or wrongdoing to the Whistleblowing Committee, which has a duty of confidentiality. It is prohibited to subject persons who submit whistleblower reports using the system to any disadvantageous treatment as a result of such reporting. The system is designed to ensure the effectiveness of whistleblowing to prevent or quickly detect violations of applicable laws and regulations. |
| Internal Audits by the Internal Audit Office | The Internal Audit Office, operating independently of other divisions that execute business practices, conducts internal audits. Through such audits, it verifies the appropriateness and effectiveness of the internal management system of each division, and by promoting the improvement of the systems, it ensures that all employees lawfully execute their duties. |
| Risk | Definition | Countermeasure |
|---|---|---|
| Performance trends in the manufacturing industry | Our major clients belong to the manufacturing industry, and we dispatch engineers primarily to their design and development departments. There is a risk that these major clients may reduce their capital investments, R&D costs, and the use of external engineers due to economic recession and other factors in the countries or regions in which they operate. There is a risk that significant changes in the business environment may take place for automobile-related manufacturers, which account for a large share of our sales. |
We will strengthen measures such as sector rotation and new business development and sales in order to build a client base that is capable of ensuring stable earnings that are not dependent on specific sectors or influenced by specific corporate trends. | Competition with other companies in the industry | There is a risk that competition with other companies may intensify due to market contraction or new entrants in the engineer staffing industry, where we operate our business, and this may result in a fierce price competition. | We will facilitate the improvement of all engineers’ skill levels through educational programs and training curricula segmented by business field, with the aim of promoting the assignment of engineers to upstream business areas where the unit price of engineers is likely to be higher. | Effectiveness of education and training | There is a risk that the training does not turn out to be as effective as expected and the unit price of engineers does not increase due to low customer satisfaction, as well as the risk that we fail to satisfy the requests from clients, and they start to make complaints. | We will support our engineers in improving their skills by providing general, external, basic, customized, and/or career training based on our long-accumulated experience. We will strive to improve the technical and human skills of our staff by holding skill development seminars for all employees and human development training for managers. |
Securing suitable clients for our dispatching business | Although we always strive to secure and expand our clients for our engineer dispatching business, there is a risk that we may be unable to find suitable clients that match our engineers and cannot maintain or improve the unit price of engineers and/or utilization rates. | We will secure and expand our business partners by strengthening our new business development and sales capabilities, utilizing online conferencing tools, and making proposals for the selection of engineers, team dispatching, and organization of contracting services in response to client needs. | Regulations on total work person-hours | The total work person-hours of our engineers is determined based on the business conditions of the client company. There is a risk that the revisions to relevant laws and regulations generate a larger pressure against long working hours, which may result in a significant decrease in the total work person-hours of engineers. | To compensate for a decrease in the total work person-hours, we will facilitate the improvement of all engineers’ skill levels through educational programs and training curricula segmented by business field, with the aim of promoting the assignment of engineers to upstream business areas where the unit price of engineers is likely to be higher. | Securing science and engineering graduates | We consider science and engineering graduates to be an important managerial resource, and there is a risk that the population of science and engineering graduates may decrease due to the declining birth rate and other factors, making it significantly more difficult to hire talented graduates. | We will attract students by offering a variety of options, including a performance-based salary system, a limited area system, an internal recruitment program, and a job change assistance program. | Securing career engineers | We consider engineers with work experience to be an important managerial resource, and there is a risk that the competition to secure career hires may intensify due to a shortage of engineers who wish to change jobs as a result of booming design and development activities in the manufacturing industry, making it significantly more difficult to hire talented career engineers. | We will attract prospective employees by offering a variety of options, including a performance-based salary system , a limited area system , an internal recruitment program , and a job change assistance program . | Information management | There is a risk that information may be leaked to outside parties for some reason, and our social credibility will be damaged. There is a risk that system failures and other problems may be caused by computer viruses, unauthorized access, natural disasters, or other unforeseen events. |
We will acquire the “PrivacyMark” and introduce other such measures to properly manage personal information, confidential information, and all other information obtained in the course of business operations. We will take appropriate cybersecurity measures to ensure the stable supply of our services. |
Laws, regulations, licenses, and permits | There is a risk that we may violate the Worker Dispatching Act and other relevant laws and regulations, which would hinder the continuity of our business. There is a risk that revisions to relevant laws and regulations may be made that are significantly unfavorable to our business. |
We consider compliance with the Worker Dispatching Act and other relevant laws and regulations to be one of our highest priorities, and we will maintain a legal compliance system by monitoring compliance with laws and regulations via internal audits and by regularly confirming compliance with laws and regulations at different meetings. We will take appropriate measures whenever relevant laws and regulations are revised. |
Disasters, accidents, etc. | There is a risk that natural disasters, man-made disasters, and other disasters and accidents that significantly exceed our prediction may take place. There is a risk that our business activities may be hindered as a result of the spread of COVID-19 and other infectious diseases. |
We will establish a Business Continuity Plan (BCP) and manual to deal with such disasters and accidents in an effort to mitigate the damage. | Climate change | There is a risk that our business activities may be halted or stagnated as a result of our facilities being damaged by natural disasters due to climate change. If a carbon tax is introduced or environmental regulations are tightened as part of the government’s efforts to transition to a decarbonized society, there is a risk that we may be unable to offer personnel that meet our clients’ demands for engineers committed to carbon neutrality initiatives. |
We have announced our support for the recommendations from the Task Force on Climate-related Financial Disclosures (TCFD) and have rated climate change as a high-priority issue. We will commit to taking actions and initiatives based on our environmental activity policy with the aim of achieving a more sustainable society. | Mergers and acquisitions | There are risks of significant capital demands and amortization of goodwill, etc. Such M&As may not necessarily generate synergies as expected, and there is a risk that business performance may not progress as expected due to major changes in the business environment or business conditions. |
Our M&As are implemented after thorough consideration of the risks involved by conducting preliminary research through detailed due diligence on market trends and client needs, as well as the financial status and contractual relationships of the target company. | Medium-Term Business Plan | There is a risk that the market environment or economic conditions may change dramatically beyond expectations, and the business environment may not develop as predicted. | We will promote the Medium-Term Business Plan with carbon neutrality as the pillar of our business activities and establish internal systems for recruitment, training, and sales activities. | Prime Market listing maintenance criteria | Depending on our financial status and business performance as well as the market environment and economic conditions, there is a risk that we may not be able to meet the Prime Market’s listing maintenance criteria by the fiscal year ending January 31, 2025. | In order to meet the listing maintenance criteria by the fiscal year ending January 31, 2025, we will take various measures such as increasing the ratio of tradable shares, increasing earnings per share (EPS), increasing shareholder returns, and improving capital efficiency. |
