In 2002, Shin-Etsu Chemical established a Risk Management Committee that has been working to address and eliminate risks surrounding the Company and its operations. In September 2025, the structure of the Risk Management Committee was revamped in order to respond appropriately and promptly to the rapid changes and uncertainties in the business environment in recent years. The Committee is chaired by the President and consists of five members, who are Directors and Corporate Officers, and six assistants. Specific risk initiatives are undertaken by cross-divisional teams (CDTs) consisting of implementation leads and co-implementers, including from Group companies.

The Committee identifies the themes to be addressed and appoints the CDT implementation leads and co-implementers. The Committee then receives reports from the CDTs, evaluates their activities, and provides instructions on action plans and strategies. In this way, the Committee takes the lead in risk management for the Shin-Etsu Group. For FY2025, the Committee has set 10 priority themes, including cybersecurity and raw material procurement risks. The themes taken up by the Committee are added to and revised as appropriate in light of changes in the international and economic situation.

The CDTs have conducted risk investigations and assessments related to their assigned issues, formulated implementation plans, and carried them out for Shin Etsu Chemical and Group companies in Japan and overseas. The CDTs also promote the formulation of business continuity plans, training, and information sharing. This fiscal year, the CDTs carried out concrete and detailed activities on various assigned issues, including conducting risk-related training for all employees, investigating cybersecurity measures in the supply chain, and surveying the risk management efforts of Group companies.

Risk management initiatives are reported to the Board of Directors, the Managing Directors' Meeting, and the Audit & Supervisory Board.

The Company has established Risk Management Regulations that anticipate comprehensive risks that may arise in the course of the Shin-Etsu Group’s business activities from a long-term perspective and has established a risk management system and responses to any risks that materialize.

Risk management is carried out following the procedures of the PDCA cycle shown in the diagram below in accordance with the characteristics of each risk.

The Group offers a number of products with high market share not only in Japan but around the world or which used in special applications in state-of-the-art industries. For that reason, if these products cannot be supplied due to an accident or serious disaster such as a massive earthquake or fire, it will have an effect on society.

In the Company, each division and each plant is preparing for a disaster and accident and formulates a business continuity plan on the basis of the Companywide Business Continuity Management Regulations. Each Group company also formulates a business continuity plan.

In addition, if a disaster or accident occurs, we will work using the structure shown below. Each of the countermeasures head office and organizations carry out emergency response and recovery support on the basis of pre-defined business standards.