The world has seen, and will continue to see, volatility relating to disruptive innovations in technology, cyber-attacks, geopolitical disputes and macroeconomic risks, sustainability and ESG, and catastrophic events (such as resource scarcity, natural disasters, humanitarian crises, as well as outbreaks, epidemics, and pandemics). While change is constant, the challenges of recent and future years require global companies, such as the Bridgestone Group, to build and sustain resilience of its operations. The Bridgestone Group’s 2030 Long Term Strategic Aspiration recognizes these challenges and focuses our efforts on becoming a resilient ”excellent” Bridgestone.
To that end, the Bridgestone Group is committed to enhancing its global and regional programs to manage risks, including the Bridgestone Group’s ability to identify, assess, mitigate, and respond to significant enterprise-wide risks. As part of our ongoing efforts to manage global risks and ensure we deliver on the Bridgestone’s Mission of “Serving Society with Superior Quality,” the Bridgestone Group recently introduced several program enhancements that will enable us to remain resilient and, on some occasions, transform volatility into opportunity.
Enterprise approach to risk management
Our enterprise risk management program is built on a framework that strives for alignment between our global and regional risk management programs and the different risks faced by the organization around the world.
In early 2022, the Bridgestone Group established the Global Management Risk Committee (the “GMRC”). The GMRC, chaired by the Group Global General Counsel, is a chartered committee consisting of the CEOs and Chief Risk Officers (each a “CRO”) of each region, as well as others with relevant expertise within the organization. The GMRC meets several times a year (including through a regular cadence of meetings and on an ad hoc basis as needed) and has direct oversight of the most significant enterprise-wide global risks. The GMRC evaluates various global risks from short-, medium-, and long-term perspectives, and provides direction and oversight for the relevant leaders and cross-functional groups within the organization who are charged with leading the risk management efforts. Members of the GMRC also periodically provide updates and reports to the Global CEO and board members. These periodic updates provide regular opportunities for senior leadership to engage with the global program, provide direction and to help ensure risk management is part of the Bridgestone Group’s strategic planning and decision making.
In addition to the GMRC, the Bridgestone Group has also formed a Chief Risk Officer Council (the “CRO Council”). The CRO Council consists of the CROs and dedicated enterprise risk management professionals from each region. The CRO Council meets frequently and has direct responsibility for the design and implementation of enterprise risk management at the global and regional levels, including investment in and use of leading risk management technology and systems, and continuously enhancing our business continuity and crisis management activities. The CRO Council helps ensure alignment on global risk-related activities together with risk-related activities for each strategic business unit and region. The efforts of the CRO Council will help build and sustain a culture of resilience (including, for example, by periodically conducting risk identification exercises and defining risk appetite) and embedding enterprise risk management in strategic planning and decision making throughout the organization. The CRO Council reports to the GMRC and closely collaborates with the Bridgestone Group’s Global Sustainability Committee to ensure that sustainability is integrated into ERM processes (including, for example, that materiality assessments relating to our sustainability program are helping inform our global and regional risk management programs). Each of the CROs are also responsible for driving and coordinating operational risk mitigation and management activities at the department and SBU levels in their respective regions. Finally, each of our SBU board of directors has formed a Governance and Risk Committee to provide additional oversight over Bridgestone’s risk management efforts.
In addition to the internal resources who are focused on global risk management, the Bridgestone Group also periodically engages different external experts and other third parties to help support the global and regional risk management programs. These third parties periodically provide support for risk-related activities (such as risk identification and validation exercises), advising on particular risk topics (such as geopolitical disputes) and other program enhancements.
The Global Enterprise Risk Management program seeks to evaluate and capitalize on the best industry-leading frameworks, including the framework provided by the Committee of Sponsoring Organizations & Treadway Commission (COSO), the International Organization for Standardization (ISO 31000), the Risk Management Society (RIMS) and other industry-leading thought leaders. The Group’s Global Enterprise Risk Management program is developed based on elements of these industry-leading frameworks and thought leadership. The framework of the organization is reviewed and updated as needed to respond to the changing business landscape.
Most important risks and opportunities
The Bridgestone Group conducts an annual risk exercise to identify, assess, validate, and develop appropriate response strategies for our most significant risks and to ensure that our strategic planning is aligned with addressing these risks. Some of the mitigation and management approaches to some of our global risks are reflected in the Bridgestone 3.0 Journey 2023 Integrated Report as part of strategic, operational, and financial planning. For risk management, particularly focused on the Regional Chief Risk Officer (CRO), please refer to the Business Continuity (BCP), Risk Management.
