Risk management

Our group operates a diverse business which includes tobacco, pharmaceuticals, and processed food. We also operate on a global basis with offices in Europe, CIS, Africa, and the Middle East, among others. Due to this diversity and as we operate in a changing business environment, we are exposed to various risks.

We look at emerging risk such as increase in cyber/IT security risk, risk of natural disasters arising from climate change or increase in political risk. We examine financial and business risks such as the effect of currency fluctuation or impact of regulatory developments. Our approach to addressing key risks is detailed in our latest integrated report under 'Risk Factors'. We also address compliance risk as we strive to ensure all of our business operations are carried out with integrity.

Risk management system

Our risk management system is based on four pillars – Identify, Assess, Plan, and Monitor. This circular approach ensures a systematic approach to risk management and allows us to be conscious of, and appropriately address, more complex, wide-ranging risk factors. The JT Group CEO appoints a person who oversees the comprehensive review of all risks related to our Group (hereinafter ‘risk management officer’) amongst senior vice presidents.

  • Identify
    Our risk management officer is responsible for the comprehensive review of all risks related to the JT Group.
  • Assess
    Senior vice presidents perform a risk impact assessment under their own responsibilities and evaluates all of the risks to identify the key risks for our business operations. The key risks identified are reported to the risk management officer. The risk management officer determines the key risks to our Group are based on reports issued by each business division, then reports these to the JT Group CEO.
  • Plan
    Senior vice presidents develop an action plan to address the JT Group’s key risks. The plans are reported to the risk management officer and CEO.
  • Monitor
    We continue to monitor the implementation of our action plans in every relevant division. Senior vice presidents report progress to the risk management officer and CEO periodically.

Our key financial and business risks are considered by the Board of Directors on a quarterly basis. Internal audits are carried out by a division independent of the business, which reports directly to the JT Group CEO.

Crisis risk management

We have a crisis management and disaster response protocol, whereby a project team, headed by the JT Group CEO, can be swiftly called upon in times of crisis or disaster.

Compliance risk management

The JT Group Compliance Committee plays a significant role in the Group’s governance. Its aim is to oversee and promote compliance throughout the Group and, as a deliberative body, to ensure accountability to the Board of Directors. The head of the JT Group Compliance Committee is the CEO, and the committee includes the external expert and Executive Vice President.

We make every effort to ensure that our business operations are carried out in an appropriate way, and to gain a high level of trust and confidence from our stakeholders.

Enterprise risk management

We recognize the need for a Group-wide global risk management framework: this would allow us to be conscious of, and appropriately address, more complex, wide-ranging risk factors. We are establishing more systematic ways to analyze and respond to risk factors surrounding our Group and our stakeholders, with a view to further strengthening our risk governance.