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Risk Management
The Group’s View of Risk Management
The Group defines risk as “uncertainties that have both potential positive and negative sides that could have an impact on the achievement of targets by a company’s management.” The Company has positioned risk management as the “activity that increases corporate value by managing risks by reasonable and optimal methods from a company-wide perspective” to achieve sustainable corporate growth by addressing the positive side and the negative side of risk properly.
Enterprise Risk Management (ERM) Centered on the Risk Management Committee
J. Front Retailing has a Risk Management Committee, which is chaired by its President and Representative Executive Officer and comprises its Executive Officers and the presidents of major operating companies. The committee has a secretariat headed by an officer in charge of risk management. The secretariat shares important matters decided by the committee with operating companies to promote enterprise risk management (ERM). We position risk as the starting point of strategy and link risk with strategy so that risk management will enhance corporate value.
Risk Management Process
The Group promotes risk management through the following processes. Specifically, we are striving to ensure that risks of high importance to the Group are not overlooked, under the external and internal environmental analyses, and based on the recognition of Directors, the management team, external experts, and practical operation divisions.
Those risks that are of extreme importance to the Group management over the medium term are classified as “important risks for JFR Group,” and we are implementing countermeasures in order of priority, using them as the starting point for the “Group Medium-term Business Plan.”
Important risks for JFR Group are monitored for changes in the environment surrounding the risks and the progress of countermeasures, which are discussed by the Risk Management Committee and reported to the Board of Directors.
The Group’s Risk Perception
Of the thirteen important risks for JFR Group, we have positioned four risks, “changes in industrial structure of existing businesses,” “intensification of competition for human resources,” “acceleration of technology innovations,” and “increasing complexity of sustainability issues,” as the top priority risks in the Medium-term Business Plan because of their extremely large impact on the Group’s management.
Strengthening Resilience
In response to risks such as natural disasters that threaten business continuity, we have established a business continuity system based on our business continuity plan from the perspective of ensuring critical operations (funds, payment operations, etc.) and critical infrastructure (systems, etc.). We are also working to improve our ability to respond to a wide range of crisis events and their effectiveness by expanding the content of our business continuity plan, including the development of a Manual for Responding to the Eruption of Mt. Fuji, and conducting regular BCP drills at each operating company.
Information Security Initiatives
The Group positions information security as a key management priority and is working to strengthen its management framework. In March 2026, we reinforced our system of checks and balances by separating the governance function, which is responsible for policies and regulations, from the execution function, which is responsible for implementing and operating measures. In addition, we have established the JFR-CSIRT to ensure a swift response in the event of an incident by coordinating with relevant divisions and external organizations. In normal times, we conduct threat analyses and provide education and training, while also refining the measures across the “physical,” “technical,” “organizational,” and “human” dimensions, thereby working to improve security standards and reduce risks across the entire Group.
