Risk Management Enhancement
Following the occurrence of significant losses in 2021, we conducted a comprehensive review of our risk management framework to further enhance risk management. Through that review, we analyzed a number of areas, such as our business management, communications among related departments, mutual cooperation among departments, and even the allocation of management resources and have systematically reorganized, including revamping our organizational and personnel structures.
* Please scroll horizontally to look at table below.
| Changes on the Executive-Side Committee |
Establishment of the Supervisory Committees |
Regular Review of the Code of Conduct |
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|---|---|---|---|---|
| Group Integrated Risk Management Committee | Consideration of establishment at both the working and director levels while referencing also to examples of other peers | |||
| 2021 | [At the end of March] Occurrence of significant losses arising from transactions with a US client We took a disciplined approach to unwind the positions and liquidate the hedges, taking into account both market impact and our own trading losses | Appointment of four new outside directors Establishment of the Board Risk Committee was approved by the Board of Directors |
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| 2021 |
[At the end of October] We published a press release "Nomura Enhances Global Risk Management" which includes an outline of our enhancement measures |
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| 2022 |
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Reorganization to the Group Risk Management Committee
To further strengthen the involvement of senior management in risk management, the Group Integrated Risk Management Committee was developed and reorganized to Group Risk Management Committee. |
"Managing risks appropriately"* was newly added to the Code | |
| 2023 | [August] The Steering Committee for Enhancement of Risk Management was integrated into the Group Risk Management Committee, as most of the enhancement measures have been steadily achieved | |||
"Managing risks appropriately" (Excerpt from the Nomura Group Code of Conduct)
We will deepen our knowledge and understanding on risks, properly recognize and evaluate them, and actively engage in risk management. We will assume appropriate risks to pursue the improvement of Nomura Group's corporate value and provide the highest quality of services to our clients. Each employee is accountable and will work together to prepare for all possible contingencies.
Risk Culture
Nomura Group recognizes a risk culture as an essential foundation and source of competitiveness for maintaining and developing business.
In a series of intensive initiatives triggered by the occurrence of significant losses, we discussed our desired risk culture, developed a structure for constantly aiming to foster and embed a risk culture, and commenced our actions.
Defining and Promoting Our Target State
- In March 2022, "Managing risks appropriately" was added to the Nomura Group Code of Conduct as a new item
- Incorporated our emphasis on fostering a corporate culture that includes a risk culture into various projects and publications, and promoted internally and externally on various occasions
- Accelerated internal promotion globally with the key themes "Challenge, Escalate, Respect" to embed a sound risk culture
Initiatives to Embed the Concept
- In order for each individual to properly understand the documented aims, and to be able to implement them in their daily work, we conducted training to more deeply embed risk culture and events in which various opinions could be exchanged across departments and regions. Many officers and employees participated in those efforts.
- Incorporated risk culture's elements into existing frameworks such as hiring, objectives setting, and performance evaluation, and added mechanisms for continuous development including individual motivation
Confirmation of Embeddedness and Continued Dialogue
- In the Nomura Group Employee Survey, questions related to risk culture were added to confirm the degree of embeddedness, and a framework for the associated comparisons over time was developed
- Added a mechanism to continue our efforts as a company to examine various types of information in a multifaceted manner and strive to understand our own culture through dialogues
For the Future
Advancing the enhancement of our risk management framework will remain one of our key management issues over the medium to long term. In order to provide additional value to our clients and all other stakeholders, Nomura Group will appropriately manage risks under a robust and enhanced risk management framework and keep taking various measures to further embed a risk culture.
