Risk of Upfront Investment and Delayed Monetization Associated with Launching New Businesses
First written in FY2020. 2 of 3 entries say "Mitigated", first in FY2021. Latest entry: FY2024.
The whole theme swung hardest in 2019: 6 of 26 companies on the "Worse" side.
9 other companies' latest entry also says "Mitigated".
- FY2024MitigatedAnnual report
「When launching a new business, the group considers the cost of capital, conducts sophisticated, multifaceted risk assessments of the business and contract terms based in part on research by outside experts, and holds repeated discussions at its Nomination, Compensation and Governance Committee and Board of Directors, whose members possess a range of specialized skills. It also obtains liability insurance and other coverage as necessary to control risks.」
The company explicitly identified a combination of risk management measures for the risks of upfront investment and delayed monetization in new businesses, including consideration of the cost of capital, assessments by outside experts, reviews by committees and the Board of Directors, and insurance coverage. - FY2021MitigatedAnnual report
「For new businesses, the company controls risks by conducting sophisticated, multifaceted risk assessments based in part on research by outside experts, and by holding repeated discussions at its Corporate Governance Committee and Board of Directors, which include members with a range of specialized skills.」
As mitigation measures for the risks of upfront investment and delayed monetization in new businesses, the company describes assessments and discussions by outside experts, the Corporate Governance Committee and the Board of Directors. - FY2020First statedAnnual report
「Launching a new business may require upfront investment in items such as equipment, potentially reducing the profit margin, and it is expected to take a certain period of time before the new business generates stable revenue.」
Upfront investment associated with initiatives to launch new businesses, the time required to monetize them, and the possibility of failing to meet plans or delaying investment recovery were first described as major risks.