Corporate Governance

At Murata, we position corporate governance as one of our most important management focuses. Seeking to realize sound corporate growth and development while also giving consideration to all our stakeholders, we work constantly to establish and ensure the efficient functioning of optimal management systems.
Based on a recognition of the importance of incorporating perspectives from outside the company, we first appointed Outside Statutory Auditors in 1971. In 2001, we appointed Independent Outside Directors for the first time. More recently, we have made efforts to increase the diversity of our Independent Outside Directors and boost the ratio of Independent Outside Directors on our Board of Directors. Since we became a Company with an Audit and Supervisory Committee structure in 2016, Independent Outside Directors now represent more than one-third of our Board of Directors. In addition to appointing Outside Officers, we have also worked to enhance corporate governance by progressively implementing the measures shown in the table below in order to strengthen our execution and oversight functions and increase management transparency.

History of measures to enhance corporate governance

Changes in number of Directors

Overview of Murata’s Corporate Governance System

Selecting “Company with an Audit and Supervisory Committee Structure” as Our Form of Governance

Murata Manufacturing has selected “Company with an Audit and Supervisory Committee Structure” as its form of corporate governance. In 2016, we made the transition to this status from being a “Company with a Board of Company Auditors.”
In a Company with an Audit and Supervisory Committee structure, the Board of Directors is able to delegate decisions regarding important matters for execution to the company’s Executive Directors. By delegating decisions on individual matters for execution, we are able to realize more rapid management decisions and more flexible execution. At the same time, because the Board of Directors is able to adopt a greater focus on discussion and monitoring in relation to management policy and business strategy, we believe that this organizational form also enhances the functions of our Board.
In addition, Murata’s Directors who serve as Auditors have voting rights on the Board of Directors, and, as members of our Audit and Supervisory Committee, have the right to offer opinions regarding executive appointments and remuneration at General Shareholders’ Meetings. Given this, we believe that we have every expectation of realizing strong oversight functions, including in relation to our Executive Directors.

●Board of Directors

Murata’s Board of Directors decides on our basic direction and particularly important matters for execution, and oversees the execution of duties by corporate Officers. With our transition to an Audit and Supervisory Committee structure, our Board of Directors is now centrally focused on a monitoring function. 

At present, we have 12 Directors, of whom five are Independent Outside Directors. Independent Outside Directors therefore represent more than one-third of our total number of Directors.

In fiscal 2017, we convened our Board of Directors 10 times.

●Audit and Supervisory Committee

The Audit and Supervisory Committee audits our executives’ performance of their duties. Members also have the right to offer opinions regarding the appointment and remuneration of Directors at General Shareholders’ Meetings.

At present, our Audit and Supervisory Committee is made up of four members, of whom three are Independent Outside Directors. Three of the members of the Committee possess extensive knowledge in the areas of finance and accounting. We have one full-time Audit and Supervisory Committee member, who shares information regarding the company’s business and financial status with the non-full-time members.

In fiscal 2017, we convened our Audit and Supervisory Committee 11 times.

●Nomination Advisory Committee and Remuneration Advisory Committee

We have established advisory bodies for our Board of Directors in order to enhance the independence, objectivity, and accountability of the Board’s functions in relation to the appointment and remuneration of Corporate Officers. Both of these advisory committees are made up of two Independent Outside Directors and two Internal Directors.

In fiscal 2017, we convened the Nomination Advisory Committee three times and the Remuneration Advisory Committee twice.

●Management Executive Committee

The Management Executive Committee has been established as a deliberative body to assist decision making by the Board of Directors and the Representative Directors. It is made up of titled executives and Vice President/Directors, and is establishing a systemic framework for deliberation regarding management matters stipulated in the company’s internal regulations.

●Internal Control Management Committee

The Internal Control Management Committee has been established to maintain and continuously improve the systems that ensure Murata’s business procedures are conducted appropriately. It evaluates the status of establishment and operation of Murata’s internal control systems.

●CSR Management Committee

The CSR Management Committee has been established to promote CSR management at Murata continuously and systematically, and works to ensure the entrenchment of CSR within the company and the implementation of unified CSR responses outside the company.

Murata’s CSR Initiatives

●Executive Officers

To enable us to make management decisions more rapidly and execute them more flexibly, we have established a system under which Executive Officers are granted responsibility and authority to execute management tasks.

Analyzing and Evaluating the Effectiveness of Our Board of Directors

Once a year, we analyze and evaluate the effectiveness of our entire Board of Directors as a measure to boost its effectiveness.

This fiscal year, we had all our Directors fill in a questionnaire, and we conducted interviews with our Outside Directors. Our Board of Directors held repeated discussions based on the results of these questionnaires and interviews in order to evaluate efficiency.

This evaluation showed that Murata’s Board of Directors is functioning effectively in view of its roles and responsibilities.

Continuing on from the previous fiscal year, to enable more time to be given to the discussion and monitoring of management policy and business strategy, the Board of Directors once again reviewed matters, including the selection of items for discussion and the allocation of deliberation time. This has resulted in the realization of improvements, including an increase in items for deliberation related to medium- and long-term strategy, and the ability to secure an adequate amount of time for discussion.

We recognize that there is further margin for the realization of reforms that will make our Board of Directors a more effective entity, including measures to improve the formulation of materials for meetings and the methods employed for exposition of items on the agenda.

Based on the results of these evaluations, going forward, we will continue to focus our efforts on further boosting the effectiveness of our Board of Directors.

Our Thinking with Regard to the Nomination of Directors

By introducing an Executive Officer system and separating execution and supervision, we have been able to realize the number of people on our Board of Directors that best ensures its effective functioning.

Taking into consideration factors including the nature of Murata’s business and the company’s scale and management environment, we select candidates for Board positions from among human resources possessing the requisite knowledge, experience and attributes to contribute to the realization of the functions of the Board of Directors (decision on basic management policy and important matters for execution and supervision of the execution of duties by company Officers), while also considering the balance and diversity of knowledge, experience and ability in the Board as a whole.

With regard to our appointment of Outside Directors, we seek out human resources in a wide range of diverse fields, working to identify candidates from among individuals satisfying criteria for the judgment of independence set by the Tokyo Stock Exchange and Murata Manufacturing itself.

In particular in the case of candidates for membership of the Audit and Supervisory Committee, in addition to the above, we select candidates from among human resources possessing attributes that will enable them to audit the status of execution of management tasks by Executive Officers from a fair and objective standpoint and contribute to improving the soundness and transparency of management, in addition to enriching knowledge and experience in the areas of management oversight and business operation. It should also be noted that we select the majority of our Directors who sit on the Audit and Supervisory Committee from outside the company.

※For more information regarding criteria for judgment of the independence of Independent Outside Directors, see “I. Basic Views on Corporate Governance, Capital Structure, Corporate Attributes and Other Basic Information,” “1. Basic Views” in the Murata Manufacturing Corporate Governance Report; for more information regarding reasons for appointments, see “II. Business Management Organization and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversight in Management,” “1. Organizational Composition and Operation” in the same report.

Thinking in Relation to Executive Remuneration

Murata Manufacturing’s basic policy with regard to executive remuneration is to provide remuneration that is appropriate for the top management cadre of a globally competitive manufacturer of electronic devices and components, to maintain a system and a level of remuneration that enables us to secure human resources of a comparable level of excellence to other companies in the same industry, and to boost morale and motivation in relation to improving business results, contributing to increased corporate value.

Remuneration for Internal Directors who are not members of the Audit and Supervisory Committee is made up of ① Monthly remuneration; ② Bonuses to provide short-term incentives; and ③ Stock-based remuneration to provide medium- to long-term incentives and to promote a greater sharing of values between Directors and shareholders.

Outside Directors who are not members of the Audit and Supervisory Committee and Directors who are members of the Committee receive monthly remuneration only. The remuneration for Directors who are members of the Audit and Supervisory Committee is fixed remuneration, decided on the basis of consultation with the Directors concerned.

Composition of Remuneration of Directors

(Remuneration of Internal Directors who are not members of the Audit and Supervisory Committee)

Internal Control System

Murata Manufacturing’s Board of Directors has formulated a basic policy regarding the establishment of a system to ensure that the company’s business is conducted appropriately (an internal control system)*. We are working on this basis to establish and operate a suitable internal control system.

The Murata Manufacturing Group shares the Murata Philosophy as a fundamental management philosophy and, looking towards its realization, has established a basic philosophy of compliance and a Code of Conduct, which are being shared throughout the Group as a whole. In addition, we have established regulations and procedures in relation to decision making, and based on these we are consulting with our affiliates regarding their business operation, in addition to sharing a range of information related to business operation within the Group. In addition, Key Functional Staff Departments (General Administration, Personnel, Accounting, etc.) establish frameworks, procedures, and criteria for judgment in relation to each of these functions to ensure that operations are conducted appropriately and efficiently within the Murata Manufacturing Group. They also provide guidance to subsidiaries as necessary. Our internal audit department, the Office of Internal Audit, which functions as an independent body, conducts evaluations and engages in monitoring in order to ensure that procedures within the Group are conducted appropriately and efficiently, in accordance with laws and regulations, company regulations, etc.

*For more details regarding Murata’s basic policy in relation to the establishment of an internal control system, please refer to “IV. Matters Related to Internal Control System” “1. Basic Views on Internal Control System and Progress of System Development” in the Murata Manufacturing Corporate Governance Report.

Corporate Governance Guidelines (PDF: 186KB)

Corporate Governance Report (Submitted to the Tokyo Stock Exchange) (PDF: 407KB)