Reinforcing Risk Management
In order to improve the sustainable enterprise value of the entire Group, Murata is building a risk management system to appropriately manage the various internal and external risks related to its business activities. Moreover, we are engaging in activities to reduce loss when risks are discovered that have a significant impact on our business. Examples of these activities include regularly classifying and evaluating each risk concerning our overall business activities and implementing countermeasures in advance according to the priority, etc.
Murata has established the "Risk Management Committee" as a subcommittee of the CSR Management Committee, which is chaired by the President and Representative Director. This committee is chaired by the Director and Managing Executive Officer and is composed of Directors from the departments of General Affairs, Human Resources, Accounting, Finance, Planning, Public Relations, Intellectual Property, Environmental Affairs, Information Systems, and Legal Affairs to discuss countermeasures concerning company-wide risk matters. We have also established the Information Security Subcommittee and BCM* Subcommittee as subordinate organizations to study and take measures to address particular risks.
*BCM (Business Continuity Management)
Management activities are operated on an ongoing basis to formulate, maintain, and renew the BCP (Business Continuity Plan), to allocate budget and resources for business continuity, to take preventative measures, and to conduct, check, and continually improve education and training for permeating initiatives.
The Key Functional Staff Department and the Business Division responsible for implementation, which are responsible for risks, extract the risks that the Murata Group is currently facing or risks that are expected in the near future. The Key Functional Staff Department prevents the omission of risk identification by correctly recognizing: (1) risks which must be identified as company-wide risks from among the risks extracted by the Business Division responsible for implementation and (2) risks that the Key Functional Staff Department and Business Division responsible for implementation must mutually share and cooperate on. Further, the department is building a system that can appropriately respond to company-wide risks. (Refer to the figure below) Moreover, the extracted risks are comprehensively identified and managed by evaluating the importance based on the frequency of occurrence and impact and then displaying those risks on a risk map.The Risk Management Committee reviews the details of risks with a high degree of importance and urgency from among the risks which are extracted in this manner and issues instructions for added countermeasures as needed. In addition, the departments which are responsible for each risk report on those risks with a high degree of importance and urgency to management within the Board of Directors and Management Committee. This enables management to identify the corresponding risks and take the appropriate risk countermeasures.
Business Continuity Plan (BCP）
A major natural disaster has the potential to bring business to a stop for extended periods. Consequently, Murata has devised a business continuity plan (BCP) to ensure that we can fulfill our duty to provide customers with a stable supply of products. We are conducting initiatives to minimize damage and continue business, such as ensuring earthquake resistance and safety for buildings and production facilities, constructing backup frameworks for our communications and information systems, and maintaining supply from inventory.
Within material procurement, the production locations of material suppliers are stored in a database so that procurement activities are not delayed when a disaster or other risk occurs. We are also formulating an initial response system and an initial response flow for expected risks aimed at the implementation of a rapid initial response. Furthermore, with regard to important materials we are promoting measures such as implementing a multi-vendor system, confirming the BCP implementation status of our vendors, and ensuring sufficient inventory to cover the expected recovery period, if risks materialize, as measures to ensure stable procurement.
In addition, we are working to confirm effectiveness and continually improve initial response measures, improve crisis response capabilities, and find points to be improved regarding BCP by conducting periodic disaster drills and business continuity drills. During fiscal 2020, the headquarters carried out BCP training in a workshop format based on disaster scenarios and revised the basic BCP and BCM rules for the headquarters based on the training results.
Initiatives in response to new coronavirus infection (COVID-19)
With the continuing global spread of the novel coronavirus infection (COVID-19), Murata has made it a top priority to ensure the health and safety of its employees and business partners and provide peace of mind to everyone in the community. We do so while fulfilling our responsibility to globally supply the electronic components that support society and connect the supply chain.
Until now, Murata has devised various measures to prevent infection, prevent the spread of infection, and ensure business continuity through the Crisis Management Center established at its headquarters. We have also strived to continue operation of our domestic and overseas production sites through the strong sense of responsibility of our employees and by practicing behaviors that prevent infection.
Specifically, Murata is working to minimize the impact of the novel coronavirus infection on employee health and Murata business operations by implementing measures to prevent employee infections such as telecommuting, staggered working hours, business travel restrictions, recording employee activity records within the company, setting up barriers in the cafeteria and workplace, requesting employees to refrain from private activities, and developing BCP in the event of an outbreak.