Reinforcing risk management
Basic approach
In order to sustainably improve the 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, twice a year, we are engaging in activities to reduce loss when risks which have a significant impact on our business activities are discovered such as regularly classifying and evaluating each risk concerning our overall business activities and implementing countermeasures in advance according to the priority, etc.
Promotion structure
Murata established the Risk Management Committee, chaired by our president and co-chaired by our risk management officer, to consider measures for countering company-wide risks. The Information Security Subcommittee and BCM* Subcommittee have also been established as subordinate bodies for forming and implementing countermeasures for individual 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.
Risk management promotion system diagram
Link: Murata’s Corporate Governance System
Understanding risks
Twice a year, the Key Functional Staff Department and the Business Division responsible for implementation, which are responsible for risks, routinely extract the risks that the Murata Group is currently facing or risks that are expected in the near future. The Key Functional Staff Department is preventing oversights in risk identification and working to build a system that can appropriately respond to risks by correctly recognizing (1) risks which must be identified as company-wide risks from among those extracted by the Business Division responsible for implementation and (2) risks that the Key Functional Staff Department and Business Division responsible for implementation must share and cooperate for. (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 the 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.
The Internal Audit Department also monitors for the proper implementation of the PDCA cycle for risk management in the company through direct and indirect audits of the Risk Management Committee and Key Functional Staff Department.
Company-wide risk management system
Business and other risks
Risks that may have a material impact on the company include the following. The frequency of occurrence and the degree of impact of residual risk remaining after implementing each risk countermeasure, are classified into the three categories – “High,” “Medium,” and “Low.” With regard to the degree of impact, an indicator is selected from the five indicators of “Organizational impact,” “Impact on production activities, etc.,” “Regulatory/administrative impact,” “Impact on business transactions,” and “Media/reputational impact” and classification is made based on the criteria that has been set in advance for each indicator. For more details about each risk, refer to the Annual Securities Report (date of submission: June 24, 2025).
External environmental risks
Management foundation risks
Emerging risks
Below are emerging risks that are new or those that may significantly impact the business of Murata in the future, along with what we are doing to handle these risks.
Business Continuity Management (BCM)
Murata set Business Continuity Management (BCM) as a key issue in fiscal 2019, and since then has continued to promote various measures and implement continuous improvements.
Basic BCM policy
- 1.
Ensure the safety of employees and others, and then work toward preventing secondary disasters.
- 2.
Do everything possible to resume production and keep supplying products to markets.
- 3.
Support regional recovery as member of the local community.
- 4.
Thoroughly implement required advance measures after taking costs and benefits into consideration, in order to minimize asset loss during a disaster and to resume production more quickly.
- 5.
Revise the Business Continuity Plan (BCP) regularly and as the business environment changes, in order to continuously improve business continuity organizations.
- 6.
Establish business continuity organizations with all employees working together under the proactive leadership of management.
Specific initiatives
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 2024, we developed and strengthened BCPs that cover the required items (possible scope of damage, action plans required for business continuity, and advance measures) at both our domestic and overseas business sites and plants and worked on establishing a BCP to prevent risks that would impair business continuity and to minimize loss if risks should materialize. Although some of our manufacturing sites were severely affected due to the Noto earthquake in January 2024, production was handled by putting BCP into action including production at other sites.
Future initiatives
We must promote the establishment of BCM organizations to handle risks that could occur at the global level, prevent risks that could impair Murata's business continuity, and minimize loss if risks should materialize.
Toward that end, Murata conducts regular drills and other activities at domestic and overseas business locations in order to verify the effectiveness of our BCP to revise it when required. We also continue to put autonomous BCM activities into practice. Additionally, we continue to work toward reinforcing business continuity organizations through measures such as further diversifying production sites in order for the entire group to continuously supply products to the markets.
An earthquake in the Nankai Trough would be especially massive and damaging, and we realize that we must prepare for this. We continue to promote measures in order to fulfill our obligations as a components manufacturer to continue to supply products.