Analysis and evaluation of effectiveness of the Board of Directors

In the fiscal 2023 evaluation of effectiveness, the following points were recognized as having some challenges.

• (1) Consolidating opinions and knowledge from inside and outside the Company and deepening deliberations that contribute even more to enhancing corporate value
• (2) Supporting bold risk-taking by executives and further reinforcing structures including the Board of Directors

Regarding issue (1) :

• Engage in healthy debate that takes into consideration more diverse perspectives and opinions from inside and outside the Company
• Further enhance the quality of explanations by reinforcing collaboration between the department in charge of explanation and the Secretariat to identify fundamental discussion topics and secure adequate time for deliberation
• Provide additional opportunities for Outside Directors to learn about initiatives relating to execution

Regarding issues (1) and (2) :

• Conduct ongoing discussions within the Directors concerning the optimal status of the Board of Directors and individual organizations that embodies the spirit of Murata

Based on the above, we have mainly promoted the following initiatives in fiscal 2024.

• Conducted discussions among the Directors and implemented measures to verbalize them with respect to matters concerning the desired state of the Board of Directors that contributes to the sustained growth of the Company and enhancement of corporate value over the medium- to long-term
• Carried out thorough pre-meeting coordination for each agenda item among the Chairman of the Board, the Secretariat of the Board of Directors, and the departments in charge of explanation with respect to the discussion points and time management in the deliberation of each agenda item to be discussed at the Board of Directors meetings
• Solicited opinions of Outside Directors and increased the sophistication of management of pre-meeting explanations^* to accurately identify issues to be discussed
• Promoted facilitation by the Chairman for interactive exchange of opinions between internal Directors and Outside Directors
• Implemented exchange of opinions at the Board of Outside Directors meetings, a forum of communication among Outside Directors, to improve the effectiveness of the Board of Directors
• Enhanced provision of Company information to Outside Directors such as sharing of information on important internal events, in addition to tours of business sites which the Company has been organizing for some time

• *Initiatives to brief Outside Directors prior to Board of Directors meetings on key agenda items, especially those with significant information gaps between Inside and Outside Directors, as well as other relevant matters.

The fiscal 2024 evaluation of effectiveness was conducted using the following process.

• A questionnaire for all Members of the Board of Directors^*
• Individual interviews of Outside Directors^*
• Individual interviews of Inside Directors
• In-company analysis and discussion
• Discussions among the directors

• *The questionnaire and individual interviews of Outside Directors were carried out by a third party.

Through conducting the questionnaire and interviews, various confirmations were carried out regarding the desired state and composition of the Board of Directors, discussions and monitoring, leadership by the Chairman, performance of each Director, management of the Board of Directors, and matters related to the committees including the voluntary Advisory Committees and Board of Outside Directors.

Results of the process of the analysis and evaluation as described above, the Board of Directors of the Company has been assessed to be functioning with sufficient overall effectiveness in consideration of its duties and obligations.

• Appropriate monitoring is carried out by the Board of Directors with respect to the management structure, policies, and business execution
• Discussions at the Board of Directors meetings are appropriately conducted from a wider, medium- to long-term perspective
• The composition of the Board of Directors including the number of Directors, their diversity, and the ratio of Inside to Outside Directors are generally appropriate
• The Chairman leads lively discussions at the Board of Directors meetings and contributes appropriately to ensure Directors’ performance of their functions
• Outside Directors effectively provide advice and pose questions, and Inside Directors take the advice statements and questions of Outside Directors with sincerity and fully take them into consideration when making decisions and determinations
• Agenda items and discussion points are appropriately selected in alignment with management strategies, corporate value, and stakeholder interests
• The Secretariat’s support for Directors is appropriately provided.
• The Nomination Advisory Committee and Remuneration Advisory Committee both conduct sufficient deliberation on important subjects, and appropriate collaboration with the Board of Directors is in place.
• Steady progress is being made to address the challenges recognized in the previous evaluation of effectiveness.

The following points are identified as issues to be addressed.

• Further deepen deliberation on how discussions should be conducted on the execution side that contribute to the Company’s sustained growth and enhancement of corporate value over the medium- to long-term, and on the significance of the Board of Directors monitoring such discussions

Based on the challenges recognized in these evaluations, the Company will mainly take the following actions in fiscal 2025.

• Continue deliberation on how discussions should be conducted on the execution side that contribute to the Company’s sustained growth and enhancement of corporate value over the medium- to long-term
• Define issues and discussion points that lead to enhancement of corporate value, to which end further strengthen collaboration among the Chairman of the Board of Directors, the Secretariat, and the departments in charge of explanation, and enhance discussions on the execution side with respect to the defined discussion points
• Engage in healthy debate that takes into consideration more diverse perspectives and opinions from inside and outside the Company
• Provide Outside Directors with more opportunities to learn about the views and initiatives taken by the executive team

The Company will continue working to further improve the effectiveness of the Board of Directors.

Link: Message from the Chairman of the Board Page
Link: Discussion with Outside Directors Page

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