As a company grows, its impact on society also grows. Over the last two to three years, Murata has worked to evolve our governance and revise governance frameworks proactively
One of these revisions is to streng then our risk response framework. A strategy we use to achieve this is gathering perspective company-wide. As such, in April 2023, we repositioned the Risk Management Committee.
Specifically, its previous charter was as a subcommittee of the CSR Management Committee, but we evolved it into an independent committee under the direct supervision of the Representative Director. Also, its membership is now comprised of Directors and Vice Presidents.
Given the complexity of the risk management issues being addressed, we were aware that there were limits as a CSR Management Committee subcommittee to the extent to which the group could expand its activities. With Outside Directors' backing, we took action to forward this large-scale movement.
Within this function's evolution, we recognize that gauging how much risk Murata can take is an issue to be addressed.
We can only boldly take on challenges if we understand our risk tolerance. Our goal is to deepen discussion under the new committee structure and clarify standards for assessing risk tolerance through a scientific approach incorporating a pioneering spirit.
From fiscal 2022 to this year, we also enhanced the initiatives and discussions of the Nomination Advisory and Remuneration Advisory Committees. The groups' achievements include revisions to the definitions and criteria used in the Director skills matrix and strengthening governance concerning remuneration. However, the most significant benefit was convening the two committees and holding joint meetings.
It was necessary to coordinate the division of roles between the two committees, particularly in terms of evaluating the President and Representative Director from each committee's perspective. The concept of joint meetings came while we explored how they should collaborate.
However, the results have exceeded our expectations. Within these joint meetings, we exchanged information, aligned recognition regarding shared issues, shared opinions from diverse viewpoints, and sorted out and organized matters for further discussion. The issues that come up in the joint meetings were taken back and discussed at the individual committee level. Those conclusions were then carried into the next joint meeting for a more focused discussion. This process kept repeating until a resolution was achieved. I want to continue this process and make discussions even more enriching. We built a process for appropriately evaluating the President and Representative Director and linking this to remuneration, selections, and dismissals. I would like to continue discussions for continuing to evolve this with the aim of further enhancing corporate value. I look forward to gleaning more perspective on this topic from Outside Directors based on their own knowledge and experience.
We also transformed the Board of Directors, which I chair. One thing I focused on when chairing Board meetings was to elevate the discussions to cover more strategic and substantive issues. One initiative that has been effective in this regard is the advance briefings given to Outside Directors.
Advance briefings provide a deeper dive into related agenda items, particularly those needing to fill knowledge gaps between Inside and Outside Directors. Previously, these were only provided as deemed necessary. Since fiscal 2022, we have been fully committed to this initiative and have made improvements as we refine the process. Questions and concerns that arise during these briefings are organized to identify discussion for the Board meeting, which directly leads to more valuable and substantive discussion in the meeting itself. These advance briefings are not only an opportunity to encourage an understanding of the details of projects among Outside Directors, but they also help clarify the approaches and actions that define Murata as a company.
Finally, if you were to ask me how I approach the Board of Directors and Management Committee meetings in my role as Chairman, I would say that I try to keep my horizons as broad as possible so that I can provide input from an overarching perspective. I also want to ensure that the Board of Directors can appreciate Murata’s unique qualities such as our willingness to take on challenges and pioneering spirit.
The executive side is responsible for executing duties and is overseen by the Board of Directors. Going forward, the Board of Directors will monitor whether we are appropriately taking on the risks we should. This monitoring approach will provide the executive side with a safeguard, enabling them to boldly and proactively take these on. This is the monitoring model for the Board of Directors that I aspire to.
Our approaches to management and governance are not goals in themselves. We will continue to stay alert to changes in society and adapt our leadership while staying true to the Murata Philosophy as we strive for sustainable growth.