- The Ricoh Group has introduced a corporate audit system.
- The Board of Directors is responsible for management oversight and important decision making concerning Group management. By appointing highly independent outside directors, the Group ensures greater transparency in its management and decision making.
- Three of the Board’s nine directors are outside directors—part of an effort to incorporate various views and opinions and to eliminate arbitrary decision making in management.
- To ensure a clear separation between management oversight and business execution, internal regulations stipulate that the chairman of the company—who in principle is not involved in the management of the business—serves as the chair of the Board of Directors.
- Audit and Supervisory Board members hold discussions to determine audit and supervising policies and the assignment of duties, and monitor corporate management.
- Audit and Supervisory Board members attend all important meetings, including but not limited to Board meetings, and exchange information regularly with the representative directors.
- The Audit and Supervisory Board Members Office, with designated support staff, has been established to ensure that the Audit and Supervisory Board members can work effectively.
- Under the executive officer system, the authority to carry out business has been assigned to respective functional departments so as to expedite decision-making and clarify the roles of each department.
Board of Directors and Audit and Supervisory Board
- Board of Directors
Maximum number of directors: 15
Current number of executives: 9 (including 3 outside directors)
Term: 2 years
- Audit and Supervisory Board
Maximum number of Audit and Supervisory Board members: 5
Current number of executives: 4 (including 2 outside Audit and Supervisory Board members)
Term: 4 years
(As of June 20, 2014)
Group Management Committee
The Group Management Committee (GMC) consists of executive officers and is a decision-making body empowered by the Board of Directors. The GMC facilitates deliberations and renders decisions on the Group’s overall management from the perspective of total optimization.
Nomination and Compensation Committee
The Nomination and Compensation Committee—a unique permanent body consisting of three outside directors and two internal directors—plans the appointment/dismissal policy of directors and executive officers as well as their compensation packages.
The Internal Management and Control Division, which is in charge of internal auditing, objectively reviews and assesses the status of business execution by respective business divisions according to clearly defined rules to ensure legal compliance and adequacy of execution practices. It also provides advice and recommendations for improvement. The results are regularly reported to the GMC’s Internal Control Committee.
Ricoh has formulated a set of guidelines called the “Policy and Procedures for Prior Approvals for Audit and Non-audit Services.” In accordance with these guidelines, advance approval must be obtained from the Audit and Supervisory Board members concerning the details of and fees for auditing contracts.
In its pursuit of increased shareholder value, the Ricoh Group employs executive compensation as an effective incentive to achieve a sustainable increase in corporate earnings over the medium and long term.
The base salary of directors consists of remuneration related to management oversight, remuneration reflecting the importance of individual roles and responsibilities, remuneration for the purpose of purchasing treasury stocks (except for outside directors), and variable remuneration linked to stock price performance during the relevant fiscal year. The Ricoh Group has been strengthening incentives for executives to increase shareholder value over the long term by allocating a portion of remuneration for stock repurchase so that executives will have a common interest with shareholders.
The amount of bonuses paid to directors is based on the attainment of key performance indicators—such as sales, operating income and ROA—that pertain to shareholder value and the company’s competitiveness. Proposed bonuses for directors are brought before the general shareholders meeting for approval.
Compensation paid to the Audit and Supervisory Board members is composed solely of remuneration for their auditing duties.
[Compensation for external accounting auditors]
Ricoh verifies the appropriateness of time spent on auditing together with audit firms and certified public accountants (CPAs), taking into consideration the scale and characteristics of our businesses to determine final compensation for auditing services.
Compensation for auditing by external accounting auditors