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Governance

Maintaining Ricoh's corporate value on behalf of all stakeholders

The Ricoh Group established The RICOH Way as a set of guiding principles and values that serves as the foundation for all our business activities. Abiding by these principles in corporate ethics and compliance and maintaining transparency in management, we continuously strive to improve our governance, and in doing so ultimately enhance our corporate value.

Corporate Governance

We strongly believe that responsible global citizenship calls for a corporate culture that embraces a sense of mission to meet the expectations of diverse stakeholders—a culture that is committed to operating under the highest ethical standards in line with the expectations of society as a whole.
Based on this belief, we advance the operations of the entire Group under The RICOH Way, strengthening our governance and ceaselessly promoting a culture of integrity while working toward sustainable corporate growth.
The Ricoh Group has also introduced a corporate audit system, in which audit and supervisory board members strengthen the effectiveness of audits and the monitoring of top management, while the Board of Directors, including outside directors, maintains strict oversight over the decision-making process to make sure it is always transparent and fair. Furthermore, by expanding the executive officer system, the segregating of duties between oversight and business execution is clarified, resulting in speedier decision-making.
The Group has also implemented an integrated risk management system for both business opportunities and business execution, and it follows internal control procedures to achieve the success of our corporate strategies and business targets.

Governance structure
Governance structure

Corporate Governance Structure

  • 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.
  • Four of the Board’s eleven directors are outside directors—part of an effort to incorporate various views and opinions and to eliminate arbitrary decision making in management.
  • The Board of Directors Office is setup to support the Board of Directors, driving robust decision - making and ensuring transparent managemtnt oversight.
  • 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: 11 (including 4 outside directors)
    Term: 2 years
  • Audit and Supervisory Board
    Maximum number of Audit and Supervisory Board members: 5
    Current number of executives: 5 (including 3 outside Audit and Supervisory Board members)
    Term: 4 years

(As of June 17, 2016)

Nomination Commitee and Compensation Committee

As part of the strengthening of management oversight functions by the Board of Directors, "Nomination Committee" which is chaired by Non-executive Director, with the majority members being Outside Directors and "Compensation Committee" which is chaired by Outside Director, with the majority members being Outside Directors are established to ensure transparency and objectivity of nomination, dismissal and compensation of Directors and executive officers, etc.

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.

Internal auditing

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.

External auditing

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.

Summary of the Effectiveness of the Board of Directors

The following summarizes the results of a meeting between Ricoh’s Board of Directors and Audit & Supervisory Board Members held on May 20, 2016, to evaluate the effectiveness of the Board of Directors.

The Company reviewed its corporate governance structure in fiscal 2015 (April 1, 2015 through March 31, 2016) to find ways of driving sustainable growth and further enhancing corporate value. So that the Board of Directors can appropriately fulfill its roles and responsibilities under the new structure deployed in fiscal 2016, the Directors and Audit & Supervisory Board Members conducted self-evaluations of its effectiveness.

1. Evaluation Methods
 At the Board of Directors’ Meetings held in fiscal 2015, the Directors and Audit & Supervisory Board Members conducted individual assessments according to a previously determined format, and upon sharing these assessments, the Directors and Audit & Supervisory Members held an evaluation meeting to conduct analyses and evaluations.
2. Summary of Evaluation Results
 The evaluations from the Directors and Audit & Supervisory Board Members concluded that the Board of Directors has made its decisions based on ample deliberations and its administration of business activities is functioning effectively.
Key views presented in the evaluation meeting included the following:
  • Non-executive Directors presented appropriate views from diverse perspectives, without adhering to company practices, with the aim of initiating board discussions.
  • The Board of Directors aims to enhance opportunities and the content quality of the reports through administration of its business activities.
  • Under the guidance of the Board of Directors, an appropriate administration structure has been established to operate through steady advances in corporate governance reforms.
3. Initiatives to Further Enhance Effectiveness
 In the evaluation meeting, the Directors and Audit & Supervisory Board Members engaged in constructive discussions from various perspectives to further enhance effectiveness of the Board of Directors. As a result, in view of the current operating conditions, the Board of Directors will push ahead with the following basic policies toward its improvement in fiscal 2016:
  • 1) Enhance deliberations on important matters that contribute to the increase of corporate value over the duration of our Mid-term Management Plan.
  • 2) Enhance the provision and reporting of information to the Board of Directors to ensure timely and appropriate monitoring and thereby meet the expectations of all stakeholders.
In the evaluation meeting, specific items for improvement were proposed for each process involving the Board of Directors to implement steady improvements in line with the basic policies stated above:
  • (i) Agenda selection: Prioritize agendas that encompass strategic importance and performance impacts
  • (ii) Information provision: Enhance the provision and sharing of information to Non-executive Directors, mainly Outside Directors
  • (iii) Deliberations and decisions: Ensure efficient agenda explanations and sufficient time for deliberations
  • (iv) Reporting and follow-ups: Enhance and ensure reporting and follow-ups on the progress of business execution
Based on the above evaluation results, the Board of Directors at Ricoh will continue efforts to further enhance its effectiveness in FY 2016.

Executive compensation

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.

Executive compensation for fiscal 2016

Category Number of persons Total amount of compensation, etc.
(Millions of Yen)
Total amount of each type
(Millions of Yen)
Basic salary Bonus
Directors(excluding Outside Directors) 7 479 356 122
Audit & Supervisory Board Members
(excluding Outside Audit & Supervisory Board Members)
2 52 52 -
Outside Directors and Audit & Supervisory Board Members   5 59 59 -
Outside Directors 3 43 43 -
Outside Audit & Supervisory Board Members 2 16 16 -
Total 14 591 468 122

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[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 for fiscal 2016

Category Fiscal year ended March 31, 2016
Fees for audit services
(Millions of Yen)
Fees for non-audit services
(Millions of Yen)
Ricoh Company Ltd. 207 -
Consolidated subsidiaries 126 -
Total 333 -

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other fees

Fees for audit services and non-audit services paid the Company and its subsidiary to KPMG, which belongs to the same network as the Company's accounting auditor, were \1,364 milliion and \213 million respectively.