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Governance

Audit and Supervisory BoardAs of June 23, 2023

Audit and Supervisory Board Members

Kazuhiro Tsuji

Audit & Supervisory Board Member

Kazuhiro Tsuji

Date of birth: January 25, 1961


Meeting attendance during FY2022
Board of Directors meetings:
15/15 (100%)
Audit & Supervisory Board meetings:
14/14 (100%)
Brief personal profile
Mar 1984
Joined the Company
Mar 2010
General Manager of Human Capital Development Department, Human Resources Division
Apr 2011
General Manager of Shared Services Center, Human Resources Division
Jul 2011
Deputy General Manager of General Administration Center
Apr 2013
General Manager of Secretarial Office
Apr 2018
General Manager of Human Resources Division
Apr 2019
Corporate Vice President
Jun 2020
Audit & Supervisory Board Member (Current)

Shinji Sato

Audit & Supervisory Board Member

Shinji Sato

Date of birth: May 2, 1960


Meeting attendance during FY2022
Board of Directors meetings:
15/15 (100%)
Audit & Supervisory Board meetings:
14/14 (100%)
Brief personal profile
Apr 1983
Joined MITSUI & CO., LTD.
May 2010
President and Representative Director of Mitsui & Co. Financial Management, Ltd.
Apr 2012
Chief Financial Officer of Asia Pacific Business Unit of MITSUI & CO., LTD.
Senior Vice President of Mitsui & Co. (Asia Pacific) Pte. Ltd.
Apr 2015
Internal Auditor of Internal Auditing Division of MITSUI & CO., LTD.
Dec 2017
Joined the Company Adviser
Apr 2018
Corporate Vice President in charge of finance
General Manager of Finance and Legal Division
President of Ricoh Americas Holdings, Inc.
Jun 2019
Director of RICOH LEASING COMPANY, LTD.
Apr 2020
General Manager of Finance Division
Apr 2021
General Manager of Financial and Accounting Center
Jun 2021
Audit & Supervisory Board Member (Current)

Yo Ota

Outside Audit & Supervisory Board Member

Yo Ota

Date of birth: October 3, 1967


Major activities

He actively made comments at the Audit & Supervisory Board and the Board of Directors based on his extensive track records from his many years of experience as an attorney practicing all areas of corporate law, including M&As, corporate governance, and compliance, and his extensive experience as a specialist in corporate governance. He also attended Nomination Committee meetings as an observer and contributed to ensuring the transparency in the nomination process.
During the fiscal year under review, in addition to the above activities, he also participated in audits of divisions in fields of particular focus in relation to his areas of expertise or importance, and provided advice and recommendations. He also actively engaged in discussions at meetings such as periodic meetings with the Chairperson of the Board of Directors, Lead Independent Directors and the Representative Director, governance review meetings, and outside executive meetings and frankly shared his opinions from a professional perspective.

Meeting attendance during FY2022
Board of Directors meetings:
15/15 (100%)
Audit & Supervisory Board meetings:
12/14 (86%)
Nomination Committee meetings*:
100% (2 out of 2) * As an observer
Brief personal profile
Apr 2001
A member of staff of Civil Affairs Bureau of The Ministry of Justice (Japanese Commercial Code Group of Counsellor's Office)
Jan 2003
Partner of Nishimura & Asahi (Current)
Jun 2005
Outside Auditor of Culture Convenience Club Co., Ltd.
Jun 2005
Outside Director of Denki Kogyo Co., Ltd.
May 2012
Director of the Japan Association of Corporate Directors (Current)
Apr 2013
Professor of Graduate Schools for Law and Politics of the University of Tokyo
Jun 2013
Councilor of LOTTE Foundation (Current)
Jul 2014
Vice Chairman of Corporate Governance Committee of the Japan Association of Corporate Directors (Current)
Jun 2016
Outside Director of Nippon Kayaku Co., Ltd. (Current)
Jun 2017
Outside Audit & Supervisory Board Member (Current)

Shoji Kobayashi

Outside Audit & Supervisory Board Member

Shoji Kobayashi

Date of birth: December 29, 1953


Major activities

He actively made comments at the Audit & Supervisory Board and the Board of Directors from an objective perspective based on his extensive experience gained through many years in development and business management while serving in important positions at Kao Corporation, such as General Manager of a business division and Executive Officer, as well as his deep insight into the management and governance of a global corporation, acquired as a full-time Audit & Supervisory Board Member of Kao Corporation, and his broad knowledge regarding all aspects of technology. He also attended Nomination and Compensation Committee meetings as an observer and contributed to ensuring the transparency in the process of determining nomination and compensation.
During the fiscal year under review, in addition to the above activities, he also attended numerous audits of business units and Group headquarters organizations, subsidiaries, etc., and provided advice and recommendations from a wide range of perspectives, including technical and business operations, as well as ESG and employee engagement. He also actively engaged in discussions at meetings such as periodic meetings with the Chairperson of the Board of Directors, Lead Independent Directors and the Representative Director, governance review meetings, and outside executive meetings and frankly shared his opinions from a professional perspective.

Meeting attendance during FY2022
Board of Directors meetings:
15/15 (100%)
Audit & Supervisory Board meetings:
14/14 (100%)
Nomination Committee meetings*:
100% (11 out of 11) *As an observer
Compensation Committee meetings*:
100% (2 out of 2) *As an observer
Brief personal profile
Apr 1979
Joined Kao Soap Co., Ltd (Current Kao Corporation)
Feb 1998
Director of Chemical Research Laboratories of Kao Corporation
Sep 2002
General Manager of Industrial Materials Business Division of Kao Corporation
Jun 2006
Vice President & Executive Officer, Chemical Business Unit of Kao Corporation Business Division of Kao Corporation
Jun 2010
President & Executive Officer of Chemical Business Unit of Kao Corporation
Mar 2013
Full-time Audit & Supervisory Board Member of Kao Corporation (until March 2017)
Jun 2017
Member of Contract Monitoring Committee, National Institute of Technology and Evaluation (NITE)
Jan 2018
Advisor of SAIWAI TRADING CO., LTD.
Jun 2019
Director in charge of Control Group (Part-time) of SAIWAI TRADING CO., LTD.
Jun 2020
Outside Audit & Supervisory Board Member (Current)
Jun 2021
Chairman of Contract Monitoring Committee, National Institute of Technology and Evaluation (NITE)
Apr 2022
Member of Contract Monitoring Committee, National Institute of Technology and Evaluation (NITE) (Current)

Yasunobu Furukawa

Outside Audit & Supervisory Board Member

Yasunobu Furukawa

Date of birth: October 11, 1953


Major activities

He actively made comments at the Audit & Supervisory Board and the Board of Directors based on his many years of experience as a certified public accountant and as an engagement partner for audits of global corporations with operations overseas at Ernst & Young ShinNihon LLC., and on his extensive insight and experience in corporate management as an outside director, audit committee member, and outside audit & supervisory board member for other companies. He also attended Compensation Committee meetings as an observer and contributed to ensuring the transparency in the process of determining compensation.
During the fiscal year under review, in addition to the above activities, he also participated in audits of divisions in fields of particular focus in relation to his areas of expertise or importance, and provided advice and recommendations. In addition, he was particularly active in asking questions of and communicating with the Independent Auditor, when receiving reports from them. He also actively engaged in discussions at meetings such as periodic meetings with the Chairperson of the Board of Directors, Lead Independent Directors and the Representative Director, governance review meetings, and outside executive meetings and frankly shared his opinions from a professional perspective.

Meeting attendance during FY2022
Board of Directors meetings:
15/15 (100%)
Audit & Supervisory Board meetings:
14/14 (100%)
Compensation Committee meetings*:
100% (8 out of 8) *As an observer
Brief personal profile
Apr 1976
Joined Tetsuzo Ota & Co. (Current Ernst & YoungShinNihon LLC)
Sep 1980
Registered as a certified public accountant (Current)
May 1999
Representative Partner of Ernst & Young ShinNihon LLC
Aug 2008
Executive Partner of Ernst & Young ShinNihon LLC
Aug 2010
Senior Executive Partner of Ernst & Young ShinNihon LLC
Aug 2012
Senior Advisor of Ernst & Young ShinNihon LLC
Jun 2014
Outside Director of Keisei Electric Railway Co., Ltd. (Current)
Jun 2015
Outside Audit & Supervisory Board Member of Saitama Resona Bank, Limited
Jun 2015
Outside Director of NSK Ltd.
Jun 2019
Outside Director (Audit & Supervisory Committee Member) of Saitama Resona Bank, Limited
Jun 2020
Outside Audit & Supervisory Board Member (Current)

Outline of audit activities

This body reviewed risks and issues in the five areas, namely (1) Directors, (2) Business execution, (3) Subsidiaries, (4) Internal audit, and (5) Accounting audit, and formulated annual activity plans. Outline of audit activities in each of these areas and division of duties of Audit & Supervisory Board Members are illustrated in Chart 1 below.Audit activities are mainly carried out by full-time Audit & Supervisory Board Members, and the contents are shared in a timely manner at the Audit & Supervisory Board meetings. Outside Audit & Supervisory Board Members conduct audits with full-time Audit & Supervisory Board Members and make recommendations, taking advantage of their respective expertise and backgrounds, and express their opinions from the independent standpoint.

*1
Audit & Supervisory Board Member review: A series of audit procedures to be conducted including on-site audit at headquarters, principal offices, and subsidiaries as a general rule Number of Audit & Supervisory Board Member reviews conducted: 5 business unit audits, 17 Group headquarters audits, and 22 subsidiary audits (9 in Japan and 13 overseas)

Areas of focus and actions for fiscal 2022

In fiscal 2022, the final year of the Company's 20th Mid-term Management Plan, the Company engaged in a variety of initiatives, including the business unit structure that was introduced in the previous fiscal year, and introduced a new Ricoh-style job-based personnel system, with the aim of transforming into a digital services company. The Audit & Supervisory Board examined these business activities as well as associated expected risks based on changes in the internal and external environment. As a result, “the optimal form of headquarters function governance for a digital service company,” “autonomous internal control and risk management by business units and management of subsidiaries,” and “control environments within individual organizations,” were established as areas of focus for fiscal 2022.

Area of focus: (i) The optimal form of headquarters function governance for a digital service company

Based on the issues recognized in conjunction with governance changes resulting from the introduction of the business unit structure, and the state of responses to these issues, the Audit & Supervisory Board confirmed the status of the creation for the optimal form of headquarters function governance for a digital services company.

Confirmation of group governance design, creation, and operation structure
  • The Audit & Supervisory Board Members conducted reviews of each business unit and headquarters organization. They confirmed the status of the establishment and operation of governance and checks and balances functions within each functional organization, the status of headquarters cross-functional and support functions, and the division of responsibilities.
  • Feedbacks regarding internal control issues identified through auditing activities, Outside Executive Meetings, governance review meetings, and other discussions were provided as appropriate at information sharing meetings with the leaders of Group headquarters functional organization and the presidents of business units in order to assist with making improvements.
Confirmation of the states of governance in functions whose structure changed as a result of the transition to the business unit structure
  • With regard to functions related to quality, purchasing, and supply chain management, shared by multiple business units, Audit & Supervisory Board Members performed reviews spanning organizations, including the Group headquarters management organization, and confirmed the status of their mutual cooperation, divisions of duties, and other matters.

Area of focus: (ii) Autonomous internal control and risk management by business units and management of subsidiaries

Under the business unit structure, each business unit is required to autonomously conduct internal control, risk management, and management of its own subsidiaries. The Audit & Supervisory Board confirmed that structures for doing so had been created and were being appropriately operated and managed.

Confirmation of the status of creation of systems aligned with business unit characteristics and resources
  • The Audit & Supervisory Board conducted Audit & Supervisory Board Member reviews of business units, participated in business operation meetings, and used information sharing meetings with business unit presidents to confirm the status of their creation of internal controls and the status of the operation and management of these internal controls.
  • The Audit & Supervisory Board confirmed improvements made to address issues pointed out during internal audits, etc., the rollout of these improvements throughout the Group, and the status of creation and operation of processes for firmly establishing these improvements.
  • Audit & Supervisory Board Member reviews were carried out of subsidiaries selected based on their importance, the presence or absence of risks, and whether or not there were changes in management conditions following the introduction of the business unit structure. The status of management by Supervising Organizations*2 and their cooperation were confirmed.
*2
Supervising Organizations: Headquarters organizations that administer their Affiliate(s) individually.

Area of focus: (iii) Control environments within individual organizations

The Audit & Supervisory Board confirmed whether each organization was properly maintaining a control environment, taking into consideration the transition to the business unit structure, the impact of the Ricoh-style job-based personnel system introduced in fiscal 2022, and the like.

Confirmation of the level of understanding among employees regarding changes in the internal environment, the impact of these changes, and changes in the organization culture
  • In Audit & Supervisory Board Member reviews conducted at some of the headquarters organizations (5 organizations) and subsidiaries (9 companies), roundtable discussions with employees were also conducted to determine the impact of changes in the internal environment, how these changes were seen by individual employees, the degree to which they accepted the new systems, the impact on the workplace, and the like.
  • The Audit & Supervisory Board confirmed the understanding of current situation by top management of each organization and subsidiary concerning the results of internal employee engagement surveys and compliance surveys and the status of measures taken in response.
  • The information and insights obtained through these activities were shared at Outside Executive Meetings and the opinions of Outside Directors and Outside Audit & Supervisory Board Members were confirmed. These were provided to Supervising Organizations and related organizations such as human resource departments as feedbacks.

Issues to be monitored in fiscal 2023

Each Audit & Supervisory Board Member has reviewed and evaluated the results of auditing activities in fiscal 2022, and the Audit & Supervisory Board reviewed and analyzed the results at its meeting, confirming points of improvement with the aim of improving the quality of auditing. In conjunction with this, it also considered the issues to be monitored in fiscal 2023. The Audit & Supervisory Board will continue to pay close attention to “measures aimed at transforming the Company into a digital services company,” and it has identified “governance under the new management system” through changes to the management structure, including the change in Representative Director and CEO, and “measures for enhancing corporate value” as issues to be monitored in fiscal 2023.

Notes on the Audit Performance

The Audit and Supervisory Board prepared the Audit Report on the following; (i) Methods and contents of the Audit employed by the Audit and Supervisory Board Members and the Audit and Supervisory Board, and (ii) Audit results. With respect to (i) Methods and contents of the Audit employed by the Audit and Supervisory Board Members and the Audit and Supervisory Board, the Board decided to voluntarily prepare and disclose these Notes, as complementary material to the Audit Report, in order to enhance the effectiveness of the dialogue with stakeholders including shareholders, based on the belief that it is crucial to provide more concrete explanation, to enhance audit transparency.