Ricoh 2014 Annual Report Download - page 40

Ricoh Group Sustainability Report 201439
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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)
Management 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.
•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Ofce,
with designated support staff, has been established
toensurethattheAuditandSupervisoryBoard
members can work effectively.
•Undertheexecutiveofcer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.
Group Management Committee
The Group Management Committee (GMC) consists
of executive ofcers 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
ofcers as well as their compensation packages.
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
dened 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.
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
reecting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 scal 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 veries the appropriateness of time spent on
auditing together with audit rms and certied public
accountants (CPAs), taking into consideration the scale
and characteristics of our businesses to determine
nal compensation for auditing services.
• Executive compensation
11
2
6
3
17
550
21
67
14
617
550
21
67
14
617
—
—
—
—
—
Directors
Outside Directors
Audit and Supervisory
Board Members
Total
Outside Audit and
Supervisory Board Members
Number
(People)
Base salary
(¥ million)
Total
(¥ million)
Bonus
(¥ million)
Payments between April 1, 2013 and March 31, 2014
• Compensation for auditing by external accounting auditors
Payments between April 1, 2013 and March 31, 2014
1,555
69
1,624
Total
¥ million
Compensation for auditing services
Compensation for non-auditing services
• Board of Directors
and
Audit and Supervisory
Board