As the environment surrounding the company becomes more complex and diversified, the Ricoh Group positions risk management as an essential initiative in appropriately controlling the various internal and external uncertainties that surround the Group's business and in implementing management strategies and achieving business objectives. All Group employees strive to improve risk management, as illustrated in the diagram below.
The Risk Management Committee is positioned as an advisory committee to the GMC and supports the decision-making of the GMC in the Group's risk management activities. It also promotes risk management activities of the entire Group and creates a highly feasible mechanism in line with the actual conditions by periodically revising the risk management system.
The committee chairperson is appointed by the CEO, and comprises representatives from each organization mainly undertaking the headquarters function. With its basic stance of “always be open to risks,” the committee convenes meetings as needed, and makes recommendations to the GMC even if risks are implied by parties outside the committee.
Regular meetings will be held to strengthen collaboration among the various divisions and business units throughout the Ricoh Group and to increase the effectiveness of risk management at each division of Ricoh and each Group company.
The chairperson of the risk management committee will set up these regular meetings, and risk management promoters who are appointed by the head of each business unit will attend them. The main objectives of these meetings are as follows.
Setting down the Ricoh Group “Incident Management Standard” for all affiliate companies in Japan and overseas, the Ricoh Group has created a system to deal with incidents that may have a negative impact on corporate business activities and to prevent reoccurrence based on the president's policies. “serious incidents” are to be reported from the division in which the incident occurred through the management division primarily responsible for each incident, to the Ricoh President, the Internal Control Committee members, the disclosure management division, officers connected to the case, and Audit and Supervisory Board Members.
A summary of serious incidents that have occurred during the most recent six months, together with a description of how they were dealt with and the measures taken to prevent reoccurrence, as well as changes in the numbers of occurrences classified by incident, are reported to the Board of Directors every half fiscal year. The GMC will refer to the content of these serious Incident reports as well as changes and trends in the number of occurrences when reviewing managerial risks for the next fiscal year.
Among the reported incidents, the number of compliance-related serious incidents (corresponding to GRI G4 SO5 (a)) in the past three years were 19 in the fiscal year ended March 31, 2017, and 27 in the fiscal year ended March 31, 2018, and 33 in the fiscal year ended March 31, 2019.
|The year ended
March 31, 2017 (%)
|The year ended
March 31, 2018 (%)
|The year ended
March 31, 2019 (%)
|Labor law violation||11||13|
|Embezzlement or theft||63||22||36|
|Unfair trade practices||7||3|
Of these compliance-related serious incidents, there was one major incident that required disclosures to external organizations in the fiscal year ended March 31, 2016, which was an accounting violation occurred in India. However, there has been no major incident since the fiscal year ended March 31, 2017. We will leverage our website and other vehicles to promptly share any information that should be disclosed regarding Ricoh India.
An independent auditor that Ricoh India appointed in 2015 raised concerns regarding reporting, and delayed the publication of the results until the matter could be concluded. Ricoh India's audit committee, together with its accountants and lawyers in India, undertook an internal investigation which revealed that some employees had falsified accounts. Ricoh India announced its fiscal 2016 results on November 18, 2016.
Ricoh takes the above matter seriously, and will fully cooperate with any continuing oversight by India regulators and courts. Concerning its global systems, it will reflect external expert assessments of the effectiveness of governance and internal controls at overseas subsidiaries in formulating and deploying measures to reinforce internal audits at those subsidiaries and prevent similar incidents from recurring.
The Ricoh Group has created a Business Continuity Plan (BCP) to enable the business to quickly recover and continue and to minimize the degree of damage in the event of an unanticipated disaster or accident.
In addition to the business continuity plan we enforce BCM issues such as implementation, application, education, training, correction and reviews as the coverage of BCPs.
Each Group company establishes BCPs depending on its situation. Overall, the Ricoh Group has formulated a BCP to manage three possible scenarios: new influenza pandemic, a wide-area disaster in Japan including major earthquakes, and a long-term suspension of product supplies.
Currently, the Ricoh Group has two BCPs, one being formulated on the assumption of “New Influenza epidemic” and the other being the “Widespread disaster in Japan, such as major earthquakes.”
The Ricoh Group establishes response systems and execute necessary actions against the risk of a new influenza epidemic, based on the following basic policy.
In order to facilitate Ricoh Group companies around the world to recognize the conditions of outbreak of new influenza, and to respond based on a prescribed action plan, in the event of an outbreak of new influenza the Ricoh Group has established and has been applying the original alert level and criteria of issue. Having experienced the new influenza (A/H1N1) epidemic around the world from 2009 to 2010, the Ricoh Group conducted a review of the alert level in order to enable appropriate responses according to the individual conditions, and has been adopting the current level since FY2011.
The 5-step decision levels are formulated, and each Ricoh Group company implements countermeasures according to each level.
By referring to the phases released by the WHO, the Headquarters of Ricoh conducts a comprehensive study of : (1) the spread of infection, (2) the severity level, and (3) the damage to the Ricoh Group in each region, etc., and make a specific assessment of the alert level in each region.
The following is the overview of the alert levels.
The Ricoh Group has established and is implementing the “Ricoh Group New Influenza Action Guideline.”
The Action Guideline provides operations and activities to be conducted by each department and employee, approved/prohibited actions under each alert level. It also provides necessary preparations and execution items for operations to be continued under the alert level 5.
Ricoh Group companies / Divisions decide the business operations with priority that should be continued even during the pandemic of alert level 5, ensuring that safety of Employees is secured.
As a rule, the Ricoh Group suspends its businesses under the pandemic of alert level 5 and its Employees shall stay at home. Nevertheless, there are business operations whose continuation is considered indispensable in order to meet the strong needs of the society or due to inevitable reasons from the management point of view.
Operations to continuously provide customers who are engaged in public works* with products and services in the following
Basic jobs that must be performed by the Ricoh Group so that it can be sustained as a corporation (Payments of salaries, Payments to its creditors, etc.).
Jobs whose continuation under alert level 5 is regarded to be indispensable by each division, which is registered as such by the approval of the division manager in advance, and for which Response Plan that stipulated has been prepared.
The Ricoh Group has prepared a Response Plan, to continue business under the alert level 5.
Each company and each department has conducted analysis of impacts on the Continuing businesses with the utmost priority and Continuing jobs with priority, and prepared response plans based on the “Ricoh Group New Influenza Action Guideline.”
In order to respond quickly and effectively to widespread natural disasters and accidental disasters in Japan, the Ricoh Group has established the Large Scale Disaster BCP in Japan based on the following basic policy.
For the purpose of facilitating quick, appropriate and wide-ranging response to various disasters likely to occur in widespread regions in Japan (e.g., earthquakes, large-scale flood disasters, volcanic eruptions, nuclear power plant accidents, etc), BCP assumes representative disasters, such as “Tokyo-Epicentered Major Earthquake” and “Nankai Trough Huge Quake” as a basis of its formulation.
After selecting the important functions which the Ricoh Group should address (e.g., disaster prevention, establishment of information infrastructure, sales, production & procurement, etc.) each of these functions establishes BCP according to the following steps.
What and how much is sufficient for BCPs established independently by Ricoh Group companies? Is there any part that is missing or that is unnecessary? Those are the questions we have asked. After participating in a model business project of the Ministry of Economy, Trade and Industry and taking advantage of know-how gained from ISO 22301, the Ricoh Group's unique “Small BCP Establishment Manual” was created in 2014. Each Group company subsequently created the BCPs in accordance with that.
This includes a simple checklist for establishment status, making it possible to grasp the response of each company at a glance.
“Large Scale Disaster Response Manual” for employees was distributed, while at the same time, an e-learning material titled “Major disaster : Preparation in advance and responses to the outbreak – BCP of the Ricoh Group –,” was prepared to educate the outline of BCP that the Ricoh Group has developed and how to respond to disasters.
In addition to the evacuation trainings conducted by each company and business site every year, various types of simulation trainings are provided for specific groups, including “the Group Disaster Task Force”, “the Group Companies Local Disaster Task Force”, “each company and business site of the Ricoh Group”, etc.
In the simulation trainings, Message Board (*) browsing training is also included, which was newly developed as a means of being contacted by the company.