Corporate Governance

Our Policy

We continue to enhance our corporate governance approach and activities to fulfill our responsibilities to our shareholders and other key stakeholders and support transparent, fair, timely and conclusive decision-making, with the goal of achieving sustainable growth and increasing corporate value over the medium- to long-term. Furthermore, we formulated and disclosed our Corporate Governance Guidelines for the purpose of ensuring transparency and fairness in decision-making and realizing effective corporate governance through the proactive provision of information. We also revise the guidelines as appropriate in line with governance-related developments.

Basic Policy on Corporate Governance

In order to achieve sustainable growth and increase corporate value over the medium- to long-term, INPEX fulfills its social responsibilities in cooperation with its shareholders and other stakeholders, and works to enhance its corporate governance for the purpose of conducting transparent, fair, timely and decisive decision-making.

Corporate Governance Report

INPEX has presented and disclosed the Corporate Governance Report describing basic views on our corporate governance and others in accordance with the regulations for the stock exchange.

Overview of the Corporate Governance Structure

INPEX has adopted an Audit & Supervisory Board Member organizational structure, under which Audit & Supervisory Board members audit the execution of operations, which are in turn carried out by directors well versed in their field. In addition, the Company has introduced an Executive Officer System to pursue management with agility and efficiency. INPEX frequently engages in negotiations with the governments of oil-producing countries and overseas oil companies. This necessarily requires internal directors and executive officers who have knowledge, expertise and international experience relating to the Company's business and both a sound knowledge of the Company and their particular field of expertise. Internal directors in principle hold the concurrent position of executive officers. By adopting this concurrent organizational structure, the Company's Board of Directors is better placed to execute operations in an efficient manner. At the same time, this structure helps to ensure effective operating oversight.
In addition to enhancing the transparency of management and bolstering the ability of the Board of Directors to carry out its supervisory function, INPEX has appointed five of its 12-member Board of Directors from outside the Company. Through this initiative, steps have been taken to ensure that management issues are considered and deliberated with a greater degree of objectivity from an independent standpoint. Moreover, four of the Company's five Audit & Supervisory Board members are also appointed from external sources. In addition to putting in place an Audit & Supervisory Board, INPEX has set up the Audit & Supervisory Board Members' Office and deployed dedicated staff and is reinforcing collaboration between Audit & Supervisory Board members and the Audit Unit, as well as independent auditors.

Overview of the Corporate Governance Structure
Organizational structure Company with Audit & Supervisory Board Member
Directors Number of directors as stipulated by
the Articles of Incorporation
up to 16
Number of directors (number of outside directors) 12 (5)
Term of office 1 year
Audit & Supervisory Board Members Number of Audit & Supervisory Board members
as stipulated by the Articles of Incorporation
up to 5
Number of Audit & Supervisory Board members (number of outside Audit & Supervisory Board members) 5(4)
Term of office 4 years
Number of independent directors and auditors 9
(5 outside directors, 4 outside Audit & Supervisory Board Members)
Other Issuance of a Class A Stock to the Minister of Economy, Trade and Industry

[1] Directors and the Board of Directors

The responsibilities of the Board of Directors shall be to fully exercise its supervisory function, secure fairness and transparency in management, and ensure sustainable growth and increase corporate value over the medium to long term through implementation of effective corporate governance, with recognition of its fiduciary responsibility to shareholders.
The Company's Board of Directors comprises 12 members, five of whom are outside directors. In addition to a monthly meeting, the Board of Directors meets as necessary to discuss and determine matters concerning management strategy and important business execution, and to supervise the execution of duties by directors. The term of office for directors is set at one year. In addition to enhancing the ability of directors to respond to changes in the Company's global operating environment in a timely manner, this initiative helps to further clarify management responsibilities.

[2] Executive Committee and Executive Officer System

From the perspective of increasing the speed of decision making related to the execution of business, we have established an Executive Committee. Meetings are held weekly and as necessary. At the Executive Committee, flexible decision making is conducted for resolutions not affiliated with the Board of Directors, and deliberation is held to contribute to decision making by the Board of Directors.
We implemented an Executive Officer System to respond accurately and quickly to a rapidly changing management environment and the expansion of our business activities. The term of office for executive officers is set to one year, the same as for directors.

[3] Audit & Supervisory Board and Audit & Supervisory Board Members

The Audit & Supervisory Board is composed of five Audit & Supervisory Board members, four of which come from outside. In addition to attending meetings of the Board of Directors and the Executive Committee, the Audit & Supervisory Board members review the execution of business duties by directors and executive officers through reports from and interviews with related departments. Furthermore, the Audit & Supervisory Board members meet on a regular and as needed basis with the Independent Auditors to receive reports on audits from them and exchange views on key audit issues. The Audit & Supervisory Board members also exchange views with the internal audit department (Audit Unit) as it develops annual audit plans and receive quarterly reports on internal audits conducted by the Audit Unit. In addition, the full-time Audit & Supervisory Board members are informed by the Audit Unit about internal audits and the evaluation of internal controls, as necessary. To strengthen the auditing function and ensure effective corporate governance, the Audit & Supervisory Board Members’ Office has been set up with full-time staff assigned to it. In this manner, efforts are being made to promote collaboration between the Audit & Supervisory Board members, the Audit Unit and the Independent Auditors. Moreover, we have constructed a system to strengthen the monitoring function through periodic meetings with representative directors and directors.

[4] Accounting Audit and Auditor Compensation

In accordance with the Companies Act and the Financial Instruments and Exchange Act, we accept accounting audits from Ernst & Young ShinNihon LLC. The amount of auditor compensation is determined in total based on the audit plan and the number of auditing dates, after obtaining approval from the Audit & Supervisory Board.

Compensation Paid to the CPAs and Related Parties
Name of the CPA firm Ernst & Young ShinNihon LLC
Names of the CPAs Hiroaki Kosugi, Satoshi Takahashi, Takeshi Yoshida, Kentaro Moronuki
Accounting audit members 29 CPAs, 7 persons who passed an accountant exam, etc., and 43 others
Compensation for auditing services ¥353 million
(INPEX: ¥270 million; Consolidated subsidiaries: ¥82 million)
Compensation for non-auditing services ¥17 million
(INPEX: ¥5 million; Consolidated subsidiaries: ¥12 million)

[5] Internal Committees

To further enhance the efficacy of the corporate governance function, INPEX has set up 1. the Nomination and Compensation Advisory Committee, 2. the INPEX Advisory Committee, 3. the Compliance Committee and 4. the Sustainability Committee. In addition, the Company maintains 5. the Corporate HSE Committee, 6. the Information Security Committee and 7. the INPEX Value Assurance System Committee to appropriately manage risks associated with business operations.

Internal Committees
1 Nomination and Compensation Advisory Committee
Number of meetings held in FY2021: 6

The Nomination and Compensation Advisory Committee was established in January 2017 with the aim of strengthening the functional independence and objectivity as well as accountability of the Board of Directors in connection with the nomination of and compensation paid to directors.

2 INPEX Advisory Committee
Number of meetings held in FY2021: 1

The INPEX Advisory Committee was established in October 2012 with the aim of enhancing corporate value and the corporate governance function. Comprising external experts in a broad spectrum of fields, the committee provides the Board of Directors with multifaceted and objective advice and recommendations across a wide range of areas. Areas of discussion and advice include international political and economic conditions, an outlook of energy conditions and ways in which to bolster corporate governance.

3 Compliance Committee
Number of meetings held in FY2021: 3

The Compliance Committee was established in April 2006 with the aim of promoting compliance initiatives across the entire Group. The committee formulates fundamental compliance policies applicable to the Group, deliberates on important matters and manages the manner in which compliance is practiced.

4 Sustainability Committee
Number of meetings held in FY2021: 2

In April 2012, the INPEX Group established the CSR Committee with the aims of better fulfilling its corporate social responsibility and promoting activities that contribute to the sustainable development of society. The committee discusses basic policies regarding sustainability and important matters pertaining to sustainability implementation including corporate governance and climate change response.

5 Corporate HSE Committee
Number of meetings held in FY2021: 8

In accordance with the HSE Management System, the Corporate HSE Committee was established in October 2007 to promote health, safety and environment initiatives. In addition to formulating corporate HSE policies and priority targets for each period, the committee advances HSE activities across the organization.

6 Information Security Committee
Number of meetings held in FY2021: 2

The Information Security Committee was established in November 2007 to consider and determine all appropriate measures necessary to maintain, manage and strengthen information security. The committee also takes steps to address any incident relating to information security and to put in place preventive measures.

7 INPEX Value Assurance System Committee
Number of meetings held in FY2021: 11

The INPEX Value Assurance System Committee was established in May 2014 to contribute to the Company's decision-making process with respect to confirmation of the status of preparations in connection with important milestones of major projects in which INPEX participates, and promote the value of the projects.

[1] Outside Directors

Regarding the appointment of outside directors, we believe that it is important to comprehensively consider a variety of factors. These factors include the validity of business decisions and consideration of their effectiveness, expertise and objectiveness in the oversight function in addition to the perspective of independence. As corporate managers, academics or other specialists, the Company’s five outside directors possess broad knowledge and many years of experience in such fields as resource/energy industry, finance and legal matters. One of the outside directors concurrently serves as advisor to Mitsubishi Corporation, which is a shareholder of the Company. As INPEX and Mitsubishi Corporation are engaged in business activities in the same fields, there is a possibility of conflicts of interest arising. Accordingly, the Company recognizes the necessity to pay particular attention to corporate governance. INPEX considers it important for all its directors, including the outside director who concurrently serves at Mitsubishi Corporation as mentioned above, to carry out their management duties while maintaining a high level of awareness at all times on matters including the obligation to prohibit competition under the Companies Act, the appropriate handling of transactions with conflicts of interest and the prevention of information leakage. The Company has therefore obtained pledges confirming these points from all directors including the outside director referred to above.

[2] Outside Audit & Supervisory Board Members

When appointing outside Audit & Supervisory Board members, we believe that it is important to comprehensively consider factors such as independence, efficacy in the oversight function and professionalism.
Four of the Company's five Audit & Supervisory Board members are appointed from external sources. Audit & Supervisory Board members possess a rich knowledge and experience in the Company's business as well as in such fields as finance, legal affairs and management, which they use when performing auditing activities for the Company.

[3] Independence of Outside Directors and Outside Audit & Supervisory Board Members

The Company has reported all outside directors and outside Audit & Supervisory Board members as independent directors as defined by Tokyo Stock Exchange, Inc.
As a part of efforts to comply with the Corporate Governance Code, INPEX has formulated independence standards for outside directors and outside Audit & Supervisory Board members taking into consideration the independence standards and qualification for independent directors issued by the Tokyo Stock Exchange. The Company determines the independence of outside directors, including major shareholders and business partners that do not fall within the scope of these standards.

Independence Standards for Outside Directors and Outside Audit & Supervisory Board Members

The Company shall, based on the independence criteria set forth by the Tokyo Stock Exchange, determine that an Outside Director or an Outside Audit & Supervisory Board Member is independent from the Company if he or she falls under none of the following items.

  1. 1A major shareholder of the Company (who directly or indirectly holds 10% or more of the Company’s voting rights) or an executive thereof
  2. 2A person whose major business partner is the Company (*1) or an executive thereof
  3. 3A major business partner of the Company (*2) or an executive thereof
  4. 4A legal professional, accountant, or consultant who receives money or other properties of more than ¥10 million per year on average over the past three (3) years from the Company or its subsidiary, excluding compensation for Directors or Audit & Supervisory Board Members (if the person receiving such properties is an organization such as a legal entity or a partnership, a person who belongs to such organization)
  5. 5An accounting auditor of the Company or its subsidiary (if such accounting auditor is an accounting firm, a person who belongs to such accounting firm)
  6. 6A person who receives donations or subsidies of more than ¥10 million per year on average over the past three (3) years from the Company or its subsidiary (however, if the person receiving the donation or subsidies is an organization such as a legal entity or a partnership, a director or other officer managing the business of the organization to which the amount of such donations or subsidies exceeds the greater of ¥10 million per year or 30% of the total expenses per year of such organization, on average over the past three (3) years)
  7. 7A person who fell under any of items 1 through 6 above in the past three (3) years
  8. 8A relative within the second degree of kinship of a person who falls under any of (a) through (d) below (excluding persons who are not material (*3))
    1. (a)A person who falls under any of items 1 through 7 above
    2. (b)An executive of a subsidiary of the Company
    3. (c)A non-executive Director or an accounting advisor of a subsidiary of the Company (limited to cases where said Outside Audit & Supervisory Board Member is to be designated as an Independent Audit & Supervisory Board Member)
    4. (d)A person who fell under item (b) or (c) above or an executive of the Company in the most recent three (3) years (including a non-executive Director, if said Outside Audit & Supervisory Board Member is to be designated as an Independent Audit & Supervisory Board Member)
  9. 9Other than each of the preceding items, a person who is substantially judged by the Company to possibly cause a conflict of interest with ordinary shareholders of the Company
  1. *1A person whose major business partner is the Company” refers to a business partner whose business relationship with the Company may have an influence on decision-making of business, etc. of said business partner to the same extent as said business partner’s parent company, subsidiary or affiliate. Specifically, this could be a so-called subcontractor whose consolidated net sales from transactions with the Company account for a considerable part of the said subcontractor’s consolidated net sales, etc.
  2. *2A major business partner of the Company” refers to a business partner whose business relationship with the Company may have an influence on decision-making of business, etc. of the Company to the same extent as the Company’s parent company, subsidiary or affiliate. Specifically, this could be the counterparty in transactions with the Company whose consolidated net sales from the transactions account for a considerable part of the Company’s consolidated net sales, or a supplier who provides merchandise and services which are essential to the business activities of the Company.
  3. *3Specifically, a “material” person is assumed to be an officer, general manager or equivalent of each company/business partner in case of the persons referred to in items 1 through 3, and a certified public accountant who belongs to each accounting firm or a lawyer who belongs to each law firm (including so-called associates) in case of the persons who belong to organizations referred to in items 4 and 5.

[4] Audit & Supervisory Board and Audit & Supervisory Board Members

The Audit & Supervisory Board is composed of five Audit & Supervisory Board members, four of which come from outside. In addition to attending meetings of the Board of Directors and the Executive Committee, the Audit & Supervisory Board members review the execution of business duties by directors and executive officers through reports from and interviews with related departments. Furthermore, the Audit & Supervisory Board members meet on a regular and as needed basis with the Independent Auditors to receive reports on audits from them and exchange views on key audit issues. The Audit & Supervisory Board members also exchange views with the internal audit department (Audit Unit) as it develops annual audit plans and receive quarterly reports on internal audits conducted by the Audit Unit. In addition, the full-time Audit & Supervisory Board members are informed by the Audit Unit about internal audits and the evaluation of internal controls, as necessary. To strengthen the auditing function and ensure effective corporate governance, the Audit & Supervisory Board Members’ Office has been set up with full-time staff assigned to it. In this manner, efforts are being made to promote collaboration between the Audit & Supervisory Board members, the Audit Unit and the Independent Auditors. Moreover, we have constructed a system to strengthen the monitoring function through periodic meetings with representative directors and directors.

Outside Directors/Outside Audit & Supervisory Board Members: Concurrently Held Positions and Reason for Appointment
  Name Independent
director/
auditors
Significant concurrently held positions Reason for appointment Attendance at board meetings for
the year ended December 31, 2021
Outside Directors Jun
Yanai
Advisor of Mitsubishi Corporation Outside Director, Kintetsu World Express, Inc. Expected to provide supervision of the execution of business from an international perspective and the necessary comments and suggestions, etc. in the meetings of the Board of Directors, etc. primarily by utilizing his experience as a corporate executive and abundant experience and insight in the resource and energy industry. Board of Directors meetings 16/16
Norinao
Iio
- Expected to provide supervision of the execution of business from an international perspective and the necessary comments and suggestions, etc. in the meetings of the Board of Directors, etc. primarily by utilizing his experience as a corporate executive and abundant experience and insight in the resource and energy industry. Board of Directors meetings 16/16
Atsuko
Nishimura
Outside Director, TAISEI CORPORATION Expected to provide supervision of the execution of business from a diverse and global perspective and the necessary comments and suggestions, etc. in the meetings of the Board of Directors, etc. by utilizing her abundant experience as a diplomat and extensive insight on international conditions, in addition to expert knowledge as a university professor. Board of Directors meetings 16/16
Tomoo
Nishikawa
- Expected to provide supervision of the execution of business from a diverse and global perspective and the necessary comments and suggestions, etc. in the meetings of the Board of Directors, etc. by utilizing his abundant experience and insight as an international attorney, in addition to knowledge in a variety of fields such as expert knowledge as a university professor. Board of Directors meetings 16/16
Hideka
Morimoto
Outside Director, Takasago Thermal Engineering Co., Ltd. Expected to provide supervision of the execution of business from a sustainability (ESG) perspective and the necessary comments and suggestions, etc. in the meetings of the Board of Directors, etc. by utilizing his abundant experience and insight on the environment and energy policy developed through his career in the Ministry of the Environment, in addition to expert knowledge as a university professor. -
Outside Audit & Supervisory Board Members Hideyuki
Toyama
- Has extensive experience and broad range of insights in the field of finance and expertise and experience as a lawyer Board of Directors meetings 16/16 Audit & Supervisory Board meetings 16/16
Shinya
Miyake
- Has extensive experience and broad range of insights in the fields of international financing and finance. Board of Directors meetings 16/16 Audit & Supervisory Board meetings 16/16
Mitsuru
Akiyoshi
Senior Adviser, Mizuho Marubeni Leasing Corporation (appointed April, 2022) Outside Director, Concordia Financial Group, Ltd. Has extensive experience and broad range of insights in the fields of finance and management. Board of Directors meetings 16/16 Audit & Supervisory Board meetings 16/16*
Hiroko
Kiba
- Has a wide and diverse range of knowledge gained through her service as a member of the Advisory Committee for Natural Resources and Energy and the Industrial Structure Council, as well as abundant experience and insights as a freelance newscaster and a university professor. Board of Directors meetings 16/16 Audit & Supervisory Board meetings 16/16

Compensation for directors (excluding outside directors) consists of basic compensation, which is paid according to the duties of each director; bonuses, which serve as a shortterm incentive; and stock-based remuneration, which gives a medium- to long-term incentive. Compensation for outside directors is limited to basic compensation only from the perspective of independence of their duties.
Bonuses as a short-term incentive is linked to the Company’s net income attributable to owners of parent (hereinafter “net income”) and cash flows from operating activities before exploration, which are our major financial indices, as well as a safety index (zero major accidents) that serves as a non-financial index. The amount of compensation is calculated based on the evaluation weights in the table below according to the degree of achievement of these targets, and the final amount of compensation fluctuates within the range of 0% to 200%.

KPIs used to calculate bonuses for directors (excluding outside directors)
Bonus KPI Evaluation weight
Financial indices Net income 45%
Cash flows from operating activities before exploration 45%
Non-financial index Safety index (zero major accidents) 10%

Stock-based remuneration as a medium- to long-term incentive is paid to directors (excluding outside directors and non-residents of Japan) and executive officers (excluding non-residents of Japan) (hereinafter collectively the “eligible directors and officers”). This remuneration system is called the Board Incentive Plan Trust, and it combines performance-based elements aimed at raising the awareness among the eligible directors and officers of their contribution to the Company’s medium- to long-term business performance and enhancement of corporate value, and fixed elements aimed at strengthening the awareness among the eligible directors and officers of sharing interests with shareholders through the ownership of the Company’s shares. The performance-based portion of the stock-based remuneration is linked to the Company’s key financial indices set forth in the Medium-term Business Plan, namely, net income, cash flows from operating activities before exploration, ROE and total payout ratio, as well as to the production cost per barrel and net carbon intensity, which are our major non-financial indices. The amount of compensation is calculated based on the evaluation weights in the table below according to the degree of achievement of these targets, and the final amount of compensation fluctuates within the range of 0% to 200%. In the event that any of the eligible directors and officers commit a significantly improper or violating act, the Company may cancel or forfeit their right to receive the Company’s shares or other forms of compensation under the system (malus) and demand the return of cash corresponding to the Company’s shares or other forms of compensation already delivered to them (clawback).

KPIs used to calculate performance-linked stock-based remuneration for directors (excluding outside directors) and executive officers
Stock-based remuneration KPI Evaluation weight
Financial indices Net income 30%
Cash flows from operating activities before exploration 30%
ROE 10%
Total payout ratio 10%
Non-financial indices Production cost per barre 10%
Net carbon intensity 10%

Regarding the compensation for directors, the Nomination and Compensation Advisory Committee deliberates on major matters in accordance with the policy for determining the amount and calculation method of compensation, etc. for directors and the details of compensation, etc. for individual directors, and submits a report to the Board of Directors. Based on the report from the Committee, the Board of Directors decides on the compensation for directors within the limits and terms approved at the general meeting of shareholders. The amount of compensation to be paid to each director by type is decided by the Representative Director, President & CEO, who shall be entrusted to do so by a resolution of the Board of Directors, in accordance with the deliberation by the Nomination and Compensation Advisory Committee, a majority of whose members are outside officers, including independent outside directors.
Considering the external environment, social and economic trends, and other factors surrounding the Company, the Nomination and Compensation Advisory Committee will carefully deliberate on the appropriateness of the target values and calculation method for compensation and issue a report, based on which necessary adjustments may be made to the amount of compensation for each director by a resolution of the Board of Directors.
The adequacy of compensation for directors is verified by the Nomination and Compensation Advisory Committee after an external compensation research organization examines and analyzes the level of compensation for each position in a peer group of companies of the same size and similar industries.
The ratios of the basic compensation, bonuses and stockbased remuneration for inside directors are generally balanced to follow the principle that the higher the position held by a director is, the higher the weight of his or her performance-based compensation (bonuses and stock-based remuneration) is.

Compensation for Directors and Audit & Supervisory Board Members in FY2021
Classification Total amount of compensation paid
(millions of yen)
Total compensation by type
(millions of yen)
Number of eligible directors and Audit & Supervisory Board members
(persons)
Basic compensation Performancebased Compensation Non-monetary Compensation
Bonus Stock-based remuneration
Directors
(excluding outside directors)
536 384 140 11 8
Audit & Supervisory Board members
(excluding outside Audit & Supervisory Board members)
31 31 - - 1
Outside directors and outside Audit & Supervisory Board members 159 159 - - 10
  1. 1The monthly basic compensation for directors was set to not more than 47 million yen (including monthly compensation for outside directors of not more than 6 million yen) at the 11th Ordinary General Meeting of Shareholders held on June 27, 2017. The number of directors as of the date of this resolution was 15 (including six outside directors). This amount was revised to an annual amount, including bonuses, of not more than 900 million yen (including an amount not more than 100 million yen for outside directors) at the 16th Ordinary General Meeting of Shareholders held on March 25, 2022. The number of directors as of the date of this resolution was 12 (including five outside directors).
  2. 2The monthly basic compensation for Audit & Supervisory Board members was resolved to be not more than 10 million yen at the 13th Ordinary General Meeting of Shareholders held on June 25, 2019. The number of Audit & Supervisory Board members as of the date of this resolution was five. This amount was revised to an annual amount of not more than 140 million yen at the 16th Ordinary General Meeting of Shareholders held on March 25, 2022. The number of Audit & Supervisory Board members as of the date of this resolution was five.
  3. 3The amount of bonus is the amount based on the resolution made at the 16th Ordinary General Meeting of Shareholders held on March 25, 2022 to pay a total amount of 140 million yen to eight directors in office at the end of the business year under review, excluding outside directors.
  4. 4At the 12th Ordinary General Meeting of Shareholders held on June 26, 2018, it was resolved that a stock-based remuneration system be introduced for directors (excluding outside directors and non-residents of Japan) and executive officers (the BIP Trust). The number of directors (excluding outside directors and non-residents of Japan) as of the date of this resolution was seven. The amount of the stock-based remuneration presented above represents the fees incurred regarding the stock-based points granted during the business year under review concerning the BIP Trust for directors. At the 16th Ordinary General Meeting of Shareholders held on March 25, 2022, the maximum amount of money to be contributed per business year by the Company was revised to 434 million yen, and the maximum points granted per business year to those eligible for the system was revised to 806,000 points (equivalent to 806,000 shares of the Company). The number of directors (excluding outside directors and nonresidents of Japan) as of the date of this resolution was seven.

[Resolutions of the Company regarding the Development of the Systems for Ensuring Proper Operations (Internal Control Systems)]

The following is a summary of the resolutions of the Company, regarding the "Development of the Systems for Ensuring the Proper Operations as a Stock Company (Internal Control Systems)." This summary reflects a partial revision made by a resolution of the Board of Directors meeting held on March 26, 2018.

Systems to Ensure that Directors and Employees of the Company Execute their Duties in Compliance with Laws and Regulations and the Articles of Incorporation

To ensure that Directors and employees of the Company execute their duties in compliance with applicable laws and regulations and the Articles of Incorporation, the Company shall develop a Corporate Social Responsibility Principles and Business Principles and establish a system to ensure complete compliance. The Company shall establish a Compliance Committee consisting of full-time Directors and Executive Officers, etc., to deliberate basic policies or other important matters related to compliance. By monitoring the implementation of such policies and ensuring thorough dissemination through in-house training, etc., the Company ensures that its Directors and employees comply with laws and regulations and the Articles of Incorporation in the execution of their duties. Furthermore, the Company shall establish an internal whistle-blowing system with a department in charge and external experts (lawyers) as providers of consultation services.
In order to ensure effective compliance systems and relevant internal rules, the Company shall also verify and evaluate such systems and make the necessary improvements through audits, etc., carried out by the internal audit department which reports directly to the President & CEO and other related in-house departments or external experts. Based on the internal audit regulations, the internal audit department, which reports directly to the President & CEO, shall report the results of audit of the previous fiscal year and the audit plan for the current fiscal year to the Board of Directors.
Furthermore, the Company shall develop a system to ensure the accuracy and reliability of financial reporting, and employ such system properly while evaluating its effectiveness.

Systems for the Storage and Management of Information Related to the Execution of Duties by Directors of the Company

In accordance with applicable laws and regulations, the Articles of Incorporation and internal rules, among others, the Directors shall develop a system for information security administration, and appropriately store and manage documents and other information related to the execution of their duties.

Rules and Other Systems for Risk Management of the Company

To manage diverse risks related to the INPEX Group's business activities, Directors shall cooperate closely with the related departments to identify, analyze and evaluate such risks, and manage them in accordance with internal rules and guidelines, etc.
Furthermore, the functioning and other aspects of the risk management related to daily operations shall be verified and evaluated through audits, etc., carried out by the internal audit department under the direct control of the President & CEO of the Company and other related in-house departments or an external expert, and continually reviewed in response to changes in the business environment.

Systems to Ensure the Efficient Execution of Duties by Directors of the Company

In order to ensure that the systems to execute Directors' duties efficiently are in place, the Directors shall manage business operations with particular attention to the following:

  1. 1.With regard to certain major corporate decisions, an Executive Committee meeting attended by full-time Directors, Managing Executive Officers, etc. shall be held weekly and as necessary to ensure that the duties are executed promptly and properly.
  2. 2.With regard to the execution of daily duties, the authority of the President & CEO shall be delegated in accordance with the Board of Directors' Regulations and other internal regulations, and the persons in charge at each level shall execute their duties promptly.
    Furthermore, the Board of Directors shall formulate the long-term management strategies and medium-term management plans, and receive progress reports on the plans and targets. The Company has adopted a divisional system and assigns Directors as the head of each division in order to achieve the efficient management of business operations and establish a structure of accountability. Each division shall implement initiatives positioned as important business milestones reflecting the business environment, while taking into account important risks and their countermeasures, so as to realize goals in the medium-term business plan and other targets. The Executive Committee shall receive progress reports on the plans and targets.

Systems to Ensure the Proper Operations of the INPEX Group

  1. 1.Systems for Reporting the Company Matters Related to the Execution of Duties by Directors or Other Equivalent Managerial Staff (hereinafter "Directors, etc.,") of the Company's Subsidiaries

    In accordance with the internal rules on group management, the Company shall enter into agreements regarding group management with its subsidiaries, under which the Company requires that important matters of each subsidiary shall be reported to and approved by the Company.

  2. 2.Rules and Other Systems for Risk Management of the Company's Subsidiaries

    For risk management of the subsidiaries of the Company, in accordance with the internal rules on group management, the Company shall conduct group-wide risk management via mutual cooperation with each subsidiary. Furthermore, the Company shall require its subsidiaries to cooperate in audits, etc., carried out by the internal audit department under the direct control of the President & CEO of the Company and other related in-house departments or an external expert to verify and evaluate the management of risks related to the daily operations of the subsidiaries. Based on the results of such verification and evaluation, the Company shall have its subsidiaries conduct continuous review of their risk management in response to changes in the business environment.

  3. 3.Systems to Ensure the Efficient Execution of Duties by Directors, etc., of the Company's Subsidiaries

    To ensure the efficient execution of duties by Directors, etc., of the Company's subsidiaries, management strategies and plans shall be shared among all the INPEX Group companies. Under the vision, the Company shall have its subsidiaries manage human resources and financial resources efficiently and manage business operations in accordance with the Company's internal rules, etc., with particular attention to the following:

    1. 1.Important matters of a subsidiary of the Company shall be determined by resolution of the Board of Directors meetings of the subsidiary or by consultation among the Directors of the subsidiary.
    2. 2.Authority for the execution of daily duties by the Company's subsidiaries shall be delegated based on regulations stipulating the administrative authority of subsidiaries, and the persons in charge at each level shall execute their duties promptly.
  4. 4.Systems to Ensure that Directors, etc., and Employees of the Company's Subsidiaries Execute their Duties in Compliance with Laws and Regulations and the Articles of Incorporation

    The Company shall establish a compliance system (including an internal whistle-blowing system) that is applied to the entire Group, and this system shall be widely deployed and disseminated to all directors, auditors and other equivalent managerial staff, as well as to employees of the Company's subsidiaries.
    In cooperation with its subsidiaries, the Company shall conduct audits, etc., of the subsidiaries, carried out by the internal audit department under the direct control of the President & CEO of the Company and other related in-house departments or an external expert.
    The Company shall strive to establish a system to ensure that Directors, etc., and employees of the subsidiaries execute their duties in compliance with laws and regulations and the Articles of Incorporation, and enter into agreements regarding group management with its subsidiaries in accordance with the internal rules on group management.

Matters Regarding Employees Who Assist the Audit & Supervisory Board Members of the Company with Auditing Duties in Cases Where the Audit & Supervisory Board Member of the Company Requests the Assignment of Such Employees, Matters Regarding the Independence of Such Employees from Directors of the Company and Matters Related to Ensure the Effectiveness of Instructions Given to Such Employees

The Company has set up the Audit & Supervisory Board Members' Office as an independent organization from the business execution departments and shall deploy dedicated employees to assist the Audit & Supervisory Board Members with auditing duties in order to enhance the effectiveness of audits by Audit & Supervisory Board Members.
The employees who assist the Audit & Supervisory Board Members' duties shall follow instructions from the Audit & Supervisory Board Members. Performance appraisals, personnel changes and disciplinary action against such employees assisting the Audit & Supervisory Board Members shall require approval of the Audit & Supervisory Board Members beforehand.

Systems for Reporting to the Audit & Supervisory Board Members of the Company

The Directors and employees of the Company, directors, auditors or other equivalent managerial staff, as well as employees of the Company's subsidiaries, or persons who receive a report from them, shall report and provide information to the Audit & Supervisory Board Members of the Company as to the matters provided by laws and regulations, matters that might have a significant impact on the Company and its Group companies, and other matters that an Audit & Supervisory Board Member of the Company has determined to be reported to execute his/her duties.
Also, the Audit & Supervisory Board Members of the Company shall always be able to obtain business information whenever needed by attending the Board of Directors' meetings and other important internal meetings, as well as receiving internal approval documents, etc.
Regarding the internal whistle-blowing system of the INPEX Group, the responsible section of each Group company shall report to the Company's Audit & Supervisory Board Members swiftly as to the content internally reported by directors, auditors, other equivalent managerial staff and employees of the Group companies.

Systems to Ensure that Reporters in the Preceding Section Will Not Receive Detrimental Treatment Grounds of the Whistle-Blowing

The Company shall prohibit detrimental treatment against directors, auditors, or other equivalent managerial staff, and employees of the Group companies who reported to the Company's Audit & Supervisory Board Members. And this position shall be disseminated throughout the INPEX Group.
Regarding the internal whistle-blowing system of the INPEX Group, in case detrimental treatment against a whistle-blower is recognized, a disciplinary action will be taken against the person who treated the reporter in such a way and the head of the department to which the person belongs, pursuant to Rules of Employment, etc.

Matters Related to Policies Concerning the Treatment of Expenses or Liabilities Incurred by the Execution of Duties by the Company's Audit & Supervisory Board Members such as Procedures for Prepayments or the Redemption of Such Expenses

In case the Company's Audit & Supervisory Board Members request prepayment or redemption of expenses for their execution of duties, etc., based on Article 388 of the Companies Act, the Company shall swiftly process such expenses or liabilities except in the case such expenses or liabilities are proven to be unnecessary for the execution of duties by such Auditors.

Other Systems to Ensure Effective Audits by the Audit & Supervisory Board Members of the Company

The Representative Directors of the Company shall meet regularly with the Audit & Supervisory Board Members of the Company, provide information as necessary and strive to communicate with them. At the same time, the Company shall secure opportunities for Audit & Supervisory Board Members and Outside Directors to meet regularly, and strive to enhance their mutual cooperation and information sharing.
The Company shall also improve the effectiveness of audits by establishing a system, etc., whereby the Audit & Supervisory Board Members can cooperate with the internal audit department and receive reports regularly.
Furthermore, to conduct audits by the Audit & Supervisory Board Members, the Company shall ensure close cooperation between the Audit & Supervisory Board Members and external experts such as lawyers, certified public accountants and certified tax accountants, among others.

According to the stipulations of the Articles of Incorporation, INPEX issues a Class A Stock to the Minister of Economy, Trade and Industry. Unless otherwise provided by laws or ordinances, the Class A Stock does not possess voting rights at shareholders’ meetings. However, it is possible for the holder of the Class A Stock to exercise veto rights for certain major corporate decisions. We believe the holding of Class A Stock by the Minister of Economy, Trade and Industry will help prevent any incidence of unusual management, allow INPEX to stably supply energy as a core company for Japan’s oil & gas E&P and ensure that the Company does not incur any negative impact from a speculative acquisition or an attempt at management control through foreign capital. On this basis, INPEX’s role is assured. Furthermore, we expect positive results in terms of external negotiation and credits as a national flagship company efficiently contributing to the stable supply of energy in Japan.

Stock Data

(As of December 31, 2021)

Authorized Shares:
  3,600,000,000 shares
  1 Class A Stock
Total Number of Shareholders and Issued Shares
Common shares: 136,935/1,462,323,600 shares
Special-class share: 1 shareholder (Minister of Economy, Trade and Industry) / 1 share

INPEX is systematically developing a compliance system, an indispensable requirement for the sustained development of a company, and strives to ensure compliance with laws and regulations and adherence to corporate ethics. Specifically, we have instituted the Compliance Committee, which deliberates basic policies, plans, and significant matters pertaining to compliance, and manages the status of compliance practice to promote unified compliance initiatives throughout the Group.
In addition, in accordance with the Sustainability Principles, we have instituted the Code of Conduct, which prescribes matters to be observed to realize compliance, in order to increase compliance awareness among executives and employees in an effort to put the Business Principles into practice.
The Code of Conduct stipulates the building of sound and appropriate relationships with government and administrative authorities (prohibition of political donations except in cases permitted under relevant laws and regulations) and compliance with the anti-bribery and anti-corruption laws and regulations in the countries in which we operate. We make no donations relating to political activities.
We have been participating in the United Nations Global Compact since December 2011 and have declared our commitment to preventing corruption. Based on our Code of Conduct, we have prepared a corporate Anti-Bribery and Anti-Corruption Policy (ABC Policy) and ABC procedures and we are engaged in the prevention of bribery and corruption.
We support international standards relating to human rights, such as the International Bill of Human Rights, the International Labor Standards of the International Labor Organization (ILO), and the United Nations Guiding Principles on Business and Human Rights, and favor the United Nations Global Compact, which promotes voluntary activities by companies as good corporate citizens.

Compliance Framework

INPEX undertakes the early delivery of convocation notices for its general meeting of shareholders to ensure that shareholders have sufficient time to consider agenda items at each Ordinary General Meeting of Shareholders.

1. To invigorate the general meeting of shareholders and promote effective voting
  Supplementary explanation
Early delivery of convocation notices for
the general meeting of shareholders
The Convocation Notice for INPEX’s 16th Ordinary General Meeting of Shareholders held on March 25, 2022 was posted on the Company’s Web site more than three weeks prior to the meeting on February 24, 2022. The Convocation Notice itself was dispatched on March 3, 2022.
Use of voting rights through the Internet We implemented the exercise of voting rights via the Internet. The Company also adopted a platform for the electronic use of voting rights while posting copies of the convocation notice and other related documents, both in Japanese and English, on its Web site and TDnet (Timely Disclosure network).
2. Enhancing IR Activities
  Supplementary explanation Explanation by representative
: Yes / No
Regular IR presentations for
individual investors
We participate in events such as IR fairs for individual investors and meetings in a variety of venues virtually or in-person. Yes
Regular IR presentations for analysts
and institutional investors
We hold biannual meetings for analysts and institutional investors, either virtually or in-person, covering topics ranging from financial results to financial forecasts. Video archives are available on the IR section of the Company’s Web site both in Japanese and in English. Yes
Regular IR presentations for foreign
institutional investors
We undertake overseas IR road shows in the regions including Europe, North America and Asia, while participating in conferences and engaging in one-on-one meetings in-person, by phone or online as necessary. Yes
IR materials available on Web site Our Web site (IR section) features a host of IR tools including financial reports, financial results presentations and annual reports. Furthermore, efforts are made to disclose pertinent information such as the latest news releases, the Company’s performance and financial position, as well as trends in crude oil prices, foreign currency exchange rates, the Company’s share price and stock information. Yes
Internal System for Timely Disclosure

Disclosure Policies

To achieve the appropriate disclosure of information, we have established internal regulations for corporate information disclosure and defined the process for collecting, managing, transmitting and disclosing information throughout our company. A summary of disclosure and other policies based on the aforementioned regulations is listed. Please refer to Disclosure Policy for further details.

(The information above is current as of December 31, 2021, unless otherwise stated.)

Evaluation results of effectiveness of Board of Directors in FY 2021

With the aims of regularly verifying that the Board of Directors is functioning appropriately and identifying issues to be resolved for continuous improvement, the Company undertakes an evaluation of the effectiveness of the Board of Directors each year, and discloses a summary of the evaluation results. Based on this policy, the seventh evaluation was conducted in fiscal 2021. The evaluation method and summary of the results are as follows. Based on these evaluation results, the Company will continue to strive to improve the effectiveness of the Board of Directors.

Related Links