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CSR
CORPORATE SOCIAL RESPONSIBILITY

Governance

Basic Policy

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. Furthermore, in November 2015 we formulated and disclosed the 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.

Risk Management

We strive to accurately identify and assess the complex and varied risks inherent in the business environment and to implement necessary risk prevention measures and systems to minimize risks. In addition to large- scale natural disasters and pandemics, business risks include changes in the economic situation, social situation, laws and regulations, and other factors in the business environment as well as risks that exist in business processes such as exploration, production, transportation, and sales. We have implemented internal controls under Japan’s Financial Instruments and Exchange Law (known as “J-SOX”) based on the COSO *1 framework. Each Operational Organization *2 also performs risk management related to occupational health and safety and environmental conservation under the HSE Management System. Additionally, we analyze the impact of fluctuation in oil prices and exchange rates and disclose the information in results briefings.

*1 COSO : The Committee of Sponsoring Organizations of the Treadway Commission

*2 Operational Organization : An INPEX headquarter or organization that implements operator projects

Targets and Results

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Key Tasks FY2017 Targets FY2017 Results FY2018 Targets
Strengthen the
governance structure
  • Evaluate the effectiveness of the Board of Directors as a whole and engage in continuous initiatives to improve effectiveness (establishment of a PDCA cycle)
  • Ensure smooth operation of the Nomination and Compensation Advisory Committee
  • Improved the diversity of the Board of Directors by increasing the number of outside directors and appointing a female director
  • Mid to long-term corporate strategic management discussion held at the Board of Directors to support the development of Vision 2040 and Medium-term Business Plan 2018-2022
  • Conducted an evaluation of the Board of Directors as a whole and improved the operation of board meetings based on the evaluation results
  • Convened meetings of Nomination and Compensation Advisory Committee (held 4 times)
  • Continue initiatives to improve corporate governance, including in response to the revision of the Corporate Governance Code (e.g. introduce an executive officer stock compensation plan overseen by the Nomination and Compensation Advisory Committee)
  • Monitor status of Medium-term Business plan 2018-2022
  • Continue initiatives for the implementation of efficiency evaluations and improvements for the Board of Directors as a whole (PDCA cycle)
Upgrade the
risk management system
  • Promote earthquake-related Business Continuity Management (BCM)*3 education and training activities to Tokyo (head office) personnel
  • Engaged in headquarters Business Continuity Management (BCM) activities for earthquakes (convening of the BCM headquarters Promotion Committee) and provided education and training to employees
  • Conduct Tokyo Office-based BCM activities for earthquakes scenario, provide BCM education and training to employees, and review Tokyo office BCP*4 for highly virulent infectious disease scenarios

*3 Business Continuity Management : A proactive plan outlining the priority operations and steps to be taken in the event of a disaster to avoid or mitigate the risk of interruption to business activities.

*4 Business Continuity Plan : The activities undertaken by a company to develop and maintain a business continuity framework and ensure overall preparedness by the Company through education and training initiatives.

Case Study 01

Evaluation results of effectiveness of Board of Directors in FY 2017

With the aims of regularly verifying that the Board of Directors is functioning appropriately and identifying issues to resolve for continuing improvement, we undertake an evaluation of the effectiveness of the Board of Directors each year, and disclose the summary of the evaluation results. Based on this policy, an evaluation was conducted in fiscal 2017. The evaluation method and summary of the results are as follows.
Based on these evaluation results, we will continue striving to improve the effectiveness of the Board of Directors.

Evaluation Method

    Prior to this FY 2017 evaluation, at a meeting between Outside Directors and Audit & Supervisory Board members held in November 2017, the progress in the first half of the fiscal year regarding issues identified in the previous evaluation was discussed and an interim evaluation was conducted. In addition to the interim evaluation, at the Board of Directors meeting held in January 2018, overall results of the initiatives taken during the fiscal year were reviewed, and the implementation policy of the evaluation for the FY 2017 was deliberated and determined.
    The evaluation items included the self-evaluation of each Director and Audit & Supervisory Board members the composition, operations, roles and responsibilities of the Board of Directors, as well as the status of improvement of issues identified in the previous evaluation. An anonymous survey of all Directors and Audit & Supervisory Board members was conducted from mid-February to early March. In order to obtain more specific views and opinions from the directors, the directors were encouraged to make comments on many of the questions.
    Subsequently, results of the survey were consolidated and analyzed by the Board of Directors office. The results of the analysis, new issues identified, and action plans were discussed at a meeting among the Outside Directors, Audit & Supervisory Board members and the Representative Director. Based on such discussion, the final evaluation results and action plans were confirmed at the Board of Directors meeting held in April 2018.

Summary of Evaluation Results

  1. Effectiveness of the Board of Directors is ensured appropriately.
  2. Compared to the previous fiscal year’s evaluation results, notable improvements based on the past evaluations were seen. In particular, among issues identified in the previous evaluation, the election of a female independent Outside Director represented an improvement in diversity of the Board of Directors, and the operation of board meetings was also improved in the areas of board meeting materials and briefings for outside directors prior to board meetings. Furthermore, intensive strategic discussions conducted for the formulation of Vision 2040 and Medium-term Business Plan 2018- 2022 resulted in better evaluation on the status of improvement of issues identified in the previous evaluation.
  3. The priority issues for further improvement in the effectiveness of the Board of Directors are as follows:
    • Continue strategic discussions at Board of Directors meetings, including monitoring of the steady execution of the medium-term business plan spanning from FY 2018 to FY 2022;
    • For efficient deliberation and decisive investment decisions by the Board of Directors, enhance information regarding risks and the Company’s business portfolio in investment-related proposal materials; and
    • Continue discussions regarding the medium-to long-term improvement of the board, such as the further advance of diversity of the Board of Directors.

Case Study 02

Regular Meetings to Enhance Cooperation among Directors

INPEX regularly holds meetings among Outside Directors, the Representative Director, Audit & Supervisory Board members, and accounting auditors — such as the “Meeting of Outside Directors, Audit & Supervisory Board Members, and the Representative Director”; the “Meeting of Outside Directors and Audit & Supervisory Board Members (including the accounting auditors)”; the “Meeting of Outside Directors and the Representative Director”; and the “Meeting of Audit & Supervisory Board Members and the Representative Director,” to provide opportunities to exchange opinions on a wide range of themes relating to important business challenges, the establishment and implementation of internal control systems, and other items related to corporate governance.
Also, in the process of establishing Vision 2040 and Medium-term Business Plan 2018–2022, the members of the Board met five times for intensive discussions on our medium- to long-term challenges in light of the changing business environment and on our business strategy, including the strengthening of initiatives towards renewable energy and the establishment of a global gas value chain.

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