Corporate Governance

Our Policy

INPEX’s Mission is to contribute to the creation of a brighter future for society through our efforts to develop, produce and deliver energy in a sustainable way. Based on this Mission, to achieve sustainable growth and enhance our corporate value over the mid to long term, we fulfill our social responsibilities in cooperation with shareholders and other stakeholders. Furthermore, we continually strive to strengthen our corporate governance to ensure transparent, fair, and timely decision-making.

Please refer to the Corporate Governance section on our website for details on the Basic Policy on Corporate Governance and Corporate Governance Report.

Management Structure

To ensure efficient corporate management and highly effective supervision based on our Mission, we have adopted the structure of a company with Audit & Supervisory Board Members, whereby Audit & Supervisory Board Members audit the business execution of Directors, who are well-versed in their fields. In addition, to further increase the agility and efficiency of our management, we have introduced an Executive Officer System. This system strengthens our business execution structure to respond accurately and quickly to a rapidly changing management environment and business growth.

We have many opportunities to engage in important negotiations with governments and international energy companies. This requires Executive Directors and Executive Officers who possess knowledge, expertise, and international experience related to our business. They must also have in-depth knowledge of both the Company and their fields of expertise. Typically, Directors who were initially the Company’s employees also serve as Executive Officers. This ensures the Board of Directors is well-versed in the current management and business environments, enabling them to make informed decisions regarding optimal business execution while maintaining effective management supervision functions. At the same time, at least one third of the Board comprises of Independent Outside Directors. The measure aims to improve management transparency and strengthen the effective supervisory function of the Board. We leverage the objective perspectives of Independent Outside Directors, which may differ from those of Executive Directors. Given their independent standing, Independent Outside Directors are expected to provide advice based on their personal knowledge and experience. They oversee management and conflicts of interest transactions, and appropriately represent the views of stakeholders at Board of Directors meetings. Our Independent Outside Directors bring backgrounds in corporate management, academia, or specialized fields such as the resource and energy industry, finance, or legal affairs. They have been appointed based on their extensive experience and comprehensive insights.

We are making steady progress to increase the diversity of the Board in terms of gender and nationality. We have appointed a female Outside Director, a female Outside Audit & Supervisory Board Member, and a foreign national as a Director. Currently, two of the members of the Board, which includes Audit & Supervisory Board Members, are women, accounting for 13% of the total Board membership. We have also appointed two female employees to the role of Executive Officer through internal promotion, ensuring diversity in our management structure.

The Nomination and Compensation Advisory Committee deepens discussions on ensuring further diversity and the appropriate size and composition of the Board. The Committee then shares the content of these discussions with the Board. Diversity here includes age, gender, work history, field of expertise, cross-cultural backgrounds, wide-ranging knowledge, and more.

Four of the five members of our Audit & Supervisory Board are Independent Outside Audit & Supervisory Board Members. The Board has been established pursuant to the Japanese law to strengthen the audit function, ensuring the independence of Audit & Supervisory Board Members and effectiveness of audits. Further efforts include assigning audit assistants to the Audit & Supervisory Board Members’ Office – which assist Audit & Supervisory Board operations – and strengthening the Board’s collaboration with the internal audit department (Audit Unit) and audit firm. Engagement partners of the audit firm are appropriately rotated into the role of accounting auditor in accordance with the Certified Public Accountants Act of Japan, with none of them involved in auditing duties for more than seven consecutive fiscal years. In addition, the lead engagement partner is not involved in auditing duties for more than five consecutive fiscal years.

We hold regular meetings for Outside Directors, Representative Directors, Audit & Supervisory Board Members, and the accounting auditor. These include meetings attended by Outside Directors, Audit & Supervisory Board Members, and Representative Directors; meetings attended by Outside Directors and Audit & Supervisory Board Members (which can include the accounting auditor); and meetings attended by Audit & Supervisory Board Members and Representative Directors. Meeting participants exchange opinions on a wide range of management-related material issues, the development and operation of internal control systems, and other corporate governance-related matters.

Corporate Governance Structure

Directors and Board of Directors

The responsibilities of the Board of Directors include exercising its supervisory function to the full extent, ensuring fairness and transparency in management, fostering sustainable growth, and increasing corporate value over the mid to long term. This is achieved through effective corporate governance, acknowledging fiduciary responsibility to shareholders.

The Board consists of 10 members, including five Independent Outside Directors. The Representative Director, President & CEO, who is the most well-versed in our operations, serves as the Chair of the Board to ensure efficient discussions.

In addition to regular monthly meetings, the Board meets as needed to discuss and decide on matters concerning management strategy and material business operations. It also supervises the execution of duties by Directors.

The Articles of Incorporation state that the term of office of Directors shall be one year. This is to enhance their ability to promptly respond to changes in the global management environment and to further clarify management responsibilities.

Directors, Board of Directors Meeting Attendance, and Activities

The table below shows the composition of the Board of Directors as of April 1, 2025, and attendance at Board of Directors meetings in FY2024. Notice and materials of the 19th Ordinary General Meeting of Shareholders (pages 20 and 62)

Audit & Supervisory Board

We have adopted an Audit & Supervisory Board Member system which comprises a five-member Board, including four Outside Audit & Supervisory Board Members. These four Outside Audit & Supervisory Board Members have abundant experience and knowledge of our business, finances, tax, international financing, management, and other fields, which they apply to their auditing duties. We have also established an Audit & Supervisory Board Members’ Office, which is an organization independent from executive divisions that assists Audit & Supervisory Board Members in the execution of their duties. Four full-time employees with relevant knowledge and ability have been assigned to the Office. In principle, the Audit & Supervisory Board meets monthly on the same day as Board of Directors meetings, or as necessary. The Audit & Supervisory Board makes decisions on statutory matters including audit plans, and receives reports from the internal audit department and accounting auditor on the performance of their duties, requesting explanations when necessary. In addition, Audit & Supervisory Board Members share information on issues and other matters identified through audit activities and hold discussions on these as necessary.

In FY2024, a total of 15 Audit & Supervisory Board meetings were held and all Audit & Supervisory Board Members attended each of these meetings, as shown in the table below.

Advisory Bodies

As an advisory body to the Board of Directors, we have established the Nomination and Compensation Advisory Committee, the majority of which consists of Independent Outside Directors and Chair of which is an Outside Director. The purpose is to strengthen the independence, objectivity, and accountability of the functions of the Board regarding the nomination and compensation of Directors and contribute to the further enhancement of the corporate governance structure.

The table below shows the composition of the Nomination and Compensation Advisory Committee as of April 1, 2025, and attendance at Nomination and Compensation Advisory Committee meetings in FY2024.

<Specific content of deliberations>

Nomination:

• Status of discussions about the new INPEX Vision 2035 and Mid-Term Business Plan
• New Executive Officer structure for the fiscal year ending December 31, 2025
• Executive Officer structure in the new organization from April 2025
• Requirements for Executive and Outside Directors (redefining of requirements)
• Succession plan
• Candidates for Directors and Representative Directors
• Director and Audit & Supervisory Board Member skill matrix

Compensation:

• Review of the appropriateness of compensation levels (comparison with peer group)
• Revision of compensation for Directors
• Partial revision of the stock-based compensation system for Directors and Executive Officers
• Partial revision of the policy for determining the content of compensation and such for individual Directors
• Company financial results, management metric results, and individual division results for the fiscal year ended December 31, 2024
• Performance-linked compensation (bonuses and stock-based compensation) KPI results
• Proposal of Director bonuses and stock-based compensation for the fiscal year ended December 31, 2024

Nomination and compensation:

• Annual deliberation schedule

In terms of the other committees related to business execution, please refer to our Corporate governance.

Internal Control Related to Financial Reporting

Our Representative Director, President & CEO has responsibility for organizing and operating internal control related to financial reporting. Organization and operation of internal control related to financial reporting is conducted in accordance with the basic framework for internal control as indicated in ”On the Setting of the Standards and Practice Standards for Management Assessment and Audit concerning Internal Control Over Financial Reporting (Council Opinions)” published by the Business Accounting Council. Results are reported to the Board of Directors and an internal control report is issued.

Evaluation Results of Effectiveness of Board of Directors in FY2024

With the aims of regularly verifying that the Board of Directors is functioning appropriately and identifying issues to resolve for continuing improvement, the Company undertakes an evaluation of the effectiveness of the Board of Directors each year, and discloses the summary of the evaluation results. Based on this policy, the tenth evaluation was conducted in FY2024. Please refer to the evaluation method and summary of the results.

Skill Matrix

The Board of Directors is composed of Directors and Audit & Supervisory Board Members who have diverse and abundant experience and insight for executing INPEX Vision 2035 – Realizing a Responsible Energy Transition aimed at realizing net zero emissions in 2050.

Compensation for Directors

Basic Policy for Compensation

Our basic policy on compensation for Directors is as follows. The compensation shall:

• be attractive to recruit and retain qualified management human resources to realize our Mission
• raise awareness of the need to contribute to the sustainable growth and mid- to long-term enhancement of our corporate value
• be highly transparent and objective to ensure accountability to shareholders and other stakeholders.

Based on the basic policy, we have passed a resolution at a Board of Directors’ meeting as detailed below, on matters such as the policy for determining the content of compensation for individual Directors. In determining the content of compensation and such for each individual Director, as an advisory body to the Board, the Nomination and Compensation Advisory Committee, the Chair and majority of members of which are Outside Directors, conducts a multifaceted review including consistency between the draft and the decision policy. The Board respects the Committee’s report and confirms it aligns with the decision policy.

Compensation Levels

The levels of compensation for our Directors shall be set by a resolution of the Board of Directors once the Nomination and Compensation Advisory Committee reviews the appropriateness of the levels after conducting surveys and analysis of the levels for each position among peer groups in companies of similar sizes and industries by using data from an external research organization. The compensation shall be reviewed as necessary based on factors such as changes in the external environment.

Compensation Composition

The compensation composition of our Directors (excluding Outside Directors) consists of basic compensation in accordance with the duties and other aspects of each position, bonuses as short-term incentive compensation, and stock-based compensation as mid- to long-term incentive, as shown in the table below. Compensation for Outside Directors and Audit & Supervisory Board Members consists only of basic compensation from the perspective of the independence of their duties. The compensation for Directors, which includes basic compensation and bonuses, is paid from the total amount approved at the General Meeting of Shareholders.

The ratio of the President’s basic compensation, bonuses, and stock-based compensation when the target achievement level for each metric is 100% is set generally at 50%:30%:20%, respectively.

Process for Determining Compensation for Directors

As an advisory body to the Board of Directors, we have established the Nomination and Compensation Advisory Committee, the majority of which consists of Independent Outside Directors. The purpose is to strengthen the independence, objectivity, and accountability of the Board’s function in determining Directors’ compensation. Based on the report of the Committee, the Board establishes a policy for determining the amount of compensation for Directors and the method of calculating such amount.

The Committee shall, in principle, meet at least four times a year to deliberate major matters concerning the policy for determining the amount and calculation method of compensation and such for Directors and the details of compensation and such for each Director, and to provide advice and proposals to the Board. The Board makes decisions with the utmost respect for the content of such advice and proposals. The amount of compensation to be paid to each Director (including the final amount of bonuses based on the evaluation of the performance of the division in charge) shall be decided by the Representative Director, President & CEO, who is most familiar with our management situation, based on the content of the advice and proposals of the Committee.

Considering the external environment, social and economic trends, and other situations surrounding the Company, the Committee shall carefully deliberate on the appropriateness of the target value and calculation method for performance-based compensation and may make adjustments to the calculation of the amount of compensation for each Director by resolution of the Board.

We do not disclose the total amount of consolidated compensation and such paid to each Director or Audit & Supervisory Board Member. This is because there is no one Director or Audit & Supervisory Board Member whose consolidated compensation is 100 million yen or more, which is the disclosure standard stipulated in the Cabinet Office Ordinance on Disclosure of Corporate Affairs issued by the Financial Services Agency of Japan.

Training for Directors and Audit &  Supervisory Board Members

To ensure that Directors and Audit & Supervisory Board Members can effectively fulfill their roles and responsibilities, we provide comprehensive explanations on material matters such as our business and management strategies, along with business risks, to newly appointed members. We also provide each Director and Audit & Supervisory Board Member with the necessary training opportunities (training by experts, site visits, etc.). In FY2024, we provided training sessions for Executive Directors (one session) and Outside Directors (four sessions). These include two sessions on business risks.

In addition, we strive to enhance collaboration and business knowledge among the Board of Directors by arranging regular lectures and opinion exchange meetings with external experts on topics such as affairs in the Middle East.