CONTENTS
Value Creation Story
Message from Top Management
Business Structure Reforms
Human Capital / Human Capital Strategy
Evolution of the Business Platform / Innovation Management
Sustainability
Corporate Governance
Data Section
Idemitsu Integrated Report 2025 61
Outline of Corporate Governance System ■ Directors and Audit & Supervisory Board Members ■ Overview of Board of Directors and Assessment of Effectiveness ■ Selection of Officers / Skill and Career Matrix
Compensation for Executives ■ Overview of the Nomination and Compensation Advisory Committee ■ Status of the Activities by the Audit & Supervisory Board
Corporate Governance
Idemitsu Kosan considers it important to build good relationships with various stakeholders by improving management transparency and striving for sound and sustainable growth. We also earnestly incorporate diverse and open-minded opinions from those outside our company including shareholders, Independent Outside Directors and Independent Audit & Supervisory Board Members. We are aiming to be a company that is widely relied on and trusted by society through transparent and fair management.
62 Outline of Corporate Governance System 63 Directors and Audit & Supervisory Board Members 65 Overview of Board of Directors and Assessment of Effectiveness 67 Selection of Officers / Skill and Career MatrixCompensation for Executives
Overview of the Nomination and Compensation Advisory Committee
Status of the Activities by the Audit & Supervisory Board
CONTENTS
Value Creation Story
Message from Top Management
Business Structure Reforms
Human Capital / Human Capital Strategy
Evolution of the Business Platform / Innovation Management
Sustainability
Corporate Governance
Data Section
Idemitsu Integrated Report 2025 62
Outline of Corporate Governance System ■ Directors and Audit & Supervisory Board Members ■ Overview of Board of Directors and Assessment of Effectiveness ■ Selection of Officers / Skill and Career Matrix
WEB
Compensation for Executives ■ Overview of the Nomination and Compensation Advisory Committee ■ Status of the Activities by the Audit & Supervisory Board
WEB
WEB
Outline of Corporate Governance SystemCorporate Governance
The Board of Directors of Idemitsu makes important business decisions and supervises the execution of business in accordance with laws, regulations, the Articles of Incorporation, and other rules. We have increased the objectivity of the Board of Directors by stipulating in the Articles of Incorporation that the Board of Directors determines the Chair and any Director other than the President & Representative Director can be selected as Chair, separating the roles of the chair and the President & Representative Director. Since FY2021, an Outside Director serves as Chair of the Board of Directors. In addition, we delegate authority for business execution to the President & Representative Director, Directors (who serve concurrently as Executive Officers), Executive Officers, and General Managers with a view to facilitating speedier decision making.
Moreover, the execution of duties is audited by Audit & Supervisory Board Members and the Audit & Supervisory Board, which remain independent of the Board of Directors.
-
Outline of the System
Appointment/Dismissal
Appointment/Dismissal
Nomination and Compensation Advisory Committee
Safety and Safety Assurance Advisory Committee
Inquiry
Board of Directors
Audit
Report
Report
Supervision and Appointment/Dismissal
Audit & Supervisory Board/Audit & Supervisory Board Members
Audit
Collaboration
Appointment/ Dismissal
Financial Auditor (Auditing Firm)
Collaboration
Collaboration
Audit
Business Execution
Inquiry
Direction
Report
Report
Report
Inquiry Report
Report
Safety & Environmental Protection Headquarters
Supervision/ Direction
Audit
Report
Inquiry Report and Support
CNX Strategy Headquarters, Procurement Headquarters, Department, Internal Company, Affiliated Companies
Supervision/ Direction
Employees
Notice
Management Committee/Enterprise Risk Management Committee
President & Representative Director
Quality Assurance Headquarters
Committee for the Evaluation of International Controls over Financial Reporting
Internal Audit Office
DE&I
Committee
Personnel Committee
Advisory Board
General Meeting of Shareholders
Compliance/ Harassment Hotline
-
Corporate governance structure
Basic Policy on Corporate Governance
Corporate Governance Report (Japanese only)
Organizational form
Company with Audit & Supervisory Board Members
Number of Independent Officers
6
Number of Board of Directors' meetings held in FY2024
15
Number of Audit & Supervisory Board meetings held in FY2024
16
Nomination and Compensation Advisory Committee
Yes
Number of Nomination and Compensation Advisory Committee meetings held in FY2024
9
Accounting auditor
Deloitte Touche Tohmatsu LLC
Risk Management and Compliance Committee
Information Disclosure Committee
Procurement Committee
Investment & Finance Committee
Credit Committee
Derivatives Committee
Research & Development Committee
Makeup of Directors and Audit & Supervisory Board Members in FY2025
: Male
: Female: Outside Director
10
Percentage of women
Percentage of Outside Directors
20%
40%
Directors
Audit & Supervisory Board Member
2
Outside Audit & Supervisory Board Members
2
Percentage of women
50%
Percentage of Outside Audit & Supervisory Board Members
50%
Audit & Supervisory Board Members
CONTENTS
Value Creation Story
Message from Top Management
Business Structure Reforms
Human Capital / Human Capital Strategy
Evolution of the Business Platform / Innovation Management
Sustainability
Corporate Governance
Data Section
Idemitsu Integrated Report 2025 63
Outline of Corporate Governance System ■ Directors and Audit & Supervisory Board Members ■ Overview of Board of Directors and Assessment of Effectiveness ■ Selection of Officers / Skill and Career Matrix
Compensation for Executives ■ Overview of the Nomination and Compensation Advisory Committee ■ Status of the Activities by the Audit & Supervisory Board
Directors and Audit & Supervisory Board MembersAs of June 30, 2025 ■ Number of shares of the Company held □ Board of Directors meetings attended
DirectorsBoard of Directors meeting attendance figures are for FY2024.
Number of shares held are as of the end of March 2025.
Independent Outside DirectorsSkill Matrix P.68
Shunichi Kito
Representative Director and Chairman
194,985 shares
□ 15/15
Apr. 1980 Joined Idemitsu Kosan Co.,Ltd. ("Idemitsu Kosan")
Noriaki Sakai
Representative Director and President
117,312 shares
□ 15/15
Apr. 1985 Joined Idemitsu Kosan Co.,Ltd. ("Idemitsu Kosan")
Takeo Kikkawa
Outside Director
Chair of the Board of Directors Member of the Nomination and Compensation Advisory Committee
- shares
□ 15/15
Apr. 1987 Associate Professor, Aoyama Gakuin University School of Business
Apr. 1983 Joined Teijin Limited
Jun Suzuki
Outside Director
Chair of the Nomination and Compensation Advisory Committee
12,500 shares
□ 15/15
Apr. 2005 Deputy General Manager of Personnel Department, Idemitsu Kosan July 2008 Deputy General Manager of Accounting Department, Idemitsu Kosan
June 2011 Executive Officer and General Manager of Accounting Department, Idemitsu Kosan June 2013 Director, Managing Executive Officer and General Manager of Accounting
Department, Idemitsu Kosan
June 2014 Managing Director, Idemitsu Kosan
June 2017 Executive Vice President and Director, Idemitsu Kosan
Apr. 2018 Representative Director & Chief Executive Officer, Idemitsu Kosan
Apr. 2019 Representative Director, President and Chief Executive Officer, Idemitsu Kosan June 2022 Representative Director, President and Chief Executive Officer, Idemitsu Kosan Sept. 2022 President, Petroleum Association of Japan (current)
Apr. 2025 Representative Director and Chairman, Idemitsu Kosan (current)
Atsuhiko Hirano
Representative Director and Executive Vice President
44,205 shares
□ 15/15
Apr. 1985 Joined Showa Shell Sekiyu K.K. ("Showa Shell") Sept. 2002 General Manager, Shizuoka Area, Showa Shell
Sept. 2004 General Manager of Marketing Planning Division, Showa Shell
Mar. 2005 Executive Officer and General Manager of Marketing Planning Division, General Manager of Retail Sales Division, Showa Shell
Mar. 2006 Director, Showa Shell
Mar. 2009 Corporate Executive Officer, Showa Shell
Mar. 2013 Senior Corporate Executive Officer, Showa Shell
July 2014 Representative Director, President, Solar Frontier K.K.
Apr. 2019 Managing Executive Officer, Idemitsu Kosan Co., Ltd. ("Idemitsu Kosan") June 2020 Director, Managing Executive Officer, Idemitsu Kosan
June 2022 Director, Executive Vice President, Idemitsu Kosan
June 2023 Representative Director and Executive Vice President, Idemitsu Kosan (current)
Masakazu Idemitsu
Director (Non-Executive)
100 shares
□ 15/15
Apr. 2010 Councilor, Public Interest Incorporated Foundation Idemitsu Museum of Arts (current) Councilor, Public Interest Incorporated Foundation Idemitsu Culture and Welfare Foundation
Dec. 2015 Director and Vice President, Nissho Kosan Co., Ltd. ("Nissho Kosan") Apr. 2016 Representative Director and President, Nissho Kosan (current)
Apr. 2019 Director, Idemitsu Kosan Co.,Ltd. (current)
Representative Director and President, Showa Kosan Co., Ltd. ("Showa Kosan") (current) Apr. 2020 Representative Director and President, MI Power Co., Ltd. (current)
Oct. 2020 Representative Director, General Incorporated Association Idemitsu Philosophy Laboratory (current)
Apr. 2021 Representative Director, General Incorporated Association Idemitsu Kosan Corporate History and Philosophy Laboratory (current)
Aug. 2024 Representative Director and President, ZEN Co., Ltd. (current) Aug. 2024 Representative Director and President, ENN Co., Ltd. (current)
July 2010 Deputy General Manager of Tokuyama Refinery and Deputy General Manager of Tokuyama Plant, Idemitsu Kosan
July 2012 Deputy General Manager of Human Resource Department, Health Insurance Union President and Corporate Pension Fund President, Idemitsu Kosan
July 2015 Deputy General Manager of Accounting Department, Idemitsu Kosan June 2017 General Manager of Accounting Department, Idemitsu Kosan
July 2018 Executive Officer and General Manager of Accounting Department, Idemitsu Kosan Apr. 2019 Executive Officer and General Manager of Finance Department, Idemitsu Kosan July 2020 Senior Executive Officer, Chief Financial Officer, Idemitsu Kosan
June 2021 Director, Managing Executive Officer, CFO, Idemitsu Kosan June 2022 Director, Executive Vice President, Idemitsu Kosan
June 2023 Representative Director, Executive Vice President, Idemitsu Kosan Apr. 2025 Representative Director and President, Idemitsu Kosan (current)
Masahiko Sawa
Representative Director and Executive Vice President
49,669 shares
□ 15/15
Apr. 1990 Joined Idemitsu Kosan Co.,Ltd. ("Idemitsu Kosan")
Apr. 2013 Deputy General Manager of Gas Business Department, Idemitsu Kosan June 2017 General Manager of Technology & Engineering Center, Idemitsu Kosan
Apr. 2019 Executive Officer and General Manager of Hokkaido Refinery, Idemitsu Kosan June 2021 Senior Executive Officer (in charge of Manufacturing & Technology), Idemitsu Kosan June 2022 Director, Managing Executive Officer, Idemitsu Kosan
June 2024 Director, Executive Vice President, Idemitsu Kosan
June 2025 Representative Director and Executive Vice President, Idemitsu Kosan (current)
Kazunari Kubohara
Director (Non-Executive)
- shares
□ 15/15
Dec. 2008 Registered as an attorney, established Kyuhodo Law Firm (current)
Apr. 2010 Committee Member, Tokyo Local Third-Party Committee to Check Pension Records, Ministry of Internal Affairs and Communications
Apr. 2011 Delegate, Dai-Ichi Tokyo Bar Association
Sept. 2015 Auditor, General Incorporated Association for Realizing Prescription of Adequate Amount of Anti-Dementia Drugs
June 2016 Outside Statutory Auditor, Class Technology Co., Ltd.
July 2017 Auditor, Medical Corporation Hakueikai Miyake Dental Clinic (current) Mar. 2018 Delegate, Japan Federation of Bar Associations
Apr. 2018 Vice Chairperson, the Legal Services Obstruction Countermeasures Committee, Dai-Ichi Tokyo Bar Association
Apr. 2019 Director, Idemitsu Kosan Co.,Ltd. (current)
Oct. 1993 Associate Professor, Institute of Social Science, University of Tokyo Apr. 1996 Professor, Institute of Social Science, University of Tokyo
Apr. 2007 Professor, Hitotsubashi University Graduate School of Commerce and Management Jan. 2013 President, Business History Society of Japan
June 2013 Outside Director, Mitsubishi Chemical Holdings Corporation
Apr. 2015 Professor, Graduate School of Innovation Studies, Tokyo University of Science (currently Graduate School of Management, Tokyo University of Science)
June 2017 Director, Idemitsu Kosan Co.,Ltd. (current)
Apr. 2020 Professor, Graduate School of International Management, International University of Japan
Apr. 2021 Vice President and Professor, Graduate School of International Management, International University of Japan
Sept. 2023 President, International University of Japan (current)
Shiori Nagata
Outside Director
Member of the Nomination and Compensation Advisory Committee Advisor of the DE&I Promotion Committee
372 shares
□ 11/11
Apr. 2000 Joined Deloitte Tohmatsu Consulting, Inc.
Jan. 2005 General Manager of Corporate Planning, Tohato Inc.
Apr. 2006 General Manager of Corporate Planning, Accounting, Financing and Supply Chain Management, Tohato Inc.
Jan. 2007 Unison Capital Inc.
Jan. 2011 Vice President, INCJ, Ltd.
Jan. 2015 Executive Officer, General Manager of the Recreational Marine Business Unit, Yanmar Co., Ltd.
Representative Director and President, YANMAR Marine International B.V. Apr. 2020 Director, Chief Strategy Officer, Head of the Management Strategy Division,
Yanmar Holdings Co., Ltd.
Nov. 2022 Temporary Committee Member, Industrial Structure Council, Ministry of Trade, Economy and Industry (Committee on New Direction of Economic and Industrial Policies, Manufacturing Industry Committee) (current)
Apr. 2024 Director, Yanmar Holdings Co., Ltd.
June 2024 Member of the Board Member of the Audit Committee, NEC Corporation (current) Director, Idemitsu Kosan Co.,Ltd. (current)
Sept. 2024 Administrative Counsel Member of Japan External Trade Organization (current)
Apr. 2002 General Manager, Bio-Medical Evaluation Research Department, Pharmaceutical Discovery Research Laboratories, Teijin Limited
Oct. 2003 General Manager, Pharmaceutical Planning Department, Teijin Pharma Apr. 2011 Teijin Group Chief Representative of Europe President, Teijin Holdings
Netherlands B.V.
Apr. 2012 Teijin Group Corporate Officer Chief Marketing Officer and Director for BRICs Business
Apr. 2013 Teijin Group Executive Officer
General Manager, Advanced Fibers & Composites Business Group General Manager, Carbon Fibers & Composites Business Unit President and Representative Director, Toho Tenax Co., Ltd.
June 2013 Member of the Board, Executive Officer, Teijin Limited
General Manager, Advanced Fibers & Composites Business Group General Manager, Carbon Fibers & Composites Business Unit President and Representative Director, Toho Tenax Co., Ltd.
Apr. 2014 President and CEO, Representative Director of the Board, Teijin Limited Apr. 2022 Chairperson, Member of the Board, Teijin Limited
Executive Member of the Policy Board, Japan Business Federation ("Keidanren") (current)
June 2022 Outside Director, The Midori Kai Co., Ltd. (current)
Chairman, Japan-Thailand Trade and Economic Committee, Keidanren (current)
Jan. 2023 Member, APEC Business Advisory Council (ABAC) (current)
Apr. 2023 Vice Chairman, Executive Director, Japan Association of Corporate Executives (KEIZAI DOYUKAI) (current)
June 2023 Senior Advisor, Teijin Limited (current)
External Director, MS&AD Insurance Group Holdings, Inc. (current) Director, Idemitsu Kosan Co.,Ltd. (current)
Mar. 2025 Executive Member of the Council for Science, Technology, and Innovation (Cabinet Office, JAPAN) (current)
Mio Kashiwamura
Outside Director
Member of the Nomination and Compensation Advisory Committee
- shares
□ -/-
Apr. 1998 Joined Recruit Co., Ltd. (currently Recruit Holdings Co., Ltd.) Apr. 2004 Executive Director, SHANGHAI RECRUIT ADVERTISING CO., LTD.
Oct. 2011 Sales MD Executive Manager of the 2nd MD Department, Ponpare Office, CAP Company, Recruit Co., Ltd.
Apr. 2012 Executive Directing Manager of the Beauty Information Department, CAP Company, Recruit Co., Ltd.
Oct. 2012 Senior Vice President, Recruit Lifestyle Co., Ltd. Executive Manager of the Beauty Information Department
Apr. 2015 Senior Vice President, Recruit Holdings Co., Ltd.
Apr. 2016 Representative Director and President, Recruit Staffing Co., Ltd.
Apr. 2018 SBU Executive Officer, Recruit Global Staffing B.V. (currently RGF Staffing B.V.) Apr. 2019 Senior Vice President, Recruit Co., Ltd. Representative Director and President,
Recruit Marketing Partners Co., Ltd.
Apr. 2020 Senior Vice President, Recruit Holdings Co., Ltd. Apr. 2025 Executive Vice President, Recruit Co., Ltd. (current) June 2025 Outside Director, Idemitsu Kosan Co.,Ltd. (current)
CONTENTS
Value Creation Story
Message from Top Management
Business Structure Reforms
Human Capital / Human Capital Strategy
Evolution of the Business Platform / Innovation Management
Sustainability
Corporate Governance
Data Section
Idemitsu Integrated Report 2025 64
Outline of Corporate Governance System ■ Directors and Audit & Supervisory Board Members ■ Overview of Board of Directors and Assessment of Effectiveness ■ Selection of Officers / Skill and Career Matrix
Compensation for Executives ■ Overview of the Nomination and Compensation Advisory Committee ■ Status of the Activities by the Audit & Supervisory Board
Directors and Audit & Supervisory Board Members
Board of Directors and Audit & Supervisory Board meeting attendance figures are for FY2024.
Number of shares held are as of the end of March 2025
Skill Matrix P.68
As of June 30, 2025 ■ Number of shares of the Company held □ Board of Directors meetings attended ■ Audit & Supervisory Board meeting attended
Audit & Supervisory Board MembersHidefumi Kodama
Audit & Supervisory Board Member
12,401 shares
□ 15/15
16/16
Nami Kitamura
Audit & Supervisory Board Member
30,085 shares
-/-
-/-
Independent Outside Audit & Supervisory Board MembersYumiko Ichige
Outside Audit & Supervisory Board Member
- shares
□ 15/15
16/16
Masahiko Tezuka
Outside Audit & Supervisory Board Member
- shares
11/11
11/11
April 1987 Joined Idemitsu Kosan Co.,Ltd. ("Idemitsu Kosan")
July 2011 Manager of Finance Management Section, Accounting Department, Idemitsu Kosan
July 2013 Manager of Planning & Coordination Office, Exploration & Production Department 1, and Director, Idemitsu Kosan and General Manager of General Affairs Department, Idemitsu Oil & Gas
April 2015 General Manager of Exploration & Production Planning Department, Idemitsu Kosan
July 2017 General Manager of Public Relations & CSR Affairs Office and in charge of brand strategy, Idemitsu Kosan
April 2018 General Manager of Public Relations Department, and in charge of brand strategy, Idemitsu Kosan
April 2019 General Manager of Coal Business Department, Idemitsu Kosan
April 2021 General Manager of Coal and Energy Solution Department, Idemitsu Kosan June 2022 Audit & Supervisory Board Member, Idemitsu Kosan (current)
Apr. 1990 Joined Showa Shell Sekiyu K.K. ("Showa Shell")
Apr. 2009 General Manager of New Business Promotion Department, Showa Shell Seconded to the Industry-Academia Collaboration Initiative Nonprofit Organization
Mar. 2012 Head of Overseas Intellectual Property Strategy Office, Showa Shell
Oct. 2014 General Manager of Product Development Department, Atsugi Research Center, Technology Division, Solar Frontier K.K.
Apr. 2016 General Manager of Marketing Planning Division, Showa Shell
Apr. 2017 General Manager of Energy Solutions Business Division, Showa Shell
Apr. 2019 General Manager of Public Relations Department, Idemitsu Kosan Co.,Ltd. ("Idemitsu Kosan")
July 2021 Executive Officer, General Manager of Public Relations Department, Idemitsu Kosan
Mar. 2023 Executive Officer, General Manager of Bitumen Department, Advanced Materials Company, Idemitsu Kosan (current)
June 2025 Outside Audit & Supervisory Board Member, Idemitsu Kosan Co.,Ltd. (current)
April 1989 Registered as an attorney (Daini Tokyo Bar Association) Law Department, IBM Japan, Ltd.
Dec. 2007 Partner, Nozomi Sogo Attorneys at Law (current) April 2009 Vice Chairman, Daini Tokyo Bar Association
June 2012 Outside Director, NEC Networks & System Integration Corporation April 2014 Executive Director, Japan Federation of Bar Associations
May 2014 Outside Audit & Supervisory Board member, AEON MALL Co., Ltd.
Dec. 2014 Outside Director, Audit & Supervisory Committee member, SANYO TRADING CO., LTD.
Dec. 2016 Outside Director, Audit & Supervisory Committee member, FOOD & LIFE COMPANIES LTD.
June 2018 Outside Director, ITOHAM YONEKYU HOLDINGS INC.
June 2018 National Research and Development Agency Council member, Ministry of Land, Infrastructure, Transport and Tourism
Jan. 2019 Information and Communications Council member, Ministry of Internal Affairs and Communications (current)
Mar. 2020 Outside Director, ASKUL Corporation (current)
June 2022 Outside Audit & Supervisory Board Member, Idemitsu Kosan Co.,Ltd. (current) Oct. 2023 Board Director (Non-Executive) Audit and Supervisory Committee members of
Hitachi Astemo, Ltd. (currently, Astemo, Ltd.) (current)
Oct. 1986 Joined Chuo Audit Corporation
Mar. 1990 Registered as a Certified Public Accountant July 2002 Representative, ChuoAoyama Audit Corporation
Oct. 2005 Executive board member, ChuoAoyama Audit Corporation May 2006 COO, ChuoAoyama Audit Corporation
Oct. 2007 Partner, Executive board member, Deloitte Touche Tohmatsu (current Deloitte Touche Tohmatsu LLC)
July 2016 Executive board member, The Japanese Institute of Certified Public Accountants (JICPA)
July 2019 Chairmen, JICPA
CEO, Japan Foundation for Accounting Education and Learning May 2022 Auditor, Japan Association of Corporate Directors (current) July 2022 Advisor, JICPA
Chair of Councilors, Financial Accounting Standards Foundation (current) June 2023 Outside Director (and Audit & Supervisory Committee Member), Mizuho Bank,
Ltd.
Sep. 2023 Outside Auditor, Kagayaki Holdings, Inc (current)
June 2024 Outside Audit & Supervisory Board Member, Idemitsu Kosan Co.,Ltd. (current) June 2025 Outside Director, Mizuho Financial Group, Inc. (current)
CONTENTS
Value Creation Story
Message from Top Management
Business Structure Reforms
Human Capital / Human Capital Strategy
Evolution of the Business Platform / Innovation Management
Sustainability
Corporate Governance
Data Section
Idemitsu Integrated Report 2025 65
Outline of Corporate Governance System ■ Directors and Audit & Supervisory Board Members ■ Overview of Board of Directors and Assessment of Effectiveness ■ Selection of Officers / Skill and Career Matrix
Compensation for Executives ■ Overview of the Nomination and Compensation Advisory Committee ■ Status of the Activities by the Audit & Supervisory Board
Overview of Board of Directors and Assessment of Effectiveness Overview of the Board of DirectorsIn FY2024, we systematically discussed business structure reforms, human capital strategies, the evolution of the business platform, management initiatives that will contribute to enhancing corporate value, and other matters to achieve the
Key Themes Content of the deliberations by the Board of Directors
In addition to proposals relating to strengthening the profitability of our existing businesses, the Board of Directors also discussed proposals relating to carbon neutrality initiatives, investor relations, the General Meeting of Shareholders and shareholder returns.
Main proposals: ● Measures to realize management that is conscious of capital costs and stock prices (analysis
Business strategies relating to diverse resource conservation and circulation solutions of the current situation and formulation of plans in relation to market valuation etc.)
Business struc- ● Smart Yorozuya concept and Mobility Yorozuya business strategy ● Purchase of treasury stock in accordance with our shareholder returns policy
ture reforms ● Progress in achieving profitability of Nghi Son Refinery ● Policy for dealing with strategic holdings of listed shares
Business strategies for the functional materials business ● Measures for the further expansion in the shareholder and investor base (change in share-
Review of the refineries and complexes system holder returns policy)
Restructuring of the R&D system ● Market reactions following earnings announcements
Business structure reforms for carbon neutrality in 2050 ● Review of the Annual General Meeting of Shareholders and initiatives for the next fiscal year
Human capital strategy
Evolution of the Business Platform
The Board of Directors discussed the revision of our personnel system and other matters to strengthen the relevance of our personnel system and management and business strategies.
Main proposals:
Revision of the Action Mindset and review of personnel policies to embody our Management Philosophy
The Board of Directors deliberated on proposals to contribute to the evolution of governance that supports our business platform.
Main proposals:
Basic internal controls policy (strengthen the management support and monitoring functions relating to internal controls by strengthening the audit system for major affiliated companies)
Selection of key themes to be discussed by the Board of Directors
Future response to further improve the effectiveness of the Board of Directors
Annual audit policy
-
Main Agenda Items Discussed by the Board of Directors
Medium-term Management Plan (FY2023 to FY2025) as the key themes to be debated by the Board of Directors. Moreover, in addition to resolutions and reports, we added reports (policy inquiries) as a deliberation category to support the gradual deliberation of important matters.
Assessment of the Effectiveness of the Board of DirectorsOur policy is to have all of the Directors and Audit & Supervisory Board Members assess the effectiveness of the Board of Directors as a whole and disclose a summary of the results of their assessment at least once a year. We conduct questionnaires of all the Directors and Audit & Supervisory Board Members. To improve the effectiveness of the Board of Directors, we review and strive to improve the assessment process and other points every year. In our design of the questionnaire items and analysis of the answers, we are advised by an external specialist organization.
Corporate lawyers conduct individual interviews with all Outside Officers. This activity make it possible to grasp the Officers' awareness of problems that cannot be identified through questionnaires alone. This leads to discussions on the identification of issues and initiatives toward a further improvement in the effectiveness of the Board of Directors. Moreover, we expanded the scope of this activity to include all Officers in FY2024. We collected their opinions on the challenges and the
Note: The above is a partial list of agenda items. The Board of Directors has also deliberated on other matters deemed necessary under laws, regulations, and the Idemitsu Articles of Incorporation and passed resolutions on those matters.
measures to solve them from both internal and external perspectives to further enhance discussion on our management challenges, strategies and other areas.
Meetings by Independent Outside Directors and
Independent Outside Audit & Supervisory Board Member
To further enhance discussions at Board of Directors' meetings, we hold meetings by Independent Outside Directors and
Independent Outside Audit & Supervisory Board Member 10 times a year. These meetings are comprised only of Independent Outside Directors and Independent Outside Audit & Supervisory Board Members. The meeting participants exchanged information and shared awareness about matters such as the following.
-
Details of the Process for the Assessment of the Board of Directors' Effectiveness
Applicable individuals
Questions
All Directors and Audit & Supervisory Board Members
Composition and operation of the Board of Directors
Nomination and compensation
Survey method Anonymous
Treatment of shareholders and investors
Response to the FY2023 effectiveness assessment
General effectiveness of the Board of Directors
* Answers to each question are on a 5-point scale, and space is provided for open-ended responses.
Measures to address
Questionnaire survey conducted
Individual interviews conducted based on the results of the questionnaire
Results of the questionnaire and interviews reported to and discussed by the Board of Directors
challenges which were identified in the step on the left and elsewhere discussed by the Board of Directors
Interview
Interviewer
Disclosure of results
Corporate lawyer
Anonymous
Applicable All Directors and
individuals Audit & Supervisory
Board Members
-
Main Themes in Meetings by Independent Outside Directors and Independent Outside Audit & Supervisory Board Member
Theme Contents
Business structure reforms Human capital strategy
Evolution of the Business Platform
Current situation and challenges in the power and renewable energy business in Japan
Overview of lithium battery material initiatives (solid electrolytes)
Distribution structure and sales department strategy for the oil industry
Human capital strategy for achieving the Medium-term Management Plan
Risk management and compliance initiatives
Internal control initiatives (FY2023 review and FY2024 basic policy)
Ammonia business concept
Smart Yorozuya concept and Mobility Yorozuya business strategy
ICT medium-term challenges and DX strategy
Introduction to safety, environment and quality assurance activities, results in FY2024 and plan for FY2025
CONTENTS
Value Creation Story
Message from Top Management
Business Structure Reforms
Human Capital / Human Capital Strategy
Evolution of the Business Platform / Innovation Management
Sustainability
Corporate Governance
Data Section
Idemitsu Integrated Report 2025 66
Outline of Corporate Governance System ■ Directors and Audit & Supervisory Board Members ■ Overview of Board of Directors and Assessment of Effectiveness ■ Selection of Officers / Skill and Career Matrix
Compensation for Executives ■ Overview of the Nomination and Compensation Advisory Committee ■ Status of the Activities by the Audit & Supervisory Board
Overview of Board of Directors and Assessment of Effectiveness
Initiatives Based on the Results for the Previous Fiscal Year and the Assessment Results for this Fiscal YearBased on the challenges identified in FY2023, we selected and systematically discussed the following key themes that should be subject to discussion in Board of Directors' meetings and Meeting by Independent Outside Directors and Independent Outside Audit & Supervisory Board Member to further enhance discussion on management challenges, strategies and other issues in FY2024.
Business structure reforms
We focused discussions on the projects we will prioritize tacking to realize carbon neutrality (blue ammonia, e-methanol, SAF and lithium sold electrolytes), growth of existing businesses, and financial and non-financial targets in anticipation of formulating our next Medium-term Management Plan.
Message from the Chairman of the Board of Directors | Outside Director Takeo Kikkawa
Advice on Governance and Management Issues as Outside Directors
I believe that the functions of outside directors in stock companies can be broadly divided into supervision and advice. Both of these functions are basically working properly in our company. Currently, the increasing responsibility for energy supply and the transition to carbon neutrality are intertwined in a complex manner. In this situation, our biggest management challenge is to set an appropriate investment portfolio and then put it into action. In the process of taking on this challenge, our Outside Directors proactively speak out mainly on the direction of business transformation and risk management by leveraging their respective areas of expertise.
However, that does not mean our governance structure is without problems. Despite the global expansion of our business, our Directors and Audit & Supervisory Board
Management strategies based on medium- to longterm environmental assumptions
Human capital strategy and business platform evolution
Important management challenges for sustainable improvement in corporate value
Medium-term Management Plan and business execution status
Sustainability
Members are all Japanese. We lack diversity in terms of internationality. Information
sharing between Directors and Audit & Supervisory Board Members is also insufficient. I believe there is room for improvement in these areas.
The biggest challenge facing our company is that we have a strong supply side approach but a weak market-in approach. Energy
We also discussed themes that will contribute to evolving our business platform, including human capital, DX and IT strategies.
demand in Japan toward 2040 will increase for electric power, remain flat for gas and decrease for oil. Under such circumstances, we are lagging behind in pursuing business opportunities in the expanding electric power market. The success or failure of new
Human capital strategy
Succession plan
Business platform evolution
DX and IT strategies
Corporate governance
Risk management
energy businesses depends on whether or not there is an off-taker. We have two trump cards of ammonia and black pellets with coal-fired power plant operators taking on the role of off-takers. Nevertheless, we currently lack the resolve to lead the way in carbon
As a result of the effectiveness assessment in FY2024, we have determined that the overall effectiveness of the Board of Directors has been secured. The challenges identified to further improve effectiveness are "further strengthen strategic discussions" and "report and deliberate on the overall risk management structure." As a result of those discussions, we will implement the following specific initiatives.
Further strengthen strategic discussions
We will deepen discussions on overall strategy and individual key points discussed by the business executives when formulating our next Medium-term Management Plan in Board of Directors' meetings and Meeting by Independent Outside Directors and Independent Outside Audit & Supervisory Board Member. Moreover, we will look to improve operational aspects of Board of Directors' meetings and Meeting by Independent Outside Directors and Independent Outside Audit & Supervisory Board Member.
neutrality for coal-fired power plant operators. Moreover, although we have experience and assets in relation to solar and geothermal power generation that other companies do not have, we have been unable to effectively incorporate renewable energy into our strategy for carbon neutrality. To solve these problems, I believe we need to promote a transition to a market-in approach for the electric power market.
Carbon neutrality does not mean reducing CO2 emissions to zero, but rather balancing CO2 emissions with capture and absorption to achieve net zero CO2 emissions. Accelerating the pace of CCUS is essential to increasing CO2 capture. Our company has great potential for CCUS. The use of fossil fuels is expected to continue in the future due to the increase in demand for electric power. We have sufficient capability to roll out our noble two-front strategy of leading this transition while fulfilling our responsibilities as an energy supplier. I look forward to seeing this capability demonstrated under the leadership of our new President & Representative Director Sakai.
Report and deliberate on the overall risk management structure
We will increase the involvement of the Board of Directors in risk management policies and responses. In this way, we will strengthen the function of the Board of Directors to supervise the operation status of the risk management structure for overall management. Moreover, we will improve reporting and deliberations on serious incidents and troubles that have a large social and financial impact.
CONTENTS
Value Creation Story
Message from Top Management
Business Structure Reforms
Human Capital / Human Capital Strategy
Evolution of the Business Platform / Innovation Management
Sustainability
Corporate Governance
Data Section
Idemitsu Integrated Report 2025 67
Outline of Corporate Governance System ■ Directors and Audit & Supervisory Board Members ■ Overview of Board of Directors and Assessment of Effectiveness ■ Selection of Officers / Skill and Career Matrix
Compensation for Executives ■ Overview of the Nomination and Compensation Advisory Committee ■ Status of the Activities by the Audit & Supervisory Board
Selection of Officers / Skill and Career Matrix Nomination of Director and Audit & Supervisory Board Member CandidatesNomination of Director candidates
We believe a certain number of Directors familiar with Idemitsu's business and issues is required for the Board of Directors to fulfill its roles and responsibilities, and that it is important to ensure diversity of the required knowledge, experience, and abilities of each Director so that we can secure its independence and objectivity. Based on the above thinking, we utilize human capital standards, skill and career matrices, and other tools to make appointments in consideration of the overall balance.
The President & Representative Director submits a draft to the Nomination and Compensation Advisory Committee with a full assessment of the abilities, knowledge and performance of individual candidates. The Board of Directors then finalizes its decision on the selection based on recommendations of the Nomination and Compensation Advisory Committee.
In addition, the Nomination and Compensation Advisory Committee deliberates on the dismissal of Directors as necessary and reports its conclusions to the Board of Directors.
a full assessment of the abilities, knowledge and performance of individual candidates. The Board of Directors then finalizes its decision on the selection based on recommendations of the Nomination and Compensation Advisory Committee after obtaining the consent of the Audit & Supervisory Board.
Succession plan
The Nomination and Compensation Advisory Committee has adopted a mechanism for deliberating on the selection and training of next-generation officer candidates based on the longterm plan and reporting to the Board of Directors. Currently, it is working on selection and training of candidates starting with a succession plan for the President & Representative Director.
Message from the Chairman of the Nomination and Compensation Advisory Committee (p. 70)
Officer training
We invite external experts to give officer training at least once a year in principle on the areas necessary for our officers to be able to deliberate on our management issues and other matters. We held this training in FY2024 on the themes of changes in the business environment and corporate behavior
with the aim of obtaining suggestions for our business structure reforms. All our Directors and Audit & Supervisory Board Members participated in this training.
Skill and Career MatrixIt is extremely important for Directors and Audit & Supervisory Board Members, who have a variety of knowledge and experiences, to actively discuss matters at the Board of Directors' meetings, and to enhance the quality of discussions regarding overall management strategies including human capital strategies.
Since preparing and disclosing the skills matrix in 2020, we have reviewed it as necessary in light of the management issues we face. We reviewed the fields in which we expect our officers to contribute based on the Medium-term Management Plan (FY2023 to FY2025). We also take into account diversity and appoint officers with knowledge and experience in those fields. For the areas that the Board of Directors do not have suffi-
cient skills (issues concerning economic security or other areas for which high expertise is required), we supplement them by inviting outside experts to Advisory Board meetings and officer training sessions.
Nomination of Audit & Supervisory Board Member candidates
We select Audit & Supervisory Board Member candidates who have appropriate experience and abilities as well as the necessary financial, accounting, and legal knowledge. In addition, for full-time Audit & Supervisory Board Member candidates, we select those who are familiar with Idemitsu's business and the issues we face, and who are able to carry out auditing and supervision in an accurate, fair, and efficient manner. We utilize human capital standards, skill and career matrices, and other tools to make appointments in consideration of the overall balance.
The President & Representative Director submits a draft to the Nomination and Compensation Advisory Committee with
Perspective
Areas of expected contribution
Reason for selection of areas of expected contribution
To lead change
Corporate philosophy / business strategy
The Officers are required to deeply understand and implement the Company's business objectives and the purpose of its existence, and lead the management to realize the Vision for 2050 based on perspectives such as economic security, SDGs, and DX in the context of a discontinuous management environment.
Human capital development / DE&I
The Officers are required to promote the development of human capital and increase DE&I in order to realize "A strong and flexible team that can shape the future, no matter what the future has in store," which the Company aims to incorporate in its human capital strategy.
Co-creation / international business
The Officers are required to build a co-creation relationship with diverse partners based on an international perspective in order to enhance its social implementation capabilities toward the realization of the Vision for 2050.
To support business management
Manufacturing / research
The Officers are required to have knowledge of safety in manufacturing and technology, knowledge of trends in innovative advanced technologies, and knowledge of research areas.
Marketing / supply
The Officers are required to have knowledge of marketing and sales in each field of business, knowledge of retail marketing, and knowledge of procurement and supply.
Governance / legal affairs
The Officers are required to have knowledge of governance from a shareholder's perspective, knowledge of risk management related to business operations, and knowledge of legal affairs.
Finance / accounting / tax
The Officers are required to have knowledge of finance, accounting, and tax affairs that contribute to ensuring capital efficiency and profitability.
-
List of fields in which Directors and Audit & Supervisory Board Members are expected to contribute
CONTENTS
Value Creation Story
Message from Top Management
Business Structure Reforms
Human Capital / Human Capital Strategy
Evolution of the Business Platform / Innovation Management
Sustainability
Corporate Governance
Data Section
Idemitsu Integrated Report 2025 68
Outline of Corporate Governance System ■ Directors and Audit & Supervisory Board Members ■ Overview of Board of Directors and Assessment of Effectiveness ■ Selection of Officers / Skill and Career Matrix
Compensation for Executives ■ Overview of the Nomination and Compensation Advisory Committee ■ Status of the Activities by the Audit & Supervisory Board
Skill matrixName
Terms in office (years)
Areas in which the Company particularly expects Directors and Audit & Supervisory Board Members to contribute
Reasons for having marked the areas with ● as areas of expected contribution
Corporate philosophy / business strategy
Human capital development / DE&I
Co-creation / international business
Manufacturing
/ research
Marketing / supply
Governance / legal affairs
Finance / accounting / tax
Directors
Shunichi Kito
12
●
●
●
●
Served as Representative Director and Chief Executive Officer since 2018, leading management integration. Assumed office as Representative Director and Chairman of the Company in April 2025. The Company expects him to promote growth strategies aimed at realizing the Vision for 2050, based on his insight from his experience as a Director in charge of accounting, human capital, and fuel business.
Noriaki Sakai
4
●
●
●
●
Assumed office as Representative Director and President of the Company in April 2025. The Company expects him to lead and to strengthen management foundations aimed at sustainable development, including business structure reforms and human capital investment, based on his deep knowledge and expertise from past positions in accounting, finance and personnel affairs, and his insight regarding governance mainly involving safe environment and quality assurance.
Atsuhiko Hirano
5
●
●
●
●
The Company expects him to promote business structure reforms, including establishment of a co-creation relationship based on his experience as president of an operating company, his insight from being an officer in charge of corporate planning, and his extensive international business experience in key positions in the solar and petroleum divisions.
Masahiko Sawa
3
●
●
●
●
The Company expects him to promote drafting of medium- to long-term management strategies and company-wide carbon neutral transformation as Head of Carbon Neutral Transformation Strategic Headquarters, and to lead business structure reforms as a technical manager, in addition to providing his expertise for R&D and manufacturing and technology divisions. He also promotes the Company's DE&I, such as workstyle reforms in the manufacturing and technology divisions.
Masakazu Idemitsu
6
●
●
The Company expects him to strengthen its sustainable development and management foundation in accordance with its Management Philosophy based on his deep understanding of The Origin of Management and the purpose of the Company's existence as a member of the founding family and his long-term perspective on governance as a major shareholder.
Kazunari Kubohara
6
●
●
The Company expects him to strengthen its management foundations from a multifaceted governance perspective based on his expertise related to corporate law and social problems as an attorney and his familiarity with the real estate business.
Takeo Kikkawa
Outside
8
●
●
●
The Company expects him to strengthen its management foundations and supervise as well as advise business structure reforms as an Outside Director, based on his insight related to energy transition trends both in and outside Japan and knowledge of related advanced technologies, and his ample knowledge related to corporate management as an expert in business administration, particularly regarding the energy industry theory.
Jun Suzuki
Outside
2
●
●
●
●
The Company expects him to supervise and advise the strengthening of its management foundations and the implementation of business structure reforms as an Outside Director, based on his knowledge of corporate management and governance from his experience as president and chairperson of a global chemical company, and his knowledge of a wide range of businesses such as chemicals and pharmaceuticals and related technologies.
Shiori Nagata
Outside
1
●
●
●
●
Possesses a strategic perspective and expert knowledge on management planning and administration from her career experience in a wide range of industries. The Company expects her to promote DE&I, provide strategic advice, and contribute to improving the organization and the decision-making process as an Outside Director.
Mio Kashiwamura*
Outside
-
●
●
●
●
Has held important positions at global human capital companies. The Company expects her to provide supervision and advice toward strengthening efforts in the domain of human capital and business structure reform as an Outside Director, based on her extensive experience and wide-ranging knowledge in areas such as management, human capital, public relations and liaison, and sustainability.
Audit & Supervisory Board Member
Hidefumi Kodama
3
●
●
●
The Company expects him to provide audits from finance, accounting, and international business perspectives based on his experience drafting medium- to long-term management strategies, serving as a person responsible for financial management, and managing international resources and the coal businesses
Nami Kitamura*
-
●
●
●
●
Possesses extensive experience in such fields as research, intellectual property, promoting new businesses, and public relations, with wide-ranging knowledge and expertise. The Company expects her to provide audits from the perspectives of corporate affairs, research, and new business domains.
Yumiko Ichige
Outside
3
●
●
●
Possesses ample experience as an attorney, and has ample knowledge of corporate management as an expert in corporate law. The Company expects her to provide guidance and audits from the perspectives of business strategy, governance, etc., since she actively promotes the empowerment of women in the workplace, and is well versed in the field of intellectual property from her experience as a member of a council in the Japan Patent Office.
Masahiko Tezuka
Outside
1
●
●
●
●
Has held key positions at major auditing firms, and served as Executive Board Member and Chairman and President of the Japanese Institute of Certified Public Accountants. The Company expects him to provide guidance and audits from the perspectives of management strategy, international business, governance, etc. as outside Audit & Supervisory Board Member, based on his extensive experience in auditing global businesses
indicates areas to which the Company particularly expects the relevant Director or Audit & Supervisory Board Member to contribute and does not represent all of his/her skill and experience.
indicates independent officers * indicates newly appointed officers
CONTENTS
Value Creation Story
Message from Top Management
Business Structure Reforms
Human Capital / Human Capital Strategy
Evolution of the Business Platform / Innovation Management
Sustainability
Corporate Governance
Data Section
Idemitsu Integrated Report 2025 69
Outline of Corporate Governance System ■ Directors and Audit & Supervisory Board Members ■ Overview of Board of Directors and Assessment of Effectiveness ■ Selection of Officers / Skill and Career Matrix
Compensation for Executives ■ Overview of the Nomination and Compensation Advisory Committee ■ Status of the Activities by the Audit & Supervisory Board
Compensation for ExecutivesBasic policy on executive compensation
Our basic policies regarding compensation for our Directors and Executive Officers (at Senior Executive Officer level or above) are to increase corporate performance and corporate value over the medium to long term to realize the Group's management vision and to establish a compensation system and decision-making process that is transparent, rational, and fair so that we can fulfill our accountability to customers, society, the environment, shareholders, business partners, employees, and other stakeholders. Based on this policy, our executive compensation system is as follows:
Compensation standard
Compensation levels for Directors, etc. shall be reviewed as appropriate in light of changes in the business environment
Process for determining compensation
The Board of Directors receives the Nomination and Compensation Advisory Committee's findings and then determines the amount of compensation for Directors and the method of calculating that. In addition, the individual compensation, etc. of Audit & Supervisory Board Members is determined through consultation among Audit & Supervisory Board Members. The committee met a total of nine times in FY2024. It discussed compensation on a total of six of those occasions.
Clawback system
If any Director, etc. commits an act of material misconduct, violation, etc., we may confiscate the beneficial rights to the shares to be delivered under the performance-linked stock com-
Approx. 50%
Approx. 50%
Approx. 50%
(1) Fixed compensation
(2) Performance-based bonuses
(3) Performance-linked stock compensation
-
Composition of compensation for Internal Directors (excluding part-time Directors)/Senior Executive Officers and above
(3) Performance-linked stock compensation
and external survey data for the purpose of utilizing and securing high quality personnel who contribute to the realization of the medium to long term management vision, and offering
appropriate incentives.
pensation (malus) or demand the return of money equivalent to the shares, etc. delivered (clawback), from the Director, etc.
Minimum amount
Standard amount
Approx. 25%
Approx. 25%
Approx. 50%
(1) Fixed compensation
(1) Fixed compensation
(2) Performance-based bonuses
(planned targets are fully met)
Maximum amount
Approx. 50%
Compensation structure
The compensation system for our Directors (excluding part-time Directors and Outside Directors) and Executive Officers at Senior Executive Officer level or above consists of (1) fixed compensation, (2) performance-linked bonuses, and (3) performance-linked stock compensation, so that the link with performance in the short term and the medium to long term will be emphasized respectively and the management's efforts toward improvement of corporate value over the medium to long term will be evaluated appropriately. Compensation for part-time Directors and Outside Directors consists solely of fixed compensation from the perspective of ensuring appropriate supervisory functions for assessing the appropriateness of business execution from an objective standpoint.
-
Compensation systems and performance-linked compensation systems
Type of compensation
KPIs
Outline
Indicator
Evaluation weight
Fixed
Fixed compensation
-
-
It shall be paid on a monthly basis in an amount determined according to the role and responsibilities for their duties.
Variable
Short-term
Performance-linked bonuses
Profitability indicators*
40%
It is designed to fluctuate within a range of 0 - 50%. It will be granted in June every year.
Human capital-related indicator
20%
Achievement level of behavioral targets (Directors) / targets for responsible areas (Executive Officers at Senior Executive Officer level or above)
40%
Medium to long term
Performance-linked stock compensation
Capital efficiency indicators (ROIC/ROE)
40%
From the perspective of sharing value with shareholders and continued improvement of corporate value, it places a particular emphasis on the link with the 2030 vision and the Medium-term Management Plan. It is designed to fluctuate within the range of 0 - 50% in accordance with the degree of achievement concerning the financial indicators related to business portfolio transition, and non-financial indicators determined in accordance with materiality to the Company.
Stock points are granted to Directors, etc. in June every year from the perspective of serving as an incentive to improve corporate value with a medium to long term point of view. The shares are then given to the Directors after they retire.
Fossil fuel business revenue ratio
20%
CO2 reduction (essential for the realization of carbon neutrality and a circular society)
20%
Engagement of employees (evaluating efforts toward maximization of employees' growth and fulfillment)
20%
* Current net income attributable to shareholders of the parent company, excluding inventory impact, consolidated operating income + equity income
CONTENTS
Value Creation Story
Message from Top Management
Business Structure Reforms
Human Capital / Human Capital Strategy
Evolution of the Business Platform / Innovation Management
Sustainability
Corporate Governance
Data Section
Idemitsu Integrated Report 2025 70
Outline of Corporate Governance System ■ Directors and Audit & Supervisory Board Members ■ Overview of Board of Directors and Assessment of Effectiveness ■ Selection of Officers / Skill and Career Matrix
Compensation for Executives ■ Overview of the Nomination and Compensation Advisory Committee ■ Status of the Activities by the Audit & Supervisory Board
Overview of the Nomination and Compensation Advisory CommitteeOverview of the Nomination and Compensation Advisory Committee
To enhance the transparency and objectivity of its nomination and compensation functions, as an advisory body to the Board of Directors, we have in place the Nomination and Compensation Advisory Committee consisting of Independent Outside Directors. The Committee issues recommendations on proposals for the General Meeting of Shareholders on the appointment and dismissal of Directors and Audit & Supervisory Board Members, appointment, dismissal and positions of Executive Officers with titles, and revisions to Directors' remuneration and compensation systems in response to inquiries from the Board of Directors. In FY2024, the Nomination and Compensation Advisory Committee met a total of nine times.
-
Main Deliberations and Recommendations in FY2024
Nominations
Proposals for the appointment of candidates for Directors, Audit & Supervisory Board Members and Executive Officers with titles
Proposals for the appointment of advisors
Revision of the basic corporate governance policy
Proposal for the disclosure of the skill and career matrix
Appointment of the Representative Director and President
FY2025 officer structure
Compensation
Director evaluation and compensation proposal
Setting of performance-linked target values for FY2024
Behavior targets for Directors
Partial revision of the performance-linked indicators for Executive Officers with titles
Review of the Outside Officer compensation structure
Revision of the officer compensation system (compensation standard for Executive Officers with titles)
Message from the Chairman of the Nomination and Compensation Advisory Committee
| Outside Director Jun Suzuki
Proposals for the Appointment of a New Representative Director and President and Sustainable Human Capital Strategy from Diverse Outside Perspectives
I became an Outside Director in 2023. Since then, I have constantly thought about what would be the best proposal for the Board and how the Committee should be involved in succession, top management appointments, team composition and other areas with a consciousness of the change and appointment of a new Representative Director and President. There are many officers in the company at the Senior Executive Officer level or above with the qualifications to be able to become the Representative Director and President. The Committee discussed this issue from the fall of 2024 based on the required abilities and qualities while referring to data such as the 360-degree evaluations by an outside specialist company. The Committee reached a conclusion in January 2025, and the Board of Directors then made the decision on the new Representative Director and President in February.
The Committee placed emphasis on three perspectives when narrowing down the candidates. The first is well-balanced management capabilities. This means generating
revenue in our core petroleum business while being able to make future-oriented investments to take on the challenge of transitioning to carbon neutrality. The second is inclusive leadership. This refers to supporting employees so that they can work with peace of mind in an uncertain environment and gain backing from stakeholders. The third is contribution to Japan's energy policy. This is about putting into place a structure that allows the Company to contribute even more to Japan's energy policy. We also discussed whether it would be good combination for the Representative Director and President to make decisions and operate our company while the Chairman, with his experience as President, would take on a position to lead Japan's energy policy by strongly voicing opinions on policy matters.
The Company is currently promoting personnel nurturing with continuity over a longer span of time. The Committee has also begun to discuss what human capital should be placed in which positions with an eye on the composition of the team in the next and future generations under this new structure. As the fluidity of human resources continues to increase, presenting young and mid-level employees with well-thought-out career paths will not only lead to the development of internal human resources and increased motivation, but will also send a message to those outside the company who wish to work with us.
Human capital strategy is an extremely important element to raise the corporate value of the Company. The Nomination and Compensation Advisory Committee deals with matters from the personnel system that forms the basis of the human capital strategy to officer personnel and compensation issues that cannot be discussed directly at Board of Directors' meetings. Outside Directors have various backgrounds and discuss issues from a wide range of perspectives based on their respective experiences and knowledge. They provide feedback to business executives, consult with the Board of Directors and create a cycle of discussion, proposals, decisions and monitoring. It is necessary to constantly review a company's systems and mechanisms. In the future, I will continue to provide advice which I think is the best on executive personnel and compensation systems and mechanism, as well as executive and compensation proposals for Directors while also understanding the circumstances and thinking of business executives.
CONTENTS
Value Creation Story
Message from Top Management
Business Structure Reforms
Human Capital / Human Capital Strategy
Evolution of the Business Platform / Innovation Management
Sustainability
Corporate Governance
Data Section
Idemitsu Integrated Report 2025 71
Outline of Corporate Governance System ■ Directors and Audit & Supervisory Board Members ■ Overview of Board of Directors and Assessment of Effectiveness ■ Selection of Officers / Skill and Career Matrix
Compensation for Executives ■ Overview of the Nomination and Compensation Advisory Committee ■ Status of the Activities by the Audit & Supervisory Board
Status of the Activities by the Audit & Supervisory Board Audits by Audit & Supervisory Board MembersThe four Audit & Supervisory Board Members audit the Directors and other personnel's execution of businesses through activities such as attending meetings of the Board of Directors and examining business reports, financial statements, and consolidated financial statements that are submitted to the Annual General Meeting of Shareholders. Further, they perform audit activities on a daily basis to enhance these audits. These activities include attending important internal meetings other than meetings of the Board of Directors, including meetings of the Management Committee, meetings with officers, General Managers, branch managers, managers of refineries/complexes, and presidents and auditors of subsidiaries, and conducting on-site inspections of key departments. They also meet with Representative Directors every quarter, in principle, to discuss issues and exchange opinions.
- Record of activities by the Audit & Supervisory Board
Audit & Supervisory Board | 16 times a year | The full-time Audit & Supervisory Board Members share the status of activities, and each department provides information. The Board then uses that information to confirm the management issues and the status of the initiatives to deal with them. Resolutions: Appropriateness of accounting audits, consent for the reappointment and compensation of the Accounting Auditor, audit policies and plans, and audit reports by the Audit & Supervisory Board, etc. Reports and discussions: Activities by the full-time Audit & Supervisory Board Members, activities by the Internal Audit Department, investment reviews, refinery operation issues and status, and internal control department system and initiative status, etc. |
Site visits (on-site interviews) | 10 departments 19 affiliated companies (of which, 11 are overseas companies) 6 visits involved participation by Outside Audit & Supervisory Board Members | The Board interviews representatives, executives and employees and inspects facilities mainly in departments and major affiliated companies responsible for initiatives relating to business structure reforms and investments in human capital. It confirms and debates the status of management and internal controls. The Board places importance on the sites carrying out business structure reforms and the status of initiatives relating to investments in human capital. It shares the results of its site visits with the Officers responsible for those sites and others. It encourages them to put the results into use in the management of each business. The Board continued to visit in this fiscal year the refining subsidiary where inappropriate conduct was discovered in product quality testing in FY2022. It confirmed the status of the subsidiary's response to the violation of the High Pressure Gas Safety Act uncovered in FY2024. |
Meetings with Representative Directors | 4 times a year (June, September, December and March) | The Audit & Supervisory Board Members share audit policies and plans and make recommendations based on the audit findings. The Representative Directors explain the important management issues and exchange opinions. |
Interviews with Executive Officers with titles, Executive Officers and General Managers | 6 Executive Officers with titles 3 Executive Officers 14 General Managers | The Board holds individual discussions mainly on areas relating to this fiscal year's priority audit categories with Executive Officers with titles, Executive Officers and General Managers who hold important executive positions. It confirms policies, strategies and job execution status. |
Category Status of Implementation in FY2024
In addition, the Board also works with the Group Audit & Supervisory Board Liaison Committee that covers the 13 Audit & Supervisory Board Members dispatched to affiliated companies and the Consulting Group in the General Affairs Department that dispatches part-time Audit & Supervisory Board Members to 62 affiliated companies in Japan and overseas.
Message from an Outside Audit & Supervisory Board Member | Outside Audit & Supervisory Board Member Masahiko Tezuka
Assessment on the Current State of the Company's Corporate Governance
Looking back on the year since I took up my position as Audit & Supervisory Board Member, I was very impressed with the constructive and lively discussions that took place between Outside Officers and business executives in meetings such as of the Board of Directors and the Audit & Supervisory Board. A number of things are needed for Outside Officers to fulfill their responsibilities: opportunities to obtain the necessary information must be secured, an environment where it is possible to freely speak out in meetings of the Board of Directors and the Audit & Supervisory Board must be in place, and the company must have a resolve to attempt to use the opinions of Outside Officers to improve management and Outside Officers must have the appropriate capabilities. The Company satisfies these elements to a high level. Accordingly, I can say that the Company's corporate governance is functioning soundly from the perspective of whether or not Outside Officers are fulfilling their responsibilities.
Important Themes and Activities in Audits
The petroleum industry is one which requires extremely difficult management leadership to realize carbon neutrality. The Company also needs to produce results for new businesses, such as solid electrolytes for next-generation batteries, while maintaining the profitability of its fuel oil and other existing businesses. In recent years, a series of serious safety and compliance problems has occurred in the Idemitsu Group. These include a work-related accident at our Chiba complex, and inappropriate conduct in product testing at Toa Oil Co., Ltd. and Showa Yokkaichi Sekiyu CO.,LTD. Whether or not the Company is dealing with these issues and problems is an important
theme in audits. I have also personally visited the Chiba complex, Toa Oil Co., Ltd. and Showa Yokkaichi Sekiyu Co., Ltd. I confirmed that those sites are dealing with the issues and problems appropriately.
Improvement in the Effectiveness of Audits by Engaging in Dialogue and Knowing Sites
The role of Audit & Supervisory Board Members is to be familiar with the policies, mechanisms and people in corporate management. They should then confirm that the company has established management mechanisms based on appropriate policies and that the appropriate people are appropriately operating those mechanisms. If the company is moving in the wrong direction, they need to strongly ask management to correct course. To that end, it is important to deepen dialogue with the Company's management and employees and to personally understand sites. I will also accurately grasp the situation at sites through dialogue and on-site visits to ensure that management and employees are moving in the correct direction with shared awareness. In this way, I will enhance the effectiveness of audits and contribute to the sound growth of the Company.
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Idemitsu Kosan Co. Ltd. published this content on August 29, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on August 29, 2025 at 06:27 UTC.
