Japanese

Approaches to Corporate Governance

For five years prior to 2002, MOL initiated substantial reforms of its management structure, such as appointment of outside directors and introduction of the executive officer system, laying the foundation for a corporate governance structure that was advanced and highly transparent for a Japanese company at that time. In 2015, we further enhanced the supervisory functions of the Board of Directors, and in 2017 we enhanced our evaluation of the effectiveness of the Board of Directors and formulated our own independence determination standards regarding our outside directors/Audit & Supervisory Board Member, among other efforts to further strengthen our corporate governance.

1997	Outside Audit & Supervisory Board Members increased from one to two out of a total of four auditors
1998	FY1998 Annual General Shareholders' Meeting was held in Tokyo George Hayashi (former APL chairman) invited to join the Board of Directors.
1999	After the revision of the Japanese Ship Law, George Hayashi was appointed as Director and Deputy President
2000	Management organization reform Introduced a system of executive officers Abolished the Managing Directors Committee and established an Executive Committee (reduced the membership from 21 to 10) Reformed the Board of Directors (redefined its duties as the highest-ranking decision-making body and the supervision of business activities) and reduced membership from 28 to 12 Elected two outside directors Established the Corporate Visionary Meeting Invited Takeo Shiina, (Senior Advisor at IBM Japan), and Toshihiko Fukui (former Deputy Governor of the Bank of Japan) as outside directors Established the IR Office Started holding the Annual General Shareholders' Meeting on a day relatively free of other shareholders' meetings
2001	Established the MOL Group Corporate Principles Added one more outside director, increasing the number of outside directors to three Established Compliance Policy and a Compliance Committee
2002	Second stage of management organization reforms Reforms reinforced roles of the Board of Directors concerning determination of basic strategies and monitoring risk management while providing for faster decision-making at the business execution level Board of Directors was reorganized to carry out three important functions: (1) deliberation on issues requiring approval by the Directors; (2) receipt of reports on business operations; and (3) deliberation on corporate strategy and vision Reviewed and consolidated issues submitted to the Board of Directors Expanded jurisdiction of the Executive Committee regarding execution of business activities Established the Internal Audit Office. (Improving accounting/business operation auditing of MOL Group companies as well as MOL itself)
2003	Invited Kunio Kojima, then-President of Japan Securities Finance Co., Ltd., as outside director. (Toshihiko Fukui resigned due to his appointment as Governor of the Bank of Japan) Invited Kensuke Hotta, Chairman of Morgan Stanley Japan Ltd., as outside Audit & Supervisory Board Member. Opened the Compliance Advisory Service Desk, and revised Rules of Conduct
2004	Renamed the Environment Committee, which reports directly to the Executive Committee, as the CSR and Environment Committee (with an expanded scope of examination and deliberation on issues related to CSR in MOL Group companies), and established the CSR and Environment Office in the Corporate Planning Division as the secretariat of the CSR and Environment Committee
2005	Formulated Privacy Protection Policies Executed a change in the Articles of Incorporation to abolish Directors' titles except "Chairman of the Board"; titles are allocated only to Executive Officers. (This clarifies the roles of Directors and Executive Officers)
2006	Invited Yoko Ishikura, Professor of the Graduate School of International Corporate Strategy, Hitotsubashi University as outside director. (Takeo Shiina resigned) Invited Sumio Iijima, Attorney at Law, as outside Audit & Supervisory Board Member. (Kyoichi Sato resigned) Decided basic policy on the establishment of internal control systems in response to enforcement of the new Japanese Companies Act In response to the enforcement of the Financial Instruments and Exchange Act, the Internal Control Planning Office was established in the Corporate Planning Division
2008	Invited Takeshi Komura, Executive Advisor of Tokyo Marine & Nichido Fire Insurance Co.,Ltd. as out side director.(Yukiharu Kodama resigned.)
2010	Invited Sadayuki Sakakibara, Chairman of the Board and Chief Executive Officer, Toray Industries, Inc. as outside director. (Yoko Ishikura resigned)
2011	Invited Masayuki Matsushima, Senior Advisor, the Boston Consulting Group K.K., as outside director. (Kunio Kojima resigned) Invited Hiroyuki Itami, Professor and Head, Specialist Graduate School of Management of Science and Technology, Tokyo University of Science, as outside Audit & Supervisory Board Member. (Kensuke Hotta resigned) Revised the MOL's Compliance Policy and Rules of Conduct (opened the Compliance Advisory Desk) Revised the basic policy on establishing a system to ensure the appropriateness of operations (internal control system) (Added periodic monitoring of the compliance system by the Compliance Committee)
2014	Invited Atsutoshi Nishida,Chairman of Toshiba Corporation, as outside director. (Sadayuki Sakakibara resigned) Invited Hideki Yamashita, Attorney at Law, as outside Audit & Supervisory Board Member . (Sumio Iijima resigned) Revised the Compliance Policy, establishing a Chief Compliance Officer (COO)
2015	Outside Director Atsutoshi Nishida resigned. Reformed management organization (3rd phase) Established the Nomination Advisory Committee and the Remuneration Advisory Committee Further vitalized the Board of Directors (Reviewed and consolidated issues submitted to the Board of Directors and expanded jurisdiction of the Executive Committee regarding execution of business activities) Reformed presidential selection process (A change to the Articles of Incorporation to allow appointment from Executive Officers who are not Directors was proposed to and resolved by the Annual General Shareholders' Meeting in 2016) Changed time to appoint management executives and restructure organizations to April 1, the first day of the business year
2016	Invited Hideto Fujii, Adviser to Sumitomo Corporation, and Etsuko Katsu, Professor, school of political science and economics, Meiji University as outside directors. (Takeshi Komura resigned)
2017	Conducted an evaluation of the effectiveness of the Board of Directors through a self-evaluation questionnaire and submission for discussion by the Board of Directors (evaluation items were significantly increased to enhance the evaluation) Established independence determination standard for outside directors and Audit & Supervisory Board Members.
2018	Held "Board Member Discussion Sessions" on a timely basis subsequent to meetings of the Board of Directors in order to promptly share and discuss various important matters in progress other than Board of Directors meeting proposals.
2019	Established the Environmental Management Committee under the executive committee (to serve as a control tower for MOL's environmental strategies) Invited Masaru Onishi, Senior Representative, External Affairs, Japan Airlines Co., Ltd., as outside director (Masayuki Matsushima resigned) Invited Junko Imura, certified public accountant, as outside Audit & Supervisory Board Member (Hiroyuki Itami resigned)