The two companies had agreed to merge in April 2017, but opposition by Idemitsu's founding family, which holds a roughly 28% stake, derailed those plans.
Idemitsu now aims to send one former executive and retiring Executive Vice President Daisuke Seki to Showa Shell as outside directors in late March. The latter's board currently consists of two insiders, including President Tsuyoshi Kameoka, and six outside directors.
Royal Dutch Shell Group used to have two to three board seats at Showa Shell as a leading shareholder, but the Anglo-Dutch oil major sold most of its stake to Idemitsu in December 2016. Idemitsu, which owns roughly 31% of Showa Shell, will in effect take over Royal Dutch Shell's board presence.
Meanwhile, Showa Shell will name two executives to serve as members of Idemitsu's management committee, where the company makes key strategic and other business decisions.
These exchanges are expected to be approved at the two companies' respective board meetings on Wednesday.
The merger plans remain on hold. Idemitsu's management has yet to put the matter to a shareholder vote, fearing that it would be rejected without the founding family's support. Current patriarch Shosuke Idemitsu, the son of the company's founder, has led the opposition to the deal, arguing that their corporate cultures are too different and objecting to Showa Shell's partial Saudi ownership.
Because of this hurdle, the two companies resorted to tying up in oil refining and distribution last May, which they estimate will lift profits by 25 billion yen ($232 million) over three years. In December, Idemitsu and Showa Shell announced that they will expand their cooperation to include chemicals and overseas operations, with a goal of raising the profit improvement target to 30 billion yen.
Separately, Idemitsu plans to promote Executive Vice President Shunichi Kito to president, replacing Takashi Tsukioka, who will fill the now-empty chairman's seat and continue trying to win the founding family's approval for the merger.