ENG

Corporate Governance

We pursue fair and responsible management based on transparency. 



Chapter 1 General Provisions

Article 1 [Purpose]

The purpose of these regulations is to establish a corporate governance structure that is internationally recognized, allowing AJ Networks Corporation (hereinafter referred to as the "Company") to gain trust from shareholders and stakeholders through transparent and responsible management.


Chapter 2 Shareholders

Article 2 [Shareholders' Rights]

1. Shareholders, as owners of the Company, have the following fundamental rights:

   1) Shareholders' fundamental rights cannot be retracted or restricted by the Articles of Incorporation or resolutions of the shareholders' meeting or board of directors.

   2) Shareholders, as owners of the company, may participate in the distribution of corporate profits and residual property and exercise voting rights by attending the shareholders' meeting.

   3) Shareholders have the right to receive timely and adequate information necessary for the exercise of their shareholder rights, and the Company shall faithfully respond to shareholders' requests for information, except for valid reasons.

2. Matters that significantly affect the Company's existence and shareholders' rights, such as the following, should be determined in a way that maximizes shareholders' rights at the shareholders' meeting:

   1) Amendment of the Articles of Incorporation

   2) Mergers, business transfers, and corporate splits

   3) Dissolution

   4) Reduction of capital

   5) Comprehensive exchange and transfer of shares

   6) Increase in capital causing changes in ownership structure

3. The Company shall provide shareholders with sufficient information regarding the date, place, and agenda of the shareholders' meeting well in advance, and the date and place of the shareholders' meeting should be determined to allow maximum participation by shareholders.

4. Shareholders can propose agenda items to the board of directors and should be able to inquire about and demand explanations regarding agenda items at the shareholders' meeting.

5. Resolutions of the shareholders' meeting should be transparent and fair, and shareholders should be able to exercise their voting rights as easily as possible, either directly or indirectly.


Article 3 [Fair Treatment of Shareholders]

1. Each shareholder shall have one voting right per share, and the essential rights of shareholders shall not be infringed upon. However, restrictions on voting rights for specific shareholders should be limited as prescribed by law.

2. Shareholders should be able to receive necessary information from the Company in a timely and fair manner, and even when disclosing information that is not subject to disclosure obligations, the Company should provide it fairly to all shareholders.

3. Shareholders should be protected from unfair internal transactions and self-dealings by dominant shareholders and others, and the Company should establish internal control mechanisms for internal transactions and disclose transaction details through a fair process.


Article 4 [Shareholders' Responsibility]

1. Shareholders should be aware that their exercise of voting rights may affect corporate management, and should actively exercise their voting rights for the advancement of the Company.

2. Dominant shareholders who exert influence on corporate management should act in the best interests of the Company and all shareholders, and if they cause damage to the Company and other shareholders through actions to the contrary, they should bear corresponding responsibilities.


Chapter 3 Board of Directors

Article 5 [Functions of the Board of Directors]

1. The board of directors shall have comprehensive authority over the company's management and shall perform the following functions of corporate management decision-making and management supervision. Specific functions shall be determined in accordance with the board of directors' regulations:

   1) Establishment of management objectives and strategies

   2) Appointment of management executives and supervision of management executives

   3) Evaluation of management performance and determination of compensation levels

   4) Formulation of policies for improving corporate governance and other matters

2. The board of directors may delegate authority to the CEO, senior executive officers, or board committees. However, key matters specified in law, Articles of Incorporation, or board operating regulations shall be excluded.

3. The board of directors shall recommend the establishment of policies related to the succession of the CEO. In particular, it must include content related to the CEO's succession in emergencies.

4. The board of directors shall recommend the establishment of a risk management policy for systematic risk management.


Article 6 [Composition and Appointment of Directors]

1. The board of directors must have a size that allows for effective and careful deliberation and decision-making, and it must be composed of a sufficient number of directors to enable the activation of committees established within the board of directors.

2. The board of directors must include outside directors who can function independently from management and controlling shareholders, and the number of such directors must be sufficient to ensure the substantial independence of the board of directors.

3. Individuals responsible for impairing the Company's value or infringing on shareholders' interests, as in the following cases, shall not be appointed as executives:

   1) Cases in which administrative or judicial sanctions equivalent to disqualifications under laws and regulations have been imposed or exempted due to violations of laws and regulations

   2) Cases in which approved shareholder proposals are not implemented without providing appropriate reasons

   3) Cases in which essential information that shareholders must consider when exercising voting rights, such as the Company's financial condition and matters related to board resolutions, is intentionally distorted or concealed

   4) Cases in which fulfilling the duty of loyalty as directors is impossible due to excessive concurrent positions

   5) Cases in which individuals are responsible for impairing the Company's value or infringing on shareholders' interests

4. The board of directors must be composed of individuals with expertise who can make a substantial contribution to corporate management, and the term of office of appointed directors must be respected. However, exceptions may be made in cases of illegal acts, significant facts violating laws or regulations, or significant unsuitability for duties.

5. The board of directors must be composed in a way that satisfies diversity by harmonizing knowledge, experience, and capability for the fulfillment of its role and responsibilities.

6. The chairman of the board of directors shall be appointed as stipulated in Article 4 of the board of directors' regulations, and if possible, shall be appointed separately from the CEO representing management, or if not, an outside director representing outside directors shall be appointed.

7. The Company may introduce an executive officer system as needed, and executive officers shall be responsible for business execution, allowing the board of directors to focus more on its supervisory function. The board of directors may delegate some of its authority to executive officers.

8. A director candidate recommendation committee may be operated to fairly recommend director candidates, and the committee must be composed to ensure the fairness and independence of the director candidate recommendation process.

9. In the appointment of directors, the opinions of non-controlling shareholders should also be reflected, and a cumulative voting system may be adopted for this purpose.

10. The Company shall provide shareholders with sufficient information about director candidates and adequate time to make informed decisions for exercising their voting rights.


Article 7 [Outside Directors]

1. Outside directors must have no significant relationship with the company and must be able to make independent decisions from the management and controlling shareholders. Those with significant relationships refer to those who have direct contracts or transactional relationships with the company.

2. The company must confirm and disclose that outside director candidates have no significant relationship with the company, and upon acceptance of the appointment, outside directors must submit a confirmation statement to the company stating that they have no significant relationship. If there are other interests that could potentially compromise the neutrality of the outside director's performance, these should be included in the confirmation statement and disclosed. Furthermore, if there are any changes to the information in the confirmation statement after an outside director's appointment, the outside director must immediately submit an updated statement, and the company must disclose it.

3. Outside directors should not engage in excessive concurrent positions that may hinder faithful performance of their duties.

4. The company must provide outside directors with sufficient information necessary for the performance of their duties, and outside directors may request prompt provision of information necessary for the performance of their duties.

5. Outside directors must allocate sufficient time for the performance of their duties and must review relevant documents before attending board meetings.

6. When necessary, outside directors may receive support from employees or external experts through appropriate procedures, and the company must support the costs incurred.

7. To enhance the management oversight and support functions of outside directors, separate meetings attended only by outside directors may be held independently of the board of directors.


Article 8 [Operation of the Board of Directors]

1. The board of directors should, as a general rule, be convened regularly, and at least one regular board meeting should be held every quarter.

2. To facilitate the smooth operation of the board of directors, detailed regulations for the operation of the board of directors, including its authority, responsibilities, and operating procedures, should be established.

3. The board of directors must create and maintain detailed minutes of each meeting, especially recording important discussion topics and resolutions on a per-director basis.

4. Individual director's attendance rate at board meetings and their stance on major disclosure items may be disclosed.

5. The board of directors must provide all directors with equal opportunities for expressing their opinions. In cases where some directors cannot physically attend board meetings, remote communication methods (voice or video and voice) should be provided to ensure their participation.


Article 9 [Board Committees]

1. To facilitate swift and efficient decision-making, the board of directors may establish committees within the board of directors, such as audit committees, nomination committees, and compensation committees, with an appropriate number of members performing specific functions and roles.

2. When forming board committees within the board of directors, the majority should consist of outside directors, and in the case of audit and compensation committees, they should all consist of outside directors, following the provisions of Article 393-2, Paragraph 3 of the Commercial Act.

3. Board committees within the board of directors must regularly submit reports to the board of directors regarding their activities. Furthermore, each committee must establish written regulations that include the following:

   1) The purpose of the committee's establishment

   2) The committee's authority and responsibilities

   3) Specific criteria and procedures related to the committee's work

   4) Annual activities and performance evaluations of the committee

   5) Committee composition and qualifications of committee members

   6) Structure of the committee and reporting to the board of directors


Article 10 [Duties of Directors]

1. Directors must perform their duties with the care of a prudent manager. Directors must make rational decisions based on sufficient information, time, and effort.

2. Directors must not exercise their authority for their own or third-party interests, and they must always pursue the best interests of the company and shareholders.

3. Directors must not disclose the company's secrets acquired in connection with their duties or use them for their own or third-party interests.


Article 11 [Liabilities of Directors]

1. Directors shall be liable for damages to the company if they violate laws or the Articles of Incorporation or neglect their duties. If directors are found to have acted with malice or gross negligence, they shall also be liable for damages to third parties.

2. If directors have collected reasonable data and information they can reasonably trust in the process of making management judgments, and if they have faithfully and reasonably performed their duties in a manner they believe to be in the best interests of the company, their management judgments should be respected.

3. To ensure the effectiveness of holding directors accountable and to attract competent individuals as directors, the company may purchase liability insurance for directors at the company's expense.

4. Directors must periodically engage in internal and external education to ensure efficient job performance. In particular, newly appointed directors should have the opportunity to participate in education related to their duties and corporate governance.


Article 12 [Evaluation and Compensation]

1. The activities of outside directors should be fairly evaluated, and the results of such evaluations may be reflected in their compensation and reappointment decisions.

2. The board of directors should design a compensation policy for key executives that aligns with the long-term interests of shareholders, and the company should disclose the compensation of key executives.

3. The board of directors should fairly evaluate the management activities of key executives and appropriately reflect the results of such evaluations in their compensation.


Chapter 4 Audit Organization

Article 13 [Internal Audit Committee]

1. The company may establish an audit committee within the board of directors to ensure legal and transparent management. In the case of establishing an audit committee under the Commercial Act, the company shall not appoint an auditor.

2. The audit committee must consist of at least three members to function as a deliberative body. To maintain objectivity and independence, it is desirable that all members of the audit committee be outside directors. However, if it is impossible for all members to constitute outside directors, including the chairman, at least two-thirds of the members should be outside directors.

3. The audit committee or auditor shall faithfully perform audit duties, including the following:

   1) Examine the legality of the execution of duties by directors and executives

   2) Examine the fairness and validity of the company's financial activities

   3) Review the appropriateness of the financial reporting process and the accuracy of financial reports

   4) Review the validity of significant changes in accounting principles or accounting estimates

   5) Evaluate the internal control system

   6) Approve the appointment of the head of the internal audit department

   7) Evaluate the role, organization, and budget of the internal audit department

   8) Evaluate the activities of the internal audit department

   9) Approve the appointment and dismissal of external auditors and report to the general shareholders' meeting

   10) Evaluate the activities of external auditors

   11) Evaluate the independence of external auditors and the appropriateness of non-audit activities

   12) Verify the progress of corrective actions for audit findings

   13) Formalize and disclose the regulations of the audit committee or audit

   14) Periodically disclose the content related to the activities and independence of the audit committee or audit

4. The board of directors must formalize regulations regarding the objectives, organization, authority, and responsibilities of the audit committee or auditor. Furthermore, the audit committee or auditor must annually evaluate the validity of these regulations and disclose the content.

5. When an audit committee is established, it should hold meetings at least once per quarter to review quarterly reports. If necessary, the management, chief financial officer, head of the internal audit department, and external auditor may attend.

6. The audit committee must create meeting minutes for each meeting, and the minutes must include detailed and clear records of major discussions and resolutions. The audit committee or auditor should also create audit records with specific content.

7. Audit committee members or auditors should have unrestricted access to information necessary for audit duties, and they should be able to seek advice from external experts if necessary.

8. The audit committee must report to the general shareholders' meeting on the evaluation of its own independence and major activities. The CEO should disclose this information in the annual report. If an audit committee is not established, the evaluation of the independence of the audit and major activities should be reported to the general shareholders' meeting, and the CEO should disclose this information through the annual report.

9. Audit committee members should be independent of the management and controlling shareholders. Therefore, audit committee members can only receive director's compensation, and no other compensation.


Article 14 【External Auditor】

1. The external auditor must maintain legal and substantive independence from the company, its management, and major shareholders. To protect against frequent changes in external auditors, the same external auditor must be retained for three consecutive fiscal years out of every three business years. However, the person in charge of the external auditor should not audit the same company for more than three years.

2. The external auditor must attend the shareholders' meeting and explain if there are questions from shareholders regarding the audit report.

3. The external auditor is responsible for compensating for damages incurred by the company and other information users due to negligent accounting audits. The external auditor must also check if there is information among the regularly disclosed information that corresponds to the audit results.

4. The external auditor must make efforts to determine whether the company has committed any misconduct or illegal activity during the audit.

5. The external auditor must consider the viability of the company being audited in accordance with relevant laws and regulations, including the External Audit Act for a joint-stock company.

6. The external auditor must report important matters discovered during external audit activities to the audit committee or auditors.


Chapter 5 Stakeholders

Article 15 【Protection of Stakeholder Rights】

1. The company must respect and protect the rights of various stakeholders, including employees, creditors, suppliers, consumers, and local communities.

2. The company must ensure that through appropriate governance structures, the management can faithfully fulfill its social responsibilities, such as consumer protection and environmental protection.

3. The company must ensure that working conditions comply with domestic laws and regulations, exceed international labor standards to respect the rights of workers, and improve the quality of workers' lives.

4. The company must conduct its business activities in accordance with fair trade laws, provide related education to employees to enhance awareness of compliance with fair trade regulations, and disclose such information.

5. The company must comply with creditor protection procedures for matters such as mergers, reductions of capital, divisions, and mergers that significantly affect the rights of creditors.

6. Stakeholders who hold both the position of stakeholder and shareholder should have their respective rights protected and exercised. Stakeholders should not use their position as shareholders to pursue unfair advantages.


Article 16 【Participation of Stakeholders in Management Oversight】

1. The form and level of stakeholder oversight shall be determined through discussions between relevant parties according to the characteristics of the company.

2. The company should actively adopt the content of the "Law on Worker Participation and Cooperation Promotion" to determine the form and level of worker participation in management to promote the healthy development of the company.

3. The company shall provide necessary information for the protection of stakeholder rights within the scope permitted by law, and stakeholders shall have access to relevant information.


Chapter 6 Management Oversight by the Market

Article 17 【Disclosure】

1. In addition to the information required by laws and regulations, the company shall disclose information that may have a significant impact on the decision-making of investors and other stakeholders, unless it is considered a corporate secret.

2. If there is a significant difference between the company's corporate governance structure and best practices, the company shall explain the reasons for this and associated future plans in business reports or via electronic disclosure systems.

3. In addition to regular disclosures, when making significant decisions, the company shall promptly disclose detailed and accurate information. In cases in which such decisions are made by the board of directors, information related to the board members' attendance and voting results may also be disclosed.

4. Examples of important matters that the company must disclose include but are not limited to the following:

   1) Matters that may have a significant impact on the company's financial structure or operations

   2) Matters related to the issuance of shares

   3) Matters that may cause significant changes in the company's assets, operations, or management environment

   4) Matters causing significant fluctuations in debt or debt relationships

   5) Important matters related to investments and contributions

   6) Matters causing significant changes in profit and loss structure

   7) Matters leading to changes in corporate governance and management structure

   8) Matters related to the size and method of dividends

   9) Changes in accounting standards or accounting estimates that may significantly affect investment decisions

   10) Matters related to the appointment or dismissal of inside and outside directors

   11) Matters related to the granting and cancellation of stock options

5. The company should appropriately disclose predictive information about future business performance and financial conditions.

6. In cases where foreign investors hold a significant amount of shares, audit reports and important ad hoc disclosures may be made in both Korean and English.

7. The company must designate a disclosure officer, and internal information dissemination systems should be established to ensure that important company information is promptly delivered to the disclosure officer.

8. The company must provide concrete disclosure of the ownership status of substantial controlling shareholders and their special relationships.

9. The CEO and Chief Financial Officer must certify the accuracy and completeness of financial reports.

10. Companies must establish a corporate code of ethics and disclose it.


Article 18 【Market for Corporate Control】

1. Actions that result in changes in corporate control, such as mergers, acquisitions, divisions, or transfers of business operations, must be conducted through transparent and fair processes.

2. Defensive actions to protect corporate control should not be carried out in a manner that sacrifices the interests of the company and shareholders solely to maintain the control of a portion of shareholders or management.

3. The company should allow shareholders who oppose significant structural changes, such as mergers or transfers of business operations, to exercise their appraisal rights at a fair value that reflects the substantial value of their shares, as required by law.


Article 19 【Institutional Investors】

1. Institutional investors should establish and publicly disclose internal regulations for exercising shareholder rights concerning investee companies, actively exercise shareholder rights in accordance with the principle of good faith and diligence, and disclose their actions.

2. Institutional investors should not abuse their position or engage in insider trading by using undisclosed material information when conducting any transactions or dealings with companies.

3. Regarding the exercise of shareholder rights and asset management related to companies in which they have an interest, institutional investors should disclose the content of their interests and their exercise of shareholder rights.

4. Institutional investors should establish internal control mechanisms to ensure that the exercise of shareholder rights is conducted fairly for the enhancement of company value, following their internal regulations.

5. Considering their influence, institutional investors should establish institutional measures to enhance the efficiency of their corporate governance.


Supplementary Provisions

Article 1 【Effective Date】

These regulations shall be enacted and implemented from December 1, 2020.


Corporate Governance

We strive for transparent and responsible management based on integrity

Chapter 1 General Provisions
Article 1 [Purpose]
This Charter aims to establish an internationally recognized corporate governance structure for AJ Networks Co., Ltd. (hereinafter referred to as the "Company"), fostering transparency and responsible management to gain trust from shareholders and stakeholders.

Chapter 2 Shareholders
Article 2 [Shareholders' Rights]
1. Shareholders, as owners of the Company, possess the following fundamental rights:
1) Shareholders' basic rights cannot be deprived or restricted by the Articles of Incorporation, resolutions of the shareholders' meeting, or the board of directors.
2) Shareholders have the right to participate in the distribution of profits and residual assets through dividends and exercise voting rights at the shareholders' meeting.
3) Shareholders have the right to receive sufficient and timely information necessary for the exercise of their shareholder rights from the Company, and the Company must faithfully respond to reasonable requests for information from shareholders.
2. Matters significantly affecting the Company's existence and shareholder rights, such as changes to the Articles of Incorporation, mergers, business transfers, splits, dissolution, reduction of capital, comprehensive exchange or transfer of shares, and increases in capital leading to changes in ownership structure, should be decided at the shareholders' meeting to maximize shareholders' rights protection.
3. The Company shall provide sufficient information about the date, time, and agenda of the shareholders' meeting in advance, and the date and location of the shareholders' meeting should be determined to allow maximum shareholder participation.
4. Shareholders have the right to propose resolutions to the board of directors, raise questions, and demand explanations regarding resolutions at the shareholders' meeting.
5. Resolutions at the shareholders' meeting must be transparent and fair, and shareholders should be able to exercise their voting rights directly or indirectly in the most convenient manner.

Article 3 [Fair Treatment of Shareholders]
1. Each shareholder is entitled to one vote per share, and the essential rights of shareholders should not be infringed upon. However, restrictions on voting rights for specific shareholders should be limited in accordance with the law.
2. Shareholders must be able to receive necessary information from the Company in a timely, sufficient, and fair manner, and the Company should provide equitable access to all shareholders, even when disclosing information not subject to disclosure obligations.
3. Shareholders should be protected from unfair related-party transactions and self-dealing involving major shareholders, and the Company should establish internal control mechanisms for such transactions and disclose transaction details through fair procedures.

Article 4 [Shareholders' Responsibilities]
1. Shareholders should recognize that their exercise of voting rights can influence corporate management and make active efforts to exercise voting rights for the Company's development.
2. Controlling shareholders exercising influence on corporate management should act for the benefit of the Company and all shareholders, and they should be held responsible proportionally for any damage caused to the Company or other shareholders due to actions contrary to this principle.

Chapter 3 Board of Directors
Article 5 [Functions of the Board of Directors]
1. The board of directors possesses comprehensive authority over corporate management and should perform the following functions of corporate management decision-making and supervision. Detailed functions are determined by the board of directors' regulations.
1) Establishment of management goals and strategies
2) Appointment of management executives and oversight of management executives
3) Evaluation of management performance and determination of compensation levels
4) Formulation of policies for improving corporate governance and other matters
2. The board of directors may delegate authority to the CEO, representative executive officers, or committees within the board of directors. However, significant matters stipulated by laws, the Articles of Incorporation, or the board of directors' operation regulations should be excluded.
3. The board of directors recommends the formulation of a policy on succession planning for the CEO and particularly emphasizes the inclusion of matters related to CEO succession in emergency situations.
4. The board of directors recommends the formulation and operation of a risk management policy for systematic risk management.
Article 6 [Composition and Appointment of the Board of Directors]
The board of directors should have a size that allows effective and prudent deliberation and decision-making, and it should consist of a sufficient number of directors to facilitate the activation of committees established within the board of directors.
The board of directors should include outside directors who can independently perform functions separate from management and controlling shareholders. The number of outside directors should be sufficient for the board of directors to maintain practical independence.
Individuals with responsibilities for damaging the Company's value or infringing upon shareholder rights in the following cases should not be appointed as executives:
Those who have received administrative or judicial sanctions equivalent to disqualifications under laws due to violations of regulations, or those who have been exempted from execution of such sanctions.
Those who have not implemented shareholder proposals approved by the shareholders' meeting without presenting valid reasons.
Those who deliberately distort or conceal critical information that shareholders should consider when exercising their voting rights, such as the Company's financial status and matters related to the board of directors' decisions.
Those whose faithful performance of duties as directors is compromised by excessive concurrent positions.
Other cases where they are responsible for damaging the Company's value or infringing upon shareholder rights.
The board of directors should be composed of individuals with expertise contributing significantly to corporate management, and the tenure of appointed directors should be respected. However, exceptions are allowed in cases of illegal actions, significant violations of laws or the Articles of Incorporation, or significant unsuitability for duties.
The board of directors should be composed to satisfy diversity, harmonizing knowledge, experience, and capabilities to fulfill its roles and responsibilities effectively.
The Chairman of the board of directors, who represents the board, should be appointed according to the provisions of Article 4 of the board of directors regulations. If possible, the Chairman should be appointed separately from the CEO, who represents management, or if not, an outside director representing the independent directors should be appointed.
The Company may introduce an executive officer system as needed, where executive officers handle business operations and the board of directors exercises more dedicated oversight. The board of directors may delegate some of its authority to executive officers.
To recommend director candidates fairly, the Company may operate a Director Nomination Committee, which should be structured to ensure fairness and independence in the director nomination process.
Shareholder opinions other than those of controlling shareholders should be considered in director appointments, and a cumulative voting system may be adopted for this purpose.
The Company should provide shareholders with sufficient information about director candidates and adequate time for judgment when exercising voting rights.
Article 7 [Outside Directors]
An outside director should not have significant relationships with the Company and should be capable of making independent decisions separate from management and controlling shareholders. Individuals with significant relationships refer to those who have direct contracts or transactional relationships with the Company.
The Company should confirm and disclose that outside director candidates do not have significant relationships with the Company. An outside director should submit a confirmation letter stating the absence of significant relationships with the Company when accepting the appointment. If there are other related relationships even if they do not pose a risk of compromising the neutrality of the director's duties, they should be disclosed in the confirmation letter. Furthermore, if there are changes to the confirmation letter after the appointment of the outside director, the updated letter should be promptly submitted, and the Company should disclose it.
An outside director should not hold excessive concurrent positions that could impede faithful performance of duties.
The Company should provide sufficient information necessary for outside directors to perform their duties, and an outside director may request timely provision of information necessary for their duties.
An outside director should dedicate sufficient time for the performance of duties and review relevant materials before attending board meetings.
An outside director may receive support from executives or external experts through appropriate procedures if necessary, and the Company should provide support for the expenses incurred.
To enhance the oversight and support functions of outside directors, separate meetings involving only outside directors may be held, in addition to the regular board meetings.
Article 8 [Operation of the Board of Directors]
The board of directors should be convened regularly, with at least one regular meeting held every quarter.
To facilitate smooth operation of the board of directors, detailed provisions regarding the board's authority, responsibilities, and operational procedures should be stipulated in the board of directors' operation regulations.
The board of directors should create and preserve detailed minutes for each meeting, particularly recording important discussions and resolutions by director.
Individual directors' attendance rates at board meetings and their stance on major disclosure subjects may be disclosed.
The board of directors should provide equal opportunities for all directors to express their opinions. In cases where some directors cannot attend the board meeting in person, remote communication methods (voice or video and voice) should be provided to ensure their participation.
Article 9 [Board Committees]
To facilitate prompt and efficient decision-making, the board of directors may establish committees within the board, such as an audit committee, a nomination committee, and a compensation committee, with an appropriate number of members assigned specific functions and roles.
Committees within the board should have a majority of outside directors. When forming an audit committee or a compensation committee, it is desirable to have all outside directors, and the provisions of Article 393-2(3) of the Commercial Act should be followed at a minimum.
Committees within the board should regularly submit reports on their activities to the board of directors. Each committee should establish written regulations that include the following matters regarding organization, operation, and authority:
The purpose of committee establishment
The authority and responsibilities of the committee
Specific criteria and procedures related to committee tasks
Annual activities and performance evaluations of the committee
Composition of the committee and qualifications/appointment of members
The structure of the committee and reporting to the board of directors.
Article 10 [Duties of Directors]
Directors should perform their duties with the duty of care of a prudent manager and make rational decisions based on sufficient information, dedicating adequate time and effort.
Directors should not exercise their authority for personal or third-party interests and should always seek outcomes that are in the best interests of the Company and shareholders.
Directors should not disclose Company secrets learned during the course of performing their duties to external parties or utilize them for their own or third-party interests.
Article 11 [Liabilities of Directors]
Directors are liable for damages to the Company if they violate laws or the Articles of Incorporation or neglect their duties. Directors with malicious intent or gross negligence are also liable for damages to third parties.
If a director collects reasonable and reliable data and information during the process of making managerial judgments, thoroughly reviews them, and performs their duties diligently and rationally by making judgments that they believe are in the best interests of the Company, such judgment by the director should be respected.
The Company may secure accountability investigations against directors and may subscribe to directors' liability insurance at the Company's expense to recruit capable individuals and secure the effectiveness of accountability.
Directors should engage in internal and external education to perform their duties efficiently on a regular basis. New directors, in particular, should have the opportunity to participate in education related to their duties and corporate governance.
Article 12 [Evaluation and Compensation]
The activities of outside directors should be fairly evaluated, and the evaluation results may be reflected in decisions regarding compensation and reappointment.
The board of directors should design compensation policies for key management personnel in a way that aligns with shareholders' interests and long-term understanding. The Company should disclose compensation for key management personnel.
The board of directors should fairly evaluate the managerial activities of key management personnel, appropriately reflecting the evaluation results in compensation.
Chapter 4 Audit Mechanism
Article 13 [Internal Audit Committee]
In order to ensure lawful and transparent management, the Company may establish an audit committee within the board of directors. Additionally, when required by the Commercial Act to establish an audit committee, the Company shall appoint auditors instead of establishing an audit committee.
The audit committee should consist of a minimum of three members to facilitate effective functions as a deliberative body. While it is preferable for the entire membership of the audit committee to consist of outside directors to maintain objectivity and independence, if it is difficult to achieve a composition of all outside directors, then at least two-thirds should be outside directors, including the chairperson.
The audit committee or auditors must diligently perform audit duties, and the major audit duties to be performed include the following:
Examination of the legality of the duties performed by directors and management
Examination of the appropriateness and validity of the Company's financial activities
Review of the adequacy and accuracy of the financial reporting process
Evaluation of the validity of significant accounting standards or changes in accounting estimates
Evaluation of the internal control system
Consent to the appointment of the head of the internal audit department
Assessment of the appropriateness of the role, organization, and budget of the internal audit department
Evaluation of the activities of the internal audit department
Approval of the appointment and dismissal of external auditors and subsequent reporting to the shareholders' meeting
Evaluation of the audit activities of external auditors
Assessment of the independence and appropriateness of non-audit services by external auditors
Verification of corrective measures for internal and external audit results
Formalization of audit committee regulations or audit regulations and periodic disclosure of their contents
Periodic disclosure of the activities and independence of the audit committee or auditors
The board of directors should formalize regulations regarding the objectives, organization, authority, responsibilities, and duties of the audit committee or auditors. Additionally, the audit committee or auditors should evaluate the validity of these regulations annually and disclose their contents.
If an audit committee is established, it should hold meetings at least once per quarter to review quarterly reports. When necessary, the executive officers, the chief financial officer, the head of the internal audit department, and external auditors may attend such meetings.
The audit committee should prepare minutes for each meeting, clearly and specifically recording the major discussions and resolutions. The audit committee or auditors should maintain detailed audit records specifying the audit matters.
Members of the audit committee or auditors should have unrestricted access to the information required for audit tasks and may seek advice from external experts if necessary.
The audit committee should report on the evaluation of its independence and major activities to the shareholders' meeting, and the CEO should disclose this information through the annual report. If no audit committee is established, the evaluation of the independence and major activities of the auditors should be reported to the shareholders' meeting, and the CEO should disclose this information through the annual report.
Members of the audit committee should be independent from the management and controlling shareholders. Therefore, members of the audit committee shall only receive compensation as directors and shall not receive any other form of compensation.
Article 14 [External Auditor]
The external auditor must maintain legal and substantive independence from the Company, its management, and controlling shareholders. As a protective measure against frequent changes, the same external auditor should be retained for consecutive three fiscal years, but the person in charge of the external audit should not audit the same Company for more than three years.
The external auditor should attend the shareholders' meeting and provide explanations if there are questions regarding the audit report.
The external auditor is liable to compensate for damages arising from negligent accounting audits that cause harm to the Company and other information users. The external auditor should verify whether the information presented in the financial statements audited, along with the information regularly disclosed, includes audit results.
The external auditor should make efforts to ascertain the presence of fraudulent or unlawful acts within the Company during the audit process.
The external auditor should consider the likelihood of the continued existence of the audited company in accordance with relevant laws and regulations related to the External Audit of Joint Stock Companies.
The external auditor should report significant findings identified during the audit to the audit committee or auditors.
Chapter 5 Stakeholders
Article 15 [Protection of Stakeholder Rights]
The Company shall respect and protect the rights of various stakeholders, including employees, creditors, suppliers, consumers, and local communities.
Through appropriate corporate governance, the Company should enable the management to fulfill social responsibilities, such as consumer protection and environmental preservation.
The Company should ensure that working conditions comply with domestic laws and regulations, respect the rights of workers beyond international labor standards, and strive to enhance the quality of workers' lives.
The Company should conduct its business activities in accordance with fair trade-related laws, ensure compliance with fair trade regulations, and conduct related education to raise awareness of the importance of fair trade among employees and officers, making such efforts transparent.
In matters such as mergers, acquisitions, reductions, and splits that significantly affect the position of creditors, the Company must adhere to creditor protection procedures.
When stakeholders also hold the position of shareholders, the rights of both stakeholders and shareholders should be protected and exercised. However, stakeholders should not exploit their shareholder position to pursue unfair advantages.
Article 16 [Participation of Stakeholders in Corporate Monitoring]
The form and level of monitoring by creditors should be determined through discussions among relevant parties based on the characteristics of the Company.
The Company should actively incorporate the contents of the "Act on Worker Participation and Cooperation" to determine the form and level of worker participation, promoting the sound development of the Company.
Within the limits permitted by the law, the Company should provide stakeholders with necessary information for the protection of their rights, and stakeholders should have access to relevant information.
Chapter 6 Market-Based Corporate Monitoring
Article 17 [Disclosure]
In addition to the information required by law for disclosure, the Company shall promptly disclose information that has a significant impact on the decision-making of investors and other stakeholders, unless it falls under corporate secrets, in a manner easily accessible to investors.
If there is a significant difference between the Company's corporate governance and best practices and standards, the Company shall explain the reasons and future change plans through the business report or electronic disclosure system.
In addition to regular disclosure, when important matters are decided upon, the Company shall promptly and accurately disclose the details of such matters. If the decision is made by the board of directors, information about attending directors and voting results should also be disclosed.
Examples of important matters that the Company should disclose include:
Matters that may significantly impact the Company's financial structure or operations
Matters related to the issuance of shares
Matters causing significant changes in the Company's assets, operations, or business environment
Matters causing significant fluctuations in debt or obligations
Matters related to significant investments and contributions
Matters causing significant changes in profit and loss structure
Matters causing changes in corporate governance and management structure
Matters related to the size and method of dividends
Matters related to changes in accounting standards or estimates that significantly affect investment judgment
Matters related to the appointment or dismissal of internal and external directors
Matters related to the granting or cancellation of stock options
The Company should appropriately disclose predictive information about future management performance and financial conditions.
In the case of significant ownership of shares by foreign investors, audit reports and important ad-hoc disclosures can be provided in both Korean and English.
The Company should appoint a disclosure officer, and an internal information delivery system should be established to ensure rapid communication of important information to the disclosure officer.
The Company should disclose the ownership status of substantial controlling shareholders and their related parties in a detailed manner.
The CEO and the Chief Financial Officer must certify the accuracy and completeness of financial reporting.
Companies should establish a code of business ethics and disclose it.
Article 18 [Corporate Management Right Market]
Actions that cause changes in corporate management rights, such as acquisitions, mergers, splits, or transfers of business operations, should be conducted through transparent and fair procedures.
Measures to defend corporate management rights should not sacrifice corporate and shareholder interests to maintain the management rights of some shareholders or management.
The Company should enable shareholders opposing important structural changes such as mergers or transfers of business operations to exercise their appraisal rights based on a fair value reflecting the substantial value of their shares, as stipulated by laws.
Article 19 [Institutional Investors]
Institutional investors should establish and disclose internal regulations for exercising shareholder rights, actively exercise shareholder rights based on the principles of good faith, and disclose the details of such exercises.
Institutional investors should not abuse their position or engage in insider trading by using important undisclosed information when conducting any transactions with the Company.
Institutional investors should disclose the content of exercising shareholder rights and asset management regarding companies in which they have a relationship of interest.
Institutional investors should establish an internal control system to ensure that shareholder rights are exercised fairly for the enhancement of corporate value in accordance with internal regulations.
Considering the influence of institutional investors, they should establish institutional arrangements to enhance their governance structure efficiency.
Supplementary Provision
Article 1 [Effective Date] These regulations shall be enacted and enforced on December 1, 2020.


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9, Jeongui-ro 8-gil, Songpa-gu, Seoul, Republic of Korea | Business Registration Number: 214-86-48586
COPYRIGHT © 2023 AJ ALL RIGHT RESERVED
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9, Jeongui-ro 8-gil, Songpa-gu, Seoul, 

Republic of Korea

Business  Registration Number: 214-86-48586

COPYRIGHT © 2023 AJ ALL RIGHT RESERVED