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Management Information

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Responsible management system by professional managers and independent management system with a focus on the Board of Directors
With the establishment of a holding company system, LG abandoned the “cross-shareholding structure” between affiliated companies. As a result, the holding company is solely responsible for investment, while LG Innotek can concentrate on increasing the value of the company itself and doing its own business without the burden of investment. With this corporate governance structure, LG Innotek laid the foundation of enhancing “management transparency”.
LG Innotek is strengthening business competitiveness at home and abroad, and ultimately is realizing the maximization of shareholder and corporate value by establishing responsible management system through the CEO Cheol-dong Jeong and managing the business with a focus on the Board of Directors to enhance corporate transparency.
Independent Board of Directors and active non-executive director activities
LG Innotek’s Board of Directors is independent from major shareholders and the management in terms of member composition. There are 7 directors and 4 of them are non-executive directors. Non-executive directors are professionals with outstanding expertise and experience in their field, who participate in business management through decision-making and monitoring execution of decisions regarding major issues.
The Board of Directors is operated by taking into account each director’s schedules so that all directors can attend and participate in board meetings. Directors review the information data provided by the company with sufficient time before attending board meetings, so that they can actively express their opinions, give a cool-headed assessment, and supervise important management issues, such as internal transactions among affiliated companies, and business execution of the management. LG Innotek also provides the opportunity of active participation in management to non-executive directors. For example, non-executive directors can visit workplaces for on-site management.
Strengthened independence and responsibility of the audit committee
The audit committee excludes internal personnel and is entirely composed of three non-executive directors to secure independence from the company's major shareholders and management, in order to enhance the legality and transparency of corporate accounting, which is its major function, and faithfully play a role of a monitoring and supervisory agency to secure the fairness of management. In addition, the appointment of external auditors is approved based on their specialty in business, independence and reputation, additional service capabilities, international business capabilities, and potential conflict of interest with the company.
Status of recommendations for model criteria related to governance structure
Recommendations for
exemplarly criteria
Adopted or not Remarks
Enactment of Code of Ethics
for employees
Accumulated voting system X
Electronic voting system
Separation of Representative Director from Chair of the Board of Directors
Composition of the Board of Directors (Majority being outside directors) Four outside directors (57%) out of seven directors.
Outside directors’ independence (independence from the Company,
its top managers, and majority shareholders)
Adoption of the role/operating
procedure for the Board of Directors
and its committees
Operating specialized committees inside the Board of Directors Installation/operation of the Audit Committee, the Management Committee, the Outside Director Recommendation Committee, the Internal Trading Committee, and the ESG Committee
Disclosure of details of the Board of Directors’ activities, rate of
attendance, and ayes/noes
about major agenda items
Disclosure of business report
Having directors covered by loss compensation insurance at the
Company’s expense
Composition of the Audit Committee
(all of the members being
outside directors)
Outside auditor’s maintenance of independence The Audit Committee’s review and approval of the selection of outside auditor
Verification of accuracy of business
report, etc.
Verification by the Representative Director and directors in charge
Disclosure of audit report and
important occasional disclosure
in Korean and English
Explanation about difference
from model criteria

Board of Directors Members

Cheol-Dong Jeong

Representative Director

  1. CEO, LG Innotek
    Former President, IT & Electronic Materials Company, LG Chem
  2. Elected : Mar 2022 (Term: 3 Years, Re-elected)

Chang-Tae Kim

Inside Director

  1. CFO, LG Innotek
    Former Chief of Management diagnosis 1,
    LG Economic Research Institute
  2. Elected : Mar 2020
    (Term: 3 Years, Newly Appointed)

Joon Chae

Outside Director / BOD Chairperson

  1. Professor at Seoul National University
    (Department of Business Administration)
    Vice President, Korea Derivatives Association
  2. Elected : Mar 2021 (Term: 2 Years, Re-elected)

Sang-Chan Park

Outside Director

  1. Chief of SUNY Korea
    (Department of Technical Management)
    Former Professor at Kyunghee University
    (Department of Business Administration)
  2. Elected : Mar 2022 (Term: 3 Years, Re-elected)

Hee-Jung Lee

Outside Director

  1. Professor at Korea University (Law School)
    Non-executive Member of the Personal
    Information Protection Commission
  2. Elected : Mar 2022 (Term: 3 Years, Newly Appointed)

Sang-Do Noh

Outside Director

  1. Professor at Sung Kyun Kwan University
    (Department of Systems Management Engineering)
    Chairman of the Korean CDE Society
  2. Elected : Aug 2022
    (Term: until the end of the 2023 general shareholder meeting, Newly Appointed)

Joon-Hong Ahn

Non-standing Director

  1. Electronics Team Leader of LG
    Former Head of LG Management Development Institute Jeongdo Management TFT Diagnosis 1
  2. Elected : Mar 2022 (Term: 3 Years, Newly Appointed)
※ All members of the Board of Directors have directors & officers liability insurance.

Authorities

Authorities of the Board of Directors

  1. 1. The Board of Directors decides matters related to specified laws or articles of incorporation, matters authorized by the general shareholders' meeting, and important matters related to the basic policy of company management and business execution.
  2. 2. The matters about business execution that are not stipulated as a matter to submit for consideration in this regulation will be delegated to the CEO.
  3. 3. The Board of Directors supervises the execution of the duties of directors.

Matters to Be Submitted View

The following matters need to be submitted to the Board of Directors.

01. Matters concerning the general shareholders' meeting

    1. 1. Calling a general shareholders' meeting
    2. 2. Approving business reports
    3. 3. Approving financial statements
    4. 4. Changing the articles of incorporation
    5. 5. Reducing capital
    6. 6. Dissolution, merger, division and merger, continuation of the company
    7. 7. Transferring all or important part of company's business
    8. 8. Acquiring all or part of another company’s business that has a significant impact on company’s business
    9. 9. Concluding, changing, or terminating a contract that entrusts all business or management, shares all profits and losses of business with others, and other contracts corresponding to the same
    10. 10. Appointing and dismissing a director or an audit committee member
    1. 11. Issuing shares below par
    2. 12. Indemnifying the directors from liability to the company
    3. 13. Deciding stock dividends
    4. 14. Deciding interim dividends
    5. 15. Granting stock options
    6. 16. Deciding the remuneration of directors and audit committee members
    7. 17. Approving a transaction with the company's largest shareholder and the affiliate person in accordance with Article 542-9 of the Commercial Act, and reporting to the general shareholder’s meeting
    8. 18. Large-scale internal transactions in accordance with the Fair Trade Act
    9. 19. Closing the list of shareholders and determining the base date
    10. 20. Other matters to submit to the general shareholders' meeting for consideration
    11. 21. Reducing a legal reserve

02. Matters concerning management

    1. 1. Deciding and changing the basic company management policy
    2. 2. Appointing and dismissing the manager
    3. 3. Establishing, relocating, or closing a subsidiary company (including an overseas subsidiary), branch, office, workplace, or other important facility. However, the relocation of an overseas sales subsidiary, branch, and office can also be approved by Management Committee.
    1. 4. Deciding simplicity merger, simplicity split and merger, small merger, and small split merger
    2. 5. Approving reports on this year’s performance and next year's business plans
    3. 6. Establishing, enforcing, or abolishing compliance control standards

03. Matters concerning finance

    1. 1. Investment in domestic and foreign facilities: KRW 50 billion won or more per case
    2. 2. Setting and increasing an annual total limit for the issuance of loans (excluding loans secured by sales credit) and corporate bonds, short-term bonds of LG Electronics, and CP (commercial paper)
    3. 3. Disposing other’s investment or contributed shares, or lending funds: KRW 40 billion or more per case
    4. 4. Acquiring or disposing sales or assets: KRW 50 billion or more per case
    5. 5. Issuing new shares (including transfer of preemptive right, handling of forfeited stocks and fraction stocks)
    6. 6. Issuing bonds
    1. 7. Capitalizing reserves
    2. 8. Issuing convertible bonds
    3. 9. Issuing bonds with the preemptive right
    4. 10. Acquiring and disposing treasury stocks
    5. 11. Providing collateral or guarantee for others (including a subsidiary company): KRW 40 billion or more per case
    6. 12. Burning stocks

04. Matters concerning personnel

    1. 1. Matters concerning the personnel and remuneration of executive officers
    2. 2. Appointing the Chief Financial Officer (CFO)
    1. 3. Appointing and dismissing the representative director
    2. 4. Appointing the compliance officer

05. Matters concerning directors, Board of Directors, committees, etc.

    1. 1. Approving a transaction between the director, etc. and the company
    2. 2. Approving the director’s appropriation of company opportunities and assets
    3. 3. Establishing, operating, and abolishing a committee within the Board of Directors
    4. 4. Appointing and dismissing a committee member within the board of directors
    1. 5. Re-resolution on the resolution of the committee within the Board of Directors However, not applicable for the resolution of Audit Committee.
    2. 6. Deciding expert’s assistance for the director
    3. 7. Enacting and abolishing the operation regulation of the committee within the Board of Directors
    4. 8. Approving the competitive business of the director and exercising the right of intervention

06. Others

    1. 1. Cancelling the granting of stock options
    2. 2. Designating a transfer agent
    3. 3. Other matters stipulated by the law or articles of incorporation, matters delegated by the general shareholders' meeting, and matters deemed necessary by the CEO

Activity

  1. 2021
  2. 2020
Date of holding Details of the bill Approval status Attendance of non-
executive directors
2021.12.22. Approval on the disposal of shares in China’s Huizhou Corp oration Approved 4/4
2021.11.25. Annual report on retired officers treatment Reported 4/4
Annual report on executive officers disciplinary action Reported
Report on the 2021 Management Committee resolutions and mandates Reported
Approval on the 2022 Business Plan Approved
Approval on the 2021 special relationship transactions limit increase Approved
Approval on the 2022 total limit for transactions with special relationship persons Approved
Approval on the 2022 self-dealing transactions with affiliates
and other entities
Approved
Approval on goods and services transactions with affiliates Approved
Approval on the 2022 annual borrowing limit Approved
Approval on the 2022 executive officer personnel Approved
2021.10.28. Business performance report on 2021, 3Q Reported 4/4
Approval on the large-scale facility investment Approved
Approval on the 2019 executive officer personnel Approved
Approval on the appointment of compliance personnel Approved
2021.09.02. Approval on the large-scale facility investment Approved 4/4
2021.07.29. Business performance report on 2021, 2Q Reported 4/4
Approval on goods and services transactions with affiliates Approved
2021.04.29. Business performance report on 2021, 1Q Reported 4/4
Approval on revision of operational regulations for the
Board of Directors and Audit Committee
Approved
Approval on establishment of Internal Transaction Committee Approved
Approval on establishment of ESG Committee Approved
Approval on revision of operational regulations for the
Board of Directors and Audit Committee
Approved
Approval on change in compensation on outside directors
(draft plan)
Approved
2021.03.18. Approval on change in 2021 Business Plan Approved 4/4
Approval on revision of operational regulations for the
Board of Directors and Audit Committee
Approved
Approval on change in HR management regulations for the
executive officers
Approved
Approval on payment of performance incentive for the
executive officers
Approved
Approval on execution of compensation on directors Approved
Approval on conclusion of LED asset disposal contract Approved
2021.02.17. Report on the evaluation result of operation status of the
internal accounting management system
Reported 4/4
Approval on convening the 45th Ordinary General Meeting
of Shareholders
Approved
Approval on the agenda of Ordinary General Meeting
of Shareholders
Approved
Approval on the large-scale facility investment Approved
2021.01.25. Report on the operation status of the
compliance system
Reported 4/4
Report on the operation status of the internal accounting
management system
Reported
Approval on introduction of the e-voting system Approved
Approval on the financial statements and business
report
Approved
Approval on the occupational safety & health plan Approved
Date of holding Details of the bill Approval status Attendance of non-
executive directors
2020.11.26. Annual report on the treatment of resigning executives Reported 4/4
Report on the matters resolved and delegated by the management committee Reported
Approval of the annual loan limit in 2021 Approved
Approval of business plan for 2021 Approved
Approval of goods and services transactions with subsidiary companies Approved
Approval of the transaction amount limit with affiliate persons Approved
Approval of transaction for oneself with subsidiary companies, etc. Approved
Approval of personnel matters for executive officers in 2021 Approved
2020.10.28. Management performance report for Q3 2020 Reported 4/4
Approval of LED business closing Approved
2020.07.22. Management performance report for Q2 2020 Reported 4/4
Approval of large-scale investment in facilities Approved
Approval of goods and services transactions with subsidiary companies Approved
2020.04.28. Management performance report for Q1 2020 Reported 4/4
2020.03.20. Appointment of the member of Management Committee Approved 4/4
Appointment of the members of the non-executive director candidate recommendation committee Approved
Approval for paying the special bonus for executive officers Approved
Approval for paying remuneration for directors Approved
2021.02.13. Approval for convening the 44th regular general meeting of stockholders Approved 4/4
Approval of matters to submit for consideration during the 44th regular general meeting of stockholders
- Approval of the 44th term financial statements and consolidated financial statements
- Appointment of directors
- Appointment of the member of Audit Committee
- Approval of director’s remuneration limits
Approved
Approval of the total transaction amount limit with affiliates persons in 2020 Approved
Approval of the transaction between major shareholders and the company in 2020 Approved
2021.01.29. Approval of 2019 financial statements and operating report Approved 3/4
Approval of the appointment of the compliance officer Approved
Approval of the revised HR management regulations for executive officers Approved
  • Outside director candidate
    recommendation committee
  • Roles
    Holds meetings when candidates are recommended for the appointment of outside directors.
    Authority
    1. 1. The committee has the authority of recommending candidates for the outside director position to be appointed at the shareholder general meeting.
    2. 2. When deciding on the person to be recommended as an outside director, the recommended candidate should be included six weeks before the general shareholder’s meeting by those who are qualified for exercising the shareholder’s right to recommend a candidate in accordance with Articles 363-2 (1) and 542-6 (1) and (2) of the Commercial Act.
    Members
    Outside Director Hee-Jung Lee, Outside Director Sang-Chan Park, Non-standing Director Joon-Hong Ahn
  • Audit Committee
  • Roles
    Audits the accounting and business of the company.
    Authority
    1. 1. The committee audits the accounting and business of the company. To this end, the committee may request directors to report on business or investigate the company's business and asset status at any time.
    2. 2. The committee can request to hold an extraordinary general meeting by submitting a document to the Board of Directors, which specifies the purpose and reason for holding a meeting.
    3. 3. The committee can request the subsidiary company to report their business, if it is necessary to perform its duties. If the subsidiary company does not report upon receiving the request, or the details of the report need to be confirmed, the committee may investigate the business and property of the subsidiary company in question.
    4. 4. Audit Committee decides matters prescribed in laws and articles of incorporation, and matters delegated by the Board of Directors
    Members
    Outside Director Joon Chae, Outside Director Sang-Chan Park, Outside Director Hee-Jung Lee
    ※ The term of the Audit Committee member lasts until the director's term of office expires.
  • Management Committee
  • Roles
    Improves the efficiency of management and operation of the Board of Directors.
    Authority
    The committee can review and decide the matters delegated by the Board of Directors and other routine management matters.
    Members
    Director Cheol-Dong Jeong, Director Chang-Tae Kim
  • ESG Committee
  • Roles
    Enables the company to fulfil its responsibilities and roles on the environment and the society, and to achieve transparent governance to enable sustainable growth in long term.
    Authority
    Agenda related to ESG management activities is voted for resolution, and agenda considered to be required by the committee can be reported to the Board of Directors.
    Members
    Inside Director Cheol-Dong Jeong , Outside Director Joon Chae, Outside Director Sang- Chan Park, Outside Director Hee-Jung Lee
  • Internal Transaction Committee
  • Roles
    Reinforces internal control of the company on internal transaction to improve fairness in transaction, and also enhance the transparency of company management.
    Authority
    Agenda on internal transaction is voted for resolution, and agenda considered to be required by the committee can be reported to the Board of Directors.
    Members
    Outside Director Joon Chae, Outside Director Sang-Chan Park, Inside Director Chang-Tae Kim