Governance

Hanwha pursues transparent management, shareholder-friendly management and ethics & compliance management.

We pursue systemic procedural fairness created by the system.

Hanwha believes governance is the driving force for ESG practices. We are building a system to ensure procedural fairness for sound governance. To provide easy access for stakeholders, including employees and shareholders, our organizations set up systems in three areas: transparent management, shareholder–friendly management and ethics & compliance management. By ensuring fairness, transparency and independence, we will establish a more systematic and sustainable governance structure.

Transparent
Management

In order to practice transparent management, the Board of Directors, the company’s highest decision–making body, should be appointed in a balanced manner and its professional role should be defined in advance. Hanwha affiliates organize their boards in ways appropriate to their respective business areas so directors can make rational decisions and solve problems in a creative manner supported by independence and diversity. We also established operating policies that are transparently disclosed to stakeholders.

  • Board Autonomy

    As the highest decision–making body of the company, the Board of Directors must be independent from senior management and controlling shareholders. Hanwha’s seven listed companies appoint outside directors as a majority of their boards to ensure independence. Outside directors are selected as candidates by the board through recommendations of the Executive Candidate Recommendation Committee or the Outside Director Candidate Recommendation Committee, and finally appointed through a resolution of the General Meeting of Shareholders. For fair operation, we established a policy that prohibits the appointment of long–term outside directors whose tenure exceeds six years, and also prohibited outside directors from Hanwha affiliates. Hanwha Energy, even though it’s not listed company, is enhancing governance transparency by including two outside directors out of a total of five board directors.

  • Board of Directors diversity and expertise

    Hanwha is strengthening the diversity and expertise of its Board of Directors by appointing outside directors with expertise and experience in specific fields. As a global eco–friendly energy company, Hanwha Solutions operates a multinational board that includes international outside directors. Our five subsidiaries, including Hanwha Corporation, Hanwha Aerospace, Hanwha Solutions, Hanwha Life and Hanwha Investment & Securities, expanded board diversity by appointing women as outside directors. Appointed directors receive a comprehensive assessment of expertise and responsible performance during a two–year primary term, then reappointment is determined by assessment results.

  • Corporate Governance Charter

    Our six listed companies, including Hanwha Corporation, Hanwha Aerospace, Hanwha Solutions, Hanwha Life, Hanwha General Insurance and Hanwha Investment & Securities, established the Corporate Governance Charter. This step forward strengthens competitiveness and builds a balanced governance system with mutual checks to ensure fairness, transparency and independence. The Charter specifies the authority and responsibilities of the Board of Directors and Audit Committee to ensure sound governance as well as the protection of stakeholder rights, including for shareholders, customers, partners, executives and employees. The Charter sets out principles and standards consistent with international corporate governance practices and is posted on the company's homepage for easy access.

Shareholder–
Friendly
Management

To ensure financial and social sustainability, we prioritize active communications with shareholders within a strict system to protect shareholder rights. Shareholder communications includes listening to all opinions via several channels. We also promote shareholder participation in management so we can jointly determine management direction and create a more stable and fair corporate management system.

  • Strengthening shareholder communications

    Hanwha's affiliates actively communicate with shareholders as we transparently disclose corporate activities and achievements through offline and online channels, such as regular & special IR, Q&A sessions, conference calls, site homepages, social media and more. Hanwha Corporation, Hanwha Aerospace, Hanwha Systems, Hanwha Solutions and Hanwha Life host a Non–Deal Roadshow (NDR), which announces quarterly results. These events transparently disclose corporate activities and performances, regularly providing communications about the company's key performance and investor interests and needs. We also make efforts to ensure transparency in corporate management and earn shareholder trust by disclosing management information. Beyond complying with legally required disclosures, we voluntarily disclose important issues that may have a significant impact on stakeholder decision–making, including for shareholders. Our seven listed companies publish a sustainability report every year to transparently disclose ESG management activities and company performance to stakeholders.

  • Increasing shareholder participation in management

    Using various channels, Hanwha supports shareholders who seek to exercise their rights in more convenient ways at shareholder meetings. Hanwha’s seven listed companies introduced an electronic voting system that allows shareholders to exercise voting rights online without needing to attend meetings in person. Hanwha Corporation, Hanwha Solutions and Hanwha Systems operate a written voting system that allows shareholders to vote and reply with written ballots mailed to them from the companies. The system improves minority shareholder rights and makes it more convenient for shareholders to participate in management.

Communications channels for Hanwha listed company shareholders
  • Conference calls
  • Online channels, such as YouTube, blogs, company homepages
  • IR meetings, NDR*,
    corporate presentations

    * Non–Deal Roadshow

Hanwha Corporation, Hanwha Aerospace,
Hanwha Systems, Hanwha Solutions,
Hanwha Life, Hanwha General Insurance,
Hanwha Investment & Securities

Ethics &
Compliance
Management

Ethics & compliance management refers to management that makes individual decisions and actions with a moral principle, or “ethics,” and that rigorously follows the structured discipline established by society, or “compliance.” To fully internalize our ethics & compliance management, we operate a compliance committee within the Group and affiliates. We are focused on obtaining certifications for international standards to achieve our goal in a more objective and systematic manner, including compliance management systems and anti–bribery management systems.

  • Internalizing ethics

    Overseen by the Compliance Committee, Hanwha is working to internalize ethics in all employees so everyday work and life reflects ethics & compliance management. Launched in 2018, the Hanwha Compliance Committee promotes compliance management in all affiliates by establishing a groupwide policy, monitoring affiliate activities and offering advice and support on relevant issues. The Committee produces guidelines for employees for voluntary compliance with the rules and regulations and develops education programs to improve understanding about compliance. In addition, the Committee supports compliance teams in each affiliate in order to encourage spontaneous ethics & compliance management.



    Hanwha Compliance Committee
    Compliance Committee
    Compliance Committee
    Chair
    External
    members
    (Three)
    Internal
    members
    (Two)
  • Pursuing global compliance standards

    Hanwha affiliates are committed to international compliance capabilities. As a result, our affiliates continue to obtain international standard certifications that recognize the level of our compliance management systems. In 2021, Hanwha Defense was the first in South Korea’s defense industry to obtain the certification of compliance management systems (ISO 37301).* Hanwha Solutions and Hanwha Aerospace obtained both the compliance management systems (ISO 37301) certification as well as the anti–bribery management systems (ISO 37001) certification.** In 2021, Hanwha Aerospace was ranked first in Asia and one of the top five companies worldwide by Transparency International’s Defense Companies Index on Anti–Corruption and Corporate Transparency (DCI), which rates anti–corruption policies in 134 of the world’s largest defense companies. Hanwha Aerospace received a B grade and was ranked in the top 12 percent of the 134 companies evaluated.

    * Compliance Management Systems (ISO 37301) certification: An international certification awarded after an assessment that a company’s compliance and risk management policies operate effectively and in line with global standards. ** Anti–Bribery Management Systems (ISO 37001) certification: An international certification awarded to companies with

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