ESG in Action

Governance

We pursue systemic procedural fairness

At Hanwha we believe that governance is the driving force for ESG practices, and as such 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

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 effective decisions and solve problems in a creative manner supported by independence and diversity. We are also transparent in disclosing our operating policies to stakeholders.

Hanwha prioritizes active communication between employees and shareholders.

01. Board autonomy

As the company’s highest decision-making body, the Board of Directors must be independent from senior management and controlling shareholders. All Hanwha’s listed companies ensure board autonomy by appointing outside directors, who comprise a majority of each respective board. Outside directors are selected as candidates by the board through recommendations from the Executive Candidate Recommendation Committee or the Outside Director Candidate Recommendation Committee, and finally they are appointed through a resolution at the General Meeting of Shareholders. For fair operation, Hanwha’s policy prohibits the tenure of any outside director from exceeding six years, and no one from a Hanwha affiliate can serve as an outside director. Hanwha Energy, even though it is not a listed company, is enhancing governance transparency by ensuring that two members of its five-member board are outside directors.

Hanwha's operating policies are transparently disclosed to stakeholders.

02. 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 an eco-friendly energy company with a global mindset, Hanwha Solutions operates a multinational board that has become more diverse with the addition of outside directors from overseas. Likewise, Hanwha Solutions and the Group’s other four subsidiaries — Hanwha Corporation, Hanwha Aerospace, Hanwha Life, and Hanwha Investment & Securities — have achieved greater gender balance on their boards in recent years by choosing women to serve as outside directors. During their first two years, all board members undergo a comprehensive assessment of their performance and expertise. The results determine their eligibility for reappointment.

Hanwha believes governance is the driving force for ESG practices.

03. Corporate Governance Charter

Six of our listed companies — Hanwha Corporation, Hanwha Aerospace, Hanwha Solutions, Hanwha Life, Hanwha General Insurance, and Hanwha Investment & Securities — have established Corporate Governance Charters. This step forward strengthens competitiveness and builds a balanced governance system with mutual checks to ensure fairness, transparency, and independence. These Charters specify 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 the rights of shareholders, customers, partners, executives, and employees. They also set out principles and standards consistent with international corporate governance practices and are posted on each company’s website for easy access.

Shareholder-Friendly Management

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

01. Strengthening shareholder communication

Hanwha’s affiliates actively communicate with our shareholders, transparently disclosing corporate activities and achievements through offline and online channels including regular & special IR events, Q&A sessions, conference calls, as well as company websites and social media. Hanwha Corporation, Hanwha Aerospace, Hanwha Systems, Hanwha Solutions, and Hanwha Life host a Non-Deal Roadshow (NDR), which announces quarterly results. Through these events, Hanwha transparently discloses corporate activities and performance indicators, regularly providing communications about the company’s 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 listed companies publish sustainability reports every year to transparently disclose ESG management activities and company performance to our stakeholders.

02. Increasing shareholder participation in management

Using various channels, Hanwha supports shareholders who seek to easily exercise their rights at shareholder meetings. Hanwha’s 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 voting systems that allow shareholders to vote with written ballots. This better respects minority shareholder rights and makes it more convenient for shareholders to participate in management.

03. Communication channels for Hanwha listed company shareholders

Conference calls
Online channels such as YouTube,
blogs, and company websites
IR events, Non-Deal Roadshows (NDR), corporate presentations

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

Ethics & Compliance Management

Hanwha upholds high standards of ethical conduct and has robust systems and procedures in place to ensure compliance. The Hanwha Compliance Committee is a consultative body that establishes Group-level policies, supports all Hanwha affiliates in implementing those policies, and plays an advisory role with regard to compliance. To achieve our goals in a more objective and systematic manner, we continually work to meet international compliance standards and obtain the relevant certifications. Currently, we hold ISO certification for our compliance management systems (ISO 37301) and anti-bribery management systems (ISO 37001).

01. Internalizing ethics

Together with our Compliance Committee, Hanwha is working to internalize ethics in all employees so everyday work and life reflect 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 to encourage spontaneous ethics & compliance management.

Hanwha Compliance Committee

02. Pursuing global compliance standards

Hanwha’s affiliates are committed to upholding international compliance standards. As a result, our affiliates continue to obtain international standard certifications that recognize the level of our compliance management systems. In 2021, Hanwha Aerospace was the first defense company in Korea to obtain certification for compliance management systems (ISO 37301).* Hanwha Solutions and Hanwha Aerospace obtained compliance management systems (ISO 37301) certification as well as 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 the anti-corruption policies of 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 in-house systems to prevent corruption, such as corrupt monetary transactions, bribery, and inappropriate rebates.