LOTTE Chemical Co., Ltd. (hereinafter Company) strives to contribute to the abundant lives of humanity by providing trusted and loved products and services. Company shall aim for continuous of corporate value as a company that is loved by citizens and fulfills its
social responsibilities.Company shall enact a corporate governance charter to construct a healthy governance that will serve as the platform for continuous growth, and shall procure fair, transparent and independent governance to operate an inter-checking and balanced
Chapter 1 Stockholders
Article 1 Rights of Stockholders
① Stockholders shall have basic rights prescribed by the Commercial Act and relevant laws such as rights to profit distribution participation, attending general meeting of stockholders, voting rights, etc.
② Matters that can result in major changes of the existence of Company or stockholder rights shall be determined in a way that will provide maximum guarantee of stockholder rights.
③ Company shall choose the time and place of the general meeting of stockholders so that as many stockholders as possible can attend, and provide stockholders with information such as the time, place and agenda of the general meeting of stockholders ahead of time.
④ Stockholders may propose agendas for the general meeting of stockholders according to the relevant laws such as the Commercial Act and ask questions or request explanations on the agenda of the general meeting of stockholders.
Article 2 Fair Treatment of Stockholders
① Stockholders shall have one voting right per common stock. However, voting rights for certain stockholders may be restricted as prescribed by law.
② Company shall provide fair and sufficient information necessary for stockholders in a timely fashion. Also, when disclosing information not having duty for public announcement, it must be provided fairly to all stockholders.
③ Company shall protect stockholders from unfair internal trading or self-trading of controlling stockholders.
Article 3 Responsibility of Stockholders
① Stockholders must recognize that exercising their voting rights can affect company management and strive to assertively exercise voting rights for the development of Company.
② Controlling stockholders exercising influence over Company management must act for the interests of all stockholders, and must strive not to cause damages to Company or other stockholders by behaving in a manner contrasting to it.
Chapter 2 Board of Directors
Article 4 Functions of Board of Directors
① The board of directors shall have comprehensive authority over the management of Company and shall perform management decision-making functions and management supervision functions.
② The board of directors can delegate authorities to the CEO or a committee in the board of directors. However, major issues prescribed by laws, articles of incorporation, or regulations of the board of directors shall be excluded.
Article 5 Composition of Board of Directors and Appointment of Directors
① The board of directors shall be of a scale allowing effective and prudent discussions and decision-making, and it shall be composed of a sufficient number of persons for the committee to be activated within the board of directors.
② The board of directors shall have outside directors who can perform functions independently from the executives and controlling stockholders and the number of outside directors shall be three or more so that they may maintain practical independence from the board of
directors and more than half of all directors.
③ The board of directors shall be composed of competent persons having expertise that can make practical contributions to the management of Company, and the term of the appointed directors shall be guaranteed unless there is a reason not to.
④ Company shall strive to enhance diversity of the board of directors to flexibly respond to changes in the business environment based on various perspectives and experiences.
⑤ Company shall allow stockholders to exercise voting rights with sufficient information and time to make a decision on candidates for directors.
Article 6 Operation of Board of Directors
① Board of director meetings shall, by principle, be held regularly at least once every three months, and special board of director meetings shall be held as necessary.
② There shall be board of director regulations that prescribe the authorities, responsibilities, operation procedures, etc. of the board of directors for the smooth operation of board of director meetings.
③ Company shall draft, maintain and store meeting records for each meeting.
④ Company shall disclose the attendance rate of individual directors and the activities of individual directors such as their voting history, etc. for major agendas subject to public announcement.
⑤ Directors may participate in board of director meetings by using remote communication tools.
Article 7 Committee within Board of Directors
① The board of directors can install a committee within the board of directors to perform certain functions and roles for prompt and efficient decision-making.
② Composition, operation and authority of all committees shall be in accordance to the regulations of each committee separately prescribed.
③ The committee shall report the resolutions to the board of directors and the board of directors can once again vote on the resolutions of the committee.
Article 8 (Responsibility for Ethical Compliance)
① Directors shall complete their duties according to the duties of care and good faith as good managers.
② Directors shall not exercise his or her authorities for self-interests or the interests of third persons, and must also pursue results the best interests to Company and stockholders.
③ Directors may not disclose corporate secrets that have become known while carrying out duties, and may not use it for self-interests or interests of third persons.
Article 9 Responsibility of Directors
① Should a director violate laws or the articles of association or negligent his/her duties causing damage to Company, that director shall be liable for compensation of damages to Company. Should there be malicious intent or gross negligence by a director, that
director shall be liable for compensation of damages to third parties as well.
② During the course of making management judgments, directors shall collect sufficient reliable data and information in a reasonable manner, review such data and information, and perform duties in a method deemed to be of the best interest of Company according to the
diligent and rational judgment, then such management judgment of the director must be respected.
③ Company may subscribe to liability insurance for directors at the cost of Company to procure effectiveness to call directors into account for liabilities and to recruit competent persons as directors.
Article 10 Outside Directors
① Outside directors shall independently participate in major decision-making of Company through board of director activities and make up the board of directors to supervise and support management.
② Outside directors shall be appointed at the general meeting of stockholders at the recommendation of the outside director candidate recommendation committee, and the committee shall be composed in a manner to procure fairness and independence of director candidates.
③ Outside directors may request provision of information needed for carrying out duties. Furthermore, consultation from outside experts can be received through appropriate procedures when necessary, and Company shall pay for such expenses.
④ Company shall regularly report or provide management information such as Company work situations for accurate and timely identification of management status of Company for outside directors, and shall establish and operate continuous education and training programs
for outside directors.
Article 11 Evaluation and Compensation
① Management activities of the board of directors must be evaluated fairly and the results shall be appropriately reflected in compensation.
② Evaluations on the board of directors and outside directors shall be performed regularly to enhance the efficiency of the board of directors.
③ Compensation of directors or work-related expenses shall be determined by the board of directors regarding payment and the amount of payment within the scope of payment determined by the resolution of the board of directors.
④ Compensation for directors shall maintain reasonable proportionality with his or her duties, and it shall be determined at an appropriate level considering the financial status of Company, and it must be in accordance with the regular profit enhancement of Company
⑤ Company may delegate matters related to compensation such as wage ceilings, etc. of registered directors to the compensation committee.
Chapter 3 Audit Organization
Article 12 Audit Committee
① All members of the audit committee shall be outside directors in order to maintain independence, and at least one auditor must be an expert on accounting or finances
② The audit committee shall perform duties such as legality inspections on the work activities of directors and management, integrity and feasibility inspections on the financial activities of Company, review on the accuracy of financial reports, authorization of
appointment and dismissal of outside auditors, and follow-up reports, etc. at general meetings of stockholders.
③ The audit committee can read or copy ledger records and documents related to auditing at any time, and it may request reports on sales to directors or investigate the work and assets of Company.
④ When necessary, the audit committee may request consulting to outside institutes or experts at the cost of Company.
Article 13 Outside Auditor
① Company shall maintain legal and practical independence for outside auditors from Company, management, and controlling stockholders, etc.
② Outside auditors shall attend the general meeting of stockholders, and if there are questions from stockholders regarding audit reports, the outside auditor shall provide explanation.
③ Outside auditors shall check whether there is information that is inconsistent with audit results from the audited financial statements and regular publicly announced information.
④ Outside auditors shall strive to check for corrupt or illegal activities of Company during audits.
⑤ Outside auditors shall consider the sustainability of Company according to that prescribed by relevant laws such as the Act on External Audit of Stock Companies.
⑥ Outside auditors shall report important matters checked during outside audit activities to the audit committee.
Chapter 4 Stakeholders
Article 14 Protection of Rights of Stakeholders
① Company shall strive to develop while sharing greater value with various stakeholders such as customers, employees, partners, etc.
② Company shall respect the rights of laborers and improve the quality of life of laborers.
③ Company shall value cooperative relationships with partners promote the establishment of a fair market order through compliance with laws related to fair trade, and seek balanced development of the national economy.
④ Company shall observe protective procedures of creditors regarding mergers, capital decrease, splits, etc. that have major impact on the status of creditors.
⑤ When a stakeholder is also a stockholder, the rights of both stakeholder and stockholder shall be protected.
⑥ Company shall provide information necessary for protecting the rights of stakeholders within the scope permitted by law and contracts with third parties, and it shall support access to the relevant information of stakeholders.
Chapter 5 Management Monitoring by Market
Article 15 Public Announcement
① Company shall draft and make public regular business reports, quarterly reports, and half-year reports, and shall diligently, promptly, and honestly make public information related to Company to stockholders and stakeholders.
② In addition to public announcements required by law, Company shall announce matters that may have a major impact on the decision-making of stockholders and stakeholders in detail and accurately.
③ Company shall draft public announcements in an easy-to-understand manner, and shall strive to make it easily usable by stakeholders.
④ Company shall designate a supervisor of public announcements, and shall establish an internal information delivery system so that important information of Company can be delivered to the public announcement supervisor promptly.
⑤ Company shall not provide preferential or discriminatory treatment to specific persons in terms of the scope or time of disclosing important corporate information, and it shall be publicly announced so that all stakeholders can access the information simultaneously.
Article 16 Corporate Management Rights Market
① All actions that can result in change in Company management rights such as acquisition, merger and splitting of Company or transfer of major businesses must be performed according to a transparent and fair process.
② Defending Company management rights should not be performed in a manner that sacrifices the interests of Company and stockholders to maintain the management rights of partial stockholders or management.
③ Company shall allow a stockholder who opposes major structural changes such as mergers, transfer of major operations, etc. to exercise stock purchase rights according to a fair value reflecting the actual value of his/her share as prescribed by law.