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Corporate Governance

Samsung Engineering is committed to engaging in responsible management by establishing sound and transparent corporate governance and strengthening communication to secure trust from shareholders and other various stakeholders and protect their rights. The goal of Samsung Engineering’s board of directors (BOD) is to increase the efficiency and transparency of management practices, while also strengthening the financial soundness of the company. Moreover, Samsung Engineering operates five committees under the BOD in order to serve the different needs of stakeholders in our management activities and effectively decide on major management issues.

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Composition of the BOD

The goal of Samsung Engineering’s board of directors (BOD) is to increase the efficiency and transparency of management practices, while also strengthening the financial soundness of the company. At Samsung Engineering, the CEO chairs the BOD in order to ensure timely and swift decision-making, as well as seamless implementation of all final decisions. The BOD consists of three executive and four independent directors to ensure transparency and independence in the decision-making process.

Major Shareholders - Name, Ownership
Directors Name Position Date of
Appointment
End of Term
Executive
Director
Sung An Choi President & CEO, Samsung Engineering, BOD Chairman Jan. 26, 2018 Jan. 25, 2021
Chan Sul Jung Head of Engineering Division, Samsung Engineering Jan. 26, 2018 Jan. 25, 2021
Kang Joon Kim Head of Corporate Support Division, Samsung Engineering Jan. 26, 2018 Jan. 25, 2021
Independent
Director
Young Se Kim Professor of the School of Economics, Yonsei University Mar. 15, 2013 Mar. 29, 2019
Hyung Sik Oh Former Professor of the Department of Industrial Engineering, Seoul National University Mar. 30, 2016 Mar. 29, 2019
Man Ho Seo Former Vice President of Woori Bank Mar. 24, 2017 Mar. 23, 2020
Il Dong Park Former Deputy President of the Export-Import Bank of Korea Mar. 22, 2018 Mar. 21, 2021

* As of May 2018

Director Appointment Process

Inside director candidates are recommended by the BOD or shareholders, whereas outside director candidates are nominated by the Outside Director Recommendation Committee, which takes into account their experience and expertise in respective areas of economic, social, legal and technical issues. The BOD and Outside Director Recommendation Committee review candidates’ qualifications before referring the appointment to the general shareholders’ meeting. Outside directors are restricted from holding more than two external positions, and those who are major shareholders or affiliates of the company do not qualify to be appointed as outside directors.

Director Appointment Process

Committees of the BOD

Samsung Engineering operates five committees under the BOD—the Management Committee, Audit Committee, Outside Director Recommendation Committee, Related Party Transactions Committee, and Compensation Committee—all of which effectively serve the different needs of stakeholders in our management activities.

    Management Committee
      The Management Committee deliberates and decides on matters, and reports to the BOD as authorized by the BOD resolutions, by-laws or operation rules in order to facilitate quick and smooth decision-making on management issues.
      Audit Committee
        The Audit Committee is responsible for appointing accounting, performance and external auditors. The members of the Audit Committee are selected at the general shareholders’ meeting. The list of candidates for the Committee members is announced publically before the day of a meeting so that shareholders can make an informed decision on appointing Committee members. The Audit Committee is run by three outside directors to help to ensure the transparency of Samsung Engineering’s management practices.
        Outside Director Recommendation Committee
          The role of the Outside Director Recommendation Committee is to help to ensure that outside directors are able to make decisions without being influenced by the top management or dominant shareholders. To this end, the Committee, consisting of two inside and three outside directors, nominates outside director candidates and they are approved and appointed by the resolution of the general shareholders’ meeting. Candidates for outside directors are selected among those with extensive knowledge and experience in business administration and relevant technologies, ensuring that the outside directors have expertise in making effective and reasonable decisions regarding all aspects of the sustainability management. Those who are major shareholders of or in a special relationship with the company, however, are restricted from being appointed outside directors in order to prevent conflicts of interests in the BOD.
          Related Party Transactions Committee
            The Related Party Transactions Committee carries out prior deliberation and resolutions on insider trading and financial transactions that exceed a certain level in an effort to promote fair trade and further enhance transparency with transactions concerning related parties and corporate governance.
            Compensation Committee
              Since March 2015, the Compensation Committee, composed of 3 outside directors, has worked towards setting up sensible and transparent guidelines in determining remuneration for directors.

            Composition and Functions of Committees

            Major Shareholders - Name, Ownership
            BOD Function Composition Directors
            Management Committee Deliberating and deciding on major management issues 3 executive directors Sung An Choi (Head),
            Chan Sul Jung,
            Kang Joon Kim
            Audit Committee Auditing accounting practices and business activities as well as appointing external auditors 3 independent directors Young Se Kim (Head),
            Hyung Sik Oh,
            Man Ho Seo
            Independent Director Recommendation Committee Recommending outside director candidates 2 executive directors
            3 independent directors
            Sung An Choi (Head),
            Chan Sul Jung,
            Young Se Kim,
            Hyung Sik Oh,
            Man Ho Seo
            Related Party Transactions Committee Deliberating and deciding on transactions with affiliates 3 independent directors Young Se Kim (Head),
            Hyung Sik Oh,
            Man Ho Seo
            Compensation Committee Deliberating and deciding on the limits and policies related to compensation to registered directors 3 independent directors Young Se Kim (Head),
            Hyung Sik Oh,
            Man Ho Seo

            * As of May 2018