Corporate Governance < Invest

LG U⁺’s efforts to improve its corporate governance

Practice responsible management and improve the efficiency of the Board of Directors

We have composed the Board of Directors of top experts in each field to make comprehensive management decisions with a long-term perspective in the rapidly changing IT industry. Our outside directors are experts in management, electrical and electronics, and law and objectively supervise and advise on the activities of executive directors and management.

Enhance management transparency

All four outside directors at LG U+ are members of the Audit Committee. We are striving to realize ethics management through vigorous audits. For audits and management consultation, we have an ethics management officer who operates as an independent organization responsible for ethics management under the direct control of the CEO. We have also appointed an external consulting specialist and external auditor to conduct thorough business and accounting audits based on the annual audit plan. In addition, we conduct frequent audits based on LG U+ ethical management and operate a reporting system, monitoring, and the Ethics Management Committee.

Internal control and risk management

We have an internal accounting management system to effectively control risks such as errors and fraud in accounting information, appoint a compliance officer, and establish and operate a compliance control system to handle various legal violations. In addition, our Chief Risk Management Officer (CRO) and Chief Safety Executive Officer (CSEO) manage non-financial risks in an integrated manner.

Continuously improve IR activities and corporate governance

We provide fast and accurate information on the company's business performance and communication strategy to investors in Korea, investment groups in other countries, and analysts. In addition, we are actively engaged in IR activities, such as providing customized information according to investor preferences. We are continuously striving to improve corporate governance.

The corporate governance structure of LG U⁺

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List of Directors

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List of Directors : Category, Name, Organization/current post, Appointed date, Term, Committee table
Category	Name	Organization/current post	Appointed date	Term	Committee
Executive director	Hwang Hyeon Sik	CEO and Chairman of the Board of Directors, LG U⁺	2024-03-21	3 years	Member of the ESG Committee Chairman of the Finance Committee
Executive director	Yeo Myung Hee	Executive director, LG U⁺	2023-03-17	3 years	Member of the Internal Transaction Compliance Committee Member of the Finance Committee
Other non-executive directors	Hong Bum Sik	Head of Management Strategy, LG Co., Ltd	2022-03-18	3 years	Member of the Outside Director Candidate Recommendation Committee
Outside directors	Yoon Sung Soo	Professor, Department of Business Administration, Korea University	2023-03-17	3 years	Chairman of the Audit Committee Member of the ESG Committee Member of the Outside Director Candidate Recommendation Committee
	Kim Jong Woo	Professor, Hanyang University Business School	2024-03-21	3 years	Member of the Audit Committee Member of the Internal Transaction Compliance Committee Member of the ESG Committee Chairman of the Outside Director Candidate Recommendation Committee
	Nam Hyung Doo	Professor, Yonsei University Law School	2022-03-18	3 years	Member of the Audit Committee Chairman of the Internal Transaction Compliance Committee Member of the ESG Committee
	Eom Yoon Mi	Director, Book Culture Foundation See-art	2023-03-17	3 years	Member of the Audit Committee Member of the Internal Transaction Compliance Committee Chairman of the ESG Committee

Information on the operation of the Board of the Directors

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Operation of the Board
of Directors

Operation of the Board of Directors: Members, Frequency, Main activities
Members	Seven total person Four outside directors (Yoon Sung Soo, Kim Jong Woo, Nam Hyung Doo, Eom Yoon Mi), Two executive directors (Hwang Hyeon Sik , Yeo Myung Hee), One non-executive director (Hong Bum Sik)
Frequency	Seven to ten times annually
Main activities	Decisions on major business issues, supervision of directors’ duties

Excerpts from the Regulations of the Board of Directors

1. Role: The Board of Directors deliberates and resolves matters stipulated in laws and the Articles of incorporation and important matters related to the Company’s business management
2. Types

Regular meetings of the Board of Directors: Once a quarter
Special meetings of the Board of Directors: As needed

3. Person with authority to convene: Meetings will be convened by either the Chairman or another director separately designated by the Board of Directors. However, if the person authorized to convene does not convene a meeting of the Board of Directors, the director who has requested such a meeting is entitled to convene the meeting
4. Convening process: Each member will be notified of a meeting at least twelve hours prior to the set date by written, electronic, or oral notice. However, the foregoing may be omitted if there is unanimous consent of all directors.
5. Composition: All directors. Outside directors must hold a majority of the total number of directors
6. Resolutions: A majority of directors must be present, and an affirmative vote of a majority of all directors present are required.
7. Agenda

Convening a meeting of shareholders
Business plan approval
Establishment, operation, and abolishment of committees within the Board of Directors
Investment in facilities exceeding a certain amount
Investment and disposition of shares of other companies in Korea and abroad exceeding a certain amount
Acquisition and disposition of assets exceeding a certain amount and partial transfer of business
Borrowing funds exceeding a certain amount of funds
Provision or guarantee of collateral for other parties exceeding a certain amount
Transactions involving the largest shareholder
Establishment, amendment, and abolishment of important company rules and regulations
Transactions between directors and the Company

8. Reports

Results of handling matters delegated to committees within the Board of Directors
Matters recognized by the Audit Committee that a director has or is likely to commit an act in violation of laws or the Articles of Incorporation
Reports on mergers and consolidations
Matters related to corporate social responsibility activities
Matters related to the execution of other important business operations

9. Committees

The Board of Directors may establish committees as determined by the Articles of Incorporation through a resolution of the Board of Directors.
The Board of Directors operates the Audit Committee, Internal Transaction Compliance Committee, ESG Committee, Outside Director Candidate Recommendation Committee, and Finance Committee

Information on the operation of the Audit Committee

Operation of the Audit
Committee

Operation of the Audit Committee: Members, Frequency, Main activities
Members	Four total person Four outside directors (Yoon Sung Soo, Kim Jong Woo, Nam Hyung Doo, Eom Yoon Mi)
Frequency	Five to seven times annually
Main activities	Accounting and business audits

Excerpts from the Audit Committee Regulation

1. Role: Accounting and business audits of the Company
2. Types

Regular Audit Committee meetings: Once a quarter
Special Audit Committee meetings: As needed

3. Person with authority to convene: Meetings will be convened by the Chairman. However, if the chairman does not convene a meeting of the Board of Directors, the member who has requested such a meeting is entitled to convene the meeting
4. Convening process: Each member will be notified of a meeting at least twelve hours prior to the date set for a meeting by written, electronic, or oral notice. However, the foregoing may be omitted if there is unanimous consent of all members.
5. Composition: No less than three directors. No less than two-thirds of the Committee must be outside directors.
6. Resolutions: A majority of the incumbent members and an affirmative vote of a majority of all members present are required However, in the case of special resolutions, the decision must be made with the attendance of more than 2/3 of the registered members and the approval of a majority of the members present.
7. Agenda

Request the Board of Directors to convene an extraordinary general meeting of shareholders
Statement on the agenda and documents at a general meeting of shareholders
Obligation to report to the Board of Directors when a director discovers or has concerns about another director violating related laws or the Articles of Incorporation
Prepare and submit audit reports
Request for injunction regarding illegal acts of directors
Request business reports from directors
Matters delegated by the Board of Directors
Investigate business status and financial status
Investigate subsidiaries
Receiving reports from directors
Acting as a representative of the Company regarding litigation between directors and the Company
Deciding to file/not file a lawsuit when a minority shareholder requests a lawsuit against a director
Report settlement of accounts
Review annual financial statements
Review auditor selection
Request to appoint, change, or dismiss auditors
Receive reports from auditors of fraudulent acts of directors or important facts that violate laws or the Articles of Incorporation
Receive a report from the auditor on a Company violation of the standards for accounting, etc.
Audit plan and results (including audit plan review and approval)
Review the feasibility of important accounting standards or changes in accounting estimates
Enactment or amendment of internal accounting management regulations
Evaluation of the implementation of the internal accounting management system
Evaluation of the implementation of the internal monitoring system
Evaluation of the auditor's audit activities (including the auditor's prior review and approval of the non-audit service contract)
Confirmation of actions taken for corrections as a result of an audit
Consent on the appointment and dismissal of the head of a department supporting the Audit Committee and evaluation
Other matters stipulated in laws and the Articles of Incorporation

8. Responsible department

The Audit Committee has an independent auditing department directly reporting to the Audit Committee to support its work.
The Audit Committee has the right to consent to the appointment and dismissal of the person in charge of the internal audit department

Information on the operation of the Internal Transaction Compliance Committee

Operation of the Internal
Transaction Committee

Operation of the Internal Transaction Committee: Members, Frequency, Main activities
Members	Four total person Three outside directors (Nam Hyung Doo, Kim Jong Woo, Eom Yoon Mi), One executive director (Yeo Myung Hee)
Frequency	Two to three times annually
Main activities	Resolution on internal transactions

Excerpts from the regulations of the Internal Transaction Compliance Committee

1. Role: Decision on matters related to internal transactions (approval for review of transactions between affiliates, etc.)
2. Types

Regular Internal Transaction Compliance Committee meetings: Once semi-annually
Special Internal Transaction Compliance Committee meetings: As needed

3. Person with authority to convene: Meetings will be convened by the Chairman. However, if the chairman does not convene a meeting of the Board of Directors, the member who has requested such a meeting is entitled to convene the meeting
4. Convening process: Set the meeting date and place, and Each member and attendant will be notified of a meeting twelve hours prior to the set date by written, electronic, or oral notice. However, the foregoing may be omitted if there is unanimous consent of all members.
5. Composition: No less than three directors. No less than two-thirds of the Committee must be outside directors.
6. Resolutions: A majority of the incumbent members and an affirmative vote of a majority of all members present are required
7. Agenda

Transactions falling under any of the following among transactions involving the largest shareholder of the Company, his affiliated persons, and the Company’s affiliated persons under the Commercial Act
A. When the single transaction is five one-thousandths (5/1,000) or more of the total assets or total sales as of the end of the most recent business year
B. When the annual transaction volume is twenty-five one-thousandths (25/1,000) or more of the total assets or total sales as of the end of the most recent business year
When the transaction is a transaction with a party that falls under the prohibition of providing unfair benefits to affiliated persons under the Fair Trade Act (regulation on illegal profit-taking practices for personal interests) and the amount is not less than two billion won.
Matters related to internal transactions that require approval from the Board of Directors (transactions between affiliates, etc.)

8. Reports

Matters concerning the implementation details of internal transactions approved by the Board of Directors
Other matters deemed necessary by the Committee

9. Responsible department

The Internal Transaction Compliance Committee has a department supporting the committee to assist in its affairs and support its operation.

Information on the operation of the ESG Committee

Operation of the ESG
Committee

Operation of the ESG: Members, Frequency, Main activities
Members	Five total person Four outside directors (Eom Yoon Mi, Yoon Sung Soo, Kim Jong Woo, Nam Hyung Doo), One executive director (Hwang Hyeon Sik)
Frequency	No less than once semi-annually
Main activities	Deliberation and resolution of non-financial factors (ESG) for sustainable growth

Excerpts from the regulations of the ESG Committee

1. Role: Deliberation and resolution of non-financial factors (ESG) for sustainable growth
2. Types

Regular committee meetings: Once semi-annually
Special committee meetings: As needed

3. Person with authority to convene: Meetings will be convened by the Chairman. However, if the chairman does not convene a meeting of the Board of Directors, the member who has requested such a meeting is entitled to convene the meeting
4. Convening process: Each member will be notified of a meeting at least twelve hours prior to the set date by written, electronic, or oral notice. However, the foregoing may be omitted if there is unanimous consent of all members.
5. Composition: No less than three directors. No less than two-thirds of the Committee must be outside directors
6. Resolutions: A majority of the incumbent members and an affirmative vote of a majority of all members present are required
7. Agenda

Establishment of basic policies and strategies for ESG management
Mid- to long-term ESG goal setting
Other matters delegated by the Board of Directors or deemed as necessary by the Committee

8. Reports

Planning and implementation of ESG management activities
Matters related to the occurrence of significant ESG-related risks and response therefor
Important matters related to compliance control, including management of key compliance risks
Other matters deemed necessary by the committee

9. Responsible department

The ESG Committee has a department supporting the committee to assist in its affairs and support its operation.

Information on the operation of the Outside Director Candidate Recommendation Committee

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Operation of the Outside
Director Candidate Recommendation
Committee

Operation of the Outside Director Candidate Recommendation Committee : Members, Frequency, Main activities
Members	Three total persons Two outside directors (Kim Jong Woo, Yoon Sung Soo), One additional non-executive director (Hong Bum Sik)
Frequency	Two to three times annually
Main activities	Review for fairness and independence in finding outside directors with expertise and nomination of candidates

Excerpts from the regulations of the Outside Director Candidate Recommendation Committee

1. Role: Recommendation of outside director candidates
2. Type: Convene as needed
3. Person with authority to convene: Meetings will be convened by the Chairman. However, if the chairman does not convene a meeting of the Board of Directors, the member who has requested such a meeting is entitled to convene the meeting
4. Convening process: Each member will be notified of a meeting at least twelve hours prior to the set date by written, electronic, or oral notice. However, the foregoing may be omitted if there is unanimous consent of all members.
5. Composition: Composed of three members. One person is either an inside director or a non-executive director and two others are outside directors
6. Resolutions: A majority of the incumbent members and an affirmative vote of a majority of all members present are required
7. Agenda

Recommendations for outside director candidates
Other matters necessary for the recommendation of outside directors

Information on the operation of the Finance Committee

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Operation of the Finance Committee

Operation of the Finance Committee : Members, Frequency, Main activities
Members	Two total persons Two executive directors (Hwang Hyeon Sik, Yeo Myung Hee)
Frequency	Convene as needed
Main activities	Review and decide on matters delegated by the Board of Directors or routine financial issues for efficient operation of the Board of Directors

Excerpts from the regulations of the Finance Committee

1. Role: Matters delegated by the Board of Directors or routine financial issues
2. Type: Convene as needed
3. Person with authority to convene: Meetings will be convened by the Chairman. Each member is entitled to request the convening of the Finance Committee by giving the agenda and the reason thereof.
4. Convening process: Each member will be notified of a meeting at least twelve hours prior to the set date by written, electronic, or oral notice. However, the foregoing may be omitted if there is unanimous consent of all members.
5. Composition: Composed of no less than two directors
6. Resolutions: A majority of the incumbent members and an affirmative vote of a majority of all members present are required
7. Agenda

Establishment, relocation, or closing of branches, offices, and business establishments
New borrowing and issuance of corporate bonds below a certain amount within the quarterly borrowing limit approved by the Board of Directors
Other routine Board of Directors mandates
Determination of the closing period and base date of the list of shareholders

Guidelines on Independent Directors' Independence

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「Guidelines on Independent Directors' Independence」

The board of directors at LG Uplus Corp. is majority independent, and systems are in place to ensure independent directors’ independence.

LG Uplus Corp. complies with the Commercial Act and other applicable South Korean laws concerning matters of independent directors’ independence. Pursuant to these laws and regulations, efforts are made to monitor and strengthen the independence of current directors and board member candidates.
Independent directors constitute a majority of the board

LG Uplus Corp. uses the following criteria to ensure independent directors’ independence

Whether or not s/he has worked for the company, as an employee, within the past 5 years;
Whether or not his/her immediate family member has worked for either the company or its affiliates within the past 3 years;
Whether or not s/he is in an employment relationship with the company’s external auditor;
Whether or not s/he is an employee of a corporate entity with which the company has signed an agreement on consulting services and technical partnerships;
Whether or not s/he is an advisor or consultant for the company or its management;
Whether or not s/he is an employee of a corporate entity whose total transactions with the company over the past 3 fiscal years accounted for 10% or more of the company’s total assets or gross sales;
Whether or not s/he has any significant conflict of interest concerning matters that may be decided upon by the board

To ensure director independence, the board takes a holistic approach in determining the existence of any material relationship
between a director and the general affairs of the company.

Guidelines on Expertise and Diversity of the Board of Directors

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「Guidelines on the Expertise and Diversity of the Board of Directors」

To facilitate reasonable decision-making, LG Uplus Corp. ensures that the board is composed of directors with significant experience in a range of fields, and that it can consider a diversity of stakeholder perspectives when making critical decisions for the company.

LG Uplus Corp. uses the following criteria to ensure director expertise:

Whether or not s/he possesses expertise in any of the following areas: management (organizational operations), economy, law, accounting, and environment;
Whether or not s/he possesses expertise and work experience in the industries in which LG Uplus Corp. and its key affiliates operate, and
Whether or not s/he possesses a sufficient understanding of the duties of an independent director.

LG Uplus Corp. uses the following criteria to ensure director diversity:

Gender: adhering to the principle of gender equality so that the board of directors may benefit from diverse perspectives
Age: enhancing the efficiency of the board by combining flexible responses with experience and knowledge to respond to the changing management environment
Professional experience & background: considering the social characteristics of South Korea and appointing directors with diverse backgrounds

Recommendation Process

Use of recommendation process for diverse, independent directors to improve outcomes for a wide range of stakeholders.

The board of directors shall consider expertise and diversity in deciding its composition, and
it should ensure that its membership reflects such requirements in a balanced manner.

LG Uplus Corp. ensures that the board consists of expert directors holding a diversity of experiences and perspectives.
All relevant factors are considered during this process, unless otherwise limited by South Korean laws.

Corporate Governance Assessment

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Corporate Governance Assessment : Category, 2019 year, 2020 year, 2021 year, 2022 year, 2023 year
Category	2019	2020	2021	2022	2023
ESG rating	B+	B	A	A	A
Environmental	B+	B+	A	A	A
Social	A	B+	A+	B+	A
Governance	B+	B	A	A	A

Differences in Corporate Governance Codes

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Differences in Corporate Governance Codes : Recommendations Found in the Codes, Introduced by LG U+, Remark
Recommendations Found in the Codes	Introduced by LG U⁺	Remark
Introduction of the Code of Ethics for Employees	Introduced	Code of Ethics for LG employees
Disclose whether the majority in the composition of the Board of Directors is outside directors	Introduced	Four persons (57.1%) out of seven are outside directors
Disclose the Board of Directors’ activities, attendance rate, and voting results on major agenda items	Introduced	Disclose related information through regular quarterly/half-annual business reports and corporate governance reports (once a year)
Composition of the Outside Director Candidate Recommendation Committee	Introduced	One non-executive director, two outside directors
Disclose whether the Audit Committee is entirely composed of outside directors	Introduced	All four members are outside directors
Introduce regulations on the roles and operating procedures of the Board of Directors and various committees	Introduced	Board of Directors Regulations, Audit Committee Operation Regulations, Finance Committee Operation Regulations, Outside Director Candidate Recommendation Committee Operation Regulations
Take out liability insurance for directors at the Company’s expense	Introduced	-
Evaluate activities of the Board of Directors	Introduced	Conducted using the ‘Outside Director Activity Evaluation Report’, which is composed according to internal standards such as meeting attendance, contribution, and independence when the term of office of an outside director expires.
Maintain the independence of external auditors	Introduced	-
Verify the accuracy and completeness of the financial reporting of the CEO and Chief Finance Officer	Introduced	-
Explain the differences found in the codes	Introduced	-
Disclose audit reports and non-periodic important disclosures in Korean and English	Introduced	-