Sound ESG Management
Governance (G)
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LOTTE Wellfood (hereinafter referred to as the Company) contributes to enriching the lives of humanity by providing products and services that are loved and trusted. As a company loved by the people, we shall fulfill our social responsibility while striving for the continuous growth of the Company's value. To establish a sound governance structure that serves as the basis for sustainable growth, the Company establishes and complies with the following Corporate Governance Charter to increase shareholder value.

Chapter 1 Shareholders

Article 1 Shareholders' Rights

  • ① Shareholders shall have basic rights such as the right to participate in the distribution of profits, attend the general meeting of shareholders, and vote as set out by the Commercial Code and related laws.
  • ② Matters that cause significant changes to the Company's standing and shareholder rights shall be determined in the direction of ensuring the maximum rights of shareholders.
  • ③ The Company determines the date and place of the general meeting of shareholders to maximize shareholders' participation and provides shareholders with information on the date, place, and agenda of the general meeting of shareholders before a sufficient period of time.
  • ④ At the general meeting of shareholders, shareholders may propose agendas in accordance with the relevant laws, such as the Commercial Code, and inquire and demand explanations of agendas.

Article 2 Equitable Treatment of Shareholders

  • ① Each shareholder has one vote per common share. However, restrictions on voting rights to specific shareholders shall be made in a limited way as set forth in applicable laws and regulations.
  • ② The Company shall sufficiently provide necessary information to shareholders in a fair and timely manner.
  • ③ The Company shall protect shareholders from unfair internal transactions, self-dealing, and interference of management by other shareholders such as dominant shareholders.

Article 3 Responsibilities of Shareholders

  • ① Shareholders shall recognize that their voting rights may affect the management of the Company and actively exercise them for the growth of the Company.
  • ② Dominant shareholders who have influence over the management of the Company shall act in the interests of the Company and all shareholders and shall not inflict losses on the Company and other shareholders by acting in ways that violate this principle.

Chapter 2 Board of Directors

Article 4 Functions of the Board of Directors

  • ① The Board of Directors shall have comprehensive authority over the management of the Company and make decisions and supervise the management.
  • ② The Board of Directors may delegate authority to the CEO or to a committee under the Board of Directors. However, the key matters set forth in the laws, Articles of Incorporation, or Board of Directors Regulations are excluded.

Article 5 Composition of the Board of Directors and Appointment of Directors

  • ① The Board shall consist of a sufficient number of directors to enable effective and careful discussion and decision-making and to activate the committees under the Board of Directors.
  • ② The Board of Directors shall have outside directors who are able to function independently from the management and dominant shareholders, and the number shall consist of three or more people that are greater than the majority of the Board to maintain its substantial independence.
  • ③ The Board of Directors shall consist of competent persons with expertise to make a substantial contribution to the management of the Company, and the elected directors shall be guaranteed a term of office unless there is a separate reason for disqualification.
  • ④ The Company shall not appoint a director who is responsible for the damage to corporate value or the infringement of shareholder rights and interests.
  • ⑤ The Company shall promote diversity in the composition of the Board so that it can respond flexibly to changes in the management environment based on various perspectives and experiences.
  • ⑥ The Company shall allow shareholders to exercise their voting rights with sufficient information and time for deciding on director candidates.

Article 6 Operation of the Board of Directors

  • ① The Board of Directors shall hold meetings regularly and, if necessary, temporary meetings shall be convened.
  • ② For smooth operation, the Board of Directors shall establish regulations that stipulate its powers, responsibilities, and operating procedures.
  • ③ The Company shall create, maintain, and keep minutes for each meeting.
  • ④ The Company shall disclose the details of individual directors' activities, such as their attendance and votes on major issues for disclosure at board meetings.
  • ⑤ Directors may participate in the Board meetings using remote communication.

Article 7 Committees under the Board of Directors

  • ① The Board may install a committee that performs certain functions and roles in order to make quick and efficient decisions.
  • ② The composition, operation, and authority of committees shall be in accordance with the regulations of each committee set forth separately.
  • ③ Committees shall notify the directors of their resolutions, and each director who has been notified may request a convocation of a meeting of the Board of Directors, and the Board may re-resolve the matters determined by committees.

Article 8 Obligations of Directors

  • ① Directors shall perform their duties with due diligence as prudent managers and in good faith.
  • ② Directors shall not exercise their authority for the benefit of the self or a third party and shall always seek results that are in the best interest of the Company and its shareholders.
  • ③ Directors shall not disclose information about the Company obtained in the process of performing their duties or use them for their own or third party's gain.

Article 9 Responsibilities of Directors

  • ① Directors shall collect reliable and substantial materials and information in the process of making management judgments, review them fully, and perform their duties in a way that is in the best interest of the Company based on sincere and reasonable judgment.
  • ② In the event that a director violates a law or articles of incorporation or neglects his or her duties and inflicts losses on the Company, the director shall be liable for damages against the Company. In the event of malice or gross negligence by the director, he or she shall be liable for damages to a third party.
  • ③ The Company may sign up for liability insurance for directors at its own expense in order to hold its directors accountable and recruit directors who can contribute to the growth of the Company.

Article 10 Outside Directors

  • ① Outside directors participate in key decisions of the Company through the activities of the Board of Directors and supervise and support the management as members.
  • ② Outside directors shall be elected at the general meeting of shareholders by recommendation of the Outside Director Recommendation Committee. The Outside Director Recommendation Committee shall be formed to ensure the fairness and independence of the candidates.
  • ③ Outside directors may request the information necessary for the performance of their duties, and, if necessary, may be advised by external experts through appropriate procedures. The Company supports the costs required for their consultation.
  • ④ The Company shall regularly report or provide management information, such as the Company's business execution, so that outside directors can accurately understand the Company's management situation in a timely manner, and shall provide continuous instructions or a training program for outside directors.

Article 11 Evaluation and Compensation

  • ① The management activities of the Board of Directors shall be evaluated fairly, and the results shall be properly reflected in the remuneration.
  • ② To improve the efficiency of the Board of Directors, assessments of the Board and outside directors shall be conducted regularly.
  • ③ The directors' remuneration or expenses necessary for their work shall be determined by the Board of Directors within the payment limits set by the resolution at the general meeting of shareholders.
  • ④ The remuneration of directors shall be determined at a reasonable rate in proportion to their duties and at a level appropriate to the financial condition of the Company. It shall also be in accordance with the Company and its shareholders' long-term interests.
  • ⑤ The Board may delegate matters related to remuneration, such as the limit of registered directors' remuneration, to the Compensation Committee.

Chapter 3 Audit Organizations

Article 12 Audit Committee

  • ① To maintain independence, all members of the Audit Committee shall consist of outside directors, and at least one of the members shall be an expert in accounting or finance.
  • ② The Audit Committee shall perform audits on the legitimacy of the directors and executives' business activities, inspect the soundness and validity of the Company's financial activities, review the accuracy of financial reports, approve the appointment and dismissal of external auditors, and present follow-up reports at the general meeting of shareholders.
  • ③ The Audit Committee may view or copy the ledger and documents related to accounting at any time, require directors to report on the business, or investigate the state of the Company's business and property.
  • ④ The Audit Committee may, if necessary, ask external agencies and experts for advice at the Company's expense.

Article 13 External Auditors

  • ① The Company shall allow external auditors to maintain legal and substantial independence from the Company, its management, and dominant shareholders.
  • ② External auditors shall attend the general meeting of shareholders and explain if there are questions from shareholders regarding the audit report.
  • ③ External auditors shall verify whether there is information contradictory to the audit results of financial statements and regular public disclosure.
  • ④ External auditors shall check the Company's fraudulent or illegal actions at the time of the audit.
  • ⑤ External auditors shall also consider the viability of the Company as required by the relevant laws and regulations, such as the "Act on External Audit of Stock Companies."
  • ⑥ External auditors shall report important findings identified during the audit to the Audit Committee.

Chapter 4 Stakeholders

Article 14 Protection of Rights of Stakeholders

  • ① The Company shall share greater value with various stakeholders, such as customers, employees, and partners, and contribute to their shared growth.
  • ② The Company shall respect the rights of workers and improve the quality of their lives.
  • ③ The Company shall value its cooperation with partners, accelerate the establishment of fair market order through compliance with fair trade laws, and promote the balanced development of the national economy.
  • ④ The Company shall comply with creditor protection procedures for mergers, capital reduction, and splits that have a significant impact on the creditor's status.
  • ⑤ In the event that stakeholders also serve as shareholders, the Company shall protect their rights as both stakeholders and shareholders.
  • ⑥ The Company shall provide the information necessary to protect the rights of stakeholders to the extent permitted by laws and agreements with third parties, and support their access to relevant information.

Chapter 5 Management Monitoring by the Market

Article 15 Disclosure

  • ① The Company shall regularly prepare and disclose business reports, quarterly reports, and semi-annual reports, and disclose information related to the Company to shareholders and stakeholders in good faith as swiftly as possible.
  • ② In addition to the disclosures required by law, the Company shall disclose matters that may have a significant impact on shareholders and stakeholders' decision-making in a timely, detailed, and accurate manner.
  • ③ The content of disclosure shall be easy to understand and accessible to stakeholders.
  • ④ The Company shall designate a person responsible for disclosures and establish an internal communication system that allows important company information to be quickly delivered to the person in charge.
  • ⑤ The Company shall not favor or discriminate against certain persons in the scope and time of disclosing important corporate information, and shall allow all stakeholders to access the disclosed information at the same time.

Article 16 Corporate Management Rights Market

  • ① Acts that cause changes in the management rights of the Company, such as acquisitions, mergers, splits, and transfers of important business, shall be carried out through transparent and fair procedures.
  • ② The Company shall not act to maintain the management rights of some shareholders or executives in a way that sacrifices the interests of the Company and its shareholders.
  • ③ The Company shall allow shareholders who oppose important structural changes, such as mergers and transfers of important businesses, to exercise the right to purchase shares at a fair value that reflects the actual value of their shares in accordance with the law.