Corporate Governance

Through transparent corporate governance, LG H&H tries to protect the BOD’s independence and our shareholders’ right. Since the launch of the LG Corp, holding company in 2003, we founded a transparent governance system, intensifying responsible management by professional managers. Additionally, we are maximizing managerial efficiency and enhancing corporate value by operating the BOD in an independent and specialized manner.

Shareholder Composition

As of the end of 2021, the total number of issued shares(including preferred shares) was
17,717,894. The largest shareholder was LG Corp., which held a 34% stake.

[Common shares*, as of 2021]

Key Shareholders Foreigners 46%, LG Corp. 34%, Domestic Institutions and Individuals 14%, Treasury Stock  6%

* Common shares(15,618,197)

BOD Composition and its Operation

The board of directors of LG H&H is comprised of two internal directors, one non-executive director and four Independent directors. Their independence from the largest shareholder and management is secured. When a shareholder suggests the selection of directors based on relevant regulations, the BOD can present the bill at the general shareholders’ meetings as long as it is legitimate.

However, when a director nominee has a special relationship with key shareholders, his/her qualification to be selected is limited. Independent directors play a critical role in the decision-making process for management such as providing valued opinions on basic policies on the company’s expertise in the economic, environmental and social areas. In addition, they monitor and check the company’s performance to enhance corporate value and improve stakeholders’ right.

Compensation for Independent and executive directors comprises an annual basic salary and incentives. The annual salary is determined within the maximum compensation for directors as approved by the shareholders’ meeting, while incentives depend on the company’s business performance. The BOD holds regular meetings according to the pre-set annual operations plan, and convenes temporary meetings whenever other key management issues urgently need to be discussed.

To prevent conflict of interests during the BOD’s resolutions, the voting rights of stakeholders with interests in certain motions are limited in accordance to Commercial Law and the company’s own BOD regulations. On the other hand, to ensure that the BOD fulfills its role as the de facto highest decision-making body of the company, an employee within the legal team is designated to support directors. The employee is responsible for providing materials and explanations to Independent directors.

By providing sufficient time before general meetings, he/she should help the directors to carefully analyze and review bills for discussion based on sufficient information.

Activities of Audit Committee

The Audit Committee is operated according to separate operational regulations from those for the BOD. This separation helps to secure independency and transparency from the shareholders and management. The Committee comprised of three outside directors, including the committee head, establishes and executes an internal audit plan through an independent position.

Furthermore, it approves quarterly audit results reported by external auditors and plays a role as a supervisory organization for management. To effectively support its audit activities, LG H&H allows the Audit committee to request external auditors, who review reports on the company’s sales and property status.

BOD Composition and its Operation