Hyosung, Reinforces corporate transparency for greater shareholder value

Hyosung took actions to improve its corporate governance to enhance its trust from shareholders and the market. These efforts include : establishing the Transparency Committee that reports only to the Board of Directors; appointing an external director as the Chairman of the External Director Recommendation Committee.

The key notes of the corporate governance improvement plan are stronger transparency, stronger independence for external directors, and reinforcement of internal monitoring. This change was initiated by Chairman Cho Hyun-joon who stated in his inaugural statement in July that ‘We need to find measures to increase corporate transparency to bring upon greater shareholder value through broader communication with the market’.

□ Transparency Committee to examine internal transactions and reasonable management.

Hyosung newly established a Transparency Committee that reports to the Board of Directors of Hyosung Corporation. The committee is composed of three external directors (Jeong Sang-myeong, Kwon Oh-gon, Choi Joong-kyeong), and one internal director (Kim Kyoo-young). External Director Jeong Sang-myeong, a former Prosecutor General, has been appointed as the representative of the committee.

The Transparent Committee’s roles and responsibilities are : i) prior examination and resolution of large-scale internal transactions to prevent corporate tunneling or undue transactions; ii)prior examination of major management issues related to shareholder value including divesture, acquisition, M&A, equity offerings and capital reduction; iii)review and monitor the performance of fair trade compliance program; iii) examination of ethical management and CSR activities.

The Transparent Committee will enforce internal transactions, and monitor whether the top management is facilitating reasonable management activities to protect the shareholders’ rights and interests. Findings and conclusions of the Transparent Committee will be disclosed in the quarterly and annual reports of Hyosung.

□ External Director appointed as the Chairman of External Director Recommendation Committee.

External Director Kim Myeong-ja, former Minister of Environment will chair the External Director Recommendation Committee, succeeding Chairman Cho Hyun-joon.

This change was prepared to enhance corporate value and solidify the groundworks for Hyosung’s earnest performance of social responsibilities by appointing accomplished and experienced professionals through an objective and external viewpoint who will help Hyosung’s management.

□ Reinforced internal accounting policies

Apart from this, Hyosung’s internal accounting policies will be reinforced to further enhance financial transparency. Specialized manpower and information will be deployed to aid Auditors so that they may performing independent and in-depth audits.

Furthermore, audits on the operation of ‘Internal financial management policy’, which is the result of the internal management improvement project concluded earlier this year, will be doubled from once a year to twice each year. This audit will provide a full-front internal financial monitoring through a substantial evaluation procedure.

All accounting managers and officers will undergo a ‘Financial Transparency and Policy Compliance Training’. This training is expected to improve the financial understanding and practice of the managers and officers, and, moreover bring more trust in Hyosung to the market.

“The newly announced governance improvement plan displays our intents to enhance shareholder-friendly policies and secure transparency,” said President & Representative Director Kim Kyoo-young. “We will continue our efforts to communicate with shareholders and the market with the goal to bring upon more trust towards Hyosung.”