Corporate governance

LG Electronics creates corporate value through transparent corporate governance.

Corporate governance principles Board of directors Directors

Reponsible management system / Board-centred management system

LG Electronics removed the Circulating investment Structure of its affiliated companies with the launch of a holding company system, this enabled the holding company to take full charge of investments. Consequently, LG Electronics has been able to focus on its own businesses while increasing the overall value of the Company.

This corporate governance structure has laid the groundwork for increasing managerial transparency. Through a board-centred mangement system comprising of the CEO of LG Electronics and a Board of Directors, we are taking huge steps in strenthening our competitiveness at both the domestic and international level, in order to maximize corporate and shareholder value.

Independence of the board of directors / Active participation of independent directors

LG Electronics has established and maintained an independent structure of Board of Directors. The majority of Board of Directors consists of 4 independant directors to perform functions independently from the management and controlling shareholders.

The Company has the Independent Director Candidate Recommendation Committee comprising of 1 executive director and 2 independent directors to ensure fairness and independence in the process of recommending and selecting candidates for independet deirectors, directors ard finally elected at the General Shareholders' Meeding after underfoing a tight review by the Committee on their suitability to perform their duties.

The Company's independent directors composed of outstanding experts from various fields perform effective monitoring of the management's business execution, and provide and independent and objective perspective on board matters and decisions. The Company arrange BOD meetings with great care to enable all directors to attend meetings and conduct substanitial deliberation of the agenda such as cricical business issues, internal transactions of affiliates, and management's business execution.

To support effective activities and performance of duties of the BOD, the Company provides relevant documnets prior to the meetings so that directors are able to devote sufficient time and effort to review the relevant documents thorughly in advance to attend the meetings. In addition, the Company continues to provide independentdirectors with regular opportunities to visit and inspect the domestic and overseas business sites in person for practical field experience, and provide internal and external training to enhance their understanding of our business.

Strengthening independence and responsibility of audit committee

The Audit Committee is composed of 4 members, all of which are independent directors in order to maintain the independence from the controlling shareholders and the management.

The Audit Committee faithfully performs its audit duties over Company's accounting and major business affairs to increase transparency and ensure the fairness in management. In addition, the Audit Committee appoints independent auditors based on the criteria such as expertise, independence, reputation, global competitiveness, and possibility for conflicts of interest with the Company.