Article 1 (Purpose)

These Guidelines are designed to provide for specific principles and procedures to be observed with regard to the composition and operation of the Board of Directors of Hana Financial Group (hereinafter referred to as “Company”), installation of committees under the Board of Directors, required competencies of officers, evaluation of the performance of officers, and matters related to the succession of members of management, including the eligibility of the chief executive officer, etc. in order to protect the interests of the shareholders and financial consumers of the Company.

Article 2 (Principle of Governance Structure)

  1. The Company shall provide financial services that promote the mutual growth and happiness of customers, shareholders, employees, and society in general and strive to increase managerial stability by establishing a healthy and transparent corporate governance structure, thereby contributing to the long-term growth and development of the nation’s financial industry.
  2. The Company shall consistently strive to ensure the professional and independent operation of the Board of Directors, orderly succession of members of management, and efficient communication with shareholders and investors.

Article 3 (Public Notice)

  1. In accordance with Article 14, Paragraph 3, Subparagraph 1 of the Act on the Corporate Governance of Financial Companies (hereinafter referred to as “Corporate Governance Act”), in the event the Company enacts or amends these Guidelines, it shall post a public notice thereof on the Company website, etc. within seven (7) business days from the date of such enactment or amendment.
  2. In accordance with Article 14, Paragraph 3, Subparagraph 2 of the Corporate Governance Act, the Company shall post the annual results of the operation of the Board of Directors, etc., under these Guidelines, on the Company website, etc. no later than twenty (20) days prior to the date of the ordinary general meeting of shareholders the following year.

Article 4 (Enactment and Amendment, etc.)

These Guidelines shall be enacted and amended by the resolution of the Board of Directors. However, this provision shall not apply to cases involving compliance with relevant laws, changes made in accordance with resolutions of the general meeting of shareholders or meeting of the Board of Directors, modifications to these Guidelines not involving any major changes to their content, or amendments made as a result of reorganization.

Article 5 (Composition of the Board of Directors)

  1. The Company shall have up to fifteen (15) directors so as to ensure efficient decision making and allow for the expression of a wide variety of opinions.
  2. The Company shall have at least three (3) outside directors, who shall be appointed in accordance with relevant laws, such as the Corporate Governance Act, and who shall comprise a majority of all directors.

Article 6 (Chairman of the Board of Directors)

  1. The Board of Directors shall elect its chairman from among outside directors every year. The term of office of the chairman shall be until the date of the ordinary meeting of shareholders the following year. In the event a chairman is unable to fulfill his or her duties due to injury, illness, etc., a new chairman shall be elected, and the term of office of the newly elected chairman shall be the same as that of the chairman he or she replaced.
  2. The chairman of the Board of Directors shall convene and preside over the meetings of the Board of Directors.
  3. In the event the chairman is absent or otherwise unable to fulfill his or her duties due to injury, illness, etc., a director designated by the Board of Directors shall issue the notice regarding the convening of the meeting of the Board of Directors, convene the meeting, and act on behalf of the chairman.
  4. Notwithstanding Paragraph 1 of this Article, if a non-outside director is appointed as chairman of the Board of Directors, the Board of Directors shall disclose the reason thereof and appoint a senior outside director to represent all outside directors.
  5. The senior outside director shall carry out the duties listed below.
    1. Convene and preside over the meeting of outside directors, which shall be comprised of only outside directors
    2. Provide support to ensure that outside directors carry out their duties efficiently
    3. Other duties and responsibilities necessary to enhance the roles and obligations of outside directors
  6. The Company and its employees shall provide all support to the senior outside director necessary for him or her to carry out the duties stipulated in Paragraph 5 above.

Article 7 (Eligibility of Directors)

  1. Directors shall satisfy all eligibility criteria prescribed under Article 5 of the Corporate Governance Act and related laws. In the event an elected director no longer satisfies such criteria, the director shall lose his or her position as director. However, this provision shall not apply in the case of suspension from the performance of duties, business suspension, reprimand or public warning).
  2. All directors shall possess an exemplary work ethic, integrity, and ability to represent the interests of all shareholders and stakeholders through fair and balanced means. In addition, directors shall have a high capacity for strategic thinking, substantial practical knowledge, mature judgment, and strong sense of responsibility.
  3. Executive directors, as members of the top management of the Company, shall have sufficient experience and professional knowledge related to the business of the Company as well as sound judgment and ability to carry out tasks effectively.
  4. Outside directors shall satisfy all eligibility criteria prescribed under Article 6 of the Corporate Governance Act and related laws. In the event an outside director no longer satisfies such criteria, the outside director shall lose his or her position as director.
  5. All outside directors shall possess professional knowledge and mature judgment and shall be elected based on the extent to which they fulfill the following criteria.
    1. Practical experience in and professional knowledge of finance, economics, management, accounting, and law that is sufficient to fulfill the responsibilities of an outside director
    2. Ability to act fairly and independently in promoting the interests of all shareholders and financial consumers without any preference for the interests of specific groups
    3. Strong sense of ethics and responsibility necessary to carry out the duties and fulfill the responsibilities of an outside director
    4. Ability to put sufficient time and effort into faithfully carrying out the duties of an outside director

Article 8 (Authorities and Responsibilities of the Board of Directors)

  1. The Board of Directors shall have comprehensive authorities and responsibilities regarding the management of the Company to the extent permitted by relevant laws, and shall approve the management strategy, management goals, and business plan and supervise the implementation thereof so as to serve the interests of the Company and its shareholders.
  2. The Board of Directors shall pass resolutions on important matters of the Company and matters that need to be decided based on the authority of the Board of Directors, as prescribed under the Commercial Act, Corporate Governance Act, and other relevant laws, and supervise the directors in the performance of their duties.
  3. The Board of Directors may delegate some of its authorities to committees under itself to the extent that such delegation does not violate relevant laws or the Articles of Incorporation.
  4. Each of the following matters shall be deliberated on and decided by the resolution of the Board of Directors.
    1. Matters regarding management goals and the evaluation thereof
    2. Matters regarding the enactment, amendment, and abolition of important regulations, such as the Articles of Incorporation
    3. Matters regarding budgets and settlement of accounts
    4. Matters regarding significant changes to an organization, such as dissolution, business transfer, and merger
    5. Matters regarding the enactment, amendment, or abolition of internal control or risk management guidelines
    6. Matters regarding the establishment of governance policy, such as policy in relation to the succession of the chief executive officer
    7. Matters regarding the supervision of conflicts of interest among major shareholders, officers, and the Company
    8. Matters regarding the convening of general meetings of shareholders and the agenda of such meetings
    9. Matters regarding capital and fundraising
    10. Matters regarding important contracts, etc.
    11. Other matters as prescribed by relevant laws and regulations of the Board of Directors
  5. Each of the following matters shall be reported to the Board of Directors.
    1. Results of the execution of resolutions of the Board of Directors
    2. Resolutions passed by committees under the Board of Directors
    3. Matters that other regulations require to be reported to the Board of Directors
    4. Others matters that the Board of Directors, and chairman & chief executive officer deem necessary to be reported to the Board of Directors
  6. With regard to matters to be deliberated on, decided, and reported as per Paragraphs 4 and 5 of this Article, the details of each matter shall be dealt with as set forth by the regulations of the Board of Directors.
  7. Other matters related to the authorities and responsibilities of the Board of Directors shall be dealt with as set forth by the regulations of the Board of Directors.

Article 9 (Authorities and Responsibilities of Directors)

  1. Directors shall participate in business decisions through the Board of Directors with the goal of protecting the interests of all shareholders, ensuring the sound management of the Company, and increasing the enterprise value of the Company.
  2. Directors may request that the management of the Company report the status of the business activities of the Company and submit related materials.
  3. Directors may request that the Company secure an outside institution to provide consultations related to legal matters, accounting, and management, if deemed necessary to facilitate the activities of the Board of Directors.
  4. Directors shall perform fiduciary duties in service of the interests of the Company and its shareholders.
  5. Directors shall not disclose to others or use for their own benefit or the benefit of a third party confidential business information related to the Company or affiliated companies acquired during their time in office or after their retirement from the position of director.
  6. In the event a director discovers information that has the potential to cause considerable damage to the Company, the director shall report such information to the Audit Committee without delay.
  7. In the event a director violates a law or the Articles of Incorporation, or causes damage to the Company or a third party due to negligence in the performance of his or her duties, the director shall, depending on the nature of such damage, bear all criminal and civil liabilities for the damage caused to the Company or the third party. However, if the director, in the course of making managerial decisions, performed his or her duties sincerely and in the best interests of the Company based on sound judgment, such decisions shall be respected.
  8. Outside directors, as members of the Board of Directors and its committees, shall supervise the business activities of the management of the Company to ensure that such business activities are carried out in accordance with all relevant laws, contribute to the sound management of the Company, and are in line with the long-term interests of the Company and its shareholders.
  9. In the event of a material change in the relationship between the Company or an affiliate company and an external entity within which an outside director holds a position, and where such outside director resigned or experienced changes in the nature and content of his or her responsibilities in said external entity, the outside director concerned shall immediately notify the relevant nomination committee of the details of the situation and seek the decision of said committee concerning whether he or she should resign from the Company.
  10. At its own expense, the Company shall purchase liability insurance for directors in order to reduce directors’ burden of liability and secure competent directors. Outside directors, however, shall bear up to 20 percent, but not exceeding KRW 100 million, of the total liability.

Article 10 (Procedure for the Appointment of Directors and Their Term of Office)

  1. The chairman & chief executive officer shall be appointed by the resolution of the Board of Directors from among directors elected by the general meeting of shareholders upon the recommendation of the Chairman Nomination Committee.
  2. Executive directors, and non-executive directors, excluding the chairman & chief executive officer, shall be appointed by a general meeting of shareholders upon the recommendation of the Nomination Committee.
  3. Outside directors shall be appointed by a general meeting of shareholders upon the recommendation of the Outside Director Nomination Committee.
  4. Members of the Audit Committee shall be appointed by a general meeting of shareholders upon the recommendation of the Auditor Nomination Committee.
  5. The Company shall appoint one (1) outside director to serve as a member of the Audit Committee, following a procedure that is separate from the procedure for the appointment of other directors.
  6. The term of office of directors shall be determined in accordance with each of the following subparagraphs, and directors shall be eligible for reappointment. However, the term of office shall be extended until the close of the ordinary general meeting of shareholders held for the last fiscal year of each director’s term of office.
    1. The term of office of executive and non-executive directors shall be determined by a general meeting of shareholders, and shall not exceed three (3) years.
    2. The term of office of outside directors shall be up to two (2) years and may be extended for periods of one (1) year thereafter, but shall not exceed a total of five (5) consecutive years.
  7. Among outside directors, only those who have achieved excellent business performance shall be eligible for renewal of their term of office.
  8. The age of a director shall not exceed seventy (70). In the case where a director turns seventy (70) during his or her term of office, such director’s term of office shall be extended until the close of the first ordinary general meeting of shareholders convened after the date of the director’s seventieth (70th) birthday.
  9. In the event the chairman & chief executive officer is unable to perform his or her duties due to injury, illness, etc., other director shall perform the duties of the chairman & chief executive officer in accordance with the priority established by the Board of Directors. If an office of director becomes vacant, the Company is not required to elect a substitute director as long as such vacancy does not cause the number of directors to fall below the legally required minimum number of directors.

Article 11 (Standards of and Procedure for the Retirement of Directors)

  1. Directors shall retire through the means or for the reasons outlined in each of the following subparagraphs.
    1. Expiry of term of office
    2. Submission of letter of resignation
    3. Failure to meet the qualifications prescribed under the Corporate Governance Act, the Articles of Incorporation, and other relevant laws and regulations
    4. Special resolution of the general meeting of shareholders for the dismissal of a director due to significant violations of relevant laws or the Articles of Incorporation, improper acts in the course of performing duties, etc.
  2. The term of office of a substitute director appointed to fill a vacancy in the office of director shall commence from the date of his or her inauguration.

Article 12 (Procedure for the Convocation of Meetings of the Board of Directors)

  1. The meetings of the Board of Directors shall be divided into ordinary meetings of the Board of Directors and extraordinary meetings of the Board of Directors, and shall be convened by the chairman of the Board of Directors.
  2. Ordinary meetings of the Board of Directors shall be convened at least once (1) every quarter, and extraordinary meetings of the Board of Directors shall be convened when deemed necessary by the chairman of the Board of Directors or upon the request of other directors. In the event the chairman rejects a request to convene a meeting for no justifiable reason, other directors may convene a meeting of the Board of Directors without the approval of the chairman.
  3. In order to convene a meeting of the Board of Directors, the date of the meeting must first be determined, and a notice outlining the purpose of such meeting must be issued seven (7) days prior to the convening of the meeting. However, with the consent of all directors, this procedure need not be followed.

Article 13 (Method of Adoption of Resolutions of the Board of Directors)

  1. All resolutions of the Board of Directors shall be adopted by a majority vote with more than one half (1/2) of all directors in attendance, except as otherwise provided for in relevant laws and regulations or the Articles of Incorporation.
  2. The Board of Directors permits any director to take part in the adoption of a resolution by means of a telecommunication system capable of transmitting and receiving video and audio signals simultaneously, thereby allowing directors to participate in meetings without being physically present. In this case, the relevant directors shall be deemed to have attended the meeting.
  3. Any director with a special interest in respect to a matter under the deliberation of the Board of Directors shall not exercise his or her voting right, and such director shall not be counted among the directors present for the calculation of the vote regarding said matter.

Article 14 (Evaluation of Performance, etc.)

  1. The Board of Directors shall conduct fair evaluations of its own performance and the activities of outside directors by reviewing the activities of the Board of Directors.
  2. An evaluation of the performance of the Board of Directors and the activities of outside directors shall be conducted once (1) annually at the beginning of the year.
  3. Evaluation indicators shall be established so as to ensure the transparent and efficient composition and operation of the Board of Directors and expand its role.
  4. The Board of Directors shall acknowledge the results of the evaluation of its performance and the activities of outside directors and make changes to its operations accordingly.
  5. The Board of Directors shall refer to the results of the evaluation of the activities of outside directors when considering the re-election of outside directors.
  6. Other specific details relating to this Article shall be determined by the Board of Directors.

Article 15 (Committees of the Board of Directors)

  1. In order to ensure the efficiency of its operation, the Board of Directors may establish the committees listed in each of the following subparagraphs and, if necessary, establish temporary committees as well.
    1. Steering Committee of the Board of Directors
    2. Audit Committee
    3. Risk Management Committee
    4. Management Development and Compensation Committee
    5. Nomination Committee
    6. Outside Director Nomination Committee회
    7. Auditor Nomination Committee
    8. Chairman Nomination Committee
  2. Specific details regarding the committees of the Board of Directors shall be decided by the regulations for each committee, which are to be determined separately.
  3. The committees shall report their resolutions to the Board of Directors, and the Board of Directors may accept or reject such resolutions. However, the Board of Directors may not reject the resolutions of the Audit Committee.

Article 16 (Steering Committee of the Board of Directors)

  1. The Committee (in this Section, “Committee” refers to the particular committee addressed by each Article) shall be comprised of up to six (6) directors, including the chairman of the Board of Directors and the senior outside director. Outside directors shall comprise the majority of all members of the Committee.
  2. The chairman of the Committee shall be the chairman of the Board of Directors who is outside director, or the senior outside director.
  3. The Committee shall deliberate on and decide each of the following matters.
    1. Matters relating to the operation and procedures of the Board of Directors and its committees
    2. Matters relating to improving the corporate governance structure
    3. Matters relating to changes of the size of the Board of Directors, etc.
    4. Other matters deemed necessary by the Board of Directors or the Committee
  4. The Committee shall be convened whenever the chairman of the Committee deems it necessary.
  5. Resolutions of the Committee shall be adopted by the affirmative vote of the majority of the Committee members.

Article 17 (Audit Committee)

  1. The Committee shall be comprised of at least three (3) directors, of which at least one (1) member shall be a specialist in accounting or finance, as prescribed under Article 19 of the Corporate Governance Act, and at least two-thirds (2/3) of all members shall be outside directors.
  2. Each member of the Committee shall satisfy at least one of the qualifications listed in the following subparagraphs.
    1. An individual who holds a professional certification, such as that of a lawyer, certified public accountant, certified internal auditor, etc. with at least five (5) years of practical experience in a related industry
    2. An individual who holds a master’s degree or higher in law or business with a career of at least five (5) years at an educational institution, research institute, etc.
    3. An individual who has been engaged in the finance or financial management sectors for at least ten (10) years and is an expert in accounting, internal control, auditing, or EDPS
    4. An individual who is deemed to possess qualifications equal to those outlined under Subparagraphs 1, 2, and 3 above by the general meeting of shareholders or Auditor Nomination Committee
  3. The chairman of the Committee shall be appointed from among members who are outside directors by the resolution of the Committee.
  4. In the event the chairman of the Committee is unable to perform his or her duties due to absence, injury, illness, etc., other members shall perform the chairman’s duties on his or her behalf in accordance with the priority established by the Committee.
  5. The Committee shall deliberate on and decide each of the following matters.
    1. Requests to convene an extraordinary general meeting of shareholders
    2. Statements regarding the agenda and documents to be submitted to general meetings of shareholders
    3. Preparation and submission of audit reports
    4. Requests to convene an extraordinary meeting of the Board of Directors
    5. Requests for suspension of a director who has committed acts in contravention of relevant laws
    6. Establishment of annual audit plan
    7. Matters related to internal audits and investigations of assets and subsidiaries
    8. Consent to the appointment of officers and general managers in charge of auditing matters
    9. Approval of appointment and dismissal of an external auditor
    10. Enactment, amendment, and abolition of regulations on auditing matters
    11. Matters prescribed under relevant laws, regulations, and the Articles of Incorporation
    12. Other matters deemed necessary by the Board of Directors or the Committee
  6. The Committee shall be, in principle, be convened once (1) every quarter, and may be called whenever deemed necessary by the chairman of the Committee.
  7. The Committee shall be convened by the chairman, and the chairman shall determine the date and notify all members seven (7) days prior to convening the Committee. However, with the consent of all members, such procedure need not be followed.
  8. Resolutions of the Committee shall be adopted through the affirmative vote of a majority of members with a majority of members in attendance. However, resolutions on the appointment or dismissal of an external auditor requires the presence of two-thirds (2/3) of all members and an affirmative vote of the majority of members present.

Article 18 (Risk Management Committee)

  1. The Committee shall be comprised of a chairman and up to eight (8) directors elected by the Board of Directors, and shall include at least one (1) director who has experience working with a finance company or in the finance, accounting, or financial management department of a non-financial company. The majority of the Committee shall be outside directors.
  2. The chairman of the Committee shall be elected from among members who are outside directors by the resolution of the Committee.
  3. The Committee shall deliberate on and decide each of the following matters.
    1. Establishment of basic guidelines and risk management strategy
    2. Establishment of risk limits for the Company and affiliated companies
    3. Matters regarding the allocation of risk capital for each affiliated company
    4. Approval of limits on investment and loss
    5. Enactment and amendment of regulations relating to risk
    6. Approval of risk assessment method and use of risk assessment model, which requires the approval of the supervisory authority
    7. Matters concerning the structure and job assignments of a risk management division
    8. Matters relating to the introduction and operation of a risk management system (however, if the total investment amount is less than KRW 1 billion, this task may be delegated to the Risk Management Executive Committee)
    9. Matters regarding the establishment of a risk limit and approval to exceed such risk limit
      • a. Credit line for a single, individual corporation and single borrower
      • b. Country risk limit and credit line by industry
      • c. Other credit lines deemed necessary by the Board of Directors or the Committee
    10. Other matters as deemed necessary by the Board of Directors or the Committee
  4. The Committee shall be, in principle, convened once (1) every quarter, and may also be convened when deemed necessary by the chairman or upon the consent of one-third (1/3) of Committee members.
  5. Resolutions of the Committee shall be adopted by the affirmative vote of a majority of members.

Article 19 (Management Development and Compensation Committee)

  1. The Committee shall consist of no more than five (5) outside directors, including one (1) director from the Risk Management Committee. However, one or more committee members shall be appointed from among directors with extensive experience in banking, accounting, or finance at financial institutions or general companies.
  2. The chairman of the Committee shall be elected by the resolution of the Committee.
  3. The Committee shall deliberate on and decide the following matters.
    1. Matters related to the determination of compensation, method of payment of compensation, and performance evaluations for officers of the Company and affiliated companies and staff in charge of the financial investment business
    2. Matters related to the design and operation of the compensation and performance evaluation systems for officers of the Company and affiliated companies and staff in charge of the financial investment business, and assessments of the propriety of said design and operation
    3. Matters related to the decision-making process for a compensation policy for officers of the Company and affiliated companies and staff in charge of the financial investment business
    4. Matters related to the preparation and public disclosure of the annual report on the payment of compensation
    5. Preliminary review of compensation in accordance with Article 5, Paragraph 4 of the Regulations on the Severance Pay of Officers
    6. Other matters related to the compensation system
    7. Other matters deemed necessary by the Board of Directors or the Committee
  4. The Committee may review and make comments on resolutions passed by the evaluation and compensation committees of affiliate companies with regard to each of the matters listed in Paragraph 3 above.
  5. Meetings of the Committee shall be convened on occasion as deemed necessary by the chairman of the Committee.
  6. All resolutions of the Committee shall be adopted by an affirmative vote of a majority of all members.

Article 20 (Nomination Committee)

  1. The Committee shall consist of no more than five (5) directors, including one (1) director from the Management Development and Compensation Committee. However, outside directors shall make up the majority of the Committee members.
  2. The chairman of the Committee shall be elected by the Committee members.
  3. The Committee shall deliberate on and decide the following matters.
    1. Matters related to the recommendation of CEO candidates for major affiliated companies
    2. Matters related to the establishment of management succession plans for the CEOs of major affiliated companies as well as the management of CEO candidates and the verification of their eligibility
    3. Matters related to the establishment of eligibility criteria for the CEOs of major affiliated companies
    4. Other matters necessary for the recommendation of CEO candidates for major affiliated companies and the establishment of management succession plans
    5. Matters related to the deliberation on and recommendation of candidates for the position of registered officer of the Company, excluding the chairman & chief executive officer, and outside directors
    6. Matters related to the composition of the management committees of affiliated companies
    7. Other matters deemed necessary by the Board of Directors or the Committee
  4. The Committee shall be convened, when deemed necessary, by the chairman of the Committee.
  5. Resolutions of the Committee shall be adopted by the affirmative vote of a majority of members with a majority of members in attendance. However, no committee member shall exercise his or her voting rights in relation to a resolution that recommends himself or herself as a candidate.

Article 21 (Outside Director Nomination Committee)

  1. The Committee shall consist of at least three (3) and no more than six (6) directors, including the chairman of the Board of Directors or senior outside director, and outside directors shall make up the majority of the Committee members.
  2. The chairman of the Committee shall be either the chairman of the Board of Directors, who is also an outside director, or the senior outside director.
  3. The Committee shall deliberate on and decide the following matters.
    1. Matters related to the establishment of principles for the appointment of outside directors
    2. Matters related to the recommendation of outside director candidates for the Company
    3. Matters related to the regular management of outside director candidates and the verification of their eligibility
    4. Other matters necessary for the recommendation of outside director candidates
  4. The Committee shall be convened, when deemed necessary, by the chairman of the Committee.
  5. Candidates recommended under Paragraph 3, Subparagraph 2 above must include an outside director candidate recommended by shareholders who are eligible to exercise the right to recommend candidates under the Corporate Governance Act. However, this provision shall not apply if such candidate does not meet the eligibility criteria prescribed under the Corporate Governance Act and other relevant laws.
  6. Resolutions of the Committee shall be adopted by the affirmative vote of two-thirds (2/3) of all members. However, a committee member shall not exercise his or her voting rights in relation to a resolution that recommends himself or herself as a candidate.

Article 22 (Auditor Nomination Committee)

  1. The Committee shall consist entirely of outside directors.
  2. The chairman of the Committee shall be elected from among Committee members by a resolution of the Committee.
  3. The Committee shall deliberate on and decide the following matters.
    1. Matters related to the nomination of Audit Committee member candidates; and
    2. Any other matters necessary for the nomination of Audit Committee member candidates
  4. Meetings of the Committee shall be convened on occasion as deemed necessary by the chairman of the Committee.
  5. All resolutions of the Committee shall be adopted by the affirmative vote of two-thirds (2/3) of all members. However, no committee member shall exercise his or her voting rights in relation to a resolution that recommends himself or herself as a candidate.

Article 23 (Chairman Nomination Committee)

  1. The Committee shall consist of at least three (3) and no more than eight (8) directors, including the chairman of the Board of Directors, who is also an outside director, or the senior outside director, and one or more members of the Management Development and Compensation Committee.
  2. The chairman of the Committee shall be elected by a resolution of the Committee from among Committee members who are also outside directors.
  3. The Committee shall deliberate on and decide the following matters.
    1. Matters related to the recommendation of candidates for the position of chairman & chief executive officer
    2. Matters related to the establishment of the management succession plan for the position of chairman & chief executive officer, management of the candidate group, and verification of candidate eligibility
    3. Matters related to the establishment of eligibility criteria for the position of chairman & chief executive officer
    4. Other matters necessary for the recommendation of candidates for the position of chairman & chief executive officer and establishment of the management succession plan
  4. Meetings of the Committee shall be convened on occasion as deemed necessary by the chairman of the Committee.
  5. All resolutions of the Committee shall be adopted by the affirmative vote of a majority of members with a majority of members in attendance. However, no committee member shall exercise his or her voting rights in relation to a resolution that recommends himself or herself as a candidate.

Article 24 (Performance Evaluations, etc.)

  1. The Board of Directors shall conduct fair evaluations of the performance of the committees of the Board of Directors on an annual basis.
  2. Performance evaluations of the committees of the Board of Directors shall be conducted once in the first half of every year.
  3. Evaluation indicators shall be set up to ensure the transparent and efficient composition and operation of the committees of the Board of Directors and enhance the roles of the committees.
  4. The Board of Directors shall refer to the results of the performance evaluations of the committees of the Board of Directors to ensure the efficient operation of those committees.
  5. Other details regarding this Article shall be determined by the Board of Directors.

Article 25 (Scope of Officer)

The term “Officer” in these Guidelines shall refer to officers prescribed under Article 2, Paragraph 2 of the Corporate Governance Act.

Article 26 (Eligibility of Officers)

  1. Officers (in this Article, this shall exclude registered directors) shall satisfy all eligibility criteria prescribed under Article 5 of the Corporate Governance Act and relevant laws. In the event an officer no longer satisfies such criteria, the officer shall lose his or her position as an officer of the Company. However, this provision shall not apply in cases of suspension of the performance of duties, suspension of business execution, or reprimand or public warning.
  2. Officers shall have a high capacity for strategic thinking and possess practical knowledge, mature judgment, and a strong sense of responsibility.
  3. The Company may establish separate standards regarding the eligibility of officers, including such criteria as business performance, professionalism, sense of ethics, and health status.

Article 27 (Eligibility of Compliance Officer and Risk Officer)

  1. The position of compliance officer shall be filled by an individual who satisfies all of the eligibility criteria prescribed under Article 26 of the Corporate Governance Act. In the event the appointed compliance officer no longer satisfies the eligibility criteria prescribed under Article 26, Paragraph 1, Subparagraph 1 of the Corporate Governance Act, he or she shall lose the position of compliance officer.
  2. The position of risk officer shall be filled by an individual who possesses professional knowledge and practical experience in the area of risk management and satisfies all of the eligibility criteria prescribed under Article 28, Paragraph 3 of the Corporate Governance Act. In the event the appointed risk officer no longer satisfies the eligibility criteria prescribed under Article 28, Paragraph 3, Subparagraph 1 of the Corporate Governance Act, he or she shall lose the position of risk officer.

Article 28 (Authority and Responsibility of Officers)

  1. The chief executive officer shall represent the Company, implement all resolutions adopted by the Board of Directors and committees of the Board of Directors, and oversee the overall business of the Company.
  2. Executive directors shall assist the chief executive officer, carry out business activities of the Company as per the instruction of the chief executive officer, and exercise the authorities delegated to them commensurate with their responsibility.
  3. Officers who are not registered directors shall perform duties as assigned by the chief executive officer and hold authorities commensurate with their responsibility.
  4. Officers shall adhere to the provisions of the Articles of Incorporation, internal regulations of the Company, all relevant laws, and instructions relating to businesses activities, and shall perform their duties sincerely.

Article 29 (Stocks Held by Officers)

  1. Registered directors shall come to hold shares of the Company, as specified below, within six (6) months of their first appointment to the position of director.
    1. Chairman & chief executive officer: 20,000 shares
    2. Executive directors: 5,000 shares
    3. Outside directors and non-executive directors: 1,000 shares
  2. Officers who are not registered directors shall hold a certain number of shares of the Company.

Article 30 (Appointment of Officers)

  1. Officers (in this Section, this shall exclude registered directors) shall be appointed by the chief executive officer and enter into a contract of appointment with the Company.
  2. The chief executive officer shall appoint individuals who satisfy all of the eligibility criteria for officers as prescribed under the Corporate Governance Act and relevant laws and are deemed to be most suitable for the position based on their experience and expertise in finance.
  3. Notwithstanding Paragraph 2 above, the group chief strategy officer, group chief finance officer, group chief risk officer (hereinafter referred to as “Chief Officers”), group chief compliance officer, risk officer, and group internal audit officer shall be appointed by the resolution of the Board of Directors upon the recommendation of the chief executive officer.
  4. The term of office of an officer shall be two (2) years, and may be extended by no more than one year. However, when calculating the term of office, time spent as an officer and division head at affiliated companies shall be included.
  5. The term of office of Chief Officers shall not exceed three (3) years.
  6. The term of office of the group chief compliance officer and risk officer shall be at least two (2) years.
  7. In order to extend the term of office of an officer, the officer shall satisfy the same eligibility criteria that were applied at the time he or she was first appointed.
  8. The chief executive officer shall report all appointments and dismissals of officers to the Board of Directors.

Article 31 (Retirement, etc. of Officers)

  1. Officers shall retire in accordance with the provisions of each of the following subparagraphs. In the cases of Subparagraphs 4 and 5, officers may be dismissed even while still holding office.
    1. Expiration of term of office
    2. Submission of letter of resignation
    3. Mandatory retirement, as per the personnel management regulation
    4. Disciplinary dismissal, as per the internal personnel management regulations
    5. In cases where the chief executive officer deems it improper for an officer to maintain and carry out the duties of his or her position
  2. Notwithstanding Paragraph 1 above, any dismissal of Chief Officers or the group internal audit officer shall be approved by the resolution of the Board of Directors, and any dismissal of a group chief compliance officer or risk officer shall be approved by an affirmative vote of two-thirds (2/3) of all directors.
  3. In the event an officer is no longer able to fulfill his or her duties due to injury, illness, etc., all related matters shall be dealt with as per the instruction of the chief executive officer.

Article 32 (Education and Training of Officers)

  1. The Company shall conduct education and training for newly appointed officers in order to familiarize them with the status of the Company and expand their knowledge of strategy, finance, financial management, and risk. In each of the following cases, however, business reports may replace such education and training.
    1. Officer who is a former employee or who was appointed while serving as an employee of the Company
    2. Officer with proven professionalism based on previous positions with other companies
  2. The Company shall prepare and conduct education and training programs for outside directors on a continuous basis.
  3. Officers may participate in internal or external educational programs of the Company to improve their management skills.
  4. The Company may send officers to external institutions for training.

Article 33 (Selection of and Education for Officer Candidates)

  1. The Company shall select a group of talented, core employees based on the performance and capability of each, and shall consider them when appointing officers in the future.
  2. The Company may consider an officer candidate from outside the Company if an individual with particular experience or professionalism is needed in relation to a specific business of the Company.
  3. The Company may prepare and operate education and training programs for officer candidates with the goals of strengthening its long-term competitiveness and building a foundation for sustainable growth. It may also refer to the evaluation results of such education and training programs when considering the appointment of new officers or extensions of terms of office.

Article 34 (Performance Evaluation for Officers)

  1. Matters regarding the evaluation of the performance of officers (in this Section, this shall exclude outside directors) shall be determined by the Management Development and Compensation Committee.
  2. The goals and procedure of the performance evaluation shall be determined by the Management Development and Compensation Committee in consideration of the rank of the officers and the particular characteristics of their responsibilities.
  3. Performance evaluations shall consist of annual evaluations and long-term evaluations. Performance evaluation indicators shall be established in consideration of the guidelines presented in each of the following subparagraphs.
    1. Refrain from short-sighted competition with the goal of outward expansion, and ensure that long-term performance, profitability, and soundness are reflected as important criteria.
    2. Set indicators of long-term performance and profitability as core indicators; allow the soundness indicator a certain level to reflect risk management; limit increases in the weight of qualitative indicators to a certain level in order to maintain objectivity.
    3. Performance evaluation indicators may be adjusted in consideration of market conditions, economic forecasts, etc., and an objective evaluation system should be established to ensure that too much weight is not given to qualitative indicators, thereby avoiding overly generous evaluations.
    4. Officers in charge of risk management, compliance, and internal audit shall be evaluated and compensated based on a separate guideline, such as independent indicators that are not related to performance in areas that such officers are responsible for supervising and auditing.
  4. The results of performance evaluations shall be reflected in the payment of performance-related compensation, decisions regarding the re-appointment of officers, etc.

Article 35 (Remuneration of Officers)

  1. Remuneration for officers consists of basic pay, short-term performance pay, and long-term performance pay.
  2. Basic pay is a fixed amount paid every month that is determined in consideration of the importance or value of the particular characteristics of a position as well as the typical level of remuneration in the relevant industry and within the Company.
  3. Short-term performance pay shall be determined by multiplying the maximum short-term performance pay for an individual by a rate decided based on the results of the performance evaluation, and will be paid out in a lump sum in the year following the year in which the performance evaluation was conducted.
  4. Long-term performance pay shall be based on shares of the Company, and the number of shares shall be determined by multiplying the maximum number of shares for the long-term performance of an individual by a rate decided based on the results of the performance evaluation. Long-term performance pay shall be paid out in a lump sum upon the close of a reserve period based on the prevailing share price on the payment date.
  5. Remuneration for outside directors shall be determined separately by the Management Development and Compensation Committee.

Article 36 (Principle of Management Succession of the Chief Executive Officer)

  1. The Board of Directors shall establish internal regulations concerning the management succession of the chief executive officer and decide the required time period for each phase of the succession planning, the individual responsible for carrying out the succession process, and the related procedures, etc.
  2. The internal regulations specified in Paragraph 1 above shall cover each of the following matters.
    1. Establishment and modification of the management succession plan
    2. Minimum eligibility criteria of the chief executive officer
    3. Reason and timing of decisions regarding the commencement of the succession process of the chief executive officer
    4. Procedures for the nomination of the chief executive officer and management succession
    5. Selection of candidates for the position of chief executive officer and subsequent measures, such as eligibility verification, etc.
    6. Emergency plan, including matters such as the selection of a substitute chief executive officer and new chief executive officer candidate in the event the chief executive officer experiences an emergency or accident
    7. Other matters necessary for the appointment of the chief executive officer
  3. The Board of Directors shall determine the reasons for and timing of the decision to commence the management succession procedure, as mentioned in Paragraph 2, Subparagraph 3 above, after carefully considering the status of the Company and the risks involved.
  4. The Board of Directors shall ensure that the management succession procedure mentioned in Paragraph 3 above is completed as quickly as possible after the process is initiated. However, in the event the appointment process is delayed due to natural disaster or other unavoidable circumstances, including the disqualification of the selected candidate or an incident that prevents the candidate from accepting the appointment, the Company shall immediately announce the reason for such delay, the substitute who will serve until the appointment of a new chief executive officer, and the schedule of the operation of the Company and the appointment of the chief executive officer.
  5. The Board of Directors shall review the management succession plan at least once every year.
  6. The Board of Directors shall disclose the internal regulations concerning succession, as mentioned in Paragraph 1 above, through the annual report on corporate governance and the remuneration system.

Article 37 (Support for the Management Succession Plan for the Chief Executive Officer)

  1. The division of the Company responsible for assisting the Board of Directors shall provide support for the management succession of the chief executive officer, as carried out by the Chairman Nomination Committee and Nomination Committee.
  2. The division of the Company responsible for assisting the Board of Directors shall perform each of the following tasks.
    1. Conduct continuous management, evaluation, and verification of the chief executive officer candidates
    2. Provide support for the evaluation of chief executive officer candidates
    3. Carry out other support tasks as necessary for the succession of the chief executive officer

Article 38 (Eligibility of the Chief Executive Officer)

  1. The chief executive officer of the Company shall be elected from among those who have experience in and knowledge of finance, share the vision of the Company, and will strive to secure the public interest and sound management of the Company.
  2. Details regarding the eligibility, etc. of the chief executive officer shall be determined by the relevant committees of the Board of Directors.

Article 39 (Procedure for the Nomination of CEO Candidates)

  1. The Chairman Nomination Committee shall recommend a candidate for the position of chairman & chief executive officer of the Company, and the candidate nomination of the Nomination Committee shall be made in accordance with the regulations of the Nomination Committee.
  2. The Chairman Nomination Committee and Nomination Committee shall recommend, through a fair and transparent procedure, a candidate for the position of chief executive officer who shall uphold the interests of the Company, the shareholders, and other stakeholders.
  3. The Chairman Nomination Committee and Nomination Committee shall recommend a candidate for the position of chief executive officer after thoroughly verifying that the candidate satisfies the eligibility criteria prescribed by relevant laws and these Guidelines.
  4. The Chairman Nomination Committee and Nomination Committee may, if necessary, receive recommendations from outside sources, such as shareholders, stakeholders, or external advisory institutions.
  5. The details of the procedures for recommending chief executive officer candidates shall be determined by the relevant committees of the Board of Directors.

Article 40 (Announcement regarding the Nomination of the Chief Executive Officer)

In the event the Chairman Nomination Committee nominates a chief executive officer, or the Nomination Committee nominates a chief executive officer of an affiliate company, the Company, or the relevant affiliated company, shall announce the following information prior to the date a notice is issued regarding the convocation of a general meeting of shareholders, and the details of such announcement and methods for accessing the announced information shall be included on such notice.

  1. Summary of the procedure for the nomination of a chief executive officer candidate
  2. List of the members of the nomination committees and their profiles
  3. Person in each nomination committee who suggested the candidate and their relation to the candidate
  4. Whether the candidate satisfies the eligibility criteria as per relevant laws, and evidence thereof
  5. Reason for recommending the candidate for the position of chief executive officer
  6. Career of the chief executive officer candidate
  7. Other information required by the Board of Directors concerning the recommendation of the chief executive officer candidate

Article 41 (Establishment of Accountability-based Management System)

  1. The term of office of the chief executive officer of the Company shall be specified in the Articles of Incorporation, and matters regarding the appointment and dismissal of the chief executive officer shall be subject to the provisions of Article 10 (Procedure for the Appointment of Directors and Their Term of Office) and Article 11 (Standards of and Procedure for the Retirement of Directors)
  2. The chief executive officer of the Company shall carry out his or her duties in accordance with the Articles of Incorporation, and may delegate part of his or her authorities to an individual designated by the chief executive officer to the extent that such delegation does not violate any relevant laws or the Articles of Incorporation.
  3. Guidelines and procedures regarding the evaluation of the chief executive officer shall be determined by the Board of Directors or the committees of the Board of Directors.

SUPPLEMENTARY PROVISIONS

Article 1 (Enforcement Date)

These Guidelines shall take effect from August 1, 2016. However, the eligibility criteria, etc. for officers shall apply to officers who are appointed (or re-appointed) after this enforcement date.

Article 2 (Abolition of Other Guidelines)

The existing Corporate Governance Guidelines of Hana Financial Group shall be abolished.

SUPPLEMENTARY PROVISIONS

Article 1 (Enforcement Date)

These Guidelines shall take effect from October 27, 2017.