Article 1 (Objective)

The objective of the regulation is to set forth the provisions regarding matters related to operation of outsider directors of Hana Financial Group (hereinafter mentioned as ‘the company’)

Article 2 (Definitions)

For the purpose of this Standard, the definitions of the terms are as follows:

  1. “Outside Directors” refers to the outside directors defined in Article 382, Clause 3 of the Commercial Act.
  2. “Board of Directors and etc.," refers to the Board of Directors meeting pursuant to Commercial Code Article 390 and Sub-committees pursuant to Commercial Code Article 393-2.
  3. “Subsidiary and etc.,” means subsidiary and etc., pursuant to Financial Holding Company Act Article 4 Clause 1 Paragraph 2.
  4. “Affiliate Company” means affiliate company pursuant to the 「Act on regulation of monopoly and fair trade」.

Article 3 (Role and Responsibilities of Outside Director)

As members of the board of directors, outside directors shall establish management strategies and goals and supervise management personnel so as to ensure the lawfulness and soundness of management practices, thereby securing long-term benefits for the stakeholders, including the company, shareholders, financial consumers, etc.

Article 4 (Authority of Outside Director)

Outside Director as member of the Board may request the management team to report or provide materials and information on the status of business operations.

Article 5 (Obligations of Outside Director)

  1. Outside directors shall endeavor to have the board of directors make decisions in consideration of the long-term benefits of the stakeholders, including the company, shareholders, and financial consumers, by participating actively on the board and reviewing bills carefully in advance.
  2. Outside directors shall devote a certain number of hours annually, as determined by the board of directors, for their participation on the board of directors in order to fulfill the obligations set forth in Clause 1 of this Article.
  3. Outside directors shall not disclose to others, nor use for the interests of third parties, the trade secrets of the company (including the affiliated companies) acquired during their time in office or after retirement.
  4. In the event outside directors cause damages to the company or a third party by violating the law or the Articles of Association or by neglecting their duties, they shall bear all civil and criminal liability for the company and the third party.
  5. The company shall renew the liability insurance of officers annually, thereby maintaining the usual benefits of liability insurance, so as to cover the activities of outside directors during their terms in office and after retirement. However, the proportion of liability borne by outside directors shall be set at 20 percent of the indemnity amount within a limit of KRW 100 million.
  6. When the universities or other non-profit corporations (hereinafter referred to in this clause as “Non-profit Corporations, etc.”) where outside directors, their spouses, blood relatives, or blood relatives of their spouses (hereinafter referred to as “Outside Directors etc.”) are or have been trustees or employees within the last two years, receive donations (including comparable benefits, but excluding donations or contributions provided based on the Articles of Association of non-profit corporations in which the company participated as a member or an employee, before they were appointed as outside directors for the first time, referred to in this clause as “Donations etc.”) from the company (including non-profit corporations established by the company or the affiliated companies), the relevant outside directors shall report such donations to the board of directors, in accordance with the following provisions. However, should any unavoidable circumstances, such as a delay in convening the board of directors, prevent them from providing such notification, the outside directors shall report on the matter as soon as the relevant circumstances have been resolved.
    1. Shall report donation for the last 2 years in the BOD meeting convened in the first in case that Outside Directors are newly appointed in the company
    2. When outside directors become trustees or employees of non-profit corporations after the appointment, they shall report the details of donations within two years to the first board of directors meeting.
  7. If an outside director has a substantial change in the relationship between outside institutions concurrently engaged and the company or subsidiaries, resigns from the institutions and has a change in professional responsibilities, characteristic and job in charge he or she shall notify the Outside Director Nomination Committee and ask the judgment of the committee regarding his or her resignation.

Article 6 (Appointment Process of Outside Directors)

the company shall appoint Outside Director in the GSM with the recommendation from the Outside Director Nomination Committee.

Article 7 (Procedure for Nomination of Outside Director Candidate)

  1. The Outside Director Nomination Committee (hereinafter ‘the Committee’ in this Article) shall recommend, in a fair and transparent manner as it would for outside director candidates, those who will benefit the Company and shareholders.
  2. The Committee may request for information and data regarding the potential candidate pool to the management or the Outside Director Support Organization pursuant to Article 14.
  3. Upon the receipt of information on a potential candidate from the pool, as specified in the above Clause 2, the support department under the Outside Director should verify such information and the relevant experience of the candidate through materials provided by the candidate and information from other sources.
  4. The Committee shall nominate the candidate as Outside Director after fair and objective verification process of voting the candidate against the qualification criteria as defined in the relevant law and regulations
  5. When seeking outside director candidates, the Committee may accept recommendations from outside parties, including shareholders, stakeholders, and external consulting agencies, if necessary.
  6. The Company shall include outside director candidates recommended by shareholders with shareholder proposal rights in accordance with the Act on Governance of Financial Companies. However, this shall not apply in the event such candidates do not satisfy the eligibility requirements defined in the related laws and regulations.
  7. When the Committee recommends the reappointment of an outside director, the letter of recommendation shall be accompanied by an evaluation and review report of the Committee, in accordance with the Clause 1 of Article 12.

Article 8 (Disclosure of Matters for Nomination of Outside Director Candidate)

When the Outside Director Nomination Committee recommends outside director candidates, the company shall disclose the details of the outside director candidates prior to such notification at the general shareholders’ meeting, as specified in the Governance Announcement Regulations.

Article 9 (Term of Outside Director)

  1. The term of an Outside Director shall be within 2 years but shall be within 1 year for re-appointment service term. However, in case of exceeding the term as defined that the expiration of Outside Director’s term shall be concurrent with the closing time of GSM held for the final fiscal year during the term of the Outside Director this clause may not be applied.
  2. Regarding the reappointment of outside directors, an evaluation shall be carried out, in accordance with Article 12, in order to determine the level of their performance.
  3. The total tenure of an Outside Director shall not be more than 5 years consecutively. However, in case of exceeding 5 years as serving consecutively until the closing time of GSM held for the 5th fiscal year during the term of the Outside Director this clause may not be applied.
  4. If an Outside Director is re-appointed within 2 years from the expiration date of the term then it shall be considered as continuously serving the directorship
  5. The term of office of outside directors, shall include their term of office as outside directors (limited to those who have been appointed as outside directors within two years of retirement) of the affiliated companies.

Article 10 (Limitation of Re-appointment for Sub-committee of BOD)

As determined by the board of directors, outside directors shall serve a term not exceeding two successive years as committee members under the board of directors, including the Management Development and Compensation Committee. However, this limit may change in the event of unavoidable circumstances, such as inconsistency in the term expiration or concerns regarding the composition of the Committee under the board of directors brought about by such limitation.

Article 11 (Evaluation of Outside Directors)

  1. At the beginning of each year, the Company shall carry out fair evaluations of outside directors based on their activities.
  2. When necessary, the company shall commission outside evaluation agencies to evaluate outside directors reappointed for a term of two years or longer at least once every two years.
  3. The board of directors shall determine the evaluation method and process for Clause 1 above and endeavor to enhance the objectivity of the evaluation of outside directors, such as by taking the advice of outside agencies for the design of a fair evaluation standard.
  4. The outside evaluation agencies mentioned in Clause 2 of this article shall have expertise in the relevant fields, and agencies that have signed a consulting contract with the company including legal and management consulting within the last three years, or are still under contract, shall be excluded.

Article 12 (Compensation of Outside Directors)

  1. The company shall establish a performance-based compensation system for outside directors, including participation in committees under the board of directors.
  2. The compensation of Outside Director shall not be linked with business performance of the Company.

Article 13 (Outside Director Support Department)

  1. The support department for the board of directors shall be responsible for supporting all activities of the outside directors and the outside director nomination committee.
  2. The department shall be responsible for the following tasks:
    1. Support the reporting, provision, and delivery of management information, as stipulated in Article 15 and Article 16.
    2. Support for the appointment of outside directors, in accordance with Article 3-2, Clause 5 of the Regulations for the Board of Directors.
    3. Support for the evaluation and qualification verification of outside directors.
    4. Support for the Outside Director Nomination Committee in accordance with Article 3, Clause 1 of the Regulations for the Outside Director Nomination Committee.
    5. Support for other tasks necessary for outside directors to carry out their roles and responsibilities.
  3. The support department for outside directors shall report the status of Clause 2, Section 4 of this Article to the Outside Director Nomination Committee on a regular basis.

Article 14 (Provision of Information to Outside Director)

  1. To ensure that the Outside Director clearly understands the management status of the company, the company should provide the Outside Director with information on the management of the company and Affiliated Companies on a regular basis.
  2. In case the Outside Director requests for report or provision of management information to the BOD Chairman or Senior Outside Director, the Company shall, unless there are justifiable reasons not to, with no delay report or deliver the management information Outside Director
  3. The company shall have outside directors who participate on relevant boards of directors etc. fully review the agenda by sending the agenda seven days prior to the board of directors meeting, as specified in the Articles of Association. However, upon the unanimous agreement of the directors, this seven-day time period may be reduced or the agenda may not be sent.

Article 15 (Provision of Advisory Services to Outside Director)

If Outside Directors should request for receiving legal, accounting or management advisory service from external professional institutions deemed necessary for BOD activities, the Company shall provide this.

Article 16 (Training for Outside Director)

  1. The Company shall provide education or training program to newly appointed Outside Directors regarding strategies, finance, accounting, risk management and other areas of banking business.
  2. The Company shall prepare and operate continuous training or education programs for Outside Directors.

Article 17 (Disclosure)

Non-compliance with the restrictions on the successive appointment of committee members under the board of directors, in terms of the operation of outside directors, shall be disclosed in accordance with the Governance Announcement Regulations.

Article 18 (Executive Session)

To ensure free and open discussion and improve the function of management support of outside directors regarding the board agenda and current management affairs a chairman of the board who is an outside director or the senior director regularly convenes executive session at least twice a year solely with outside directors present.

SUPPLEMENTARY PROVISIONS

Article 1 (Date of Enactment) The date of enactment of this Standard is March 26, 2010.

SUPPLEMENTARY PROVISIONS

Article 1 (Date of Enactment) The date of enactment of this Standard is February 10, 2011.

SUPPLEMENTARY PROVISIONS

Article 1 (Date of Enactment) The date of enactment of this Standard is February 06, 2015.

Article 2 (Transitional Measures)

  1. Article 9 of these regulations shall apply to outside directors appointed (including reappointments and successive appointments) after these regulations have entered into effect.
  2. Regarding the total terms of office for outside directors appointed after these regulations have entered into effect, in accordance with Article 9, Clause 3, Article 9, Clause 4 and 5 shall apply to their terms of office before these regulations enter into effect.
  3. If the company is unable to adhere to the ratio of newly appointed outside directors specified in Article 10 as of the first general shareholders’ meeting after these regulations enter into effect, when considering the current outside directors’ terms of office, the company shall disclose the reason for its failure to adhere to the ratio and its plan for future compliance by the end of the month following the month of the general shareholders’ meeting.
  4. The Outside Directors serving at the time of the enactment of this Standard are regarded as being newly appointed in the first GSM after the enactment of this Standard in terms of Article 5 Clause 6 Paragraph 1.

SUPPLEMENTARY PROVISIONS

Article 1 (Date of Enactment) These Regulations shall be effective from October 23, 2015.

SUPPLEMENTARY PROVISIONS

Article 1 (Date of Enactment) These Regulations shall be effective from August 01, 2016.

SUPPLEMENTARY PROVISIONS

Article 1 (Date of Enactment) These Regulations shall be effective from July 21, 2017.