The Coway Board of Directors (BOD) has a reasonably robust corporate governance structure featuring effective checks and balances and experts' decision-making power on corporate management allocated by shareholders in accordance with relevant laws and the articles of association. The BOD is responsible for coordinating the interests of stakeholders, monitoring investments and inside transactions, and deliberating and approving transparent compensation, while managing overall corporate risks. It also strives to improve transparency and efficiency of business management.

In 2022, total 6 board meetings were held, with an average attendance rate of 100%.

In accordance with Article 382 of the Commercial Act, the BOD consists of three executive and four independent directors as of the end of March, 2023. The number of independent directors (57.1 percent) outnumbers executive directors, which ensures the BOD’s fairness and independence. The BOD members, who are experts in diverse areas, including business management, accounting, and law, make decisions efficiently and carefully.

Coway has an Independent Director Candidate Recommendation Committee to ensure fairness and independence in the selection process. The selection of independent directors is finalized at the general meeting. For the selection of directors at the general meeting, detailed information on the candidates including personal history, fields of expertise, recommenders, and transactions with Coway should be provided 14 days prior to the general meeting, to prove their independence of the company. For the transparency and independence of the BOD, we carefully review any conflict of interest, including possession of shares in Coway, and transparently disclose their legal qualifications to stakeholders and shareholders. To verify the independence of outside directors, we have established guidelines that comply with relevant laws and regulations and global standards. We aim to improve the level of independence of outside directors by screening candidates more rigorously, and we verify the independence of candidates and existing outside directors in accordance with these guidelines.

The BOD at Coway consists of experts in diverse areas regardless of gender and age, to ensure that it does not represent specific interests or vocational groups. In particular, we seek to sharpen our BOD’s competitiveness by stressing the candidates’ expertise in the process of selecting independent directors. We recruit experts in a wide range of areas, including business administration, industry, finance/accounting, and law for the BOD’s diversity and expertise.

Coway secures the independent decision-making authority of the Board of Directors and establishes a reasonable and sound governance structure centered on independent directors through checks and balances.

In order to verify the independence of outside directors, Coway has established guidelines that comply with relevant laws and regulations and global standards. Based on these requirements, the BOD and the Independent Director Candidate Recommendation Committee verify the independence of outside director candidates and existing outside directors. We will determine that an outside director is independent if he/she meets the following points, and will comprehensively consider any other material relationship with the company.

For efficient and professional operation of the BOD, we have set up various BOD Committees, including the Management Committee, Independent Director Candidate Recommendation Committee, Audit Committee, and ESG Committee. As of April 2023, the Management Committee consisted of three executive directors, the Audit Committee, three independent directors, and the Independent Director Candidate Recommendation Committee, three independent directors, and the ESG Committee, one executive director and two independent directors. As members of the BOD, independent directors hold a majority, which allows the BOD to fulfill its responsibility to check the management in accordance with the principle of checks and balances. The Management Committee consists of executive directors only as it deliberates and decides on diverse matters on business activities. Other committees include independent directors with expertise in their fields.

In order to recruit outstanding experts as independent directors and support them in actively fulfilling their duties, we provide reasonable remuneration in consideration of the level of legal responsibility and renumeration level in the same industry. We evaluate independent directors qualitatively in terms of attendance and practicality of their suggestions, but we do not reflect it in remuneration and reappointment of independent directors. We have a principle of not remunerating independent directors based on the evaluation results as it may impair the independence of independent directors.

Coway aims to promote the sustainable development of Coway by inducing and rewarding CEOs and executives for their responsible participation in the mid- and long-term growth of the company, preventing decisions based on short-term performance.

Coway has established and disclosed a medium-term dividend policy to enhance the predictability of dividends for shareholders. In accordance with the principle of enhancing shareholder value, Coway plans to allocate financial resources generated within the range of distributable profits to strategic investments for sustainable growth, maintaining a sound financial structure (including cash flow), and returning to shareholders, taking the internal and external business environment into account. Coway plans to pay cash dividends once a year within the range of 40% of annual separate FCF and 20% of dividend payout ratio based on consolidated net income, taking business conditions into account.

As of the end of 2022, Coway’s shareholders consisted of Netmarble (25.08 percent), foreign investors (61.31 percent), local institutions and others (11.94 percent), and treasury stock (1.67 percent). The total number of shares issued by Coway is 73,799,619 shares, which consist of 100% common shares without preferred shares.

Coway follows the principle of 1 voting per share and does not have a differential voting system that grants multiple voting rights to specific stocks. However, voting rights of treasury stocks held as treasury stocks are limited by commercial law. As of the end of December 2022, 72,563,745 shares (98.32% of the total issued shares) had voting rights. Coway does not utilize the written or electronic voting system. Instead, we encourage shareholders who have difficulty in exercising their voting rights to exercise such rights by proxy. Also, we do not use cumulative voting in accordance with the articles of association, but we plan to consider implementing it if it is necessary in the future.