Hanwha Group to Strengthen Oversight of Management, Expand Independent Director Chair System

Kwon Ikhwan Appointed Independent Director Chair of Hanwha Corporation
Hanwha Systems and Hanwha Ocean Also Begin Appointment Process
Hanwha Aerospace and Hanwha Engine Target Next Year

Special Committees and Board Secretariats to Be Established
Expanded Advisory and Support Roles on Major Management Issues
"Putting the Enhancement of Shareholder Value First"

Hanwha Group is introducing a system in which independent directors (outside directors) chair the boards of major listed affiliates. The move is intended to enhance the independence and transparency of decision-making by putting independent directors, who oversee and hold management accountable, in charge of board operations. The overhaul also includes establishing a special committee to review matters involving conflicts of interest among shareholders and a dedicated support office for the board.

Kwon Ikhwan, the new chairman of the board of Hanwha Co., Ltd.

Hanwha Group said on October 14 that the board of Hanwha Corporation had appointed independent director Kwon Ikhwan as its new chairman. Following Hanwha Solutions' introduction of a board chairmanship system led by an outside director in 2024, the group is extending the system to other major listed affiliates.

The key element of the overhaul is an expanded role for independent directors. The plan is to have them chair the board and lead the review and discussion of agenda items, while providing them with the information and practical support needed to examine major management issues and strengthen their oversight. By pursuing the appointment and institutional reforms together, the group aims to bolster the protection of shareholder interests.

New Chairman Kwon is a legal expert who graduated from the 22nd class of the Judicial Research and Training Institute. He served as director general of the Planning and Coordination Office at the Ministry of Justice, chief of the Daejeon District Prosecutors' Office and chief of the Seoul Southern District Prosecutors' Office before joining the board of Hanwha Corporation in 2022. He has since served as chair of the Internal Transactions Committee and as a member of the Audit Committee and ESG Committee.

Hanwha Systems and Hanwha Ocean have also begun the process of appointing independent directors as board chairs. Hanwha Systems plans to complete its appointment through a board resolution this month, while Hanwha Ocean aims to do so by next month.

Hanwha Aerospace and Hanwha Engine plan to appoint independent directors as board chairs after partially reorganizing their boards in response to changes in the external environment resulting from the enforcement of amendments to the Commercial Act. They are targeting the first half of 2027.

The group will also introduce institutional measures to strengthen the board's review function. The first step is to add provisions for operating a "special committee" to each affiliate's board regulations.

The special committee will be a non-standing advisory body made up exclusively of independent directors. It will review in advance major management issues that could involve conflicts of interest among shareholders or attract significant public attention, and advise the board on them. The committee will help the board assess the impact of major decisions on shareholder interests before those decisions are made.

Each affiliate will establish a "Board Secretariat," a dedicated support office directly under its board. The Secretariat will support board operations and provide information in advance on major agenda items. The aim is to give independent directors the practical support they need to review agenda items based on sufficient materials.

If appointing an independent director as board chair changes who leads board operations, the special committee and the Secretariat are measures to support that change. The goal is to substantially strengthen the board's oversight by enhancing advance reviews of major issues and the provision of information.

Major listed affiliates, including Hanwha Corporation, Hanwha Solutions and Hanwha Aerospace, plan to complete the addition of provisions authorizing special committees and the establishment of Board Secretariats by next month, following board resolutions and amendments to their regulations.

A Hanwha Group official said, "This measure responds to public calls for an expanded role for boards and, above all, reflects our commitment to putting the enhancement of shareholder value first." The official added, "We will strengthen our competitiveness in global markets through more advanced corporate governance and continue to build investor confidence."

This content was produced with the assistance of AI translation services.