Article 1 (Purpose) The standards aims to define specific matters related to all governance principles and policies so that BNK Financial Group (Subsidiaries and others are included in some cases. Hereinafter, referred to as the ‘company') can protect stakeholders such as shareholders and financial consumers, improve the sound management and transparency of the company, and ultimately promote the long-term development according to Article 6 of 「Exemplary Standards for Financial Institution Governance」.
Article 2 (Principles and Policies)
① The company shall delegate the decision making and work performance of the company to the Board of Directors and the management and report the work performance status of the management for the harmony of checks and balances between the Board of Directors and the management.
② The company shall have expertise and diversity not to concentrate specific backgrounds and occupational groups, compose the Board of Directors with verified outside directors forming a majority of board members, and establish a governance structure in which the Board of Directors and the management can keep a mutual balance within the framework of checks.
③ As it publicly announces main internal standards such as internal governance standards and the activity details of the Board of Directors and the committees within the Board of Directors on the website of the company, the company shall make an effort to improve the transparency of the governance.
④ The Board of Directors shall make an effort to improve the governance by carrying out inspections on governance policies according to governance principles every year, evaluating propriety, and reflecting management environments, institutional changes, and others.
Article 3 (Enactment, Change, and Others) The standards shall be enacted and changed by resolution of the Board of Directors. The amendment and simple wording correction caused by a change in the superordinate regulation such as relevant laws, supervisory regulations, and the Articles of Incorporation shall be delegated to the representative director/CEO.
Chapter 2 The Composition and Management of the Board of Directors
Part 1 Current Status of the Board of Directors
Article 4 (Composition of the Board of Directors)
① The Board of Directors shall consist of all directors, inside directors, outside directors, and directors not engaged in business affairs(hereinafter, referred to as“non-executive directors”).
② The number of directors shall be no more than fifteen (15). The number of outside directors shall be three (3) or more, a majority of the total number of directors.
Article 5 (Chairman of the Board of Directors)
① The Board of Directors shall appoint the chairman of the Board among directors according to regulations specified by the Board of Directors every year.
② When the chairman of the Board is absent due to unforeseen circumstances, the director shall deputize for the chairman in the exercise of the latter's duties in the order prescribed in advance by the Board of Directors.
③ When it appoints a non-outside director as the chairman, the Board of Directors shall appoint the person representing outside directors (hereinafter, referred to as 「the lead outside director」).
④ The lead outside director shall perform the work prescribed in the following clauses:
1. Convene and preside over the outside directors' meeting composed of all outside directors;
2. Support so that outside directors can get work performance status reports and relevant data from executives such as the chair person of the Board of Directors, the management, and others;
3. Perform the works necessary to improve the roles and responsibilities of outside directors.
Part 2 Eligibility Requirements for Outside Directors
Article 6 (Passive Eligibility Requirements for Directors)
① The director shall not fall under any of regulations specified in the clauses of Article 38 of the Financial Holding Companies Act and Article 17 of its Enforcement Decree.
② The person who falls under any of the cases specified in each clause of Article 40, Section 4 of the Financial Holding Companies Act shall not qualify as an outside director. The outside director shall lose his/her office when he/she comes to fall under any of these cases after taking office.
③ The outside director shall not be appointed as an outside director of the other company during his/her term of office. However, it is exceptional when he/she concurrently holds office as an outside director in the subsidiaries of the company.
Article 7 (Active eligibility requirements for Directors)
① The director shall have competencies needed to develop the public utility of the company, the soundness of the management, and the credit order as one who has financial experience and knowledge.
② The outside director shall be appointed among people who have expertise and insight, considering the matters specified in the following clauses:
1. Whether he/she has sufficient practical experience or professional knowledge in the relevant field such as finance, economy, management, accounting or law, need to perform the duties of the outside director;
2. Whether he/she can fairly perform the duties of the outside director for the interests of all shareholders and financial consumers without being bound to specific interests;
3. Whether he/she has ethics and accountabilities appropriate to perform the duties of the outside directors;
4. When he/she spends sufficient time and effort needed to perform the duties of the outside director faithfully;
③ The person who has sufficient practical experience or professional knowledge in the relevant field, specified in Section 2, Clause 1, is one who falls under any of qualifications specified in the following clauses:
1. Professional managers (one who had or has worked in a position of an executive or higher/the same level at the corporation under the external audit according to「Corporation's External Audit Act」or the corresponding foreign law);
2. The person who had ever been engaged in the work related to the qualifications of attorneys or certified public accountants for five (5) or more years;
3. The person who had ever worked in the position of at least a researcher or a full-time lecturer in the relevant field in a research institute or college for five (5) or more years as one who has a Master's degree or a higher degree in the field of finance, economy, management, law and accounting;
4. The person who had ever worked in a financial company for ten (10) or more years;
5. The person who had ever performed finance or accounting-related works as an executive for five (5) or more years or as an employee for ten (10) or more years at the stock certificate listed corporation (the stock certificate listed corporation in accordance with「Capital Market and Financial Investment Business Act」);
6. The person who had ever been engaged in finance or accounting-related works or supervisory works for five (5) or more years at the government, the local government, a public institution in accordance with 「Act on the Management of Public Institutions 」, Financial Supervisory Service, Korea Exchange in accordance with 「Capital Market and Financial Investment Business Act」 or the financial investment business-related institution (excluding financial investment-related organizations) in accordance with Article 9, Section 17 of the same law
7. The person who had been engaged in financial or accounting-related works for five (5) or more years at the institution ((A considerable number of foreign financial institutions are included) subject to the inspection in accordance with Article 38 of「Act Related to the Establishment of Financial Service Commission and Others」.
8. The person recognized to have the qualification corresponding to Clause 1 to 7 by the Board of Directors or the Outside Director Nomination Committee as one who has rich professional knowledge or practical experience.
Part 3 Rights and Obligations of the Board of Directors and Directors
Article 8 (Rights and Obligations of the Board of Directors)
① The Board of Directors shall resolve the matters prescribed in the relevant law or the Articles of Incorporation and delegated by resolution of a general meeting of shareholders, basic corporate management policies, and the important matters related to work performance.
② The Board of Directors shall have the environment and the system for the risk management, which correspond to the management strategies of the company and its subsidiaries. The Board of Directors shall have the rights to advise, recommend corrective measures, and make a request for data submission in relation to the management issues of subsidiaries within the legal limit.
③ The Board of Directors shall supervise the overall internal control and directors' job performance.
④ The Board of Directors shall not do any of the acts described in the following clauses in exercising its rights:
1. Do not undermine the management soundness of subsidiaries and others (including subsidiaries, and companies controlled by a subsidiary in the Financial Holding Companies Act), consumer rights and interests, and a sound order in financial transactions;
2. Do not leak the business secrets of the company obtained while performing their jobs even after retirement as well as during their terms of office;
3. Do not violate relevant laws.
⑤ The Board of Directors shall prepare the internal control standards needed to supervise subsidiaries and others, and appoint a compliance office to check up the compliance.
Article 9 (Directors' Rights and Obligations)
① Directors may participate in the decision making process related to the work performance of the company, and request the provision of information necessary for job performance through the Board of Directors.
② Directors shall follow relevant laws such as the commercial code and internal regulations, and faithfully perform their duties for the company as good managers.
③ When they find the fact which may significantly damage the company, directors shall immediately report it to the Audit Committee.
④ Directors shall neither leak the business secrets of the company obtained while performing their jobs nor use them for self- or the third party's interests even after retirement as well as during their terms of office.
Article 10 (Resolutions of the Board of Directors and Others)
① The Board of Directors shall resolve the matters specified in the following clauses. However, its rights may be delegated to the committee within the Board of Directors or the CEO within the limits of the relevant law and the Articles of Incorporation.
1. Matters related to the general meeting of shareholders
2. Matters related to general management
3. Matters related to subsidiary management
4. Matters related to the enactment, enforcement, and abolition of important regulations
5. Matters related to directors and others
6. Matters related to important contracts and lawsuits
7. Matters related to capital and financing
8. Matters required to be resolved by the Board of Directors according to the relevant law
9. Other matters deemed necessary by the representative director.
② The matters specified in the following clauses shall be reported to the Board of Directors:
1. The result of carrying out the resolutions adopted by the Board of Directors
2. Resolutions adopted by the committee within the Board of Directors
3. Settlement results by quarter
4. Matters related to the appointment and dismissal of the management
5. Appointment and dismissal of the person responsible for the clerical support organization in the Board of Directors
6. Matters defined to be reported to the Board of Directors in other regulations
7. Other matters deemed necessary to be reported to the Board of Directors and the representative director
Part 4 Criteria and Procedures for the Appointment and Resignation of Directors
Article 11 (Procedures for the Appointment of Directors)
① Candidates for the representative director/CEO shall be recommended by the CEO Nomination Committee, go through the resolution of a general meeting of shareholders, and be appointed as the representative director/CEO by the Board of Directors.
② The candidates for executive directors (except the representative director) and non-executive directors shall be recommended by the Group Executive Nomination Committee, go through the resolution of the Board of Directors, and be appointed at a general meeting of shareholders.
③ The candidates for outside directors and the members of the Audit Committee shall respectively be recommended by the Outside Director Nomination Committee and the Audit Committee Member Nomination Committee, go through the resolution of the Board of Directors, and be appointed at a general meeting of shareholders.
④ Outside directors corresponding to around one-fifth (1/5) of the total outside directors shall newly be appointed at an ordinary general meeting of shareholders every year (except the consecutive appointment, but including the appointment at an extraordinary general meeting of shareholders convened after the ordinary general meeting of shareholders held in the previous year. In this case, the total number of outside directors newly appointed for the past five (5) years shall be no less than the annual average number of outside directors for the past five (5) years (the total number of outside directors based on the date of an ordinary general meeting of shareholders).
⑤ The regulation specified in Section 4 shall not apply to the case that the total number of outside directors is less than 5.
Article 12 (Director's Term of Office)
① The director's term shall be determined at a general meeting of shareholders within the time period not exceeding three (3) years after the appointment. The consecutive appointment may be permitted.
② The outsider director's term shall be two (2) years. The outside director may consecutively hold office on an annual basis, but not for more than five (5) year. However, it is exceptional when the total term of office does not exceed five (5) years because he or she has held office by the end date of an ordinary general meeting of shareholders related to the settlement period for five (5) years during the term.
③ The outside director shall be considered to hold his/her office consecutively when he/she is re-appointed within two (2) years after the term in office ends.
④ The outside director's term specified in Section 2, shall be calculated including the term that he/she had held office as an outside director in subsidiaries and others (Limited to the person appointed as an outside director of the company within two (2) years after resignation.)
⑤ The term specified in Section 1 shall be extended up to the date that an annual general meeting of shareholders ends when the director's term ends before the end date of an annual general meeting of shareholders for the relevant settlement period after the last settlement period ends.
⑥ The director's term shall be computed from the date that he/she takes office unless otherwise determined at a general meeting of shareholders.
Article 13 (Director Resignation)
① When he/she intends to resign before his/her term of office ends, the relevant director shall submit a resignation letter indicating his/her intent to resign to the company.
② A director shall be considered to resign his/her office when his/her term ends.
③ A director who falls under any of disqualification criteria prescribed in the relevant law and the internal standards shall lose his/her office.
④ A director may be dismiss when he/she does any fraudulent act or an act significantly against the law or the Articles of Incorporation related to his/her duties. In this case, the dismissal shall be determined by resolution of a general meeting of shareholders according to the regulation specified in Article 34 of Commercial Code.
⑤ When the office of a director is vacated, the successor shall be appointed at an extraordinary or the next ordinary general meeting of shareholders. When there is a by-election, the elected director's term shall be computed from the date that he/she takes office. However, when the quorum is met, the successor may not be appointed by resolution of the Directors of Boards.
Part 5 Convocation Procedures and Voting Method of the Board of Directors
Article 14 (Convocation of the Board of Directors Meeting)
① There are two types of board meetings, regular and special. The chairman of the Board of Directors shall convene board meetings. However, when the chairman is absent due to unforeseen circumstances, the director shall deputize for the chairman in the exercise of the latter's duties in the order prescribed in advance by the Board of Directors.
② The regular meeting shall be held once per quarter. On the other hand, the special meeting shall be convened without delay when the chairman recognizes that it is necessary or a majority of the directors on the register, the Audit Committee or the representative director/CEO requests to call a meeting.
③ When a board meeting is convened, a written convocation notice which the purpose of the meeting is clearly stated shall be given to every directors by fax, telegram, registered mail or electronic means (computer communications, e-mail and others) seven (7) days before the scheduled start date of the meeting. However, the convocation period may be shortened when there is an urgent reason. The convocation procedures may be omitted with the consent of the entire directors.
Article 15 (Resolution Method of the Board of Directors)
① Unless otherwise provided in the law or the Articles of Incorporation, all resolutions of the Board of Directors shall require the attendance of a majority of the directors on the register and the affirmative vote of a majority of directors present at the meeting.
② The board of directors may allow all or part of directors to participate in the resolution process through an effective means of two-way communications that all directors can transmit and receive voices at the same time without attending a meeting in person. In such case, relevant directors shall be deemed to have attended the meeting in person.
③ Each director shall have one vote. However, the director who has a special interest in a resolution shall not exercise his/her voting right. In this case, the number of the voting rights which cannot be exercised shall not be included in the number of the voting rights of the directors present at the meeting.
Part 6 Establishment of Operating Plans for the Board of Directors and Others, and Director Evaluation
Article 16 (Establishment of Operating Plan for the Board of Directors and Others)
① The company shall make an annual plan for the operation of the Board of Directors and the committees within the Board of Directors (hereinafter, referred to as 'the Board of Directors and others’)
② The company shall generalize the operating performance of the Board of Directors and others, reflect it into outside director evaluation, and use it in making operating plans for the Board of Directors and others.
Article 17 (Director Evaluation)
① The company shall regularly evaluate executive directors, non-executive directors, and outside directors every year.
② The regulations separately determined by the Board of Directors shall apply to the matters related to the time, method, procedures and others of the evaluation specified in the previous section.
Article 18 (Outside Director Evaluation)
① The company shall fairly evaluate outside directors based on their activity details.
② The Board of Directors shall define the matters specified in the following clauses for the evaluation specified in Section 1.
1. The method of evaluating outside directors such as self-assessment, Board of Directors evaluation, and employee evaluation;
2. Evaluation cycle by evaluation specified in Clause 1.
③ The Board of Directors may design the evaluation criteria for outside directors, taking counsel from an external institution.
④ The company may evaluate outside directors who have held office for two (2) or more years through an external evaluation company once ore more at least every two years.
⑤ The external evaluation company described in Section 4 shall be selected as an institution with the expertise in the relevant field. The institution which had or has concluded an advisory contract such as legal or management consulting services with the company within the last three (3) years shall be excluded.
⑥ The company shall publicly announce the implementation of the evaluation specified in Section 1 and the results through an annual governance report.
⑦ The company shall report the results of the evaluation specified in Section 1 to an ordinary general meeting of shareholders.
Chapter 3 Establishment and Operation of the Committees within the Board of Directors
Article 19 (Committees of the Board of Directors)
① The Board of Directors may the committees specified in the following clauses. The roles, management and others of these committees shall be defined according to the committee regulations separately defined.
1. The Board of Directors Steering Committee
2. The CEO Nomination Committee
3. The Group Executive Nomination Committee
4. The Audit Committee
5. The Outside Director Nomination Committee
6. The Risk Management Committee
7. The Management Development and Compensation Committee
8. The Audit Committee Member Nomination Committee
② In addition to the committees specified in Section 1. the special committee may be established by resolution of the Board of Directors when it is necessary for the consideration or resolution of a special issue.
③ When each committee is convened, the notice which the date, time, place and purpose of the committee meeting are clearly stated and agenda items shall be given to each member seven (7) days before the scheduled start date of the meeting. However, the convocation period may be shortened in case of urgency.
④ The committee shall notify every director of its resolutions. When he/she has any objection to the resolution, the director being notified of the resolution may make a request for the convocation of a board meeting. The Board of Directors may resolve the matter previously resolved by the committee again. However, this regulation shall not apply to the Audit Committee.
Article 20 (Appointment Criteria for the Chairman and Members)
① The chairman of the committee shall be elected among its members. When the chairman of the committee is absent due to unforeseen circumstances, the member shall deputize for the chairman in the exercise of the latter's duties in the order prescribed in advance by the committee.
② The chairman's term shall be one (1) years. When it is separately clarified in the regulations of each committee, the relevant regulation shall apply.
③ The outside director shall not consecutively hold office for more than 2 years in the committee within the Board of Directors. However, an exception shall be made under unavoidable circumstances (for example, when the inconsistency in the end dates of the term in office, and a term limit may cause a significant obstacle to the composition of the committee within the Board of Directors)
Article 21(The Board of Directors Steering Committee)
① The committee shall consist of the chairmen of four (4) different committees, the Board of Directors, the Audit Committee, the Risk Management Committee, and the Management Development and Compensation Committee. However, when the number of members is less than 4 due to the concurrent position in two or more committees, the vacancy caused by the insufficient number of members shall be filled among other outside directors or non-executive directors.
② It shall be a principle that a meeting is held once half a year. However, when deemed necessary by the chairman, the meeting may frequently be convened.
③ The committee shall perform the roles specified in the following clauses and report the results and others to the Board of Directors:
1. Matters related to the efficiency and activation of the Board of Directors and others;
2. Make an annual plan for the convocation of the Board of Directors and others, and the management of outside directors;
3. Matters related to an improvement in the corporate governance;
4. Other matters deemed necessary by the Board of Directors and others.
Article 22 (The CEO Nomination Committee)
① The committee shall consist of the CEO and all outside director or non-executive directors.
② The chairman shall convene the meeting. However, The first committee meeting may be convened by the chairman of the Board of Directors.
③ The committee shall deliberate and resolve the matters specified in the following clauses:
1. Recommend CEO candidates;
2. Support the Board of Directors for the CEO's management succession;
3. Set up eligibility requirement for the CEO;
4. Identify and management a CEO candidate group and verify candidates' eligibility requirements;
5. Carry out the matters related to the recommendation of CEO candidates.
④ The committee shall report the matters related to the identification and management of a candidate group and the verification of candidates' eligibility requirements, specified in Section 3, Clause 4, to the Board of Directors.
Article 23 (The Group Executive Nomination Committee)
① The committee shall be composed of five (5) members including the CEO, non-executive directors, and outside directors. The number of outside directors shall form a majority of the total number of members.
② The chairman shall convene the meeting. However, The first committee meeting may be convened by the chairman of the Board of Directors.
③ The committee shall deliberate and resolve the matters specified in the following clauses:
1. Recommend candidates for the executive (except the CEO) and non-executive directors of the holding company;
2. Recommend candidates for the CEO of the subsidiary;
3. Recommend candidates for the executive directors and non-executive directors of the bank (except for outside directors and executive members of the Audit Committee);
4. Identify and manage candidates for the president of the bank and verify candidates;
5. Set up eligibility requirements such as Group executives' qualities;
6. Carry out other matters related to the recommendation of candidates for Group executives, determined by the Board of Directors.
④ The committee shall report the matters related to the identification of candidates and the verification of candidates' eligibility requirements, specified in Section 3, Clause 4, to the Board of Directors.
Article 24 (the Audit Committee)
① The committee shall consist of three (3) or more directors. The number of outside directors shall form no less than two-third (2/3) of the total members. In this case, one or more of committee members shall be accounting or financial experts, defined by the relevant law.
② It shall be a principle to convene a meeting once per quarter. However, when deemed necessary by the chairman, the meeting may frequently be convened.
③ The committee shall perform the work prescribed in the following clauses:
1. Supervise the works of directors and the management;
2. Approve the appointment of outside auditors;
3. Carry out other matters prescribed in the relevant law, the Articles of Incorporation or the internal standards related to audit works.
④ The committee shall carry out its jobs independently from the legislative and the enforcement body of the Board of Directors.
Article 25(The Outside Director Nomination Committee)
① The committee shall be composed of three (3) or more directors. The number of outside directors shall form a majority of the total members.
② The chairman shall convene the meeting. However, The first committee meeting may be convened by the chairman of the Board of Directors.
③ The committee shall perform the work prescribed in the following clauses:
1. Establish, check up, and supplement the principles for the appointment of outside directors;
2. Recommend candidates for outside directors who will be appointed at a general meeting of shareholders;
3. Manage a candidate group for outside directors and verify candidates;
4. Carry out the matters related to the management of the Outside Director Candidate Selection Advisory Board;
5. Carry out other matters necessary to recommend candidates for outside directors.
④ The committee shall report the management details of a candidate group specified in Section 3, Clause 3 to the Board of Directors.
⑤ The committee member shall neither recommend himself/herself as an outside director and nor exercise his/her voting right in the resolution of the committee, which he/she is recommended as an outside director candidate.
Article 26 (The Risk Management Committee)
① The committee shall consist of no more than five (5) directors including executive directors and outside directors. The committee members shall be appointed by resolution of the Board of Directors, considering work experience, expertise, and others.
② It shall be a principle to convene a meeting once per quarter. However, when deemed necessary by the chairman, the meeting may frequently be convened.
③ The committee shall perform the work prescribed in the following clauses:
1. Establish basic risk management policies in accordance with management strategies;
2. Determine the bearable level of risk;
3. Approve the risk tolerance limit by subsidiary;
4. Approve the proper investment limit or the loss tolerance limit by subsidiary;
5. Enact and amend the risk management regulations of the Risk Management Council;
6. Other matters deemed necessary by the Board of Directors and the committee.
Article 27 (The Management Development and Compensation Committee)
① The committee shall consist of three (3) or more directors. The committee members shall be appointed by resolution of the Board of Directors, considering directors' work experience, expertise and others. However, the number of outside directors shall form no less than a majority of the total members.
② One or more of committee members shall be people who have ever been engaged in finance, accounting or financial affairs.
③ The committee shall have one or more members of the Risk Management Committee participate so that the risk management sector can fully be handled in the compensation system.
④ It shall be a principle that a meeting is held once half a year. However, when deemed necessary by the chairman, the meeting may frequently be convened.
⑤ The committee shall take charge of the works prescribed in the following clauses:
1. Deliberate the long and short-term management goals of executive directors and executive officers;
2. Review the long and short-term performance measurement and compensation of executive directors and executive officers;
3. Determine eligible compensation recipients such as the management and specific employees and review performance measurement and compensation;
4. Carry out other matters deemed necessary by the Board of Directors or the committee.
Article 28 (The Audit Committee Member Nomination Committee)
① The committee shall consist of all outside directors.
② The chairman shall convene the meeting. However, The first committee meeting shall be convened by the chairman of the Board of Directors.
③ The committee shall perform the work prescribed in the following clauses:
1. The matters related to the selection and recommendation of candidates for the members of the Audit Committee;
2. Other matters necessary to recommend candidates for the members of the Audit Committee.
Chapter 4 Executives
Part 1 Executives' Roles and Others
Article 29 (Executives' Roles and Others)
① “Executives” shall be divided into two types, executive officers who are directors and those not directors.
② The executive officers, directors, shall be appointed as executive directors at a general meeting of shareholders. On the other hand, the executive officers, not directors, shall be those who perform corporate works after delegated by the CEO among people who are not directors.
③ The executive officers' positions shall be divided into the CEO, the president, the vice-president and managing directors according to the scope of right and responsibility. They shall perform the duties of the position appointed by the CEO.
④ The eligibility requirements for executives shall be the same as those for directors, specified in Article 6, Section 1 and Article 7, Section 1.
Part 2 Executives' Rights and Responsibilities
Article 30 (Executives' Rights and Responsibilities)
① The CEO shall perform the matters resolved by the Board of Directors and generalize corporate works in accordance with the determination made by the Board of Directors.
② The CEO shall take responsibility for the matters specified in the following clauses in addition to the director's responsibilities defined in the relevant law, the internal standards, and others:
1. Establish the strategic directions of the Group, regularly check up strategies, and report them to the Board of Directors;
2. Provide stable support to achieve the profit and growth goal of the Group;
3. Report main pending issues to the Board of Directors and perform the guidelines of the Board of Directors;
③ Executive officers shall have the authority and right to make an arbitrary decision related to the job given by the CEO. They shall follow all directions of the CEO and faithfully perform their duties related to the position appointed by the CEO.
Part 3 Criteria and Procedures Related to Executives' Appointment and Resignation
Article 31 (Appointment of Executives)
① The CEO shall be appointed as the representative director/CEO at a board meeting through the resolution of a general meeting of shareholders after recommended by the CEO Nomination Committee. The term shall be the same as the director's term specified in Article 12, Section 1.
② The executive director shall be appointed at a general meeting of shareholders through the resolution of the Board of Directors after recommended by the Group Executive Nomination Committee. The term shall be no more than three 3) years. The consecutive appointment can be permitted.
③ The executive officer shall be appointed by the CEO. The term shall be two (2) years at the first appointment. The consecutive appointment can be permitted on an annual basis. However, the term may differ within two (2) years in case of the appointment between group companies.
Article 32 (Executive Resignation)
① The CEO shall lose his/her office when he/she falls under any of disqualification criteria for executives, prescribed in Article 38 of the Financial Holding Companies Act and Article 17 of its Enforcement Decree. He/she may be dismissed when he/she does any fraudulent act or an act significantly against the law or the Articles of Incorporation related to his/her duties. However, the director shall be dismissed by resolution of a general meeting of shareholders.
② When the CEO is absent due to unforeseen circumstances, the executive director shall deputize for the representative director in the exercise of the latter's duties. When the CEO and the executive director are absent, the person determined by the Board of Directors shall deputize for the representative director.
③ The executive officer, not directors, shall be dismissed when he/she falls under any of regulations specified in the following clauses. He/she may be dismissed during the term of the contract when it is judged that he/she has any of the reasons for dismissal, defined in the personnel regulations or is unsuitable to maintain the status of the executive office.
1. When the term (the term of the employment contract) ends;
2. When the relevant executive officer submits a resignation letter;
3. When the relevant executive officer has any of the reasons for natural dismissal defined by the personnel regulations.
Part 4 Training System for Executives and Candidates
Article 33 (Education for Outside Directors)
① The company shall provide education or training related to corporate strategies, finance, accounting, risk management and others for new outside directors.
② The company shall operate education or training programs for outside directors.
Article 34 (Education for Executive Candidates)
① The company shall prepare and carry out many different criteria such as selection criteria and eligibility requirements for CEO candidates, and the education, training and evaluation system for executives.
② Executives and executive candidates may participate in the internal or external education program to improve their management performance competencies.
Part 5 Performance Evaluation and Method of Remuneration Payment for Executives
Article 35 (Method and time of Executive Performance Evaluation)
① The company shall regularly evaluate executives' performance every year.
② The matters related to the method, procedures and others of the evaluation specified in the previous section shall be deliberated by the Management Development and Compensation Committee and determined by the Board of Directors.
③ The company shall use the result of an executive performance evaluation as reference data in determining the consecutive appointment.
Article 36 (Composition and Payment Method of Remuneration for Executives)
① The executives' remuneration shall consist of base salary and performance salary. The performance salary shall be divided into the short- and the long-term performance-based pay.
② The short-term performance-based pay shall be given after a performance goal is given and the result is evaluated on an annual basis. 40% and 60% of the performance-based pay shall respectively be given to the CEO and other executives in cash in the year of performance evaluation. The remaining performance-based pay shall be deferred and given in conjunction with share prices for three (3) years.
③ The long-term performance-based pay shall be given after the base salary is multiplied by the payment rate according to the performance result on the three (3)-year basis. While 40% to 60% of the performance-based pay shall given by position in cash, the remaining pay shall be deferred and given in conjunction with share prices for three (3) years.
④ When the management indicator of the company becomes worse, the short and the long-term performance-based pay shall be given after the collection rate is calculated and deducted.
⑤ The maximum payment limit of the performance salary, the evaluation criteria for executive-specific performance salaries, and the payment rate shall be deliberated by the Management Development and Compensation Committee and separately determined by the Board of Directors.
Chapter 5 Public Notice
Article 37 (Regular Public Notice)
① The company shall prepare an annual governance report including the contents specified in the following clauses, prescribed in 「Exemplary Standards for Financial Institution Governance and publicly announce it twenty (20) days before the scheduled start date of an ordinary general meeting of shareholders held next year. However, it is exceptional when the current operating status of the Board of Directors and others (limited to the case that the contents of the public notice, required in an annual governance report, are included) are publicly announced according to the internal governance standards in accordance with Article 23-4 of the ｢Banking Act｣ within the time period prescribed in the body of the standards.
1. The governance policies of the company (internal governance standards, internal standards for the CEO's management succession, ethical codes and others) and corporate governance status;
2. Matters related to the composition and activities of the Board of Directors and the committees within the Board of Directors;
3. Matters related to the recommendation of candidates for outside directors;
4. Matters related to the activities of outside directors;
5. Matters related to the CEO's management succession;
6. Matters related to the Executive Nomination Committee (apply to the bank holding company and the bank);
7. Activity details of the Audit Committee;
8. Compensation matters;
9. Activity details of the Risk Management Committee;
10. Matters related to the general meeting of shareholders;
11. Governance-related recommendations of Financial Service Commission and improvements or plans of the financial company;
12. Other main matters related to governance, prescribed in the Articles of Incorporation.
② When they do not publicly announce the matters related to the compensation for the fluctuation which occurred in the previous year through an annual governance report within the time period specified in Section 1, the Board of Directors and others shall additionally announce the fluctuation compensation for the previous year by the 15th day of the next month after the start date of the board meeting and others resolving this.
③ The company shall submit an annual governance report to a general meeting of shareholders first held after preparing it.
Article 38 (Occasional Public Notice)
① When it appoints or dismisses a director, the company shall publicly announce the fact on its website without delay.
② If any, the company shall publicly announce the matter which corresponds to Article 20, section 3 without delay.
③ When the meeting such as a board meeting is held, the date and time of the meeting, agenda items (including reporting items), outside directors' attendance, approval, and others shall publicly be announced by the 15th day of the next month. However, when it is inappropriate or difficult to announce them next month, the company shall publicly announce a specific notice plan which the date of the future notice and the reason for delay are included within the relevant period.
Article 39 (General Meeting of Shareholders)
① When it presents an agenda item related to outside directors at a general meeting of shareholders, the company shall individually present different agenda items such as the recommendation of outside director candidates.
② The chairman of the Board of Directors and the chairmen of the committees within the Board of Directors may attend an ordinary general meeting of shareholders to answer shareholders' questions.
③ The company shall publicly announce the total number of issued shares, the number of voting shares, the ratio of shares with a favorable and an unfavorable view by agenda item and other relevant matters on its website after the general meeting of shareholders.
Article 40 (Method of Public Notice) The public notice shall be given on the website of the company and Korea Federation of Banks unless there is no particular regulation.
Additional Provision
Article 1 (Enforcement Date) The standards shall enter into force on February 4, 2015.
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