Shareholder Rights

• Shareholders, as the owners of POSCO, have the following rights which are guaranteed by the relevant laws and regulations, such as the Commercial Code:

◇ the right to participate in profit sharing

◇ the right to attend and vote at the General Meeting of Shareholders (GMS)

◇ the right to propose objectives of the GMS, such as nomination of candidates for directors

◇ the right to obtain relevant corporate information in a timely and easily accessible manner

• To fully protect the rights of shareholders, any matters causing fundamental changes to the existence of the Company and the shareholders’ rights (including, but not limited to, mergers, amendments to the articles of incorporation, capital reduction) shall be decided at the GMS.

• Shareholders should be able to exercise their voting rights as easily as possible and based on their free will. POSCO will provide sufficient information on the GMS agenda and allow the shareholders’ voting rights to be exercised in writing.

 

Shareholder Responsibilities

• Shareholders shall make every effort to exercise their voting rights proactively for the development of the Company, acknowledging the fact that exercising such rights can affect the management of the Company.

 

Functions of the BOD

• The BOD shall have a comprehensive authority over the management of the Company within the scope provided by the relevant laws and regulations, and shall make key managerial decisions and supervise the management activities in the best interests of the Company and its shareholders.

• The BOD shall perform the following functions:

◇ Setting of business goals and core business strategies

◇ Determining the appointment and/or dismissal, supervision, assessment, and compensation policy of the management

◇ Periodic monitoring of the management’s accomplishments

◇ Approving significant investment projects, large-scale borrowing of funds, annual business plans and budgets.

◇ Overseeing other matters prescribed by laws and regulations, articles of association, and operating regulations of the BOD

 

BOD Composition and Appointment of Directors

• The Company shall have two or more directors and a limited number of non-executive directors.

• The chairperson of the BOD shall be the CEO and/or representative director.

• By resolution of the BOD, the Company shall appoint the CEO and representative directors among the executive directors. The positions of president, vice president, senior managing director, or managing director may be granted to a director by the resolution of the BOD upon the recommendation of the CEO.

 

Qualifications of Directors

• Directors shall possess an exemplary sense of ethics, a sense of professionalism and honesty, and the ability to enhance the long-term value of all shareholders and represent the interests of all stakeholders in a balanced manner.

• Executive directors, as high-level managers of the Company, shall have abundant experience and expertise relating to the Company’s business, and shall be capable of making managerial decisions in a rational and entrepreneurial manner.

• Non-executive directors shall have abundant expertise or experience in a relevant field of industry, finance, academia, law, accounting, or public sector, shall have no material relationship with the Company and shall be able to make decisions independently from the management of the Company and selected shareholders.

 

Roles of Non-executive Directors

• Through the BOD activities, non-executive directors shall participate in the Company’s key decisionmaking process. As members of the BOD, non-executive directors shall supervise and support the management through constructive advice.

• A non-executive director may request the provision of information necessary to perform their duties. If necessary, the non-executive director may receive consultation from third party experts through proper procedures, for which POSCO will cover any reasonable expenses.

• Non-executive directors shall devote sufficient time for purposes of performing their duties and shall review all related materials before attending a BOD meeting.

 

Responsibilities of Directors

• Directors shall do their utmost to perform their duties of care and duties of loyalty for the best interests of the Company and its shareholders. Directors shall not leak or use any information obtained in the course of performing these duties for their own benefit or the benefit of any third parties.

• Directors, as members of the Company, shall abide by POSCO’s Code of Ethics. The BOD shall oversee compliance with the code of conduct set forth in the Code of Ethics.

• If a director violates the law or the articles of incorporation, or neglects his/her duties, he/she is liable for damages to the Company. In case there is any malice or gross negligence, he/she is also liable for damages to a third party. However, managerial decisions of a director that are based on good faith procedures and rational and reasonable judgement shall be respected.

• In order to secure the effectiveness of holding directors accountable and to recruit competent

personnel as directors, the Company may subscribe to liability insurance on behalf of directors.

• A director must resign if a conflict of interest between POSCO and the director is not resolved. The director shall not engage in any discussions or decision-making processes that may affect his/her personal or professional interests.

 

Operation of the BOD

• In order to make the best managerial decisions for the best interests of POSCO and its shareholders, the BOD should operate in an efficient and rational manner.

• In principle, BOD meetings should be held regularly during the year. If there is an urgent agenda to be addressed, an interim meeting of the BOD will be held. For a sound operation of the BOD, the operating regulations for the BOD which stipulate in detail the BOD’s authority, responsibilities, and operating procedures should be enacted and implemented.

 

Assessment and Compensation of the Management

• The BOD should design and implement the assessment and compensation system for the management that can contribute to the increase in the shareholders’ long-term values. The management activities of the management should be evaluated fairly, and the results should be rationally and appropriately linked to their compensation and reappointment.

 

 

Outside Auditors

• Outside auditors shall perform fair audits independently from the Company, its management and certain shareholders.