Board Composition
Election of Directors and Terms of Office
Directors are elected by shareholders at a general meeting of shareholders. Candidates for inside directors are nominated by the Board of Directors, while candidates for independent directors are nominated by the Independent Director Nomination Committee. The total number of directors shall be greater than three and no more than nine. In the case of electing two or more directors, the cumulative voting system prescribed in Article 382-2 of the Commercial Act is not applied. The term of office is three years, and a director may be re-elected at a shareholders’ meeting.
Election of Chairperson
The chairperson of the Board of Directors is elected from among the directors following a resolution of the Board. Currently, independent director Choi Jongku is serving as chairperson.
Board Expertise and Diversity
The Company does not set restrictions pertaining to race, sex, cultural background, or area of expertise when considering Board members. In the board nomination process, it actively considers race, sex, cultural background, or area of expertise of individuals who can participate in the Board with new and diverse perspectives. In particular, for independent directors, the Company seeks candidates who meet the qualifications set forth by relevant laws and regulations, and have expertise or experience in areas such as management, economics, accounting, law or relevant technologies.
Independence of Independent Directors
Samsung Electro-Mechanics judges the "independence" independent directors.
If a requirement is not met, a determination of no ‘independence’ is made. The requirements are as follows.
①Individuals who engage in company business, ②Individuals who have key interests or affiliations (including personal services contract) with the company, the CEO, the significant customer or supplier of the company, or the largest shareholder, ③The spouses, lineal ascendants, and lineal descendants of directors, auditors, and executive officers of the company, ④Individuals who have worked as executives and employees of the Company within the past five years, ⑤Executives and employees of companies where an executive of Samsung Electro-Mechanics serves as an independent director, ⑥An employee or a partner of an accounting firms that were in charge of auditing the company during the past year, are prohibited from serving as independent directors. The standards for independence of independent directors of our company meet the requirements of Articles 382 and Article 54-8 of the Commercial Act, and Article 22-2 of the Articles of Incorporation of the Company.
If a requirement is not met, a determination of no ‘independence’ is made. The requirements are as follows.
①Individuals who engage in company business, ②Individuals who have key interests or affiliations (including personal services contract) with the company, the CEO, the significant customer or supplier of the company, or the largest shareholder, ③The spouses, lineal ascendants, and lineal descendants of directors, auditors, and executive officers of the company, ④Individuals who have worked as executives and employees of the Company within the past five years, ⑤Executives and employees of companies where an executive of Samsung Electro-Mechanics serves as an independent director, ⑥An employee or a partner of an accounting firms that were in charge of auditing the company during the past year, are prohibited from serving as independent directors. The standards for independence of independent directors of our company meet the requirements of Articles 382 and Article 54-8 of the Commercial Act, and Article 22-2 of the Articles of Incorporation of the Company.
Operations of the Board of Directors
Board Types
- Regular Board Meetings: Meetings are held once every quarter as a general rule.
- Special Board Meetings: Meetings are held as needed.
Board Meetings
The chairperson calls the meeting of the Board of Directors and must notify each director of the meeting date at least 12 hours before the time of meeting. A director may request the chairperson convene a meeting of the Board by submitting the agenda and objectives if he or she has determined that there are justifiable reasons for business purposes. If the chairperson refuses to convene the Board without just cause, the director who raised the subject matter may himself or herself call a meeting of the Board.
Board Resolution
A resolution of the Board of Directors shall be made when a majority of the directors are in attendance and by a majority vote of the directors in attendance. However, to the extent permitted by relevant laws and ordinances, it is possible to conduct a meeting by means of telecommunication. In order to conduct a fair evaluation and engage in a rational decision-making process, directors with special interests in the subject matters being reviewed are prohibited from exercising their voting rights and are not included in the number of voting rights of the directors in attendance.
Main Matters Considered
Shareholders Meetings and Proposals
- Convening general meetings of shareholders
- Approval of operating reports and financial statements
- Changes to the Articles of Incorporation
- Appointment and dismissal of directors
- Matters relating to the Company’s dissolution, mergers and acquisitions, and transfer of the entire business or key parts of the business, as well as transfer of the entire business or key parts of the business of another company that can have significant implications for the Company
- Directors’ compensation, etc.
Management Matters
- Decisions regarding basic management policies of the Company, and amendments to such
- Approval of management plans and of quarterly and semi-annual reports
Financial Matters
- Matters concerning issuance of shares(- Decisions regarding issuance of new shares, Issuance of convertible bonds and bonds with subscription rights)
- Acquisition, disposal and retirement of treasury stock
- Approval of internal transactions
- Matters involving other key corporations and pertaining to investment/disposal, furnishing of collateral/debt guarantees, credit agreements, etc.
Matters Concerning Directors, Board of Directors, Committees
- Approval of directors’ involvement in competitive businesses, of concurrent service for another business in the same industry, and of transactions between a director and the Company
- Appointment of the chairperson of the Board of Directors
- Appointment of the CEO of the Company and joint representatives
- Establishment of committees, appointment and dismissal of committee members
- Establishment and dismissal of other operating rules for the Board and committees
Other
- Matters set forth in the law or the Articles of Incorporation
- Matters delegated by the meeting of shareholders and matters deemed necessary by the CEO
Responsibilities and Obligations
Fiduciary Duty of Directors
Directors have a duty of care in making decisions as corporate fiduciaries.
Duty in Good Faith
Directors must perform their duties faithfully for the Company in accordance with the provisions of the law and the Articles of Incorporation.
Prohibition of Directors’ Involvement in Managing Competitive Businesses
Unless approved by the Board or by a committee set by the Board, directors may not engage in operating businesses that are in the same industry as the Company.
Other
Liability Insurance
In accordance with internal regulations and with approval from the Board or the appropriate committee, the Company provides directors with liability insurance.
Scope of indemnification : The insurance covers the damages to shareholders and other stakeholders arising from a director’s violation of his or her duty of care as a fiduciary and of his or her duty in good faith.
Efforts to Support Independent Directors
In accordance with relevant regulations, independent directors, who play an integral role in maintaining the independence of the Board of Directors, may receive the assistance of external specialists in making important decisions. To this end, the Company has made it a policy to provide external support to the greatest extent possible, such as providing the services of legal or accounting advisers, upon request by independent directors.
In order to provide opportunities for independent directors to exchange opinions and suggestions on matters of overall management of the Company, meetings of independent directors without members of management present are held regularly (at each quarterly meeting of the Board) or when needed.
The Company does not hesitate to provide all the support necessary for independent directors to actively and independently serve the Company. The Company supports regular educational or training efforts such as visits to domestic and international management sites and reports on the status of operations.