UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15D-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of September, 2023

Commission File Number: 1-13368

 

 

POSCO HOLDINGS INC.

(Translation of registrant’s name into English)

 

 

POSCO Center, 440 Teheran-ro, Gangnam-gu, Seoul, Korea, 06194

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒              Form 40-F  ☐

 

 

 

POSCO HOLDINGS INC. is furnishing under cover of Form 6-K:

Exhibit 99.1: An English-language translated documents of POSCO HOLDINGS INC.’s Corporate Governance Report for the year 2022.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

				POSCO HOLDINGS INC.
				(Registrant)
Date: September 5, 2023				By		/s/ Han, Young-Ah
						(Signature)
						Name: Han, Young-Ah
						Title: Senior Vice President

 

 

May 31, 2023

POSCO HOLDINGS INC.

 

 

 

[ Contents ]

 

I. Overview			3
II. Current Status of Corporate Governance			5
1. Corporate Governance Policy			5
2. Shareholders			7
(Core Principle 1) Rights of Shareholders			7
(Core Principle 2) Fair Treatment of Shareholders			18
3. Board of Directors(BoD)			33
(Core Principle 3) Function of BoD			33
(Core Principle 4) Composition of BoD			45
(Core Principle 5) Responsibilities of Outside Directors			64
(Core Principle 6) Evaluation of Outside Directors Activities			71
(Core Principle 7) Operation of BoD			73
(Core Principle 8) Special Committees in BoD			79
4. Audit Organization			85
(Core Principle 9) Internal Audit Organization			85
(Core Principle 10) Independent Auditor			93
5. Other Highlights			97
•  Attachment : Key Compliance Indicators of Corporate Governance			98

 

 

2

I				Overview

 

•

Name of Company : POSCO HOLDINGS INC.

 

•

People in charge of the report :

 

-

Main In-charge : Joo, Hyung-Kweon Leader, Investor Relations Team

02-3457-1408            Email: silentj@posco-inc.com

 

-

Co In-charge : Jang, Soo-Young, Manager, Investor Relations Team

02-3457-0747            Email: syjang0228@posco-inc.com

 

•

Record Date : December 31, 2022

 

•

Company Overview

 

Largest Shareholder		National Pension Service		Shareholding Ratio of the Largest Shareholder 1)		9.11%
				Shareholding ratio of Minority Shareholders 2)		67.12%
Business Type		Non-Financial		Major Products		Holding Company
Enterprise Group under Monopoly Regulation and Fair Trade Act		Yes		Act on the Management of Public Institutions		Not Applicable
Name of Enterprise Group		POSCO
Summary of Financial Status (In hundred millions of KRW)
		2022		2021		2020
Consolidated Revenue		847,502		763,323		577,928
Consolidated Operating Profit		48,501		92,381		24,030
Consolidated Profit from Continuing Operations		35,605		71,959		17,882
Consolidated Profit		35,605		71,959		17,882
Consolidated Total Assets		984,068		914,716		790,870
Separate Total Assets		511,491		642,428		567,950

 

1)

As of December 31, 2022

 

2)

It is based on the total number of issued shares with voting rights (excluding treasury stock) as of December 31, 2022 and minority shareholders those with less 1% of the total number of issued shares.

 

3

Glossary
BoD, the BoD		The Board of Directors
GMoS		General Meeting(s) of Shareholders
The company, company, we, our, us		POSCO HOLDINGS as a separate business entity

 

4

II				Current Status of Corporate Governance

 

1. Corporate Governance Policy

 

•

The Principle and Policy of Corporate Governance

POSCO HOLDINGS pursues advanced corporate governance that enhances shareholders’ value in the long-term and equally better interested parties’ rights. The management conducts responsible management with their expertise and reasonable decision-making and the BoD which consists of majority number of Outside Directors supervises and advises the management. This “Global Professional Management” is harmonized based on checks and balances and these principles, as proclaimed in Corporate Governance Charter are carried out within and outside POSCO HOLDINGS.

Detailed principles of corporate governance are reflected on internal regulations for corporate governance such as Articles of Incorporation, Operational Regulations of the Board of Directors, Corporate Governance Charter, etc., and also available on POSCO HOLDINGS’ website at http://www.posco-inc.com

POSCO HOLDINGS leadingly adopted Outside Directors Policy in 1997 and has continuously improved it for independence of BoD and to strengthen its roles.

Followed by vertical spin-off to the holding company in March 2022, POSCO HOLDINGS has been strengthening its Control Tower functions, including future business portfolio development and group business management functions.

The BoD consists of members with abundant experience and expertise from the fields of industry, academia, law, environment, accounting and public services in order to provide diversity and balanced-perspective for the management’s reasonable decision-making. In order to effectively supervise and intervene the management, the BoD consists of more than half of Outside Directors. In addition, the BoD is operated centered on outside directors, with the Chairmen of BoD and Special Committees are appointed from Outside Directors.

 

•

Characteristics of Corporate Governance

POSCO HOLDINGS’s BoD, as permanently established and the highest decision-making body, has the right to elect Representative Directors. Since 2006, the Chairman position of BoD has been separated from the position of the CEO and the Representative Director and has been appointed among Outside Directors by resolutions of BoD.

Outside Directors who have expertise and abundance of experience are recommended by Director Candidate Recommendation Committee or by shareholders’ suggestion then elected at the GMoS by shareholders’ votes. As of May 31, 2023, The BoD has total 12 Directors: 7 Outside Directors, 4 Inside Directors, and 1 Non-Standing Director.

The Articles of Incorporation was revised in accordance with the launch of the holding company in March 2022, and therefore, we currently operate five committees within the board of directors, including ESG Committee, Director Candidate Recommendation Committee, Evaluation and Compensation Committee, Finance Committee, and Audit Committee. Outside Directors are more than half of total number of Directors in each Special Committee. In addition, Director Candidate Recommendation Committee, Evaluation and Compensation Committee and Audit Committee consist of all Outside Directors in order to guarantee independent decision-making. Among Special Committees, Director Candidate Recommendation Committee and Audit Committee are mandatory for operation under the Commercial Act. However, the rest of 3 Special Committees were established voluntarily by the BoD for professionalism, independence and efficiency of the BoD. Finance Committee and Audit Committee are operated with experts who have experience in the fields of Industries, accounting/finance and public affairs and ESG Committee is operated with an environment expert.

 

5

The company held a total of 11 board meetings in 2022, and the attendance rate of the directors was 100%. The special committees held a total of 27 meetings, and the attendance rate of the committee members was 100%. In addition, all independent directors participated in major activities of the board such as Board Strategy Sessions, Independent Director Meetings, ESG Sessions, Leadership Sessions, Strategic/Performance Review Sessions, and site visits. The company’s independent directors are devoting sufficient time and effort to fulfill their duties and are doing their best to fulfill their authority and role as directors.

 

6

2. Shareholders

 

(Core Principle 1) Rights of Shareholders   •  Shareholders need to be given sufficient information in a timely manner to exercise rights and need to exercise rights with proper procedure.

 

(Sub-Principle 1-①) The company needs to provide sufficient information for the date, location and agendas of GMoS, long enough before the meeting date.

A. History and Notice of GMoS

POSCO HOLDINGS has held 3 Ordinary GMoS and 1 Extraordinary GMoS from January 1, 2021 till May 31, 2023. Information regarding GMoS such as date, location, agendas, etc. were provided to shareholders through Korea Exchange(KRX) public disclosure both in Korean and English, Data Analysis, Retrieval and Transfer System(DART) website by Financial Supervisory Service, U.S. Securities and Exchange Commission(SEC) website, company website, mail notice for domestic shareholders, Depositary Notice and Proxy Card for foreign DR shareholders, and so on.

The history and details of GMoS from January 1, 2021 to May 31, 2023 are given in the following table.

 

•

(Table 1-①-1) History and Details of GMoS from January 1, 2021 to May 31, 2023

 

				Ordinary GMoS 2023		Ordinary GMoS 2022		Extraordinary GMoS 2022		Ordinary GMoS 2021
Resolution of Convocation				January 27, 2023		January 28, 2022		December 10, 2021		January 28, 2021
Notice of Convocation				February 20, 2023		February 17, 2022		January 5, 2022		February 18, 2021
GMoS Date				March 17, 2023		March 18, 2022		January 28, 2022		March 12, 2021
Days between Notice of Convocation and GMoS Date				24 days		28 days		22 days		21 days
Location/ Region				POSCO Center / Gangnam-gu, Seoul		POSCO Center / Gangnam-gu, Seoul		POSCO Center / Gangnam-gu, Seoul		POSCO Center / Gangnam-gu, Seoul
Notice to Shareholders				Mail notice, POSCO website, DART and KRX website		Mail notice, POSCO website, DART and KRX website		Mail notice, POSCO website, DART and KRX website		Mail notice, POSCO website, DART and KRX website
Notice for foreign shareholders				U.S. SEC website, Depositary Notice and Proxy Card for DR holders, and KRX English public disclosure		U.S. SEC website, Depositary Notice and Proxy Card for DR holders, and KRX English public disclosure		U.S. SEC website, Depositary Notice and Proxy Card for DR holders, and KRX English public disclosure		U.S. SEC website, Depositary Notice and Proxy Card for DR holders, and KRX English public disclosure
Details		BoD		12 out of 12 Directors attended		11 out of 12 Directors attended		12 out of 12 Directors attended		12 out of 12 Directors attended
		Audit Committee Members		3 out of 3 members attended		3 out of 3 members attended		3 out of 3 members attended		3 out of 3 members attended
		Shareholders’ Remarks		1)  1 shareholder remark 2)  Message : Plans for POSCO Group’s LiB Business		1)  2 shareholder remarks  2)  Message : payout ratio, share cancellation		1)  5 shareholder remarks  2)  Message : vertical spin-off related issues, payout ratio, share cancellation		1)  1 shareholder remark 2)  Message : Plans for Lithium-ion battery materials business

 

7

B. Providing Information regarding GMoS

POSCO HOLDINGS held 3 Ordinary GMoS and 1 Extraordinary GMoS from January 1, 2021 to May 31, 2023. Generally, we provide dates and locations of GMoS through BoD resolutions by 6 weeks before the meetings. After resolutions on the GMoS agendas by the BoD, we provided information through Korea Exchange(KRX), Data Analysis, Retrieval and Transfer System(DART) website by Financial Supervisory Service, U.S. Securities and Exchange Commission(SEC) website, and our website. In addition, until 2 weeks before the GMoS, we provided GMoS notice, related supplementary information, guide for voting rights exercise, ballot paper, return envelope, etc. to every shareholder by mail. In order to provide information better for our foreign shareholders, we have been conducting the Korea Exchange public disclosure in English since our GMoS in March 2021.

Although the company conducted Notice of Convocation 4 weeks before the date of GMoS March 2022 and met one of the Corporate Governance Key Compliance Indicator, we have not met the standard in 2023 by conducting the Notice of Convocation 3 weeks(24 days) before the date of GMoS. We will try our best to provide sufficient information to shareholders 4 weeks in advance regarding the GMoS in the future.

 

8

A. History of Shareholders’ Exercise of Voting Rights

(i) Date of GMoS and whether it has been held on Congested Dates for GMoS

From January 1, 2021 to May 31, 2023, the company has held 3 Ordinary GMoS, and participated in the Voluntary Compliance Program for GMoS Date Separation for all three years by setting GMoS dates on non-congested dates. The following are the details regarding the exercise of voting rights at the general meetings of shareholders held from January 1, 2021 to May 31, 2023.

 

•

(Table 1-②-1) Dates of GMoS and Voting Types from January 1, 2021 to May 31, 2023

 

		GMoS 2023		GMoS 2022		GMoS 2021
Congested Dates for GMoS		March 24, 2023 March 30, 2023 March 31, 2023		March 25, 2022 March 30, 2022 March 31, 2022		March 26, 2021 March 30, 2021 March 31, 2021
Date of GMoS		March 17, 2023		March 18, 2022		March 12, 2021
Meeting on Non-Congested Date		Yes		Yes		Yes
Conduct of Voting via Mail		Yes		Yes		Yes
Conduct of Electronic Voting		Yes		Yes		Yes
Conduct of Proxy Solicitation		Yes		Yes		Yes

(ii) GMoS Voting Results on Each Agenda

The company held 2 GMoS from January 1, 2022 to May 31, 2023 and the results on each agenda are as follows.

(ii) Introduction of ballot paper and electronic voting system and proxy solicitation

The company mails written ballot papers and envelops to all shareholders so that they can exercise their voting rights through written voting if they cannot attend GMoS. To promote participation by minority shareholders and protect their rights, POSCO HOLDINGS also operates the electronic voting system every year. We also recommend proxy solicitation, and we have uploaded the proxy solicitation form on the website to facilitate shareholders’ exercise of voting rights. Since March 2021, the company has broadcasted GMoS live under COVID-19 situation, and made efforts to ensure the participation of shareholders as much as possible by receiving shareholder inquiries in advance.

(iii) GMoS Voting Results on Each Agenda

 

9

•

(Table 1-②-2) GMoS Voting Results on Each Agenda

 

Ordinary						The 54th GMoS						March 18, 2022
Agenda				Resolution Type		Description		Result		Number of Total Issued Shares with Voting Rights (①)		Exercised Shares from ① (A) 1)		For (B) (Ratio, %)2)
														Against, Spoilt vote, etc. (C) (Ratio, %)3)
1				Ordinary		Approval of the 54th (January 1, 2021 ~ December 31, 2021) Financial Statements		Approved		75,625,572		56,086,920		45,926,950 (81.9%)
														10,159,970 (18.1%)
2		2-1		Ordinary		Election of Inside Director Chon, Jung-Son		Approved		75,625,572		56,086,320		46,748,318 (83.4%)
														9,338,002 (16.6%)
		2-2		Ordinary		Election of Inside Director Chung, Chang-Hwa		Approved		75,625,572		56,086,320		39,236,266 (70.0%)
														16,850,054 (30.0%)
		2-3		Ordinary		Election of Inside Director Yoo, Byeong-Og		Approved		75,625,572		56,086,920		39,430,679 (70.3%)
														16,656,241 (29.7%)
3				Ordinary		Election of Non-Standing Director Kim, Hag-Dong		Approved		75,625,572		56,086,920		37,899,741 (67.6%)
														18,187,179 (32.4%)
4		4-1		Ordinary		Election of Outside Director Sohn, Sung Kyu		Approved		75,625,572		56,086,920		53,302,928 (95.0%)
														2,783,992 (5.0%)
		4-2		Ordinary		Election of Outside Director Yoo, Jin Nyong		Approved		75,625,572		56,086,920		53,349,615 (95.1%)
														2,737,305 (4.9%)
		4-3		Ordinary		Election of Outside Director Pahk, Heui-Jae		Approved		75,625,572		56,086,920		51,288,028 (91.4%)
														4,798,892 (8.6%)
5		5-1		Ordinary		Election of Audit Committee Member from Outside Directors Sohn, Sung Kyu		Approved		75,625,572		49,045,521		46,257,121 (94.3%)
														2,788,400 (5.7%)
		5-2		Ordinary		Election of Audit Committee Member from Outside Directors Yoo, Jin Nyong		Approved		75,625,572		49,045,521		46,319,713 (94.4%)
														2,725,808 (5.6%)
6				Ordinary		Approval of the Ceiling Amount of Total Remuneration for Directors		Approved		75,625,572		56,086,920		53,120,362 (94.7%)
														2,966,558 (5.3%)

 

1)	Number of shares for Audit Committee Member agenda excluded the number of shares that are limited for voting rights. Exercised shares(A) = Number of shares (B) + Number of shares (C)

2)	Ratio of approval shares (%) : (B/A) x 100

3)	Ratio of objection, spoilt vote and other shares = (C/A) x 100

 

10

정 기						The 55th GMoS						March 17, 2023.
Agenda				Resolution Type		Description		Result		Number of Total Issued Shares with Voting Rights (①)		Exercised Shares from ① (A) 1)		For (B) (Ratio, %)2)
														Against, Spoilt vote, etc. (C) (Ratio, %)3)
1				Ordinary		Approval of the 55th (January 1, 2022 ~ December 31, 2022) Financial Statements		Approved		75,849,177		54,021,693		46,974,931 (87.0%)
														7,046,762 (13.0%)
2		2-1		Special		Partial Amendments of the Article of Incorporation : Change of the Location of the Head Office		Approved		75,849,177		54,021,693		51,508,281 (95.3%)
														2,513,412 (4.7%)
		2-2		Special		Partial Amendments of the Article of Incorporation : Removal of Exercise of Voting Rights in Writing		Approved		75,849,177		54,021,693		39,204,818 (72.6%)
														14,816,875 (27.4%)
		2-3		Special		Partial Amendments of the Article of Incorporation : Change of the Record Date for Year-End Dividends		Approved		75,849,177		54,021,693		52,625,369 (97.4%)
														1,396,324 (2.6%)
3		3-1		Ordinary		Election of Inside Director Jeong, Ki-Seop		Approved		75,849,177		54,021,693		43,618,751 (80.7%)
														10,402,942 (19.3%)
		3-2		Ordinary		Election of Inside Director Yoo, Byeong-Og		Approved		75,849,177		54,021,693		42,906,536 (79.4%)
														11,115,157 (20.6%)
		3-3		Ordinary		Election of Inside Director Kim, Ji-Yong		Approved		75,849,177		54,021,693		43,449,303 (80.4%)
														10,572,390 (19.6%)
4				Ordinary		Election of Non-Standing Director Kim, Hag-Dong		Approved		75,849,177		54,021,693		38,381,607 (71.0%)
														15,640,086 (29.0%)
5				Ordinary		Election of Outside Director Kim, Joon-Gi		Approved		75,849,177		54,021,693		52,455,580 (97.1%)
														1,566,113 (2.9%)
6				Ordinary		Approval of the Ceiling Amount of Total Remuneration for Directors		Approved		75,849,177		54,021,693		51,540,266 (95.4%)
														2,481,427 (4.6%)

 

1)	Exercised shares(A) = Number of shares (B) + Number of shares (C)

2)	Ratio of approval shares (%) : (B/A) x 100

3)	Ratio of objection, spoilt vote and other shares = (C/A) x 100

 

11

B. Company’s Effort for Shareholders’ Voting Rights Exercise

As described in A. History of Shareholders’ Exercise of Voting Rights, POSCO HOLDINGS provides voting via mail, electronic voting, and proxy solicitation in order to facilitate shareholders’ participation to GMoS. Especially for the GMoS held from 2020 under the COVID-19 situation, the company promoted non-contact exercise of voting rights such as voting via mail or electronic voting through company website. Additionally, we provided e-mail address and phone number for inquiries regarding GMoS through the CEO’s letter via mail with the notice of GMoS convocation, and actively responded to shareholders’ inquiries.

 

•

(Picture 1-②-1) Promotion on the Company Website

 

    

 

12

A. Shareholder Proposal Right

(i) Guidance of shareholder proposal procedures

Regarding shareholder proposal standards and procedures for Outside Director candidate recommendation, the company prescribed in the Article 30 of the Articles of Incorporation that by exercising shareholder proposal right in accordance with relevant laws, shareholders may recommend Outside Director candidates to Director Candidate Recommendation Committee.

(ii) Standards and procedures of shareholder proposal

When the recommendation of an Outside Director candidate is received as shareholder proposal, the Investor Relations(IR) team checks whether it meets the shareholder proposal requirements. After that, the Director Candidate Recommendation Committee verifies the candidate’s eligibility and recommends to the GMoS as an Outside Director candidate.

(iii) History of shareholder proposals and implementation status

From January 1, 2021 to May 31, 2023, there was no shareholder proposal with regards to GMoS agenda or no public letter received from institutional investors as part of the Stewardship Code. Accordingly, implementation status related to shareholder proposal or public letter of institutional investors have been omitted. In the future, if there is any shareholder proposal related to agenda of the GMoS, the company will respect shareholders’ opinions so that they can freely ask questions and request explanations at the GMoS.

B. Support for Exercise of Shareholder Proposal Right

Though the company does not provide separate guidance regarding the shareholder proposal procedure as stipulated by law on the website, shareholders who possess the right to propose matters as prescribed by law are notified of the recommendation process for independent director candidates through electronic mail or other means to facilitate the recommendation of such candidates.

In order to enhance communication with shareholders and secure a diverse pool of independent director candidates, the “Shareholder Recommendation System” has been introduced since 2018, allowing shareholders to directly participate in the process of recommending candidates. Candidates recommended by shareholders undergo the same qualification review process as other candidates by the Advisory Committee for Independent Director Candidates.

About 3~4 months before Ordinary GMoS, a letter from the Chairman of Director Candidate Recommendation Committee is sent to shareholders who can exercise shareholder proposal rights under the Commercial Act, suggesting recommendation of one Outside Director candidate per one shareholder and the recommendation is received by e-mail or mail. For the Ordinary GMoS held in March 2023, the recommendation period was from November 10, 2022 to December 15, 2022.

For the Ordinary GMoS in March 2019, one candidate(law major, professorship, female) was proposed for Outside Director through the Shareholders’ Recommendation procedure and the Outside Director Candidate Recommendation Advisory Panel included the candidate as one of the potential candidates and proceeded discussion. It was concluded that the candidate did not meet the need of the company and was not recommended to the Director Candidate Recommendation and Management Committee. Subsequently, the related information was provided to the recommended organization.

 

13

A. Shareholder Return Policies

(i) Shareholder Return Policy and company’s future plan

In January 2020, the company announced its first mid-term dividend policy aimed at enhancing transparency and predictability regarding dividends. The policy set a target dividend payout ratio of approximately 30% from 2020 to 2022. Subsequently, with the expiration of the existing medium-term dividend policy, the company announced its medium-term shareholder return policy for the next three years (2023 to 2025) in April 2023. Under this policy, starting from 2023, the company plans to allocate 50-60% of the annual Free Cash Flow (parent only) as a funding source. The company aims to distribute a basic dividend of KRW 10,000 per share and utilize the remaining funds for additional returns to shareholders, thereby promoting shareholder value and stable dividend distribution.

In addition, by partially amending the Articles of Incorporation in 2016, the company introduced quarterly dividend system so that quarterly dividends can be paid in cash by resolution of the BoD and the quarterly dividends has been continued since the 2nd quarter of 2016.

In April 2020, the BoD resolved on a share repurchase trust contract in order for stable management of stock price and improvement of shareholders’ value. During the contract period, from April 13, 2020 to April 12, 2021, the company finished repurchasing shares worth KRW 1 trillion (4.49 million share, 5.1%) which is the contract amount. Additionally, in August 2022, the company conducted a share cancellation of 3% of the issued shares to further enhance shareholder returns and increase shareholder value.

Furthermore, at the 55th GMoS in March 2023, the company amended the Articles of Incorporation to change the year-end dividend record date to a date determined by the BoD. This amendment lays the foundation for introducing a shareholder-friendly dividend procedure, enabling shareholders to make investment decisions after the dividend amount is publicly disclosed.

(ii) Method of guidance on shareholder return policies, etc

When the company establish a new shareholder return policy and conduct a quarterly/final dividend resolution, treasury stock purchase, or treasury stock cancellation, we disclose the details without delay and inform our shareholders in detail through IR events and announcement on the company website. In addition, shareholders can conveniently check the company’s shareholder return policy and related information such as dividend policy, treasury stock status, and dividend inquiry on our IR website.

B. Information Provision of Shareholders Return Policies

In April 2020, the company website related to shareholder return policy was re-organized to provide information on the mid-term dividend policy, dividend details and amounts, and information on share repurchase in Korean and English. In addition, the POSCO HOLDINGS dividend information service has been established and operated as a separate website to enable online search of dividend details from the 3rd quarter dividend of 2020. Through the service, information related to shareholder return, such as the company’s investor relations materials, mid-term dividend policy, and share repurchase result is provided in an integrated manner.

(POSCO HOLDINGS dividend information service)

: https://dividend.posco.co.kr:4452/F52/F52B10/jsp/home/posF52BMain.jsp

 

14

•

(Picture 1-④-1) Disclosure of Shareholders Return Policy

 

 

15

A. Shareholder Return Status

(i) Shareholder Return Status for the past 3 years

During the mid-term dividend policy period (2020-2022), the company carried out the largest shareholder returns of KRW 3,384 billion including cash dividend of KRW 2,816 billion(dividend payout ratio of 24.8%) and retirement of treasury shares (3% of total issued shares which is KRW 568 billion in terms of book value). The total shareholder return rate including both cash dividends and retirement of treasury stock amounts to 29.8%.

The company has set shareholders return target of approximately 30% in order to improve predictability and transparency on dividends at the BoD in January 2020. And when calculating a dividend payout ratio, based on profit attributable to owners of the controlling company in consolidated basis, by adjusting one-off expenses without cash outflows the company reinforced linkage with business performance.

In 2020, based on KRW 1,816 billion, profit attributable to owners of the controlling company in consolidated basis is KRW 1,602 billion and one-off expenses without cash outflows is KRW 214 billion, the BoD discussed applying dividend payout ratio of 38.7% (adjusted dividend payout ratio of 34.2%). The annual dividend per share was resolved to KRW 8,000 and the total annual dividend of KRW 620 billion was paid.

In 2021, based on KRW 7,143 billion, profit attributable to owners of the controlling company in consolidated basis is KRW 6,617 billion and one-off expenses without cash outflows is KRW 526 billion, the BoD discussed applying dividend payout ratio of 19.4% (adjusted dividend payout ratio of 18.0%). The annual dividend per share was resolved to KRW 17,000 and the total annual dividend of KRW 1,286 billion was paid.

In 2022, based on KRW 3,493billion, profit attributable to owners of the controlling company in consolidated basis is KRW 3,144 billion and one-off expenses without cash outflows is KRW 349 billion, the BoD discussed applying dividend payout ratio of 28.9% (adjusted dividend payout ratio of 26.1%). The annual dividend per share was resolved to KRW 12,000 and the total annual dividend of KRW 910 billion was paid. In addition, to enhanced the shareholder value, the company has canceled 3% of the total issued shares (KRW 568 billion based on book value) at BoD held in August 2022.

The shareholder return status for the last 3 fiscal years is as follows.

 

•

(Table 1-⑤-1) Shareholder Return Status in the Last 3 Fiscal Years                (Shares, KRW, Billions of KRW, %)

 

Fiscal Year		Month for Year-end Closing		Types of Shares		Share  Dividend		Cash Dividend
								Dividend per Share (KRW)		Total Dividend (Billions of KRW)		Dividend Ratio to Market Value		Dividend Payout Ratio
														Consolidated Basis 1)		Separate Basis
2022		December		Common		—		12,000		910		4.1%		28.9%		—
				Class		—		—		—		—
2021		December		Common		—		17,000		1,286		6.0%		19.4%		24.8%
				Class		—		—		—		—
2020		December		Common		—		8,000		620		3.0%		38.7%		64.2%
				Class		—		—		—		—

 

•

Dividend per Share : Sum of quarterly dividends/share and year-end dividend/share

 

•

Dividend Payout Ratio :

 

•

Consolidated base is calculated total dividend divided by profit attributable to owners of the controlling company.

 

•

Dividend Ratio to Market Value is calculated by dividing Dividend per Share to average closing share prices of the 1 week which is the time period prior to the two last trading days before the year-end record date.

 

1)	The adjusted dividend payout ratio with the company’s mid-term dividend policy is different due to adjustment of one-off expenses without cash outflows.

 

16

(ii) Quarterly Dividend Status

The company has introduced quarterly dividend system since 2016, and has been maintaining shareholder return through quarterly dividends throughout the year. The details of quarterly dividends for the last 3 fiscal years are as follows. The company has not paid stock dividends or differential dividends in the last 3 fiscal years.

 

•

(Table 1-⑤-2) Quarterly Dividend Status in the Last 3 Fiscal Years

(KRW, Billions of KRW)

 

Fiscal Year		Quarter		Resolution Date of BoD		Dividend per Share		Total Dividend
2022		1st		May 13, 2022		4,000		303
		2nd		August 12, 2022		4,000		303
		3rd		November 4, 2022		2,000		152
		4th		January 27, 2023		2,000		152
2021		1st		May 14, 2021		3,000		227
		2nd		August 13, 2021		4,000		303
		3rd		November 5, 2021		5,000		378
		4th		January 28, 2022		5,000		378
2020		1st		May 8, 2020		1,500		120
		2nd		August 7, 2020		500		40
		3rd		November 6, 2020		1,500		118
		4th		January 28, 2021		4,500		343

B. Shareholder Right for Shareholder Return

The mid-term dividend policy was established at the BoD in January 2020 to enhance transparency and predictability related to dividends by reflecting the expectations and demands of shareholders. The company has set shareholder return target of approximately 30% of dividend payout ratio, and adjusted one-off expenses without cash outflows from profit attributable to owners of the controlling company so that dividends linked to business performance are paid out.

The company has recently established a new shareholder return policy for the next three years (2023-2025) in order to offer balanced shareholder returns through business growth and stable dividend. We have Established a shareholder return policy based on ‘free cash flow’ in consideration of the need for future growth investment. In order to achieve sustainable growth as a global eco-friendly future materials provider, we also have adopted base dividend to minimize the risk of v in shareholder returns due to the uncertainty of free cash flow. In addition, we have amended the Articles of Incorporation to adopt advanced dividend procedures of ‘determining dividends before the record date’. We will continue to make ongoing efforts to transparently communicate with shareholders and actively reflect their rights in relation to shareholder returns.

 

17

(Core Principle 2) Fair Treatment of Shareholders   •  Shareholders need to be given fair voting rights according to the type and number of shares and the company needs to make efforts to furnish system that provides corporate information fairly to shareholders.

 

A. Stock Issuance Information

(i) Status of Issued Shares

According to the Articles of Incorporation, the total number of shares which the company is authorized to issue is 200,000,000 shares. As of May 31, 2023, 96,480,625 common shares were issued 11,909,395 of them were retire, resulting in total of 84,571,230 common shares remained.

 

•

(Table 2-①-1) Share Issuance Status

 

구 분		Authorized Shares *		Issued Shares**		Remarks
Common Shares		200,000,000		84,571,230		Canceled 11,909,395 treasury shares
Class Shares		—		—		—

 

*	Authorized Shares : Total number of shares that is authorized to issue by the company under the Articles of Incorporation

**	Issued Shares : Total issued shares as of May 31, 2023 deducted by the number of retired shares

(ii) Voting rights among different classes of shares

So far, the company has not been applied to different classes of shares, and therefore, separate description related to the shares has been omitted.

B. Voting Rights on Issued Shares

The company does not have any different classes of shares, but issued only common shares. Shareholders exercise fair voting rights in accordance with the principle of 1 voting right per 1 share.

For reference, at the 54th GMoS in March 2022, the number of shares holding voting rights was 75,625,572 which excludes the company’s treasury stock, 11,561,263 shares. At the 55th GMoS in March 2023, the number of shares holding voting rights was 75,849,177 which excludes the company’s treasury stock, 8,722,053shares.

C. Communication with Shareholders

1) Investor Relations Activities

(i) IR activities

In January, April, July, and October of each year, we hold annual and quarterly earnings announcements in the form of conference calls presided by the CSO. After the announcement, the company regularly conducts non-deal roadshows (NDR) for institutional investors in Korea, Asia, the Americas, and Europe, and frequently participates in domestic and international conferences held by securities companies to have direct communication on investors’ interests and requests.

 

18

We also strives to strengthen market confidence in key business strategies by providing top management access to key shareholders, and CSO, the Head of IR team and others if necessary are directly involved in overseas NDRs to share the company’s performance and mid and long-term strategic direction with investors, and thereby strive to provide higher-level feedback on shareholder interests. Especially, since 2018, we have provided opportunities for direct communication between Outside Directors and shareholders to improve understanding of the company’s corporate governance and to strengthen communication with shareholders.

IR team’s email address is available on the company website and shareholders can send comments or questions to the IR team through the Contact Us page. The IR representative respond to shareholder inquiries received by e-mail after checking them. In addition, shareholders can reach IR team through IR telephone as well.

In addition, the company has established a section for IR meeting request on the website for investors who want to visit the company directly and holds frequent meetings, and provides diverse IR activities that reflect investors’ interests.

From February 2020 to December 2021, due to widespread of COVID-19 and social distancing policy as one of the counter-measures, it was difficult to hold face-to-face meetings. But with frequent conference calls, we are having active communication with domestic and foreign investors and working to expand our investors pool. In addition, we are actively communicating with investors through conferences and conference calls on ESG-related issues that have recently emerged.

In order to strengthen communication channels with our investors, we have started to provide online streaming service that is also available to our minority shareholders from 2022 1Q Earnings Release session. Furthermore, in March 2023, the POSCO HOLDINGS IR’ YouTube channel was launched to respond to the needs of individual investors and strengthen communication with the shareholders.

Video contents such as tech talk and market talk are produced by EV battery materials experts to introduce the overall EV battery material business. Also, virtual tour contents are provided in order to give detailed introduction of POSCO HOLDINGS’ new businesses in Korea and overseas. IR team answers the questions that come through company website(http://www.posco-inc.co.kr). We also try to strengthen communication with our minority shareholders by actively responding to their inquires over the phone.

 

•

(Table 2-①-2) Major IR Events, Conference Calls, and Discussions with Shareholders

from January 1, 2022 to March 31, 2023

 

Date		Counterpart		Meeting Type		Subject		Remarks
January 4~21, 2022		Domestic and foreign institutional investors		NDR		NDR (Regarding transition to a holding company)
January 28, 2022		Domestic institutional investors, Analysts		Conference call		Earnings release (Provisional business outcome of FY2021 and Q&A session)
February 8~10, 2022		Domestic institutional investors, Analysts		NDR		NDR followed by Earnings release
March 24, 2022		Foreign institutional investors		Conference		Credit Suisse Conference (Earnings, markets, business issues, etc.)
April 25, 2022		Domestic institutional investors, Analysts		Conference call		Earnings release (Provisional business outcome of 1st quarter of FY2022 and Q&A session)

 

19

April 25~28, 2022		Domestic institutional investors, Analysts		NDR		NDR followed by Earnings release
May 31, 2022		Foreign institutional investors		Conference		Morgan Stanley Conference (Earnings, markets, business issues, etc.)
July 5, 2022		Domestic and foreign institutional investors		IR		2022 LiB Material Business Value Day (POSCO Group’s LiB Material Business, etc.)
July 7, 2022		Foreign institutional investors		NDR		CSO IR (POSCO Group’s LiB Material Business strategy and future plan)
July 21, 2022		Domestic and foreign institutional investors,		Conference call		Earnings release (Provisional business outcome of 2nd quarter of FY2022 and Q&A session
July 26~28, 2022		Domestic institutional investors		NDR		NDR followed by Earnings release
August 18, 2022		Domestic and foreign institutional investors		Conference		Samsung Securities Conference (Earnings, markets, business issues, etc.)
August 19, 2022		Foreign institutional investors		NDR		CEO IR Business strategy and plan as a leading provider of eco-friendly future materials
October 3~7, 2022		Foreign institutional investors		NDR		NDR (The United States) (Earnings, markets, business issues, etc.)
October 24, 2022		Domestic and foreign institutional investors		Conference call		Earnings release (Provisional business outcome of 3rd quarter of FY2022 and Q&A session
October 25~27, 2022		Domestic institutional investors		NDR		NDR followed by Earnings release
November 16~18, 2022		Domestic and foreign institutional investors		Conference		Morgan Stanley Conference (Earnings, markets, business issues, etc.)
November 29~30, 2022		Domestic institutional investors, Analysts		IR		2022 Green Steel Value Day (Green Steel, materials for EV and etc.)
January 1~December 31, 2022		Domestic/Foreign institutional investors, Analysts		IR		Individual meetings and conference calls per request of shareholders and investors		165 times in 2022
January 27, 2023		Domestic and foreign institutional investors		Conference call		Earnings release (Provisional business outcome of FY2022 and Q&A session)
January 30~February 2, 2023		Domestic institutional investors		NDR		NDR followed by Earnings release
March 22~23, 2023		Foreign institutional investors		Conference		Credit Suisse Conference (Earnings, markets, business issues, etc.)
April 27, 2023		Domestic and foreign institutional investors,		Conference call		Earnings release (Provisional business outcome of 1st quarter of FY2023, Shareholder Return policy for 2023~2025 and Q&A session)
April 28~May 4, 2023		Domestic institutional investors		NDR		NDR followed by Earnings release
May 16, 2023		Domestic and foreign institutional investors		Conference		BofA Conference (Earnings, markets, business issues, etc.)
May 18, 2023		Foreign institutional investors		IR		Gwangyang LiB Business site tour POSCO HY Clean Metal, POSCO Pilbara Lithium Solution, POSCO Future M
May 24, 2023		Foreign institutional investors		IR		CSO/ Meeting with LiB materials business experts
May 25~26, 2023		Domestic and foreign institutional investors		Conference		Samsung Securities Conference (Earnings, markets, business issues, etc.)
January 1~31 May, 2023		Domestic and foreign institutional investors,		IR		Individual meetings and conference calls per request of shareholders and investors		54 times

 

20

(ii) IR team contact information

The company discloses e-mail address of the IR department on the company website, and shareholders can send opinions or questions to the IR department through the inquiry section. Inquiries to shareholders received by e-mail are reviewed and answered by the IR persons in charge.

In addition, it is accessible to an IR-only phone through the company’s representative phone posted on the company website, and we respond to shareholders’ inquiries.

In addition, the company information including IR materials are disclosed to all shareholders in a timely and fair manner at the Korea Exchange electronic disclosure system, KIND (http://kind.krx.co.kr), the Financial Supervisory Service electronic disclosure system DART (http://dart.fss.or.kr), and the company website, etc.

(iii) Information for Foreign Shareholders

The company operates an English website for foreign shareholders, and inquiries can be forwarded to the IR department by using the email address of the IR department or the Q&A section. Inquiries received are answered after checks by the IR persons in charge. In addition, the company has been participating in the Korea Exchange’s English disclosure strengthening campaign since 2020 and has strengthened disclosure of information to foreign investors by actively utilizing the English disclosure of the electronic disclosure system, KIND.

As the company listed American Depositary Receipts(ADR) on the New York Stock Exchange (NYSE), we submit English disclosures to the EDGAR system (https://www.sec.gov/edgar) of the U.S. Securities and Exchange Commission(SEC). In addition, the IR contact information is provided on Form 20-F submitted to the SEC, so that shareholders can submit inquiries.

 

•

(Table 2-①-3) English Disclosure to KIND System from January 1, 2022 to May 31, 2023

 

21

Date of Disclosure		Disclosure Title		Contents
January 10, 2022		Matters Related to Ad Hoc Public Disclosure Obligation (Fair Disclosure)		Guide to the shareholder-friendly policy to enhance shareholder value
January 13, 2022		Interim Report on Business Performance (Fair Disclosure)		Provisional business performance for the year 2021
January 13, 2022		Report on Business Performance according to Consolidated Financial Statements (Fair Disclosure)		(Consolidated basis) Provisional business performance for the year 2021
January 17, 2022		Organization of Investor Relations Event		Notice disclosure for IR event
March 4, 2022		Relocation of Head Office		Notice of relocation of Head Office
March 14, 2022		Submission of Audit Report		Submission of Audit Report
March 16, 2022		Decision on Closure of Shareholder’s Registry(Including Record Date) for Dividends		Record date notice for quarterly dividend
March 18, 2022		Outcome of Annual Shareholders’ Meeting		Result of Ordinary GMoS
March 18, 2022		Notice on Change of CEO		Changes of representative directors
April 15, 2022		Other Management Information(Voluntary Disclosure)		Receipt of examination result for report on the conversion of holding company
April 15, 2022		Report on Business Performance according to Consolidated Financial Statements (Fair Disclosure)		(Consolidated basis) Provisional business performance for the 1st quarter of 2022
April 15, 2022		Organization of Investor Relations Event		Notice disclosure for IR event
April 25, 2022		Report on Business Performance according to Consolidated Financial Statements (Fair Disclosure)		(Consolidated basis) Provisional business performance for the 1st quarter of 2022
May 3, 2022		Submission of Annual Report or Other Documents Submitted to Overseas Exchange, etc.		Form 20-F submitted to the SEC
May 13, 2022		Decision on Cash Dividends and Dividends in Kind		Decision on quarterly cash dividend
May 13, 2022		Adjustments of Conversion Price, Warrant Exercise Price or Exchange Price (Information Disclosure)		Adjustment of Exchange Price
July 5, 2022		Organization of Investor Relations Event		Notice disclosure for IR event
July 5, 2022		Inclusion of Subsidiary in Holding Company		Notice of Inclusion of Subsidiary in Holding Company
July 5, 2022		Future Business or Management Plans (Fair Disclosure)		Explanation on POSCO Group’s LiB materials business
July 14, 2022		Report on Business Performance according to Consolidated Financial Statements (Fair Disclosure)		(Consolidated basis) Provisional business performance for the 2nd quarter of 2022
July 14, 2022		Organization of Investor Relations Event		Notice disclosure for IR event
July 21, 2022		Report on Business Performance according to Consolidated Financial Statements (Fair Disclosure)		(Consolidated basis) Provisional business performance for the 2nd quarter of 2022
August 16, 2022		Decision on Merger (Material Business Matters of Subsidiary Company)		Merger of POSCO Energy and POSCO International
August 16, 2022		Occurrence of Causes for Corporate Dissolution		Occurrence of Causes for Corporate Dissolution (Subsidiary Company POSCO Energy)
August 16, 2022		Decision on Cash Dividendsand Dividends in Kind		Decision on quarterly cash dividend
August 16, 2022		Adjustments of Conversion Price, Warrant Exercise Price or Exchange Price (Information Disclosure)		Adjustment of Exchange Price
August 16, 2022		Retirement of Stocks		Notice of retirement of treasury shares

 

22

August 16, 2022		Other Management Information(Voluntary Disclosure)		2Q 2022 Shareholders return, Merger of POSCO International and POSCO Energy
September 7, 2022		Suspension of Production		Notice of Suspension of Production (Subsidiary Company POSCO)
September 14, 2022		Resumption of Production(Voluntary Disclosure)		Notice of Resumption of Production (Subsidiary Company POSCO)
September 15, 2022		Decision on Closure of Shareholder’s Registry(Including Record Date) for Dividends		Record date notice for quarterly dividend
September 16, 2022		Other Management Information (Voluntary Disclosure)(Material Management matters of Subsidiary Company)		Update on production resume schedule of major mills in Pohang Steelworks and estimated impact on revenue (Subsidiary Company POSCO)
October 6, 2022		Exclusion of Subsidiary from Holding Company		Notice of exclusion of Subsidiary in Holding Company
October 11, 2022		Other Management Information (Voluntary Disclosure)(Material Management matters of Subsidiary Company)		Business plan of 2nd stage of POSCO Argentina’s lithium brine project (Subsidiary Company POSCO Argentina)
October 19, 2022		Report on Business Performance according to Consolidated Financial Statements (Fair Disclosure)		(Consolidated basis) Provisional business performance for the 3rd quarter of 2022
October 19, 2022		Organization of Investor Relations Event		Notice disclosure for IR event
October 24, 2022		Report on Business Performance according to Consolidated Financial Statements (Fair Disclosure)		(Consolidated basis) Provisional business performance for the 3rd quarter of 2022
November 1, 2022		Exclusion of Subsidiary from Holding Company		Notice of exclusion of Subsidiary in Holding Company
November 1, 2022		Inclusion of Subsidiary in Holding Company		Notice of Inclusion of Subsidiary in Holding Company
November 4, 2022		Material Business Matters Related to Investment Decisions		POSCO’s decision on acquisition of steel business related shares or investment certificates of POSCO HOLDINGS (Subsidiary Company POSCO)
November 4, 2022		Decision on Cash Dividendsand Dividendsin Kind		Decision on quarterly cash dividend
December 21, 2022		Exclusion of Subsidiary from Holding Company		Notice of exclusion of Subsidiary in Holding Company
December 21, 2022		Inclusion of Subsidiary in Holding Company		Notice of Inclusion of Subsidiary in Holding Company
January 3, 2023		Exclusion of Subsidiary from Holding Company		Notice of exclusion of Subsidiary in Holding Company
January 20, 2023		Organization of Investor Relations Event		Notice disclosure for IR event
January 20, 2023		Report on Business Performance according to Consolidated Financial Statements (Fair Disclosure)		(Consolidated basis) Provisional business performance for the 3rd quarter of 2022

 

23

January 20, 2023		Prior Notice on Disclosure of Final Earnings		Prior Notice on Disclosure of Final Earnings
January 27, 2023		Decision on Calling Shareholders’ Meeting		Decision on Calling Shareholders’ Meeting
January 27, 2023		Decision on Cash Dividendsand Dividendsin Kind		Decision on year-end cash dividend
January 27, 2023		Report on Business Performance according to Consolidated Financial Statements (Fair Disclosure)		(Consolidated basis) Provisional business performance for the year 2022
January 27, 2023		Changes of 30% or More in Sales or Profits/Losses (15% or More in the Case of Large-sized Corporations)		Changes of 15% or More in Sales or Profits/Losses
January 27, 2023		Forecast for Business Performance according to Consolidated Financial Statements (Fair Disclosure)		(Consolidated basis) Provisional business performance for the year 2022
March 15, 2023		Submission of Audit Report		Submission of Audit Report
March 15, 2023		Decision on Closure of Shareholder’s Registry(Including Record Date) for Dividends		Record date notice for quarterly dividend
March 17, 2023		Outcome of Annual Shareholders’ Meeting		Result of Ordinary GMoS
March 17, 2023		Adjustments of Conversion Price, Warrant Exercise Price or Exchange Price (Information Disclosure)		Adjustment of Exchange Price
March 17, 2023		Notice on Change of CEO		Changes of representative directors
March 17, 2023		Decision on Disposal of Treasury Stock		Notice of Decision on Disposal of Treasury Stock
April 4, 2023		Inclusion of Subsidiary in Holding Company		Notice of Inclusion of Subsidiary in Holding Company
April 27, 2023		Report on Business Performance according to Consolidated Financial Statements (Fair Disclosure)		(Consolidated basis) Provisional business performance for the 1st quarter of 2023
April 27, 2023		Matters Related to Ad Hoc Public Disclosure Obligation (Fair Disclosure)		Shareholder Return policy for 2023~2025

 

•  The company listed American Depositary Receipts on the New York Stock Exchange and under the rules of the U.S. Securities and Exchange Commission, we submit English public disclosures such as Form 20-F, Form 6-K, Form SD, etc.

(iv) Fair Disclosure

The company is actively utilizing the fair disclosure system to provide shareholders with sufficient information in a timely manner. In particular, fair disclosures and informative disclosures related to performance announcements are conducted on a regular basis in every quarter. The list of fair disclosures from January 1, 2022 to May 31, 2023 are as follows:

 

24

•

(Table 2-①-4) List of Fair Disclosures

 

Date of Disclosure		Disclosure Title		Contents
January 12, 2022		Provisional business performance		Provisional revenue, operating profit on separate basis
January 12, 2022		Provisional business performance on consolidated basis		Provisional revenue, operating profit on consolidated basis
January 14, 2022		Organization of Investor Relations Event		The purpose, methods, summary of IR event
January 25, 2022		Prior Notice on Disclosure of Final Earnings		Prior Notice on Disclosure of Earnings of FY2021
January 28, 2022		Outlook on business performance		Outlook on separate basis of revenue, crude steel production, product sales volume
January 28, 2022		Outlook on business performance on consolidated basis		Outlook on consolidated basis of revenue
January 28, 2022		Provisional business performance		Provisional revenue, operating profit on separate basis
January 28, 2022		Provisional business performance on consolidated basis		Provisional revenue, operating profit on consolidated basis
February 3, 2022		Outlook on business performance		Outlook on separate basis of revenue, crude steel production, product sales volume
February 3, 2022		Outlook on business performance on consolidated basis		Outlook on consolidated basis of revenue
February 3, 2022		Provisional business performance		Provisional revenue, operating profit on separate basis
February 3, 2022		Provisional business performance on consolidated basis		Provisional revenue, operating profit on consolidated basis
April 14, 2022		Provisional business performance on consolidated basis		Provisional revenue, operating profit on consolidated basis
April 14, 2022		Organization of Investor Relations Event		The purpose, methods, summary of IR event
April 25, 2022		Provisional business performance on consolidated basis		Provisional revenue, operating profit on consolidated basis
July 5, 2022		Organization of Investor Relations Event		The purpose, methods, summary of IR event
July 5, 2022		Future Business or Management Plans (Fair Disclosure)		Investment in LiB Business
July 14, 2022		Organization of Investor Relations Event		The purpose, methods, summary of IR event
July 14, 2022		Provisional business performance on consolidated basis		Provisional revenue, operating profit on consolidated basis
July 21, 2022		Provisional business performance on consolidated basis		Provisional revenue, operating profit, profit, etc. on consolidated basis
July 21, 2022		Outlook on business performance on consolidated basis		Outlook on business performance of 2022 on consolidated basis
October 19, 2022		Provisional business performance on consolidated basis		Provisional revenue, operating profit on consolidated basis
October 19, 2022		Organization of Investor Relations Event		The purpose, methods, summary of IR event
October 24, 2022		Provisional business performance on consolidated basis		Provisional revenue, operating profit, profit, etc. on consolidated basis
January 20, 2023		Organization of Investor Relations Event		The purpose, methods, summary of IR event
January 20, 2023		Provisional business performance on consolidated basis		Provisional revenue, operating profit on consolidated basis
January 27, 2023		Provisional business performance on consolidated basis		Provisional revenue, operating profit, profit, etc. on consolidated basis
January 27, 2023		Changes of 30% or More in Sales or Profits/Losses (15% or More in the Case of Large-sized Corporations)		Main causes for changes in sales or profits/losses amount
January 27, 2023		Outlook on business performance on consolidated basis		Outlook on business performance of FY 2022
April 18, 2023		Organization of Investor Relations Event		The purpose, methods, summary of IR event
April 18, 2023		Provisional business performance on consolidated basis		Provisional revenue, operating profit on consolidated basis
April 27, 2023		Provisional business performance on consolidated basis		Provisional revenue, operating profit, profit, etc. on consolidated basis
April 28, 2023		Matters Related to Ad Hoc Public Disclosure Obligation (Fair Disclosure)		Shareholder Return policy for 2023~2025

 

25

(v) Unfaithful Disclosure Corporation

The company has not been designated as an unfaithful disclosure corporation from January 1, 2022 until May 31, 2023 and therefore, the table for the list of designation of unfaithful disclosure corporation and its details has been omitted.

D. Provision of Corporate Information to Shareholders

As referred on C. Communication with Shareholders, the company provides company information including IR materials on its website and public disclosure websites such as DART(http://dart.fss.or.kr), KIND(http://kind.krx.co.kr), etc. fairly to all shareholders in a timely manner. In addition, as the company listed American Depositary Receipts(ADR) on the New York Stock Exchange(NYSE), we submit English disclosures to the EDGAR system (https://www.sec.gov/edgar) of the U.S. Securities and Exchange Commission(SEC). The company runs website with English and provides English translations of IR materials, independent auditors’ quarterly, interim review reports and annual audit reports thereby, giving a fair access to the corporate information to all of its shareholders, whether domestic or foreign.

 

26

A. Corporate Control System related to Internal Transactions and Self-Transaction

(i) Corporate Control System of Internal Transactions and Self-Transaction

In order to prevent internal transactions for the purpose of private profits by management or controlling shareholders, the company has prepared separate internal control related rules. First of all, the internal accounting management regulations are managed by the resolution of Audit Committee. And regarding transactions of funds, assets, and securities over certain amounts conducted by the company’s largest shareholder, including its related parties, and the company’s related parties are ruled to be resolved by the BoD.

The company established ESG committee to deliberate and decide on large-scale internal transactions of from KRW 5 billion to less than KRW 100 billion, and in the case of large-scale internal transactions of from KRW 100 billion or more, the Committee conducts prior deliberation and it needs approval from the BoD. Please refer to ‘VI.3. Board of Directors(BoD)” for the details of internal transactions decided or deliberated by the ESG Committee.

(ii) Comprehensive board approval for internal transactions with affiliated companies, managements or controlling shareholders.

In accordance with Article 542-9 of the Commercial Act, the company gets comprehensive approvals from the BoD in advance if expected transaction amounts with affiliated companies during the current fiscal year exceed 5% of the total assets or total sales of the previous year. There was no such comprehensive approval in 2022.

(iii) Transactions with major shareholders and related parties

In 2022, the Company did not provide credit grants to major shareholders, assets transfer or business transactions with major shareholders. The major transactions between the company and related parties (affiliated companies) are as follows.

<Reference : POSCO HODLINGS’ 2022 Business Report – X. Details of transactions with major shareholders, etc >

 

(in millions of Won)
Name of the Company		Sales and others(*1)												Purchase and others(*2)
		Sales				Dividend				Others				Purchase of material				Purchase of fixed assets				Outsourced processing cost				Others
Subsidiaries (*3)
POSCO			87,165				—				2				—				—				—				10,446
POSCO E&C (Former POSCO ENGINEERING & CONSTRUCTION CO.,LTD.			7,502				16,555				7				—				80,306				—				13,086

 

27

(in millions of Won)
Name of the Company		Sales and others(*1)												Purchase and others(*2)
		Sales				Dividend				Others				Purchase of material				Purchase of fixed assets				Outsourced processing cost				Others
POSCO STEELEON (Former POSCO COATED & COLOR STEEL Co., Ltd.)			133,743				—				215				—				—				7,656				18
POSCO DX (Former POSCO ICT) (*4)			1,760				4,970				18				—				39,932				10,190				34,724
eNtoB Corporation			3				24				—				60,649				9,706				32				3,453
POSCO Future M (Former POSCO CHEMICAL CO., LTD			89,535				13,878				44				84,301				4,757				56,325				908
POSCO Energy (*5)			4,331				—				—				6,682				—				—				3,925
POSCO Mobility Solutions			176,534				—				—				—				—				8,802				28
POSCO INTERNATIONAL Corporation			2,102,356				62,093				—				244,230				—				768				1,049
POSCO Thainox Public Company Limited			49,359				22,867				—				—				—				—				1
POSCO Canada Ltd.			—				—				—				77,225				—				—				—
Qingdao Pohang Stainless Steel Co., Ltd.			32,584				—				—				—				—				—				—
POSCO JAPAN Co., Ltd.			28,790				—				—				835				—				—				16
POSCO-VIETNAM Co., Ltd.			44,840				—				513				—				—				—				—
POSCO MEXICO S.A. DE C.V.			102,776				—				562				—				—				—				—
POSCO Maharashtra Steel Private Limited			171,806				—				1,130				—				—				—				120
POSCO(Suzhou) Automotive Processing Center Co., Ltd.			42,320				—				—				—				—				—				15
POSCO VST CO., LTD.			28,475				—				—				—				—				—				—
POSCO INTERNATIONAL SINGAPORE PTE LTD.			—				—				179				379,823				—				—				—
POSCO ASSAN TST STEEL INDUSTRY			47,335				—				537				—				—				—				8
Others			203,869				2,452				6,574				61,457				18,844				53,139				223,222
Sub Total			3,355,083				122,839				9,781				915,202				153,545				136,912				291,019

 

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(in millions of Won)
Name of the Company		Sales and others(*1)												Purchase and others(*2)
		Sales				Dividend				Others				Purchase of material				Purchase of fixed assets				Outsourced processing cost				Others
Associates and joint ventures (*3)
SNNC			3,242				5,348				8				148,239				—				—				—
POSCO-SAMSUNG-Slovakia Processing Center			25,614				—				—				—				—				—				—
Roy Hill Holdings Pty Ltd			—				186,813				—				210,455				—				—				—
Others			78,048				209,457				14,704				14,015				—				—				197
Sub Total			106,904				401,618				14,712				372,709				—				—				197
Total			3,461,987				524,457				24,493				1,287,911				153,545				136,912				291,216

 

(*1)	‘Sales and others’ consist sales of steel products (before vertical spin-off), profits from trademark use, rental income and dividend income of subsidiaries, associates and joint ventures.

(*2)	‘Purchases and others’ mainly consist of subsidiaries’ purchases of construction services and purchases of raw materials to manufacture steel products.

(*3)	As of December 31, 2021, the company provided guarantees to related parties

(*4)	Others (purchase) mainly consist of service fees related to maintenance and repair of ERP System.

(*5)	POSCO Energy was merged into POSCO International in January 2023.

As of December 31, 2022, the details of receivables and payables between the company and the related parties (affiliated companies) are as follows.

 

										(in millions of Won)
Name of the Company		Receivables												Payables
		Trade accounts and notes receivable				Others				Total				Accounts payable				Others				Total
Subsidiaries
POSCO			75,343				6,600				81,943				5,678				14,663				20,341
POSCO E&C (Former POSCO ENGINEERING & CONSTRUCTION CO.,LTD.			3,808				660				4,468				—				—				—
POSCO STEELEON (Former POSCO COATED & COLOR STEEL Co., Ltd.)			818				—				818				—				—				—

 

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										(in millions of Won)
Name of the Company		Receivables												Payables
		Trade accounts and notes receivable				Others				Total				Accounts payable				Others				Total
POSCO DX (Former POSCO ICT) (*2)			687				—				687				859				705				1,564
eNtoB Corporation			—				—				—				—				—				—
POSCO Future M (Former POSCO CHEMICAL CO., LTD			8,550				—				8,550				—				5,086				5,086
POSCO Energy (*5)			3,400				462				3,862				—				1,593				1,593
POSCO Mobility Solutions			489				—				489				—				—				—
POSCO INTERNATIONAL Corporation			2,002				—				2,002				—				502				502
Qingdao Pohang Stainless Steel Co., Ltd.			—				—				—				122				—				122
POSCO Maharashtra Steel Private Limited			—				466				466				486				—				486
POSCO ASSAN TST STEEL INDUSTRY			—				513				513				104				—				104
PT. KRAKATAU POSCO			—				8,967				8,967				391				—				391
Others			1,918				5,618				7,536				11,874				3,335				15,209
Sub Total			97,015				23,286				120,301				19,514				25,884				45,398
Associates and joint ventures
SNNC			94				—				94				—				—				—
Roy Hill Holdings Pty Ltd			23,400				—				23,400				—				—				—
FQM Australia Holdings Pty Ltd(*1)			—				202,562				202,562				—				—				—
Others			190				761				951				74				—				74
Sub Total			23,684				203,323				227,007				74				—				74
Total			120,699				226,609				347,308				19,588				25,884				45,472

 

(*1)	Other payable for FQM Australia Holdings Pty is full long-term loans. POSCO HOLDINGS lent 12,116 million in 2022.

(*2)	POSCO Energy was merged into POSCO International in January 2023.

 

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A. Shareholder protection policy in the event of changes in corporate ownership structure or major business

POSCO declared the ‘POSCO Charter of Corporate Citizenship’ on July 25, 2019 and affirmed that under its management philosophy of ‘Corporate Citizenship : Building a Better Future Together’, will engage and communicate with all stakeholders including customers, employees and shareholders, and continually seek changes and innovation in pursuit of sustainability by ultimately creating greater value for the company. Accordingly, the company is implementing a shareholder protection policy that actively collects opinions of shareholders, including minor shareholders, through various communication channels such as homepage and representative phone. In addition, if a listed company decides at a general shareholders’ meeting to have a significant impact on shareholders’ interests, such as acquiring, merging, or transferring major business areas, shareholders who oppose the resolution can exercise their right to purchase shares at a predetermined price.

B. Change in governance structure or major business changes and shareholders protection during reporting fiscal year

Recently, on Dec 10, 2021, the company gathered BoD meeting to decide the vertical spin-off to transfer to a holding company structure. At the meeting, BoD approved the plan for the vertical spin-off, announcement for Special General Shareholders’ Meeting, and the date of the spin-off. Also on the same day of the BoD meeting, the company held a investor day to explain the plan to transfer into holding company structure to investors, including foreign, institutional, and minor shareholders.

Though the conference call was held towards major domestic and overseas institutional shareholders, the company uploaded the presentation material for the spin-off and Q&A of the investor day on the company website in order to help all the investors’ including minor investors understanding.

Prior to the Special Shareholders’ Meeting (Jan 28, 2022), to gain the approval for the vertical spin-off, the company held individual conference call led by the executive level to explain on the plan to both domestic and overseas investors (held 45 meetings, from Dec 13, 2021 to Jan 21, 2022) and heard the investors’ thoughts on the plan. Moreover, to actively engage with minor shareholders, the staff engaged personally on answering the inquiries raised on the company website and explained the agenda.

To prohibit the conflict of interest of existing shareholders and any harm in shareholders’ value by possible dual-listing after the spin-off, the company decided to keep the new company (steel) unlisted after the spin-off. To guarantee the decision, clauses related to listing as public or third-party offering were not included in the Articles of Incorporation of new company, POSCO, and included clauses stating that in case the new company desires to come public, it must win the recognition of the Shareholders’ Meeting of POSCO Holdings (“existing company”). This was ensure the shareholders that the company is certain to keep the steel business unlisted. Not only steel, but also new growth businesses will remain unlisted, in case of a spin-off. Such decisions enabled the company to solely keep the growth value of unlisted subsidiaries in line with the shareholders’ value of the holding company, a form of an advanced global governance structure. The company has publicly disclosed the policy through CEO letter (Jan 5, 2022) uploaded on the website.

 

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The company also disclosed the progress of the mid-term strategy on 1Q 2022 earnings result material when announcing the vertical spin-off. By providing on-line streaming service of the earnings release conference call, the company levelled up the transparency of information to all shareholders.

This vertical spin-off is simple vertical spin-off that accord with the Article 530-2 or 530-12 of the Commercial Act, and therefore, appraisal right by a shareholder of dissident shareholders do not apply to the case.

If the major changes in business and corporate governance structure take place in the future, the company will actively utilize public filing, investor events, homepage disclosure, and letters, to help the investors, including the minor shareholders, to understand the decision and plans of the company. Moreover, we plan to actively listen to opinions of minor shareholders through diverse communication channels such as channels as company website, official IR email account and calls. The company will also try its best to protect the shareholders’ rights by maintaining the policy which is un-listing the newly spin-off companies.

 

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3. Board of Directors(BoD)

 

(Core Principle 3) Function of BoD   •  BoD needs to determine the company’s business goals and strategies for the benefit of the company and shareholders, and to effectively supervise the management.

 

(Sub-Principle 3-①) BoD needs to effectively perform business decision-makings and management supervision.

A. Operation Policy of BoD

The BoD of the company decides important matters of the company, such as setting business goals and core business strategies for the benefit of the company and shareholders in accordance with relevant laws and the Operational Regulations of the Board of Directors. And the concrete roles of the BoD are specified in the Article 38 (1) of the Articles of Incorporation and the Operational Regulations of the Board of Directors.

The BoD may establish special committee pursuant to the Article 38 and 45 of the Articles of Incorporation and delegate authority to the committee after determining scope of authority and operation. Details of the operation of the special committee except for the audit committee are separately determined by the Operational Regulations of the Board of Directors.

Other than BoD and Special Committees, strategic sessions are held in which Board members and major non-registered executive officers participate in order for BoD’s effective fulfillment of roles. There are also regular meetings among Outside Directors to collect opinions proactively on agendas of the BoD.

Each agenda is thoroughly reviewed before making decisions by the BoD and if necessary, opinions are collected through a pre-meeting report and reflected in the agenda. Also, regular visitations of major business sites are conducted to enhance understanding on businesses.

(i) Deliberation and Report Items for BoD specified in the Articles of Incorporation and the Operational Regulations of the Board of Directors

As of submission date of this report, the matters for the agenda of BoD and Special Committees are as follows.

 

•

(Table 3-①-1) Deliberation and Report Items for BoD and Special Committees

(As of May 31, 2023)

 

Board of Directors   (BoD)		[Deliberation Items]   1. GMoS   (1)   Convocation of GMoS (2)   Approval on statements of financial position, comprehensive income, changes in equity, cash flows and notes, statements of appropriation of retained earnings or statements of disposition of deficit and accompanying statements, and consolidated financial statements in every settlement term (3)   Approval of annual report (4)   Amendments on the Articles of Incorporation (5)   Retirement of shares (6)   Remuneration, retirement benefits of Directors

 

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		(7)   Other agendas to be submitted to GMoS   2. Business   (1)   Establishment of business goals and core business strategies (mid and long-term business plans, annual operating objectives, business rationalization plans, etc.)
		(2)   Important CI establishment and modification (corporate philosophy, flag, badge, etc.) (3)   Group-level restructuring plans (4)   Yearly business plans (5)   Appointment of the Chairman of the BoD (6)   Recommendation of candidates for Inside Directors (7)   Appointment of the CEO and the Representative Director, appointment of Representative Directors (8)   Management succession and management training plans (9)   Management evaluation and compensation plans (10)  Composition and operation plans for Special Committees under the BoD (11)  Determination on expert assistance for Directors (12)  Matters concerning the composition and operation of CEO Candidate Recommendation Committee and the Succession Council (13)  Enact, amend or repeal of the following company regulations A. Operational Regulations of the Board of Directors and Audit Committee   3. Investment and Finance   (1)   New external investments, capital increase or investment shares disposal of invested companies (KRW 100 billion or more, investment and capital increase includes borrowings and liabilities that the company takes) (2)   In-house investment plans (New establishment or expansion project of KRW 200 billion or more) (3)   Acquisition and disposal of tangible, intangible, fixed assets or important investment assets ( KRW 200 billion or more, based on book value per unit of invested assets) (4)   Deficit disposal (5)   Decision on appropriation of retained earnings (6)   Decision of new shares issuance (7)   Forfeited and odd-lot shares disposal (8)   Retirement of treasury stock for profit (9)   Decision to repurchase and dispose of treasury stock (10)  Transfer of reserve fund to equity (11)  Issuance of corporate bonds and important borrowings (long-term borrowings over KRW 100 billion) (12)  Issuance of convertible bonds (13)  Issuance of bond with warrant (14)  Donation (Over KRW 1 billion)   4. Others   (1)   Filing lawsuit or arbitration, responding to a court reconciliation or mediation, or taking other legal actions equivalent to KRW 100 billion or more. (2)   Transactions with the largest shareholder of the company (including its related parties) and with related parties as prescribed by the Commercial Act A. A single transaction size of one-hundredth or more of total assets or revenue as of the end of the latest fiscal year B. During the current fiscal year, the total current fiscal year transaction amount including transaction with specific persons or business entities becomes 5% or more of total assets or revenue as of the end of the latest fiscal year (However, it is excluded when it is ordinary transactions that the total amount of the transactions are approved and the transactions amounts occurred within the approved amount.) (3)   Transactions with related parties under the Monopoly Regulation and Fair Trade Act. A. Provision or transaction of funds such as provisional payments or loans, etc. (KRW 100 billion or more) B. Provision or transaction of shares or bonds of the company (KRW 100 billion or more) C. Provision or transaction of assets such as real estates or intangible property rights (KRW 100 billion or more) (4)   Appointment of transfer agent (5)   Decision on administration fees treatment for shares of the company (6)   Establishment, transfer or closure of branches (7)   Approval of transactions between Directors and the company (8)   Compliance officers appointment or dismissal, enactment or amendment of compliance standards (9)   Other matters by laws or Articles of Incorporation, and matters submitted by Directors in relation to business execution   [Report Items]   1.  Result of matters delegated to Special Committees 2.  Important matters related to operation of invested companies 3.  Report the results of the compliance officer’s compliance checks 4.  Other important business execution matters

 

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(ii) Main contents and effects of agendas of Board authority the that are delegated to the Special Committee or Representative Director among the authorities of BoD

In addition to what is mandatory under relevant laws, the Company sets the following items as deliberation items so that the Board members can vote on the company’s major management matters.

 

-   Retirement of shares   -   Remuneration, retirement benefits of Directors   -   Establishment of business goals and core business strategies (mid and long-term business plans,       annual operating objectives, business rationalization plans, etc.)   -   Important CI establishment and modification (corporate philosophy, flag, badge, etc.)   -   Yearly business plans   -   Appointment of the Chairman of the BoD   -   Recommendation of candidates for Inside Directors   -   Appointment of the CEO and the Representative Director, appointment of Representative Directors   -   Management succession and management training plans   -   Management evaluation and compensation plans   -   Composition and operation plans for Special Committees under the BoD   -   Determination on expert assistance for Directors   -   Matters concerning the composition and operation of CEO Candidate Recommendation Committee and the Succession Council   -   Enact, amend or repeal of the following company regulations   A. Operational Regulations of the Board of Directors and Audit Committee   -   New external investments, capital increase or investment shares disposal of invested companies       (KRW 100 billion or more, investment and capital increase includes borrowings and liabilities that       the company takes)   -   In-house investment plans (New establishment or expansion project of KRW 200 billion or more)   -   Acquisition and disposal of tangible, intangible, fixed assets or important investment assets ( KRW 200 billion or more, based on book value per unit of invested assets)   -   Donation (Over KRW 1 billion)   -   Filing lawsuit or arbitration, responding to a court reconciliation or mediation, or taking other legal       actions equivalent to KRW 100 billion or more.

 

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(iii) Matters of Board authority that are delegated to the Special Committee or Representative Director

According to Article 38(2) and Article 45 of the Articles of Incorporation, as well as the sub-clauses of Chapter 4 of Operational Regulations of the Board of Directors, the BoD may establish Special Committees within the Board to deliberate the agendas specified in the regulations. Each Special Committee notifies the results of its deliberations or decisions at the subsequent BoD meeting, in accordance with Article 21 of Operational Regulations of the Board of Directors. If a Special Committee meets separately from the BoD, it also notifies the individual directors of the results. Furthermore, according to Article 21 of Operational Regulations of the Board of Directors, the Board of Directors can reconsider resolutions made by the Special Committees except for matters specifically designated as the exclusive authority of Special Committees. Please refer to the details indicated in Principle 4-1 regarding the current status, key roles, and composition of the Special Committees within the Board. As of the date of disclosure, the agendas for deliberation and reporting by the Special Committees are as follows.

 

•

Deliberation and Reporting Items of the Special Committees

(May 31, 2023)

 

ESG Committee		[Deliberation Items]   1.  Matters related to Operations of BoD and Special Committees A. Agenda development and establishment of operating standards of the BoD and Special Committees B. Prior deliberation on revision or repeal of the Operational Regulations of the Board of Directors C. Prior deliberation of the composition and operation of the Special Committees under the BoD 2.  ESG-related implementation monitoring and report publication 3.  Deliberation and resolution of donation from over KRW 100 million to KRW 1 billion and Prior deliberation of donation over KRW 1 billion 4.  Internal transactions under Monopoly Regulation and Fair Trade Act (The act of providing or trading funds, securities, or assets with related party as business counterpart or for related party) A. Review of internal transaction-related issues and improvement measures B. Prior deliberation on internal transaction (Amount KRW 100 billion or more) C. Deliberation and resolution of internal transactions (Amount from KRW 5 billion to less than KRW 100 billion) 5.  Appointment of Compliance Officer   [Report Items] 1.  Important issues regarding ESG of subsidiaries
Director Candidate Recommendation Committee		1.  Qualification review of Outside Director candidates and recommendation to GMoS 2.  Preliminary review and qualification review of Inside Director candidates 3.  Prior deliberation on appointment of members of Special Committees 4.  Prior deliberation of appointment of Representative Directors other than the Representative Director and CEO 5.  Operation of Outside Director Candidate Recommendation Advisory Panel 6.  Other matters necessary for recommending candidates for Outside Directors

 

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Evaluation and Compensation Committee		1.  Establishment of management succession and management training plan 2.  Establishment of plan for management evaluation and compensation, and execution 3.  Prior deliberation on remuneration and retirement allowance of Directors
Finance Committee		1.  Developing policies for soundness of company’s internal value and finance 2.  Prior deliberation in case of filing in litigation or arbitration, or responding to reconciliation or mediation in the process of trial or taking any equivalent level of legal actions with the amount of KRW 100 billion or more 3.  External Investments (Business units other than Steel) (1)   Prior deliberation on new business investments, capital increase or investment shares disposal of invested companies (KRW 100 billion or more. Investment and capital increase includes borrowings and liabilities that the company takes) (2)   Prior deliberation on existing business investments, capital increase or investment shares disposal of invested companies (KRW 200 billion or more. Investment and capital increase includes borrowings and liabilities that the company takes) (3)   Approval of new business investments (From KRW 50 billion or more to less than KRW 100 billion. Investment and capital increase includes borrowings and liabilities that the company takes.) (4)   Approval on existing business investments, capital increase or investment shares disposal of invested companies (From KRW 100 billion or more to less than KRW 200 billion. Investment and capital increase includes borrowings and liabilities that the company takes.) (5)   Prior deliberation for Acquisition and Disposal of Tangible and Intangible Fixed Assets and Significant Investment Assets (Exceeding KRW 200 billion based on book value per unit of invested assets) 4.  Deliberation and resolution on bond issuance and important borrowings (including refinancing borrowings exceeding KRW 100 billion) 5.  Prior deliberation on bond issuance and important borrowings (new long-term borrowings exceeding KRW 100 billion) 6.  Deliberation and resolution on offering non-current assets as collateral 7.  Deliberation and resolution on takeover of debt such as collateral, guarantee, etc. from invested company (excluding the case involving steel investment).
Audit Committee		1.  The matters to be submitted to the Committee are as follows. (1)   Setting the work scope of the committee (2)   Matters that the BoD or Representative Directors delegated (3)   Request for Extraordinary GMoS (4)   Consulting of external experts (5)   Audit of the legitimacy of management’s business execution (6)   Review soundness and validity of the company’s financial activities and the appropriateness of financial reporting (7)   Review the validity of important accounting standards or changes in accounting estimates (8)   Evaluation of the operation status of the internal accounting management system (9)   Evaluation of the internal control system (10)  Agreement on appointment or dismissal of internal audit department representative (11)  Contract for appointment, remuneration and non-audit services of independent auditors (12)  Evaluation of independent auditors’ audit activities (13)  Report internal audit department’s annual audit plan and results (14)  Report on the evaluation results of the company’s ethical compliance (15)  An independent auditor reports on important facts of the company’s Directors’ misconduct or in violation of laws or Articles of Incorporation (16)  Report that independent auditors have violated the company’s accounting standards (17)  Enactment, amendment or repeal of internal accounting management regulations (18)  Other items deemed necessary by each committee member .   2.  The contracts for the appointment, remuneration, and non-audit services of external auditors shall be approved in advance. However, if it is difficult to obtain prior approval due to time constraint, the contract may be concluded with the approval of the chairperson or the delegated member. The details of the contract must be reported to the committee convened for the first time after the contract approval date.

 

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B. Whether BoD effectively performs business decision-makings and business supervision

Our management performs responsible business practices based on expertise and reasonable decision-making and the BoD, centered with independent Outside Directors, supervises and advises the management. The initial plans such as strategic direction of the POSCO Group, business plans, etc. set out by the management, but after active discussions at the Board level including strategic sessions, meetings of Outside Directors, etc. opinions of the Directors are actively reflected.

In the BoD strategic session held in April 2022, discussions were held on “hydrogen business vision and execution strategy”, “secondary battery material business growth acceleration strategy”, and “global decarbonization trend and direction of steel business”. The ESG session in August 2022 discussed key ESG issues within the group, including ‘POSCO Carbon Neutral Performance and Plan’, ‘POSCO FutureM 2050 Carbon Neutral Strategy and Action Plan’, ‘POSCO Safety Activities and outcome of the activities’, and ‘POSCO International Overseas Business Issues and Progress’. In the strategy/performance review session held in November 2022, discussions on ‘Group Business Portfolio Strategy’, ‘Business Performance and Mid-term Strategy by Major Businesses’, and ‘Management Plan for 2023’ were conducted.

In addition, at the Outside Director meetings held in June and October 2022, governance-related matters such as “Leadership Coaching and Information Exchange Program” and “BoD’s Direction and Role of the Holding Company”.

 

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A. The CEO Succession Policy

(i) Establishing succession policy and operating body

In accordance with Article 29 of the Articles of Incorporation, BoD decides candidates for CEO and CEO Candidate Recommendation Committee verifies eligibility of the candidates. After that, BoD recommends a candidate to the GMoS. After electing the candidate as an Inside Director at GMoS, BoD appoints the Director as Representative Director then the succession process of Representative Director and CEO is completed.

(ii) The main contents of succession policies, such as the establishment and operation of succession policies, selection, management and education of candidates

In the process above, the succession council identifies and proposes candidates to the BoD that meet qualifications set by the BoD in order for independent and transparent CEO appointment. Also, by conducting multi-faceted and in-depth qualification reviews of candidates, who are nominated by the BoD, from the CEO Candidate Recommendation Committee which is composed of all Outside Directors, the company operates management succession process with separation of roles and authorities between organizations. In particular, in May 2022, the Basic Qualification Requirements for CEO Candidates, which are the qualifications set by the board of directors, were newly established in order to block external influences in the process of succession and establish a fairer and more transparent succession process.

The current succession policy is applicable in contingent situations, and in 2018, even in the sudden succession process, there was a case that the succession of the CEO was successfully completed according to the established policy. In addition, since the company has two Representative Directors, it is possible to conduct internal or external duties even when the Representative Director and the CEO is not able to conduct the roles.

 

 

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(iii) Training status during the period subject to disclosure

In order to systematically train candidates for the top management, the company selects and manages key talents from executive officers and managerial level of employees in each major work areas since 2017. This is a year-round operation of selection-nurturing-evaluation, and every year, all core talents are re-evaluated, excluding those with low performance and competency development, and new talents are discovered so that the candidate group for CEO can be nurtured practically. In order to improve global management competency and leadership, the selected personnel are nurtured by performing major internal tasks, completing training at major institutions, and having 1:1 mentoring with external experts. In particular, in 2022, we have established a “Future Entrepreneurship Talent Development” education program to cultivate managerial candidates from a long-term perspective. External experts are operating the “Future Entrepreneurship Talent Development” education program to enhance the entrepreneurial capabilities of potential CEOs and cultivate the necessary management expertise and insights for selected key personnel.

Furthermore, we are strengthening the sharing of CEO candidate development achievements through leadership sessions between external directors and CEO. This is to ensure a fair and smooth succession in the future.

(Reference) The education program for key personnel is also disclosed to external stakeholders through the POSCO Holdings Corporate Citizenship Report. (Employee career development and fair evaluation>Key personnel development) * ‘21 Corporate Citizenship Report (p. 88)

 

 

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A. Operation of Internal Control Policy

1) Risk Management

(i) Risk Management

As a holding company, the company operates a risk management system that checks various risks that may occur throughout the group’s management activities and reports monitoring results and countermeasures of some critical issues to the BoD. We classify risks into business risks, ESG risks and non-business risks, and perform practical risk reduction activities with the highest priority, such as managing each case by the related departments.

Business risk is managed by Corporate Strategy Team, Finance Team, and three teams in charge of Group’s main business : Steel Business Team, Green Infrastructure Team and Green Materials and Energy Team. The Corporate Strategy Team is in charge of Group’s strategy and investment related risks while Finance Team is in charge of financial risks such as exchange rates and funds. Three teams in charge of Group’s main business monitor risks related to the Group’s business operation. POSCO Research Institute monitors external risks such as industrial and financial market trends, changes in business conditions in global expansion areas, and strategies of competitors at all time. Monitoring results are regularly reported to relevant departments or distributed throughout the companies through Global Information Hub (GIH), the group information hub.

ESG risks are managed by ESG Team which established a group-level ESG issue response and management system to systematically manage and effectively respond to the requirements of internal and external stakeholders. Other risks such as ethics and compliance, which are non-business risks, are managed by a risk self-prevention system centered on the ethics management section under the ESG team and the legal team. Major reviews, countermeasures, and key ESG issues identified through risk management are regularly reported to the Board’s specialized committees (Finance Committee, Audit Committee, ESG Committee) and the Board of Directors. Risk monitoring results and countermeasures are regularly reported to the BoD’s Special Committees which are Finance Committee, Audit Committee, ESG Committee, and the BoD.

 

 

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(ii) Compliance Management

In order to check compliance with the compliance control standards, the company established and implemented the compliance control standards by the resolution of the BoD in May 2012 and established related internal regulations and has operated it since August 2017. We hire compliance officer with legal qualifications. The compliance officer monitors the legality of company management activities in accordance with the compliance control standards, and faithfully supports the company’s organizations and businesses through various compliance support activities such as departmental self-inspection through checklists and preemptive management of major risk areas, etc. The company discloses the details of the appointment and operation of compliance officers in the Business Report at the DART website operated by the Financial Supervisory Service, and the results of these activities are compulsorily reported to the BoD.

 

•

(Table 3-③-1) The Current Status of Compliance Officer

 

Name

Gender

Month and Year of Birth

Position

Responsibilities

Major Careers

Date of Appointment (Term)

Kim,  Young-Jong

Male

September,   1966

Senior  Executive  Vice  President

•  Head of Legal Team   •  Compliance Officer

•  Hanyang University (Bachelor’s degree and Master’s degree) •  Director of the Anyang branch of Suwon District Prosecutors’ Office •  Representative lawyer of law firm, Homin

May 13, 2022 (3 years)

 

Date		Main Checklist		Results of Inspection
January,    2022		Provision of domestic and international legal information updates on weekly basis		Overall good, some improvement needs are supplemented according to internal policies, etc.
February, 2022		Compliance education for executives on laws such as industrial safety and health laws
		Monitoring and sharing the status and information about sanction against Russia
March, 2022		Amendment of Company regulations followed by the Spin-off
April, 2022		Compliance education for executives on the importance of compliance control systems and the latest trends of compliance.
		Monitoring restricted action of holding company, change of conglomerate and compliance check of disclosures
May, 2022		Fair Trade CP workshop
		Compliance training for operational staffs
June, 2022		Fair trade compliance training for management and leaders
July, 2022		Compliance training for employees on the governance structure of the company.
August, 2022		Fair trade risk assessment of the business unit
		Compliance training for operational staffs
		Fair trade CP-related education for executive officers of subsidiary companies

 

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Date		Main Checklist		Results of Inspection
September, 2022		Compliance training for executives on M&A (Merger and Acquisition) matters.
		Compliance checks on restricted actions of holding companies.
		Fair trade CP-related education for executive officers of subsidiary companies
October, 2022		Compliance training on the Major Accidents and Disasters Punishment Act
		Compliance checks on restricted actions of holding companies
		Fair trade CP-related education for executive officers of subsidiary companies
November, 2022		Validation assessment of compliance control standards
		Compliance checks on restricted actions of holding companies.
		Compliance training for operational staffs
December, 2022		Voluntary compliance check of business unit
		Evaluating fair trade CP-related activities for subsidiary companies
		Inspection to prevent damage from bidding collusion of subsidiaries

(iii) Internal Accounting Management

The company proactively adopted ICoFR(Internal Controls over Financial Report) in 2001, first introduced in the Republic of Korea. Since then, the company has improved the internal control through self-assessment every fiscal year. As listed on the New York Stock Exchange the company went through the audit with separate and consolidated scopes respectively, conducted by independent auditors under the Sarbanes-Oxley Act enforced in 2002. In order to enhance the effectiveness of the internal control, the company extends the coverage of the internal control across the POSCO group.

The Act on External Audit of Stock Companies, recently revised, states several measures to promote effectiveness of the internal accounting management system. In particular, as the audit level for the internal control has been upgraded from ‘review’ to ‘audit’, the company completely re-designed internal control activities accordingly. Following revised guidelines of internal control committee, the company established the department whose function is solely to review and support the company’s internal control, made amendments to the company’s existing guidelines and rules, developed education plans on the internal control, and improved the existing system in order for the compensation to be tied with the evaluation on the internal control.

The company evaluates the effectiveness of the internal control every fiscal year, Representatives of the company report the results to the GMoS, the BoD, and the Audit Committee. The company assesses the operation of the system in two parts – design assessment and operation assessment. In the design assessment, the company detects and takes preventive approach to errors and irregularities that might affect the financial statements. The company checks the adequacy and completeness. In the operation assessment, the company evaluates evidence with which it is proved that those who carry out each control activities have conducted their jobs in the same manner as what is described in the control statement. Any potential improvements found in the process of evaluation are referred to related personnel such as independent auditors, departments in charge, actual conductors of control activities and lead to practical enhancements.

 

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(iv) Disclosure Information Management

The company established and operates guidelines for managing disclosure information, and informs related departments and subsidiaries on those matters. In addition, by operating review process, we review in advance whether it is necessary to disclose certain agendas that will be resolved at the BoD or at the Special Committees under the BoD. In the case of information that is deemed necessary for disclosure, the person in charge of disclosure will report it internally after reviewing accuracy of the information with the relevant departments. After review and approval by the head of the disclosure department and disclosure officer, the relevant contents are disclosed in a timely manner. In the case of regular reports such as Business Reports, internal control procedures such as confirmation and signatures by the heads of the departments responsible for disclosure contents and approval by the disclosure officer are established and followed.

 

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A. The Status of BoD Composition

(i) BoD, Special Committee under BoD and the BoD related Organizational Chart

 

•

(Table 4-①-1) The BoD related Organizational Chart as of May 31, 2023

 

 

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(ii) BoD and Composition of BoD as of submission of the report

Composition of BoD as of submission date of this report is as follows:

 

•

(Table 4-①-2) Composition of BoD as of May 31, 2023

 

Inside/    Outside    Director

Name

Gender (Age)

Title

Date of Appointment1)

End of Term

Specialty

Major Careers

Inside

Choi, Jeong-Woo

Male (66)

Representative Director and CEO,

July 27, 2018

Date of GMoS 2024

Strategy. Finance and Accounting, Audit, Group Business Management

•  POSCO HOLDINGS, Representative Director and CEO (March 2022 ~ Present) •  POSCO, Representative Director and CEO (July 2018 ~ March 2022) •  POSCO CHEMTECH, Representative Director and President (March 2018 ~ July 2018) •  POSCO, Representative Director and President (Head of Corporate Strategy & Finance Center, March 2017 ~ March 2018) •  POSCO, Senior Executive Vice President (Head of Corporate Strategy & Finance Center, July 2015 ~ March 2017) •  POSCO DAEWOO Corporation (Head of Planning and Finance Division, March 2014 ~ July 2015) •  POSCO, Executive Vice President (Head of Corporate Audit Office, March 2012 ~ March 2014) •  Bachelor’s degree in Economics. Pusan National University (1983)

Inside

Jeong, Ki-Seop

Male (61)

Representative Director and President, Head of Corporate Strategy Team (CSO), member of Finance Committee,

March 17, 2023

Date of GMoS 2024

Finance/ Accounting, Strategy/Investment, Group Business Management

•  CSO of Chief Strategy Office, President of POSCO HOLDINGS INC., (March 2023 ~ Present) •  Representative Director, President of POSCO Energy (January 2020 ~ January 2023) •  Senior Executive Vice President, Head of Corporate Planning Division, POSCO Energy (February 2018 ~ January 2020) •  Executive Vice President, Head of Domestic Business Management Office, POSCO (February 2017 ~ February 2018) •  Senior Vice President, Head of Domestic Business Management Office, POSCO (February 2016 ~ February 2017) •  Senior Vice President, Finance Chief, POSCO (March 2015 ~ January 2016) •  Senior Vice President, Head of Business Strategy Department, POSCO International (March 2013 ~ March 2015) •  Senior Vice President, Head of Overseas Management Team, POSCO International (March 2012 ~ February 2013) •  Bachelor’s degree in Business Management, Yonsei University (1985)

 

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Inside

Yoo, Byeong-Og

Male (61)

Chief of Green Materials & Energy Business Team, Member of ESG Committee

March 18, 2022

Date of GMoS 2024

Steel technology, Procurement, New business

•  Senior Executive Vice President, (Chief Green Materials & Energy Business Officer, May 2023 ~ Present) •  Senior Executive Vice President, POSCO HOLDINGS (Head of Green Materials & Energy Business Team, March 2022 ~ May 2023) •  Senior Executive Vice President, Head of Industrial Gasses & Hydrogen Business Unit, POSCO (January 2021 ~ February 2022) •  Senior Executive Vice President, Head of Purchasing and Investment Division, POSCO (January 2019 ~ January 2021) •  Executive Vice President, Head of Corporate Strategy Department, POSCO (February 2017 ~ January 2019) •  Senior Vice President, Head of Raw Materials Department, POSCO (February 2017 ~ January 2019) •  Master of Management of Technology, POSTECH (2008)

Inside

Kim, Ji-Yong

Male (61)

Head of New Experience of Technology Hub, Group CTO

March 17, 2023

Date of GMoS 2024

Steel production/ Technology, New business, New technology development

•  Senior Executive Vice President, Head of New Experience of Technology Hub, POSCO HOLDINGS INC., CTO, POSCO Group (March 2023 ~ Present) •  Senior Executive Vice President, Head of New Experience of Technology Hub, POSCO HOLDINGS INC. (January 2023 ~ March, 2023) •  Senior Executive Vice President (Inside Director), Head of Safety Health Environment(SHE) Division, POSCO (March 2022 ~ January 2023) •  Senior Executive Vice President (Head of Safety Health Environment(SHE) Division), POSCO (January 2022 ~ March 2022) •  Senior Executive Vice President, Head of Gwangyang Steelworks, POSCO (January 2021 ~ January 2022) Executive Vice President, President of PT.KP (Krakatau-POSCO), Representative President of PT-P-Indonesia Inti (February 2018 ~ January 2021) •  Executive Vice President, Representative President of PT-P-Indonesia Inti (April 2015 ~ January 2018) •  Executive Vice President, Head of PT-P-Indonesia Inti Launch TF Team (February 2015 ~ March 2015) •  Executive Vice President, Head of Steel Solutions Centre, POSCO (March 2014 ~ December 2014) •  Senior Vice President, Head of Advanced Materials Department, POSCO (February 2010 ~ March 2014) •  Doctoral degree in physical metallurgy, Utah University (1992)

 

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Non-    standing    Director

Kim, Hag-Dong

Male (63)

—

March 18, 2022

Date of GMoS 2024

Steel Manufacturing /Technology

•  Representative Director & Vice Chairman, POSCO (January 2022 ~ Present) •  POSCO, Representative Director and President (Head of Steel Business Unit and Head of Steel Production & Technology Division, March 2021 ~ January 2022) •  POSCO, Inside Director and President (Head of Steel Business Unit, January 2021 ~ March 2021) •  POSCO, Inside Director and Senior Executive Vice President (Head of Steel Production & Technology Division, March 2019~January 2021) •  POSCO, Senior Executive Vice President (Head of Steel Production Division, January 2019~March 2019) •  POSCO, Senior Executive Vice President (Head of Gwangyang Works, February 2017~January 2019) •  POSCO, Senior Executive Vice President (Head of Pohang Works, March 2015~February 2017) •  SNNC, Senior Executive Vice President and Representative Director (March 2013~February 2015) •  POSCO, Senior Vice President (Deputy Head of Gwangyang Works, Iron & Steel Making, February 2010~March 2013) •  Carnegie Mellon University, Master’s degree in Materials Science Engineering (1997)

Outside

Pahk, Heui-Jae

Male (62)

Chairman of BoD, Member of Director Candidate Recommendation Committee, Member of Finance Committee

March 15, 2019

Date of GMoS 2025

Industries (New business/ venture)

•  Professor, Mechanical & Aerospace Engineering, Seoul National University (March 1993~Present) •  President, Korea Association of Industrial Tech. Security (February 2017~Present) •  President, Office of Strategic R&D Plan, MOTIE (April 2013~April 2016) •  Founder and CEO, SNU Precision CO., LTD. (February 1998~December 2016) •  Ph.D. in Mechanical Engineering, Manchester University (1990) •  Higher Doctorate in Engineering, Manchester University (2019)

Outside

Kim, Sung-Jin

Male (74)

Chairman of ESG Committee, Member of Audit Committee,

March 9, 2018

Date of GMoS 2024

Industries (small and medium business/ industry policies)

•  Adjunct Professor, Dept. of Economics, Seoul National University (2011~Present) •  Minister of Maritime Affairs and Fisheries (2006~2007) •  Administrator of the Small and Medium Business Administration (2004~2006) •  M.A. and Ph.D. in Economics, Kansas State University (1991)

Outside

Yoo, Young-Sook

Female (67)

Chairman of Evaluation and Compensation Committee, Member of ESG Committee,

March 12, 2021

Date of GMoS 2024

Academia (Environment)

•  Principal Research Scientist, Korea Institute of Science and Technology(KIST) (March 1994~Present) •  Chairperson of the Board(non-permanent), Climate Change Center (January 2020~Present) •  Co-President, Climate Change Center (February 2014~January 2020) •  Minister, Ministry of Environment (June 2011~March 2013) •  Ph.D. in Biochem. & Biophysics Dept. at Oregon State University (1986)

 

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Outside

Kwon, Tae-Kyun

Male (67)

Member of Finance Committee, Member of Evaluation and Compensation Committee

March 12, 2021

Date of GMoS 2024

Finance (Finance/ International investment)

•  Senior Advisor (non-permanent), Yulchon LLC. (December 2015~June 2021) •  Ambassador, Korea to the United Arab Emirates (June 2010~June 2013) •  Chief Administrator, Public Procurement Service (January 2009~April 2010) •  Head of Trade and Investment Office, Ministry of Knowledge Economy (March 2008~December 2008) •  Deputy Minister for Free Economic Zone Planning, MOFE (March 2007~March 2008) •  Commissioner, Korea Financial Intelligence Unit, MOFE (October 2006~March 2007) •  Economic Councilor, OECD Representative (2001~July 2004) •  Ph.D. in International Finance at Chung-Ang University (2007)

Outside

Yoo, Jin-Nyong

Male (65)

Chairman of Director Candidate Recommendation Committee, Member of ESG Committee, Member of Audit Committee

March 18, 2022

Date of GMoS 2025

Industries (New technology development)

•  CEO, Angel 6+ (2019~Present) •  CTO and President, LG Chem (2017~2018) •  President & Head, Research Park, LG Chem (2014~2016) •  EVP & Head, Research Park, LG Chem (2005~2013) •  Ph.D. in Polymer Engineering at Lehigh University (1990)

Outside

Sohn, Sung-Kyu

Male (63)

Chairman of Audit Committee, Member of Director Candidate Recommendation Committee, Member of Evaluation and Compensation Committee

March 18, 2022

Date of GMoS 2025

Accounting (Academia)

•  Professor, School of Business, Yonsei University (1993~Present) •  President, Korean Accounting Association (2016~2017) •  Distinguished Professor, Samil (2013~2015) •  Non-standing commissioner, Securities and Futures Commission, South Korea (2010~2013) •  Non-standing member, Korea Accounting Standards Board (2008~2010) •  Ph.D. in Business Management at Northwestern University (1992)

Outside

Kim, Joon-Gi

Male (58)

Member of Evaluation and Compensation Committee, Member of Finance Committee

March 17, 2023

Date of GMoS 2026

Law, Trade affairs, governance

•  Professor of Law, Yonsei Law School (2008 ~ Present) •  President, Korean Council for International Arbitration (KOCIA) (2022 ~ Present) •  Vice Chair, ICC Korea, International Arbitration Committee (2021 ~ Present) •  Member, KCAB, International Arbitration Committee (2018 ~ Present) •  Panel of Arbitrators, World Bank’s International Centre for Settlement of Investment Disputes (2013 ~ Present) •  Professor, Graduate School of International Studies, Yonsei University (1998 ~ 2008) •  Founding Executive Director, Hills Governance Center in Korea (2003 ~ 2007) •  Assistant Professor of Law, Business Administration Department, Hongik University (1995 ~ 1998) •  Foley & Lardner, Attorney (1992 ~ 1995) •  Juris Doctor, Georgetown University Law Center (1992)

 

1)	In case of re-appointment, the date of initial appointment is stated.

 

49

(iii) BoD and Composition of Special Committees under BoD as of report submission

Composition of Special Committees under BoD as of submission date of this report is as follows:

 

•

(Table 4-①-3) The Composition of Special Committees under BoD as of May 31, 2023

 

Special Committees

Composition

Major Roles

Title

Inside /Outside Director

Name

Gender

Other   Positions1)

ESG Committee   (4 members)   (A)

Chairman

Outside

Kim, Sung-Jin

Male

E

•  Review of low-carbon policies related to environment and climate change •  Prior deliberation on the safety and health plan •  Matters concerning the operation of BoD and Special Committees •  Prior deliberation and approval of insider trading under the Monopoly Regulation and Fair Trade Act

Member

Outside

Yoo, Young-Sook

Female

C

Member

Outside

Yoo, Jin-Nyong

Male

B, E

Member

Inside

Yoo, Byeong-Og

Male

—

Director   Candidate   Recommendation   Committee   (3 members)   (B)

Chairman

Outside

Yoo, Jin-Nyong

Male

A, E

•  Qualification screening of candidates for Outside Director and recommendation to GMoS •  Operation of the Outside Director Candidate Recommendation Advisory Group, etc.

Member

Outside

Pahk, Heui-Jae

Male

D

Member

Outside

Sohn, Sung-Kyu

Male

C, E

Evaluation and   Compensation   Committee   (4 members)   (C)

Chairman

Outside

Yoo, Young-Sook

Female

A

•  Matters related to management evaluation, compensation plan establishment and execution •  Prior deliberation on matters concerning remuneration and severance pay of directors, etc.

Member

Outside

Kwon, Tae-Kyun

Male

D

Member

Outside

Sohn, Sung-Kyu

Male

B, E

Member

Outside

Kim, Joon-Gi

Male

D

Finance   Committee   (4 members)   (D)

Chairman

Outside

Kwon, Tae-Kyun

Male

C

•  Pre-deliberation and approval of new and existing investment •  Preliminary deliberation and resolution on the recruitment of bonds and important borrowing of funds

Member

Outside

Pahk, Heui-Jae

Male

B

Member

Outside

Kim, Joon-Gi

Male

C

Member

Inside

Jeong, Ki-Seop

Male

—

Audit Committee   (3 members)   (E)

Chairman

Outside

Sohn, Sung-Kyu

Male

B, C

•  Legitimacy audit on management’s business execution •  Review soundness and feasibility of the company’s financial activities and adequacy of financial reporting •  Evaluation on operation status of the internal accounting management system, etc.

Member

Outside

Kim, Sung-Jin

Male

A

Member

Outside

Yoo, Jin-Nyong

Male

A, B

 

1)	If the director concurrently serves as a member of other committees under BoD, it is indicated with the corresponding committee codes.

(iv) Number, ratio and reappointment status of Outside Directors

 

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Pursuant to Article 542-8 of the Commercial Act, listed companies with assets of KRW 2 trillion or more, which the company is applied, must have at least 3 Outside Directors, but the Outside Directors must be the majority of the total number of Directors. According to the Article 27 of the Articles of Incorporation, the total number of Directors in the Board shall be at least 3 but no more than 13 Directors, of which 8 or fewer Outside Directors and 5 or fewer Inside Directors. As of May 31, 2023, our BoD consists of 7 Outside Directors, 4 Inside Directors, and 1 Non-standing Director, and the Outside Directors are more than half of the total number of Directors which meets the legal requirements of the Commercial Act, as well as effectively executes management supervisory functions and independent decision-makings.

In addition, there are Special Committees under the BoD, and each Special Committee consists of more than half of Outside Directors, with Inside Directors who have experience and expertise in each field in order to share the work, thereby securing efficiency and expertise of the BoD. The term of office of Outside Directors is as below and it is set in order to ensure continuity of the Board of Directors’ business performance.

 

•

(Table 4-①-4) The term of office of each outside director as of May 31, 2023

 

Name of Outside Director		Term of Office (Date of Appointment)
Park, Heui-Jae (Chairman)		March 18, 2022~ GMoS of March 2025(March 15, 2019)
Kim, Sung-Jin		March 12, 2021~ GMoS of March 2024 (March 9, 2018)
Yoo, Young-Sook		March 12, 2021~ GMoS of March 2024 (March 12, 2021)
Kwon, Tae-Kyun		March 12, 2021~ GMoS of March 2024 (March 12, 2021)
Yoo, Jin-Nyong		March 18, 2022~ GMoS of March 2025(March 18, 2022)
Sohn, Sung-Kyu		March 18, 2022~ GMoS of March 2025(March 18, 2022)
Kim, Joon-Gi		March 17, 2023~ GMoS of March 2026(March 17, 2023)

(v) Number, ratio and reappointment status of Outside Directors

The company has separated the position of Chairman of BoD from Representative Director and CEO since 2006 in order for BoD to function independently from the management. Chairman of BoD is elected through resolution by BoD, among Outside Directors, and the Outside Director Park, Heui-Jae was elected as the Chairman of the BoD on March 17, 2023.

B. The Composition of BoD and Sufficient Number of Outside Directors for Independent Functions

As stated in A. The Status of BoD Composition, the company maintains outnumbered Outside Directors than required by law in order for BoD to function independently from the management, and for independent and effective decision-makings, has separated the position of Chairman of BoD from Representative Director and CEO since 2006. In addition, we have established a support department to actively assist the board of directors in conducting effective and careful discussions and decision-making processes.

 

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A. Policies to Secure Professionalism, Accountability and Diversity of BoD and

Information about Directors

(i) Policies to secure professionalism, accountability and diversity of BoD and members of BoD

When the Company examines qualifications of Director candidates, the company not only applies qualifications required by the Commercial Act, but also limits qualifications of Directors with the ones who have expertise and abundant experience in related fields in accordance with the Article 29-3 and the Article 31 of the Articles of Incorporation. In addition, we closely review that no one who is responsible for damage to corporate values or for infringement of shareholders’ interests should be appointed as a Director. In relation to this, our Directors meet all qualifications required by relevant laws and regulations, including Article 382 (3) and 542-8 (2) of the Commercial Act and we further strengthened diversity of the BoD by appointing Outside Director Yoo, Young-Sook, a female environmental expert at the GMoS held in March 2021 and Outside Director Yoo, Jin-Nyong, an expert in the development and commercialization of new technologies in the secondary battery and advanced materials sector in March 2022.

As of May 31, 2023, the BoD of the company is composed of 7 Outside Directors, 4 Inside Directors and 1 Non-standing director, which meets the requirements of Commercial Law, and can effectively perform the company’s management function and make independent decisions. In order to realize an advanced corporate governance structure to increase shareholder value and to promote balanced rights of interested parties, the company makes continuous efforts to form BoD with the management who can perform responsible management based on professional knowledge and rational decision-makings and with Outside Directors who can support the management’s rational decision-makings and independently supervise without being bias on certain fields.

 

Qualification of Directors (Corporate Governance Charter 3-3, Qualification of Directors)

 

①	Directors shall possess an exemplary set of ethics, business sense and integrity, and the ability to enhance long-term value of all shareholders and fairly represent the interest of all stakeholders.

 

②	Inside directors, as a high-level managers of corporation, shall have sufficient experience and knowledge related to the Company’s business, and shall be capable of making managerial decisions in a rational and appropriate manner

 

③

Outside directors shall have sufficient knowledge and experience in the relevant field such as finance, economics, management, legal, accounting, etc., and shall have no material relationship with the Company and shall be able to make decisions independently from the Company and specific shareholders.

Firstly, we have four Insider Directors possessing expertise and accountability. Inside Director Choi, Jeong-Woo who is Representative Director and CEO has expertise and management capabilities not only in the steel business but also in the overall subsidiaries with experiences as the Head of Value Management Department, POSCO and President of POSCO CHEMICAL. Inside Director Jeong, Ki-Seop who is Representative Director and President is currently serving as CSO of Chief Strategy Office professionalized in Group management strategy and risk management. He was a former Head of Domestic Business Management Office, POSCO and President of POSCO Energy. Inside Director Yoo, Byeong-Og has deep insight and knowledge of the group with extensive experiences in raw materials purchase, corporate strategy, purchasing and investment, industrial gasses and hydrogen and etc. As a Chief Green Materials & Energy Business Officer, he is responsible for establishing POSCO Group’s new growth strategies and implementing new

 

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