Board of Directors

Following the launch of the holding company, LG Corp., LG Electronics operates under an advanced corporate governance structure that comprises a professional administrator and a Board of Directors. This structure helps us deploy more transparent, value-creating management activities that help increase corporate and shareholder value.

Management System

When LG Electronics removed the “Circulating Investment Structure” of its affiliated companies (through the launch of a holding company system’), this enabled the holding company to take full charge of investments. Consequently, LG Electronics has been able to focus on its own businesses while increasing the overall value of the Company. This corporate governance structure has laid the groundwork for increasing managerial transparency. Through a responsible management system comprising of the CEO of LG Electronics and a Board of Directors, we are taking huge steps in strengthening our competitiveness at both the domestic and international level, in order to maximize corporate and shareholder value.

Board of Directors

The BOD consists of 7 Directors, 4 of whom are Outside Directors.The directors are elected in accordance wiith the Korean Commercial Code and other related regulations. The BOD operates independently of any influence from major shareholders and management. The Outside Directors are appointed by the AGM following review by the Outside Directors Candidate Recommendation Committee, to ensure fairness and transparency in the nomination of candidates. The Outside Directors are recognized professionals who monitor overall corporate management activities and provide substantial advice to management. The BOD actively provides recommendations for important management decisions and conducts unbiased evaluation and supervision of the management. In 2010, the BOD met 10 times to review 38 agendas (28 approved, 10 reported). The attendance rate by all BOD members was 97% (The attendance of the outside director was 100%).

Committees

The BOD is supported by three Board Committees. They are the Audit Committee, the Outside Director Candidate Recommendation Committee and the Management Committee. The Audit Committee consists of three Outside Directors, and is responsible for examining corporate financial records and accounting to ensure compliance with the accounting laws and transparency. The Management Committee reviews and determines the agendas delegated by the BOD and ordinary management activities. In 2010, the Management Committee reviewed a total of 52 agendas.

Evaluation and Compensation

Compensation for the BOD members is made within regulations pertaining to BOD compensation that has been approved at the General Shareholder's Meeting. The evaluation of management and executives of LGE is held annually. Top management and executives are evaluated to determine whether they have set and achieved challenging goals, whether their job objectives composed of quantitative and non-quantitative factors were achieved, as well as their capability through fair and objective process, and appropriate compensation corresponding to the outcome of the evaluation is determined.

Directors

Audit Committee

To ensure complete independence from the company’s management and major shareholders, the Audit Committee is composed of three outside directors. The Committee's role is to examine various financial reports and enhance managerial transparency and fairness as supervisors. In addition, the committee members approve the appointment of outside auditors only after careful review of the candidates' professionalism, independence, reputation, capability, ability to audit international businesses, as well as possibilities of conflict of interest associated with the Company.