Hyundai Capital has put in place stable and efficient governance to achieve corporate sustainability and protect interests of its shareholders and stakeholders. We implement robust corporate governance by allowing the Board of Directors to provide proper checks and balances and enhance governance efficiency by making sure that the board is comprised of experts. In addition, to promote transparency in governance we get important decisions that the company makes approved by the board and have in place the standards and procedures for getting the board’s approval in line with the Articles of Incorporation. To increase independence of governance, we have created the Audit Committee and put internal policies in place which allow us to convene meetings where external auditors attend discussions without senior management’s presence and also made sure that all the members of the Officer Candidates Recommendation Committee are outside directors. As a result of our efforts, Hyundai Capital was named as one of the leading finance companies in corporate governance by the Korea Corporate Governance Service (KCGS) in 2021.

Hyundai Capital ensures independence of the Board of Directors to allow it to fulfill its role of overseeing senior management and making important business decisions to protect shareholders’ interests. For these purposes, we have appointed a senior outside director who represents outside directors and created the Board of Outside Directors which is made up of solely outside directors empowered to discuss pressing issues independently of senior management. We make sure that the majority of the board are outside directors and their level of professional expertise is sophisticated enough to give constructive feedback to the organization and provide checks and balances on decisions made by senior management.

Hyundai Capital convenes a Board of Directors Meeting once a quarter on a regular basis and extraordinary board meetings on an as-needed basis. We define board independence in its decision-making process specified in the Articles of Incorporation and make sure that it requires two thirds or more of the votes cast by the board directors to approve any transactions between a registered director and the company in line with the Commercial Code. In 2021, nine board meetings were convened with 56 items put on the agenda and the average attendance rate of outside directors was 100%.
In addition, we have six committees reporting to the board to help it make decisions efficiently including the Board of Outside Directors, Audit Committee, Risk Management Committee, Officer Candidates Recommendation Committee, Remuneration Committee and Executive Committee. The board and its committees are evaluated in terms of their composition, roles, responsibilities, management, etc. and outside directors are also evaluated individually once a year. Outside directors evaluate the board and individual committees that they are part of in terms of whether the board and the committees were in compliance with laws, whether sufficient information was provided for them to make the right decisions, whether the board composition was appropriate, etc. With the board’s approval, a team looking after board management puts in place the evaluation frameworks to assess outside directors’ expertise, fairness, ethics and integrity and reports the evaluation results to the board.

Hyundai Capital has the Risk Management Committee under the board. At the committee, we are managing and controlling different types of risks that the company needs to take during the course of business by recognizing/measuring/assessing them in a reasonable manner to make sure the company stably runs its business even when risk has arisen. Also, the committee creates basic risk management guidelines and strategies, decides how much risk that the company is allowed to take, and approves risk management policies created/revised, etc. In addition, to efficiently manage different types of risks arising from business, we are running a sub-committee of the Risk Management Committee named ‘Risk Control Committee’ which consists of Chief Risk Officer, officers/executives looking after finance/corporate management, debt collections, business units and corporate strategy.
The role of the Risk Control Committee is to put controls in place to enable the company to effectively manage risk based on basic risk management guidelines and standards approved by the Risk Management Committee.