Hanwha Group is sharply expanding the appointment of independent directors as board chairmen, in step with revisions to South Korea's Commercial Act aimed at strengthening board independence and transparency.
Hanwha (000880.KS) said its board appointed independent director Kwon Ik-hwan as chairman at a meeting on the 14th. Kwon, a legal expert who completed the 22nd class of the Judicial Research and Training Institute, previously served as head of the Ministry of Justice's planning and coordination office, chief of the Daejeon District Prosecutors' Office and chief of the Seoul Southern District Prosecutors' Office. The role had been held by Kim Woo-suk, president and chief executive of the construction division and an inside director, meaning the appointment separates the chief executive and board chairman positions.
"Since joining Hanwha's board in 2022, Kwon has served as chair of the internal transactions committee and as a member of the audit committee and the ESG committee, contributing significantly to building a transparent and rational management environment," the company said. "As board chairman, he is expected to demonstrate balanced decision-making capabilities based on deep expertise in law and capital markets."
Hanwha Group's major listed affiliates are moving to hand the board chairmanship to independent directors. Hanwha Solutions (009830.KS) led the shift in 2024, followed by Hanwha on the 14th. Hanwha Systems (272210.KS) and Hanwha Ocean (042660.KS) plan to appoint independent directors as board chairmen through board resolutions in October and November, respectively. Hanwha Aerospace (012450.KS) and Hanwha Engine (082740.KS) aim to make such appointments in the first half of next year after partially reorganizing their board memberships.
"Appointing independent directors as board chairmen will institutionalize healthy checks and balances in major management decisions, marking a turning point that raises our adherence to global standards and market trust to a higher level," a Hanwha Group official said.
The group is also introducing institutional mechanisms to strengthen the substantive role and authority of its boards.
It will first write into its board regulations the basis for operating a "special committee" that provides advisory input on major decisions involving potential conflicts of interest among shareholders or drawing broad public attention. The special committee will be a non-standing advisory body composed solely of independent directors, reviewing such matters in advance and verifying them from an objective perspective, which the group expects to further strengthen shareholder protection and procedural fairness.
Each company will also establish a "board secretariat," a dedicated support organization reporting directly to the board. The secretariat will support board operations and provide sufficient advance information on key agenda items, helping directors make independent and effective decisions.
"This step responds to social demands for an expanded role for boards and reflects a decision that puts enhancing shareholder value first," Hanwha Group said. "We will continue to strengthen investor trust through more advanced governance."