Best Technology, Better Future

Governance

Risk Management

Company-wide Risk Management System

  • Operates as key management committees to ensure timely and efficient company-wide decisions on management issues arising from the business operation

    Major executives from each organization, including CFO and business managers participate in decision-making, to manage risks such as business/financial/ESG that may affect the company's business activities, and report to the Board of Directors for resolutions on major agendas

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    Submission of agenda items by organization

    (When company-wide decision-making is required)
    • Submission of agenda to the Management Committee and request for review

      Responding to company-wide risks and issues (business, finance, HR, ESG, etc.)

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    Deliberation and decision-making of key management committees

    • Review on agendas and discussion on responses

      Participation of relevant departments and the management, etc.

      Review on countermeasures and decision-making on implementation

    • Decision-making on deliberation· approval of the BOD (if necessary)

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    Deliberation and decision-making at the BOD

    • Review on agendas and discussion on responses

      Participation of relevant departments and the management, etc.

      Review on countermeasures and decision-making on implementation

    • Decision-making on the agenda of the BOD (if necessary)

  • Top management and employees recognize the importance of risk management and manage and respond to company-wide risks to ensure stable business operations

    Proactively identify potential risks based on an internal and external business risk management system and monitoring, and continuously implement prevention and mitigation measures

    Establish and operate a cooperative system with relevant departments for immediate response when risks are discovered

Risk Management Process
  • Proactively respond to risks to prevent unpredictable events, misunderstandings, and rumors from becoming business risks

    Continuously manage and prevent incidents that may cause significant damage to the organization, including reputational damage and financial loss

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Compliance Risk Management

  • LX Semicon clearly aware that compliance with laws and regulations cannot be achieved by a single department's compliance activities alone, and has established and managed a company-wide compliance management system
  • Compliance Officer report to the BOD every year, about the compliance with the compliance control standards, the results of the compliance control system effectiveness evaluation, and the compliance work plan for the next year
  • Compliance Officer and Legal Teamplan and implement annual compliance activities, develop and implement training programs, and conduct company-wide compliance risk assessments
  • Compliance Risk Owners assigned by relevant departments conduct self assessment and report the result to the compliance department
  • To strengthen the management of internal transactions, if there is an agenda that requires approval from the board of directors by law, such as large-scale internal transactions, the ESG committee will review it in advance and obtain final approval from the board

    LX Semicon regularly conducts compliance risk self-assessment by department to proactively identify related risks and identify risk

    Compliance risks derived through self-assessment are quickly corrected through educational activities and compliance inspection activities, and results are reported to management

Risk Management Pool

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Management Process

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Subcontractor Risk Inspection
  • Inspect the status of departments dealing with outsourcing partners, including sharing subcontractor risk types and management guidelines of regulations related to supplier transactions
  • Conduct reviews in five areas; Inspect whether there is substantial command system, whether the partner is substantially incorporated, aspects of the partner's personnel and labor decisions and management, aspects of the partner's business expertise and technology, and the independent corporate organization and facilities of the partner
  • Take corrective actions on areas for improvements identified during first-party subcontracting risk reviews to prevent risks of violations
Compliance Training for Employees
  • Conduct online and offline training to enhance compliance awareness, thereby preventing legal risks and fostering a culture of compliance

    Board of Directors: Take compliance training sessions (independent director workshops)

    Employees: Take online compliance training

    Relevant departments: Provide customized training tailored to departments with potential compliance risks

  • Planned to support employees in improving compliance awareness through face-to-face training and the expansion of training contents