SM Confirms Three Temporary Audit Committee Members at Board Meeting and Approves Shareholder Return Policy

[Asia Economy Reporter Lee Jung-yoon] SM held a board meeting and announced on the 25th that it resolved three agenda items related to the temporary outside director candidate recommendation committee and shareholder return policy among the 12 agreed matters for enhancing shareholder value and improving governance announced together with Align Partners Asset Management.

The three agenda items resolved at the board meeting held on the 22nd were approved with the consent of three inside directors out of four directors, and abstention by outside directors. At the board meeting, SM approved the regulations for the temporary outside director candidate recommendation committee as the first agenda item and appointed three committee members as the second agenda item.

The temporary outside director candidate recommendation committee consists of three members: CEO Lee Sung-soo as an inside director member, Professor Cho Myung-hyun of the Department of Business Administration at Korea University recommended by the board as an external member, and Visiting Professor Lee Nam-woo of the Graduate School of International Studies at Yonsei University recommended by Align as an external member.

SM’s board expects to accelerate board-centered management by recommending independent and rational outside director candidates together with the members of the temporary outside director candidate recommendation committee.

Additionally, SM’s board resolved a shareholder return policy to return at least 20% of separate net profit to shareholders over the next three years. Through the disclosure of this shareholder return policy and board approval, SM plans to return profits to shareholders through cash dividends or treasury stock cancellation starting from the general shareholders’ meeting in March this year.

Furthermore, SM announced the introduction of a multi-producing system for a sustainable production system, an important item among the 12 agreed matters for enhancing shareholder value and improving governance announced with Align Partners Asset Management on the 20th. In this regard, it was announced that the management’s plan will be publicly disclosed at 12 noon on February 3 through the SMTOWN YouTube channel and website.

As the shareholder actions of Align Partners Asset Management, which have continued since last year, were resolved through a dramatic agreement with SM’s management, SM is expected to establish necessary policies centered on the board to enhance shareholder value and promptly implement them.