Governance — ST PHARM

Environmental
Social
Governance

ESG

Governance

Board of Directors

Committees

Risk Management

Composition and Operation

ST Pharm establishes key management policies through the Board of Directors to promote sustainable growth and maximize corporate value. The BOD makes rational and transparent management decisions by internalizing the management system. As the highest decision-making body in the company, the BOD consists of four members (one inside director and three outside directors)

The BOD holds regular and extraordinary meetings, with regular meetings held once a quarter and extraordinary meetings held when necessary. The BOD resolves on matters stipulated by laws and regulations or the Articles of Association, matters delegated by the AGM, basic policies for company management, and important matters related to the business operation, and supervises the performance of directors' duties.

Independence

The BOD is an independent organization that represents the interests of shareholders and stakeholders while overseeing the execution of the duties of directors and management, with the goal of supporting the sustainable growth of the company. To ensure objective and independent decision-making, free from the influence of management or special interests, more than half of the Board is composed of independent outside directors, and the BOD Chairperson is appointed as an outside director by the resolution of the BOD.

Board independence policy

ST Pharm Co., Ltd. (the "Company") is committed to achieving the high standards of corporate governance expected by our stakeholders. In particular, the independence of the Board of Directors, which holds the authority for significant decision-making, is a critical standard for our operations.
In accordance with this Board Independence Policy, the Chairperson of the Board is an Outside Director, and the Company maintains a target where Outside Directors constitute 50% or more of the Board's composition.
The independence of ST Pharm's Board is grounded in the Korean Commercial Code, the Financial Investment Services and Capital Markets Act, and international best practices. To be considered independent, a director must satisfy the following criteria:

Past Employment: Must not have held an executive position within the Company or its affiliates (group companies) within the last three years.
Family Ties: Must not be an immediate family member of an executive of the Company or its affiliates.
Contractual Relationships: Must not have a contractual relationship with the Company or its affiliates, including but not limited to consulting, advisory, or professional service agreements.
Business Connections: Must not be associated with a significant customer or supplier of the Company or its affiliates.
Non-Profit Affiliations: Must not be affiliated with a non-profit organization that receives substantial donations from the Company or its affiliates.
External Auditors: Must not be an external auditor (or an employee thereof) of the Company or its affiliates.
Conflict of Interest: Must be free from any other conflicts of interest that the Board determines would compromise their independence.

The Board of Directors holds the authority to determine the independence of Outside Directors, and all assessments of independence are conducted in accordance with this policy.

Expertise

ST Pharm's BOD is composed of experts in various fields with extensive professional knowledge in accounting, law, management, or practical experience in the pharmaceutical industry. Leveraging their diverse backgrounds and expertise, BOD members deliberate and make decisions on important matters related to the company's management policies and business execution, including sustainability management.

Conflicts of Interest

hen appointing outside directors, ST Pharm receives a “Confirmation of Outside Director Candidate” to check for any conflicts of interest and prevent situations in which a director’s personal interests conflict with those of the company. Items to be checked for outside director candidates include 1) positions held concurrently, 2) mutual ownership of shares with suppliers and stakeholders, 3) controlling shareholders, and 4) transactions with related parties and outstanding amounts (total amount of debt). The current status of concurrent positions held by BOD members is disclosed in our business report.

BOD Composition and Competency Indicator (as of Dec 31, 2024)

Classification		Internal Directors	Outside Directors
Name		Moo-Je Sung	Dong-Pyo Kim	Cheol-Hong Kim	Seung-Beom Han
Gender		Male	Male	Male	Male
Position		CEO, ST Pharm	Professor, Department of chemical Engineering	CEO, HAON Accounting Corporation	Managing Attorney, the Way Law Firm
Date of Appointment		June 19, 2024	March 25, 2022	March 25, 2024	June 19, 2024
Board Skills Matrix	Accounting/Tax	V	-	-	-
	Leadership	V	V	V	V
	Business	V	-	V	V
	Laws	-	-	-	V
	Pharmaceutical Industry (R&D)	V	V	-	-
Board of Directors		○	●	○	○
Composition of Committees	Recommending Candidates for Outside Directors	○	●	○	-
	Evaluation and Compensation	○	○	-	●
	Audit	-	○	●	○

Committees under the BOD

Committee for Recommending Candidates for Outside Directors

The Committee for Recommending Outside Director Candidates has the right to recommend outside director candidates to be appointed at the shareholders' meeting, who are independent and have a level of expertise and independence that is in line with ST Pharm's strategic goals. To ensure the independence of the Committee, two-thirds of the committee members are outside directors (one inside director and two outside directors) and an outside director is appointed as the chairperson.

Evaluation and Compensation Committee

The Evaluation and Compensation Committee establishes standards for the performance evaluation and compensation of executives, and evaluates the performance of the company and the CEO annually and determines compensation based on the evaluation and compensation standards. To ensure the independence of the Committee, it is at least two-thirds composed of outside directors (one internal director and two outside directors), and an outside director is appointed as the chairperson.

Audit Committee

ST Pharm established the Audit Committee in 2024 in accordance with the Commercial Act and the Articles of Association to enhance transparency, strengthen internal controls, manage risks and realize sustainable management. The Committee is independent from management, with all members outside directors to ensure its objectivity. In addition, the members are appointed as independent individuals who have no conflicts of interest with the company. The primary roles of the Committee are designing and monitoring internal control systems, reviewing internal audit results and reporting them to the BOD, reviewing the appointment and replacement of outside auditors, and reviewing the transparency of financial reports and accounting systems. To strengthen the responsibilities of the Audit Committee, we intend to hold regular meetings at least four times a year, as well as to prepare and share Audit Committee Reports with stakeholders.

Risk Management Framework

Risk Monitoring

ST Pharm has a risk monitoring organization with the BOD and the Audit Committee at the center to respond to financial and non-financial risks. In June 2024, we strengthened our risk monitoring system by establishing an independent Audit Committee with authority over the company's business and audits (including accounting audits). The Audit Committee establishes and applies an annual audit plan for internal control and risk management, in consideration of the organization's business direction and risk environment.

Operational Risk Management

ST Pharm's Social Responsibility Management Committee manages matters related to management principles set forth in the “The Code of Corporate Ethics” and risks and opportunities identified in management activities. The subcommittee under the Social Responsibility Management Committee is developing strategies and frameworks to respond to financial and non-financial risks (climate change, human rights, supply chain risks, etc.) that arise in each business area, while each working organization is responsible for responding to risks through practical measures.

Environmental Social Governance