LOTTE

LOTTE
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Lifetime Value Creator

COMPLIANCE

A clean and prosperous world where everyone can trust each other completely.
That is the beautiful future we, the Lotte family, should aspire towards.

LOTTE COMPLIANCE

Meaning of Compliance

What is “compliance”?
Compliance refers to internal control devices that ensure a company is managed in accordance with laws, regulations, ethics, and broader social values.
It is a way to protect the company from internal and external malefactors by ensuring that members of the company follow the internal control system to prevent exposure to unwanted risks.
The value of compliance
  • Compliance is valuable as one of a company’s important management assets.
  • It has been analyzed that companies which abide by the law have increased financial value than companies which do not. Through the reasonable application of tools, management capacity can be enhanced and comprehensive risk management is also possible.
  • Compliance is an effective method of risk management and it is also a platform from which a company can leap forward into the global arena.

Tone at the top

Keys for compliance
One of the keys for compliance is confidence in the chief executive officer’s decisions. Starting from the chief executive officer’s power, compliance related processes can be carried out by independent organizations.
Declaration of the will of the chief executive officer
  1. Declaration of “Lotte Employees’ Code of Conduct” In 2000, Lotte declared a code of conduct for the first time in Korea, and then in 2015, the ethics code was revised to reflect a more practically applicable approach in this declaration: “Lotte Employees’ Code of Conduct.”
  2. National declaration of managerial compliance with the law In August, 2015, Lotte declared that it will seek the“improvement of governance structure and increased managerial transparency.” In November, 2016, Lotte declared that “it will become a company that prioritizes ethical values, social values, and qualitative growth.”
  3. Establishment of compliance committee In accordance with the promise made in 2016, a compliance committee consisting of third-party experts, directly under the supervision of the chairman, was established in May of 2017, to kick start managerial compliance with the law.
  4. Expansion of compliance organizations In late 2017, a foundation for compliance management was established at the recommendation of the compliance committee and subsidiaries in order to establish and reinforce organizations dedicated to managerial compliance with the law.

Lotte Group’s Compliance Activities

Under the mission statement “we enrich people’s lives by providing superior products and services that our customers love and trust,” we pledge that we will pursue growth as a company that is loved by the people and committed to social responsibility, and will follow the declaration of compliance management as follows below.

Article 1 (Code of conduct of employees)
  • We carry out our tasks with honest, diligent, and responsible attitudes, and establish our company’s culture based on mutual respect and trust.
  • We increase the value of company through transparent and efficient management, and always do our best to maximize benefit for the shareholders.
  • We set customer satisfaction as the top priority, and provide the best quality products and services that customers desire.
  • We establish clean, fair, and orderly relationships with partners and pursue mutual development through partnership reinforcement.
  • We respect our competitors, relevant regulations, and commercial practices to pursue fair and free competition.
  • We continue to do our best to grow as an environmentally-friendly company and contribute to the conservation of the earth and human prosperity.
  • We abide the law, and contribute to national and social interests, and we fully commit ourselves to the realization of our corporate social responsibility.
  • We respect human rights and protect the weak, setting respect and love for all humankind as our key value.
Article 2 (Duties and responsibilities of employees)
  • We have to hold the strictest standards of ethics for ourselves, and establish and maintain a culture where creditability, honesty, ethics, and mutual respect are maintained.
  • We must have a depth of knowledge and understanding of the regulations and internal company policies (referred as “related regulations” below) applicable to the execution of tasks, and constantly ensure compliance to the related regulations when carrying out daily tasks.
  • We, when we cannot judge how to respond to a particular situation, contact superiors, company compliance teams, legal teams, and so on to make the most appropriate and ethical decisions.
  • We, upon discovery of infringement of the related regulations, have to take appropriate actions to identify and prevent the unjust act in a prompt manner. When it is difficult to act ethically on behalf of the company, or the situation becomes known, we must cooperate with the compliance team.
Article 3 (Duties and responsibilities of the company)
  • The company should make sure that employees understand the related regulations and offer compliance training and education sessions on a regular basis to ensure fair and transparent execution of tasks.
  • The company should establish a management system so that employees can inspect and check whether related regulations are appropriately followed, monitoring and managing whether the practice is regularly carried out.
  • The company should protect employees who report suspicious activities which involves infringement of related regulations, and no harm should be inflicted on the employee.
  • The company should take appropriate actions to hold any employee accountable when an infringement of related regulations is confirmed.