PKX POSCO Holdings Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15D-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of September, 2023

Commission File Number: 1-13368

POSCO HOLDINGS INC.

(Translation of registrant’s name into English)

POSCO Center, 440 Teheran-ro, Gangnam-gu, Seoul, Korea, 06194

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒              Form 40-F  ☐

POSCO HOLDINGS INC. is furnishing under cover of Form 6-K:

Exhibit 99.1: An English-language translated documents of POSCO HOLDINGS INC.’s Corporate Governance Report for the year 2022.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

May 31, 2023

POSCO HOLDINGS INC.

[ Contents ]

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02-3457-1408            Email: silentj@posco-inc.com

02-3457-0747            Email: syjang0228@posco-inc.com

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POSCO HOLDINGS pursues advanced corporate governance that enhances shareholders’ value in the long-term and equally better interested parties’ rights. The management conducts responsible management with their expertise and reasonable decision-making and the BoD which consists of majority number of Outside Directors supervises and advises the management. This “Global Professional Management” is harmonized based on checks and balances and these principles, as proclaimed in Corporate Governance Charter are carried out within and outside POSCO HOLDINGS.

Detailed principles of corporate governance are reflected on internal regulations for corporate governance such as Articles of Incorporation, Operational Regulations of the Board of Directors, Corporate Governance Charter, etc., and also available on POSCO HOLDINGS’ website at http://www.posco-inc.com

POSCO HOLDINGS leadingly adopted Outside Directors Policy in 1997 and has continuously improved it for independence of BoD and to strengthen its roles.

Followed by vertical spin-off to the holding company in March 2022, POSCO HOLDINGS has been strengthening its Control Tower functions, including future business portfolio development and group business management functions.

The BoD consists of members with abundant experience and expertise from the fields of industry, academia, law, environment, accounting and public services in order to provide diversity and balanced-perspective for the management’s reasonable decision-making. In order to effectively supervise and intervene the management, the BoD consists of more than half of Outside Directors. In addition, the BoD is operated centered on outside directors, with the Chairmen of BoD and Special Committees are appointed from Outside Directors.

POSCO HOLDINGS’s BoD, as permanently established and the highest decision-making body, has the right to elect Representative Directors. Since 2006, the Chairman position of BoD has been separated from the position of the CEO and the Representative Director and has been appointed among Outside Directors by resolutions of BoD.

Outside Directors who have expertise and abundance of experience are recommended by Director Candidate Recommendation Committee or by shareholders’ suggestion then elected at the GMoS by shareholders’ votes. As of May 31, 2023, The BoD has total 12 Directors: 7 Outside Directors, 4 Inside Directors, and 1 Non-Standing Director.

The Articles of Incorporation was revised in accordance with the launch of the holding company in March 2022, and therefore, we currently operate five committees within the board of directors, including ESG Committee, Director Candidate Recommendation Committee, Evaluation and Compensation Committee, Finance Committee, and Audit Committee. Outside Directors are more than half of total number of Directors in each Special Committee. In addition, Director Candidate Recommendation Committee, Evaluation and Compensation Committee and Audit Committee consist of all Outside Directors in order to guarantee independent decision-making. Among Special Committees, Director Candidate Recommendation Committee and Audit Committee are mandatory for operation under the Commercial Act. However, the rest of 3 Special Committees were established voluntarily by the BoD for professionalism, independence and efficiency of the BoD. Finance Committee and Audit Committee are operated with experts who have experience in the fields of Industries, accounting/finance and public affairs and ESG Committee is operated with an environment expert.

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The company held a total of 11 board meetings in 2022, and the attendance rate of the directors was 100%. The special committees held a total of 27 meetings, and the attendance rate of the committee members was 100%. In addition, all independent directors participated in major activities of the board such as Board Strategy Sessions, Independent Director Meetings, ESG Sessions, Leadership Sessions, Strategic/Performance Review Sessions, and site visits. The company’s independent directors are devoting sufficient time and effort to fulfill their duties and are doing their best to fulfill their authority and role as directors.

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A. History and Notice of GMoS

POSCO HOLDINGS has held 3 Ordinary GMoS and 1 Extraordinary GMoS from January 1, 2021 till May 31, 2023. Information regarding GMoS such as date, location, agendas, etc. were provided to shareholders through Korea Exchange(KRX) public disclosure both in Korean and English, Data Analysis, Retrieval and Transfer System(DART) website by Financial Supervisory Service, U.S. Securities and Exchange Commission(SEC) website, company website, mail notice for domestic shareholders, Depositary Notice and Proxy Card for foreign DR shareholders, and so on.

The history and details of GMoS from January 1, 2021 to May 31, 2023 are given in the following table.

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B. Providing Information regarding GMoS

POSCO HOLDINGS held 3 Ordinary GMoS and 1 Extraordinary GMoS from January 1, 2021 to May 31, 2023. Generally, we provide dates and locations of GMoS through BoD resolutions by 6 weeks before the meetings. After resolutions on the GMoS agendas by the BoD, we provided information through Korea Exchange(KRX), Data Analysis, Retrieval and Transfer System(DART) website by Financial Supervisory Service, U.S. Securities and Exchange Commission(SEC) website, and our website. In addition, until 2 weeks before the GMoS, we provided GMoS notice, related supplementary information, guide for voting rights exercise, ballot paper, return envelope, etc. to every shareholder by mail. In order to provide information better for our foreign shareholders, we have been conducting the Korea Exchange public disclosure in English since our GMoS in March 2021.

Although the company conducted Notice of Convocation 4 weeks before the date of GMoS March 2022 and met one of the Corporate Governance Key Compliance Indicator, we have not met the standard in 2023 by conducting the Notice of Convocation 3 weeks(24 days) before the date of GMoS. We will try our best to provide sufficient information to shareholders 4 weeks in advance regarding the GMoS in the future.

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A. History of Shareholders’ Exercise of Voting Rights

(i) Date of GMoS and whether it has been held on Congested Dates for GMoS

From January 1, 2021 to May 31, 2023, the company has held 3 Ordinary GMoS, and participated in the Voluntary Compliance Program for GMoS Date Separation for all three years by setting GMoS dates on non-congested dates. The following are the details regarding the exercise of voting rights at the general meetings of shareholders held from January 1, 2021 to May 31, 2023.

(ii) GMoS Voting Results on Each Agenda

The company held 2 GMoS from January 1, 2022 to May 31, 2023 and the results on each agenda are as follows.

(ii) Introduction of ballot paper and electronic voting system and proxy solicitation

The company mails written ballot papers and envelops to all shareholders so that they can exercise their voting rights through written voting if they cannot attend GMoS. To promote participation by minority shareholders and protect their rights, POSCO HOLDINGS also operates the electronic voting system every year. We also recommend proxy solicitation, and we have uploaded the proxy solicitation form on the website to facilitate shareholders’ exercise of voting rights. Since March 2021, the company has broadcasted GMoS live under COVID-19 situation, and made efforts to ensure the participation of shareholders as much as possible by receiving shareholder inquiries in advance.

(iii) GMoS Voting Results on Each Agenda

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B. Company’s Effort for Shareholders’ Voting Rights Exercise

As described in A. History of Shareholders’ Exercise of Voting Rights, POSCO HOLDINGS provides voting via mail, electronic voting, and proxy solicitation in order to facilitate shareholders’ participation to GMoS. Especially for the GMoS held from 2020 under the COVID-19 situation, the company promoted non-contact exercise of voting rights such as voting via mail or electronic voting through company website. Additionally, we provided e-mail address and phone number for inquiries regarding GMoS through the CEO’s letter via mail with the notice of GMoS convocation, and actively responded to shareholders’ inquiries.

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A. Shareholder Proposal Right

(i) Guidance of shareholder proposal procedures

Regarding shareholder proposal standards and procedures for Outside Director candidate recommendation, the company prescribed in the Article 30 of the Articles of Incorporation that by exercising shareholder proposal right in accordance with relevant laws, shareholders may recommend Outside Director candidates to Director Candidate Recommendation Committee.

(ii) Standards and procedures of shareholder proposal

When the recommendation of an Outside Director candidate is received as shareholder proposal, the Investor Relations(IR) team checks whether it meets the shareholder proposal requirements. After that, the Director Candidate Recommendation Committee verifies the candidate’s eligibility and recommends to the GMoS as an Outside Director candidate.

(iii) History of shareholder proposals and implementation status

From January 1, 2021 to May 31, 2023, there was no shareholder proposal with regards to GMoS agenda or no public letter received from institutional investors as part of the Stewardship Code. Accordingly, implementation status related to shareholder proposal or public letter of institutional investors have been omitted. In the future, if there is any shareholder proposal related to agenda of the GMoS, the company will respect shareholders’ opinions so that they can freely ask questions and request explanations at the GMoS.

B. Support for Exercise of Shareholder Proposal Right

Though the company does not provide separate guidance regarding the shareholder proposal procedure as stipulated by law on the website, shareholders who possess the right to propose matters as prescribed by law are notified of the recommendation process for independent director candidates through electronic mail or other means to facilitate the recommendation of such candidates.

In order to enhance communication with shareholders and secure a diverse pool of independent director candidates, the “Shareholder Recommendation System” has been introduced since 2018, allowing shareholders to directly participate in the process of recommending candidates. Candidates recommended by shareholders undergo the same qualification review process as other candidates by the Advisory Committee for Independent Director Candidates.

About 3~4 months before Ordinary GMoS, a letter from the Chairman of Director Candidate Recommendation Committee is sent to shareholders who can exercise shareholder proposal rights under the Commercial Act, suggesting recommendation of one Outside Director candidate per one shareholder and the recommendation is received by e-mail or mail. For the Ordinary GMoS held in March 2023, the recommendation period was from November 10, 2022 to December 15, 2022.

For the Ordinary GMoS in March 2019, one candidate(law major, professorship, female) was proposed for Outside Director through the Shareholders’ Recommendation procedure and the Outside Director Candidate Recommendation Advisory Panel included the candidate as one of the potential candidates and proceeded discussion. It was concluded that the candidate did not meet the need of the company and was not recommended to the Director Candidate Recommendation and Management Committee. Subsequently, the related information was provided to the recommended organization.

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A. Shareholder Return Policies

(i) Shareholder Return Policy and company’s future plan

In January 2020, the company announced its first mid-term dividend policy aimed at enhancing transparency and predictability regarding dividends. The policy set a target dividend payout ratio of approximately 30% from 2020 to 2022. Subsequently, with the expiration of the existing medium-term dividend policy, the company announced its medium-term shareholder return policy for the next three years (2023 to 2025) in April 2023. Under this policy, starting from 2023, the company plans to allocate 50-60% of the annual Free Cash Flow (parent only) as a funding source. The company aims to distribute a basic dividend of KRW 10,000 per share and utilize the remaining funds for additional returns to shareholders, thereby promoting shareholder value and stable dividend distribution.

In addition, by partially amending the Articles of Incorporation in 2016, the company introduced quarterly dividend system so that quarterly dividends can be paid in cash by resolution of the BoD and the quarterly dividends has been continued since the 2nd quarter of 2016.

In April 2020, the BoD resolved on a share repurchase trust contract in order for stable management of stock price and improvement of shareholders’ value. During the contract period, from April 13, 2020 to April 12, 2021, the company finished repurchasing shares worth KRW 1 trillion (4.49 million share, 5.1%) which is the contract amount. Additionally, in August 2022, the company conducted a share cancellation of 3% of the issued shares to further enhance shareholder returns and increase shareholder value.

Furthermore, at the 55th GMoS in March 2023, the company amended the Articles of Incorporation to change the year-end dividend record date to a date determined by the BoD. This amendment lays the foundation for introducing a shareholder-friendly dividend procedure, enabling shareholders to make investment decisions after the dividend amount is publicly disclosed.

(ii) Method of guidance on shareholder return policies, etc

When the company establish a new shareholder return policy and conduct a quarterly/final dividend resolution, treasury stock purchase, or treasury stock cancellation, we disclose the details without delay and inform our shareholders in detail through IR events and announcement on the company website. In addition, shareholders can conveniently check the company’s shareholder return policy and related information such as dividend policy, treasury stock status, and dividend inquiry on our IR website.

B. Information Provision of Shareholders Return Policies

In April 2020, the company website related to shareholder return policy was re-organized to provide information on the mid-term dividend policy, dividend details and amounts, and information on share repurchase in Korean and English. In addition, the POSCO HOLDINGS dividend information service has been established and operated as a separate website to enable online search of dividend details from the 3rd quarter dividend of 2020. Through the service, information related to shareholder return, such as the company’s investor relations materials, mid-term dividend policy, and share repurchase result is provided in an integrated manner.

(POSCO HOLDINGS dividend information service)

: https://dividend.posco.co.kr:4452/F52/F52B10/jsp/home/posF52BMain.jsp

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A. Shareholder Return Status

(i) Shareholder Return Status for the past 3 years

During the mid-term dividend policy period (2020-2022), the company carried out the largest shareholder returns of KRW 3,384 billion including cash dividend of KRW 2,816 billion(dividend payout ratio of 24.8%) and retirement of treasury shares (3% of total issued shares which is KRW 568 billion in terms of book value). The total shareholder return rate including both cash dividends and retirement of treasury stock amounts to 29.8%.

The company has set shareholders return target of approximately 30% in order to improve predictability and transparency on dividends at the BoD in January 2020. And when calculating a dividend payout ratio, based on profit attributable to owners of the controlling company in consolidated basis, by adjusting one-off expenses without cash outflows the company reinforced linkage with business performance.

In 2020, based on KRW 1,816 billion, profit attributable to owners of the controlling company in consolidated basis is KRW 1,602 billion and one-off expenses without cash outflows is KRW 214 billion, the BoD discussed applying dividend payout ratio of 38.7% (adjusted dividend payout ratio of 34.2%). The annual dividend per share was resolved to KRW 8,000 and the total annual dividend of KRW 620 billion was paid.

In 2021, based on KRW 7,143 billion, profit attributable to owners of the controlling company in consolidated basis is KRW 6,617 billion and one-off expenses without cash outflows is KRW 526 billion, the BoD discussed applying dividend payout ratio of 19.4% (adjusted dividend payout ratio of 18.0%). The annual dividend per share was resolved to KRW 17,000 and the total annual dividend of KRW 1,286 billion was paid.

In 2022, based on KRW 3,493billion, profit attributable to owners of the controlling company in consolidated basis is KRW 3,144 billion and one-off expenses without cash outflows is KRW 349 billion, the BoD discussed applying dividend payout ratio of 28.9% (adjusted dividend payout ratio of 26.1%). The annual dividend per share was resolved to KRW 12,000 and the total annual dividend of KRW 910 billion was paid. In addition, to enhanced the shareholder value, the company has canceled 3% of the total issued shares (KRW 568 billion based on book value) at BoD held in August 2022.

The shareholder return status for the last 3 fiscal years is as follows.

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(ii) Quarterly Dividend Status

The company has introduced quarterly dividend system since 2016, and has been maintaining shareholder return through quarterly dividends throughout the year. The details of quarterly dividends for the last 3 fiscal years are as follows. The company has not paid stock dividends or differential dividends in the last 3 fiscal years.

(KRW, Billions of KRW)

B. Shareholder Right for Shareholder Return

The mid-term dividend policy was established at the BoD in January 2020 to enhance transparency and predictability related to dividends by reflecting the expectations and demands of shareholders. The company has set shareholder return target of approximately 30% of dividend payout ratio, and adjusted one-off expenses without cash outflows from profit attributable to owners of the controlling company so that dividends linked to business performance are paid out.

The company has recently established a new shareholder return policy for the next three years (2023-2025) in order to offer balanced shareholder returns through business growth and stable dividend. We have Established a shareholder return policy based on ‘free cash flow’ in consideration of the need for future growth investment. In order to achieve sustainable growth as a global eco-friendly future materials provider, we also have adopted base dividend to minimize the risk of v in shareholder returns due to the uncertainty of free cash flow. In addition, we have amended the Articles of Incorporation to adopt advanced dividend procedures of ‘determining dividends before the record date’. We will continue to make ongoing efforts to transparently communicate with shareholders and actively reflect their rights in relation to shareholder returns.

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A. Stock Issuance Information

(i) Status of Issued Shares

According to the Articles of Incorporation, the total number of shares which the company is authorized to issue is 200,000,000 shares. As of May 31, 2023, 96,480,625 common shares were issued 11,909,395 of them were retire, resulting in total of 84,571,230 common shares remained.

(ii) Voting rights among different classes of shares

So far, the company has not been applied to different classes of shares, and therefore, separate description related to the shares has been omitted.

B. Voting Rights on Issued Shares

The company does not have any different classes of shares, but issued only common shares. Shareholders exercise fair voting rights in accordance with the principle of 1 voting right per 1 share.

For reference, at the 54th GMoS in March 2022, the number of shares holding voting rights was 75,625,572 which excludes the company’s treasury stock, 11,561,263 shares. At the 55th GMoS in March 2023, the number of shares holding voting rights was 75,849,177 which excludes the company’s treasury stock, 8,722,053shares.

C. Communication with Shareholders

1) Investor Relations Activities

(i) IR activities

In January, April, July, and October of each year, we hold annual and quarterly earnings announcements in the form of conference calls presided by the CSO. After the announcement, the company regularly conducts non-deal roadshows (NDR) for institutional investors in Korea, Asia, the Americas, and Europe, and frequently participates in domestic and international conferences held by securities companies to have direct communication on investors’ interests and requests.

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We also strives to strengthen market confidence in key business strategies by providing top management access to key shareholders, and CSO, the Head of IR team and others if necessary are directly involved in overseas NDRs to share the company’s performance and mid and long-term strategic direction with investors, and thereby strive to provide higher-level feedback on shareholder interests. Especially, since 2018, we have provided opportunities for direct communication between Outside Directors and shareholders to improve understanding of the company’s corporate governance and to strengthen communication with shareholders.

IR team’s email address is available on the company website and shareholders can send comments or questions to the IR team through the Contact Us page. The IR representative respond to shareholder inquiries received by e-mail after checking them. In addition, shareholders can reach IR team through IR telephone as well.

In addition, the company has established a section for IR meeting request on the website for investors who want to visit the company directly and holds frequent meetings, and provides diverse IR activities that reflect investors’ interests.

From February 2020 to December 2021, due to widespread of COVID-19 and social distancing policy as one of the counter-measures, it was difficult to hold face-to-face meetings. But with frequent conference calls, we are having active communication with domestic and foreign investors and working to expand our investors pool. In addition, we are actively communicating with investors through conferences and conference calls on ESG-related issues that have recently emerged.

In order to strengthen communication channels with our investors, we have started to provide online streaming service that is also available to our minority shareholders from 2022 1Q Earnings Release session. Furthermore, in March 2023, the POSCO HOLDINGS IR’ YouTube channel was launched to respond to the needs of individual investors and strengthen communication with the shareholders.

Video contents such as tech talk and market talk are produced by EV battery materials experts to introduce the overall EV battery material business. Also, virtual tour contents are provided in order to give detailed introduction of POSCO HOLDINGS’ new businesses in Korea and overseas. IR team answers the questions that come through company website(http://www.posco-inc.co.kr). We also try to strengthen communication with our minority shareholders by actively responding to their inquires over the phone.

from January 1, 2022 to March 31, 2023

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(ii) IR team contact information

The company discloses e-mail address of the IR department on the company website, and shareholders can send opinions or questions to the IR department through the inquiry section. Inquiries to shareholders received by e-mail are reviewed and answered by the IR persons in charge.

In addition, it is accessible to an IR-only phone through the company’s representative phone posted on the company website, and we respond to shareholders’ inquiries.

In addition, the company information including IR materials are disclosed to all shareholders in a timely and fair manner at the Korea Exchange electronic disclosure system, KIND (http://kind.krx.co.kr), the Financial Supervisory Service electronic disclosure system DART (http://dart.fss.or.kr), and the company website, etc.

(iii) Information for Foreign Shareholders

The company operates an English website for foreign shareholders, and inquiries can be forwarded to the IR department by using the email address of the IR department or the Q&A section. Inquiries received are answered after checks by the IR persons in charge. In addition, the company has been participating in the Korea Exchange’s English disclosure strengthening campaign since 2020 and has strengthened disclosure of information to foreign investors by actively utilizing the English disclosure of the electronic disclosure system, KIND.

As the company listed American Depositary Receipts(ADR) on the New York Stock Exchange (NYSE), we submit English disclosures to the EDGAR system (https://www.sec.gov/edgar) of the U.S. Securities and Exchange Commission(SEC). In addition, the IR contact information is provided on Form 20-F submitted to the SEC, so that shareholders can submit inquiries.

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(iv) Fair Disclosure

The company is actively utilizing the fair disclosure system to provide shareholders with sufficient information in a timely manner. In particular, fair disclosures and informative disclosures related to performance announcements are conducted on a regular basis in every quarter. The list of fair disclosures from January 1, 2022 to May 31, 2023 are as follows:

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(v) Unfaithful Disclosure Corporation

The company has not been designated as an unfaithful disclosure corporation from January 1, 2022 until May 31, 2023 and therefore, the table for the list of designation of unfaithful disclosure corporation and its details has been omitted.

D. Provision of Corporate Information to Shareholders

As referred on C. Communication with Shareholders, the company provides company information including IR materials on its website and public disclosure websites such as DART(http://dart.fss.or.kr), KIND(http://kind.krx.co.kr), etc. fairly to all shareholders in a timely manner. In addition, as the company listed American Depositary Receipts(ADR) on the New York Stock Exchange(NYSE), we submit English disclosures to the EDGAR system (https://www.sec.gov/edgar) of the U.S. Securities and Exchange Commission(SEC). The company runs website with English and provides English translations of IR materials, independent auditors’ quarterly, interim review reports and annual audit reports thereby, giving a fair access to the corporate information to all of its shareholders, whether domestic or foreign.

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A. Corporate Control System related to Internal Transactions and Self-Transaction

(i) Corporate Control System of Internal Transactions and Self-Transaction

In order to prevent internal transactions for the purpose of private profits by management or controlling shareholders, the company has prepared separate internal control related rules. First of all, the internal accounting management regulations are managed by the resolution of Audit Committee. And regarding transactions of funds, assets, and securities over certain amounts conducted by the company’s largest shareholder, including its related parties, and the company’s related parties are ruled to be resolved by the BoD.

The company established ESG committee to deliberate and decide on large-scale internal transactions of from KRW 5 billion to less than KRW 100 billion, and in the case of large-scale internal transactions of from KRW 100 billion or more, the Committee conducts prior deliberation and it needs approval from the BoD. Please refer to ‘VI.3. Board of Directors(BoD)” for the details of internal transactions decided or deliberated by the ESG Committee.

(ii) Comprehensive board approval for internal transactions with affiliated companies, managements or controlling shareholders.

In accordance with Article 542-9 of the Commercial Act, the company gets comprehensive approvals from the BoD in advance if expected transaction amounts with affiliated companies during the current fiscal year exceed 5% of the total assets or total sales of the previous year. There was no such comprehensive approval in 2022.

(iii) Transactions with major shareholders and related parties

In 2022, the Company did not provide credit grants to major shareholders, assets transfer or business transactions with major shareholders. The major transactions between the company and related parties (affiliated companies) are as follows.

<Reference : POSCO HODLINGS’ 2022 Business Report – X. Details of transactions with major shareholders, etc >

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As of December 31, 2022, the details of receivables and payables between the company and the related parties (affiliated companies) are as follows.

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A. Shareholder protection policy in the event of changes in corporate ownership structure or major business

POSCO declared the ‘POSCO Charter of Corporate Citizenship’ on July 25, 2019 and affirmed that under its management philosophy of ‘Corporate Citizenship : Building a Better Future Together’, will engage and communicate with all stakeholders including customers, employees and shareholders, and continually seek changes and innovation in pursuit of sustainability by ultimately creating greater value for the company. Accordingly, the company is implementing a shareholder protection policy that actively collects opinions of shareholders, including minor shareholders, through various communication channels such as homepage and representative phone. In addition, if a listed company decides at a general shareholders’ meeting to have a significant impact on shareholders’ interests, such as acquiring, merging, or transferring major business areas, shareholders who oppose the resolution can exercise their right to purchase shares at a predetermined price.

B. Change in governance structure or major business changes and shareholders protection during reporting fiscal year

Recently, on Dec 10, 2021, the company gathered BoD meeting to decide the vertical spin-off to transfer to a holding company structure. At the meeting, BoD approved the plan for the vertical spin-off, announcement for Special General Shareholders’ Meeting, and the date of the spin-off. Also on the same day of the BoD meeting, the company held a investor day to explain the plan to transfer into holding company structure to investors, including foreign, institutional, and minor shareholders.

Though the conference call was held towards major domestic and overseas institutional shareholders, the company uploaded the presentation material for the spin-off and Q&A of the investor day on the company website in order to help all the investors’ including minor investors understanding.

Prior to the Special Shareholders’ Meeting (Jan 28, 2022), to gain the approval for the vertical spin-off, the company held individual conference call led by the executive level to explain on the plan to both domestic and overseas investors (held 45 meetings, from Dec 13, 2021 to Jan 21, 2022) and heard the investors’ thoughts on the plan. Moreover, to actively engage with minor shareholders, the staff engaged personally on answering the inquiries raised on the company website and explained the agenda.

To prohibit the conflict of interest of existing shareholders and any harm in shareholders’ value by possible dual-listing after the spin-off, the company decided to keep the new company (steel) unlisted after the spin-off. To guarantee the decision, clauses related to listing as public or third-party offering were not included in the Articles of Incorporation of new company, POSCO, and included clauses stating that in case the new company desires to come public, it must win the recognition of the Shareholders’ Meeting of POSCO Holdings (“existing company”). This was ensure the shareholders that the company is certain to keep the steel business unlisted. Not only steel, but also new growth businesses will remain unlisted, in case of a spin-off. Such decisions enabled the company to solely keep the growth value of unlisted subsidiaries in line with the shareholders’ value of the holding company, a form of an advanced global governance structure. The company has publicly disclosed the policy through CEO letter (Jan 5, 2022) uploaded on the website.

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The company also disclosed the progress of the mid-term strategy on 1Q 2022 earnings result material when announcing the vertical spin-off. By providing on-line streaming service of the earnings release conference call, the company levelled up the transparency of information to all shareholders.

This vertical spin-off is simple vertical spin-off that accord with the Article 530-2 or 530-12 of the Commercial Act, and therefore, appraisal right by a shareholder of dissident shareholders do not apply to the case.

If the major changes in business and corporate governance structure take place in the future, the company will actively utilize public filing, investor events, homepage disclosure, and letters, to help the investors, including the minor shareholders, to understand the decision and plans of the company. Moreover, we plan to actively listen to opinions of minor shareholders through diverse communication channels such as channels as company website, official IR email account and calls. The company will also try its best to protect the shareholders’ rights by maintaining the policy which is un-listing the newly spin-off companies.

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A. Operation Policy of BoD

The BoD of the company decides important matters of the company, such as setting business goals and core business strategies for the benefit of the company and shareholders in accordance with relevant laws and the Operational Regulations of the Board of Directors. And the concrete roles of the BoD are specified in the Article 38 (1) of the Articles of Incorporation and the Operational Regulations of the Board of Directors.

The BoD may establish special committee pursuant to the Article 38 and 45 of the Articles of Incorporation and delegate authority to the committee after determining scope of authority and operation. Details of the operation of the special committee except for the audit committee are separately determined by the Operational Regulations of the Board of Directors.

Other than BoD and Special Committees, strategic sessions are held in which Board members and major non-registered executive officers participate in order for BoD’s effective fulfillment of roles. There are also regular meetings among Outside Directors to collect opinions proactively on agendas of the BoD.

Each agenda is thoroughly reviewed before making decisions by the BoD and if necessary, opinions are collected through a pre-meeting report and reflected in the agenda. Also, regular visitations of major business sites are conducted to enhance understanding on businesses.

(i) Deliberation and Report Items for BoD specified in the Articles of Incorporation and the Operational Regulations of the Board of Directors

As of submission date of this report, the matters for the agenda of BoD and Special Committees are as follows.

(As of May 31, 2023)

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(ii) Main contents and effects of agendas of Board authority the that are delegated to the Special Committee or Representative Director among the authorities of BoD

In addition to what is mandatory under relevant laws, the Company sets the following items as deliberation items so that the Board members can vote on the company’s major management matters.

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(iii) Matters of Board authority that are delegated to the Special Committee or Representative Director

According to Article 38(2) and Article 45 of the Articles of Incorporation, as well as the sub-clauses of Chapter 4 of Operational Regulations of the Board of Directors, the BoD may establish Special Committees within the Board to deliberate the agendas specified in the regulations. Each Special Committee notifies the results of its deliberations or decisions at the subsequent BoD meeting, in accordance with Article 21 of Operational Regulations of the Board of Directors. If a Special Committee meets separately from the BoD, it also notifies the individual directors of the results. Furthermore, according to Article 21 of Operational Regulations of the Board of Directors, the Board of Directors can reconsider resolutions made by the Special Committees except for matters specifically designated as the exclusive authority of Special Committees. Please refer to the details indicated in Principle 4-1 regarding the current status, key roles, and composition of the Special Committees within the Board. As of the date of disclosure, the agendas for deliberation and reporting by the Special Committees are as follows.

(May 31, 2023)

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B. Whether BoD effectively performs business decision-makings and business supervision

Our management performs responsible business practices based on expertise and reasonable decision-making and the BoD, centered with independent Outside Directors, supervises and advises the management. The initial plans such as strategic direction of the POSCO Group, business plans, etc. set out by the management, but after active discussions at the Board level including strategic sessions, meetings of Outside Directors, etc. opinions of the Directors are actively reflected.

In the BoD strategic session held in April 2022, discussions were held on “hydrogen business vision and execution strategy”, “secondary battery material business growth acceleration strategy”, and “global decarbonization trend and direction of steel business”. The ESG session in August 2022 discussed key ESG issues within the group, including ‘POSCO Carbon Neutral Performance and Plan’, ‘POSCO FutureM 2050 Carbon Neutral Strategy and Action Plan’, ‘POSCO Safety Activities and outcome of the activities’, and ‘POSCO International Overseas Business Issues and Progress’. In the strategy/performance review session held in November 2022, discussions on ‘Group Business Portfolio Strategy’, ‘Business Performance and Mid-term Strategy by Major Businesses’, and ‘Management Plan for 2023’ were conducted.

In addition, at the Outside Director meetings held in June and October 2022, governance-related matters such as “Leadership Coaching and Information Exchange Program” and “BoD’s Direction and Role of the Holding Company”.

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A. The CEO Succession Policy

(i) Establishing succession policy and operating body

In accordance with Article 29 of the Articles of Incorporation, BoD decides candidates for CEO and CEO Candidate Recommendation Committee verifies eligibility of the candidates. After that, BoD recommends a candidate to the GMoS. After electing the candidate as an Inside Director at GMoS, BoD appoints the Director as Representative Director then the succession process of Representative Director and CEO is completed.

(ii) The main contents of succession policies, such as the establishment and operation of succession policies, selection, management and education of candidates

In the process above, the succession council identifies and proposes candidates to the BoD that meet qualifications set by the BoD in order for independent and transparent CEO appointment. Also, by conducting multi-faceted and in-depth qualification reviews of candidates, who are nominated by the BoD, from the CEO Candidate Recommendation Committee which is composed of all Outside Directors, the company operates management succession process with separation of roles and authorities between organizations. In particular, in May 2022, the Basic Qualification Requirements for CEO Candidates, which are the qualifications set by the board of directors, were newly established in order to block external influences in the process of succession and establish a fairer and more transparent succession process.

The current succession policy is applicable in contingent situations, and in 2018, even in the sudden succession process, there was a case that the succession of the CEO was successfully completed according to the established policy. In addition, since the company has two Representative Directors, it is possible to conduct internal or external duties even when the Representative Director and the CEO is not able to conduct the roles.

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(iii) Training status during the period subject to disclosure

In order to systematically train candidates for the top management, the company selects and manages key talents from executive officers and managerial level of employees in each major work areas since 2017. This is a year-round operation of selection-nurturing-evaluation, and every year, all core talents are re-evaluated, excluding those with low performance and competency development, and new talents are discovered so that the candidate group for CEO can be nurtured practically. In order to improve global management competency and leadership, the selected personnel are nurtured by performing major internal tasks, completing training at major institutions, and having 1:1 mentoring with external experts. In particular, in 2022, we have established a “Future Entrepreneurship Talent Development” education program to cultivate managerial candidates from a long-term perspective. External experts are operating the “Future Entrepreneurship Talent Development” education program to enhance the entrepreneurial capabilities of potential CEOs and cultivate the necessary management expertise and insights for selected key personnel.

Furthermore, we are strengthening the sharing of CEO candidate development achievements through leadership sessions between external directors and CEO. This is to ensure a fair and smooth succession in the future.

(Reference) The education program for key personnel is also disclosed to external stakeholders through the POSCO Holdings Corporate Citizenship Report. (Employee career development and fair evaluation>Key personnel development) * ‘21 Corporate Citizenship Report (p. 88)

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A. Operation of Internal Control Policy

1) Risk Management

(i) Risk Management

As a holding company, the company operates a risk management system that checks various risks that may occur throughout the group’s management activities and reports monitoring results and countermeasures of some critical issues to the BoD. We classify risks into business risks, ESG risks and non-business risks, and perform practical risk reduction activities with the highest priority, such as managing each case by the related departments.

Business risk is managed by Corporate Strategy Team, Finance Team, and three teams in charge of Group’s main business : Steel Business Team, Green Infrastructure Team and Green Materials and Energy Team. The Corporate Strategy Team is in charge of Group’s strategy and investment related risks while Finance Team is in charge of financial risks such as exchange rates and funds. Three teams in charge of Group’s main business monitor risks related to the Group’s business operation. POSCO Research Institute monitors external risks such as industrial and financial market trends, changes in business conditions in global expansion areas, and strategies of competitors at all time. Monitoring results are regularly reported to relevant departments or distributed throughout the companies through Global Information Hub (GIH), the group information hub.

ESG risks are managed by ESG Team which established a group-level ESG issue response and management system to systematically manage and effectively respond to the requirements of internal and external stakeholders. Other risks such as ethics and compliance, which are non-business risks, are managed by a risk self-prevention system centered on the ethics management section under the ESG team and the legal team. Major reviews, countermeasures, and key ESG issues identified through risk management are regularly reported to the Board’s specialized committees (Finance Committee, Audit Committee, ESG Committee) and the Board of Directors. Risk monitoring results and countermeasures are regularly reported to the BoD’s Special Committees which are Finance Committee, Audit Committee, ESG Committee, and the BoD.

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(ii) Compliance Management

In order to check compliance with the compliance control standards, the company established and implemented the compliance control standards by the resolution of the BoD in May 2012 and established related internal regulations and has operated it since August 2017. We hire compliance officer with legal qualifications. The compliance officer monitors the legality of company management activities in accordance with the compliance control standards, and faithfully supports the company’s organizations and businesses through various compliance support activities such as departmental self-inspection through checklists and preemptive management of major risk areas, etc. The company discloses the details of the appointment and operation of compliance officers in the Business Report at the DART website operated by the Financial Supervisory Service, and the results of these activities are compulsorily reported to the BoD.

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(iii) Internal Accounting Management

The company proactively adopted ICoFR(Internal Controls over Financial Report) in 2001, first introduced in the Republic of Korea. Since then, the company has improved the internal control through self-assessment every fiscal year. As listed on the New York Stock Exchange the company went through the audit with separate and consolidated scopes respectively, conducted by independent auditors under the Sarbanes-Oxley Act enforced in 2002. In order to enhance the effectiveness of the internal control, the company extends the coverage of the internal control across the POSCO group.

The Act on External Audit of Stock Companies, recently revised, states several measures to promote effectiveness of the internal accounting management system. In particular, as the audit level for the internal control has been upgraded from ‘review’ to ‘audit’, the company completely re-designed internal control activities accordingly. Following revised guidelines of internal control committee, the company established the department whose function is solely to review and support the company’s internal control, made amendments to the company’s existing guidelines and rules, developed education plans on the internal control, and improved the existing system in order for the compensation to be tied with the evaluation on the internal control.

The company evaluates the effectiveness of the internal control every fiscal year, Representatives of the company report the results to the GMoS, the BoD, and the Audit Committee. The company assesses the operation of the system in two parts – design assessment and operation assessment. In the design assessment, the company detects and takes preventive approach to errors and irregularities that might affect the financial statements. The company checks the adequacy and completeness. In the operation assessment, the company evaluates evidence with which it is proved that those who carry out each control activities have conducted their jobs in the same manner as what is described in the control statement. Any potential improvements found in the process of evaluation are referred to related personnel such as independent auditors, departments in charge, actual conductors of control activities and lead to practical enhancements.

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(iv) Disclosure Information Management

The company established and operates guidelines for managing disclosure information, and informs related departments and subsidiaries on those matters. In addition, by operating review process, we review in advance whether it is necessary to disclose certain agendas that will be resolved at the BoD or at the Special Committees under the BoD. In the case of information that is deemed necessary for disclosure, the person in charge of disclosure will report it internally after reviewing accuracy of the information with the relevant departments. After review and approval by the head of the disclosure department and disclosure officer, the relevant contents are disclosed in a timely manner. In the case of regular reports such as Business Reports, internal control procedures such as confirmation and signatures by the heads of the departments responsible for disclosure contents and approval by the disclosure officer are established and followed.

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A. The Status of BoD Composition

(i) BoD, Special Committee under BoD and the BoD related Organizational Chart

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(ii) BoD and Composition of BoD as of submission of the report

Composition of BoD as of submission date of this report is as follows:

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(iii) BoD and Composition of Special Committees under BoD as of report submission

Composition of Special Committees under BoD as of submission date of this report is as follows: