Ethical Management

Goal

DL adopted a fair trade compliance program (CP) in 2003 to practice more vigorously the righteous management that it has continuously promoted and to conduct fair and transparent corporate activities.

Overview

Fair trade compliance means companies’ compliance with the prescribed laws and regulations on fair competition.
The fair trade compliance program is a compliance system operated by companies to comply with fair trade laws and regulations.

Dear fellow employees

We at DL have adopted a CP (compliance program) to perform fair and transparent corporate activities autonomously in the market environment as pursued by the Fair Trade Act by actively practicing the righteous management that we have been promoting continuously.

Now is the era when ethical management level becomes a core yardstick determining a company’s competitiveness. Unless the global standards with the two axes of fairness and transparency are combined with company management, growth—or even survival—will be impossible.
A firm’s true competitiveness can be achieved through fair competition; profits gained through unfair practices or trade can be helpful to firms for the short term but will weaken their competitiveness for the long term. We need to be fully aware of this.

DL has constructed the internal supervision system and compliance manual to have the culture and climate take root in order to abide by the competition norms as well as prevent violations of the Fair Trade Act. If any employee violates the Fair Trade Act, our company’s image can sharply decline, and hefty fine or civil or criminal punishments may be imposed. In other words, enormous tangible/intangible losses can be incurred.
I urge all our employees to pay continuous attention to and practice the CP so that a corporate culture wherein various laws and regulations are observed autonomously through the CP can be fostered.

CEO of DL

CP (Compliance Program)

What is CP?

CP (Compliance Program) is a law-abiding system operated to abide by fair trade laws and regulations. The program is designed to prevent the loss/damage of the company by preventing employees from violating laws and to improve corporate values and competitiveness.

※ What are fair trade laws and regulations?
They refer to the following various laws and regulations enacted to promote competition and maintain fair trade order: Monopoly Regulation and Fair Trade Act, Act on Clause Regulations, Fair Labeling and Advertising Act, Fair Subcontracting Act, Act on Installment Payment Transactions, Act on Sales by Visiting, and Act on Consumer Protection in E-commerce.

Usefulness of CP
1. Prevention of firm’s losses/damages arising from violations of laws and image enhancement

If the CP is successfully operated, the company can prevent or minimize monetary burden including fines, lawsuit expenses, and compensation for damages due to the Fair Trade Commission’s investigation and resulting punishment. It can also avoid corporate image decline caused by the punishment.

The successful operation of the CP can contribute to the promotion of internal and external reliability as well as enhancement of corporate social values for the long term. It can also improve customers’ trust in companies, thereby making contributions to a firm’s financial structure improvement.

2. Shaping a fair trade compliance culture

The active operation of the CP enhances employees’ law-abiding consciousness; it can become an opportunity to internalize such consciousness and also establish a fair trade compliance culture for various business partners.

It can contribute to the establishment of transparent trading order with diverse partner firms including subcontractors.

3. Contribution to the establishment of fair trade order

Companies make efforts to comply with fair trade-related laws and regulations considering the ever-changing business environment through CP operation.

As a result of such effort, unnecessary administrative waste according to ex-post excessive punishment of the government is reduced, so a virtuous circulation through which capabilities can focus on better policy development and system improvement can be realized.

Eight major factors for adopting CP
1. Preparation and execution of CP standards and procedures

Necessary standards and procedures should be executed so that employees can clearly recognize job-related fair trade laws and regulations and practice them.

2. CEO’s commitment to and support for law compliance

The CEO should publicly express his/her commitment to abide by the policy of the fair trade laws and regulations and vigorously support CP operation.

3. Appointment of compliance manager in charge of CP operation

The top decision-making body including the board of directors should appoint a compliance manager and assign responsibility for the effective operation of the CP.

4. Compliance manual preparation and use

The compliance manual is prepared under the responsibility of the compliance manager, and it contains the fair trade laws and regulations and CP standards and procedures.
The manual should be prepared in the form of document or electronic file that all employees can easily access and use.

5. Continuous, systematic compliance education

Effective education should be regularly conducted for employees in fields having high possibility of fair trade violations regarding compliance with CP standards, procedures, and fair trade laws and regulations, including top management (CEO) and purchase and sales departments.

6. Establishment of an internal monitoring system

A rationally planned monitoring and audit system should be established and operated to prevent or detect any violations early.
The monitoring and audit results should be regularly (at least twice a week) reported to the top decision-making body including the board of directors.

7. Punishment of employees violating fair trade laws and regulations

The company regulations prescribe the punishments corresponding to the level of violations against the employees responsible for the violation of fair trade laws and regulations.
Upon finding a law violation by an employee, active response should be made, and prevention should be carried out to prevent any similar violation.

8. Effectiveness evaluation and actions for improvement

For the CP to be continued and operated effectively, the inspection and evaluation on CP standards, procedures, and operations should be performed, and the resulting actions to improve them should be taken.

CP rating system
1. Goal of rating

By objectively and fairly rating the CP system operation performance, the problems of the existing CP operation can be identified, and actions can be taken accordingly. This can consistently contribute to the firm’s law compliance management.

2. Incentives by CP rating
Rating (valid period: two years) Exemption from ex officio investigation Order to announce publicly Awarding the evaluation certificate Fair Trade Commission Commissioner’s Commendation
AAA (most excellent) 2 years Exemption Upon acquiring it for two consecutive years
AA (excellent) 1 year and 6 months Reduction Upon acquiring it for two consecutive years
A (relatively excellent) 1 year Reduction -
B (moderate) - - - -
C (insufficient) - - - -
D (very insufficient) - - - -

Operating system

DL’s CP operating system

DL has constructed a CP operating system customized for DL based on the CP evaluation standards of the Korea Fair Trade Mediation Agency.
We present clear behavioral standards to comply with the Competition Act and make law compliance consciousness part of our corporate culture.
①By actually operating preventive activities in advance, ②we make sure no law violations occur and help in corporate value improvement.

1  |  Construction of CP CP operating organization consolidation and regulations management

Public expression of CEO’s commitment to practicing CP

The board of directors appoint a CP manager and assign authority.

Designation and support of CP organization/personnel

CP regulations management and operating plan establishment

2  |  Dissemination and spread of CP Preparation and use of CP operating standard

Preparation/Revision

Distribution and use

Implementation of CP education

Establishment of education plans

Implementation of education

Evaluation of education

3  |  Operation of CP Operation of the monitoring system

Questions/Advice (pre-consultation)

Inspection (self-inspection, CP inspection)

Operation of the tip-off system

Punishment and incentives

Enforcement of punishment

Offering incentives

4  |  Evaluation, feedback CP operation evaluation/improvement/reporting

CP operation evaluation and improvement

CP operation reporting

CP organization

CP organization Image