kt seeks to improve corporate governance and management transparency with ethical management
Efforts to improve governance structure and management transparency Transparent governance
01 Independent board of directors
- Independence in composition and operation of the board of directors
- 73% of the board members consist of external directors; CEO separated from the board chair. All members of the inspection, evaluation & remuneration, and internal transaction committees composed of external directors.
- Transparency in election committee.
- Recommendation committee operated (every external director, one internal executive director), an external agency is utilized to investigate candidates for post external director.
- Special authority given to the external directors.
- Evaluation of CEO management contract and recommendation of dismissal, remunerations for CEO or executive directors, and determining payment methods.
02 Enhancement of shareholder value
- Payback to share holders
- Share retirement and dividend.
- Shareholder Protection
- Concentrated / letter voting system implemented.
- Protection of shareholder rights
- CEO remuneration interlinked with stock price.
03 Responsible management by professional managers
- Appointment and Management contract
- CEO candidates are recommended by the CEO
recommendation committee and elected during
the general shareholders meeting. New CEO
signs a management contract, allowing the
board of directors to assess CEO’s management
performance every year.
- Remuneration and dismissal
- CEO remuneration is determined based on
management performance. The board of
directors may plead for CEO dismissal to the
general shareholders assembly, in the cases
where CEO’s performance rate in management
contract terms fails to reach a satisfactory level.
External Assessment of Governance Structure
- A+ in corporate governance structure | Korea Corporate Governance Service, 2014.08
- Winner of grand prize in audit of the year in corporate sector | Korea Listed Companies Association, 2010.09
- Leading advancement of audit tasks by composing the audit committee for each area of expertise, performing independent audit activities, and maximizing efficiency in internal control
- Grand prize in corporate governance structure | Korea Corporate Governance Service, 2010.06
- Highly evaluated for independent and professional board, active board management, shareholder rights protection, transparent disclosure system and strict audit-organization management.
- The first winner of “Honorary Corporation" award for 2 consecutive years in Korea | Korea Corporate Governance Service, 2008.06
- Superior governance structure business in emerging markets | Economy, 2003.09
- High score obtained in such aspects as ownership structure, financial transparency, board of directors operation, shareholder relations, and management interests.
- 1st grade governance structure | CLSAI, 2003.04
- “kt, with the best corporate governance structure, is one of the best in Asia”
- The best governance structure cases in Asia | Goldman Sachs, 2002.09
- “kt's governance structure is one the best in Asia”
- Winner corporation of the best transparency | S&P
- Highest-ranking Korean corporation among the Asia-Pacific 100 corporations.
Difference From Best Criterion
What is the Best Criterion of Corporate Governance?
In March 1999, the Korea Corporate Governance Improvement Center (CGS) enacted the standard guideline necessary to establish a desirable corporate governance of Korean companies with the reference to corporate governance best criterion of developed countries and the professional opinions of various fields.
A table regarding kt's decision and details on standard regulation of corporate governance.
|Recommended Exemplary Standards
||Adopted by kt
|Concentrated vote system
|Separation of board chair from CEO
||External (independent) director as the board chair
|External directors composition requirement (majority of seats)
||73% of the board members
|Independence of external directors (from the corporate, executive management, and controlling shareholders)
|Promotion committee composition requirement (External directors majority of seats)
|Remuneration committee composition requirement (full external directors)
|Audit committee composition requirement (full external directors)
||Including one financial expert
|Interlinking stock option with business management
||Granted stock quantity linked to business performance
|Precise certificate on financial reports
||Submitted after certified by NYSE
|Enactment and disclosure of corporate ethics
|Explanation of differences from standard criteria
||Posted on the webpage
|Assessment by board of directors