Amid an investigation over bribery claims involving some of its top executives, Samsung Electronics recently announced a series of measures it intends to take to bring greater transparency and accountability in managing financial donations and monetary support for corporate social responsibility (CSR)-related activities and funds.
The measures are aimed at strengthening the review and approval process for donations and payments to corporate social responsibility (CSR)-related projects. The company said it will also enhance the review of how these projects are being executed.
Board approval for donations over one billion won. All financial donations and CSR funding amounting to more than 1 billion won (approximately US$871,800) will require the approval from the company’s board of directors. “This is to enhance the transparency of the management of such donations and funds and to strengthen the compliance by requiring the approval of the board, which is comprised of a majority of outside directors,” Samsung stated.
To date, Samsung only required board approval for endowments that were more than 0.5% of the company’s shareholder equity. Currently, 0.5% of the shareholder equity is approximately 680 billion won (US$592.8 million).
Public disclosure of the resolution. Samsung will disclose details of the financial donations and CSR funding agreed at the board through the DART, the electronic disclosure system operated by the Financial Supervisory Service. Related details will also be made available in quarterly business reports, as well as the annual sustainability report.
Establishment of a review council for preliminary review. To strengthen the preliminary review process, Samsung will establish a review council comprised of the head executives of legal, financial, human resources, and communication departments. The council will meet once a week to review the proposed projects. Any financial donation or CSR funding amounting to more than 10 million won (approximately US$8,718) will be subject to review and will be transferred to the next process only after approval from the review council.
Quarterly review of project execution. The operation of approved financial donations and CSR funding will be reviewed every quarter not only by the review council and management, but also the audit committee of the board. The review by the board’s audit committee, comprised solely of outside directors, will help toward improving transparency related to the execution of financial donations and CSR funding.