Overview | Corporate Governance | IR

Corporate Governance

KT&G strives to strengthen long-term sustainable growth and build a transparent and independent governance structure to promote the interests and rights of its shareholders and stakeholders, and to preemptively respond to changes in the business environment and market.

Under the KT&G Corporate Governance Charter, which contains the principles and visions of governance that conform to the global standard, the company continues to solidify and develop a board-oriented responsibility management system governed by independent non-executive directors.

KT&G Charter of Corporate Governance

Independence of Board of Directors

Independence of the organization and operation of board of directors

Proportion of non-executive directors: 75%, CEO and Chairman are separated.
All members of Audit Committee · Evaluation and Compensation Committee · Governance Committee · Independent Director Nomination Committee are non-executive directors.

Transparency of appointment process of non-executive director

Operation of the commission of recommendation of candidates for non-executive director (Composed of at least three external directors)
Utilization of research center for the investigation of candidates for non-executive director

Grant of special authority to non-executive director

Evaluation of president’s management contract and dismissal proposal of president
Decision on president’s wage and payment method

Responsible Management of Professional Manager

Appointment and Management Contract

The Governance Committee searches for and recommends a presidential candidate
The final selection will go through the Presidential Candidate Recommendation Committee and recommended at the general shareholders' meeting
Appointment of the President at the general shareholders' meeting
A Three Stage Fair and Transparent Process: 'Governance Committee' - 'Presidential Candidate Recommendation Committee' - 'General Shareholders' Approval’
The new president concludes the management contract
The Board of directors assesses management performance every year

Rewards and Dismissal

A wage system connected with management performance
When the president does not fulfill the management contract, the board of directors proposes a dismissal in the general meeting of stockholders

Title	KCGS	MSCI
Integrated Grade	A+	AA
Corporate Governance	A+	92%Global 99%Domestic

Model standards recommended	Whether adopted by KT&G	Remarks
Introduction of corporate control structure to the site		-
Introduction of ethics regulations for staffs and executives		-
Public announcement adoption or whether to adopt concentrated voting system		-
Composition of the Board of Directors (majority composition by non-executive directors)		2 executive director and 6 non-executive directors
Separation of the post of representative director and chairman of board of directors or appointment of senior non-executive director		Separation of the post of representative director and chairman of board of directors
Public announcement of the details of activities, attendance rate, and pro and cons on the key agendas of the Board of Directors		-
Composition of director recommendation committee		-
Composition of compensation committee		-
Composition of audit committee (composed entirely of non-executive directors)		-
Introduction of regulations on the roles and operational procedures of Board of Directors and various committees		4 non-executive directors
Subscription of damage compensation & liability insurance for the directors at the costs of the company		-
Evaluation of the details of the activities of the Board of Directors		-
Maintenance of the independence of the external auditors		-
Certification of the accuracy and completeness of the financial report by the representative director and personnel in charge and responsible for finance		-
Explanations on the difference with model standards		Uploaded on the website
Public announcement of the audit report and key issues for public announcements as needed in Korean and English languages		-

Awards History

Year	Awards
2024	Selected as excellent corporation for disclosing corporate governance reports (by the Korea Exchange)
2023	Selected as the company with the best governance structure (Grade A+, hosted by Korea Institute of Corporate Governance and Sustainability)
2020-2022	Achieved at least an A grade in governance (hosted by Korea Institute of Corporate Governance and Sustainability)
2019	Winning the grand prize for corporate governance integration(Hosted by Corporate Governance Service Korea)
2011-2019	Acquired A + rating for corporate governance (Rank A in 2017, Conducted by Korea Corporate Governance Service)
2010	•Won the Award of Excellence in corporate governance(Hosted by •Corporate Governance Service Korea) Re-amendment of KT&G's Corporate Governance Charter
2007	Nominated as the Hall of Fame Inductee in corporate governance(Hosted by Corporate Governance Service Korea, Korea Exchange) *Maintained the same status in 2008.
2006	•Won the Award of Excellence in corporate governance for 3 consecutive years (Hosted by Corporate Governance Service Korea, Korea Exchange) •Re-amendment of KT&G's Corporate Governance Charter
2005	•Amendment of KT&G's Corporate Governance Charter •Won the Award of Excellence in corporate governance for 2 consecutive years (Hosted by Corporate Governance Service Korea, Korea Exchange)
2004	Won the Award of Excellence in corporate governance (Hosted by Corporate Governance Service Korea, Korea Exchange)
2003	Establishment and proclamation of KT&G's Corporate Governance Charter (Consisting of shareholder rights, board of directors, audit system, stakeholders, disclosure and etc.)