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.
Independence of Board of Directors
- Proportion of non-executive directors: 86%, CEO and Chairman are separated.
- All members of Audit Committee · Evaluation and Compensation Committee · Governance Committee are non-executive directors.
- 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
- Evaluation of president’s management contract and dismissal proposal of president
- Decision on president’s wage and payment method
Improvement of Shareholder Value
- Execution of stable and proactive shareholder return policy based on mid- and long-term profit growth
- The company discloses mid- and long-term shareholder policy in order to improve market predictability
- Shareholder Return Policy (FY 2021~2023)
KT&G implemented Shareholder Return Policy worth approximately 2.75 trillion won focused on 「Cash Dividends + Share Repurchase」.-
(Cash Dividends) approximately 1.75 trillion won over the three-year period.
*FY 2021 about 575.9 billion won paid
*FY 2022 about 581.4 billion won paid
*FY 2023 about 590.8 billion won paid -
(Share Repurchase) approximately 1 trillion won over the three-year period.
*FY 2021 about 348.3 billion won repurchased
*FY 2022 about 356.8 billion won repurchased
*FY 2023 about 302.6 billion won repurchased and cancelled
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(Cash Dividends) approximately 1.75 trillion won over the three-year period.
- (FY 2024~2026) : KT&G announced to implement Shareholder Return Policy worth approximately 2.8 trillion won in 「Cash Return (Cash Dividends + Share Repurchase)」 and 「Treasury Cancellation」 equivalent to 15% of total outstanding shares
- Shareholder Return Policy (FY 2021~2023)
- Introduction of the Concentrated Vote System
- Adoption of the Electronic Voting System to enhance convenience of exercising voting right
Responsible Management of Professional Manager
- 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
- 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
Awards
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Selected as the company with the best governance structure (Grade A+, hosted by Korea Institute of Corporate Governance and Sustainability)
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Achieved at least an A grade in governance (hosted by Korea Institute of Corporate Governance and Sustainability)
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Winning the grand prize for corporate governance integration(Hosted by Corporate Governance Service Korea)
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Acquired A + rating for corporate governance (Rank A in 2017, Conducted by Korea Corporate Governance Service)
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Won the Award of Excellence in corporate governance(Hosted by Corporate Governance Service Korea)
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Re-amendment of KT&G's Corporate Governance Charter
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Nominated as the Hall of Fame Inductee in corporate governance(Hosted by Corporate Governance Service Korea, Korea Exchange)
※ Maintained the same status in 2008.
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Won the Award of Excellence in corporate governance for 3 consecutive years (Hosted by Corporate Governance Service Korea, Korea Exchange)
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Re-amendment of KT&G's Corporate Governance Charter
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Amendment of KT&G's Corporate Governance Charter
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Won the Award of Excellence in corporate governance for 2 consecutive years (Hosted by Corporate Governance Service Korea, Korea Exchange)
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Won the Award of Excellence in corporate governance (Hosted by Corporate Governance Service Korea, Korea Exchange)
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Establishment and proclamation of KT&G's Corporate Governance Charter (Consisting of shareholder rights, board of directors, audit system, stakeholders, disclosure and etc.)
Corporate Governance Evaluation Grade
|
KCGS * 2023 |
MSCI * 2023 |
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|---|---|---|---|
| Integrated Grade |
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| Corporate Governance |
|
92% Global |
99% Domestic |
Difference with the model standards of corporate control structure
(As of 2021)
| Model standards recommended | Whether adopted by KT&G | Remarks |
|---|---|---|
| Introduction of corporate control structure to the site | O | - |
| Introduction of ethics regulations for staffs and executives | O | - |
| Public announcement adoption or whether to adopt concentrated voting system | O | - |
| Composition of the Board of Directors (majority composition by non-executive directors) | O | 1 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 | O | 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 | O | - |
| Composition of director recommendation committee | O | - |
| Composition of compensation committee | O | - |
| Composition of audit committee (composed entirely of non-executive directors) | O | 4 non-executive directors |
| Introduction of regulations on the roles and operational procedures of Board of Directors and various committees | O | - |
| Subscription of damage compensation & liability insurance for the directors at the costs of the company | O | - |
| Evaluation of the details of the activities of the Board of Directors | O | - |
| Maintenance of the independence of the external auditors | O | - |
| Certification of the accuracy and completeness of the financial report by the representative director and personnel in charge and responsible for finance | O | - |
| Explanations on the difference with model standards | O | Uploaded on the website |
| Public announcement of the audit report and key issues for public announcements as needed in Korean and English languages | O | - |
