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KT&G

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KT&G conducts business in accordance with the decision-making of the board of directors and under the responsibility of the CEO, and intends to become a global blue-chip company by maximizing corporate value and the values of employees.

KT&G corporate governance envisions to establish both professional and responsible management system based on the board of directors and dominated by independent non-executive directors in order to balance 3the values of entire shareholders and takeholders.

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KT&G
Independence of Board of Directors Improvement of Shareholder Value Responsible Management of Professional Manager
Independence of the organization and operation of board of directors
  • Proportion of Outside Directors: 71%, CEO and Chairman are separated.
  • All members of Audit Commission and Evaluation Committee are outside directors
Transparency of appointment process of outside director
  • Operation of the commission of recommendation of candidates for outside director
  • Utilization of research center for the investigation of candidates for outside director
Grant of special authority to outside director
  • Evaluation of president’s management contract and dismissal proposal of president
  • Decision on president’s wage and payment method
Shareholder Return
  • Execution of stable cash dividends based on mid- and long-term profit growth
Shareholder Protection
  • Introduction of the Concentrated Vote System
Appointment and Management Contract
  • Candidates for president are recommended by the commission of recommendation of the candidate for president, and the president is appointed in a general meeting of stockholders
  • 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

Awards

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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.)

Corporate Governance Evaluation Grade

KCGS * 2020

MSCI * 2021

Integrated
Grade

A

A

AA

AA

Corporate
Governance

A

A

89%

Global

99%

Domestic

Difference with the model standards of corporate control structure

(As of the end of June, 2020)

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KT&G
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 2 executive directors and 5 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 -
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