Samsung Electronics has announced a series of measures 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 CSR projects. The company will also enhance the review of how these projects are being executed. Samsung is now a publicly traded company and along with that are strict governance and accountability rules.
The news comes after Samsung Group heir Lee Jae-yong was arrested on allegations that the presidential office put pressure on the state fund to back a merger in return for the alleged favours that Samsung granted to Choi Soon-il, a confidante of President Park Geun-hye, and her daughter, under a consulting arrangement.
Firstly, Samsung Electronics 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 proposed projects.
Any financial donation or CSR funding amounting to more than 10 million won (approximately $10,000) will be subject to review and will be transferred to the next process only after approval from the Review Council.
Effective immediately all financial donations and CSR funding amounting to more than 1 billion won will require full 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 compliance by requiring the approval of the board, which is comprised mostly of outside directors.
Samsung Electronics will disclose details of the financial donations and CSR funding agreed at the Board of Directors 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 in the annual sustainability report.