Samsung Electronics today 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.
According to the plan, all financial donations and CSR funding amounting to more than 1 billion won ($886,210.56) 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.
To date, the company 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.
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.
In order to strengthen the preliminary review process, 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 the proposed projects.
Any financial donation or CSR funding amounting to more than 10 million won will be subject to review, and will be transferred to the next process only after approval from the Review Council.
The operation of approved financial donations and CSR funding will be reviewed every quarter not only by the Review Council and the management, but also the audit committee of the Board of Directors.
The flagship of South Korea's top conglomerate Samsung Group has been at the center of an influence-peddling scandal that led South Korea's parliament to impeach President Park Geun-hye in December.
Jay Y. Lee, leader of Samsung Group and Samsung Electronics' vice chairman, was arrested last week after being named a suspect by the South Korean special prosecutor's office. Lee is accused of pledging 43 billion won in bribes to a company and organizations backed by President Park Geun-hye's confidant, Choi Soon-sil, to curry favor.
Separately, the Samsung Group Vice Chairman Choi Gee-sung and President Chang Choong-ki have offered to resign to take responsibility for the graft scandal. Choi and Chang are also suspects in the special prosecutor's investigation.
Both executives were part of Samsung's secretive top policy-making Future Strategy Office, which came under spotlight for arranging donations.