First in the Industry
Samsung Electronics has decided to take part in “corporate governance structure disclosure system,” which has been introduced by the Korea Exchange (KRX) early this year in order to improve the corporate governance structure of listed companies.
The KRX announced on August 24 that Samsung Electronics will publicly release a report on its corporate governance structure at the end of September.
As Samsung Electronics has decided to announce its corporate governance structure report for the first time among domestic listed companies in accordance with the new system, the KRX expects that there will be an increasing number of participating companies. In addition, some other large companies are strongly considering the possibility of joining the new system. Financial holding companies are also expected to voluntarily introduce the system.
A corporate governance structure report is the self-evaluation of listed companies whether they abide by 10 core measurements of the corporate governance best practices. The measurements include the rights of shareholders, fair treatment of shareholders, function of the board of directors, outside directors, assessment and reward and Internal audit committee.
Companies participating in the corporate governance structure disclosure system should voluntarily comply with the core principles and state the reasons in the report why they failed to abide by the principles when they did due to certain reasons. It is the method of comply or explain (COEE).
The KRX believes that the system will significantly improve an unclear governance structure of domestic companies when it is settled.
Accordingly, the KRX holds an information meeting and visits businesses to encourage them to take part in the system. It has revised the detailed rules and introduced the system in March this year but haven’t made companies be required to join the system yet.