KT Initiates Outside Director Appointment Process... Excludes Inside Directors from Participation

Introduction of External Director Preliminary Candidate Recommendation Method for Shareholders
Utilizing Appointment Advisory Group to Ensure Fairness and Objectivity

KT announced on the 8th that it will begin the process of appointing outside directors.

The outside director appointment process will be conducted based on the improvement plan for the outside director appointment procedure prepared by the 'New Governance Establishment TF.' After five in-depth discussions among TF members, KT has prepared an improvement plan for the 'outside director appointment procedure,' which is the first step and the most urgent task in this governance improvement.

On the 31st, the KT shareholders' meeting is being held under tight security at the KT Research and Development Center in Seocho-gu, Seoul. Photo by Dongju Yoon doso7@

First, considering that KT is a widely held company without a specific major shareholder, it will introduce a 'shareholder-based preliminary candidate recommendation' method to protect shareholder rights. As of this date, all shareholders who have held KT shares for more than six months, even one share, are eligible to recommend preliminary candidates for outside directors. Shareholder recommendations will be accepted until 1 PM on the 16th. Along with shareholder recommendations, candidates recommended by external professional agencies (search firms) will be included to form the pool of outside director candidates. KT will strive to compose the board of directors including at least one outside director recommended by shareholders.

Additionally, internal directors will be excluded from all outside director appointment processes. This measure aims to resolve the issue of management building internal strongholds raised externally and to strengthen the independence of candidate evaluations. Accordingly, the Outside Director Candidate Recommendation Committee, which was previously composed of one internal director and all outside directors, will now be composed entirely of outside directors.

To ensure fairness and objectivity in evaluating outside director candidates, an Appointment Advisory Group will be utilized during the appointment process. The Appointment Advisory Group receives candidate recommendations from external professional agencies, and the New Governance Establishment TF conducts the first evaluation of the candidates. Then, the Outside Director Candidate Recommendation Committee, composed of five external experts selected based on the TF’s evaluation results, will conduct further assessments. The Appointment Advisory Group conducts in-depth evaluations of candidates in terms of expertise, independence, fairness, and diligence. Based on the first shortlist by the Appointment Advisory Group, the Outside Director Candidate Recommendation Committee will conduct a second evaluation to finalize the outside director candidates.

As the TF completes the improvement of the outside director appointment process, it will also conduct detailed discussions on the CEO appointment procedure and the role of the board of directors. In particular, to strengthen the board’s supervisory function, enhance shareholder value, and preemptively block internal stronghold formation, the number of internal directors will be limited to one CEO. Various improvement measures, including adjusting the roles of committees within the board and applying special resolutions at the shareholders’ meeting for CEO appointments, are also under review. Detailed plans will be finalized through additional discussions among TF members.

Earlier, on the 17th of last month, KT formed the 'New Governance Establishment TF (hereafter TF)' composed of corporate governance experts recommended by major domestic and international shareholders. The TF is preparing improvement measures starting with the outside director appointment process, followed by the CEO appointment procedure and the role of the board, to establish a KT governance system trusted externally while preventing internal stronghold formation and parachute appointments in this widely held company. To enhance fairness and transparency in the appointment processes of outside directors and the CEO, the TF is seeking optimal solutions for KT governance improvements by reviewing cases of domestic and international telecom companies and widely held companies, as well as benchmarking global leading companies.

This content was produced with the assistance of AI translation services.