"Compensation by Executives for Company Losses"... Kakao Subcommittee Demands Responsible Management Improvement Plan

Junshinwi Recommends Responsible Management, Ethical Leadership, and Trust Restoration
"Kim Beom-su Must Fulfill Responsibility for Group Governance Improvement"
Kakao and 6 Partner Companies to Report Improvement Plans Within 3 Months

The 'Compliance and Trust Committee' (hereinafter referred to as the Compliance Committee), an external body supporting the compliance and ethical management of Kakao affiliates, presented recommendations on the 20th to select key agendas for the sustainable growth of the Kakao Group and requested six affiliated companies under agreement, including Kakao, to establish improvement plans.

The Compliance Committee judged that although the Kakao Group has achieved growth in scale, it has not sufficiently fulfilled its corresponding social responsibilities. To overcome this, it recommended three agendas?'Responsible Management,' 'Ethical Leadership,' and 'Restoration of Social Trust'?along with detailed improvement measures. The affiliated companies must establish implementation plans for the detailed improvement measures under each agenda and report to the Compliance Committee within three months.

Since its launch in December last year, the Compliance Committee held meetings over approximately two months with various stakeholders, including representatives of affiliated companies, compliance officers, labor unions, and employees, to gather opinions on Kakao’s current status and direction. All members of the Compliance Committee, including Chairperson Kim So-young, conducted discussions swiftly to help the Kakao Group restore social trust and continue making the right choices, and prepared this recommendation based on the opinions of the members.

To establish the foundation for the first agenda, 'Responsible Management,' the Compliance Committee ordered the preparation of measures for ▲a control tower ▲a compliance system ▲strengthening the responsibility of management. Chairman Kim Beom-su of the CA Council, the group’s control tower, was requested to fulfill his responsibilities as the founder and major shareholder to improve the group governance system. As a measure to strengthen the compliance system, the committee recommended that affiliated companies establish a systematic procedure for decision-making with significant social impact, such as large-scale investments, and set objective evaluation criteria for management performance as well as standards for compensation liability if illegal acts cause damage to the company.

To establish the second agenda, 'Ethical Leadership,' affiliated companies are required to enact and declare a code of conduct for management behavior. The code of conduct must include four compliance items selected by the Compliance Committee: ▲'Value,' pursuing innovation based on the common good ▲'Fairness,' making decisions that do not violate fairness and ethics ▲'Communication,' practicing communication based on core values and the resulting vision ▲'Responsibility,' regarding the process and outcomes of decision-making.

Finally, the Compliance Committee judged that it is important for the Kakao Group to strengthen responsibility and coexistence for shareholders and partners to implement the agenda of 'Restoration of Social Trust.' To this end, it recommended that affiliated companies establish plans to protect shareholder value and grow together with partners. As a detailed measure, it ordered that when pursuing mergers and acquisitions or initial public offerings, plans to protect shareholder value must be prepared. This is a measure to prevent concerns about the decline in parent company shareholder value due to subsidiary listings. It also requested the establishment of coexistence goals and plans for partners such as small business owners and the creation of verification procedures.

Chairperson Kim said, "I hope this recommendation will serve as a starting point to lay the foundation for compliance and trust management principles to take root at Kakao," adding, "The Compliance and Trust Committee will monitor the proper implementation of the recommendations and work together to create a new tomorrow for Kakao."

In response, Jeong Shin-ah, the designated CEO of Kakao, stated, "We respect the Compliance Committee’s recommendations, which came after much deliberation and deep discussion for Kakao’s healthy change and new leap," and added, "We will strive to establish an implementation plan reflecting the committee’s recommendations so that Kakao can set a proper course that receives social support and trust."

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