After its vice chairman was implicated in a national bribery scandal, Samsung is taking measures to ensure nothing like this ever happens again.
Following a very messy political scandal, Samsung is hoping to clean things up a bit. On Friday, the South Korean company announced a number of new measures that seek to “bring greater transparency and accountability in managing financial donations and monetary support for corporate social responsibility (CSR)-related activities and funds.” The impetus for this change, of course, comes from legal proceedings that implicate the vice chairman and heir to the Samsung empire Lee Jae-yong in a number of bribery charges. So now, the company is doing some reactive damage control.
According to the company’s news release on the new measures, the goal will be to strengthen the review and approval process for donations and payments to various charitable projects. Samsung has also promised to bolster oversight on how the projects are ultimately executed. Because apparently, there’s no such thing as a purely charitable action.
Samsung says that under its new guidelines, all financial donations and funding related to CSR efforts that amount to more than 1 billion won ($884,000) will need to be approved by the company’s board of directors. Given that the board is comprised mainly of outside directors, Samsung believes this new protocol will “enhance the transparency of the management of such donations and funds.” Previously, the board was only involved when endowments were greater than 0.5 percent of the company’s shareholder equity, which amounted to an impressive 680 billion won (around $600 million).
Furthermore, moving forward, Samsung will also provide details of financial donations through an electronic disclosure system operated by the Financial Supervisory Service, and these details will be publicized in quarterly business reports and the annual sustainability report. CSR projects will also be more carefully reviewed, as Samsung plans to create a Review Council comprised of the head executives of its legal, financial, human resources, and communication departments.
Finally, Samsung has established a process for auditing all donations on a quarterly basis. “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 company noted. “The review by the Board’s audit committee, comprised solely of outside directors, will help toward improving transparency related to the execution of financial donations and CSR funding.”