KB wins CGS crown for corporate governance

Kim Seok-dong, Financial Service Commission chairman, left, handing the CGS’s corporate governance award to Euh Yoon-dae, KB Financial Group chairman, at an event held at the Korea Exchange headquarters in Yeouido, southern Seoul, yesterday. Provided by the company

KB Financial Group won the top award for corporate governance by the Corporate Governance Service (CGS), a nonprofit organization, yesterday.

According to CGS, KB received high marks for enhancing the independence of its board of directors by appointing an outside director as chairman of the board, while also reserving membership of the financial group’s audit and compensation committee for outside directors only.

Additionally, KB received high marks for protecting customer information and developing green financial products.

The CGS said KB made outstanding efforts in welfare systems for its employees, including better job security, while encouraging companies that do business with the group to improve the ethics of their management.

Last year Posco received the highest award for corporate governance.

Doosan Infracore and the Internet portal company Daum both ranked second for corporate governance.

Other companies that received high marks for corporate governance included S-Oil, SK Hynix and Samsung Electro-Mechanics.

This year, 710 companies were reviewed, while only six received high marks. As a result, 82 percent of the companies were found to be lacking in corporate governance.

In a statement, CGS said the awards are intended to improve corporate governance in local companies and also encourage responsible management practices that will contribute to the overall improvement of the capital market.

Financial Services Commission Chairman Kim Seok-dong, who participated in the event, said the government is working on creating a system that would help companies that show social responsibility receive a better evaluation in the market.

“Healthy corporate governance is an inevitable core of competitiveness for all companies,” Kim said. “Companies today can only survive international competition by taking an interest in corporate governance.” He asked companies to pursue socially responsible policies that would enhance corporate profits and value.

By Lee Ho-jeong [ojlee82@joongang.co.kr]