KT&G Revises Board Rules to Improve Fairness and Transparency in CEO Election

South Korean tobacco company KT&G said it has revised its board regulations to improve fairness and transparency in the election process by removing preferential consideration for an incumbent chair seeking another term. The next chair will be selected through the Governance Committee, the Chair Candidate Recommendation Committee, and the Board of Directors. The company emphasized that the election will be carried out transparently.

Breaking news: According to a December 8 report by South Korean media outlet theviewers, KT&G’s board of directors discussed the selection process for the next chair candidate at a meeting held on December 7. It decided to delete provisions giving priority consideration to an incumbent chair wishing to serve another term and to revise the board regulations accordingly.

The selection process for KT&G’s chair candidate is conducted in three stages: “Governance Committee - Chair Candidate Recommendation Committee - Board of Directors.”

The Governance Committee is a standing committee responsible for proposing the criteria for evaluating chair candidates, building the candidate pool, and recommending candidates for review. Based on this, the non-standing Chair Candidate Recommendation Committee evaluates the candidates, selects the final candidate, and recommends that person to the board.

After that, the board decides on the candidate and submits the proposal to the shareholders’ meeting, where the final selection is determined through a collective resolution of all shareholders. Both the Governance Committee and the Chair Candidate Recommendation Committee are composed entirely of outside directors who are fully independent from the company’s management.

Board Chair Lim Min-gyu said, “We revised the board regulations to improve the fairness and transparency of the chair election process. In accordance with legal procedures, the Governance Committee is expected to convene in December, and the subsequent election process will proceed according to the relevant procedures. We will disclose the process to the public in a transparent manner as it moves forward.”