LG strengthens ESG push with committee set-up

LG will create ESG (environment, social and corporate governance) Committee and Internal Trading Committee within the holding company and key affiliates for better transparency and long-term sustainability of the group. 

LG Corp., the holding company of the South Korean conglomerate, said on Mar. 19 that it held a discussion with the board of directors on measures to improve corporate governance and compliance, including specific plans to create relevant committees under the board.

The agenda will undergo official approval procedures prior to the actual set-up.

LG group’s 13 key affiliates, including LG Chem Ltd. and LG Electronics, will each form the two committees as well through board meetings.

The ESG Committee will oversee corporate policies on key areas including environment, safety, social responsibility, customer value, shareholder value and governance. Outside directors will make up the committee, with each company’s CEO also joining as a member for more efficient execution of committee decisions.  

LG will also operate a separate ESG consulting group under the committee to provide working-level assistance to the members and strengthen ESG expertise.

The Internal Trading Committee will be composed of three outside directors and one director from inside the company. The committee will review the transparency of various types of transactions including self-dealing, appropriation of corporate opportunity, related-party transactions, large-scale internal transactions and tunneling.

LG will also bolster the authority and autonomy of its Audit Committee by adding one more member to the current three. The agenda to set up the four-person committee will be discussed during next year’s general shareholders’ meeting.

A separate team of auditors will be established to assist the operations of the committee.

LG will also make changes to strengthen its Outside Director Candidate Recommendation Committee, by selecting an outside director as the committee chair and conducting regular reviews on the candidates.

“LG has been receiving positive feedback as the pioneer in corporate governance as South Korea’s first company to establish a holding company structure. Our drive on ESG will provide an important springboard for the group’s sustainable growth moving forward,” noted an LG official.

Write to Hyung-Suk Song at click@hankyung.com
Daniel Cho edited this article.