Who knew donations could be so dangerous, right? Ask Samsung. The company recently had its top executive arrested and the president of its home country rendered powerless, as a result of several donations made by Samsung to charities associated with the now impeached president. With an eye towards ensuring that such events do not take place in the future, the company has now tightened rules and regulations regarding corporate donations.
Apparently, any financial support to third parties that is worth 1 billion won ($886,210.56) or more, will now be voted upon by the company’s board of directors and will be disclosed publicly as well. This brings the ceiling significantly lower from the previous system, wherein only payments of 680 billion won or more were subject to board approval.
This move improves transparency in financial aid and appropriation of social corporate social responsibility funds, and strengthens compliance management.
The move comes after Samsung Electronics’ vice chairman Jay Y. Lee, was arrested last week in connection with bribery charges. Lee was said to have attempted to bend the governmental system to his will by pledging 43 billion won in bribes to oganizations that had the backing of President Park Geun-hye’s cloase aid, Choi Soon-sil.
In November, Lee had said that he was coerced into making the payments (coerced by who though?) and promised that Samsung would ensure that payments like this are not made in the future. I appears as if measures to ensure the same are being implemented now. Meanwhile, Samsung Group Vice Chairman Choi Gee-sung and President Chang Choong-ki, have both offered to take responsibility of the graft scandal and resign in the connection.
Were these executives to leave too, Samsung could be in trouble. For one, the company has already lost its leader in Lee, and has also been unable to nominate a new outside director. If you remember, the company had promised to nominate at least one new board member with global C-suite experience. However, it has been unable to find anyone to fill the bill. Choi in particular, has been a mentor to Lee and is widely regarded as his second in command. As such, his exit could throw the top leadership in chaos.
Of course, it could be a move purely for the public’s benefit. Meanwhile. following the news of Choi and Choon-ki’s offer to resign, Samsung shares slipped down 2.5 percent on Friday.