Samsung Electronics Co. will require all donations and corporate social responsibility (CSR) related funding worth 1 billion won ($883,002) or above to get approval from its board of directors as part of efforts to enhance transparency and accountability in contributions, the company announced in a press statement on Friday.

The announcement comes after the independent counsel, which has been investigating the power abuse scandal involving President Park Geun-hye and her confidante Choi Sun-sil, accused Samsung Group of seeking favors from government authorities to facilitate hereditary succession at Korea’s biggest corporate empire in return for its handsome donations to questionable groups run by Choi at the suggestion of President Park.

Samsung Electronics Vice Chairman Jay Y. Lee, also Samsung Group’s de facto leader, is currently under custody after the independent counsel arrested him on multiple charges including bribery associated with President Park and Choi and embezzlement.

The country’s electronics mogul after a board meeting on Friday said it has decided to obligate all financial donations and CSR funding amounting 1 billion won or more to get approval from the board of directors formed with a majority of outside directors. Until now, it had required board approval only on the donations worth 0.5 percent or above of the firm’s shareholder equity and donations worth 5 billion won or above to affiliated party such as Samsung Foundation, public welfare unit under Samsung Group. Currently, 0.5 percent of Samsung Electronics shareholder equity is worth roughly 680 billion won.

The company said it will also disclose details on all donations and CSR funding approved by the board of directors through the county’s regulatory filing as well as in its quarterly business reports and annual sustainability report. To enhance transparency of its financial donations, it plans to set up a review council that will examine every endowment project before board approval. The review council’s meeting will be attended by directors from its legal, financial, human resources and communication departments every week.

In addition, the company will enhance monitoring of the execution of funds by having the review council, management, and audit committee, which will be comprised solely of outside directors, to evaluate it on a regular basis.

Samsung Group with its de facto head physically detained on criminal charges has come under council management with individual chief executives responsible for their corporate jurisdiction.

On Friday, Samsung Electronics shares ended down 2.5 percent, or 48,000 won, at 1,911,000 won.

By Song Sung-hoon

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