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| Kakao Chairman Kim Beom-su |
The ESG committee is comprised of Kim and two outside directors. While the inclusion of the outside directors is aimed at keeping the owner's influence in check, the question is whether they will be able to speak up about possible governance issues.
The committee is seen to have been created to prevent possible ethical issues arising from the use of artificial intelligence (AI), or the use of personal data, after a Kakao affiliate caused controversy over the mishandling of personal information.
While it is expected to focus on these areas, governance is also a key pillar of the committee which seeks to align the company's business to values supporting the environment, creating benefits for society and achieving good governance.
Kakao's governance gained attention after Kim earlier this month handed his two children 60,000 shares each. This raised questions over whether these were measures taken by him to prepare them to eventually take over the business.
It has been Kim's stance that he would not have his children take over his business, a common practice among owner families of conglomerates.
Kakao also said the shares were not given as a means of succession. However, no specifics are available as to why the shares were given to his children and other family members at this time.
Meanwhile, the fact that Kim's children are working for a company that is the second-largest shareholder of Kakao has also come under the spotlight. The company K Cube Holdings is an investment firm owned entirely by Kim. It owns an 11.22 percent stake in Kakao and is the second-largest shareholder after Kim, who owns 13.74 percent.
Kakao said there were no issues with his children working for the company, given they have not been given positions on the board and receive the same pay that entry-level employees get.
Understandably, the ESG committees at SK Group, Samsung Electronics and Naver are all headed by outside directors.
Regarding the issue, a Kakao official said, "The fact that Kim is the chairman of the ESG committee shows the extent of his willingness to adhere to the values the committee represents."
"Whether the chairman of the committee will be able to faithfully carry out his role will be key, rather than who sits in the position," a professor of the Korea Corporate Governance Service's Corporate Governance Committee said. "ESG committees have only been set up at major firms in recent years, so it is yet to be seen whether they will be able to serve their intended purpose."
