이 기사는 2021년 03월 23일 08:06 thebell 에 표출된 기사입니다.

LG Corp, the holding company of South Korean conglomerate LG Group, said Friday that it and its listed affiliates will create an environment, social and corporate governance (ESG) committee and an internal trading committee as part of efforts to reinforce self-monitoring of governance and compliance issues.

LG Corp and its affiliates will also make changes to their audit committee and outside director candidate recommendation committee.

Market insiders are paying attention to whether the move will lead to an upgrade of LG Electronics' ESG ratings.

LG Electronics currently has two committees within its board, the management committee and the outside director candidate recommendation committee. The management committee consists of only three members including LG vice chairman Kwon Young-soo.

The newly-created ESG committee will be comprised of all outside directors and CEOs of each affiliate. The internal trading committee will be composed of three outside directors and one inside director. The audit committee will add one member to four from current three. The agenda to create a four-person committee will be decided at the next year’s general shareholders’ meeting.

The restructuring is expected to weaken LG vice chairman Kwon's influence on the LG Electronics’ board. Kwon has chaired LG Electronics board and the outside director candidate recommendation committee. The ESG committee will consist of CEO of each affiliate and the internal trading committee will consist of an inside director. The outside director candidate recommendation committee will select an outside director as its committee chair.

LG Electronics has had poor governance scores due to unbalanced decision-making. The Korea Corporate Governance Service gave 'B' rating on LG Electronics’ governance in 2020. It received 'B+' from 2012 to 2014, 'C' in 2015 and 'B' since 2016 while it received 'A' or 'A+' for environmental and social performances. Its overall ESG ratings were 'B+' from 2017 to 2020 largely due to its poor governance performance.

LG Electronics' governance ratings could improve after the new committees are set up, but it is unlikely to happen in the near future, industry watchers said. (Reporting by Seul-gi Kim)