Strengthening Risk Management Processes in Investment Decision-Making
The Kakao Compliance and Trust Committee (hereinafter referred to as the Compliance Committee), an independent body supporting compliance and trust management of Kakao’s affiliated companies under agreement, announced on the 13th that it has established the 'Investment and Audit-Related Code of Conduct.' This is to enhance investment responsibility and ensure the effectiveness of audits in accordance with the Compliance Committee’s recommendations to the Kakao Group.
In February, the Compliance Committee recommended three agendas for the long-term development of the Kakao Group: 'responsible management,' 'ethical leadership,' and 'restoration of social trust.' Following these recommendations, the Kakao Group announced improvement measures including ▲systematization of pre- and post-procedures for large-scale investments and ▲reorganization of the group audit organization. As a follow-up, the Compliance Committee additionally proposed the establishment of codes of conduct for investment and audit.
Accordingly, at the regular meeting of the Compliance Committee held on the 11th, the Kakao Group announced ▲Code of Conduct for Investment Table Operations, ▲Code of Conduct for Investment Asset Evaluation and Monitoring, and ▲Code of Conduct for Group Audit Operations. These codes formalize the essential matters that the Kakao Group must adhere to during investment and audit processes. They were established to concretely realize the Kakao Group’s compliance management.
First, the Code of Conduct for Investment Table Operations aims to enhance investment accountability by clearly defining the roles and responsibilities of each organization according to investment agendas and by subdividing procedures. It strengthens legal review procedures by mandating the participation of the legal team during investment discussions and specifies principles to prevent conflicts of interest, thereby ensuring the ethicality of the investment process. The investment table will be composed with the Strategy Committee Chair at the center, allowing participation from CEOs of related affiliated companies under agreement and internal and external experts to enhance professionalism and objectivity.
Furthermore, through the Code of Conduct for Investment Asset Evaluation and Monitoring, the Kakao Group will comprehensively review the impact of investment agendas on the group. In particular, investment agendas will be evaluated from business and financial perspectives for at least three years. Those judged to have poor performance will be designated as management targets, and follow-up measures to strengthen financial soundness will be implemented.
The Code of Conduct for Group Audit Operations centralizes audit operations under the CA Council’s Responsible Management Committee (책경위). It focuses on ensuring the independence of audit organizations within each affiliated company under agreement to enhance effectiveness. The code also includes provisions to prevent personal conflicts of interest among audit supporters. Affiliated companies under agreement must conduct regular audits annually and may also carry out special audits. Depending on the case, the Responsible Management Committee is required to report the results of special audits to the Compliance Committee.
The Compliance Committee expects that by establishing these codes, the Kakao Group will increase transparency in decision-making and enable decisions that comprehensively consider the group’s collective interests.
Chairperson Kim So-young stated, "We positively evaluate Kakao’s steady progress in establishing a compliance system and restoring social trust," adding, "The committee will continue to do its best to support Kakao in becoming a company trusted by the public again through compliance management."
Meanwhile, the Compliance Committee plans to hold a workshop at the end of this month with compliance officers from Kakao’s affiliated companies under agreement. At the workshop, the results of a research project on evaluation criteria for the compliance systems of affiliated companies under agreement will be announced.
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