Korea Electric Power Corporation announced on the 27th that it will embark on measures to establish an efficient governance structure in line with global standards.
KEPCO signed a 'self-reliance and accountability management agreement' on the 24th at the KEPCO Art Center with seven affiliate companies to ensure the autonomous management of domestic affiliates and strengthen accountability for business performance. The seven affiliate companies are Kepco ES, Kepco Solar, Korea Marine Energy, Jeju Hallim Marine Energy, Cafes, KEPCO CSC, and KEPCO FMS.
This agreement was established with the intent of ensuring autonomous and efficient decision-making centered on the boards of directors of affiliate companies in line with global management trends, such as revisions to the Organisation for Economic Co-operation and Development (OECD) guidelines, and strengthening accountability management through clear management goals and rational evaluations.
This is the first case in Korea to effectively apply the principles of management autonomy and board independence emphasized in the OECD guidelines to public institution subsidiary companies. The subsidiaries are expected to enhance competitiveness and efficiency through bold and strategic decision-making tailored to their respective situations and characteristics.
The heads of the subsidiary companies will autonomously manage through self-established management goals and strategic decision-making. They will be subject to clear accountability regulations regarding dismissal during their term, performance-based compensation, and term extensions.
In particular, the system clarifies the 'self-management that is accountable for results' by including institutional mechanisms to realize accountable management alongside performance-based compensation based on management performance evaluations.
Kim Dong-cheol, president of KEPCO, said, 'I will ensure that the independent management authority centered on the board of directors is maximally guaranteed for the subsidiary company presidents, and minimize any management intervention beyond the shareholder rights as defined by law.'
KEPCO plans to present a model case for the management system of public institution subsidiary companies and to create a success story that can serve as a reference for the management systems of domestic public institutions.