LS Networks Discloses Corporate Governance Report with Multiple Non-Compliances and Weak Shareholder Return Policy
LS Networks disclosed its corporate governance report, revealing non-compliance with many of the 15 core indicators, highlighting governance improvement tasks.
Shareholder return policy inadequate: no dividends for the past 3 years; despite amending articles to provide dividend predictability, no actual returns.
Largest shareholder holds 81.8%, minority holds 18.19%, raising concerns over governance independence.
Board lacks gender diversity; all male, no cumulative voting, no individual evaluation of outside directors.
CEO succession policy and non-financial risk management policy absent; internal control policies need improvement.
Audit committee consists entirely of outside directors including an accounting/finance expert, but fails to hold quarterly meetings with external auditors without management presence.
Small-scale merger conducted in 2024, shareholder protection procedures were followed.
[AI Summary]Despite some strengths such as exceeding legal requirements in outside director ratio, LS Networks faces challenges in gaining investor trust due to lack of shareholder returns and multiple governance non-compliances. The inability to pay dividends and high ownership concentration are negative signals for minority shareholder protection. Future voluntary governance improvements and shareholder return policies will be key factors for stock re-rating.