FedChamber "More than Half of Listed Companies Lack External Director Talent Pool... Qualification Restrictions Must Be Eased"

Survey of Top 200 Non-Financial Listed Companies by Total Assets
Lawyers and Accountants Preferred by 70% of Experts

[Asia Economy Reporter Dongwoo Lee] A survey revealed that more than half of the top 200 non-financial listed companies by total assets desire outside directors with expertise but are facing difficulties due to a shortage of talent pools. There are calls to reconsider excessive qualification restrictions on outside directors to ensure the autonomy of corporate governance.

The Federation of Korean Industries (FKI) announced on the 19th that, based on a survey conducted by the professional survey agency Monoresearch regarding the outside director system, 51.4% of the surveyed companies responded that the most important competency for outside directors is "expertise."

By company size, among companies classified as large listed companies under the Commercial Act with assets exceeding 2 trillion won, 54.2% answered that expertise is important. For companies with assets under 2 trillion won, the figure was 50%. The FKI explained that the larger the company, the more numerous and complex the related businesses, thus requiring outside directors with expertise.

Companies that answered "independence in decision-making and monitoring/supervision" as important accounted for 48.6%. Preferences for professionals such as those holding specialized certifications like lawyers, accountants, and tax accountants were 41.4%, and former businesspeople with high industry understanding were 28.7%, with experts making up 70.1% overall.

Half of the surveyed companies cited a shortage of talent pools for appointable outside directors as their greatest difficulty. This was followed by procedural burdens related to registration and disclosure regulations (24.3%) and external interference (8.6%). By company size, 58.2% of companies with assets over 2 trillion won pointed to the shortage of outside director talent pools as their biggest challenge.

The FKI forecasted that, starting this year, it will become even more difficult to appoint desired directors due to the enforcement decree of the Commercial Act, which strictly limits qualifications such as term limits for outside directors.

Yoo Hwan-ik, head of the Corporate Policy Office at the FKI, said, "This survey shows that even large companies find it difficult to find outside directors with expertise," adding, "Excessive qualification restrictions on outside directors should be reconsidered now to guarantee the autonomy of corporate governance."

This content was produced with the assistance of AI translation services.