Companies Eager to Hire 'Female Directors'... Experts Cite 'Labor Shortage'

[Asia Economy Reporter Kim Heung-soon] Major companies, including the four major groups Samsung Electronics, Hyundai Motor, SK, and LG, are focusing on recruiting female experts. This is because, due to the revision of the Capital Market Act, from August next year, large corporations must include at least one female director on their boards. Companies have begun competing to secure reputable female outside directors who are also related to their business sectors before the revised law takes effect. Companies that have already recruited female outside directors are pushing for their reappointment, but since many companies still do not have female directors, it is expected that a 'talent shortage' will be inevitable.

According to CEO Score, a corporate evaluation site, as of September last year, among 147 companies with assets exceeding 2 trillion won (based on 2019 financial statements), the proportion of female directors among registered executives (inside and outside directors) was 5.1%. Out of a total of 1,086 registered executives, only 55 were female directors. Among these companies, 46 had at least one female director, accounting for 31.3%, while 101 companies, or 68.7%, had no female directors at all.

According to the revised Capital Market and Financial Investment Business Act, which will be enforced in August next year, listed companies with total assets exceeding 2 trillion won must not compose their entire board of directors with members of only one gender. Accordingly, about 100 companies without any female directors must appoint new female directors by this year's or next March's shareholders' meeting.

Accelerating Outside Director Appointments Ahead of August Capital Market Act Revision Enforcement
The Four Major Groups Moving Swiftly

The four major groups are responding quickly. Samsung Electronics plans to reappoint Professor Kim Sun-wook, Honorary Professor at Ewha Womans University Law School, whose term expires at next month's shareholders' meeting. Earlier, Samsung Electronics opened the era of female outside directors early by recruiting Kim Eun-mi, the current president of Ewha Womans University, in 2013. They appointed a figure with not only relevance to their core business areas but also significant social symbolism. Professor Kim, who is up for reappointment, was the first female head of the Legislation Office during the Roh Moo-hyun administration and also served as president of Ewha Womans University.

Hyundai Motor Group, appointing a female outside director for the first time ever this year, focused on recruiting experts in future new business fields. Hyundai Motor selected Associate Professor Lee Ji-yoon of KAIST's Department of Aerospace Engineering as its first female outside director candidate. Professor Lee was the first female director of the Korean Society for Aeronautical and Space Sciences and, in 2019, was the first Korean professor elected as a director of the American Institute of Navigation. Hyundai Motor is expected to seek her opinions on the direction and technological trends of Urban Air Mobility (UAM), a future core business. Hyundai Mobis confirmed Professor Kang Jin-ah of Seoul National University's Graduate School of Technology Management and Economic Policy, an expert with nearly 30 years of experience in technology management and business innovation, as an outside director candidate, while Kia selected Professor Cho Hwa-soon of Yonsei University's Department of Political Science and Diplomacy, an expert spanning political science and science and technology, as its outside director candidate.

SK Group is also taking proactive steps. SK Telecom plans to reappoint Professor Yoon Young-min of Korea University's Department of Media Studies, an expert in crisis and communication management, as an outside director. Earlier, SK Hynix recruited Han Ae-ra, a former judge and professor at Sungkyunkwan University Law School, as an outside director in March last year to enhance objectivity in board operations. Additionally, SK Networks, SK Chemicals, and SK Discovery currently have all-male boards and are assessing the status for appointing female directors.

LG Group is also accelerating efforts to recruit female outside directors. LG Electronics plans to propose the appointment of Professor Kang Soo-jin of Korea University Law School as an outside director at the shareholders' meeting next month. Professor Kang is recognized as a legal expert well-versed in fair trade and compliance (law-abiding management). LG Hausys has nominated Professor Seo Soo-kyung of Sookmyung Women's University’s Department of Environmental Design, and advertising agency G2R has nominated Professor Choi Se-jung of Korea University's Department of Media Studies as outside director candidates. LG Corporation, the holding company of LG Group, plans to appoint an ESG (Environmental, Social, and Governance) expert, a hot topic in the business community, while LG Uplus plans to appoint an open innovation expert as female outside directors.

Female Talent 'Highly Valued'...Urgent Need to Find Suitable Candidates

The primary condition companies consider when recruiting female directors is expertise in their business fields. An industry insider said, "We first consider whether the candidate can contribute to board operations and provide advice for future planning." Generally, female professors, legal professionals, and bureaucrats are preferred, but the pool of experts meeting these criteria is limited, making competition fierce.

Companies that already have female directors must find new candidates when the current outside directors reach the maximum reappointment term of six years under current law. Due to the severe talent shortage, cases of one person serving as an outside director for two companies simultaneously are increasing.

A business community official said, "Regardless of the law revision, there is great interest in the participation of meticulous and rational female experts on boards," adding, "Major companies are desperately searching for capable female director candidates."

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