Over a Decade of Stagnation in South Korea's Anti-Corporate Sentiment

[Asia Economy Reporter Yoo Je-hoon] Anti-corporate sentiment in Korea has remained stagnant for over a decade. This is the result of a repeated cycle of public opinion deterioration caused by the deviant behaviors of some companies and subsequent regulatory tightening by the government and the National Assembly. As companies in the economic sector have recently been strengthening ESG (Environmental, Social, and Governance) management to improve anti-corporate sentiment, there are calls for improvements in regulatory policies that treat companies and businesspeople as potential criminals.

94% of Companies Say "Anti-Corporate Sentiment Exists"

The Korea Employers Federation (KEF) will hold a symposium titled “Anti-Corporate Sentiment in Korea: Diagnosis of Causes and Improvement Measures” on the afternoon of the 1st at the Press Center in Jung-gu, Seoul. The symposium will proceed with a presentation by Professor Ahn Jae-wook of Kyung Hee University on “Causes and Solutions of Anti-Corporate Sentiment,” followed by a panel discussion.

KEF is holding the symposium because the issue of anti-corporate sentiment shows little sign of resolution. According to a recent survey conducted by KEF targeting 109 companies, 93.6% of respondents said that “anti-corporate sentiment exists.”

In particular, when asked how the perceived level of anti-corporate sentiment has changed compared to the past, 42.2% answered “it has intensified,” and 34.3% said “it is similar,” indicating that 76.5% of the responding companies believe there has been no improvement. Among large companies, 71.4% responded that it has intensified, overwhelmingly surpassing companies with 300-999 employees (21.0%) and those with fewer than 300 employees (39.6%).

Stagnant for Over a Decade... Repeating a Vicious Cycle

Anti-corporate sentiment was first brought to public attention in 2003 when Accenture, a U.S. consulting firm, conducted a related survey across 22 countries and Korea ranked first in this undesirable category. The Korea Chamber of Commerce and Industry (KCCI) has also monitored trends by annually surveying and publishing the “Corporate Favorability Index (CFI)” since that year. The Corporate Favorability Index also shows no meaningful improvement in anti-corporate sentiment.

The CFI surveyed by KCCI recorded 38.2 points in its first survey in the first half of 2003. Despite minor fluctuations, it showed a gradual upward trend, reaching 54.0 points in the first half of 2010. However, after the Sewol ferry disaster, it dropped back to 44.7 points in the second half of 2014, returning to the level of ten years prior. In 2015, after changing the survey method, it reached a peak of 60.7 points, but following the so-called state affairs manipulation scandal of the previous administration the next year, it plunged to 47.6 points.

The cause of the lack of progress in anti-corporate sentiment is attributed to a “vicious cycle.” The deviant behaviors of some companies worsen public opinion, leading to regulatory tightening by the legislative and executive branches, which in turn causes further deviant behaviors?a pattern that has repeated over the past decade.

Recently, companies have been actively working to resolve anti-corporate sentiment by strengthening ESG management, compliance, and transparent management, as the sentiment has led to uniform regulatory tightening that returns as a management burden. A business community official said, “Companies must take the lead in eradicating the pervasive anti-corporate sentiment in our society and making companies beloved by the public,” adding, “The National Assembly and government’s regulatory-only policy stance also needs to change.”

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