60% of Domestic Group Heads Lack CEO Title... 35% Are Non-Registered Executives

[Asia Economy Reporter Suyeon Woo] It has been revealed that 60% of the heads of 60 major domestic groups have relinquished the title of CEO and hired professional management CEOs. At the same time, it was found that 35% of the heads are operating as non-registered executives without being listed as inside directors.

On the 23rd, the Korea CXO Institute analyzed the '2021 Status of Executives of Heads of 71 Domestic Corporate Groups' and announced these results. The survey targeted 60 companies with natural person identical persons (heads) among the 71 groups designated by the Fair Trade Commission (FTC) this year as having assets exceeding 5 trillion won.

The survey found that among the heads of 60 domestic groups, only 23 hold the title of 'CEO' at affiliated companies within their groups. Conversely, this means that 37 out of 60 heads (61.7%) do not hold the CEO title.

The head with the most CEO business cards is Chairman Kim Hong-guk of Harim Group. Chairman Kim serves as CEO at four affiliates: Harim Holdings, Pan Ocean, Harim, and Farmsco. Shin Dong-bin, Chairman of Lotte Group, concurrently holds CEO positions at three companies: Lotte Holdings, Lotte Confectionery, and Lotte Chemical.

The CXO Institute interpreted that heads who do not hold CEO positions, such as those in Samsung, Booyoung, and Kumho Asiana groups, are either legally detained due to legal issues or are practicing shadow management as non-registered executive chairpersons, like in Shinsegae and Mirae Asset groups. They also introduced cases like Hyundai Heavy Industries and Hankook Tire, where the heads have stepped back from frontline management and handed over control to their children.

Among the 37 heads without the CEO title, 21 were found to also lack any inside director titles. This means that 35% of the 60 heads are non-registered executives and cannot participate as members of the board of directors, the highest decision-making body of the company. On the other hand, 20 heads were found to be registered executives who also serve as chairpersons of the board.

Oh Il-seon, director of the Korea CXO Institute, said, "With the full enforcement of the Serious Accident Punishment Act next year, there may be some cases where group owners transfer their current CEO or inside director positions at affiliates to professional managers. It is necessary to consider institutional measures that can minimize the side effects of this."

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