[The Editors' Verdict] Businesses Are First-Rate, But What About Labor Unions?

The late Lee Kun-hee, chairman of Samsung, made his "fourth-rate politics" remark in 1995. At the time, he said, "Politics is fourth-rate, administration is third-rate, and business is second-rate." Although this comment earned him animosity from the political sphere, it resonated with many people. So, what about now, 28 years later?

It is hard to deny that businesses have become first-rate. Samsung, SK, Hyundai Motor, LG, and others have grown into world-class companies. Last year, Samsung Electronics ranked 5th for the third consecutive year in the "Global 100 Brands" list released by global brand consultancy Interbrand. Its brand value reached $87.7 billion (approximately 114 trillion KRW). Only Apple, Microsoft, Amazon, and Google had higher brand values than Samsung Electronics. Hyundai Motor (35th) was valued at $17.3 billion (about 22 trillion KRW), ranking 6th among global automobile brands. Kia (87th) also made it into the top 100 brands.

The growth of these companies was driven by relentless technological development and innovation. Samsung Electronics has strengthened its position as the world's number one memory semiconductor company while also threatening Apple in the mobile device market. Hyundai Motor has long invested in next-generation mobility such as hydrogen fuel cell and electric vehicles, and through premium strategies like Genesis, it has completely shed the stigma of being called a "tin can car" in the past. SK and LG affiliates have also established themselves as leading global companies in fields such as semiconductors and batteries.

There are noteworthy aspects in this process?namely, corporate transparency. Twenty years ago, Korean companies were viewed with suspicion by foreign investors. The image of Korean companies, represented by "chaebols," was that of second-rate companies with opaque accounting and management decisions dominated by the owner's unilateral choices. Some large business owners even ended up behind bars due to accounting fraud scandals. Faced with pressure from the government, investors, and consumers for accounting transparency on one hand, and the unavoidable choice to become global companies on the other, Korean companies devoted themselves to enhancing transparency. To survive, companies had no choice but to secure transparency.

In 2011, the International Financial Reporting Standards (IFRS) were fully adopted, followed by accounting system reforms such as the 2017 amendment to the External Audit Act. Transparency in accounting for non-profit organizations and groups is also being strengthened. Last year, a periodic audit designation system for public interest corporations and private universities was implemented, and next year, apartment complexes and other multi-unit housing will also be subject to external audits.

What about labor unions in first-rate companies? In the 1980s, labor unions were a key force in improving the human rights of workers under harsh conditions and leading the democratization of our society through the democratic union movement. When striking against unfair treatment, they often received overwhelming public support. But now, one wonders how many people still applaud labor unions.

Large company unions are focused solely on securing massive bonuses, and under-the-table payments under the name of monthly fees are rampant at construction sites. The perception of unions has worsened considerably as some union officials have been found embezzling union dues or accepting bribes in exchange for job placements. In particular, suspicions about the accounting transparency of union operating funds remain the first issue to be resolved. Unions must ask themselves: what rank are they really?

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