Four Major Groups Considering Joining FKI... Revival of the Eldest Brother Role Amid 'Changed Atmosphere'

The Federation of Korean Industries (FKI) has sent official letters to the four major conglomerates?Samsung, SK, Hyundai Motor, and LG?requesting their rejoining as member companies. This move comes as these four groups, which withdrew following the 2016 Park Geun-hye administration's political scandal, have begun reviewing the decision to rejoin. This return movement of the four major groups emerges at a time when the FKI is being recognized for somewhat regaining its role as a trusted economic organization. Currently, the FKI is undergoing organizational restructuring to transform into the Korea Economic Association (KEA), which integrates the FKI and the Korea Economic Research Institute, as part of efforts to restore trust.

Kim Byung-joon, former chairman of the Federation of Korean Industries. Photo by Dong-joo Yoon doso7@

On the 21st, the four major groups?Samsung, SK, Hyundai Motor, and LG?received official letters from the FKI on the 19th requesting their rejoining as members of the integrated Korea Economic Association (KEA), scheduled to launch at the end of August, and have begun preparations for internal discussions. The letter states that the four major groups, which maintain their membership status in the existing Korea Economic Research Institute, will have their status succeeded to the KEA. It also includes a request for active participation so that the KEA, which is undergoing a complete transformation and is the only proper private think tank in Korea, can gain public support.

The decision on whether the four major groups will rejoin will be made at the FKI general meeting at the end of next month. The groups will also discuss the agenda at their respective major affiliates' board meetings by the end of this month. The business community believes that since the FKI has recently made efforts to restore its role by organizing economic delegations accompanying President Yoon Suk-yeol on overseas trips, rejoining by member companies is possible. In fact, the heads of the four major groups attended the 'Korea-Japan Business Roundtable' co-hosted by the FKI and Japan's Keidanren in March, and appeared at the 'Korea-US Business Roundtable' event in April, actively participating in FKI-hosted events. Hyundai Motor Group Chairman Chung Eui-sun also took part in the FKI's public communication project 'Godsaeng (God生) One Meal' in May.

However, even though the four major groups will discuss the matter through their boards and Samsung's Compliance Committee, the atmosphere suggests that rather than individually expressing their intention to rejoin, they are likely to join all at once with a justified reason for rejoining. A senior official from one of the four major groups said, "If we join the FKI, all four major groups will join together," adding, "We will join the FKI someday, but the timing is the issue." Another senior official from a major group said, "It will be difficult for the four major groups to decide and communicate their rejoining individually," and "It seems they will move together."

Some speculate that if all four major groups pursue rejoining, Samsung's move will have a decisive influence. On the 18th, Lee Chan-hee, chairman of Samsung's Compliance Committee, said regarding Samsung's rejoining, "More careful consideration is needed," and added, "I think the FKI itself needs a Copernican revolution (a brilliant idea that breaks the conventional thinking framework)." Since Chairman Lee mentioned a Copernican revolution, it is interpreted that the integrated and reorganized KEA must accompany a groundbreaking reform that completely breaks the ties of collusion between politics and business and performs its proper role for the four major groups to have a reason to move. Until recently, Samsung had shown a negative stance or avoided mentioning rejoining the FKI. Chairman Lee's remark that "consideration is needed" is seen as somewhat different from Samsung's previous attitude.

The main reason the four major groups left the FKI was largely due to being embroiled in controversies over collusion between politics and business during the Mir and K-Sports Foundation scandals. To induce the return of the four major groups, the FKI must prove that it is a transparent organization with no possibility of being linked to political-business collusion. The FKI has proposed reform measures such as changing the institution's name, establishing an Ethics Management Committee, strengthening think tank functions, expanding ESG (environment, social, governance) management, and activating global networks as alternatives.

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