Company Listing Family Members as Directors Rises After 5 Years

Fair Trade Commission Announces 2023 Corporate Governance Status of Publicly Disclosed Business Groups

The proportion of companies with family members of the heads of large conglomerates registered as directors has turned upward after five years.

On the 26th, the Korea Fair Trade Commission (KFTC) analyzed and announced the '2023 Governance Status of Publicly Disclosed Business Groups (hereinafter large business groups)' containing this information.

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According to the KFTC analysis, among 2,602 affiliates belonging to 64 large business groups with heads, the proportion of companies with at least one family member of the head registered as a director was 16.6% (433 companies).

The proportion of companies with family members of the head registered as directors decreased from 21.8% in 2018, 17.8% in 2019, 16.4% in 2020, 15.2% in 2021, to 14.5% in 2022, but slightly increased after five years. The proportion of companies with family members of the head registered as directors in the 57 groups analyzed consecutively last year and this year was 14.6%, an increase of 0.1 percentage points compared to last year. The KFTC evaluated the upward turn in the proportion of companies with family members of the head registered as directors this year as "positive in terms of responsible management."

By group, the business group with the highest proportion of companies with family members of the head registered as directors among all affiliates was Celltrion (88.9%). Among 9 affiliates, 8 had family members of the head registered as directors. On the other hand, five groups including Samchully, E-Land, and Mirae Asset had no family members of the head registered as directors.

The heads themselves concurrently held an average of 2.8 directorships (2.5 for second and third generation heads). The proportion of companies where family members of the head served as non-registered executives rather than board members was 5.2% (136 companies). A survey of 309 listed companies belonging to 73 large business groups showed that the proportion of outside directors on the board was 51.5%, slightly down from 51.7% last year.

The KFTC stated, "There are still many companies where family members of the head enjoy authority as non-registered executives without bearing responsibility as registered executives," and added, "There is still significant room for improvement in the practical operation of institutional measures."

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