CEOs of big companies also dominate boardroomMost Korean CEOs wield great influence on their companies’ board of directors by serving as their chairperson and have a say in choosing outside members of the board, regulatory records indicated Thursday.
An inspection by the Financial Supervisory Service on listed firms showed 86 percent of their CEOs also served as the heads of the boards of directors and 61.2 percent were participants in the committees that select the boards’ external members. The latter rate is higher than that for the committees on inter-affiliate trading (29.8 percent) and committees on compensation (36.7 percent).
The inspection was conducted on 1,087 firms that closed their books in December and have assets of at least 100 billion won ($89.38 million).
An average of 5.4 people served on the directors’ boards, three of them usually from the firms. The boards convened 13.9 times a year on average, but the number applies only to big companies. Fifty mid-sized companies reported meeting about once or even less each quarter.
Records showed there were only 19 firms where an outside member cast an opposing vote on a company motion.
The selection process for outside directors was murky, with 81.7 percent of the firms not disclosing related information. There was no information on the relations between the outside director and the firm for 35.5 percent of the inspected companies, and no citations of relations between external members and the biggest shareholders for 24.1 percent of the firms.
Outside board members usually served 39.8 months, with their terms commonly extended once or twice. There were 163 people serving for over nine years or on their third or more terms.
The same records showed that 23 of the outside members have never attended a board meeting.
Backgrounds of the outside members included academia (28.3 percent), industry (22.4 percent), law (14.1 percent) and accounting (11.8 percent).