Corporate boards lack women ahead of law requiring them

Nearly half of the largest listed companies in Korea have no female board members, according to a report Tuesday, despite the planned implementation of a law that requires balance on corporate boards.

The revision to the Financial Investment Service and Capital Markets Act, due to come into effect in August, will require a company with over 2 trillion won ($1.7 billion) in assets to guarantee board diversity. In short, these companies need at least one female director.

Leaders Index found that 77 companies out of 167 listed companies with over 2 trillion won in assets, had no women directors as of the third quarter of 2021.

A year earlier, 116 of the companies had no women on their boards.

"The law only says 'a certain sex' cannot dominate the board, but based on the male-biased structure in the Korean market, the revision is meant to include more female executives in the corporate governance structure," the report said.

The number of companies with a female member of the board increased from 51 to 90 since the revision was passed.

In total, 103 women are on the boards of these companies. Of those, 93 are independent directors.

"Many companies had hastily filled in the seats with outside board members who do not hold any management position within the company," the report said.

Only nine companies had female executives directors: Naver, CJ CheilJedang, Hotel Shilla, Samsung SDI, Daesang, Netmarble, Lotte Chilsung Beverage, Kumho Tire and Daishin Securities.

The only company that had both outside and inside female board members was Lotte Chilsung Beverage.

The large number of companies falling short of the new law's demands means that competition to appoint female directors will grow fierce starting in March, when companies hold their regular shareholder meetings.

Of the 77 companies that do not have a female board member, 54 have 138 outside board members with contracts ending this March. The other 23 companies will have to replace existing members with female members before the law kicks in in August.

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]