ESG Management Focus... Food Industry Increases Female Executives

[Asia Economy Reporter Seungjin Lee] The food industry, which has long been conservative in corporate culture and reluctant to expand female executives, is now making changes as ESG (Environmental, Social, and Governance) management becomes a hot topic. CJ CheilJedang has appointed its first female inside director, signaling the food industry's intention to accelerate the recruitment of female talent.

Amendment to the Capital Markets Act... Appointment of First Female Inside and Outside Directors

According to the food industry on the 10th, CJ CheilJedang and Nongshim, which recently held their regular shareholders' meetings, appointed their first female inside director and outside director, respectively. This appointment of female executives is a measure in accordance with the amended Capital Markets Act, which was revised in February last year and is scheduled to be enforced in August next year.

According to the amended Capital Markets Act, listed companies with total assets of 2 trillion won or more must include at least one female director on their board to prevent the board from being composed of only one gender. This is in response to criticism that most boards have been composed solely of men, resulting in a lack of diversity. CJ CheilJedang and Nongshim have total assets (based on separate financial statements) of 9.538 trillion won and 2.493 trillion won, respectively, as of last year.

The newly appointed Kim So-young, Head of the AN Business Division (Vice President equivalent) at CJ CheilJedang, is the company's first female inside director. This also reflects the fact that the board has been composed mainly of men until now. CJ CheilJedang's appointment of a long-serving internal female executive as an inside director is a very rare case in the business world, and the company plans to continuously expand the hiring of female talent.

Nongshim also recently held a shareholders' meeting and appointed its first female outside director. The newly appointed Kim Ji-yeon, a professor at Seoul National University of Science and Technology, is the only female among the approximately 40 registered and unregistered executives at Nongshim. Nongshim expects that by appointing Professor Kim, a food expert and a woman, it will be able to strengthen its focus on female customers.

CJ CheilJedang Kim So-young New Inside Director

Food Industry Accelerates ESG Management

Some companies with total assets under 2 trillion won, which are not subject to the amended Capital Markets Act provisions, are also accelerating the recruitment of female talent to expand ESG management. Although food companies' main customers are women and the proportion of women in the workplace is high, the proportion of female executives has been particularly low. This has negatively affected the 'governance' evaluation in ESG, prompting changes.

Samyang Foods reorganized its board last month and established an ESG committee under the board. This is a measure to strengthen board functions, aiming to build a transparent and fair management system and strategically manage non-financial factors. To secure board diversity, the company also included one female outside director.

Pulmuone has had an ESG committee since 2017 and is accelerating ESG management. It also established a dedicated department called 'Right Mind Management.' Among major food companies, Pulmuone has the highest proportion of female outside directors, with three women listed as registered executives.

Some Still Slow to Expand Female Executives

Some food companies that have traditionally adopted conservative management styles remain passive in expanding female executives.

Companies such as Dongwon F&B, Lotte Confectionery, Ottogi, Harim, and Haitai Confectionery & Foods have no female executives among both registered and unregistered executives. In some cases, female workers outnumber male workers, yet there are no female executives. In the case of Orion, except for Vice Chairwoman Lee Hwa-kyung, the wife of Chairman Dam Cheol-gon, there are no female executives among all registered and unregistered executives.

Regarding this, a food industry official explained, "Many food companies still have conservative aspects due to their long-standing corporate culture," adding, "Considering the proportion of female employees, it is true that there are relatively more male executives." He continued, "As ESG management has become a hot topic, it is internally judged that the traditional way of operating organizations is no longer feasible," and said, "Going forward, most companies will actively appoint female executives and strive to create a female-friendly corporate culture."