Appointment of Female Directors in Companies with Assets of 2 Trillion Won: 55% Are Female Executives, Mostly Outside Directors

Significant Increase in Female Registered Executives Due to Capital Market Act
Female Inside Directors in Companies Over 2 Trillion Won Remain at 1.2%
Companies Mainly Appoint Female Executives as Outside Directors

[Asia Economy Reporter Han Jinju] Among companies with assets exceeding 2 trillion won, one in two (55%) have appointed at least one female executive director. This is attributed to many companies appointing female executives as outside directors before the enforcement of the 'Capital Market Act,' which prohibits boards of directors from being composed of a single gender.

On the 5th, the Ministry of Gender Equality and Family announced the results of the '2021 Gender Status of Executives in Listed Companies' survey. The ministry also revealed trends in the gender composition of executives in companies with total assets exceeding 2 trillion won, in relation to the special provisions on board gender composition under the 'Capital Market Act' to be applied from August next year.

5.7% Female Executives in Companies with Over 2 Trillion Won in Assets... 1.2% Female Inside Directors

Among 152 companies subject to the Capital Market Act, 85 companies (55.9%) appointed at least one female executive director. Last year, only 45 out of 147 companies (30.6%) met the Capital Market Act standards, marking a 25.3 percentage point increase in one year. With the enforcement of the Capital Market Act from August next year, which prohibits boards from being composed of only one gender, companies have rapidly appointed female executive directors, resulting in a significant increase.

The proportion of female executives among all executives in companies with assets over 2 trillion won increased by 1.2 percentage points from the previous year to 5.7% (491 individuals). 118 companies (77.6%) appointed at least one female executive, a double-digit increase of 10.9 percentage points.

Top 20 Companies with Over 2 Trillion KRW in Assets and Highest Proportion of Female Executives (Source: Ministry of Gender Equality and Family)

Among 173 executive directors in companies with assets over 2 trillion won, 97 (8.3%) were women, and among 7,504 non-executive directors, 394 (5.3%) were women. When limited to inside directors who make key management decisions, the proportion of female executives was only 1.2% (5 individuals). The proportion of outside directors, who are external to the company, was 12.2%, an increase of 5.2 percentage points from last year. It is analyzed that most companies filled the female executive ratio with outside directors to meet the quota.

There were 38 companies that had no female executive directors until last year but newly appointed at least one female executive director this year. These include Hyundai Motor, Hyundai Construction, Hyundai Glovis, Hyundai Mobis, Kia, Samsung Life Insurance, LG Electronics, LG Uplus, LX Hausys, GS Construction, SK, SK Networks, SK Rent-a-Car, E-Mart, Hanwha, Hanwha Aerospace, CJ Logistics, CJ CheilJedang, POSCO, and others.

Overall Female Executive Ratio in Listed Companies is 5.2%

Trend of the Proportion of Female Executives in All Listed Companies (Data=Ministry of Gender Equality and Family)

Among 32,005 executives (including executive and non-executive directors) in 2,246 listed companies, 1,668 (5.2%) were female executives, an increase of 0.7 percentage points from the previous year. The number of companies appointing female executives rose slightly to 815, up 2.8 percentage points. When expanded to all female employees in listed companies (406,631), the female executive ratio was only 0.41% (1,668 individuals), which is one-sixth of the male executive ratio (2.57%). There is one female executive per 244 female employees, but one male executive per 39 male employees. The gender gap in the ratio of employees to executives is 6.3 times higher for men.

Industries with a high proportion of female employees include education services, wholesale and retail trade, business support and rental services, and finance and insurance. Industries with a high proportion of female executives are education services, scientific and technical services, information and communication, and wholesale and retail trade. The ratio of female executives to female employees in education services and wholesale and retail trade was low at 0.34% and 0.22%, respectively.

Jeong Young-ae, Minister of Gender Equality and Family, stated, "While the gradual increase in the proportion of female executives in listed companies is meaningful, considering the expansion of women's social participation, the advancement of women into decision-making positions in the private sector remains insufficient. Active improvements and various efforts to change perceptions are necessary."