"Seeking Female Outside Directors"... Electronics Industry Strengthens Board Diversity

Starting with Samsung Electronics and Electric General Meetings on the 15th
Board Specificity Not Achieved for Listed Companies with Assets Over 2 Trillion
Strengthening Board Expertise and Diversity

[Asia Economy Reporter Han Ye-ju] The regular March shareholder meeting season has officially begun. What stands out is the lineup of outside directors. Following the revised Capital Markets Act, major companies are increasing the number of female outside directors. The Capital Markets Act stipulates that listed companies with total assets of 2 trillion won or more must not compose their entire board of directors with members of a single gender.

In the electronics industry, Samsung Electronics, Samsung SDI, and Samsung Electro-Mechanics began their regular shareholder meetings on the 15th, followed sequentially by LG Display (21st), LG Innotek (23rd), LG Electronics (27th), and SK Hynix (29th).

Among them, LG Display and SK Hynix are increasing the proportion of female outside directors from one to two.

SK Hynix plans to reappoint Professor Han Ae-ra of Sungkyunkwan University School of Law as an outside director and newly appoint Kim Jung-won, an advisor at Kim & Chang law firm, as an outside director. If the agenda passes at the shareholder meeting, the number of outside directors will increase from six to seven, and the number of female outside directors will increase from one to two (Han Ae-ra and Kim Jung-won).

LG Display has nominated Professor Park Sang-hee of the Department of Materials Science and Engineering at the Korea Advanced Institute of Science and Technology (KAIST) as a candidate for outside director. The company judged that Professor Park has expertise in the display field, serving as president of the Korean Information Display Society and as a distinguished member of SID, among other roles. If Professor Park is appointed, LG Display will have two female outside directors, including Professor Kang Jung-hye of the Seoul National University School of Law. This is an increase of one female outside director just one year after Professor Kang's appointment last year. Having two female outside directors is a first since the company went public.

Samsung SDI is also recommending Lee Mi-kyung, CEO of the Environmental Foundation, as a new outside director candidate. Lee, who has experience as an outside director at HYBE, leads ESG forums and serves as a member of the Carbon Neutrality Committee, making her a prominent NGO activist. She is expected to assist Samsung SDI in establishing ESG management strategies.

The scene from the 53rd Samsung Electronics Annual General Meeting held last year.
[Photo by Yonhap News]

Samsung Electro-Mechanics will propose the appointment of Choi Jong-gu, chairman of the Lina Jeonseonggi Foundation, as an outside director, and the reappointment of Professor Yeo Yoon-kyung of Ewha Womans University’s Business Administration Department as an outside director.

Samsung Electronics is also proactive in appointing female outside directors. In December last year, it held an extraordinary general meeting and appointed Yoo Myung-hee, former head of the Ministry of Trade, Industry and Energy’s Trade Negotiation Headquarters, as an outside director. This appointment is interpreted as a move to respond to rapidly changing international circumstances and intensified competition among global companies by bringing in an international trade expert.

Companies are increasing the proportion of female outside directors to pursue workforce diversity in line with ESG (Environmental, Social, and Governance) principles.

Since the Capital Markets Act, which came into effect in August last year, includes a provision that companies listed with assets of 2 trillion won or more must not compose their board of directors solely of one gender, appointing female outside directors has effectively become mandatory for companies. Companies without female inside director candidates are seeking prominent women from outside to fill outside director positions. Currently, there are 143 companies with assets exceeding 2 trillion won.

However, some point out that although the number of female outside directors is gradually increasing, the proportion of female executives remains small. The so-called glass ceiling is not easily broken. In fact, as of February, the proportion of female executives on the boards of listed companies among the top 500 companies was only 10%. Most of these are female outside directors. There are only 23 female inside directors, more than half of whom?15?are family owners, with only eight being professional managers.