[Inside Chodong] I Want to See the Chairman and CEO at the Shareholders' Meeting

"It would be good if Chey Tae-won, chairman of SK Group, attended the general shareholders' meeting."

At the SK shareholders' meeting held on the 29th of last month, shareholders expressed dissatisfaction over Chairman Chey's absence. Chairman Chey did not attend the meeting due to his participation in the Boao Forum. Although Chairman Chey is an inside director responsible for internal decision-making, the chairman of the shareholders' meeting is Vice Chairman Jang Dong-hyun. Legally, it is not a problem if Chairman Chey does not appear at the meeting venue.

In fact, chairmen of the top five domestic conglomerates?Samsung, SK, Hyundai Motor, LG, and Lotte?rarely appear at shareholders' meetings. In Samsung Electronics' case, Chairman Lee Jae-yong is an unregistered executive, so he is not obligated to attend the meeting. Similarly, at LG, Vice Chairman Kwon Bong-seok attended the meeting instead of Chairman Koo Kwang-mo. Chairman Koo's greeting, stating, "Despite the global economic slowdown, we will continue to invest unwaveringly in securing core business competitiveness such as customer base, future technology, and talent," was read aloud by Vice Chairman Kwon, who holds the same CEO title.

This atmosphere was reflected in major affiliates within the groups as well. At LG Electronics, Chief Financial Officer (CFO) Bae Doo-yong attended and resolved the agenda instead of CEO Cho Joo-wan. CFO Kim Hong-gi presided over the LG Household & Health Care shareholders' meeting. Hyundai Motor's shareholders' meeting was led by President Jang Jae-hoon. Chairman Chung Eui-sun, who holds the positions of group chairman and inside director, chose a business trip to Mexico instead of attending the meeting. Shin Dong-bin, who is at the center of Lotte Group's governance structure spanning Lotte Holdings and domestic affiliates, did not appear not only at the Lotte Holdings meeting but also at affiliate meetings such as Lotte Chemical and Lotte Chilsung Beverage, where his reappointment as inside director was on the agenda.

The owners of companies are the shareholders. Also, companies have an obligation to contribute to social development. Yet, the owners and representatives symbolizing the companies do not communicate with the shareholders. The owners and representatives are at the top of the decision-making pyramid and are responsible for overall company management. In return, they receive tens of billions of won in compensation annually.

Of course, looking back, there have been attempts among the heads of the top five groups to actively communicate with shareholders. In 2018, ahead of attending the Lotte Holdings shareholders' meeting in Japan, Chairman Shin, who was then detained, submitted a bail petition citing attendance at the meeting as the reason. He explained the necessity of bail to gain an opportunity to explain himself, not only to defend management rights but also to stabilize group management.

People can hardly remember the last time the owners or representatives of the top five groups gave interviews to the media. Chairman Chey Tae-won recently gave an interview, but it was not as the group representative; he spoke in his capacity as chairman of the Chamber of Commerce. Of course, there is some understanding for keeping distance from the public. They have a lot of work, and excessive interest in their private lives can be burdensome. However, shareholders are different. Even if their stakes are smaller than the owners', they are partners and owners of the company.

Facing shareholders is not an easy position. Shareholders who buy stocks based on the company's future value want to confirm the company's future from the person with the highest decision-making authority. There is no law that says chairmen of large corporations must step back while chairmen of small and medium-sized enterprises communicate with shareholders at the meeting. The starting point for enhancing shareholder value lies with the shareholders. This is also why many chairmen and representatives still sweat it out and stand in front of shareholders despite receiving harsh criticism.