16% of Listed Mid-sized Companies Have Majority Owner Family Representation on Board of Directors

CEO Score Survey on Board Status of 722 Companies
Owner Family Ratio on Boards 23.2%... Women 5.4%

It was found that publicly listed mid-sized companies where the owner family holds more than half of the board of directors account for nearly 16% of the total. The proportion of owner family members among board members exceeded 23%. The percentage of female directors was in the 5% range.

On the 7th, CEO Score, a corporate data research institute, investigated the board composition status of 722 publicly listed mid-sized companies in Korea (as of the end of last month) and found that 114 companies, or 15.8% of the total, had owner families holding a majority on the board.

Among the top 500 companies, only 9 out of 268 listed companies (3.4%) had owner families holding a majority on the board. Mid-sized companies had 4.7 times that ratio compared to the top 500 companies. The number of publicly listed mid-sized companies with owner families holding more than half of the board increased by 2 from the end of last year (112 companies). The ratio also rose by 0.3 percentage points from 15.5% to 15.8%.

The owner family ratio exceeded half in 11 companies including Shindaeyang Paper, Seegene, and Dongwoo Farm to Table. In 9 companies including FST, the ratio fell below half.

Among publicly listed mid-sized companies, 30 companies had an owner family ratio exceeding 50% with three or more members. At Hwacheon Kikong, 5 out of 8 board members (62.5%) were owner family members, including Chairman Kwon Young-yeol and his younger brother, Vice Chairman Kwon Young-doo. At Shindaeyang Paper, 5 out of 9 board members (55.6%) were owner family members, including Chairman Kwon Hyuk-hong and his spouse, Director Lee Kyung-ja. Owner family members were included in groups of four on the boards of Korea Cast Iron Pipe Industry, Geumhwa PSC, Husteel, Yuseong TNS, and DSR Steel.

The total number of board directors among the 722 companies surveyed was 3,752. Owner family members numbered 872 (23.2%). This was 13.5 percentage points higher than the owner family ratio of 9.7% among the top 500 companies. The average number of owner family members on the boards of publicly listed mid-sized companies was 1.2, which was 0.5 higher than that of large companies (0.7). A total of 579 mid-sized companies (80.2%) appointed at least one owner family member. For large companies, the figure was 134 (50%).

The proportion of women on boards was lower in publicly listed mid-sized companies than in large companies. The percentage of female directors on boards of publicly listed mid-sized companies was 5.4% (203 people). This was less than half of the 11.6% (212 people) in the top 500 companies. Among publicly listed mid-sized companies, 161 companies (22.3%) appointed at least one female director. In large companies, 61.9% (166 companies) appointed at least one female director.

Article 165 of the Capital Markets Act states that, as of the end of the most recent business year, the board of directors of a publicly listed company with total assets of 2 trillion won or more must not be composed entirely of one gender.