Collection of AGM Notices from 21 Major Domestic Corporations
Appointment of 34 New Outside Directors
Building Management Strategies Reflecting Uncertainty
Preparing to Foster New Growth Businesses Such as Robots
Active Recruitment of Financial Experts to Enhance Corporate Value
Declining Popularity of ESG Experts
This year, major domestic conglomerates are recruiting outside directors from various fields including finance and accounting, law, management, and technology, as well as economic bureaucrats. In particular, they appear to be bringing in a large number of experts in trade and artificial intelligence (AI) to respond to increased domestic and international uncertainties. Experts in ESG (environment, social, and governance) related fields such as environment, employment, and labor, which have been major issues in corporate management, were relatively few.
On the 23rd, Asia Economy compiled the shareholder meeting notices submitted to the Financial Supervisory Service from 21 major domestic conglomerates, finding that these companies will appoint 34 new outside directors from various professional fields. Among them, trade and policy experts and finance and accounting experts were the most numerous, with 8 each. Following them were 7 legal experts, and 7 and 5 experts in management and technology, respectively.
Considering that more than half of the outside directors of domestic conglomerates are finance, accounting, and legal experts, this year saw a significant increase in the recruitment of outside directors with expertise in trade and technology. This appears to be a move to establish management strategies reflecting uncertainties amid rapidly changing trade environments, with anticipated geopolitical and geoeconomic risks and shifts in the global political landscape. It is also interpreted as a strategic step to foster new growth businesses such as robotics and AI.
The company that decided to recruit a large number of trade experts is Hanjin Group. Hanjin Kal, the holding company of Hanjin Group, has nominated Professor Song Baek-hoon of Dongguk University, an international trade expert, as an outside director. Korean Air also plans to appoint Professor Huh Yoon of Sogang University, who served as a former Ministry of Commerce official, a U.S. lawyer, an arbitrator at the Shanghai International Economic and Trade Arbitration Commission, and president of the Korean International Trade Association.
The core business of air transportation is a representative regulated industry where coordination of differences with not only domestic but also foreign countries is important. This recruitment is also interpreted as being mindful of the corporate merger with Asiana Airlines, the group's biggest current issue.
Samsung Electro-Mechanics has nominated former Korea Electric Power Corporation (KEPCO) President Jung Seung-il as a new outside director. Jung is an expert in the energy industry, having served as president of KEPCO and Korea Gas Corporation, and also handled trade affairs as an FTA policy officer during his time at the Ministry of Trade, Industry and Energy. He later served as head of the Trade and Investment Office.
POSCO Holdings attracted attention by deciding to appoint former SK Hynix Vice Chairman Park Sung-wook. Park, an engineer by background, is regarded as an expert in the materials industry. The company explained the reason for the recruitment, saying, "He has been actively involved in research and development and technological innovation, including serving as chairman of the Korean Academy of Engineering," and added, "He will provide insights and greatly contribute to the company's growth and sustainability."
Samsung Electronics and Hyundai Mobis are also recruiting a large number of technology experts such as those in artificial intelligence (AI). Samsung Electronics has nominated Professor Cho Hye-kyung of Hansung University’s AI Application Department, a robotics expert, as an outside director. Professor Cho has served as a director of the Korean Institute of Electrical Engineers, president of the Korean Robotics Society, graduated from Seoul National University’s Department of Control and Instrumentation Engineering, and is a junior alumnus of Kyung Kye-hyun, head of Samsung Electronics’ Device Solutions (DS) division.
Hyundai Mobis plans to appoint the Chief Operating Officer (COO) of CASE With Tenstorrent as an outside director. This recruitment aims to gain insights into technology fields such as electrification and software-defined vehicles (SDV), which are recent hot topics in the automotive industry.
Recruitment of former bureaucrats is also notable. Samsung Electronics plans to newly appoint former Financial Services Commission Chairman Shin Je-yoon as an outside director. Shin, who entered public service through the 24th Administrative Examination, is a seasoned bureaucrat. He held key positions such as First Vice Minister of Strategy and Finance (2011?2013) and Chairman of the Financial Services Commission (2013?2015) during the Lee Myung-bak and Park Geun-hye administrations. He currently serves as an advisor at the law firm Bae, Kim & Lee and is an outside director and audit committee member at HDC. Samsung SDS will process a proposal to appoint former Statistics Korea Commissioner Lee In-sil as an outside director and auditor. Samsung Engineering will newly appoint former Export-Import Bank Vice President Shin Kyung-taek as an outside director. He oversaw project financing (PF) as head of the Plant Finance Division at the Export-Import Bank.
LS Electric will newly appoint former Minister of Strategy and Finance Yoon Jeung-hyun as an outside director and audit committee member. Yoon previously served as Chairman of the Financial Supervisory Commission and Governor of the Financial Supervisory Service, as well as Minister of Strategy and Finance. He currently operates the Yoon Economic Research Institute, named after himself.
There are also moves to enhance corporate value. Kia plans to appoint Lee In-kyung, Vice President of MBK Partners, as an outside director at the regular shareholders’ meeting on the 15th of next month. He is the Chief Financial Officer (CFO) of Korea’s largest private equity fund and is regarded as an expert in capital markets and strategic investment. Hyundai Glovis, an affiliate of Hyundai Motor Group, is also filling its board with capital market experts, such as appointing former Mirae Asset Securities Chairman Choi Hyun-man as an outside director. This aligns with efforts to strengthen shareholder returns and boost stock prices by each affiliate.
On the other hand, the appointment of new experts in the ESG field has decreased. According to an analysis by Leaders Index, a corporate analysis research institute, of the board capabilities of 827 outside directors from 237 companies that submitted quarterly reports among affiliates of the top 30 groups, the proportion of expertise in the ESG field was the lowest at 3.5% (29 people).
An industry insider said, "Outside directors should play a monitoring role by enhancing management transparency and voicing independent opinions for the benefit of the company, but interest in the ESG field appears to be low."
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