More than 1,000 Outside Directors in Top 50 Groups... Nearly 90 Holding Concurrent Positions on Two Boards

CXO Research Institute, Survey on Outside Directors of Top 50 Groups Last Year
Scholars Most Numerous Among Outside Directors Active in Two Companies

Last year, the number of outside directors in the top 50 domestic conglomerates exceeded 1,000. Nearly 90 individuals served as outside directors on the boards of two different companies simultaneously. Among those holding concurrent outside director positions, scholars were the most common.

On the 20th, Korea CXO Research Institute, a corporate analysis specialist, announced the results of its "2023 Analysis of Outside Directors in the Top 50 Conglomerates."

As of last year, there were 1,218 outside directors participating on the boards of subsidiaries within the top 50 conglomerates. Among large business groups with controlling shareholders, SK Group had the highest number of outside directors at 98. Hyundai Motor (74), Lotte (70), and Samsung (66) groups also had more than 50 outside directors each. Hanwha (47), Kakao (46), Hyundai Department Store (44), LG (38), CJ (34), and HD Hyundai and LS (31 each) groups also had more than 30 outside directors.

Of the 1,218 individuals surveyed, 51.6% (628 people) had terms ending before this month's shareholders' meetings. Among them, 58.2% (709 people) were newly appointed outside directors entering the company boards for the first time. The remaining 41.8% (509 people) had been reappointed two or more times.

There were 86 outside directors serving on the boards of two companies. Among them, 79.1% (68 people) were male, and 20.9% (18 people) were female. By birth year, those born between 1965 and 1969 accounted for the largest share at 30.2% (26 people), followed by those born between 1960 and 1964 at 25.6% (22 people), and 1955 to 1959 at 23.3% (20 people). Those born after 1970 made up 12.8% (11 people).

Among single birth years, 1966 was the most common with 8 people (9.3%). Notable outside directors born in 1966 included Lee Dong-yeol (Hyundai Wia and Daehan Electric Wire), Cho Hyun-wook (Samsung Heavy Industries and Lotte Chilsung Beverage), and Cho Hwa-sun (LG Chem and Kia).

Looking at the careers of outside directors serving on two company boards, scholars accounted for the largest portion at 38.4% (33 people). Former government officials made up 34.9% (30 people), legal professionals 15.1% (13 people), and entrepreneurs 11.6% (10 people). Among the former government officials, 16.3% (14 people) were former ministers or vice ministers.

The most prominent scholar serving as an outside director on two company boards is Jeong Gap-young, former president of Yonsei University. He has served as an outside director for Korean Air and CJ Logistics. He has held the outside director position at CJ Logistics for six consecutive years since 2018. Among former government officials, former Minister of Justice Kim Hyun-woong is notable. Kim served as Minister of Justice from July 2015 to November 2016. He is currently the lead attorney at Barun Law Firm and serves as an outside director for Hotel Shilla and HD Hyundai Oilbank.

Among former judges, Kim Tae-hee, former judge of the Seoul Administrative Court, stands out. She is the lead attorney at Pyeongsan Law Firm and serves as an outside director at Shinsegae I&C and SM Entertainment. Among former prosecutors, Gu Bon-seon, former chief prosecutor of the Gwangju High Prosecutors' Office, is notable. Gu is the lead attorney at Gu Bon-seon Law Office and currently serves as an outside director for Hanjin and Hanwha Systems.

By group, Samsung and SK had the highest number of outside directors serving on two company boards, with 17 people each. This accounted for 25.8% of Samsung's total 66 outside directors and 17.3% of SK's 98 outside directors. Hyundai Motor (14 people, 18.9%) and Lotte (12 people, 17.1%) followed.

Oh Il-seon, director of the CXO Research Institute, said, "Although the outside director system has been introduced in Korea for nearly 30 years, it often empowers key figures such as CEOs rather than effectively checking internal management. It is necessary to consider various institutional reforms, such as appointing at least one shareholder-nominated outside director or introducing a system where some outside directors serve full-time for a certain period."