'Core of Nonghyup Agricultural and Livestock Product Distribution' Cooperative Joint Business Corporation Seeks to Enhance Autonomy and Productivity for Revitalization

Han Hoon Vice Minister Visits Cheonan City Cooperative Joint Business Corporation Site
Announces 'Measures to Revitalize Cooperative Joint Business Corporation Operations'

The government is pushing for a major institutional reform to revitalize the Cooperative Joint Business Corporation system, which marks its 20th anniversary since introduction. The authority of the CEO will be significantly strengthened to establish a responsible management system, including granting the CEO the chairmanship of the board of directors.

On the afternoon of the 30th, Han Hoon, Vice Minister of the Ministry of Agriculture, Food and Rural Affairs, visited the Cheonan City Cooperative Joint Business Corporation located in Cheonan, Chungcheongnam-do, held a meeting, and announced the "Measures to Revitalize the Operation of Cooperative Joint Business Corporations."

Han Hoon, Vice Minister of the Ministry of Agriculture, Food and Rural Affairs (left), visited the Cheonan City Cooperative Joint Business Corporation located in Cheonan, Chungcheongnam-do, on the afternoon of the 30th, held a meeting, and announced the "Measures to Revitalize the Operation of Cooperative Joint Business Corporations."

A Cooperative Joint Business Corporation is a corporation formed by the alliance of two or more cooperatives with the purpose of scaling up and specializing the business of individual regional cooperatives and enhancing competitiveness through joint business execution.

At the meeting, Vice Minister Han said, "Since the introduction of the Cooperative Joint Business Corporation system in 2004, there has been quantitative growth, but there were also issues such as the lack of an independent management system for the corporations and insufficient operational transparency, which limited substantial growth. We have prepared these measures to foster Cooperative Joint Business Corporations as key players in the distribution of agricultural and livestock products produced by local agricultural cooperatives."

First, to establish a responsible management system for the CEO, the CEO's authority will be significantly strengthened. The CEO will be granted the chairmanship of the board of directors, and the introduction of outside directors will be made mandatory. Additionally, the CEO will be given the authority to evaluate the performance of dispatched employees and decide on the continuation of their dispatch. To ensure sufficient term security, the term of office will be extended from 2 years to 3 years. The capital contribution will be increased from 300 million KRW to 500 million KRW to secure the corporation's financial liquidity, and employee training will be subdivided and an evaluation system after training will be introduced to enhance staff expertise.

Along with this, an external audit system will be introduced for Cooperative Joint Business Corporations with assets of 50 billion KRW or more, and external management consulting will be made mandatory for insolvent corporations. Furthermore, to strengthen the responsibility of contributing cooperatives, management improvement obligations such as additional capital contributions will be imposed on contributing cooperatives through evaluations of the Cooperative Joint Business Corporations.

The support and management system for Cooperative Joint Business Corporations will also be strengthened. A Cooperative Joint Business Corporation Support Team will be newly established within the NongHyup Economic Holding Company to create a comprehensive management system covering the entire lifecycle from establishment to operation of the corporations. Cooperative Joint Business Corporations will also be included in the distribution loss compensation fund support operated by the NongHyup Economic Holding Company to promote business revitalization.

Vice Minister Han said, "We have prepared a major institutional reform plan by collecting field opinions to promote the operation of Cooperative Joint Business Corporations. I ask the NongHyup Economic Holding Company, Cooperative Joint Business Corporations, and others to actively cooperate to ensure that the measures prepared this time are well implemented."