Looking at Outside Directors of Large Corporations... Increase in Bureaucrats and Decrease in Scholars

Strengthening Policy and Regulatory Response... Increase in Recruitment of Former Ministers and Vice Ministers
Some Companies Downsize Boards, Seen as Move to Enhance Accountability

In line with the March shareholder meeting season, an analysis of the status of outside directors in large corporations revealed a trend of decreasing scholar appointments and increasing appointments of former high-ranking government officials. Notably, the recruitment of former ministers and vice ministers stood out, which is interpreted as companies aiming to reduce regulatory risks while enhancing their policy response capabilities.

The Korea CXO Institute, specializing in corporate analysis, announced on the 10th that these results were derived from a "Comparison and Analysis of the Characteristics of Newly Appointed Outside Directors in 2019 and 2025." The survey targeted 42 companies that had submitted board meeting convening resolutions by the 7th, among those required to replace outside directors after completing a full six-year term at major affiliates of the top 50 domestic groups. Under the Capital Markets Act, the maximum tenure for an outside director at the same company is six years. Those who participated in the board in 2019 must be replaced before this year's general meeting.

The newly appointed outside directors this year were predominantly former bureaucrats. In particular, the number of former ministers and vice ministers increased significantly from 2 in 2019 to 8 this year. Most of these cases were found in Samsung affiliates: ▲Samsung Life Insurance (Koo Yoon-chul, former 2nd Vice Minister of Strategy and Finance and Director of the Office for Government Policy Coordination) ▲Samsung Heavy Industries (Kim Sang-gyu, former Administrator of the Public Procurement Service and Audit Committee Member of the Board of Audit and Inspection) ▲Samsung E&A (Moon Seung-wook, former Minister of Trade, Industry and Energy) ▲Samsung Biologics (Lee Ho-seung, former 1st Vice Minister of Strategy and Finance and Chief of Policy Office at the Presidential Office).

Additionally, companies such as ▲DB HiTek (Hong Nam-ki, former Deputy Prime Minister and Minister of Strategy and Finance) ▲HD Hyundai Energy Solutions (Lee Jeong-seop, former Vice Minister of Environment) ▲SBS (Lim Hwan-soo, former Commissioner of the National Tax Service; Choi Yoon-soo, former 2nd Deputy Director of the National Intelligence Service) also recruited former ministers and vice ministers as outside directors.

The number of former judges and prosecutors remained at a similar level. Six new appointments were made this year, five of whom were former judges. Lawyer Kim Chang-bo of the law firm DaeRuk Aju (former Chief Judge of the Seoul Central District Court) was recommended as an outside director for SK Telecom, and lawyer Kim Mu-gyeom of Logos (former judge of the Seoul High Court) was recommended for Doosan Bobcat.

On the other hand, the proportion of scholars such as professors significantly decreased from 48.2% in 2019 to 38.2% this year. Among scholars, professors related to business administration, including finance and accounting, accounted for 71.4%, while professors in science and engineering fields accounted for 28.6%. Representative professors in the science and engineering fields newly appointed as outside directors include ▲Lee Hyuk-jae, Professor of Electrical Engineering at Seoul National University (Samsung Electronics) ▲Jung Jin-taek, Professor of Mechanical Engineering at Korea University (Doosan Enerbility) ▲Kim Chan-woo, Professor of Artificial Intelligence at Korea University (Hyundai Wia). Professor Jung Jin-taek previously served as president of Korea University, and Professor Kim Chan-woo served as Vice President in charge of the Samsung Electronics Global AI Center.

Some companies also slightly reduced the size of their boards. In the case of SK Hynix, one of the outside directors who had been active since 2019 (subject to mandatory replacement this year) left the position vacant, reducing the number of outside directors from six to five. The Korea CXO Institute predicted that as responsibilities for outside directors strengthen in the future, there may be a growing trend toward downsizing boards.

The proportion of female outside directors increased from 5.4% to 7.3% during the same period. This year, companies such as Hyundai Motor, SK Biopharm, Hanjin KAL, and LG HelloVision appointed new female outside directors. Hyundai Motor recruited Kim Soo-i, former Global PE Head of the Canada Pension Plan Investment Board (CPPIB); SK Biopharm recruited Cho Kyung-sun, former CEO of Shinhan DS; Hanjin KAL appointed Cho In-young, former Chief Judge of Daegu District Court and Professor at Yonsei University Law School; and LG HelloVision selected Choi Soo-jung, Professor of Business Administration at Soongsil University specializing in finance, as new board members.

Director Oh Il-seon commented, "About 70% of the newly appointed outside directors this year were fresh faces who do not participate in other company boards," but also noted, "Approximately 10% moved directly to other companies immediately after their six-year term ended, indicating that the 'recycling' of outside directors remains prevalent."