[Reporter’s Notebook] The Crisis of K-Food Lies Within

Chronic Governance Issues Plague the Food Industry
K-Food's Global Success at Stake
Breaking Free from Outdated Corporate Structures is Essential

"Now, exports are everything."

This is the unanimous sentiment emphasized by food industry insiders encountered in the field. As the domestic market stagnates and demographic structures undergo rapid change, expanding overseas has become not just a growth strategy but an urgent solution for the survival of the industry itself. In fact, K-food has achieved tangible results in a short period by leveraging the influence of Korean Wave content, the unique flavors of Korean cuisine, and a healthy, sophisticated image to win over global consumers. However, behind this dazzling success, long-standing problems persist-namely, opaque governance structures and the resulting owner risks.

The global market no longer evaluates companies solely based on "good products." Management transparency and sound governance have become fundamental requirements for attracting investment and establishing business partnerships. This is why global food giants like Nestle and Unilever have separated ownership and management, established independent boards of directors, and implemented systems to keep CEOs in check. Measures such as separating the roles of board chair and CEO and appointing a majority of outside directors are not just superficial mechanisms-they are essential foundations that ensure crisis response capabilities and management sustainability.

However, Korean food companies are still stuck in outdated practices. During the reporting process for the [K-Food Governance Report], which analyzed the governance structures of 20 listed domestic food companies, it was found that their boards of directors largely remained mere rubber stamps for owner families, and outside directors were often valued more for their loyalty than for their independence. The rights of minority shareholders were little more than declarative slogans, and in some cases, even financial decision-making was not transparently disclosed. This is not a matter that can simply be dismissed as a "Korea discount." Such issues can foster distrust in business partnerships and overseas expansion, acting as obstacles to the broader growth of Korea's food industry.

The bigger problem is that these governance structures undermine the overall dynamism of the food industry. The food sector is characterized by rapid trend shifts and requires constant innovation and investment. Nevertheless, family-centered conservative management continues to discourage new initiatives, and decisions on new businesses are overwhelmingly influenced by the personal judgment of the owner. If organizations are more concerned with internal dynamics than with external changes, the K-food boom is likely to remain a fleeting success.

Fortunately, the recently passed amendment to the Commercial Act is expected to be a crucial turning point that can break this cycle. As the system has been reformed to check owner-dominated boards and guarantee the rights of minority shareholders, Korean food companies now have an opportunity to align themselves with global standards. However, the law is only a minimal safeguard. Companies must voluntarily establish management transparency-not merely to avoid regulation, but to earn lasting love at the world's dining tables.

The popularity of K-food is undoubtedly an opportunity. But if sustainability is the goal, companies need the courage to break free from outdated internal frameworks rather than basking in external achievements. Consumers are not just buying "flavor"; they are also consuming a company's social responsibility and philosophy. The question must be asked of domestic food companies: Are you truly prepared to survive at the world's table?