Influence without Responsibility
Less than 10 percent of conglomerate owners in Korea are registered as directors of their business groups. This means that it is not easy to hold them accountable for business failures, although they exercise great influence on the management activities of the groups.
According to ecent data released by the Fair Trade Commission, conglomerate owners are registered as directors at only 116 out of the 1,370 companies associated with the 39 conglomerates subject to cross shareholding restrictions. Even when the owners’ family members are counted in, the number of such companies is just 312. The percentage dropped from 26.0 percent to 22.8 percent between 2013 and this year.
The groups have a total of 5,688 directors, and only 116 and 322 out of them are the owners and their family members, respectively. The owners of 12 of the conglomerates – Samsung, SK, Hyundai Heavy Industries, Hanwha, Dooasn, Shinsegae, LS, Daelim, Taekwang, E-Land, Hite Jinro and Hansol – are not registered as directors at all.