Conglomerates rushing to appoint female outside directors

By Kim Bo-eun

Major conglomerates are scrambling to appoint female board members, before a revised capital market act goes into effect next year requiring large companies to have at least one woman on their boards.

Given the lack of female senior executives at most companies, they are seeking to comply with the law by appointing outside board members.

“We have had calls asking for data on female professionals,” said Kim Sang-kyung, who heads the Korea Network of Women in Finance (KNWF). The organization seeks to foster female leaders in the finance sector and Kim has spearheaded movements for better female representation in the private sector.

“Professors have served in outside director positions in many cases, but these days there is a high preference for professionals who have worked for corporations and also in the finance sector,” she said.

The revisions to the capital market act state that companies with assets exceeding 2 trillion won cannot have their boards comprised of a single gender.

According to corporate tracker CEOScore, at 147 companies with assets exceeding 2 trillion won, women accounted for 5.1 percent of board members. Among the 147 firms, 68.7 percent did not have any female board members.

Data from headhunting firm UnicoSearch shows women accounted for 7.9 percent of 441 board members at Korea's top 100 companies. It showed 70 out of the 100 firms did not have a single female board member.

These companies are now tasked with appointing a female board member before their general shareholders' meetings in March next year.

Major conglomerates are taking steps to have new female board members appointed at their shareholders' meetings this month.

Hyundai Motor is seeking to have its first female board member approved at its shareholders' meeting to be held later this month.

The company stated in a regulatory filing that the shareholders' meeting on March 24 will address the appointment of KAIST professor of aerospace engineering Lee Ji-yun as an outside director of the company.

Hanwha Corporation is also seeking to appoint a female board member at its shareholders' meeting. The parent company of Hanwha Group stated in a filing that it is seeking to appoint Hankuk University of Foreign Studies professor Bak Sang-mee as an outside director of the company's board.

LG Group said it is planning to appoint female board directors at its holding company as well as four of its affiliates.

Kim of KNWF pointed out, however, that the regulation requiring a female board member does not penalize companies that do not follow suit.

“Some companies may not comply by stating the lack of qualified professionals. Korea should also introduce a penalty, just like the State of California which fines firms that fail to comply with such regulations,” she said.

“It's important to ensure that moves to include a female board member are not delayed any further. Saying the pool of qualified individuals is limited is just an excuse for not making the effort to find untapped talent.”