Subscribe
E-Paper
 |
| Ottogi Chairman Ham Young-joon / Courtesy of Ottogi |
By Kim Jae-heun
Food company Ottogi is reviewing changes to the governance system for its board of directors after its total assets passed 2 trillion won ($1.81 billion) last September.
Ottogi's current board consists of four members ― three directors and an auditor. According to the Commercial Law, a company with total assets over 2 trillion won must have at least four directors: three external and one from within the firm. Ottogi also does not operate an audit committee, which is mandatory for a company with its financial standing.
"We acknowledge that our environment, social and corporate governance (ESG) evaluation is fairly low for our sales. A team is working on the issue currently and we will improve our governance system when they come up with a solution," an Ottogi official said.
Ottogi's total assets were around 1.5 trillion won three years ago, however, these grew considerably after it took over two subsidiaries in 2018 and one more last year.
The company needs to improve its governance system as local economic trends are seeking transparent and professional management by boards of directors. Its CEO Ham Young-joon has also been asked to relinquish his chairman post on the board of directors.
As one of the largest food firms here, Ottogi has built a reputation as a respected company; but it has failed to introduce an advanced management system.
The Korea Corporate Governance Service gave it Grade B in the governance category during an ESG evaluation last year.
"B is not a bad grade. It still doesn't mean we have failed in that category. However, it looks low compared to other grades we obtained in the environment and social categories," the official said.
Ottogi will host a general shareholders' meeting in March and decide whether to add more outside board members.
"The final accounting for the whole year is taking place now and we cannot confirm if our total assets have passed 2 trillion won. We will adopt new measures according to the required legal regulations when the results are finalized," the official said.
