Related regulations to go into effect in August
By Kim Bo-eun
A deadline is looming for Korean companies to add female members to their boards, but about half of the firms subject to the regulation still fall short of the requirement, data shows.
The revised Capital Markets Act going into effect in August applies to listed companies with at least 2 trillion won ($1.67 billion) in assets. According to corporate tracker Leaders Index, among the 168 companies subject to the regulation, 68 firms, or 46 percent, did not have any female board members as of the third quarter of last year.
This is still a significant improvement, however, from the same quarter of 2020 when 116 companies did not have any female members on their boards.
However, data shows that most of the women on company boards are outside members. Among the 102 female board members at 90 companies, only nine were from their respective firms.
Companies with female board members from within their organization include Naver, CJ CheilJedang, Hotel Shilla, Samsung SDI, Daesang, Netmarble, Lotte Chilsung, Kumho Tire and Daishin Securities.
The companies with female board members not from outside were mostly those owned by conglomerates, such as in the case of Hotel Shilla CEO Lee Boo-jin, the daughter of the late Samsung Electronics Chairman Lee Kun-hee.
In other cases, some female board members were foreign nationals, such as Tencent Vice President Piao Yanli who is the outside director of Netmarble.
Outside directors were mostly from academia at 45.7 percent, followed by those from the government at 18.5 percent and from the corporate sector at 17.4 percent.
The companies with no gender diversity on their boards will likely have a hard time securing female members, given the limited pool of candidates.
This is considered a structural problem, given a large proportion of women leave the workforce for childbirth and childcare, resulting in a lack of female representation at the executive level in corporations. Women also constitute only a small number of senior-level positions in the government.
While the companies will have to find female figures to sit on their boards, it is also unclear how much influence they would be able to wield, given most positions will be filled from outside of the company.
"Under current circumstances, there is definitely a lack of qualified candidates," said Oh Il-sun, director of Korea CXO Institute, a corporate tracker. "But efforts are ongoing to train female professionals in the corporate sector as well as academia, which will enable circumstances to improve in the coming years."
Oh added, "While including one female board member may not immediately have the intended effect, the introduction of the law is a meaningful starting point that will likely lead to positive changes."