Yeouido’s financial district. (Image courtesy of Yonhap)
SEOUL, Sept. 24 (Korea Bizwire) — As South Korea’s major conglomerates approach annual reshuffling season, a new survey has revealed that only a small fraction of the country’s largest corporations have established independent CEO succession committees.
According to corporate research firm Leaders Index, just 14 of the nation’s top 500 companies by revenue — or 3.8 percent — operated CEO candidate recommendation committees as of last year. These bodies, typically composed of outside directors, are designed to insulate the CEO selection process from external influence and strengthen board independence.
Among the country’s ten largest conglomerates, POSCO Holdings was the only affiliate with such a committee. No family-controlled chaebol subsidiaries were found to maintain one.
Beyond POSCO Holdings, Asiana Airlines, Pulmuone and Hanssem were the only non-financial firms with succession panels; most of the remainder were financial institutions, which are legally required to run nomination committees under the Financial Companies Governance Act.
The analysis also showed that South Korean boards are slowly expanding their oversight functions. The average number of standing committees among the surveyed firms rose to 3.6 in 2024, up from 3.4 a year earlier.
Audit committees were the most common, present at 81.2 percent of companies, followed by ESG committees (57 percent), outside director nomination committees (55.1 percent) and compensation committees (48.4 percent). Still, 46 companies — or 12.4 percent — reported having no board subcommittees at all.
Leaders Index argued that the rarity of CEO succession committees raises questions about transparency and governance standards at some of Korea’s largest enterprises. “These committees are critical mechanisms for ensuring fairness in executive succession and enhancing the integrity of corporate governance,” the institute said, urging more companies to adopt them.
M. H. Lee (mhlee@koreabizwire.com)
