SEOUL, March 24 (Korea Bizwire) — Outside directors at South Korea’s major listed companies voted for nearly all agenda items at board meetings in 2020, a report showed Wednesday, raising suspicions that they serve as mere rubber stamps.
Independent directors at 277 listed units of 64 conglomerates approved 99.53 percent of the total 6,716 motions forwarded to 2,991 board meetings last year, according to the report from corporate tracker CEO Score.
Last year’s approval rate was down slightly from the previous year’s 99.61, but was still close to 100 percent.
Outside directors disapproved or expressed “reservation” opinions on only 33 agenda items.
Of the total, 42 conglomerates, including Hyundai Motor Group, steel giant POSCO and shipbuilding titan Hyundai Heavy Industries Group, registered 100-percent approval rates.
Outside directors at local family-controlled conglomerates have been under fire for simply rubber-stamping key decisions to serve the interests of the largest shareholders or management rather than small investors.
South Korea introduced the outside director system in 1999, one year after its foreign exchange crisis, to prevent chief executives and large shareholders from making unilateral decisions that run against corporate interests.