SEJONG — The variety of members of the family serving as unregistered executives at family-run conglomerates, or chaebol, has elevated, elevating considerations a couple of rising hole between authority and accountability, the antitrust regulator stated Wednesday.
Since 2010, the Truthful Commerce Fee (FTC) has reviewed and launched annual reviews on the possession and governance constructions of designated company teams as a part of its market-monitoring efforts to encourage enhancements in administration practices.
In keeping with the newest report, among the many 77 conglomerate teams, 18.2 p.c of their 518 associates had a member of the proprietor household formally appointed to the corporate’s board of administrators in 2025, the FTC stated.
The variety of owner-family administrators totaled 704, accounting for 7 p.c of all registered board members this 12 months, up from 5.6 p.c in 2021, the FTC stated.
The ratio of members of the family serving as unregistered executives additionally continued to rise, officers stated.
Among the many 77 teams, 7 p.c of associates, or 198 firms, employed owner-family members as unregistered executives, up from 5.9 p.c a 12 months earlier.
The rise was notably notable amongst listed firms, the place the proportion of corporations with unregistered owner-family executives jumped 6.3 proportion factors on-year to 29.4 p.c.
“Unregistered executives can wield vital administration affect, but not like registered administrators, they’re largely free from authorized duties and liabilities,” Eum Jan-di, an FTC official, stated.
The official famous that the not too long ago revised Business Act strengthened administrators’ fiduciary duties, requiring them to guard the pursuits of all shareholders equally.
“If the variety of owner-family members serving as unregistered executives continues to develop, the effectiveness of the revised regulation might be undermined,” she stated.
The FTC stated it’ll proceed to intently monitor whether or not owner-family members exploit regulatory blind spots to abuse their authority.
