Outside directors at South Korea's major listed firms voted for nearly all agenda items for board meetings in 2018, sparking suspicions that they serve as mere rubber stamps, a corporate tracker said on Mar. 27, 2019.
According to CEO Score, independent directors at 251 listed units of 57 conglomerates approved 99.66 percent of the total 6,350 motions forwarded to the board last year.
Last year's approval rate was up slightly from the previous year's 99.62 percent.
Only seven agenda items were disapproved, while outside directors expressed "reservation" opinions on as many motions.
"Of the total, 46 groups posted a 100 percent approval rate last year," CEO Score said. "Outside directors can't avoid criticism they remain just rubber stamps."
Independent directors at local family-controlled conglomerates have been under flak for just rubber-stamping key decisions to serve the interests of the largest shareholders or management rather than small investors.
South Korea adopted the outside director system in 1992 to keep chief executives and large shareholders from making unilateral decisions that run against a company's interests. (Yonhap)