About eight out of 10 listed firms in South Korea were found to have poor corporate governance, industry data showed on Sept. 2.
Every year, the Korea Corporate Governance Service, an institution formed by the Korea Exchange and a KOSDAQ-listed companies’ association, reviews corporate governance practice of listed companies.
According to the institution, 77.2 percent of 712 companies were given “B”, the third lowest on its seven-level rating scale. The rating, which indicates “weak” corporate governance, suggests the company must improve. It also warns weak corporate governance can expose risk to its shareholders.
When breaking down by conglomerates, listed affiliates under Kumho Asiana, Daelim, Hanjin
Group and Hyosung received “B” or lower.
Meanwhile, all the listed firms under Doosan
Group and Hankook Tire
received “satisfactory” “B+” or higher. Hyundai Department Store
Group followed the list with 83.3 percent of its affiliates given “B+” or higher, trailed by Hanwha Group with 71.4 percent and Samsung Group with 66.7 percent.
“The number of companies with ‘B+’ or higher rating stands at 126, up 20 percent from last year. But majority of the companies still have weak corporate governance,” according to the institution.
By companies, 33, including KB Financial Group, NH Investment & Securities, SK Innovation, Samsung C&T, Woori Bank and POSCO
, got the second-highest rating of “A+”.
However, 28 companies, including STX Heavy Industries, Namyang Dairy Products, Hyundai Merchant Marine and Hyosung, received the lowest “D” grading.
No company earned the highest “S” rating.
By Ahn Sung-mi (firstname.lastname@example.org