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Harim Group headquarters in Gangnam, Seoul. (Photo: Harim) |
[Alpha Biz= Paul Lee] Harim is facing criticism over corporate governance after nominating an outside director from a group affiliate for a new board position.
The company plans to appoint Lim Chae-eon, managing director of Namyang Memorial Park, as an outside director and audit committee member at its annual shareholders’ meeting on March 26.
Lim currently serves as an outside director at NS Shopping, a wholly owned subsidiary of Harim Holdings, the group’s largest shareholder. As his term there ends, he is expected to move to Harim’s board, effectively rotating outside director positions within the same corporate group.
Harim said the move does not violate the law, explaining that outside directors at affiliate companies are classified as non-executive officers, which are not subject to certain disqualification rules under the Commercial Act.
However, critics argue that transferring outside directors between affiliates could undermine the independence of outside directors, a principle the law aims to protect.
Harim also proposed amendments to its bylaws, including a cap on directors’ liability for damages and transferring the authority to decide special bonuses for executives from the board to the CEO.
The company said the changes are intended to enhance corporate governance transparency, adding that it will also increase the number of separately elected audit committee members from one to two.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
