S. Korea’s FTC says rise in unregistered chaebol executives raises accountability concerns

Seoul, Nov 19 The number of family members serving as unregistered executives at family-run conglomerates, or chaebol, has increased, raising concerns about a growing gap between authority and accountability, the antitrust regulator said on Wednesday.

Since 2010, the Fair Trade Commission (FTC) has reviewed and released annual reports on the ownership and governance structures of designated corporate groups as part of its market-monitoring efforts to encourage improvements in management practices, reports Yonhap news agency.

According to the latest report, among the 77 conglomerate groups, 18.2 per cent of their 518 affiliates had a member of the owner family formally appointed to the company's board of directors in 2025, the FTC said.

The number of owner-family directors totaled 704, accounting for 7 per cent of all registered board members this year, up from 5.6 per cent in 2021, the FTC said.

The ratio of family members serving as unregistered executives also continued to rise, officials said.

Among the 77 groups, 7 per cent of affiliates, or 198 companies, employed owner-family members as unregistered executives, up from 5.9 per cent a year earlier.

The increase was particularly notable among listed companies, where the proportion of firms with unregistered owner-family executives jumped 6.3 percentage points on-year to 29.4 per cent.

"Unregistered executives can wield significant management influence, yet unlike registered directors, they are largely free from legal duties and liabilities," Eum Jan-di, an FTC official, said.

The official noted that the recently revised Commercial Act strengthened directors' fiduciary duties, requiring them to protect the interests of all shareholders equally.

"If the number of owner-family members serving as unregistered executives continues to grow, the effectiveness of the revised law could be undermined," she said.

The FTC said it will continue to closely monitor whether owner-family members exploit regulatory blind spots to abuse their authority.

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