Korea’s business lobby group to self reform to boost transparency

The Federation of Korean Industries’ Acting Chairman Kim Byong-joon announces at a press conference in Seoul, on May 18. [Photo provided by FKI]

The Federation of Korean Industries (FKI), South Korea’s major business lobby group, has come up with self-reform measures to turn itself into an economic think-tank and to attract new member firms.

The measures were announced by the FKI’s Acting Chairman Kim Byong-joon in a press conference on Thursday, which include improvements in decision-making governance and research capability. Kim said that the FKI will incorporate Korean Economic Research Institute (KERI) to improve its research capabilities that can be used to offer insights on industrial and business environments at home and abroad. “The FKI, combined with the KERI, will be transformed into a new organization,” said Kim.

In addition to absorbing a research institute, the FKI unveiled four additional measures designed to overhaul the organization and ensure transparent governance. For example, the lobby group will establish an ethics committee of outside experts to protect its member companies from corruption and illicit business activity. The establishment of such a mechanism is of significance, given that South Korea’s four major conglomerates - Samsung Electronics Co., SK Group, Hyundai Motor Group and LG Group - canceled their membership as the lobby group was involved in an influence-peddling scandal involving South Korea’s former President Park Geun-hye in 2016.

“The committee will be responsible for any major decision-making under the FKI,” said Kim.

The creation of the committee serves as its effort to seek self-reflection on the role it plays, according to the FKI. “The organization has only focused on its relation with the government, rather than with the public community, and failed to keep up with societal changes,” said Kim.

As part of the measures, the FKI will expand its executive committee, which currently consists of 11 chairpersons of corporations, to include more business leaders of younger generations. “We will encourage younger leaders from tech firms to join the committee as part of our efforts to adapt to industrial trends,” said Kim.

The FKI will change its official name in Korean. The group said it decided to adopt its former official Korean name, which was used until 1968 since its inception in 1961. Its English name, “The Federation of Korean Industries,” will be kept in place.

Meanwhile, it has remained unclear whether the major four conglomerates would rejoin FKI. Participation from the four corporations matters to the FKI because it can face limitations in enhancing its status as a representative business organization without the major business players.

“We had been in talks with the chairmen of the four groups when formulating the recent measures, and they will have increased interest in joining the FKI if the measures prove effective,” said Kim.