Large Business Group Boards Tighten Investment Reviews... Half of Listed Companies Apply Stricter Scrutiny Than Disclosure Rules

Survey of 212 Listed Companies in Large Business Groups
SK, LG, POSCO and Others Tighten Investment Reviews
Board Oversight Varies Across Groups

Nearly half of the KOSPI-listed companies in large business groups have adopted board investment review and approval thresholds stricter than the Korea Exchange’s disclosure requirements. This means their boards review whether investments are appropriate even when the transactions fall below the disclosure thresholds.

According to Corporate Data Research Institute CEO Score on Nov. 11, a review of board review and approval thresholds for investments in other corporations and the disposal of investment stakes at 212 KOSPI-listed companies belonging to business groups subject to disclosure found that 101 companies (47.6%) require board review and approval even for transactions smaller than the Korea Exchange’s disclosure thresholds.

At 86 companies (40.6%), internal board approval thresholds were the same as the disclosure thresholds. The remaining 25 companies (11.8%) had internal approval thresholds higher than the disclosure thresholds, leaving the board with a relatively narrower scope for prior oversight.

Among the groups, SK had the broadest application of board oversight measures. Of the 15 listed companies surveyed, 12 had adopted thresholds stricter than the disclosure requirements. SK Innovation set transactions amounting to at least 1.0% of its equity as subject to board approval. From November 2024, it temporarily lowered the threshold to at least 0.5% to strengthen its management oversight function. SK hynix, SK Telecom, SK Square, and SK Networks also require board review and approval for transactions amounting to at least 1.5% of equity.

Corporate Data Research Institute CEO Score

LG Group also applied thresholds stricter than the disclosure requirements at 10 of the 11 listed companies surveyed. LG Electronics, LG Chem, LG Energy Solution, and LG Corp. set investments of at least KRW 100 billion as subject to board approval. LG Innotek (KRW 80 billion), LG Uplus (KRW 50 billion), and LG CNS (KRW 40 billion) also established their own thresholds, allowing their boards to review investment decisions before disclosure obligations arise.

All five companies surveyed at POSCO and Shinsegae, as well as all nine companies at Hyundai Department Store Group and all four at LX Group, applied stricter thresholds. Eight of the nine companies at Lotte and seven of the eight at HD Hyundai also operated internal rules stricter than the disclosure requirements.

Among the top 10 business groups, Samsung was an exception: only two of the 11 companies surveyed, including Samsung C&T and Hotel Shilla, applied stricter thresholds. At Hanwha, the figure was just one of the eight companies surveyed: Hanwha Vision.

A total of 25 companies had internal board approval thresholds less stringent than the Korea Exchange’s disclosure requirements. These included Samsung Heavy Industries, Cheil Worldwide, S-1, Hyundai Wia, Innocean, and Hyosung affiliates. In particular, Samsung Heavy Industries and Innocean set their board approval threshold at 10% or more of equity, four times the Korea Exchange threshold of 2.5%.

The survey covered 212 companies for which board review and approval thresholds could be compared, excluding financial firms and real estate investment trusts, out of 295 KOSPI-listed affiliates of business groups subject to disclosure as of the end of October 2026. The Korea Exchange disclosure threshold is 5% or more of equity, while for large corporations with total assets of at least KRW 2 trillion, it is 2.5% or more of equity.

This content was produced with the assistance of AI translation services.