To root out
collusive ties between politicians and businessmen, transform itself into a more
transparent body and truly take on roles as a think tank, FKI announced
across-the-board reform measures on March 24 at a meeting of its council
members, including the chairman and deputy chairmen, and the members of a reform
committee. Pledging itself to assume an essential role as a business
organization, the Federation changed its Korean name to 'Hangiryeon' meaning the
Association of Korean businesses but its English title remains unchanged.
Attendees of the meeting agreed to slash the budget and employees by more than
40%, scrap the council meeting of the chairman and deputy chairmen and close the
accounting for social cooperation to stave off any recurrence of
At the press briefing,
FKI Chairman Chang Soo Huh said, "We at FKI deeply apologize once again for
causing a great disappointment to the people which had been created by the
influence-peddling and corruption scandal last year. Championing the founding
ideals, we will try our best to reinvent ourselves and make the Federation an
entity solely living up to roles as a business organization." "We'll also double
efforts to win back trust from its member companies and our society," he
FKI, whose core decisions had been generally
made at the council meeting of the chairman and deputy chairmen, plans to
transform itself into a member-oriented business association. Major decisions
will be made at board meetings of new management directors. The new board will
be composed of professional business managers. The switching of decision-makers
from the council to the new board, FKI explained, is designed to prevent
arbitrary decisions which had been made by the FKI secretariat. On top of this,
to sound out opinions of its members, the Federation will put sub-committees
like the one for economic policies as official channels for communication with
the members in operation.
The Federation will be
scaling down its secretariat, closing the Social Affairs Division which has
recently been thought to be involved in a massive corruption scandal. The
secretariat will be reduced from seven to three divisions in charge of
communications, administration and international cooperation. Its future
activities will focus on committee-based communication with its members and
private economic diplomacy via bilateral business councils including the
Korea-US Business Council.
Research functions of the
economic and industrial divisions will be delegated to the Korea Economic
Research Institute (KERI). In addition to corporate policy research, KERI will
broaden its scope of research to do objective research on national agendas such
as low fertility and the fourth industrial revolution.
scraps social affairs division, social cooperation
The Federation has decided to close its
social cooperation accounting. A senior executive of FKI explained, "The
decision aims at nipping in the bud any chance of recurring corruption scandals
involving organizations like the Mir Foundation and the K-Sports Foundation."
FKI would reject any unlawful requests from outside for sponsoring and
fund-raising. It will enhance transparency in its activities and financial
statement to a level which amounts to a public-service corporation by disclosing
them twice a year on its website.
"Based on consultations with
professionals and ideas from our member companies, the reform committee has come
up with these plans. We will do our best to restore consensus and support from
the people and our member companies," Vice Chairman Tae Shin Kwon
"FKI has contributed to realizing the nation's economic
take-off and played a pivotal role in facilitating communication between the
business community and the government and in carrying out private economic
diplomacy," said former minister Jeung Hyun Yoon of the Ministry of Strategy and
Finance (MOSF) who is on the reform panel. Former MOSF minister Jae Wan Bahk,
who is also on the committee, said, "While working on reform measures, I have
seen the executives and staff members of FKI painfully trying to redefine their
raison d'etre and roles of the past and the future. "FKI needs to reinvent
itself as a body that serves the interests of the national economy. It also
needs to carefully consider how to help the people seek solutions to social
issues such as future industries, polarization and shared growth," he
Meanwhile, the reform committee will be meeting frequently
to go into the specifics of its plans which will be finalized at the BOD meeting
and the general meeting to be held soon.
Dear members and fellow citizens:
I would like to start
by deeply apologizing once again for causing grave concerns to our members and
the people which had been created by the influence-peddling and corruption
scandal last year.
At the general meeting in February, we made public a
three-pronged reform direction: entirely severing the collusive ties between
politics and business; enhancing transparency of our activities; and beefing up
our function as a think-tank.
At the same time, we promised to bring up
reform plans that our members and the people could recognize at the earliest
To this end, we organized a reform committee to which we
have invited professionals of great eminence and taken extensive opinions from
various strata of society into consideration.
Our plans boil down to the
following four points:
First, FKI will never be part of any project that
serves a political purpose. By closing a social cooperation accounting and the
social affairs division, we will proactively ban any attempt to involve us in
politics. The Federation would reject any unlawful requests for sponsoring and
fund-raising. It will enhance transparency in its accounting details by
disclosing them on a regular basis.
Second, except for functions for
communication with its members and for private economic diplomacy, we will
drastically undergo an overhaul which would be tantamount to virtual
dissolution. We will single-mindedly live up to roles as a business
organization. Accordingly, we will scale down any unnecessary
Third, we will replace our name which has been used for over
50 years by 'Hangiryeon' literally meaning the Association of Korean businesses.
By abolishing the council meeting of the chairman and deputy chairmen, we will
try to quell any concern that the Federation is operated solely by owners of big
businesses. Roles of the secretariat will be limited to assisting the board of
directors which will be at the center of FKI activities. By running
subcommittees under the BOD, we will keep encouraging the members to join more
in our activities.
Last but not least, we will put more emphasis on
strengthening our role as a business and industrial think tank which serves the
interests of national development and openly takes part in sound policy debates
by integrating our research programs into those of KERI. Moving beyond issues
dealing with big businesses, we will work on solutions to national agendas like
the fourth industrial revolution.
Our commitment to reforms shall not be
a simple slogan or lip service. Devoting ourselves to bringing these ideas to
fruition, we will help achieve yet another economic take-off in the days to
come. We will spare no efforts to reinvent ourselves until we will be able to
win back support and trust from our members and the people.