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 chairman, 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 per cent, scrap the council meeting of the chairman and deputy chairmen and close the accounting for social cooperation to stave off any recurrence of government-business collusion.

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 added.

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.

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 asserted.

“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 advised.

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.

Chairman’s statement

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 possible date.

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 divisions.

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.

Thank you.

Source: FKI

Image: Fotosearch