[Edaily Marketin, Reporter LEE GEON-EOM ] There are growing calls for domestically listed companies to disclose the details of resolutions passed by their boards of directors and subordinate committees with greater transparency. Critics argue that companies should not limit disclosures to broad categories such as “overseas subsidiary operations” or “banking transactions,” but should instead disclose key details—such as specific contract names and transaction counterparties—in detail so that shareholders can accurately understand the status of major corporate decisions. Particularly at a time when the government’s push to enhance corporate value (Value-Up) is fostering a trend toward strengthening shareholder rights, such vague disclosures are being criticized as somewhat unhelpful to investors.

According to the financial investment industry on the 3rd, some listed companies tend to avoid providing detailed descriptions of agenda items handled by management committees—which are typically run by inside directors to facilitate swift decision-making. They often merely announce that an item has been approved without specifying the details. It is common for them to withhold specific information regarding how such decisions affect cash flows or business operations.

Notable examples include Hyosung Group and the major affiliates of HSHYOSUNG Group, which was recently spun off. Hyosung(004800)discloses the activities of its management committee in its periodic reports, but the information is presented in a way that makes it difficult to grasp the substance of the agenda items.

In fact, according to Hyosung’s interim report for this year, the majority of agenda items voted on by the Management Committee during the first half of the year were listed only as “matters related to overseas subsidiaries,” “matters related to banking operations,” or “matters related to corporate affairs.” The phrase “matters related to overseas subsidiaries” alone appeared more than ten times in the first half of the year.

No detailed information was provided regarding which specific subsidiaries were involved or whether the resolutions concerned loans or the extension of payment guarantees. Major affiliates, as well as #HSHYOSUNG—which has been spun off from the group—are also following this outdated practice by disclosing agenda items in a similarly vague and generalized manner.

It is believed that companies conceal the specific names or targets of these agenda items out of concern that sensitive internal decisions—such as the injection of resources into underperforming overseas subsidiaries—might be exposed to the public.

The problem lies with loan and debt guarantee transactions that fall below the threshold for mandatory ad hoc disclosures, as well as simple extensions of existing contracts. Even after being approved by the Management Committee, there is no specific disclosure channel for such transactions other than the vague agenda item listed in the periodic report.

If transactions below the threshold occur repeatedly, as in the case of Hyosung, the cumulative exposure can grow to a significant scale even if the individual transactions are small. If such decisions are repeatedly made by committees dominated by inside directors—where outside directors’ oversight does not extend—investors are unable to accurately assess the risks, resulting in serious limitations on their investment decisions.

This stands in stark contrast to the transparent disclosure practices of major conglomerates that are strengthening communication with shareholders and improving the quality of their disclosures. Companies such as Hanwha(000880), SK(034730), and DOOSAN(000150) are receiving positive market evaluations by disclosing specific business names and subject matters in detail.

Hanwha Ocean(042660)In its semi-annual report, the company detailed specific projects and even the names of purchased parts in the section on board resolutions, including “Agreement on the Establishment of a Stock Pledge for the Shinan-Ui Offshore Wind Power Generation Project” and “Purchase Agreement for LNGC ALS Air Compressors.”

SK Innovation(096770) Similarly, it enhanced shareholder understanding by clearly disclosing investment targets and regions, such as the “AI Investment Capital Commitment” and the “Promotion of the Vietnam Quy Nhon LNG Power Generation Project.” DOOSAN ENERBILITY(034020) also clearly states the specifics of projects in which it is participating, such as “Participation in the Construction of the TES CO., LTD. Semiconductor Test Plant.”

At a time when the protection of shareholder rights and transparency in corporate governance have emerged as top priorities in the capital market, the practice of lumping agenda items together is unlikely to avoid criticism that it runs counter to shareholder-friendly policies. This is why some observers point out that it creates inefficiencies, such as requiring investors to manually search through and trace back details of contingent liabilities or transactions with related parties hidden in the notes to the financial statements.

An official in the financial investment industry pointed out, “The details of committee activities in periodic reports are the bare minimum mechanism demonstrating that the board’s oversight function is actually working,” adding, “If shareholders cannot even verify the names of the agenda items, they have no way of knowing what they are supposed to monitor.”