The Ministry of Small and Medium Enterprises and Startups and its affiliated organization, the Korea Foundation for Cooperation between Large and Small Enterprises and Agriculture (Korea Foundation), are experiencing conflicts over the composition of the foundation's board of directors.
Kim Young-hwan, former secretary-general of the Korea Foundation, claimed in a phone interview with ChosunBiz on the 20th that "the Ministry of Small and Medium Enterprises has instructed to add five unrelated small business personnel as new directors on the board of the Korea Foundation."
Having assumed the role of secretary-general of the Korea Foundation in March 2022, he resigned last month with one month left in his term and is currently in conflict with the ministry.
The Korea Foundation is a foundation that promotes cooperation projects between large and small enterprises in terms of technology, personnel, and market access, and discovers excellent cooperative models to support the mutual growth and fair trade of large and small enterprises. It has a committee for mutual growth under its governance.
After passing the 33rd administrative examination, Kim served as the director of the strategic market policy division in the Ministry of Knowledge Economy (now the Ministry of Trade, Industry and Energy) and held positions such as director of international market policy and Deputy Minister for Planning and Coordination in the Ministry of Small and Medium Enterprises.
◇Opposition to the appointment of small business directors to the board
The conflict between the Ministry of Small and Medium Enterprises and Kim began in January of last year when the ministry proposed expanding the board of the Korea Foundation by adding small business personnel as directors.
The members of the Korea Foundation's board are composed of the secretary-general, a chairperson, one representative each from the Ministry of Small and Medium Enterprises, the Ministry of Trade, Industry and Energy, and the Fair Trade Commission, two representatives from small enterprises, and one academic expert.
In January of last year, the Ministry proposed to the foundation to add five small business personnel as board directors. This was in line with the need for the foundation to collect various opinions from the private sector as the targets for win-win cooperation policies, including small businesses, needed to be expanded.
However, Kim raised objections. He argued that the core projects of the foundation, which involve the establishment and operation of the Mutual Cooperation Fund for Large and Small Enterprises and the Rural Mutual Fund, involve minimal support for small businesses. There is a concern that the board could deviate from the foundation's purpose and role, and he insisted that personnel from the Ministry of Agriculture, Food and Rural Affairs or the Ministry of Oceans and Fisheries should be appointed instead.
Kim stated that he inquired to the ministry about the purpose and decision-making background for adding small business personnel to the board, but he did not receive a response.
Kim noted that "if the composition of the board needs to change, the board should gather opinions transparently in accordance with relevant laws regarding the foundation’s role, support targets, and the board's functions," and added that "the Ministry instructed to add small business personnel to the board without such procedures, which infringes upon the board's autonomy and deliberative authority."
A ministry official stated that "it was not an instruction to appoint new directors for small business personnel but a communication of opinions," and emphasized that "the Korea Foundation needs to reflect the current market situation, which requires an expansion of support targets for win-win cooperation beyond the manufacturing-centered approach of the past to include small businesses."
◇Was there workplace harassment? Ministry of Small and Medium Enterprises and Labor Office investigation results differ
The Ministry subsequently conducted a comprehensive audit of the Korea Foundation. The audit was prompted by a report from an internal employee in July of last year claiming that "he was subjected to workplace harassment by Secretary-General Kim Young-hwan." The ministry concluded that there was workplace harassment by the former secretary-general, but the labor office reached a different conclusion, stating that there was no workplace harassment.
A ministry official explained that "the results differ because the Ministry conducted an audit in accordance with public institution laws, while the Labor Office conducted an investigation based on the Labor Standards Act."
Kim countered that "it is problematic for the Ministry to claim that it can investigate workplace harassment, even though it falls under matters related to the Labor Standards Act and the Ministry of Employment."
The Ministry also announced, based on the audit results, that they would impose fines on the former secretary-general for not properly submitting job-related stock materials. In response, Kim objected, stating, "I submitted the necessary materials," and the matter of imposing fines has moved to the courts as a non-contentious case.