RaymondsIndex

One person is the CEO of Company A and concurrently serves as an outside director of Companies B and C.

If you look at DART, there are more executives like this than you might think.

This is not just a story about a busy person.

Why is concurrent office as an executive a problem?

Executives have decision-making authority in the company.

What happens in an adjunct structure:

Company A’s information influences Company B’s decision-making → Information asymmetry can be utilized

- When a transaction occurs between Company A and Company B → Conflict of interest automatically occurs.

- Resources taken out from Company A move to Company B → Tunneling structure

Carroll et al. (2024) Empirical: Concurrent executive positions are a structural design mechanism of capital power concentration among companies.

Which patterns are dangerous?

Concurrent structures with high red flags from a relational risk perspective:

① Executive of CB acquisition corporation = Same person as executive of issuer

A structure in which one owns one’s own CB

- Internal information can be used to determine the timing and price of conversion

② Executives from companies with a history of listing and closing reappear in newly listed companies

“Business Recycling Executive” pattern

- One of the key leading signals captured by RaymondsRisk

③ A few executives simultaneously control multiple companies

The Kim family monopolizes executives of five listed companies.

- Capital polarization → typical pattern of network concentration

④ The outside director is a person from the majority shareholder

Board independence zero

- Minority shareholder protection functions are virtually paralyzed

How to actually check

DART → Check the disclosure of the company's executive status

2. Search for “concurrently serving as an executive at another company” by the executive’s name.

3. Check the company history of past employment → Whether there is a history of management issues and delisting

RaymondsRisk automates this process for 49,446 people at 3,109 companies.

key message

The fact that an executive is in multiple companies is not just personnel information.

It is a map that shows how capital moves.

■ Reference materials

Carroll et al. (2024): Empirical study on concurrent executive positions and concentration of capital power.

- Kim KS (2015): CMS structure — Mechanism of full control with minority stake

- Min (2016): Chaebol legal exploitation structure

- RaymondsRisk White Paper: https://www.konnect-ai.net/whitepaper

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