[BizHanKook] It has been confirmed that all members of the audit committee at Coupang's domestic entity have recently resigned. Coupang had previously operated an audit committee consisting of three directors. With the resignation of all audit committee members, there is speculation that the committee will be dissolved. During the same period, Coupang appointed a new auditor, suggesting a shift from an audit committee system to a single-auditor system.
According to the Commercial Act, listed companies with total assets of 2 trillion won or more are required to establish an audit committee, with few exceptions. As Coupang’s domestic entity is unlisted, it is not mandatory to have an audit committee. Nevertheless, Coupang had been operating an audit committee composed of directors.
Until recently, the Coupang audit committee consisted of three audit members: Coupang executive director Yoon Hye-young, outside director Kim Won-jun, and outside director Lee Jae-bung. Among them, member Yoon Hye-young appeared before the public last December by attending a National Assembly hearing on Coupang.
According to the corporate registry, all three audit committee members resigned in September. While the three individuals maintain their positions as executive and outside directors, they no longer serve as audit committee members. At the same time, Alexander Ruby Hur was appointed as the new auditor for Coupang. Auditor Hur is registered as an "auditor," not an "audit committee member."
This move by Coupang has led to speculation that the audit committee system has been abolished. The analysis is that a single auditor will now handle Coupang's audit duties instead of the committee. While Coupang has not officially announced the dissolution of the audit committee, the resignation of all members followed by the appointment of a new auditor suggests that the previous system has effectively come to an end. However, the background behind changing the audit committee system remains unknown.
Both the audit committee system and the single-auditor system have their own pros and cons. In the case of an audit committee, outside directors acting as committee members may have limited ability to grasp details of what is happening inside the company because they are outsiders. There are also concerns that an executive director serving on the committee may struggle to maintain independence from management. Therefore, some argue that an independent auditor may be more effective in keeping management in check than an audit committee.
However, while an auditor can attend board meetings and offer opinions, they cannot directly vote on board agenda items because they are not directors. On the other hand, members of an audit committee are either executive or outside directors and can voice their positions directly at board meetings. Therefore, an audit committee inherently has stronger voting power within the board than an individual auditor.
The reason behind Coupang's shift from an audit committee system to a single-auditor system has not been disclosed. BizHankook inquired with Coupang about the reasons for the resignations and the new appointment, but Coupang did not provide a separate statement.