In banking groups, which do not have an owner manager, the voice of nonexecutive directors carries weight ― so much so that the board’s disposition tends to display the direction of the entire group.
This is also why the selection of these outside directors is often subject to political peddling. But this year, financial groups are determined to change the system, calling for independence and professionalism.
The most active to lead such change, KB Financial Group decided to fully embrace the recommendation of outside organizations and to reach out to former top executives of rival groups.
In February, the group appointed seven new members of the board, including former Shinhan Financial Group CEO Choi Young-hwi and former Samsung Card CEO Yoo Suk-ryul. The selection was based on the reports by the governance reform task force and headhunting offices.
This not only reflected the group’s effort to increase the ratio of financial officials in its board, but also echoed the resolution of chairman Yoon Jong-kyoo to restore KB’s former glory as the nation’s leading banking group ― back from market champion Shinhan Bank.
For the past five years, Shinhan Bank has remained the unrivaled No. 1 bank, both in terms of total assets and net profit.
These series of reforms were largely the consequences of the leadership feud that turned the group upside down last year. The months-long dispute ended with the resignations of bank president Lee Kun-ho and the board members, as well as the dismissal of group chairman Lim Young-rok.
Hana Financial Group followed suit and brought to its directorate board Lee Jin-kuk, former Shinhan Investment vice president, and Yang Won-keun, former KB Financial Group vice president.
Another noticeable change was that some of the group’s board members will also serve as nonexecutive directors of Hana Bank and Korea Exchange Bank, the group’s two flagship banks.
As Hana Financial has long been perplexed with the deadlocked merger process of its two banks, the dual role system is considered an effort to bridge the two organizations and to add momentum to the stalled talks.
NH Financial Group, which is currently seeking to nominate a new chairman, is facing criticism that most of its board members are former government officials.
The agricultural cooperative-based banking group is to organize a chairman candidate recommendation committee this week to elect the successor to Yim Jong-yong, who was tapped last month as the Financial Services Commission chairman.
Rumors of Cho Won-dong, former presidential secretary for economic affairs, being a potential candidate for the job further amplified the suspicion that the selection may have been influenced by the government.
By Bae Hyun-jung (tellme@heraldcorp.com)
