Financial Supervisory Service Gov. Lee Chan-jin, center, poses during a meeting with financial holding group chairmen at the Korea Federation of Banks building in Seoul, Dec. 10. From left are NH NongHyup Financial Group Chairman Lee Chan-woo, Woori Financial Group Chairman Yim Jong-yong, Hana Financial Group Chairman Ham Young-joo, FSS Gov. Lee, Korea Federation of Banks Chairman Cho Yong-byoung, Shinhan Financial Group Chairman Jin Ok-dong and KB Financial Group Chairman Yang Jong-hee. Yonhap
Major financial groups’ year-end CEO appointments at their subsidiaries are widely viewed as prioritizing continuity over bold reshuffles, despite broad-based organizational overhauls that have included the creation and expansion of teams focused on productive finance in line with the Lee Jae Myung government’s financial transformation drive, industry officials said Monday.
Financial authorities, meanwhile, have raised concerns over entrenched practices in appointing financial holding group chairmen and CEOs and are preparing to launch a task force to overhaul corporate governance more broadly, heightening tensions across the financial sector.
The four major financial groups — KB, Shinhan, Hana and Woori — have a total of 52 subsidiary CEOs. Of these, 28 are set to see their terms expire by the end of the year, meaning more than half face renewal or replacement.
As of Dec. 24, KB, Shinhan and Hana Financial Group have completed their subsidiary CEO appointments. Of the 18 executives up for review, only five were replaced, while the remaining 13 were retained. At Woori Financial Group, decisions on its 10 subsidiary CEOs are expected to be delayed, as the executive nomination committee is still deliberating whether to renew Yim Jong-yong’s chairmanship.
KB Financial Group decided to replace two of its seven subsidiary heads — at KB Securities’ investment banking unit and KB Savings Bank — while renewing the mandates of CEOs at other subsidiaries, including KB Securities, KB Insurance and KB Asset Management. The reshuffle has been characterized as pursuing limited change while maintaining overall stability.
Hana Financial Group chose to replace just one of its seven subsidiary CEOs, at Hana F&I. The remaining six, including the heads of Hana Securities and Hana Life, were reappointed for another year.
Shinhan Financial Group followed a similar approach, replacing two of four executives — at Shinhan Life and Shinhan Asset Management — while granting one-year term extensions to the CEOs of Shinhan EZ Insurance and Shinhan Asset Trust.
In addition, Hana Financial Group Chairman Ham Young-joo is already serving a renewed term, while Shinhan Financial Group Chairman Jin Ok-dong will be officially reappointed in March. Woori’s Yim is seeking another three-year term.
Corporate governance has emerged as the central issue in the financial sector this month, as the Financial Supervisory Service (FSS), the country’s financial watchdog, has placed financial holding group governance under intense scrutiny.
Since taking office in August, FSS Gov. Lee Chan-jin has repeatedly raised concerns about the concentration of power stemming from prolonged tenures of CEOs at financial holding groups and banks. The debate gained further momentum after President Lee Jae Myung publicly criticized the practice of repeatedly renewing chairmen’s terms as a “corrupt inner circle,” prompting financial authorities to step up governance reform efforts.
“Current financial laws provide only limited authority to supervise or sanction holding companies,” Gov. Lee told the president during a policy briefing on Dec. 19. “The lack of public oversight over financial holding companies at the top of group structures underscores the need to address this regulatory gap.”
The FSS is expected to establish a corporate governance reform task force in the near future and convene its inaugural meeting. Discussions will cover a wide range of issues, including fairness in executive selection, board independence, shareholder-nominated directors, CEO eligibility standards and stronger accountability for holding companies over internal controls at their subsidiaries.