"Increase Board Transparency and Checks... Financial Supervisory Service Issues Management Caution to Woori and Hana Financial"

[Asia Economy Reporter Kim Hyo-jin] The Financial Supervisory Service (FSS) has urged Woori Financial Group to enhance the transparency of its board of directors' operations. It also ordered Hana Financial Group to strengthen the oversight function of its outside directors.

According to the financial sector on the 26th, the FSS recently notified Woori Financial Group of a management caution measure. This action was taken following a partial inspection that judged Woori Financial Group's board meeting minutes to be prepared only formally.

From January to September last year, Woori Financial Group's board meeting minutes contained only formal content such as opening declarations, agenda reports, resolution results, and closing declarations, without any discussion details from the directors.

Since decisions are effectively made during informal meetings held before the official board meetings to discuss agenda items, the board meeting minutes inevitably end up being prepared only formally.

The FSS's position is that, as these informal agenda discussion meetings function essentially like board meetings, the discussion content of these meetings should be recorded in the form of minutes.

Hana Financial Group received a management caution measure urging it to strengthen the oversight function of outside directors.

The issue arose because Hana Financial Group violated internal regulations requiring that meeting materials be sent at least seven days in advance to allow outside directors sufficient time to review them, instead requesting consent forms exempting the provision of pre-meeting materials on the day of the meeting.

The FSS also pointed out that during Hana Financial Group's board operations, important issues raised by outside directors were processed as originally proposed without sufficient discussion or reconsideration.

The FSS judged that reducing the number of inside directors from three to one in the board operations committee in February 2018 was also problematic.

Additionally, the FSS demanded that Hana Financial Group enhance the expertise and diversity of its outside directors, rationalize the operation of the executive performance compensation system, and strengthen the group's compliance monitoring functions.

A management caution is an administrative guidance measure that requests financial companies to exercise caution or voluntarily improve. Woori Financial Group and Hana Financial Group must submit a report on the measures taken regarding the management caution issues to the FSS within six months.

This content was produced with the assistance of AI translation services.