Bank of Korea's 'Self-Audit' to Change... Disciplinary Committee Likely to Include External Members

Adopting Civil Servant Central Disciplinary Committee Method
Lee Ju-yeol: "Reviewing Does Not Mean We Won't Do It"

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] The Bank of Korea is considering including external members in its Management Personnel Committee, which decides on disciplinary actions for misconduct. Previously, the Management Personnel Committee was composed solely of Bank of Korea staff, leading to controversy over a 'self-audit.' (Reported by this paper on October 15)

On the 22nd, it was reported that the Bank of Korea has begun revising internal regulations to reflect this change. However, since labor-management agreement is required, the final decision is expected to be made through further discussions. On the 21st, Lee Ju-yeol, Governor of the Bank of Korea, stated, "We are reviewing it," adding, "Reviewing does not mean we will not proceed." Currently, all six members of the Bank of Korea's Management Personnel Committee are internal staff.

The Bank of Korea is considering adopting the approach of the Central Disciplinary Committee for public officials by including external members. In the case of public officials, disciplinary decisions are made by referring cases to respective jurisdictional committees, with the Central Disciplinary Committee composed of nine members, five of whom are external members.

More than half receive minor disciplinary actions... Audited by internal staff

According to data submitted by the Bank of Korea to Representative Yang Kyung-sook of the National Assembly's Planning and Finance Committee, a total of 16 employees were disciplined over the five years from 2016 to last year.

Among them, 10 employees received minor disciplinary actions such as reprimands and salary reductions, while the remaining six received major disciplinary actions such as suspension or dismissal. With more than half receiving minor salary reduction penalties, there have been calls to correct the 'protecting our own' style of discipline.

By reason, work-related and sexual harassment cases each accounted for four incidents, representing a high proportion. Looking at last year, workplace bullying cases also resulted only in salary reductions. Only sexual harassment disciplinary cases led to suspensions.

Recommendation to reform performance bonus system and establish 10 expert positions

The Bank of Korea plans to release a 'Management and Personnel Innovation Plan' by the end of this year. Mercer’s recently published report on the Bank of Korea’s management and personnel innovation includes proposals to reform the performance bonus system and create 10 expert positions.

Mercer recommended a differentiated payment of performance bonuses to ensure clear recognition of member compensation. As the range of performance bonus differentiation increases, salary gaps among employees are expected to widen based on evaluations.

Additionally, the consulting report includes plans to establish 10 senior positions in areas such as economic research, field surveys, financial markets, financial stability, monetary and credit policy, and digital currency. It also emphasized assigning these experts to handle external relations and lead major projects.

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