KB Union Recommends Outside Director Again... Financial Sector on Alert for Expansion of Union-Recommended Director System (Comprehensive)

Former Export-Import Bank Deputy Governor Kim Young-su Recommended as New Outside Director
Union-Recommended External Expert Attempts Board Participation
Foreign Shareholders Oppose...Not Likely to Be Easy

[Asia Economy Reporter Sim Nayoung] The KB Financial Group labor union has recommended former Export-Import Bank Vice President Kim Youngsoo as a new outside director, drawing attention from the financial sector to the outcome of next month's shareholders' meeting.

The key issue is whether the labor union recommended director system, first introduced at the Export-Import Bank in September last year, will be expanded to private banks. The labor union recommended director system is a system where an external expert recommended by the labor union participates in the board of directors. It is a preliminary stage of the labor director system, where labor representatives directly enter the board and exercise voting rights. A bill to introduce the labor director system in public institutions passed the National Assembly last month.

According to the labor union on the 14th, on the afternoon of the 9th, they visited the KB Financial Group Board Secretariat in Yeouido, Seoul, to deliver a shareholder proposal and a power of attorney. Former Vice President Kim joined the Export-Import Bank of Korea in 1985 and has worked as an overseas investment expert in the Hong Kong local corporation and the International Finance Department. From 2018 until November last year, he served as a standing director at the Korea Overseas Infrastructure & Urban Development Corporation.

Financial companies, including banks, can recommend outside directors through the exercise of minority shareholder rights with as little as 0.1% of shares under the "Act on the Governance of Financial Companies." The KB Financial Group Labor Union Council stated, "We have secured 0.55% (2,145,994 shares) of KB Financial shares by collecting powers of attorney from employees and general shareholders until recently."

The KB Financial labor union has nominated outside director candidates through labor union recommendations or employee stock ownership associations from 2017 to 2020. However, none passed the shareholders' meeting. The financial sector predicts that it will be difficult to pass this time as well because foreign shareholders holding about 71% of KB Financial shares are opposing it.

Among financial companies, the Export-Import Bank, a policy bank, was the first to introduce the labor union recommended director system. Industrial Bank of Korea has also announced that the labor union will recommend three outside director candidates within this week.

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