Revised Capital Markets Act - Spread of Female Leadership in Banking Sector under ESG Management Policy

[Asia Economy Reporter Yoo Je-hoon] A strong wave of women is sweeping through the banking sector. This is as various financial companies are successively appointing female outside directors and CEO candidates. This is interpreted as a result of the overall banking sector's Environmental, Social, and Governance (ESG) management trend combined with the enforcement of the revised Capital Markets Act.

According to the financial sector on the 13th, KB Kookmin Bank's Outside Director Candidate Recommendation Committee decided to recommend Moon Soo-bok, a female ICT expert and professor in the Department of Computer Science at KAIST, as a new outside director candidate. Moon is scheduled to be officially appointed as an outside director of KB Kookmin Bank after the resolution at the regular shareholders' meeting to be held on the 24th.

Increasing the number of female outside directors is not limited to KB Kookmin Bank. Shinhan Financial Group also recommended Kim Jo-seol, a female professor in the Department of Economics at Osaka University of Commerce, as a new outside director candidate ahead of its regular shareholders' meeting. If Kim is finally appointed at the shareholders' meeting, the number of female outside directors on Shinhan Financial's board will increase to two, including Yoon Jae-won, a professor at Hongik University, who was recommended for reappointment this time.

The Outside Director and Audit Committee Candidate Recommendation Committee of Shinhan Financial explained the background of the appointment, saying, "Candidate Kim is a representative female economist proficient in East Asian economies," and "She is expected to faithfully fulfill her duties as an outside director who contributes to the group's ESG and financial consumer protection strategies and fairly represents the opinions of diverse shareholders."

Woori Financial Group also recommended Song Soo-young, a female lawyer from the law firm Sejong, as a new outside director candidate. Born in 1980 and belonging to the so-called 'MZ generation' (Millennials + Generation Z), Song is an expert in the ESG field. Woori Financial stated, "We prioritized experts necessary to enhance the board's collective expertise in legal and ESG fields as well as to improve gender diversity on the board."

Regional financial holding companies are no different. JB Financial Group appointed Lee Sung-yeop, an accountant at Woori Accounting Corporation; BNK Financial appointed lawyer Kim Soo-hee; and DGB Financial appointed Geum Hyo-shin, a professor at Kyungpook National University Law School, as outside directors respectively.

The number of female CEOs is also increasing. At the end of last month, Hana Financial Group recommended Noh Yoo-jung, former executive director at Hana Bank, as the new CEO of Hana Fund Service. Noh is the first female CEO among the affiliates of Hana Financial Group. Shinhan Financial also appointed Cho Kyung-sun, a graduate of the first class of the in-house female talent development program 'She-roes,' as the new CEO of Shinhan DS at the end of last year, producing the group's first female CEO.

The increase in female CEOs and outside directors is interpreted as a result of the recent ESG management trend, which has become a universal rule in the banking sector. Securing gender diversity is also an important topic in improving governance. In particular, the revised Capital Markets Act, which prohibits listed companies with total assets exceeding 2 trillion won from composing their boards of directors with only one gender, is set to be enforced in August this year, which also has an impact.

Each financial holding company is expanding its pool of female talent to prepare for this. According to the recently released annual reports on governance and compensation systems of each financial holding company, the proportion of women in Shinhan Financial's outside director candidate pool (long list) increased by 12.6 percentage points from 24.8% (29 people) in 2020 to 37.4% (49 people) last year. Woori Financial increased by 8.8 percentage points from 20.0% (32 people) to 28.8% (46 people) during the same period. In addition, each holding company operates leadership development programs such as KB WE Star Mentoring, Shinhan She-roes, Woori Wing, and Hana Waves to nurture female talent within the company.

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