KB Financial Labor Union's Recommended Director Appointment Fails... Fifth Setback

Approval Rate Stalls at 4.53%

[Asia Economy Reporter Yu Je-hoon] KB Financial Group's labor union's fifth attempt to appoint a labor union-recommended outside director was once again rejected.

KB Financial Group announced on the 25th that at the shareholders' meeting held at the KB Kookmin Bank headquarters in Yeouido, Seoul, the proposal to appoint candidate Kim Young-soo (former Vice President of the Korea Eximbank), recommended by the National Financial Industry Labor Union KB Kookmin Bank Branch and others, was rejected. For the proposal to pass, it needed the approval of 25% of the total issued shares with voting rights and a majority of the attending shareholders, but the approval rate was only 4.53%.

Since 2017, KB Financial's labor union has attempted to appoint labor union-recommended outside directors five times up to this shareholders' meeting, but all attempts have failed. This year, there was some expectation as President-elect Yoon Seok-yeol and others expressed positive views on introducing labor directors in public institutions, but it was ultimately rejected.

Earlier, major proxy advisory firms also recommended opposing the appointment of labor union-recommended directors. ISS, the world's largest proxy advisory firm, expressed opposition and stated, "While Kim, the former Vice President, is highly regarded for his overseas experience, his expertise appears to be in infrastructure and urban development fields," adding, "It is questionable how he can contribute to improving the overseas business of a financial group that handles various financial products."

Ryu Je-gang, Chairman of the KB Financial Labor Union Council (Chairman of the Financial Labor Union KB Kookmin Bank Branch), said during a shareholder speech, "Although an investment of one trillion won has been made, the Indonesia KB Bukopin Bank has not been normalized. We recommended this to supplement risk management in the overseas business sector, which is a weak point of KB Financial Group, and we hope this intention is not distorted," adding, "To strengthen the independence of the board, it is desirable to compose it through various channels."

He continued, "As an interested party and employee, I hope and pray more than anyone else that KB Bukopin Bank becomes a successful model," and requested, "I earnestly ask the management and the board to pay special attention to this and to prevent deterioration as in past cases."

Yoon Jong-kyu, Chairman of KB Financial, said, "Regarding KB Bukopin Bank, it is true that the scope of restructuring and support increased more than expected as COVID-19 approached," adding, "We have the enthusiasm to create a case of acquiring a failing bank and increasing shareholder value through normalization, and we expect it to take 3 to 5 years." He also stated, "This is the fifth consecutive year that the labor union-recommended outside director proposal has been submitted, and I hope this will be an opportunity to humbly reflect on the serious meaning of the shareholders' voting results."

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