[Reshaping Financial Shareholders' Meetings]② Oldboy-Feminine Wave... Attention-Grabbing Outside Directors

As financial authorities signal a crackdown on the oligopoly of the five major financial holding companies, attention is also focused on the new outside directors who will monitor and supervise the management. At this week's shareholder meetings, 'old boys' and a 'female wave' stand out.

Outside Director Old Boys and 'Female Wave'

According to the financial sector on the 16th, KB Kookmin Bank plans to appoint former NongHyup Financial Group Chairman Son Byung-hwan as a new outside director at the shareholder meeting scheduled for the 23rd. After the change of administration, Son stepped down from the NongHyup Financial Group chairman position last year and moved to become a non-standing research fellow at the Korea Institute of Finance. While he received positive evaluations for his management capabilities, given the nature of NongHyup Financial Group, which is heavily influenced by politics, it was widely speculated that he would give way to a new figure. Indeed, with former Prime Minister's Office Secretary-General Lee Seok-jun appointed as the new head of NongHyup Financial Group, Son also found himself in need of a new path.

However, it is rare for a former holding company chairman to move to an outside director position at another bank, drawing industry attention. Although Son is known to have a high level of understanding of the industry, the optics of a former holding company chairman moving directly to an outside director role shortly after stepping down are not very favorable. A banking industry insider said, "Objectively, it is desirable because a professional person can properly fulfill the outside director's original role of oversight, but from the perspective of bank employees, having someone who knows all the internal affairs of the banks as an outside director might feel burdensome."

The increasing presence of women, which has been rare in the financial sector, is also notable. KB Financial Group and Hana Financial Group have each appointed women as new outside directors at their shareholder meetings scheduled for the 24th.

In the case of KB Financial Group, two out of three new outside director candidates are women. Professor Yeo Jeong-seong of Seoul National University's Department of Consumer Studies and Cho Hwa-jun, full-time auditor at Mercedes-Benz Financial Services Korea, are expected to be appointed as new outside directors. KB Financial's female outside directors total three (42.8%), exceeding the European Union's mandatory female outside director ratio of 40% starting June 2026. Hana Financial Group also appointed Won Sook-yeon, a professor in the Department of Public Administration at Ewha Womans University, as a new outside director.

72% Reappointment Rate... ISS Opposes

Among 25 candidates for outside directors at the four major financial holding companies (KB, Shinhan, Hana, Woori), 18 (72%) are expected to be reappointed. In particular, all eight outside director candidates at Shinhan Financial Group (Kwak Soo-geun, Bae Hoon, Sung Jae-ho, Lee Yong-guk, Lee Yoon-jae, Jin Hyun-duk, Choi Jae-bung, Yoon Jae-won) are up for reappointment.

Rather than innovating with new figures, outside directors at domestic financial holding companies have chosen 'stability,' facing criticism both domestically and internationally. ISS, the world's largest proxy advisory firm, recently recommended shareholders oppose the reappointment of candidates at Shinhan, Hana, and Woori Financial Groups in its report on the four major financial holding companies' shareholder meeting agendas.

This is because they failed to collectively respond to executives involved in major incidents such as the Lime and DLF scandals and hiring irregularities, which carry legal risks, and thus lack the qualifications for reappointment.

Regarding Shinhan Financial Group, ISS pointed out, "Although Chairman Cho Yong-byoung was ultimately acquitted of hiring irregularity charges, the board took no action when he was first indicted and found guilty in the first trial." For Hana Financial Group, ISS highlighted Chairman Ham Young-joo's legal risks related to the DLF scandal. Chairman Ham received a heavy disciplinary action for the incomplete sale of DLF and filed a cancellation lawsuit but lost in the first trial. However, based on past precedents, the consensus is that the possibility of outside director candidates being rejected at the shareholder meetings is low.

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