DGB Financial Starts Chairman Appointment Race Today... Will Kim Tae-o Challenge for a Third Term?

Possibility of Reappointment with Record Performance
Authorities' Negative Perception and Age Limit as 'Obstacles'
Chairman Candidate Profile by Late February Next Year

DGB Financial Group is set to officially begin the process of selecting its next chairman. Attention is focused on whether the current chairman, Kim Tae-oh, will challenge for a third term, overcoming regulatory authorities' negative perceptions of long-term incumbency and age restrictions.

Kim Tae-oh, Chairman of DGB Financial Group, is attending a meeting between financial authorities and bank holding company chairmen held at the Bankers' Hall in Jung-gu, Seoul on July 5. Photo by Yoon Dong-joo doso7@

According to financial circles on the 25th, the Chairman Candidate Recommendation Committee (CCRC), composed of seven outside directors of DGB Financial, held its first meeting and decided to initiate the CEO (chairman) succession process. Compared to other financial holding companies that typically start their CCRC 3 to 4 months before the chairman’s term expires, DGB Financial Group’s timing to activate the CCRC is relatively early. Chairman Kim’s term runs until March next year, leaving about six months remaining. In 2019, DGB Financial revised its regulations to start the succession process six months before the chairman’s term expires, aiming for thorough candidate evaluation.

At the meeting, an announcement regarding the ‘appointment principles’?which include plans to proceed with an objective and transparent process?is expected. Additionally, the committee is likely to share the final report from an external consulting project on ‘governance advancement’ conducted over three months since May and decide whether to apply its recommendations to the current CCRC.

The CCRC plans to finalize the candidate pool by receiving nominations from both internal and external sources, then narrow down from a first-round candidate group (longlist) of about 10 people to a second-round candidate group (shortlist) of 3 to 4 people, and finally select one candidate. Since DGB Financial’s shareholders’ meeting is usually held in March, the next chairman’s profile is expected to be revealed around the end of February next year. This is because the board of directors must convene and appoint the chairman and other inside directors and submit agenda items at least one month before the shareholders’ meeting.

Interest is centered on whether Chairman Kim will attempt a third term. Kim, who took office in 2018, succeeded in his second term in March 2020 and has been leading DGB Financial for six years. Internally, the need for reappointment is raised due to the record net profit of 309.8 billion KRW in the first half of this year and the necessity to steadily transition the core affiliate, Daegu Bank, into a commercial bank.

However, there are significant obstacles. First, financial authorities have expressed negative views on long-term incumbency of financial institution heads. Major financial holding company chairmen are being replaced one after another. Former Shinhan Financial Group Chairman Cho Yong-byeong, former NH Financial Group Chairman Son Byung-hwan, and former Woori Financial Group Chairman Son Tae-seung, all expected to be reappointed, have declared their retirement and stepped down. At KB Financial Group, where the chairman selection process is currently underway, the current chairman Yoon Jong-kyu has also decided to retire early.

The ‘age limit’ is another challenge to overcome. Article 15 (Director’s Term) of the internal governance regulations in DGB Financial’s ‘Governance and Compensation System Annual Report’ stipulates that “the chairman cannot be appointed or reappointed if over 67 years old.” Chairman Kim is currently 68 years old, so to challenge for reappointment, he must obtain a majority attendance and approval from the eight board members to amend this regulation. Since Chairman Kim himself is included in the board, this raises concerns about a ‘self reappointment’ controversy. A financial industry insider said, “Considering public opinion, it will not be easy for the CCRC to hold a board meeting and change internal regulations by itself to pursue reappointment while the committee is in progress.”

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