[Outside Director Profiles] ① From Promising Bureaucrat to Regular Outside Director... Yoonjae Lee, Chairman of Shinhan Financial Group Board

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"Drinking gatherings? (laughs) He is someone who hardly jokes in private. He is very meticulous and never overlooks any matter. Even at his age, he is someone who has devoted himself to studying. In a way, he is well-suited to the important role of an outside director, which is to monitor and supervise management."

Lee Yoon-jae (73), former Presidential Secretary for Finance and Economy, was officially appointed as the chairman presiding over the Shinhan Financial Group board of directors at the regular shareholders' meeting on the 23rd. Chairman Lee is a unique figure who gave up a promising civil servant position once considered ministerial material early on and has since been active as a business executive, columnist, translator, and outside director.

Born in Seoul in 1950, Chairman Lee is a 'traditional bureaucrat' who passed the civil service exam after attending Kyunggi High School and Seoul National University Law School. He followed the elite 'KS line (Kyunggi High School - Seoul National University)'. He is also the cousin and direct junior of Lee Hun-jae (79), former Deputy Prime Minister and Finance Minister, known as the 'godfather of Mopiah' (a term referring to former Ministry of Finance and Economy bureaucrats).

Before graduating from university, Lee passed the 11th civil service exam in 1972 and began his public service career at the Economic Planning Board. He was recognized early on as a 'talent' by figures such as former Deputy Prime Minister and Finance Minister Jin Nyeom, former Finance Minister Kang Bong-gyun, and the late Kim Jae-ik, Chief Secretary for Economic Affairs, due to his flawless work and diligence.

Promoted to section chief, Lee studied abroad at Stanford University in the U.S. in 1980, earning an MBA. After returning, he advanced rapidly through positions such as Head of Fund Planning, Budget Officer for Construction and Transportation, General Budget Officer, Second Cooperation Officer at the External Coordination Office, Chief Secretary to the Deputy Prime Minister and Minister of Economic Planning, Banking and Insurance Review Officer at the Ministry of Finance and Economy, and Director of Economic Policy. He was reportedly always at the top in promotion speed among his peers.

His internal reputation was as impressive as his career. In 2007, 'The Economist' conducted a vote among 77 government department section chiefs on the 'most influential or impressive senior public officials,' where Lee tied for first place with three votes alongside notable seniors such as former Deputy Prime Minister Lee Hun-jae, Prime Minister Han Duck-soo, and former Finance Minister Lee Kyu-sung.

During his public service, he was known as a 'boss with much to learn from,' meticulously reading reports submitted by juniors to the last page and always providing specific directions for revisions. He often said in private, "The role of a superior is to cultivate the capabilities of subordinates. One must always provide concrete guidance to nurture their abilities."

However, unlike his cousin Lee, who built his faction through sociability and heavy drinking, Lee was known to be somewhat dry in interpersonal relations during his public service. He was a scholar-type who focused on research rather than drinking, and in the conservative public service environment, he was known for his distinctly reformist and open-minded tendencies.

A senior official in the financial sector who observed him closely during his time at the Ministry of Finance and Economy said, "Chairman Lee is different from the typical old-boy bureaucrats. He is not someone who spends time reminiscing over drinks. Even during his public service, he devoted himself solely to study and research rather than drinking. I remember him saying, 'If you have time to drink, you should study English instead.'"

Under the Kim Dae-jung administration, Lee was appointed as Policy Secretary 1 in the Policy Planning Office of the Presidential Secretariat and later promoted to Senior Secretary for Finance and Economy (Grade 1). The expression 'future ministerial candidate' was not an exaggeration. However, just before turning fifty in 1999, he suddenly left public service and voluntarily became a private citizen, shocking the government circles. At that time, he was offered positions such as Deputy Minister of the Economic Department or the highly influential Budget Office Director but applied for honorable retirement without hesitation.

According to media reports at the time, regarding his sudden retirement application, he said, "As a policy official during the foreign exchange crisis, I thought I would have to take responsibility someday," "I think I have done everything I wanted as a career bureaucrat," and "If I want to study, I want to pursue humanities rather than social sciences."

After retirement, he moved to Kim & Chang law firm as an advisor and in 2001 co-founded KoREI, a private economic think tank, with his cousin Lee Hun-jae, serving as its CEO for about ten years. In 2004, he also oversaw the practical work of the 'Lee Hun-jae Fund,' a private equity fund created by Lee Hun-jae aiming to acquire Woori Bank.

Even after leaving public service, Lee was repeatedly considered a top candidate for cabinet positions. Especially in the early years of the Roh Moo-hyun administration, he was frequently mentioned for key posts such as Deputy Prime Minister and Minister of Finance and Economy, and Chairman of the Financial Supervisory Commission. A financial sector official said, "Though it was long ago, he was known as a 'genius' in the bureaucratic society."

However, he also attempted several 'transformations.' In the late 2000s, he appeared as a columnist in a daily newspaper, revealing insights not only on the economy but also on various social phenomena. His characteristic reformist and open-minded orientation was evident in this process. In his writings, he said, "In fierce competition, it is natural that conservatives properly reflect individual abilities and achievements, but the problem lies in who and how to judge whether it is 'properly' done," and "Moreover, this proper reflection should not be limited to management but should be applied to all efforts and contributions involved in the creation, development, and achievement of a company." Regarding anti-corporate sentiment, he said, "What we or they (advanced countries) hate and dislike is the wrongful acts of companies, not companies themselves."

A financial sector official who knew him well said, "He possesses considerable insight and thinking ability, along with a very reformist and open-minded mindset. He emphasized enhancing competitiveness through domestic and international competition and proactive responses to change even within the public service, and he has lived accordingly."

Chairman Lee also challenged the path of a translator. With deep knowledge of English, he translated and published Leila Aboulela's 'The Translator' in 2013 and Thomas Hardy's 'The Mayor of Casterbridge' in two volumes in 2016. It is said that he had concerns about domestic English literature translations, judging that many books translated in the 1950s and 1960s were retranslated from Japanese versions, leading to quality issues. The work he devoted particular effort to translating was 'The Mayor of Casterbridge.' After the copyright protection period (70 years) ended, he began the translation work, and those around him say he repeatedly verified the text with his characteristic scholarly temperament.

After retiring from public service, Lee mainly worked in the corporate sector. He served as an outside director at major domestic companies such as Cheil Bank, Samsung Fire & Marine Insurance, Choheung Bank, S-OIL, KT&G, LG, CJ Freshway, and Shinhan Financial Group. He joined the Shinhan Financial board in 2019 upon recommendation from IMM Investment. Among board members, he was regarded as one of the 'two tops' along with former outside director Byun Yang-ho, actively voicing opinions at meetings and sometimes not hesitating to offer harsh criticism of the company's situation, according to internal and external evaluations.

A person who worked with Chairman Lee as an outside director said, "Having met him at the board for about a year, I got the impression of a very strict style typical of a former civil servant. What stood out most was his habit of studying a lot on his own. When he had questions, he would find problems himself and research them," adding, "He also seemed to have a high understanding of business overall, having previously operated a fund company (Lee Hun-jae Fund)." He also added, "It is unfortunate that when former director Byun Yang-ho voluntarily resigned, Chairman Lee had to endure the opposition recommendation from proxy advisory firms regarding his appointment."

However, there is also criticism that he could not overcome the realities during his tenure as an outside director. A representative case was the approximately 1.15 trillion KRW third-party allotment capital increase conducted by Shinhan Financial Group in 2020. There were many suspicions about the reasons and methods of this capital increase targeting a Hong Kong-based private equity fund, but the agenda easily passed the board's approval.

At that time, only outside director Byun Yang-ho (former Director of Economic Policy at the Ministry of Finance and Economy), who worked alongside Chairman Lee, expressed opposition. An insider familiar with the situation said, "I did not expect even this outside director (Chairman Lee) to approve without raising any issues." There are also criticisms that outside directors failed to check or monitor financial accidents such as the Lime scandal. This is why proxy advisory firms recommended against Chairman Lee's appointment.

Regarding this, some say the reality was a high barrier. A senior financial official said, "It is not a matter of Chairman Lee's character or qualifications but rather the limitations of the domestic outside director system in reality," adding, "Given that outside directors are not guaranteed access to the company's confidential information and are treated as part-time jobs with high salaries, the limitations are clear, so institutional improvement should come first."

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