NongHyup Financial Holding Company appointed Song Du-han as an outside director on the 30th of last month. Song, the new outside director, received a bachelor's degree in business administration, a master's degree in finance, and a doctorate in financial economics from Temple University in the United States. He has served as an economic policy advisor for the Korea Development Institute (KDI), an adjunct professor at Hankuk University of Foreign Studies, the director of the NongHyup Financial Research Institute, and an adjunct professor at Kyonggi University.
Outside director Song served as the deputy director of the Democratic Research Institute, a policy research organization of the Democratic Party, and also acted as the head of the Fair Finance Advisory Group for Lee Jae-myung's campaign during the 20th presidential election. The Democratic Finance Forum, led by Song, aims to be a private think tank but primarily proposes financial policies to the Democratic Party. In a discussion co-hosted with Democratic Party lawmakers in February, outside director Song argued for reducing the statutory maximum interest rate from the current annual 20% to 15% and for supporting low-interest loans for the public with 860 billion won from postal savings.
There are various interpretations in the financial sector regarding NongHyup Financial's recruitment of a Democratic Party figure as an outside director. Some speculate that NongHyup Financial proactively recruited a Democratic Party figure as the likelihood of Lee Jae-myung's victory in the presidential election increased. However, there are also criticisms that this interpretation is excessive, given that outside director Song has previously served as the director of the NongHyup Financial Research Institute.
However, the process for selecting outside director Song is fraught with uncertainty. Outside director Song was raised as a final candidate for outside director on the same day as outside directors Bae Yong-won, Cha Jin-seok, and Ahn Yoon-joo, who were elected at the general shareholders' meeting in March. The NongHyup Financial Executive Recommendation Committee confirmed these four as candidates for outside directors on March 7.
After vetting the candidates, the recommendation committee on the 21st of the same month recommended only the three candidates excluding outside director Song to the board of directors. Ultimately, NongHyup Financial held an extraordinary shareholders' meeting on March 28 and newly appointed only these three outside directors.
NongHyup Financial's outside director system consists of seven members; however, due to the delay in appointing outside director Song, it operated with only six members for a month. During this time, major financial holding companies were increasing the number of outside directors and strengthening their powers to enhance the independence of their boards of directors. NongHyup Financial faced criticism for decreasing the number of outside directors, contrary to the trend of enhancing board independence.
Then, on the 30th of last month, NongHyup Financial suddenly held the committee meeting and extraordinary shareholders' meeting in succession to appoint outside director Song. It took more than two months from confirming the final outside director candidates on March 7 until the final appointment.
It is unusual for it to take two months from being selected as a final candidate to the appointment at the shareholders' meeting. It is also not common for NongHyup Financial to hold a committee meeting and extraordinary shareholders' meeting on the same day to elect an outside director. For instance, in the case of outside director Kim Byeong-hwa, who was elected in April of last year, it took 12 days from final candidate selection to the shareholders' meeting. This raises suspicions that NongHyup Financial delayed the appointment of outside director Song considering the political situation.
March of last year was a time of various expectations as the Constitutional Court's impeachment ruling on former President Yoon Suk-yeol was delayed. There were discussions in political circles about the possibility of dismissing or rejecting the impeachment trial. It is suggested that NongHyup Financial delayed the appointment of outside director Song, who is from the Democratic Party, considering these circumstances. There are also suspicions that the delay in his appointment was due to Song's participation in Lee Jae-myung's presidential campaign.
A NongHyup Financial official noted, "The delay in appointing Song as an outside director was due to his reemployment review by the ethics committee for public officials."
A financial industry official stated, "Such appointments of outside directors are possible because NongHyup Financial is a 100% subsidiary of the National Agricultural Cooperative Federation, which can hold extraordinary shareholders' meetings whenever desired," adding that "it would not be possible for other listed financial holding companies to do so."