Following the Yoon Suk-yeol administration, President Lee Jae-myung is also zeroing in on governance issues such as financial holding company chairmen's "self-extensions," heightening tension across the financial sector. In the financial sector, there are concerns that the financial authorities' governance overhaul could veer into state-controlled finance.
According to the financial sector on the 23rd, the Financial Supervisory Service has formed a task force (TF) to improve financial company governance and plans by Jan. of next year to prepare measures including strengthening verification of the selection process for financial holding company CEOs, bolstering board independence, and enhancing diversity.
At the Financial Services Commission (FSC) briefing on the 19th, President Lee sharply criticized the selection process for financial holding company CEOs, saying it allows "a corrupt inner circle to rotate among a few to exercise control," and the Financial Supervisory Service (FSS) is said to be preparing matching improvement measures.
Debate over the governance of financial holding companies has flared up each time administrations changed. Former President Yoon Suk-yeol likewise targeted financial company governance from the outset of his term, unleashing criticisms such as "bank servitude" and "banks as public goods," and most major financial holding company chairmen were replaced.
Former Shinhan Financial Group Chairman Cho Yong-byung and former Woori Financial Group Chairman Son Tae-seung were widely seen as likely to extend their terms but stepped down under pressure and sanctions from the financial authorities. NH Nonghyup Financial and BNK Financial Group also saw chairmen replaced early in the Yoon Suk-yeol administration. Former KB Financial Chairman Yoon Jong-kyu faced reports of conflict with the financial authorities and gave up a fourth term in 2023 and stepped down.
Under the Lee Jae-myung administration, Shinhan Financial Group Chairman Jin Ok-dong and BNK Financial Group Chairman Bin Dae-in have become the final candidates for the next chairmanships and are awaiting approval at next year's shareholders' meetings. Woori Financial Group Chairman Yim Jong-ryong was included in the chair candidate pool, and KB Financial Chairman Yang Jong-hee faces a term in Nov. of next year.
Every time a new administration takes office, governance issues at financial holding companies surface, and during transitions of power, tip-offs flood the financial sector. Ahead of the selection process for a chairman at a regional financial holding company recently, rumors circulated such as "a certain candidate was deeply involved in an improper loan for Kim Keon-hee," "the current chairman is not running the chairman candidate selection process fairly," and "a certain candidate engaged in political activities."
At the FSC briefing, President Lee also said, "These days, I'm getting a flood of tip-offs. When a bank selects a president, some say someone is a bad person, or there are problems with the selection process, and so on—it's pouring in." Lee asked Chief of Staff Kang Hoon-sik and Policy Chief Kim Yong-beom, "Are you getting tip-offs?" and both replied that they receive many.
A financial industry source said, "At one financial company, people even secretly photographed the CEO at a drinking gathering and tipped off politicians and the media," adding, "As administrations intervene in personnel at financial companies, networking culture persists over merit." Another source said, "Because many financial companies effectively have no owner, the political world seems to view the chairmanship as spoils."