Despite pressure from the financial authorities to revamp governance structures, financial holding companies such as Woori, BNK, and JB decided to keep the system in which only the chair serves as an inside director this year. Among the four major financial holding companies, only Woori Financial Group Chair Yim Jong-ryong is sticking to the single inside-director system.
In the financial sector, some say that when the chair of a financial holding company sits on the board, power becomes concentrated, including monopolizing management decision-making authority. According to the financial sector on the 12th, Woori Financial Group will hold a regular shareholders meeting on the 23rd of this month and put on the agenda Yim's extension of term and reappointment as an inside director. The appointment of an additional inside director was not included on the agenda.
Among the four major financial holding companies—KB, Shinhan, Hana, and Woori—Woori Financial Group is the only one maintaining a system with the chair as the sole inside director. KB Financial Group has, in addition to Chair Yang Jong-hee, KB Kookmin Bank President Lee Hwan-joo serving as another nonexecutive director. Shinhan Financial Group has President Jin Ok-dong together with Shinhan Bank President Jeong Sang-hyeok serving as inside directors. Hana Financial Group has Chair Ham Young-joo and Vice Chairs Lee Seung-ryeol and Kang Sung-mook sitting on the board as inside directors.
At Woori Financial Group, the Woori Bank president also sat on the holding company's board as a nonexecutive director, but after Yim took office in 2023, then-President Lee Won-deok resigned, leaving the nonexecutive seat vacant. Since then, Yim has maintained a single inside-director system to this day.
A Woori Financial Group official said, "If there are too many inside directors on the board, it could actually undermine the board's independence, so we are keeping the current structure," adding, "There are four outside directors recommended by the oligopolistic shareholders on the board now, so it is far from an 'inner circle.'"
Regional financial holding companies, including BNK Financial Group Chair Bin Dae-in, iM Financial Group Chair Hwang Byung-woo, and JB Financial Group Chair Kim Ki-hong, are all maintaining a system with the chair as the sole inside director.
The system with the chair as the sole inside director is also linked to President Lee Jae-myung's criticism of a "corrupt inner circle." When the outside directors' function of checking the chief executive officer (CEO) does not work and only the holding company chair sits on the board, the chair can monopolize decision-making over management matters.
Appointing an additional inside director can at least partly disperse power concentrated in the chair. Typically, executives appointed as inside directors alongside the chair are seen as the group's No. 2. Jin Ok-dong and Ham Young-joo also served as inside directors when they were bank presidents.
A financial industry official said, "A system with the chair as the sole inside director can create unchecked power," adding, "If you look at Woori Financial Group's decision-making process on mergers and acquisitions (M&A), this power structure becomes evident."