The Rebuilding Korea Party will introduce a bill to cap the number of consecutive terms for financial holding group chairpersons at two. With similar moves detected within the Democratic Party of Korea, debate in the National Assembly over banning a third consecutive term for financial holding group chairpersons is expected to reignite.
According to the financial and political sectors on the 30th, Shin Jang-sik of the Rebuilding Korea Party will hold a joint press conference with the National Office and Financial Service Workers' Union (Korea Finance & Service Workers' Union) at the National Assembly on the 31st and announce the introduction of an amendment to the Act on Corporate Governance of Financial Companies that would limit a financial holding group chairperson to one renewal of term.
The amendment would limit a financial holding group chairperson's term to three years and allow only one consecutive renewal. The current Act on Corporate Governance of Financial Companies has no provisions limiting the number of renewals or the term of a representative director. Conditions for renewal are not included in this amendment. Eleven lawmakers from the Rebuilding Korea Party and one lawmaker from the Democratic Party of Korea have been listed as co-sponsors of the amendment.
An aide in Shin's office said, "A financial holding group chairperson usually has served as the CEO of all major subsidiaries, so if the person serves three consecutive terms, they are mostly over 70. We believe that once past 70, it should be a principle not to serve as chairperson."
It is also reported that within the Democratic Party of Korea, a bill to ban a third consecutive term for financial holding group chairpersons is under discussion. The party is said to be reviewing measures to require a "special resolution" of the shareholders' meeting for a renewal of term by a financial holding group chairperson. Currently, a renewal proposal for a financial holding group chairperson falls under a "ordinary resolution," which requires approval by a majority of the voting rights of attending shareholders, with at least one-quarter of the total number of shares represented. If it becomes a special resolution, it would require approval by at least two-thirds of the voting rights of attending shareholders, with at least one-third of the total number of shares represented.
An official at the National Policy Committee said, "I understand that within the Democratic Party of Korea, measures such as limiting the term of financial holding group chairpersons and introducing a special resolution for renewals are being discussed. If various bills are introduced, the National Policy Committee will begin full-fledged deliberations."
As major financial holding group chairpersons have recently succeeded in renewing their terms one after another, any change in the system is expected to alter the structure for selecting and renewing chief executive officers (CEOs) going forward.
The financial authorities plan to announce next month measures to advance the governance of financial holding groups. The financial authorities are reviewing a plan to introduce a special shareholders' meeting resolution requirement for renewing the term of a financial holding group chairperson. If the ruling camp pushes to ban a third consecutive term for financial holding group chairpersons, the financial authorities' advancement plan is expected to lose momentum.