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| gettyimagesbank |
By Yi Whan-woo
The country's five major banking groups ― Shinhan, KB, Hana, Woori and NongHyup ― are drawing attention over whether they will replace their outside directors whose terms will expire next month amid the government's push for an overhaul of the groups' governance structures.
Thirty out of 40 outside directors at the five companies will see their tenures end. And while they can serve up to six years as stipulated by the commerce law, industry sources say it remains uncertain whether they will win approvals from shareholders and boards of directors this year.
"The government has been against oligopoly in the banking industry, and in that regard, the five companies may try not to get on the nerves of the financial authorities by keeping the seats for their outside directors," a source said.
Outside directors are supposed to transparently and objectively monitor the management of the companies in which they serve.
But they have been blamed for merely acting as a rubber stamp of CEOs and executives, because many of them were appointed to the positions through their connections with management.
Under the circumstances, banking group CEOs had little difficulty in extending their tenure, which the administration of President Yoon Suk Yeol is heavily opposed to.
"You can see how the replacement of outside directors is related to the government's reform drive of the banking groups," another source said.
By company, Shinhan has 10 outside directors whose terms will expire in March. Hana has eight, while KB has six, Woori has four and NongHyup has two.
In particular, Shinhan and Woori are strongly anticipated to pick new outside directors considering they recently picked a new CEO in the midst of the government's pressure for industry reform.
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