A branch of the MG Community Credit Cooperatives in Seoul / Yonhap
MG Community Credit Cooperatives is set to undergo major shifts in its leadership and management system by weakening the authority concentrated on its chairman and by restructuring the entire system under a newly established professional CEO position.
The restructuring plan comes after a series of controversies over a massive withdrawal crisis and employee misconduct earlier this year, aiming to salvage the financial institution's soundness.
According to the credit union's management innovation advisory committee that announced the restructuring measures at the government complex in Seoul on Tuesday, the new position of management representative director will oversee overall business.
The chairman position of MG Community Credit Cooperatives, which could originally be reappointed, will be changed to a single four-year term post. The authority of the chairman post will also be limited to external activities and the head of the board of directors. The weakening of the chairman's excessively concentrated power is aimed at preventing irregularities within the organization.
Kim Seung-ryul, center, the chair of MG Community Credit Cooperatives' management innovation advisory committee, announces restructuring measures of the state-run credit union at the government complex in central Seoul, Tuesday. Yonhap
The annual compensation for the chairman will also be reduced by 23 percent from the current level of over 600 million won ($450 million), while renumeration for full-time board directors will be cut by 28 percent from the current salary range of some 500 million won. Executive-level employees will implement a voluntary return of wage increases slated for this year.
In addition, the credit union's regional branches that have lost competitiveness due to high delinquency rates will be the targets of acquisition by other branches, with expulsion of such branches due by March next year. The credit union's advisory committee has assured that customer savings, deposits and investment funds will be fully protected in such cases.
Meanwhile, the Ministry of the Interior and Safety will maintain the supervisory authority over the credit union, despite the previous controversy for its lack of expertise on such matters. Instead, the Financial Supervisory Service (FSS), whose role was previously limited to a soundness review, will assume a greater role in the supervisory process, by forming a consultative body along with the interior ministry and the Korea Deposit Insurance Corporation (KDIC).
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