Financial holding companies' governance reform plans have been postponed from the originally scheduled March announcement to the second half of the year. However, the government continues to emphasize the public nature of finance and the need for enhanced internal controls, suggesting that the overall reform direction remains intact.
According to the financial sector on July 13, financial authorities were expected to announce improvements to the governance of financial holding companies in March. However, prolonged coordination with the presidential office has delayed the announcement without a specific timeline.
The reform plan is expected to include criteria for CEO reappointments, strengthening board independence, and expanding clawback provisions. The focus appears to be on improving governance through best practices and guidelines rather than through legislative changes.
As the announcement has been delayed by nearly four months, some speculate that the government's commitment to reform may have weakened. However, many in the financial sector interpret this as a process of fine-tuning specific criteria rather than a shift in policy direction.
Kim Yong-beom, head of the policy office, recently stated at a forum, "While foreign ownership in financial holding companies exceeds 60%, they cannot be viewed in the same light as Samsung or SK."
The foreign ownership rates in the four major financial holding companies—KB, Shinhan, Hana, and Woori—are mostly above 60%. This suggests a different governmental perspective on these sectors, as both Samsung Electronics and SK Group also have foreign ownership exceeding 50%. The government views high-tech industries like semiconductors as strategic sectors that need nurturing for national competitiveness, while finance, with its strong public nature, requires stricter management and accountability.
Although Kim's remarks did not directly address governance reform, they reflect the government's view that financial holding companies should not be left solely to management autonomy but should also enhance public accountability and responsibility.
This stance aligns with previous comments from President Yoon Suk Yeol, who stated during a cabinet meeting in May that "finance must play a public role of more than 50%" and urged the financial sector to focus on its social responsibilities in addition to profitability. In a report from the Financial Services Commission at the end of last year, it was criticized that "left unchecked, a corrupt inner circle emerges, allowing a few to exercise control at will."
As a result, while the announcement of the reform plan has been delayed until the second half of the year, there is a strong likelihood that the focus on strengthening board oversight, internal controls, and executive accountability will remain.
A financial sector official commented, "We must find a balance that enhances the public nature and responsibility of financial companies without excessively undermining management autonomy."
According to the financial sector on July 13, financial authorities were expected to announce improvements to the governance of financial holding companies in March. However, prolonged coordination with the presidential office has delayed the announcement without a specific timeline.
The reform plan is expected to include criteria for CEO reappointments, strengthening board independence, and expanding clawback provisions. The focus appears to be on improving governance through best practices and guidelines rather than through legislative changes.
As the announcement has been delayed by nearly four months, some speculate that the government's commitment to reform may have weakened. However, many in the financial sector interpret this as a process of fine-tuning specific criteria rather than a shift in policy direction.
Kim Yong-beom, head of the policy office, recently stated at a forum, "While foreign ownership in financial holding companies exceeds 60%, they cannot be viewed in the same light as Samsung or SK."
The foreign ownership rates in the four major financial holding companies—KB, Shinhan, Hana, and Woori—are mostly above 60%. This suggests a different governmental perspective on these sectors, as both Samsung Electronics and SK Group also have foreign ownership exceeding 50%. The government views high-tech industries like semiconductors as strategic sectors that need nurturing for national competitiveness, while finance, with its strong public nature, requires stricter management and accountability.
Although Kim's remarks did not directly address governance reform, they reflect the government's view that financial holding companies should not be left solely to management autonomy but should also enhance public accountability and responsibility.
This stance aligns with previous comments from President Yoon Suk Yeol, who stated during a cabinet meeting in May that "finance must play a public role of more than 50%" and urged the financial sector to focus on its social responsibilities in addition to profitability. In a report from the Financial Services Commission at the end of last year, it was criticized that "left unchecked, a corrupt inner circle emerges, allowing a few to exercise control at will."
As a result, while the announcement of the reform plan has been delayed until the second half of the year, there is a strong likelihood that the focus on strengthening board oversight, internal controls, and executive accountability will remain.
A financial sector official commented, "We must find a balance that enhances the public nature and responsibility of financial companies without excessively undermining management autonomy."
* This article has been translated by AI.
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