Lee Chan-jin, head of the Financial Supervisory Service, convened a meeting with the chairmen of the 8th bank holding companies on September 23 to emphasize the importance of fairness and transparency in the selection process for subsidiary CEOs. With the year-end personnel changes approaching, he urged holding companies that lack adequate succession procedures, including CEO qualifications and verification periods, to address these shortcomings before initiating the selection process.
During the meeting held in Yeouido, Seoul, Lee stated, "Please ensure that subsidiary CEOs are selected through transparent and fair procedures." He referenced the term 'Daegongmusa' and stressed that the CEO selection process should not be influenced by specific factions or personal relationships, but rather based on merit. He particularly called on holding companies that have not established clear qualification criteria and minimum verification periods for evaluations to promptly rectify these issues before starting the selection process.
Lee also highlighted the need for the holding company's nomination committee to guarantee the substantive role of the subsidiary's nomination committee. This includes providing sufficient information on potential candidates and ensuring that the opinions of nomination committee members are reflected in the candidate evaluation process.
Regarding the recent heated competition for local government deposit bids, Lee pointed out that "the sight of banks with capital advantages winning contracts through competitive project costs represents unfair competition on an uneven playing field." The Financial Supervisory Service plans to examine the impact of future project cost expenditures on the banks' soundness and profitability.
In light of the increase in financial incidents, he called for strengthened internal controls. According to the Financial Supervisory Service, financial incidents in the banking sector rose from 33 cases amounting to 69.69 billion won in 2023 to 47 cases totaling 170.82 billion won from January to July this year.
* This article has been translated by AI.
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