FSS chief urges outside directors to step up oversight at regional financial groups

Lee Chan-jin, head of South Korea’s Financial Supervisory Service, told newly appointed outside directors in the financial sector that they should “fairly and objectively represent shareholders’ interests” and actively check and monitor management.

Lee spoke on April 28 at the Korea Banking Institute in central Seoul, appearing as the first lecturer in a new outside-director training program run by the Korea Banking Institute. He said the role of outside directors is “more important than ever” if financial companies are to carry out their core functions.

“Transparent governance helps minimize principal-agent problems between shareholders and management, raising shareholder value and ultimately building trust in the financial industry,” Lee said, calling outside directors central to transparent and fair governance.

He also cited repeated cases of consumer harm, including misselling, and the concentration of financial resources in real estate, saying the low-growth trend underscores the need to shift toward more productive finance. Lee said the FSS would provide institutional support, including reflecting board-level feedback on sound governance in its supervision and inspections.

After the lecture, the FSS signed a memorandum of understanding with three regional financial holding companies — iM, BNK and JB — to train and strengthen outside directors. The move follows a February agreement last year with five major financial holding companies: KB, Shinhan, Hana, Woori and NH NongHyup. Attendees included BNK Financial Group Chairman Bin Dae-in, who won a second term last month, along with iM Financial Group Chairman Hwang Byung-woo and JB Financial Group Chairman Kim Ki-hong.

Under the agreement, the Korea Banking Institute will add topics tailored to regional holding companies to its outside-director curriculum and introduce remote learning to improve access for directors living outside Seoul. The FSS and the Korea Federation of Banks said they plan to encourage active participation across the financial sector.