October 30, 2024

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A taxi passes by ATMs of major local banks lined up on a Seoul street. (Newsis)

Major Korean financial groups are intensifying efforts to broaden and diversify their boards in response to a governmental drive for inclusivity within the sector.

Woori Financial Group is appointing two new female members to its outside board of directors for the first time in its history. Lee Eun-ju, a media expert from Seoul National University, and Park Sun-young, an economics professor from Dongguk University, will replace the company's first and only female outside director, Song Soo-young of law firm Shin & Kim, upon her retirement. The company has expanded the size of its outside board from six to seven members in the process.

Similarly, Hana Financial Group is replacing three retiring outside directors with three new members, one of whom is female, Samsung SDS Executive Vice President Yoon Shim. This change elevates the number of Hana's outside board members from eight to nine, and female representation from one to two.

The company noted that it is increasing the outside board in response to the expansion of the internal board -- from one to three -- to maintain the independence of outside directors. Hana Bank President Lee Seung-lyul and Hana Securities President Kang Seong-muk are joining the holding firm's internal board of directors.

Industry sources anticipate that Shinhan Financial Group will raise the number of its female outside directors from two to three. Although the terms of all nine incumbent outside directors are set to expire this month, the exact number of replacements remains unconfirmed.

KB Financial Group boasts the industry's largest female representation, with three women among its seven external directors, while NongHyup Financial Group has two women among its seven. Both companies are poised to maintain their current board numbers and female proportions this year.

Collectively, the five major financial holding firms anticipate a combined raise in their female representation from 24.3 percent to 30.7 percent following this month's regular shareholders meetings, during which new board members will be elected.

These recent efforts by financial giants align with the government's tightened measures to enhance inclusivity and diversify outside directors in the finance sector. In December, local authorities unveiled some 30 guidelines to enhance the governance structures of local banks and their holding firms, emphasizing alignment with the major global investment banks in their gender balance and board size.

While the government has not set a target rate, industry sources suggest achieving around 30 percent female board representation to meet standards set by environmental, social and governance evaluation organizations inside and outside of the country.

Eight financial holding firms and 16 lenders are expected to submit road maps this month to implement the government's guidelines on enhancing corporate management structures.

By Choi Ji-won (jwc@heraldcorp.com)