22-07-2025
Checks, gaps, global voices: The evolving face of Korea's bank governance
Governance reforms gain ground amid uneven progress on diversity, independence
South Korea's financial giants have been working to shed their long-standing reputation for rubber-stamp governance, as diversity and boardroom expertise have visibly improved. Yet, with CEOs and legacy ties still exerting implicit power in some high-level conference rooms, the extent to which boards can hold management accountable remains in question.
All four of Korea's top financial groups now have at least two female outside directors, with women holding an average of 32 percent of those seats. Shinhan leads with four of nine, followed by KB with three of seven, Hana with three of nine and Woori with two of seven.
Notably, the female directors are, on average, more than a decade younger than their male peers — suggesting that gender inclusion is also fostering generational renewal. Average board ages cluster between 61 and 63, with Shinhan and Woori the youngest at roughly 61.7 years old.
However, none of the boards currently includes a foreign national. The last was Stuart B. Solomon, a former MetLife executive who left KB in 2022. The absence is especially striking given that foreign investors now hold an average 63 percent stake across the four groups — more than six times the Kospi average.
While not legally mandated, foreign directors are widely seen as a marker of governance transparency and stronger representation of foreign shareholders' interests.
Strengthening internal oversight was the dominant theme in board appointments across Korea's top banking groups this year.
Woori made the most sweeping changes, replacing four of its seven outside directors after a high-profile internal control failure led to regulatory scrutiny. It also launched an ethics and internal control committee and revamped its audit committee.
New appointees include Kim Choon-soo, a compliance specialist and former head of Eugene Group's ethical management division, and Rhee Yeong-seop, a Seoul National University professor with expertise in economics and financial regulation — both expected to strengthen the group's internal controls.
To support Woori's digital transformation, tech entrepreneur Kim Young-hoon, a founding member of Daou Tech, also joined the board.
Still, gaps remain. Woori's board skill matrix highlights a lack of expertise in consumer protection and legal affairs — areas that need strengthening going forward.
The other three groups, with more balanced skill coverage, emphasized continuity while selectively shoring up governance capabilities.
Shinhan added two new directors with deep ties to Japan, preserving its long-standing alignment with the Korean-Japanese community and maintaining the share of third-generation Korean Japanese outside directors. New appointees include Chun Myo-sang, a third-generation Korean Japanese and certified public accountant in Japan, and Yang In-jip, a Korean national with extensive professional experience in Japan, including as a tech CEO and former chair of the Korean Business Association in Japan.
This enduring alignment reflects Shinhan's founding roots — established with capital from Korean Japanese investors in the 1980s — and continues to serve as a stabilizing force in its governance.
KB maintained board stability while adding targeted expertise. New appointees include Ewha University economics professor Chah Eun-young and E-Jung Accounting CEO Kim Sun-yeop, bolstering regulatory and audit oversight. A new internal controls committee is chaired by Lee Myong-hwal, a veteran economist and policy expert. Notably, KB limits outside director terms to five years, shorter than the industry's six-year norm, underscoring its commitment to board renewal.
Hana made minimal changes, but focused on governance upgrades. It established an internal controls committee and added Suh Young-sook, former chief credit officer at SC Bank Korea, as its only new outside director. Though modest in scope, the move raised Hana's female director ratio and added global credit expertise.
Despite formal efforts to separate management and oversight, executive influence remains entrenched.
At KB and Shinhan, the CEOs of their flagship banks — Lee Hwan-ju and Jung Sang-hyuk, respectively — sit on the holding company's board as 'nonstanding' directors: nonexecutive, nonindependent, but voting members who serve on committees. These positions blur the boundary between oversight and management.
Hana goes further, including not only its CEO, but also two vice chairs — Lee Seung-lyul and Kang Seong-muk — on the board. In 2024, the group expanded its board to 12 members — the largest among its peers — by adding external directors to balance the increased number of internal seats. Notably, Lee remains a board member even after stepping down as Hana Bank CEO, reinforcing the view that these seats function as power bases for the group's CEO Ham Young-joo, who secured a three-year term extension in March.
As foreign ownership rises, investor communication is increasingly seen as a measure of governance openness. All four groups now provide English-language disclosures, translated shareholder materials and access to electronic voting — but depth and quality still vary.
Shinhan and Woori lead in outreach. From July 2024 to June this year, Shinhan held eight investor sessions involving board members, along with 24 CEO- and 43 chief financial officer-level meetings. It offers disclosures in Korean, English and Japanese and commissions third-party board evaluations. Woori conducted over 100 foreign investor meetings during the year, many attended by the CEO, signaling volume and senior-level commitment.
Hana and KB focus on accessibility. Hana has held two annual investor roundtables since 2022, with full participation from outside directors. This year, it scheduled one at 10 p.m. local time to accommodate North American shareholders. KB upgraded infrastructure this year with simultaneous interpretation and livestreaming of shareholders meetings, while tailoring voting procedures for institutional and American Depositary Receipt holders.
Woori, Shinhan and KB — each listed on the New York Stock Exchange — also file English-language disclosures via the US Securities and Exchange Commission, alongside Korean regulatory filings.
Still, global investors see room for improvement. More frequent board engagement and clearer channels for shareholder input remain key. Amar Gill, secretary-general of the Asian Corporate Governance Association, stressed that board-level dialogue is essential not just for transparency, but to strengthen the boards themselves.
'There should at least be a designated point person on the board for foreign investors to engage with,' Gill told The Korea Herald. 'The most important part is engagement with investors at the board level, particularly from independent directors. They should be getting feedback from the market. That is how they are empowered.'
He also stressed that logistical improvements around annual shareholders meetings are needed to support non-Korean shareholders. 'Two to three weeks' notice is not enough. It should be at least a month in advance. And foreign investors attending should be able to ask questions.'
