[비즈한국] Major domestic financial groups have officially commenced their succession planning processes ahead of year-end CEO appointments for their subsidiaries. In the second half of this year alone, about 70 subsidiaries across the eight major financial holding companies are scheduled to undergo CEO selection processes. Following warnings from financial authorities regarding opaque personnel practices driven by factionalism or personal ties, these groups have refined their procedures to expand the authority of their subsidiaries' Executive Nomination Committees (ENI). However, some point out that as long as holding companies retain significant influence over the final candidate selection process, it remains questionable whether these procedural reforms will be effective.
Shinhan Financial Group’s Subsidiary CEO Recommendation Committee (Subsidiary Committee) held a meeting on September 21 to initiate the succession process for nominating subsidiary heads. The terms of 12 subsidiary CEOs at Shinhan Financial are set to expire at the end of this year, including those at Shinhan Bank, Card, Securities, Capital, Insurance, Savings Bank, and Venture Investment. Among them, Shinhan Asset Trust and Shinhan REITs Management (which is set to be dissolved) are currently in the process of a merger; the Subsidiary Committee has recommended Lim Hyun-woo, current CEO of Shinhan REITs Management, as the inaugural CEO of the integrated entity to be launched in 2027.
The Shinhan Subsidiary Committee announced that it discussed improvement measures to expand the role of subsidiary-level nomination committees during its first meeting. The group decided to share information on the subsidiary succession candidate pool with the bank's nomination committee and grant that committee the authority to recommend candidates. They also announced plans to concretize qualification requirements and evaluation criteria for subsidiary CEOs to be used in candidate deliberations. The group-level committee will proceed with candidate pool reviews, while final candidates will be selected after deliberation by each subsidiary's nomination committee.
BNK Financial Group’s CEO Recommendation Committee (BNK Committee) began the succession process for its subsidiary CEOs on September 30 to discuss recommendation procedures and schedules. At BNK Financial, the terms of seven subsidiary heads are ending this year, including those at BNK Kyongnam Bank, as well as Securities, Asset Management, Savings Bank, and Venture Investment. The BNK Committee will conduct a comprehensive verification of candidates' careers, performance, competencies, and experience through document screening, reference checks, management plan presentations, and in-depth interviews. The process will proceed with the selection of a primary candidate pool in October, narrowing down the pool in mid-November, and selecting the final candidates in mid-December.
The BNK Financial Board of Directors resolved on September 16 to improve succession procedures for both the holding company and its subsidiaries. The measures include strengthening the role of the bank's nomination committee, such as granting it the authority to recommend candidates on an ongoing basis and allowing it to observe final interviews. Fairness in the competition process has also been bolstered. To ensure candidates fully understand the company and can effectively explain their management vision and capabilities, the group will provide necessary information such as management status, key issues, and strategies from the past three years in advance. This aims to ensure a fair evaluation by providing the same information even to external candidates who may have difficulty accessing internal company situations.
BNK Financial explained, “We focused on objectively verifying candidate qualifications and capabilities while reducing the information gap among candidates so that both internal and external contenders can compete on fair terms.”
Hana Financial Group’s Group Executive Nomination Committee also began its subsidiary CEO succession process on September 30. Hana Financial is conducting the process for six subsidiaries, including Hana Bank, Hana Securities, Card, Capital, Life Insurance, and Savings Bank. The group committee plans to finalize a shortlist of no more than three candidates per subsidiary by the end of October and select one final candidate for each by early December to recommend to their respective subsidiary nomination committees.
Hana Financial also emphasized expanding the role of the bank's nomination committee and reflecting its opinions in the shortlist. The group and bank committees now share the shortlist, and the head of the bank's nomination committee attends the evaluation process for final candidate selection to share their opinions. Candidate verification procedures have also been strengthened. A minimum of two weeks of verification time is secured at each stage of narrowing down the candidate pool, and pre-defined evaluation criteria are applied to all candidates to enhance fairness. Since 2024, Hana Financial has granted the bank's nomination committee the authority to recommend candidates for the position of bank president. Once the bank's committee submits the candidates and reasons for recommendation, the group committee deliberates on whether to include them in the candidate pool.
At Woori Financial, the terms of 12 subsidiary CEOs are ending this year, including those at Woori Bank, Securities, Card, Capital, Asset Trust, Savings Bank, and Asset Management. Woori Financial has also recently improved its next-generation bank president succession process by expanding the role of the nomination committee. The previous method, where the holding company’s committee recommended subsidiary candidates, has been changed to a system where the subsidiary (bank) nomination committee recommends candidates directly. Candidate verification procedures have also been bolstered. The bank's nomination committee is now allowed to review candidates with external professional institutions and has been granted the authority to verify candidates' past management performance.
At KB Financial, which recently decided on Lee Jae-keun, head of the KB Financial division, as the final candidate for the next chairman following Chairman Yang Jong-hee, the terms of 10 subsidiary heads—including those at the bank, securities, card, insurance, and asset management—are ending at the end of this year. KB Financial operates its recommendation committee under the name "Affiliate CEO Recommendation Committee (Appointee Committee)," and when the holding company’s committee recommends final candidates, each subsidiary’s committee reviews them. It is reported that the KB Financial committee recently discussed criteria for selecting subsidiary CEO candidates.
The backdrop for financial groups moving to strengthen the authority of subsidiary nomination committees ahead of CEO appointments is the demand from authorities. Regulators believe that the current process, centered on group chairmen and holding companies, leads to formalistic candidate management and a lack of transparency. Financial Supervisory Service Governor Lee Chan-jin pointed out at an executive meeting on September 15, "The CEO succession procedures established by financial holding company nomination committees are insufficient, and the role of subsidiary nomination committees is limited."
During a meeting with the chairmen of eight bank holding companies and the Chairman of the Korea Federation of Banks on September 23, Governor Lee also demanded, "Please strive to appoint subsidiary heads through transparent and fair procedures," adding, "You must ensure that subsidiary nomination committees can sufficiently perform their practical roles in the process of candidate recommendation, verification, and selection, in line with the spirit of the Act on Corporate Governance of Financial Companies and best practices."
Meanwhile, some argue that institutional improvement and actual effectiveness are two different things. Hwang Yong-shik, a professor of business administration at Sejong University, noted, "I understand the intent of the financial authorities and the purpose of the procedural improvements, but considering the relationship between the holding company and its subsidiaries, it is not realistically easy to reduce the influence of the holding company." He added, "While it is necessary to ensure the autonomy of subsidiaries during the personnel process, it is questionable whether it is appropriate to strictly restrict the holding company’s intervention, given the inherent function of a holding company."