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KB Financial Group headquarters in Yeouido, western Seoul. (KB Financial Group) |
Efforts by KB Financial Group union members to get an outside director recommended by them fell through for the fifth time on Friday, with the majority of the banking group’s shareholders voting against the plan.
The proposal by the union members and KB’s group of employee shareholders – which owns a combined 1.73 percent stake in the firm – to push former Export-Import Bank of Korea Vice President Kim Young-su to become one of the group’s outside directors failed to pass at Friday’s shareholders meeting, according to KB.
KB Financial‘s labor union had named Kim in February, citing his expertise in overseas investment spanning over three decades. Kim started his career at the Eximbank in 1985.
This marks the fifth time KB’s union failed to get an outside director recommended by them appointed since 2017.
Earlier this month, Institutional Shareholder Services, a major global proxy advisory firm, advised KB shareholders to vote against the union-backed nominee, casting doubt on whether Kim’s cited “expertise” would contribute to the growth of the firm.
In line with the ISS, experts have voiced concerns of appointment of union-backed directors, saying that the union already has a strong voice and power, a factor that has made Korea a less attractive market for foreign businesses.
“South Korean businesses already have a strong system where the voices of union members can be delivered to its employers,” the main opposition People Power Party Rep. Yun Chang-hyun and former president of the Korea Institute of Finance said.
“Appointing a union-backed outside director could further mute the voice of shareholders in its place,” he added.
Placing more union-backed directors in firms was a key election pledge for outgoing President Moon Jae-in, but the plan has failed to bear fruit in a majority of the industries here.
In January, however, the National Assembly passed a bill that forced state-run institutions to hire at least one union-backed outside director.
By Jung Min-kyung (
mkjung@heraldcorp.com)
