Value context and insight. lkm@koreatimes.co.kr
Financial groups vow to fortify internal controls amid employee misconduct, loan scandals
Shinhan Financial Group chair Jin Ok-dong speaks during a shareholders' meeting at the group headquarters in Seoul, Wednesday. Courtesy of Shinhan Financial Group
By Lee Kyung-min
The country’s three leading financial groups — KB Kookmin, Shinhan and Woori — vowed to strengthen internal control measures at their respective shareholders’ meetings Wednesday in a collective move to address brewing public criticism over a slew of employee embezzlement cases and poorly granted loans.
Also among the groups’ efforts to restore investor confidence and shareholder returns were KB’s appointment of a woman outside director, Woori’s policy exempting shareholders from 15.4 percent financial income tax and Shinhan’s ethical management.
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According to KB Financial, the former head of KT Capital, Cho Wha-joon, was appointed chair of the group’s board of directors.
The measures are part of bolstering diversity in the makeup of the group’s top decision-making body. Cho succeeds Kwon Seon-joo, a former CEO of the state-run Industrial Bank of Korea.
KB Financial Chairman Yang Jong-hee said the group would improve its corporate structure and advance the business model for management efficiency and innovation.
KB's wealth management and small- and medium-sized enterprise financing will be strengthened, he added, coupled with global business.
“Our commitment to environment, social and corporate governance will continue,” he said.
Woori Financial passed a motion exempting the group’s shareholders from a 15.4 percent tax on dividends, along with five other agenda items.
“About 3 trillion won ($2 billion) in capital reserve will be reoriented for the plan,” a Woori official said.
It also passed a motion to set up an ethics and internal control committee.
The group chair, Yim Jong-yong, said Woori will continue to fortify internal control across all departments and operations. “We will promote ethical management among all employees and establish a corporate culture of integrity."
Shinhan Financial said the group’s sustainable growth drive led to robust profits, as evidenced by its overseas revenue jumping 38.1 percent from the previous year. It was the highest figure from its global business to date.
The group's chair, Jin Ok-dong, acknowledged the group was not immune from irregularities and vowed continued commitment to raising ethical standards for its employees and shareholder values.
“Shinhan achieved a shareholder return rate of 40.2 percent last year, up 4 percentage points from the previous year. Our performance was not without painful instances of indiscretion, but we will learn from the mistakes," Jin said.