Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Korean women still struggle to shatter glass ceiling in finance sector
By Anna J. Park
Major firms unveil ambitious plans, but gender equality remains elusive at the top
The glass ceiling in the financial sector is proving to be difficult to break in Korea.
Despite long-term strategic plans by major financial groups to foster female leaders and to promote gender equality, the advancement of women at the top echelons of management at financial firms is still very rare in the country.
In the financial sector, the number of female executives or CEOs is particularly very low, as they face a double glass ceiling due to the financial industry's uniquely conservative and masculine corporate culture that has made it difficult for female workers to be promoted to top management positions.
Among the holding companies and subsidiaries of Korea's four major financial groups — KB, Shinhan, Hana and Woori — female CEOs exist at only 6 percent, or four companies, out of a total of 59 as of September 2023.
Even within the financial sector, the barriers in the banking industry have proven to be particularly formidable.
Since the establishment of the banking industry in Korea, only three women have held the position of bank CEO to date: Kwon Seon-joo, the former chief of state-run Industrial Bank of Korea (IBK) from 2013 to 2016, incumbent Citibank Korea CEO Yoo Myung-soon, who is serving her second term, and Kang Shin-sook, who currently leads Suhyup Bank, the banking arm of the National Federation of Fisheries Cooperatives, since 2022.
However, excluding state-run, foreign banks or cooperatives, there has never been a female CEO at a domestic commercial bank. The situation is the same at credit card companies. There have been a few female CEOs in the insurance and securities industries, although the number is extremely small.
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Gender diversity hard to see at boards of directors
Industry insiders pointed to a substantial lack of a female talent pool in the managerial positions of the financial institutions, on top of the sector's conservative corporate culture, as the reasons for the scarcity of female leaders.
Indeed, data from the Financial Supervisory Service's (FSS) electronic disclosure system, DART, show that women account for only 9 percent, or 84 executive positions, out of 899 executives at 23 domestic financial companies, including the five major commercial banks (KB Kookmin, Shinhan, Hana, Woori and NH Nonghyup), major life insurance companies (Samsung, Hanwha, Kyobo, Shinhan and NongHyup), major non-life insurers (Samsung Fire & Marine, Hyundai Marine & Fire, DB Insurance, KB Insurance and Meritz Fire & Marine), as well as eight credit card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori, Hana and BC Card), as of the second quarter of 2023.
Furthermore, according to Rep. Yoon Young-deok of the main opposition Democratic Party of Korea, there are 30 financial companies without a single registered director who is female. In the banking sector, eight banks — Woori, Daegu, Busan, Gwangju, Jeonbuk, Gyeongnam, IBK and K bank — have zero female registered directors as of the second quarter. In the securities industry, 15 companies — Yuanta, Kyobo, Shinyoung, HI, Eugene, Nomura, eBEST, IBK, DB Financial, Bookook, BNK, Hanyang, JP Morgan, Cape and Goldman Sachs — were identified as having no female registered directors as of the second quarter.
"If registered directors are skewed toward a specific gender, biased decision-making is inevitable," Rep. Yoon said. "Financial companies that aim to incorporate ESG management should actively consider recruiting women to be registered directors to enhance the diversity and transparency of the financial sector."
But the financial industry is not the only sector in Korea with a glass ceiling.
According to the Glass Ceiling Index compiled and announced by the U.K.'s Economist magazine, Korea has consistently ranked at the bottom among 29 OECD countries for nine consecutive years, since the introduction of the index in 2013. The Glass Ceiling Index is announced each March and assesses the previous year's overall working conditions for female workers in OECD countries in 10 metrics, including the gender pay gap, parental leave, cost of child care, educational attainment and representation in senior management and political positions.
While Korea showed poor performance in most of the metrics, the representation of women on boards of directors was particularly low, accounting for only 4.9 percent, compared to the OECD average of 25.6 percent.
Besides Korea's prevalent corporate setting that has not been advantageous for female workers, the financial sector itself is globally known for its apparent glass ceiling.
A famous report on gender diversity in the global banking industry by Michael Ferrary, professor at France’s SKEMA School of Business back in 2018, showed that women face a double glass ceiling in the banking industry: "One when being promoted to management and another when being promoted to executive roles." Conducting surveys on 71 banks across 20 countries, the report highlighted that the banking industry has reached a seeming parity in terms of overall employee representation — women make up 52 percent of banking sector employees globally — but they average only 38 percent of middle managers and 16 percent of executive committees.
The global situation does not seem to have advanced much in recent years.
A McKinsey report published in late 2021 on the gender gap in North America's financial services showed that although women have a slight edge at the entry level in terms of hiring numbers, comprising 52 percent of the industry workforce, their representation falls off at each rung up the corporate ladder, with 73 percent of financial services C-level executives being men, and only 27 percent being women.
The report also cites that the banking industry presents a thicker glass ceiling.
While women make up 53 percent of the entry-level banking workforce, their portion drops to less than one third at senior vice president levels and C-suite levels.
Blake Steenhoven, a professor at the Smith School of Business in Canada, who co-wrote a study in 2022 on the glass ceiling in the finance sector, also warned that women make up less than a fifth of Chartered Financial Analyst (CFA) certification holders, which is an immediate red flag. He said it is a global phenomenon that women's representation decreases at higher levels at financial organizations, as they are not promoted at the same rate as their male peers.
Urgent need to foster female leaders
Combining Korea's overall poor status in female leadership, as shown in the Glass Ceiling Index, with the global characteristic of a male-dominated financial sector, it is clear that Korean financial companies are in a greater need of taking proactive measures to foster and promote women.
According to a survey by the Ministry of Gender Equality and Family, the financial industry ranks among the top four in 17 industries in terms of the proportion of female workers, but it lagged far behind other industries when it comes to the ratio of female executives.
"Domestic financial industry indicators showed that the proportion of female managers increased from 14.7 percent in 2018 to 17.9 percent in 2020. However, when examining the executive status of listed financial companies from 2019 to 2021, the proportion of female executives was only 3 percent in 2019 and 5 percent in 2021. This significantly low proportion of female executives confirms the existence of a double glass ceiling in the financial industry," the Financial Economy Institute said in a report.
One positive note is that the average rate of increase in the proportion of female managers is shown to be growing faster than the overall proportion of female workers in the financial industry, meaning that a qualitative improvement is taking place in the female leadership status of the domestic financial sector. Still, more proactive measures are needed to break the glass ceiling in the sector, specifically in decision-making positions as well as managerial roles.
The country's gender quota legislation that was enacted in 2020 via a revision of the Capital Market Act is also expected to accelerate moves by financial institutions to enhance gender diversity at the top. The law requires companies with an asset size totaling over 2 trillion won to have at least one female director at the board.
As a result of the legislation, the percentage of women on the boards of listed companies with assets above 2 trillion won increased from 3.2 percent in 2019 to 7.8 percent in 2021. However, the increase came mostly from the appointments of outside directors, rather than registered directors, highlighting the need for further internal promotions of female workers.
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Female leadership fostering programs
Various studies both in and outside of the country showed that a diverse workforce proved to be beneficial for firms and their stakeholders, yielding fewer cases of fraud, better performance, and higher rates of innovation and productivity.
"The increase in the proportion of female directors on boards brings positive effects to performance by providing diverse perspectives and experiences. Companies need to put efforts not only to achieve a numerical increase in the presence of female directors at boards, but also to ensure qualitative diversity," Han Sang-yong, a research fellow at the Korea Insurance Research Institute, said in a 2021 report on board diversity at financial companies.
Accordingly, major financial companies are aiming to increase the presence of female directors through development programs for aspiring women workers. In fact, four major groups have already announced goals to raise the proportion of female leaders up to 20 to 30 percent from mid- and long-term perspectives.
Under the goals, they are implementing various programs to foster female leaders including "SHeroes" at Shinhan Financial Group, "WE (Women Empowerment) STAR" at KB Financial Group, "Hana Waves" at Hana Financial Group, and "Wing" at Woori Financial Group. Along with the programs, the financial groups have also set a clear numerical goal to increase female leadership.
In the case of Shinhan Financial Group, Shinhan Digital Solutions CEO Cho Kyoung-sun, the first female CEO in the group's history, is a graduate of the SHeroes program. By 2030, Shinhan aims to raise the percentage of female employees to 50 percent, female mid-level managers to 45 percent, female department heads to 25 percent, and female executives to 15 percent of the workforce.
Under an initiative called "KB Diversity 2027," KB Financial Group aims to increase the proportion of female leaders, including branch managers and executives, to 20 percent by 2027. Furthermore, it plans to elevate the representation of female team leaders to 30 percent under the initiative.
Hana Financial Group plans to achieve a 30-percent ratio of female managers by 2030. Woori Financial Group aims to increase the proportion of female department heads and executives to 20 percent and 15 percent, respectively, by 2030.