Eximbank CEO in hot seat for labor-leaning stance

Export-Import Bank of Korea CEO Bang Moon-kyu / Yonhap

By Park Jae-hyuk

The chief of the Export-Import Bank of Korea (Eximbank) has come under sharp criticism for his plan to introduce a codetermination system in a bid to appease the bank's union, according to critics Friday.

In a codetermination system, seats on a board of directors are given to employees or their representatives.

The state-run bank said it has been in discussion with its union about offering one of the board seats to an expert recommended by the union.

“Because the Korean Financial Industry Union raised this issue two years ago, we have discussed this with our union,” an Eximbank spokesman said. “We are considering nominating an expert recommended by the union for our new nonexecutive director.”

A codetermination system has never been carried out in the nation's financial industry.

Although the unions of Industrial Bank of Korea (IBK) and KB Kookmin Bank had pursued the shared governance structure, their attempts ended in failure due to severe backlash.

In March, then Financial Services Commission Chairman Choi Jong-ku, who had served as Eximbank CEO, expressed his skepticism about offering board seats to bank employees.

“Considering wages and welfare offered to bank workers, their working conditions are not poor enough to enforce worker representation on boards of directors,” Choi told reporters at that time.

Financial Supervisory Service Governor Yoon Suk-heun, who had once advised the government to adopt a codetermination system, also changed his previous stance, saying in March “it is too early” for Korea to have the system.

Industry officials said Eximbank CEO Bang Moon-kyu seems inclined to keep pace with the Moon Jae-in administration's labor-friendly policies to make up for his lack of experience in the financial sector.

Bang has raised concerns among financial experts since his appointment, because he has built his career in budget management, unlike his predecessors who had expertise in international finance.

“The appointment of Bang as Eximbank CEO was quite strange, considering the export credit agency's roles,” a high-ranking official at a state-run think tank said on condition of anonymity.

When Bang was appointed Oct. 29, he immediately met with the union and had an eight-hour discussion to win their hearts.

With these efforts, he did not face the union's interruption on the day of his inauguration, unlike his predecessors who could not enter their offices for a few days after their appointments.

Private sector banks have been concerned about the state-run bank's labor-friendly attitude, because it may lead the government to pressure them to give management rights to their workers.

“If Eximbank gives a board seat to a union representative, commercial banks will face pressure to follow suit,” a commercial bank official said on condition of anonymity.

Economic experts said a codetermination system will hinder management efficiency.

“Directors may not be able to make their voices heard when discussing sensitive issues, such as restructuring,” said Yun Chang-hyun, an economist at the University of Seoul. “Codetermination in Germany is also regarded among experts as a failure.”