Eximbank may appoint outside director backed by union

The main entrance of the Export-Import Bank of Korea (Eximbank), a state-run firm under the Ministry of Economy and Finance, on Yeouido, Seoul / Korea Times file

By Yi Whan-woo

The state-run Export-Import Bank of Korea (Eximbank) is expected to finalize its list of candidates this week to fill one of the vacant positions among its three-member outside board of directors. The seat has been empty since May.

The process is being carried out under the guidelines of the Ministry of Economy and Finance, which oversees Eximbank and has the right to choose the successful candidate once the list is submitted.

Who will be selected as the new outside director is drawing attention, as this opportunity may be the last chance during President Moon Jae-in's term to have someone recommended by the financial firm's union serving in the position.

In line with the President's reform pledges, the Moon government had financial companies and relevant public organizations adopt a new management rule that requires management and labor unions separately to recommend candidates for outside director positions.

In the past, only the management side had the right to make such recommendations.

Nevertheless, among Korea's financial companies and finance-related public organizations, no candidates backed by labor unions have been able to become outside directors so far, because the conservative controlling shareholders have turned them all down.

Unsuccessful attempts have been made at Kookmin Bank, the Industrial Bank of Korea (IBK) and the Korea Asset Management Corporation (KAMCO).

Against this backdrop, industry sources believe there is a chance that a union-friendly outside director in the financial sector will be appointed.

Multiple sources say that Eximbank is most likely to come up with two to four candidates, with half of them being recommended by the bank's labor union.

The specific details about the candidates are unknown.

The sources said high-ranking officials at the Ministry of Economy and Finance, many of them conservative in mindset, are also open to upholding the President's pledge, as his term is approaching its next year.

“It is possible that Eximbank may be able to set an example of having an outside director recommended by its labor union,” a source in the field said. “If so, other financial companies are expected to follow in its footsteps.”

Meanwhile, other sources were concerned of the risk that all of the company's outside director seats could be filled by labor union-backed figures.

They argued that those figures may only be interested in employee issues and no other important issues, such as handling corporate restructuring plans and developing next-generation growth engines.

The outside directors in general have been criticized for their ties to high-ranking executives, who mostly represent their interests and not keen on corporate transparency.