KB Financial fails again to appoint outside director endorsed by labor union

The headquarters of KB Financial Group in Seoul / Courtesy of KB Financial Group

By Lee Yeon-woo

An outside director nominee endorsed by the labor union of KB Financial Group was once again unsuccessful in securing enough votes at the general shareholders meeting.

The nominee in question, Lim Gyeong-jong, was rejected as an outside director at the general shareholders meeting held at KB's headquarters in Seoul, Friday. He previously served as the head of Koexim Mandiri Finance, which is co-owned by Export-Import Bank of Korea (Eximbank) and the Pengelola Investama Mandiri Indonesia in Jakarta.

This marks the sixth time since 2017 in which a labor union-backed candidate for an outside director was rejected at a shareholders meeting.

In January, KB Financial Group's union recommended Lim as a candidate for an outside director, citing his ability to normalize sales operations at KB Bukopin Bank, a subsidiary of KB Kookmin Bank in Indonesia.

However, the Institutional Shareholder Services (ISS), the world's largest proxy adviser, opposed Lim's appointment and recommended that shareholders vote against his nomination. Additionally, the National Pension Service (NPS) rejected the idea, expressing doubts over whether his appointment could enhance shareholder value.

At the meeting, a proposal put forward by the labor union to amend the company's articles of association was also rejected. The proposal aimed to ban the appointment of CEO candidates who have worked in the government for more than one year during the past five years.

The National Pension Service (NPS) opposed the proposal, arguing that it would "excessively restrict the qualifications of the CEO."

Other issues on the meeting's agenda proceeded smoothly, including the appointment of three new outside directors proposed by the financial company.

“There have been criticisms regarding outside directors, but the board members of KB Financial Group have revamped the process to ensure that appointment of outside directors is in the best interest of shareholders and the company's value,” said Yoon Jong-kyoo, KB Financial Group chairman.

Meanwhile, Hana Financial Group concluded its general shareholders' meeting on Friday without any significant change. It had two new outside directors appointed and pledged to prioritize the interests of its shareholders.