ISS backs Lee Jae-keun's appointment as KB Financial chairman
Summary
Institutional Shareholder Services recommended that shareholders approve Lee Jae-keun as KB Financial Group chairman ahead of the extraordinary shareholders’ meeting in Seoul on Nov. 20. ISS cited the absence of known concerns about Lee and the board, and praised the group’s disclosure of committee meeting attendance. If appointed, Lee would serve a three-year term through November 2029. The recommendation may carry weight because foreign investors held 78.24 percent of KB Financial shares as of Friday.
Key Facts
- ISS said KB Financial voluntarily provides committee attendance records, although the Korea Exchange disclosure template does not require companies to report them.
- Foreign institutional investors often rely on ISS recommendations when deciding how to vote at shareholder meetings.
- Lee has held senior roles in finance, strategy, global operations and wealth management during more than three decades at KB.
- Lee became the industry’s youngest bank chief in 2022 and has overseen KB Financial’s global, wealth management and small and medium-sized enterprise activities since last year.
- The leadership change came as financial authorities pursued governance reforms to curb prolonged chairmanships at financial holding companies and improve succession transparency.
KB Financial Group Vice Chairman Lee Jae-keun, nominated as the group’s next chairman, speaks to reporters in the lobby of the group’s headquarters in Yeouido, Seoul, Sept. 14. Yonhap
Institutional Shareholder Services (ISS) has recommended that shareholders vote in favor of appointing Lee Jae-keun as chairman of KB Financial Group.
In its voting recommendations report obtained by The Korea Times, Sunday, the world's largest proxy advisory firm said "a vote for this resolution is warranted given the absence of any known issues concerning the nominee and the company's board dynamics."
ISS also noted that KB Financial Group maintains good disclosure practices regarding committee meetings, voluntarily providing attendance records to help shareholders better assess directors' effectiveness and contributions.
Most companies in Korea follow a disclosure template provided by the Korea Exchange that does not require companies to disclose committee meeting attendance records. As a result, it is common for companies to omit such information from regulatory filings, ISS added.
The recommendation comes ahead of KB Financial Group's extraordinary shareholders' meeting on Nov. 20, when shareholders will vote on Lee's appointment as group chairman. If appointed, Lee will lead the group for a three-year term until November 2029.
The endorsement could prove particularly influential, as KB Financial Group has the highest foreign ownership ratio among Korea's major financial holding companies. Many foreign institutional investors rely on ISS when making voting decisions.
As of Friday, foreign investors held 78.24 percent of KB Financial Group's shares.
Lee is a KB veteran who has held senior roles spanning finance, strategy, global operations and wealth management over more than three decades. He became the industry's youngest bank chief in 2022. Since last year, he has overseen the group's global, wealth management and small and medium-sized enterprise activities.
Lee's selection, however, came as a surprise to many industry observers, as KB Financial Group had been posting record earnings under incumbent Chairman Yang Jong-hee.
The leadership change comes as financial authorities pursue governance reforms aimed at curbing prolonged tenures among financial holding company chairmen and improving transparency in succession procedures.
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