Growing labor voices major headache to financial firms

Democratic Party of Korea (DPK) Chairman Lee Nak-yon, left, listens to supportive remarks from Park Hong-bae, then-head of the Korean Financial Industry Union (KFIU), at the National Assembly, April 2. Korea Times file

Ruling, minor opposition parties seek greater labor influence

By Lee Kyung-min

The ruling and minor opposition parties are seeking to legislate a bill that will require financial firms to have a member put forward by their union to sit on executive recommendation committees, in the latest move to gain a greater say in corporate management.

The move is in line with attempts by unions at financial firms to recommend outside directors to company boards, a stepping stone to the appointment of a labor director to ensure labor participation in corporate management. It was a presidential election pledge, but has lost steam amid fast-souring public sentiment over the administration's series of failed drives, notably its real estate policies.

Union members say a rise in representation is needed to promote the public good. But experts say corporate efficiency will be undermined due to the deeper intervention of unions whose growing collective rights are increasingly used to protect the vested interests of those with the highest salaries and job security.

Rep. Bae Jin-gyo of the minor opposition Justice Party put forth a bill recently to revise the corporate governance structure of financial firms, an idea supported by ruling Democratic Party of Korea (DPK) Rep. Min Byung-duk. The two sit on the National Assembly National Policy Committee whose task includes overseeing the Financial Services Commission (FSC), Financial Supervisory Service (FSS) and Korea Fair Trade Commission (KFTC), among other financial organizations.

The bill seeks to have a person recommended by union representatives sit on the committee that recommends people for senior management positions.

It is the first to stipulate that workers' voices should be considered in appointing leaders at financial firms, a far stronger move from a slew of discarded bills during previous regular Assembly sessions.

The move is fanning concerns of management-labor standoffs, as the DPK leadership has been filled with figures with extensive union backgrounds.

DPK lawmaker Park Hong-bae joined the party's Supreme Council on Aug. 31, a first for a former Korean Financial Industry Union (KFIU) head to join the ruling party's key leadership.

He is expected to push for the full implementation of placing a union representative on the committee, the fourth attempt following three failed ones between 2017 and 2019.

KB Financial Group's union said recently that it has recommended two figures with expertise in environmental, social and governance (ESG) to be appointed as outside directors for the Nov. 20 provisional shareholders meeting.

The push will become bolder given Park was elected KFIU head last year after pledging for greater union representation via implementation of union-recommended outside directors. Also helping was his known hardline stance as head of KB Financial's union through orchestrating KB Kookmin Bank's first strike in 19 years in January 2019.

Park also met with Financial Services Commission (FSC) Chairman Eun Sung-soo and Korea Federation of Banks (KFB) Chairman Kim Tae-young, Sept. 4, less than a week after he became a DPK Supreme Council member.

The move was to push financial policymakers to come up with measures amid rapid business expansion of “Big Tech” including Korea's largest portal Naver and fintech powerhouse Kakao Corp., mostly voicing concerns about insecurity from traditional financial services workers fast losing ground to their new technology-backed competitors.

Dankook University economist Kim Tai-gi said it remains to be seen whether the issues of wage hikes and other employee benefits will be put on the negotiating table in the months to come.

“The unions seeking to gain ground in the name of public good is nothing short of a political tactic to exert more influence,” he said. “The highest-paid group of white-collar workers with great job security wants to solidify their standing in the political area in the name of a green initiative.”