ExclusiveGlass Lewis supports Lee Jae-keun's appointment as KB Financial chairman

Glass Lewis has advised shareholders to support the appointment of Lee Jae-keun as chairman of KB Financial Group, according to a voting recommendations report exclusively obtained by The Korea Times on Tuesday.

The world’s second-largest proxy advisory firm said it had identified “no substantial issues for shareholder concern” regarding the proposed appointment.

The report also flagged several ongoing issues facing the group, including allegations of collusion over loan terms and subsequent investigations by the Fair Trade Commission, as well as the Financial Supervisory Service’s investigation into the potential mis-selling of Hong Kong-linked equity-linked securities.

While noting it had found no clear evidence linking the board to these matters that would warrant specific action at the upcoming shareholders’ meeting, Glass Lewis added that the ongoing legal proceedings and discussions would continue to be monitored.

Such issues “may indicate weak internal controls or inadequate oversight of the Group, which could lead to undermining shareholder value, and therefore warrant attention,” it cautioned. “In the event that involvement of board members or management in these matters is confirmed, shareholders may be recommended to withhold votes from certain directors on that basis.”

Glass Lewis’ recommendation follows a similar endorsement from the Institutional Shareholder Services, which also backed Lee’s appointment just days earlier.

The recommendations come ahead of KB Financial Group’s extraordinary shareholders’ meeting on Nov. 20, when shareholders will vote on Lee’s appointment to a three-year term running through November 2029.

These endorsements carry considerable weight among foreign institutional investors, who hold a particularly large stake in KB Financial. Foreign investors owned 78.15 percent of the group’s shares as of Monday, the highest proportion among Korea’s major financial holding companies.

A KB veteran, Lee has held senior positions across finance, strategy, global operations and wealth management over more than 30 years. He became the industry’s youngest bank chief in 2022 and has overseen the group’s global business, wealth management and small and medium-sized enterprise operations since last year.

His selection, however, came as a surprise to many industry observers, as KB Financial 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.