The financial authorities are considering a plan to designate the reappointment of the chief executive officer (CEO) of a financial holding company for a third term as a special resolution item for the shareholders' meeting. This is aimed at enhancing the transparency of governance by strengthening shareholders' control and reinforcing verification procedures.
On the 27th, the Financial Supervisory Service announced the results and future plans for the 'Advancement of Bank Holding Company and Bank Governance Structure.'
Kim Byeong-chil, vice president of the Financial Supervisory Service, noted during a briefing that "there are various methods to ensure shareholder control and oversight over the long-term reappointment of CEOs at banks and holding companies, including requiring special resolutions at shareholders' meetings," and added, "We are trying to find methods in collaboration with the industry that can secure fairness in reappointments and strengthen control by shareholders."
A special resolution at the shareholders' meeting requires attendance by at least one-third of all shareholders and a two-thirds majority of those present in favor. This is a higher threshold than a regular resolution, which requires the attendance of more than one-quarter and agreement from more than half. Among financial holding companies, Woori Financial Group has required a special resolution for the third term of its chairman.
The Financial Supervisory Service also stated it would consider a 'staggered term system' to enhance the independence of outside directors by separating the terms of CEOs. The staggered term system is designed to prevent all directors from retiring simultaneously by distributing their terms. Additionally, it mentioned the possibility of different term lengths for individual directors as an alternative. The Financial Supervisory Service plans to explore the use of external agencies to enhance fairness and objectivity in evaluating the expertise of candidates for CEOs and outside directors, as well as the performance assessments of boards and individual directors.
It is also promoting a plan to initiate the CEO succession process early. Currently, all financial holding companies and banks are required to begin the succession process at least three months before the CEO's term ends. Through this, each company aims to identify, cultivate, verify, and evaluate potential candidates that align with its medium- to long-term goals and strategies while enhancing the objectivity and fairness of the succession process.